On Thursday, January 26, 2023, the National Institute for Standards and Technology (NIST) released the first version of its Artificial Intelligence Risk Management Framework (AI RMF 1.0).[1]  The framework is intended for voluntary use to help incorporate trustworthiness considerations into the design, development, use, and evaluation of AI products, systems, and services.

AI RMF 1.0 was released after more than 18 months of drafting and workshops, which we have tracked in previous legal updates.[2]  The document reflects about 400 sets of formal comments NIST received from more than 240 different organizations on draft versions of the framework.  Speaking at the launch event, Dr. Alondra Nelson, Deputy Assistant to the President and Principal Deputy Director for Science and Society in the White House Office of Science and Technology Policy (OSTP), indicated that OSTP provided “extensive input and insight” into the development of AI RMF 1.0.

As in previous drafts of the AI RMF, the framework is made up of four core “functions”:

• Organizations must cultivate a risk management culture, including appropriate structures, policies, and processes.  Risk management must be a priority for senior leadership, who can set the tone for organizational culture, and for management who aligns the technical aspects of AI risk management with organizational policies.
• Organizations must understand and weigh the benefits and risks of AI systems they are seeking to deploy as compared to the status quo, including helpful contextual information such as the system’s capabilities, risks, benefits, and potential impacts.
• Using quantitative, qualitative, or mixed-method risk assessment methods, as well as the input of independent experts, AI systems should be analyzed for trustworthy characteristics, social impact, and human-AI configurations.
• Identified risks must be managed, prioritizing higher-risk AI systems.  Risk monitoring should be applied over time as new and unforeseen contexts, risks, needs, or expectations can emerge.

AI RMF 1.0 also encourages the use of “profiles” to illustrate how risk can be managed through the AI lifecycle or in specific applications using real-life examples. Use-case profiles describe in detail how AI risks for particular applications are being managed in a given industry sector or across sectors (such as large language models, cloud-based services or acquisition) in accordance with RMF core functions.  Temporal profiles illustrate current and target outcomes in AI risk management, allowing organizations to understand where gaps may exist. And cross-sectoral profiles describe how risks from AI systems may be common when they are deployed in different use cases or sectors.

AI RMF 1.0 is accompanied by:

• AI RMF Playbook—a companion resource that suggests ways to navigate and use the AI RMF across its four core “functions” to incorporate trustworthiness considerations in the design, development, deployment, and use of AI systems.[3]
• AI RMF Roadmap—a list of different initiatives for advancing the AI RMF that NIST hopes organizations will carry out independently or in collaboration with the agency.[4]
• AI RMF Crosswalks—two documents that compare AI RMF 1.0 to 1) an international standard for AI risk management, and 2) the OECD Recommendation on AI, EU AI Act as currently drafted, Executive Order 13960, and the White House’s Blueprint for an AI Bill of Rights.[5]
• Various Perspectives—a collection of statements by companies, industry organizations and advocacy organizations in support of AI RMF 1.0.[6]

Comments on AI RMF 1.0 will be accepted until February 27, 2023, with an updated version set to launch in spring 2023.

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[1] NIST Artificial Intelligence Risk Management Framework (AI RMF 1.0), available at https://nvlpubs.nist.gov/nistpubs/ai/NIST.AI.100-1.pdf.

[2] Artificial Intelligence and Automated Systems Legal Update (1Q22), available at https://www.gibsondunn.com/artificial-intelligence-and-automated-systems-legal-update-1q22/; Artificial Intelligence and Automated Systems Legal Update (2Q22), available at https://www.gibsondunn.com/artificial-intelligence-and-automated-systems-legal-update(2q22); Artificial Intelligence and Automated Systems Legal Update (3Q22), available at https://www.gibsondunn.com/artificial-intelligence-and-automated-systems-legal-update-3q22/.

[3] NIST AI Risk Management Framework Playbook, available at https://pages.nist.gov/AIRMF/.

[4] Roadmap for the NIST Artificial Intelligence Risk Management Framework (AI RMF 1.0), available at https://www.nist.gov/itl/ai-risk-management-framework/roadmap-nist-artificial-intelligence-risk-management-framework-ai.

[5] Crosswalks to the NIST Artificial Intelligence Risk Management Framework (AI RMF 1.0), available at https://www.nist.gov/itl/ai-risk-management-framework/crosswalks-nist-artificial-intelligence-risk-management-framework.

[6] Perspectives about the NIST Artificial Intelligence Risk Management Framework, available at https://www.nist.gov/itl/ai-risk-management-framework/perspectives-about-nist-artificial-intelligence-risk-management.

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The following Gibson Dunn lawyers prepared this client update: H. Mark Lyon, Frances Waldmann, and Evan Kratzer.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. If you would like assistance in submitting comments on AI RMF 1.0, please contact the Gibson Dunn lawyer with whom you usually work, or any of the following members of Gibson Dunn’s Artificial Intelligence and Automated Systems Group:

Cassandra L. Gaedt-Sheckter – Co-Chair, Palo Alto (+1 650-849-5203, [email protected])

H. Mark Lyon – Palo Alto (+1 650-849-5307, [email protected])

Vivek Mohan – Co-Chair, Palo Alto (+1 650-849-5345, [email protected])

Frances A. Waldmann – Los Angeles (+1 213-229-7914, [email protected])

© 2023 Gibson, Dunn & Crutcher LLP

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Please note, prior results do not guarantee a similar outcome.

This update provides an overview of key class action-related developments during the fourth quarter of 2022 (October through December).

Part I summarizes two cases from the First and Fifth Circuits addressing Article III standing in class actions involving “overcharge” or “overpayment” theories of injury;

Part II analyzes a recent Second Circuit decision reiterating that individualized affirmative defenses must be considered in a Rule 23(b)(3) predominance inquiry;

Part III discusses a decision from the Ninth Circuit remanding a large statutory damages award in a class action to assess whether it comported with due process;

And Part IV covers decisions from the First and Ninth Circuits involving class settlements.

I.  Courts Address Whether “Overpayment” Theories of Injury Suffice to Establish Article III Standing

Questions about standing and Article III injury in class actions continue to be front and center in the federal courts of appeals, with the Fifth and First Circuits reaching contrasting results this past quarter in cases involving claims based on alleged “overpayments.”

In Earl v. Boeing Co., 53 F.4th 897, 901 (5th Cir. 2022), the plaintiffs sought to represent all individuals who purchased tickets for air travel on the Boeing 737 MAX 8 aircraft, and alleged that these consumers overpaid for the tickets because Boeing purportedly concealed various safety defects.  After the district court granted class certification, the Fifth Circuit agreed to hear Boeing’s interlocutory appeal under Rule 23(f).

Instead of reaching the propriety of class certification, the Fifth Circuit focused on the threshold issue of Article III standing, and ultimately concluded the plaintiffs had not suffered any actual injury and remanded with instructions to dismiss the case.  Id. at 903.

Because the plaintiffs conceded they did not experience any physical injury, the court focused on their theory of economic harm.  Under this theory, the plaintiffs claimed they paid ticket prices that were “significantly higher than the value of those tickets, which for many, if not most, passengers was zero” had the alleged defects been known.  Id. at 902.  While plaintiffs submitted an expert survey analysis showing that demand for flights on the aircraft would have been lower if the public had known about the safety defect, the Fifth Circuit held that this theory rested on the “unsupportable” inferences that airlines would have continued to offer flights on the aircraft—and that the FAA would have allowed the aircraft to fly—even after the defect was disclosed.  Id. at 903.

The First Circuit also addressed an “overpayment” theory of injury this past quarter in In re Evenflo Co., 54 F.4th 28 (1st Cir. 2022).  The plaintiffs in that case alleged they bought the defendant’s booster seat relying on its statements regarding safety testing and overall safety ratings, and that but for those statements (which the plaintiffs claimed were false), they “would not have purchased the seat, would have paid less for it, and/or would have bought a safer alternative.”  Id. at 32.  The district court dismissed the action for lack of Article III standing.  Id.

On appeal, the First Circuit held that the alleged overpayment was a cognizable injury for standing purposes and that while the pleadings plausibly demonstrated standing to seek monetary relief, the plaintiffs lacked Article III standing to pursue injunctive relief.  Id. at 32.

As for monetary damages, the First Circuit concluded that “overpayment for a product—even one that performs adequately and does not cause any physical or emotional injury—may be a sufficient injury to support standing.”  Id. at 35.  The court also distinguished the U.S. Supreme Court’s decisions in TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021), and Spokeo, Inc. v. Robins, 578 U.S. 330 (2016), holding that “monetary harms such as those alleged here fall firmly on the real, concrete side of the divide.”  Id. at 39.

As for declaratory and injunctive relief, the court reversed because the plaintiffs waived their entitlement to that relief by failing to address it in their brief, and because they failed to plead any possibility of future harm (such as an intention to buy another booster seat in the future) that would entitle them to injunctive relief.  Id. at 41.

II.  The Second Circuit Reiterates That the Presence of Affirmative Defenses Can Preclude a Finding of Predominance Under Rule 23(b)(3)

In Haley v. Teachers Insurance and Annuity Association, 54 F.4th 115 (2d Cir. 2022), the Second Circuit underscored how individualized affirmative defenses—not just claims—must be considered when determining whether predominance has been met.  Following a Rule 23(f) interlocutory appeal, the court reviewed the certification of a class of nearly 8,000 retirement plans with respect to claims based on the allegation that the defendant unlawfully profited from its retirement loan program.  Id. at 117.

In vacating the certification order, the Second Circuit reaffirmed that “a complete assessment of predominance demands that a district court consider all factual or legal issues and classify them as subject either to common or individual proof.”  Id. at 121.  The court also emphasized that it is “well settled that this exercise includes any affirmative defenses,” and those defenses “do not carry ‘less weight’ on the class certification issue simply because the defendant will bear the burden of proof at the merits stage.”  Id. at 121–22.

III.  The Ninth Circuit Remands a Large Aggregate Statutory Damage Award in a Class Action for Reassessment of Potential Due Process Issues

In October, the Ninth Circuit issued a noteworthy opinion holding that aggregate statutory damage awards in class actions may become so large that they violate due process, giving guidance to lower courts when evaluating such oversized awards.

In Wakefield v. ViSalus, Inc., 51 F.4th 1109 (9th Cir. 2022), the district court had entered a nearly $1 billion judgment for approximately 1.9 million phone calls that a jury found violated the Telephone Consumer Protection Act (TCPA), which allows for $500 in statutory damages per call.  Id. at 1113.

Acknowledging the principle that “aggregated statutory damages are, in certain extreme circumstances, subject to constitutional due process limitations,” id. at 1121, the court remanded the case so the district court could determine whether the damages award was “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable,” id. at 1125.  In particular, the Ninth Circuit instructed the district court to consider several factors, including (1) the amount awarded to each plaintiff, (2) the total award, (3) the nature and persistence of violations, (4) the extent of the defendant’s culpability, (5) damage awards in similar cases, (6) the substantive or technical nature of the violations, and (7) the circumstances of each case, to determine whether the magnitude of the aggregated award is proportional and reasonable when the statute’s goals of compensation, deterrence, and punishment are taken into account.  Id. at 1122–23 (citing Six Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1309 (9th Cir. 1990)).  In evaluating these factors, courts must recognize that “[c]onstitutional limits on aggregate statutory damages awards . . . must be reserved for circumstances in which a largely punitive per-violation amount results in an aggregate [award] that is gravely disproportionate to and unreasonably related to the legal violation committed.”  Id. at 1124.

IV.  The First and Ninth Circuits Address Class Settlements

This past quarter, the First and Ninth Circuits addressed issues relating to class settlements, with the former addressing the adequacy of representation in a settlement class, and the latter addressing CAFA’s coupon settlement provision.

In Murray v. Grocery Delivery E-Services USA Inc., 55 F.4th 340, 342 (1st Cir. 2022), the First Circuit vacated approval of a class settlement in a case alleging that the defendant’s marketing campaign violated the TCPA.  An objector appealed the settlement approval, arguing that (a) the settlement class was inadequately represented because the class mixed individuals with substantially stronger claims together with those with weaker claims, and (b) the incentive awards to each named plaintiff were improper.  Id. at 344, 351, 353–54.

The First Circuit concluded that some class members were not adequately represented.  55 F.4th at 351.  It held that although all class members alleged a violation of the TCPA, there were separate provisions of the TCPA—each “having significantly different elements and facing significantly different defenses”—that applied to different class members.  Id. at 351.  Because the settlement did not distinguish between these two groups “despite the clear difference in claim value,” the court ruled that class members with higher-value claims were not adequately represented by the proffered class representatives.  Id. at 350–51.  The court did, however, approve the incentive awards to the class representatives.  Id. at 352–53.  In so doing, the First Circuit joined the Second, Sixth, Seventh, and Ninth Circuits’ interpretation on this issue, widening a split with the Eleventh Circuit, which—as discussed in our prior update—has held that such incentive awards are improper.  At the time of publication, there is a pending petition for a writ of certiorari to review the Eleventh Circuit’s decision.  See Johnson v. Dickenson, No. 22-389 (U.S.).

In McKnight v. Hinojosa, 54 F.4th 1069 (9th Cir. 2022), the Ninth Circuit held that a credit to users’ Uber accounts was not a “coupon” for purposes of CAFA’s “coupon settlement” requirements.  Id. at 1077.  CAFA requires courts to apply “heightened scrutiny” to coupon settlements because of concerns that class counsel might agree to a deal that gives their clients little value in exchange for a large fee award.  Id. at 1075.  To determine whether the settlement was a coupon settlement, the court applied the three-factor test from In re Online DVD-Rental Antitrust Litigation, 779 F.3d 934 (9th Cir. 2015):  (1) whether class members have to use their own money to take advantage of a credit; (2) whether the credit is valid only for select products or services; and (3) how much flexibility the credit provides.  54 F.4th at 1075.  Although the second factor favored finding a coupon settlement because the “credit is valid only for Uber services,” this was outweighed by the first and third factors, both of which cut against finding a coupon settlement because class members had multiple means of claiming relief, including cash.  Id. at 1076–77.

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The following Gibson Dunn lawyers contributed to this client update: Emily Riff, Lauren Fischer, Al Kelly, Wesley Sze, Lauren Blas, Bradley Hamburger, Kahn Scolnick, and Christopher Chorba.

Gibson Dunn attorneys are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work in the firm’s Class Actions, Litigation, or Appellate and Constitutional Law practice groups, or any of the following lawyers:

Theodore J. Boutrous, Jr. – Los Angeles (+1 213-229-7000, [email protected])
Christopher Chorba – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7396, [email protected])
Theane Evangelis – Co-Chair, Litigation Practice Group, Los Angeles (+1 213-229-7726, [email protected])
Lauren R. Goldman – New York (+1 212-351-2375, [email protected])
Kahn A. Scolnick – Co-Chair, Class Actions Practice Group – Los Angeles (+1 213-229-7656, [email protected])
Bradley J. Hamburger – Los Angeles (+1 213-229-7658, [email protected])
Lauren M. Blas – Los Angeles (+1 213-229-7503, [email protected])

© 2023 Gibson, Dunn & Crutcher LLP

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Please note, prior results do not guarantee a similar outcome.

The past year saw increased global government scrutiny of AI technologies and building regulatory momentum as proposed AI-focused laws and regulations matured.  Numerous proposed regulations were enacted,[1] but many stalled, underscoring the complexity inherent in regulating the increasingly crowded and fast-developing field of AI systems and tools.  In the fourth quarter of 2022, the first major AI regulation, the EU’s landmark Artificial Intelligence Act (“AI Act”), navigated some key hurdles on the path to becoming law and is widely expected to set a critical precedent for future risk-based regulatory approaches beyond Europe.[2]  There is (still) no comparable governance framework on the horizon in the U.S., but policymakers took tentative steps towards articulating a rights-based regulatory approach with the Biden administration’s “Blueprint for an AI Bill of Rights.”  Meanwhile, the patchwork of proposed and enacted state and local laws and regulations that either target or incidentally apply to AI systems continue to create compliance challenges for companies across the U.S.

Looking ahead, we anticipate that both the U.S. and EU will reach major policy milestones in 2023.  In January 2023, the National Institute of Standards and Technology (NIST) will release its long-awaited AI Risk Management Framework 1.0, a voluntary set of standards to help incorporate trustworthiness considerations into the design, development, use, and evaluation of AI products, services, and systems.  In the EU, lawmakers anticipate that the European Parliament will vote on the proposed text for the AI Act by March 2023.

Business adoption of AI has doubled in the last five years,[3] and the continued growth of the AI ecosystem reflects not only the accelerating commercial and public sector deployment of AI capabilities, but also growing organizational awareness of the governance risks posed by AI systems—up to and including in C-suites.[4]  Moreover, global standards bodies continued to advance their efforts to create risk frameworks and develop measurable standards and certification programs across all aspects of AI governance.[5]

Our 2022 Artificial Intelligence and Automated Systems Legal Review focuses on these regulatory efforts and also examines other notable policy developments within the U.S. and the EU.

I.  U.S. LEGISLATIVE, REGULATORY & POLICY DEVELOPMENTS

A.  Federal Policy Initiatives

1.  AI Bill of Rights

The past several years have seen several new algorithmic governance initiatives take shape at the federal level, building on the December 2020 Trustworthy AI Executive Order that outlined nine distinct principles to ensure agencies “design, develop, acquire and use AI in a manner that fosters public trust and confidence while protecting privacy.”[6]  On October 4, 2022—almost a year after announcing its development[7]—the White House Office of Science and Technology Policy (“OSTP”) released a white paper, titled “Blueprint for an AI Bill of Rights,” intended to guide the design, use, and deployment of automated systems to “protect the American public in the age of artificial intelligence.”[8]  It provides practical guidance to government agencies and a call to action for technology companies, researchers, and civil society to build protections towards human-centric AI that is “designed to proactively protect [people] from harms stemming from unintended, yet foreseeable, uses or impacts of automated systems.”  The Blueprint identifies five non-binding principles to act as a “backstop” in order to minimize potential harms stemming from certain applications of AI:

• Safe and Effective Systems
• Algorithmic Discrimination Protections
• Data Privacy
• Notice and Explanation
• Human Alternatives, Consideration, and Fallback

For more details, please see our Artificial Intelligence and Automated Systems Legal Update (3Q22).  The principles apply broadly to “ automated systems that … have the potential to meaningfully impact the American public’s rights, opportunities, or access to critical resources or services.”  “Automated systems” are themselves defined very broadly, encompassing essentially any system that makes decisions using computation.[9]  The Blueprint therefore stands in contrast to the draft EU AI Act, which is generally limited in scope to an identified list of high-risk AI.[10]  The Blueprint is intended to further the ongoing discussion regarding privacy among federal government stakeholders and the public, but its impact on the private sector is likely to be limited because—unlike the wide-ranging EU AI Act, which is inching towards an implementation date—it lacks prohibitions on AI deployments and details or mechanisms for enforcement.  The Blueprint is accompanied by supporting documentation, including a set of real-life examples and a high-level articulation of how the five principles can “move into practice.”[11]

2.  National Institute of Standards and Technology (“NIST”) Risk Management Framework

On August 18, 2022, NIST published and sought comments on a second draft of the NIST Artificial Intelligence Risk Management Framework (“AI RMF”), which provides guidance for managing risks in the design, development, use, and evaluation of AI systems.[12]  The AI RMF, as mandated by Congress, is intended for voluntary use to help incorporate trustworthiness considerations into the design, development, use, and evaluation of AI products, services, and systems.[13]  The framework is made up of four core principles:

• Organizations must cultivate a risk management culture, including appropriate structures, policies, and processes.  Risk management must be a priority for senior leadership.
• Organizations must understand and weigh the benefits and risks of AI systems they are seeking to deploy as compared to the status quo, including helpful contextual information such as the system’s business value, purpose, specific task, usage, and capabilities.
• Using quantitative and qualitative risk assessment methods, as well as the input of independent experts, AI systems should be analyzed for fairness, transparency, explainability, safety, reliability, and the extent to which they are privacy-enhancing.
• Identified risks must be managed, prioritizing higher-risk AI systems.  Risk monitoring should be an iterative process, and post-deployment monitoring is crucial given that new and unforeseen risks can emerge.

NIST plans to publish AI RMF on January 26, 2023.

NIST is also leading federal regulatory efforts to establish practices for testing, evaluating, verifying, and validating AI systems.  In March 2022, NIST released a document titled, “Towards a Standard for Identifying and Managing Bias within Artificial Intelligence,” which aims to provide guidance for mitigating harmful bias in AI systems.[14]  The guidance makes the case for a “socio-technical” approach to characterizing and mitigating bias in AI, noting that while computational and statistical sources of bias remain highly important, broader societal factors —including human and systemic biases—that influence how technology is developed should also be considered.  The guidance also recommends a human-centered design process, and draws out organizational measures that can be deployed to reduce the risk of potential bias, including monitoring AI systems, providing resource channels for users, implementing written policies, procedures, and other documentation addressing key terms and processes across the AI model lifecycle, and fostering a culture of internal information sharing.

3.  FTC

a)  FTC Explores Rulemaking to Combat “Commercial Surveillance”

On August 11, 2022, the FTC announced an Advance Notice of Proposed Rulemaking (“ANPRM”) to seek public comment on data privacy and security practices (“commercial surveillance”) that harm consumers,[15] and, specifically, “whether [the agency] should implement new trade regulation rules or other regulatory alternatives concerning the ways in which companies collect, aggregate, protect, use, analyze, and retain consumer data, as well as transfer, share, sell, or otherwise monetize that data in ways that are unfair or deceptive.”[16]

Notably, the ANPRM solicited public input on algorithmic decision-making, including the prevalence of algorithmic error, discrimination based on protected categories facilitated by algorithmic decision-making systems, and how the FTC should address algorithmic discrimination through the use of proxies.[17]  The FTC is undertaking this rulemaking under Section 18 of the FTC Act (also known as “Magnuson-Moss”),[18] a lengthy and complicated hybrid rulemaking process that goes beyond the Administrative Procedure Act’s standard notice-and-comment procedures.[19]  In light of these procedural hurdles, any new proposed rules likely will take considerable time to develop.  The ANPRM notes that, if new rules are not forthcoming, the record developed in response to the ANPRM nevertheless will “help to sharpen the Commission’s enforcement work and may inform reform by Congress or other policymakers.”  The inclusion of algorithmic decision-making in the scope of the potential rulemaking underscores the FTC’s continued focus on taking the lead in the regulation of automated systems at federal level.

b)  FTC Report Warns About Using Artificial Intelligence to Combat Online Problems

In December 2020, as part of the 2021 Appropriations Act, Congress tasked the FTC with conducting a study and reporting on whether and how AI could be used to identify, remove, or take other appropriate action to address a variety of online harms (scams, deepfakes, child sexual abuse, terrorism, hate crimes and harassment, election-related disinformation, and the traffic in illegal drugs and counterfeit goods).  Congress also required the FTC to recommend reasonable policies and procedures for using AI to combat these online harms, and any legislation to “advance the adoption and use of [AI]” for these purposes.

In its June 16, 2022 report,[20] the FTC advised that, while AI can be used as a tool to detect and remove harmful material online, there are significant risks associated with its use.  In particular, the FTC cautioned that because AI systems rely on algorithms and inputs created by humans, and often have built-in motivations geared more towards consumer engagement rather than content moderation, even supposedly neutral systems can disproportionately harm minorities while threatening privacy and free speech.  Additionally, the FTC stated that while many companies currently use AI tools to moderate content, they “share little information about how these systems work, or how useful they are in actually combating harmful content.”[21]  The FTC therefore advised that there needs to be more transparency before the government can understand how AI tools work in the real world.  Although the Commission acknowledged that major tech platforms and others are already using AI tools to address online harms, the report’s final recommendation is that Congress should avoid laws that would mandate or overly rely on the use of AI to combat online harms and instead conduct additional investigation into other tools that might also be helpful in moderating online content.  In his dissenting statement, Commissioner Phillips noted that the report “has no information gleaned directly from individuals and companies actually using AI to try to identify and remove harmful online content, precisely what Congress asked us to evaluate.”[22]

Further, on June 22, 2022, Senators Ed Markey (D-MA), Elizabeth Warren (D-MA), Brian Schatz (D-HI), Cory Booker (D-NJ), Ron Wyden (D-OR), Tina Smith (D-MN), and Bernie Sanders (VT) sent a letter to FTC chair Lina Khan urging the FTC to “build on its guidance regarding biased algorithms and use its full enforcement and rulemaking authority to stop damaging practices involving online data and artificial intelligence.”[23]  The letter cites the National Institute of Standards and Technology’s study that Black and Asian individuals “were up to 100 times more likely to be misidentified” by biometric surveillance tools than white individuals, and asks the FTC to use its authority to combat “invasive and discriminatory biometric surveillance tools,” including facial recognition tools.

4.  CFPB

The Consumer Financial Protection Bureau (“CFPB”) published guidance in May 2022 for financial institutions that use AI tools.  The CFPB guidance addresses the applicability of the Equal Credit Opportunity Act (“ECOA”) to algorithmic credit decisions and clarifies that creditors’ reporting obligations under the ECOA extend equally to adverse decisions made using “complex algorithms.”

5.  EEOC

The U.S. Equal Employment Opportunity Commission (EEOC) has been pursuing an initiative that seeks to provide guidance on algorithmic fairness and the use of AI in employment decisions.

On May 12, 2022, more than six months after the Equal Employment Opportunity Commission (“EEOC”) announced its Initiative on Artificial Intelligence and Algorithmic Fairness, the agency issued its first guidance regarding employers’ use of AI.  The EEOC’s non-binding, technical guidance provides suggested guardrails for employers for the use of AI technologies in their hiring and workforce management systems.

On May 5, 2022, the EEOC filed a complaint in the Eastern District of New York alleging that a software company providing online English-language tutoring to adults and children violated the Age Discrimination in Employment Act (“ADEA”) by denying employment as tutors to a class of plaintiffs because of their age. Specifically, the EEOC alleges that the company’s application software automatically denied older, qualified applicants by soliciting applicant birthdates and automatically rejecting female applicants age 55 or older and male applicants age 60 or older.  The EEOC seeks a range of damages, including back wages, liquidated damages, a permanent injunction enjoining the challenged hiring practice, and the implementation of policies, practices, and programs providing equal employment opportunities for individuals 40 years of age and older.

The EEOC’s guidance outlines best practices and key considerations that, in the EEOC’s view, help ensure that employment tools do not disadvantage applicants or employees with disabilities in violation of the Americans with Disabilities Act (“ADA”).  The guidance provides three ways in which an employer’s tools could be found to violate the ADA:  (1) by relying on the tool, the employer fails to provide a reasonable accommodation; (2) the tool screens out an individual with a disability that is able to perform the essential functions of the job with or without an accommodation; and (3) the tool makes a disability-related inquiry or otherwise constitutes a medical examination.

B.  Federal Laws & Regulations

1.  Artificial Intelligence Training for the Acquisition Workforce Act (AI Training Act)

The Artificial Intelligence Training for the Acquisition Workforce Act (AI Training Act) was signed into law by President Biden in October 2022.  The bi-partisan Act takes a risk management approach towards federal agency procurement of AI and cleared the Senate in late 2021 after being introduced by Sens. Gary Peters (D-Mich.) and Rob Portman (R-Ohio).  This bill requires the Office of Management and Budget (OMB) to develop an AI training program to support the informed acquisition of AI by federal executive agencies, and ensure agencies and individuals responsible for procuring AI within a covered workforce are aware of both the capabilities and risks associated with AI and similar technologies.

2.  National Defense Authorization Act 2023

On December 23, 2022, the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 (NDAA) was signed into law by President Biden.[24]  The NDAA contains a number of provisions relevant to AI for both the U.S. Department of Defense (DOD) and other federal agencies.  The NDAA directs defense and intelligence agencies to work to integrate AI systems and capabilities into intelligence collection and analysis, data management, cybersecurity, and other DOD operations.  The NDAA also directs the Office of Management and Budget (OMB) and the Department of Homeland Security to develop recommendations and policies for federal AI use and to assess risks and impacts, taking into consideration the December 3, 2020 Executive Order 13960 (Promoting the Use of Trustworthy Artificial Intelligence in the Federal Government)[25] providing guidance for federal agency adoption of AI for government decision-making in a manner that protects privacy and civil rights, and the input of a host of governmental and non-governmental stakeholders and experts, including academia and industry technology.

3.  The Algorithmic Accountability Act of 2022 (H.R. 6580)

The Algorithmic Accountability Act was introduced on February 3, 2022 by Sen. Ron Wyden, Sen. Cory Booker, and Rep. Yvette Clark.[26]  The bill would require large technology companies across states to perform a bias impact assessment of any automated decision-making system that makes critical decisions in a variety of sectors, including employment, financial services, healthcare, housing, and legal services.  Documentation from impact assessments would be required to be submitted to the FTC.  The Act’s scope is potentially far reaching, as it defines “automated decision system” to include “any system, software, or process (including one derived from machine learning, statistics, or other data processing or artificial intelligence techniques and excluding passive computing infrastructure) that uses computation, the result of which serves as a basis for a decision or judgment.”  The bill, which came as an effort to improve upon the 2019 Algorithmic Accountability Act after consultation with experts, advocacy groups, and other key stakeholders, was referred to the Subcommittee on Consumer Protection and Commerce.

4.  Digital Platform Commission Act of 2022 (S. 4201)

On May 12, 2022, Senator Michael Bennet (D-CO) introduced the Digital Platform Commission Act of 2022 (S. 4201), which would empower a new federal agency, the Federal Digital Platform Commission, to promulgate rules, impose civil penalties, hold hearings, conduct investigations, and support research with respect to online platforms that facilitate interactions between consumers, as well as between consumers and entities offering goods and services.[27]  The Commission would have a broad mandate to promote the public interest, with specific directives to protect consumers, promote competition, and assure the fairness and safety of algorithms on digital platforms, among other areas.  Regulations contemplated by the bill include requirements that algorithms used by online platforms “[be] fair, transparent, and without harmful, abusive, anticompetitive, or deceptive bias.”  The bill was referred to the Committee on Commerce, Science, and Transportation.

5.  American Data Privacy and Protection Act (H.R. 8152)

On June 21, 2022, members of Congress introduced a bipartisan federal privacy bill, H.R. 8152, the American Data Privacy and Protection Act (“ADPPA”).[28]  The ADPPA aims to create a national framework that would preempt many, but not all, state privacy laws.  The bill stalled during the past Congressional session, and it remains to be seen whether its framework will advance in the new Congress.  While ADPPA shares similarities with current state privacy laws, several proposed requirements are particularly relevant to AI technologies, including risk assessment obligations.  For a detailed overview of the ADPPA, please see our Artificial Intelligence and Automated Systems Legal Update (2Q22).  Although the bill was not enacted, it is likely that this or similar legislation will be considered in the new session.

6.  Health Equity and Accountability Act of 2022 (H.R. 7585)

Introduced in the House on April 26, 2022, the Health Equity and Accountability Act of 2022 (H.R. 7585) aims to address algorithmic bias in the context of healthcare.  The Bill would require the Secretary of Health and Human Services to establish a “Task Force on Preventing AI and Algorithmic Bias in Healthcare” to develop guidance “on how to ensure that the development and [use] of artificial intelligence and algorithmic technologies” in delivering care “does not exacerbate health disparities” and help ensure broader access to care.  Additionally, the Task Force would be charged with identifying the risks posed by a healthcare system’s use of such technologies to individuals’ “civil rights, civil liberties, and discriminatory bias in health care access, quality, and outcomes.”  The bill was referred to the Committee on Energy and Commerce.

C.  State Laws & Regulations

1.  Washington, D.C. Stop Discrimination by Algorithms Act (B24-0558)

In the District of Columbia, a pending bill titled Stop Discrimination by Algorithms Act of 2021 (SDAA) sought to “prohibit users of algorithmic decision-making in a discriminatory manner” in employment, housing, healthcare, and financial lending.[29]  SDAA would also require annual bias audits to identify discriminatory outcomes associated with algorithmic decision-making Systems, and impose transparency and notice requirements.  SDAA would apply to any individual or organization that possesses or controls personal information on more than 25,000 District residents; has greater than $15 million annual revenue; is a data broker that derives at least 50% of its annual revenue from collecting, assembling, selling, distributing, providing access to, or maintaining personal information; or is a service provider.  The bill proposes a private right of action for individual plaintiffs, with remedies such as injunctive relief, punitive damages, and attorneys’ fees.

In September 2022, a public hearing was held to clarify SDAA’s requirements and objectives.  Commenters focused on the expansive definition of “algorithmic eligibility determination” or “algorithmic information availability determination” in the bill, which, as drafted, applies to any determination based “in whole or significant part” on an “algorithmic process that utilizes machine learning, artificial intelligence, or similar techniques.”[30]  These broad definitions—which mirror the rights-based approach in the AI bill of rights and contrast with the EU AI Act’s risk-based hierarchy—could potentially include virtually any automated process and therefore create both significant uncertainty about the scope of the bill and the prospect of burdensome audit and disclosure obligations even for low-risk processes.  We will continue to track the progress of this bill, as well as forthcoming opportunities to participate in public hearings and submit comments.

2.  Colorado Law “Protecting Consumers from Unfair Discrimination in Insurance Practices” (SB 21-169)

In July 2021, Colorado enacted SB 21-169, “Protecting Consumers from Unfair Discrimination in Insurance Practices,” a law intended to protect consumers from unfair discrimination in insurance rate-setting mechanisms.[31]  The law requires insurers to test their big data systems—including external consumer data and information sources, algorithms, and predictive models—to ensure they are not unfairly discriminating against consumers on the basis of a protected class, and to demonstrate to the Division of Insurance how they are testing their data and tools to ensure they do not result in unfair discrimination.  The legislation directs the regulator to work with stakeholders during the rulemaking process regarding how companies should test for bias and demonstrate compliance.  The latest stakeholder meeting took place on December 8, 2022.

Similar laws attempting to regulate insurers’ use of consumer data and algorithmic processing have since been proposed in Indiana,[32] Oklahoma,[33] Rhode Island,[34] and New Jersey.[35]  We will continue monitor Colorado’s stakeholder process, as well as state legislative and regulatory activity seeking to impose requirements with respect to insurers’ use of external consumer data, information sources, and algorithms.

3.  California Department of Insurance Issues Bulletin Addressing Racial Bias and Unfair Discrimination

On June 30, 2022, the California Department of Insurance issued a bulletin addressing racial bias and unfair discrimination in the context of consumer data.[36]  The bulletin notes that insurance companies and other licensees “must avoid both conscious and unconscious bias or discrimination that can and often does result from the use of artificial intelligence, as well as other forms of ‘Big Data’ … when marketing, rating, underwriting, processing claims, or investigating suspected fraud.”[37]  To that end, the Department now requires that insurers and licensees conduct their own due diligence to ensure full compliance with all applicable law “before utilizing any data collection method, fraud algorithm, rating/underwriting or marketing tool, insurers and licensees must conduct their own due diligence to ensure full compliance with all applicable laws.”  In addition, insurers and licensees “must provide transparency to Californians by informing consumers of the specific reasons for any adverse underwriting decisions.”[38]

D.  Employment & HR

Employers are facing a patchwork of recently enacted and proposed state and local laws regulating the use of AI in employment.[39]  Our prior alerts have addressed a number of these legislative developments in New York City, Maryland, and Illinois.[40]  So far, New York City has passed the broadest AI employment law in the U.S., which governs automated employment decision tools in hiring and promotion decisions.  Specifically, before using AI in New York City, employers will need to audit the AI tool to ensure it does not result in disparate impact based on race, ethnicity, or sex.  The law also imposes posting and notice requirements for applicants and employees.  Meanwhile, since 2020, Illinois and Maryland have had laws in effect directly regulating employers’ use of AI when interviewing candidates.  Further, effective January 2022, Illinois amended its law to require employers relying solely upon AI video analysis to determine if an applicant is selected for an in-person interview to annually collect and report data on the race and ethnicity of (1) applicants who are hired and (2) applicants who are and are not offered in-person interviews after AI video analysis.[41]

1.  New York City Artificial Intelligence Law

On September 19, 2022, the New York City Department of Consumer and Worker Protection (“DCWP”) proposed rules in an attempt to clarify numerous ambiguities in New York City’s Automated Employment Decision Tools (AEDT) law, which was originally expected to take effect on January 1, 2023.[42]  New York City’s law will restrict employers from using AEDT in hiring and promotion decisions unless it has been the subject of a bias audit by an “independent auditor” no more than one year prior to use.[43]  The law also imposes certain posting and notice requirements to applicants and employees.  The DCWP’s proposed rules are currently under consideration and may well invite more questions than answers as uncertainty about the requirements lingers.  The proposed rules attempted to clarify certain key terms, specify the requirements for and provide examples of bias audits, and outline several different ways by which, if passed, employers may provide the advance notice to candidates and employees regarding the use of an AEDT.[44]

Emphasizing the ambiguities in both the law and proposed rules, commenters at the first public hearing, held on November 4, 2022, advocated for a delay in the law’s enforcement on the basis that employers would not have enough time to come into compliance with finalized rules before the January 1, 2023 effective date.  On December 12, 2022, DCWP announced that it would delay enforcement of the law to April 15, 2023.  At the end of December 23, 2022, DCWP issued revisions to the proposed rules, which included a new definition for an “independent auditor,” a slightly narrowed definition of AEDT, and information about conducting a bias audit using historical or test data.  In light of the high volume of comments it has received, DCWP held a second public hearing on January 23, 2023.[45]  We are continuing to monitor the law and proposed rules for further updates.

2.  New Jersey Bill to Regulate Use of AI Tools in Hiring Decisions, A4909

On December 5, 2022, New Jersey lawmakers introduced a bill to regulate the “use of automated tools in hiring decisions to minimize discrimination in employment.”[46]  The bill is similar to the initial draft of the New York AI law and imposes limitations on the sale of AEDTs, including mandated bias audits, and requires that candidates be notified that an AEDT was used in connection with an application for employment within 30 days of the use of the tool.  The bill has been referred to the Assembly Labor Committee.

3.  California

In March 2022, the Fair Employment & Housing Council released proposed regulations intended to clarify that the state’s current employment discrimination regulations apply to automated-decision systems, defined as any “computational process, including one derived from machine learning, statistics, or other data processing or artificial intelligence techniques, that screens, evaluates, categorizes, recommends, or otherwise makes a decision or facilitates human decision making that impacts employees or applicants.”[47]  Under the proposed regulations, actions that are based on decisions made or facilitated by automated-decision systems may constitute unlawful discrimination if the action results in disparate impact, imposing liability on employers as well as third-party vendors that use, sell, or administer covered employment-screening tools.  At a remote public workshop on March 25, 2022, the Council did not set a timeframe for adopting the proposed regulations.

The Workplace Technology Accountability Act, AB 1651, proposed in April 2022, would restrict electronic monitoring of workers to situations where there is a “business necessity,” provide access to the data collected, and mandate specific risk management requirements:  algorithmic impact assessments and data protection impact assessments for automated decision tools and worker information systems to identify risks such as discrimination or bias, errors, and violations of legal rights.[48]  The bill was referred to the Committee on Labor and Employment but was pulled in November 2022 ahead of a scheduled vetting by the Assembly Privacy Committee.

E.  Intellectual Property

1.  Federal Circuit Rules Inventors Must Be Natural Human Beings

On August 11, 2022, the U.S. Court of Appeals for the Federal Circuit affirmed a lower court’s ruling in Thaler v. Vidal that the plain text of the Patent Act requires that inventors must be human beings.[49]  Attorneys for Dr. Stephen Thaler, the creator of the AI system “DABUS” (Device for the Autonomous Bootstrapping of Unified Sentience), argued that an AI system that has “created” several inventions should be granted a patent application, and that inventorship requirements should not be a bar to patentability.  The argument followed the U.S. Patent and Trademark Office’s rejection of two DABUS patent applications.  A Virginia federal court affirmed that ruling last year, finding AI cannot be an inventor under U.S. patent law.[50]  The DABUS project has also lodged several unsuccessful test cases in Australia, the EU, and the UK.

2.  Copyright Issues

Novel copyright issues continue to emerge in 2022 as technology companies release AI tools and features to the public.  With the deployment of large-scale AI systems such as Chat GPT-3 and DALL-E 2 in 2022, there has been increasing attention paid to potential copyright issues, including authorship of AI-generated works, whether the outputs of sophisticated machine learning systems can infringe copyrighted works, and the use of copyrighted materials as training data for machine learning.  On October 28, 2022, the U.S. Copyright Office (USCO) revoked an earlier registration for an artist’s partially AI-generated graphic novel, stating that “[c]opyright under U.S. law requires human authorship. The Office will not knowingly grant registration to a work that was claimed to have been created solely by machine with artificial intelligence.”[51]  Earlier this year, the USCO Review Board affirmed a decision of the USCO denying registration of artwork generated by an AI algorithm created by Dr. Stephen Thaler, mirroring his attempts to argue that his DABUS AI system is eligible to be granted a patent.[52]

II.  EU POLICY & REGULATORY DEVELOPMENTS

A.  AI Act Developments

Following the agreement on a common European AI strategy in 2018, the establishment of a high-level expert group in 2019, and various other publications, including a 2020 White Paper, on April 21, 2021, the EU Commission published its proposal for “the world’s first legal framework on AI”—the EU Artificial Intelligence Act (“AI Act”).  The AI Act classifies AI use by risk level (unacceptable, high, limited, and minimal) and describes documentation, auditing, and process requirements for each risk level.  High-risk systems—which will be listed in an Annex—are subject to certain requirements throughout their lifecycle, including conformity assessments, technical and auditing requirements, and monitoring requirements.  Businesses will be subject to the AI Act if an output of their AI system is used within the EU, regardless of where the business operator or system is based.

In September 2022, the Czech Presidency of the Council of the European Union published a new proposal[56] proposing relatively minor changes to the draft legislation that notably included narrowing the definition of AI to focus on an AI system’s degree of autonomy and adding a chapter on General Purpose AI (“GPAI”)—large, multipurpose data models—indicating that obligations for these systems will likely be imposed through an implementing act.

The Committee of the Permanent Representatives of the Governments of the Member States to the European Union approved the final version on November 18, 2022,[57] and the EU Council formally provided its updated consensus draft (the “general approach”) on December 6, 2022.[58]  The consensus proposal limits the definition of AI systems to “systems developed through machine learning approaches and logic- and knowledge-based approaches.”  On December 14, MEPs reached an agreement to delete the provision of the AI Act that would allow providers of high-risk AI to process sensitive data to detect biases in algorithms.[59]

The adoption of the general approach allows the Council to enter negotiations with the European Parliament (known as “trilogues”) once the latter adopts its own position with a view to reaching an agreement on the proposed regulation.  The European Parliament, which is still working through a slew of compromise amendments, will likely vote on the final text in the first quarter of 2023, possibly by the end of March.[60]  Following this vote, discussions between the Member States, the Parliament and the Commission are expected to commence in April, so further negotiations can be expected during 2023.[61]  Reports suggest EU lawmakers anticipate that the Act could be approved by the end of 2023, though it would not come into force until a later time.

B.  Draft AI Liability Directive and New Draft Product Liability Directive

On September 28, 2022, the European Commission (“EC”) published a set of proposals aiming to modernize the EU’s existing liability regime and adapt it to AI systems, give businesses legal certainty, and harmonize member states’ national liability rules for AI.  The EC had previewed the draft rules in its February 2020 Report on Safety and Liability, emphasizing the specific challenges posed by AI products’ complex, opaque, and autonomous characteristics.[62]  The draft EU AI Act, the AI Liability Directive (“ALD”),[63] and the updated Product Liability Directive (“PLD”)[64] are intended to be complementary[65] and, together, are set to significantly change liability risks for developers, manufacturers, and suppliers who place AI-related products on the EU market.[66]

The draft Product Liability Directive (“PLD”) establishes a framework for strict liability for defective products across the EU—including AI systems—meaning claimants need only show that harm resulted from the use of a defective product.  Notably, the mandatory safety requirements set out in the draft AI Act can be taken into account by a court for the purpose of determining whether a product is defective.

The AI Liability Directive (“ALD”), which would apply to fault-based liability regimes in the EU, would create a rebuttable “presumption of causality” against any AI system’s developer, provider, or user, and would make it easier for potential claimants to access information about specific “High-Risk” AI Systems—as defined by the draft EU AI Act.  Of particular significance to companies developing and deploying AI-related products is the new disclosure obligation related to “High-Risk” AI systems, which could potentially require companies to disclose technical documentation, testing data, and risk assessments—subject to safeguards to protect sensitive information, such as trade secrets.  Failure to produce such evidence in response to a court order would permit a court to invoke a presumption of breach of duty.

The PLD and ALD will be subject to review and approval by the European Council and Parliament before taking effect.  Once implemented, Member States will have two years to implement the requirements into local law.  We are monitoring developments closely and stand ready to assist clients with preparing for compliance with the emerging EU AI regulatory framework.

C.  Digital Services Act

In November 16, 2022, the new Digital Services Act (“DSA”), which requires major marketplace and social media platforms to provide insight into their algorithms to the government and to provide users with avenues to remove abusive content and disinformation, entered into force.[67] The DSA imposes different obligations on four categories of online intermediaries.  The most stringent requirements apply to platforms and search engines with at least 45 million monthly active users in the EU—whether they are established inside or outside the EU—and require them to conduct risk assessments and independent audits, adopt certain crisis response mechanisms and heightened transparency requirements, provide access, upon request, to data for monitoring and assessing compliance, and establish a dedicated DSA compliance function.  Accordingly, the DSA—which is directly applicable in all 27 EU member states—brings with it significant compliance obligations for large online businesses, as well as increased accountability to relevant authorities.  The bulk of the DSA provisions will apply from January 1, 2024, although a first wave of transparency obligations will apply from February 17, 2023, and “very large online platforms” with 45 million active monthly service recipients in the EU will need to comply with additional requirements—including annual risk assessments—four months after having been designed as such by the EU Commission.

D.  The EU Parliament Adopts Special Report on AI

On April 5, 2022, the European Parliament adopted a special report on AI, which sets out a list of demands to secure the EU’s position in AI, and points to research as one of the key means to achieving that goal.[68]  The report was developed by the Parliament’s special committee on AI and will support the ongoing negotiations on the pending AI Act.  The European Parliament’s aim is to support AI research in the EU by increasing public and private investment to €20 billion by 2030.  Policymakers believe that the EU can catch up to the U.S. and China in terms of AI investment, technology development, research, and attracting talent “with clear regulations and an investment push.”

E.  EDPS Opinion on Negotiating Directives for Council of Europe’s AI Convention

On October 13, 2022, the European Data Protection Supervisor (“EDPS”) published Opinion 20/2022 “Recommendation for a Council Decision authorising the opening of negotiations on behalf of the European Union for a Council of Europe convention on artificial intelligence, human rights, democracy and the rule of law.”[69]  The “AI Convention” would complement the EU’s proposed AI Act and the proposed AI Liability Directive.  Besides the 46 EU member states, the AI Convention would also be open to participation by non-Member States and may be the first legally binding international instrument to regulate AI.  In September 2022, the Council of Europe’s Committee on Artificial Intelligence (“CAI”) examined a first draft, with a focus on “developing common principles ensuring the continued seamless application of and respect for human rights, democracy and the rule of law where AI systems assist or replace human decision-making.”[70]  The AI Convention would cover both public and private providers, and users of AI systems.

___________________________

[1] See, e.g., Mainland China’s new regulation on algorithmic recommendation technologies (Internet Information Service Algorithmic Management (IISARM) regulations), which came into effect on March 1, 2022.  http://www.cac.gov.cn/2022-01/04/c_1642894606364259.htm

[2] Another landmark EU technology law, the Digital Services Act (DSA), entered into force on November 16, 2022. The DSA introduces a comprehensive regime of content moderation rules for a range of businesses operating in the EU, including all providers of hosting services and “online platforms.”  See II.A.3. below.

[3] McKinsey, The state of AI in 2022 (December 6, 2022), available at https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai-in-2022-and-a-half-decade-in-review (In 2018, “40 percent of respondents at organizations using AI reported more than 5 percent of their digital budgets went to AI,” and in 2022, that rose to 52%.).

[4] WEF Guidance

[5] See OCEANIS, The Global AI Standards Repository, available at https://ethicsstandards.org/repository/.

[6] For more details, please see President Trump Issues Executive Order “Maintaining American Leadership in Artificial Intelligence.”

[7] White House, Join the Effort to Create a Bill of Rights for an Automated Society (Nov. 10, 2021), available at https://www.whitehouse.gov/ostp/news-updates/2021/11/10/join-the-effort-to-create-a-bill-of-rights-for-an-automated-society/.

[8] White House, Office for Science and Technology, available at https://www.whitehouse.gov/ostp/ai-bill-of-rights/.

[9] “An ‘automated system’ is any system, software, or process that uses computation as whole or part of a system to determine outcomes, make or aid decisions, inform policy implementation, collect data or observations, or otherwise interact with individuals and/or communities.  Automated systems include, but are not limited to, systems derived from machine learning, statistics, or other data processing or artificial intelligence techniques, and exclude passive computing infrastructure.  ‘Passive computing infrastructure’ is any intermediary technology that does not influence or determine the outcome of decision, make or aid in decisions, inform policy implementation, or collect data or observations, including web hosting, domain registration, networking, caching, data storage, or cybersecurity.  Throughout this framework, automated systems that are considered in scope are only those that have the potential to meaningfully impact individuals’ or communities’ rights, opportunities, or access.”  See The White House, OSTP, Blueprint for an AI Bill of Rights, Definitions, https://www.whitehouse.gov/ostp/ai-bill-of-rights/definitions/.

[10] The Blueprint does include an appendix of examples of covered AI systems, but is not limited to such.

[11] The White House, OSTP, Blueprint for an AI Bill of Rights, From Principles to Practice, https://www.whitehouse.gov/ostp/ai-bill-of-rights/safe-and-effective-systems-3/.

[12] NIST Seeks Comments on AI Risk Management Framework Guidance, Workshop Date Set, https://www.nist.gov/news-events/news/2022/08/nist-seeks-comments-ai-risk-management-framework-guidance-workshop-date-set; NIST, AI Risk Management Framework: Second Draft, https://www.nist.gov/system/files/documents/2022/08/18/AI_RMF_2nd_draft.pdf.

[13] NIST Risk Management Framework, https://www.nist.gov/itl/ai-risk-management-framework.

[14] NIST, National Cybersecurity Center of Excellence, Mitigation of AI/ML Bias in Context, available at https://www.nccoe.nist.gov/projects/mitigating-aiml-bias-context.

[15] Federal Register, Trade Regulation Rule on Commercial Surveillance and Data Security, https://www.federalregister.gov/documents/2022/08/22/2022-17752/trade-regulation-rule-on-commercial-surveillance-and-data-security.

[16] Id.

[17] Public comments are available at https://www.federalregister.gov/documents/2022/08/22/2022-17752/trade-regulation-rule-on-commercial-surveillance-and-data-security.

[18] Magnuson-Moss Warranty Federal Trade Commission Improvement Act, 15 U.S.C. § 57a(a)(1)(B).

[19] The FTC may promulgate a trade regulation rule to define acts or practices as unfair or deceptive “only where it has reason to believe that the unfair or deceptive acts or practices which are the subject of the proposed rulemaking are prevalent.”  The FTC may make a determination that unfair or deceptive acts or practices are prevalent only if:  “(A) it has issued cease and desist orders regarding such acts or practices, or (B) any other information available to the Commission indicates a widespread pattern of unfair or deceptive acts or practices.”  That means that the agency must show (1) the prevalence of the practices, (2) how they are unfair or deceptive, and (3) the economic effect of the rule, including on small businesses and consumers.

[20] Fed. Trade Comm’n, FTC Report Warns About Using Artificial Intelligence to Combat Online Problems (June 16, 2022), available at https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-report-warns-about-using-artificial-intelligence-combat-online-problems.

[21] Id.

[22] Fed. Trade Comm’n, Dissenting Statement of Commissioner Noah Joshua Phillips Regarding the Combatting Online Harms Through Innovation Report to Congress (June 16, 2022), available at https://www.ftc.gov/system/files/ftc_gov/pdf/Commissioner%20Phillips%20Dissent%20to%20AI%20Report%20%28FINAL%206.16.22%20noon%29_0.pdf.

[23] Letter to Hon. Lina Khan, Chair FTC (June 22, 2022), available at https://www.politico.com/f/?id=00000181-8b25-d86b-afc1-8b2d11e00000.

[24] 117^th Cong. S. 4543 (2021-2022).

[25] Donald J. Trump, Executive Order Promoting the Use of Trustworthy Artificial Intelligence in the Federal Government, The White House (Dec. 3, 2020), available at https://trumpwhitehouse.archives.gov/presidential-actions/executive-order-promoting-use-trustworthy-artificial-intelligence-federal-government/.

[26] 117th Cong. H.R. 6580, Algorithmic Accountability Act of 2022 (February 3, 2022), available at https://www.wyden.senate.gov/imo/media/doc/Algorithmic%20Accountability%20Act%20of%202022%20Bill%20Text.pdf?_sm_au_=iHVS0qnnPMJrF3k7FcVTvKQkcK8MG.

[27] S. 4201, 117th Cong. (2021-2022); see also Press Release, Bennet Introduces Landmark Legislation to Establish Federal Commission to Oversee Digital Platforms (May 12, 2022), available at https://www.bennet.senate.gov/public/index.cfm/2022/5/bennet-introduces-landmark-legislation-to-establish-federal-commission-to-oversee-digital-platforms.

[28] American Data Privacy and Protection Act, H.R. 8152, 117th Cong. (2022).

[29] 2021 D.C. B558.

[30] Id., Sec. 3(2)-(3).

[31] S.B. 21-169.

[32] H.B. 1238.

[33] H.B. 3186.

[34] H.B. 7230.

[35] A.B. 5651.

[36] Cal. Ins. Comm’r, Bulletin 2022-5 (June 30, 2022), available at https://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/BULLETIN-2022-5-Allegations-of-Racial-Bias-and-Unfair-Discrimination-in-Marketing-Rating-Underwriting-and-Claims-Practices-by-the-Insurance-Industry.pdf.

[37] Id.

[38] Id.

[39] For more details, see Danielle Moss, Harris Mufson, and Emily Lamm, Medley Of State AI Laws Pose Employer Compliance Hurdles, Law360 (Mar. 30, 2022), available at https://www.gibsondunn.com/wp-content/uploads/2022/03/Moss-Mufson-Lamm-Medley-Of-State-AI-Laws-Pose-Employer-Compliance-Hurdles-Law360-Employment-Authority-03-30-2022.pdf.

[40] For more details, see Gibson Dunn’s Artificial Intelligence and Automated Systems Legal Update (4Q20) and Gibson Dunn’s Artificial Intelligence and Automated Systems Annual Legal Review (1Q22).

[41] Ill. Public Act 102-0047 (effective Jan. 1, 2022).

[42] NYC Dep’t Consumer & Worker Prot., Notice of Public Hearing and Opportunity to Comment on Proposed Rules, https://rules.cityofnewyork.us/wp-content/uploads/2022/09/DCWP-NOH-AEDTs-1.pdf.

[43] For more details, please see Gibson Dunn’s New York City Enacts Law Restricting Use of Artificial Intelligence in Employment Decisions.

[44] For more details regarding the proposed rules, please see our update, New York City Proposes Rules to Clarify Upcoming Artificial Intelligence Law for Employers.

[45] NYC.gov, Automated Employment Decision Tools (Updated), available at https://rules.cityofnewyork.us/rule/automated-employment-decision-tools-updated/.

[46] Bill A4909 (Sess. 2022-2023).

[47] California Fair Employment & Housing Council, Draft Modifications to Employment Regulations Regarding Automated-Decision Systems, available at https://calcivilrights.ca.gov/wp-content/uploads/sites/32/2022/03/AttachB-ModtoEmployRegAutomated-DecisionSystems.pdf.

[48] A.B. 1651.

[49] Thaler v. Vidal, 43 F.4th 1207 (Fed. Cir. 2022).

[50] Thaler v. Hirshfeld, 558 F. Supp. 3d 238 (E.D. Va. 2021).

[51] Riddhi Setty & Isaiah Poritz, ‘Wild West’ of Generative AI Poses Novel Copyright Questions, Bloomberg Law (Nov. 18, 2022), available at https://news.bloomberglaw.com/ip-law/wild-west-of-generative-ai-raises-novel-copyright-questions; see further Riddhi Setty, Artist Fights for Copyright for AI-Assisted Graphic Novel, Bloomberg Law (Dec. 6, 2022), available at https://news.bloomberglaw.com/ip-law/artist-contests-copyright-denial-for-ai-assisted-graphic-novel.

[52] U.S. Copyright Office, Copyright Review Board, Letter Re: Second Request for Reconsideration for Refusal to Register a Recent Entrance to Paradise (Feb 14, 2022), available here.

[56] EURActiv, AI Act: Czech EU presidency makes final tweaks ahead of ambassadors’ approval (Nov. 4, 2022), available at https://www.euractiv.com/section/digital/news/ai-act-czech-eu-presidency-makes-final-tweaks-ahead-of-ambassadors-approval/.

[57] Euractiv, Last-minute changes to EU Council’s AI Act text ahead of general approach (Nov. 14, 2022), available at https://www.euractiv.com/section/digital/news/last-minute-changes-to-eu-councils-ai-act-text-ahead-of-general-approach/.

[58] EC, Artificial Intelligence Act: Council calls for promoting safe AI that respects fundamental rights (Dec. 6, 2022), available at https://www.consilium.europa.eu/en/press/press-releases/2022/12/06/artificial-intelligence-act-council-calls-for-promoting-safe-ai-that-respects-fundamental-rights/.

[59] EURActiv, Tech Brief: US draft data adequacy decision, Sweden’s (low) digital priorities (Dec. 16, 2022), available at https://www.euractiv.com/section/digital/news/tech-brief-us-draft-data-adequacy-decision-swedens-low-digital-priorities/

[60] Luca Bertuzzi, AI Act: MEPs want fundamental rights assessments, obligations for high-risk users, EURActiv (Jan. 10, 2023), available at https://www.euractiv.com/section/artificial-intelligence/news/ai-act-meps-want-fundamental-rights-assessments-obligations-for-high-risk-users/?utm_source=substack&utm_medium=email; Mike Swift, AI oversight milestones ahead for both EU and US in early 2023, officials say, Mlex (Jan. 6, 2023).

[61] Speaking at a CES Industry gathering on January 5, 2023, a policy advisor at the European Parliament said that the AI Act would include prohibitions on the use of AI for social scoring as well as “real-time, remote biometric identification” of people in public places, except for limited law enforcement purposes.

[62] EC, Report on the safety and liability implications of Artificial Intelligence, the Internet of Things and robotics, COM(2020) 64 (Feb. 19, 2020), available at https://ec.europa.eu/info/files/commission-report-safety-and-liability-implications-ai-internet-things-and-robotics_en; see also European Commission, Questions & Answers: AI Liability Directive, available at https://ec.europa.eu/commission/presscorner/detail/en/QANDA_22_5793 (“Current national liability rules are not equipped to handle claims for damage caused by AI-enabled products and services. In fault-based liability claims, the victim has to identify whom to sue, and explain in detail the fault, the damage, and the causal link between the two. This is not always easy to do, particularly when AI is involved. Systems can oftentimes be complex, opaque and autonomous, making it excessively difficult, if not impossible, for the victim to meet this burden of proof.”)

[63] European Commission, Proposal for a Directive on adapting non contractual civil liability rules to artificial intelligence (Sept. 28, 2022), available at https://ec.europa.eu/info/files/proposal-directive-adapting-non-contractual-civil-liability-rules-artificial-intelligence_en.

[64] European Commission, Proposal for a directive of the European Parliament and of the Council on liability for defective products (Sept. 28, 2022), available at https://single-market-economy.ec.europa.eu/document/3193da9a-cecb-44ad-9a9c-7b6b23220bcd_en.

[65] The AI Liability Directive uses the same definitions as the AI Act, keeps the distinction between high-risk/non-high risk AI, recognizes the documentation and transparency requirements of the AI Act by making them operational for liability through the right to disclosure of information, and incentivizes providers/users of AI-systems to comply with their obligations under the AI Act.

[66] European Commission, Questions & Answers: AI Liability Directive, available at https://ec.europa.eu/commission/presscorner/detail/en/qanda_22_5793 (“Together with the revised Product Liability Directive, the new rules will promote trust in AI by ensuring that victims are effectively compensated if damage occurs, despite the preventive requirements of the AI Act and other safety rules.”).

[67] Regulation (EU) 2022/2065.

[68] European Parliament, Report—A9-0088/2022, REPORT on artificial intelligence in a digital age (Apr. 5, 2022), available at https://www.europarl.europa.eu/doceo/document/A-9-2022-0088_EN.html; see further Goda Naujokaityte, Parliament gives EU a push to move faster on artificial intelligence, Science Business (May 5, 2022), available at https://sciencebusiness.net/news/parliament-gives-eu-push-move-faster-artificial-intelligence.

[69] EDPS, Opinion 20/2022 (Oct. 13, 2022), available at https://edps.europa.eu/system/files/2022-10/22-10-13_edps-opinion-ai-human-rights-democracy-rule-of-law_en.pdf.

[70] Council of Europe, 2nd plenary meeting of the Committee on Artificial Intelligence (CAI), available at https://www.coe.int/en/web/artificial-intelligence/-/2nd-plenary-meeting-of-the-committee-on-artificial-intelligence.

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The following Gibson Dunn lawyers prepared this client update: H. Mark Lyon, Frances Waldmann, Samantha Abrams-Widdicombe, Tony Bedel, Iman Charania, Kevin Kim*, Evan Kratzer, Brendan Krimsky, Emily Lamm, and Prachi Mistry.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Artificial Intelligence and Automated Systems Group, or the following authors:

H. Mark Lyon – Palo Alto (+1 650-849-5307, [email protected])
Frances A. Waldmann – Los Angeles (+1 213-229-7914,[email protected])

Please also feel free to contact any of the following practice group leaders and members:

Artificial Intelligence and Automated Systems Group:
J. Alan Bannister – New York (+1 212-351-2310, [email protected])
Patrick Doris – London (+44 (0)20 7071 4276, [email protected])
Cassandra L. Gaedt-Sheckter – Co-Chair, Palo Alto (+1 650-849-5203, [email protected])
Kai Gesing – Munich (+49 89 189 33 180, [email protected])
Joel Harrison – London (+44(0) 20 7071 4289, [email protected])
Ari Lanin – Los Angeles (+1 310-552-8581, [email protected])
Carrie M. LeRoy – Palo Alto (+1 650-849-5337, [email protected])
H. Mark Lyon – Palo Alto (+1 650-849-5307, [email protected])
Vivek Mohan – Co-Chair, Palo Alto (+1 650-849-5345, [email protected])
Alexander H. Southwell – New York (+1 212-351-3981, [email protected])
Christopher T. Timura – Washington, D.C. (+1 202-887-3690, [email protected])
Eric D. Vandevelde – Los Angeles (+1 213-229-7186, [email protected])
Michael Walther – Munich (+49 89 189 33 180, [email protected])

*Kevin Kim is a trainee solicitor working in the firm’s London office who is not yet admitted to practice law.

© 2023 Gibson, Dunn & Crutcher LLP

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Please note, prior results do not guarantee a similar outcome.

On January 23, 2023, the Federal Trade Commission announced its annual update of thresholds for pre-merger notifications of certain M&A transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”).  Pursuant to the statute, the HSR Act’s jurisdictional thresholds are updated annually to account for changes in the gross national product.  The new thresholds will take effect 30 days after publication in the Federal Register and apply to transactions that close on or after that date.

The size of transaction threshold for reporting proposed mergers and acquisitions under Section 7A of the Clayton Act will increase by $10 million, from $101 million in 2022 to $111.4 million for 2023.

Original Threshold	2022 Threshold	2023 Threshold
$10 million	$20.2 million	$22.3 million
$50 million	$101 million	$111.4 million
$100 million	$202 million	$222.7 million
$110 million	$222.2 million	$245 million
$200 million	$403.9 million	$445.5 million
$500 million	$1.0098 billion	$1.1137 billion
$1 billion	$2.0196 billion	$2.2274 billion

The HSR filing fees have been revised pursuant to the 2023 Consolidated Appropriations Act.  There are three new tiers for 2023, with the filing fee decreasing for certain transactions and the maximum increasing dramatically for transactions valued at or above $5 billion.  The new filing fees, which will also take effect 30 days after publication in the Federal Register, will be:

Fee	Size of Transaction
$30,000	Valued at less than $161.5 million
$100,000	Valued at $161.5 million or more but less than $500 million
$250,000	Valued at $500 million or more but less than $1 billion
$400,000	Valued at $1 billion or more but less than $2 billion
$800,000	Valued at $2 billion or more but less than $5 billion
$2,250,000	$5 billion or more

The 2023 thresholds triggering prohibitions on certain interlocking directorates on corporate boards of directors are $45,257,000 for Section 8(a)(l) (size of corporation) and $4,525,700 for Section 8(a)(2)(A) (competitive sales).  The Section 8 thresholds took effect on January 23, 2023.[1]

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[1] The Department of Justice’s Antitrust Division has promised to increase enforcement of suspected director interlocks, as discussed here: https://www.gibsondunn.com/doj-antitrust-division-head-promises-litigation-to-break-up-director-interlocks/.

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Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the new HSR size of transaction thresholds, or HSR and antitrust/competition regulations and rulemaking more generally. Please feel free to contact the Gibson Dunn attorney with whom you usually work in the firm’s Antitrust and Competition Practice Group, or any of the partners or counsel listed below:

Rachel S. Brass – Co-Chair, Antitrust & Competition Group, San Francisco
(+1 415-393-8293, [email protected])

Stephen Weissman – Co-Chair, Antitrust & Competition Group, Washington, D.C.
(+1 202-955-8678, [email protected])

Andrew Cline – Washington, D.C. (+1 202-887-3698, [email protected])

Chris Wilson – Washington, D.C. (+1 202-955-8520, [email protected])

© 2023 Gibson, Dunn & Crutcher LLP

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Please note, prior results do not guarantee a similar outcome.

Washington, D.C. associate Jeremy Christiansen is the author of “Trial Lawyers Rejoice: Justices May Clarify Issue Preservation” [PDF] published by Law360 on January 24, 2023.

The Fifth Circuit recently has been at the forefront of dramatic changes to administrative law. In the last year alone, the court has issued landmark rulings holding that SEC administrative proceedings require a jury, that the funding structure of the CFPB is unconstitutional, and that a federal law regulating horseracing violates the private nondelegation doctrine. And the court issued other significant decisions affecting the business community in the areas of arbitration, bankruptcy, class action, and constitutional law. Three Gibson Dunn partners—a former Fifth Circuit judge; a co-chair of the firm’s administrative and regulatory practice; and a Texas appellate partner who clerked on the Fifth Circuit—discuss these developments, their impact on industry, and what this means for clients’ future litigation strategy.

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PANELISTS:

Gregg Costa is a partner in the Houston office of Gibson, Dunn & Crutcher and co-chair of the firm’s Global Trial Practice Group. Mr. Costa previously served on the U.S. Court of Appeals for the Fifth Circuit from 2014 to 2022, following his nomination by President Obama and confirmation by the U.S. Senate with a vote of 97-0. His broad experience—having handled complex civil and criminal matters, at trial and on appeal, as advocate and judge—allows him to offer invaluable skills and strategic insights.

Helgi Walker is a partner in Gibson, Dunn & Crutcher’s Washington, D.C. office. She is Co-Chair of the firm’s global Litigation Practice Group and a member of the firm’s Executive Committee. She is also Co-Chair of the Administrative Law and Regulatory Practice Group and a member of the Appellate and Constitutional Law Group. Ms. Walker’s work focuses on appellate, regulatory and complex litigation matters. She has extensive experience in appellate challenges to agency rulemakings and in other high-stakes commercial litigation.

Brad Hubbard is a partner in the Dallas office of Gibson, Dunn & Crutcher. He is a member of the firm’s Appellate and Constitutional Law Practice Group. He has represented clients in their most complex, high-stakes, time-sensitive matters before the U.S. Supreme Court, the Texas Supreme Court, and state and federal courts of appeals throughout the country. Mr. Hubbard has also helped clients preserve significant wins in the U.S. Supreme Court, the Texas Supreme Court, and the Fifth, Sixth, and Seventh Circuits.

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MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1.0 credit hour, of which 1.0 credit hour may be applied toward the areas of professional practice requirement. This course is approved for transitional/non-transitional credit.

Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact [email protected] to request the MCLE form.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 1.0 hour.

California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

On December 23, 2022, Congress passed the Pregnant Workers Fairness Act (the “PWFA”) as an amendment to the 2023 Consolidated Appropriations Act, which President Biden signed into law on December 29, 2022.  The PWFA is set to go into effect on June 27, 2023.

The PWFA expands existing federal law with respect to the accommodation of pregnant employees in at least three significant ways.

First, prior to the passage of the PWFA, federal law only required employers to accommodate pregnant employees’ medical restrictions to the extent those restrictions rendered the employees “disabled” within the meaning of the Americans with Disabilities Act (the “ADA”).  The PWFA, however, requires employers to make reasonable accommodations for pregnancy-related medical conditions irrespective of whether those conditions rise to the level of a disability, as long as the accommodations do not impose an undue hardship on the employer.[1]  Second, employers may only require employees to use leave to accommodate pregnancy-related restrictions if no other reasonable accommodations are available.  (In other words, leave may only be used as a “last resort” unless, of course, the employee prefers leave as an accommodation).  Third, pregnant employees must be provided with reasonable accommodations even if they cannot perform all essential functions of the job, as long as their inability to perform those essential functions is temporary.

Below, we provide an overview of the PWFA’s requirements; explain the differences between the PWFA and existing federal and state law with respect to the accommodation of pregnancy-related medical restrictions; and summarize key takeaways for employers.

History and Overview of the PWFA

The PWFA has a lengthy history.  Although the PWFA was introduced in May 2012,[2] it only passed the House on May 14, 2021 and stalled in the Senate until its December 2022 passage as an amendment to the Consolidated Appropriations Act.  Over time, the PWFA garnered bipartisan support, and many organizations have endorsed it, including the U.S. Chamber of Commerce and several Fortune 500 companies.

The PWFA applies to all employers with 15 or more employees and its protections extend to “qualified employees,” which include both employees and applicants.[3]  The PWFA requires employers to make reasonable accommodations for pregnancy-related medical conditions as long as the accommodations do not impose an undue hardship on the employer.[4]  (The definitions of “reasonable accommodation” and “undue hardship” are the same under the PWFA as under the ADA.)[5]  The Act specifically prohibits employers from requiring pregnant employees “to take paid or unpaid leave if another reasonable accommodation can be provided.”[6]  In addition, the Act prohibits employers from denying employment opportunities to qualified employees because of their need for an accommodation and from taking adverse employment actions against employees based on their request for or use of those accommodations.[7]  Under the PWFA, qualified employees are either (a) those who can perform the essential functions of the role with or without reasonable accommodation, or (b) those whose inability to perform an essential function of the role is temporary and can be reasonably accommodated.[8]

As for remedies, the PWFA borrows the “powers, remedies, and procedures” from Title VII for private employers.[9]  Accordingly, employees may bring a private right of action against their employer after exhausting all administrative remedies, and the EEOC and the Attorney General have the same investigatory and enforcement powers under the PWFA that they have under Title VII.  The PWFA provides a defense to damages for an employer facing a failure-to-accommodate claim where the employer has provided some reasonable accommodation: namely, the employer can avoid the imposition of damages if it demonstrates that it engaged in “good faith efforts” to identify and make a reasonable accommodation that would provide “an equally effective opportunity” to that employee and not cause an undue hardship for the employer.[10]

The Act explains that the EEOC will issue regulations, including the provision of “examples of reasonable accommodations addressing known limitations related to pregnancy, childbirth, or related medical conditions,” by December 23, 2023.[11]

Interaction Between the PWFA, the ADA, and the PDA

Before the PWFA, there was no separate duty under federal law to accommodate a pregnant employee’s medical restrictions.  However, private employers were obligated to provide accommodations to pregnant employees in certain contexts as a result of two separate federal statutes: the Pregnancy Discrimination Act and the Americans with Disabilities Act.

The PDA

The Pregnancy Discrimination Act of 1978 (the “PDA”), which amended Title VII, prohibits discrimination on the basis of sex and provides that “[t]he terms ‘because of sex’ or ‘on the basis of sex’ include, but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions.”[12]  Under the PDA, “women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes . . . as other persons not so affected but similar in their ability to work.”[13]

In Young v. UPS, the Supreme Court explained that the PDA does not grant pregnant employees a “‘most-favored-nation’ status.”[14]  Thus, the mere fact that an employer “provides one or two workers with an accommodation” does not mean that “it must provide similar accommodations to all pregnant workers (with comparable physical limitations), irrespective of the nature of their jobs, the employer’s need to keep them working, their ages, or any other criteria.”[15]  Instead, the traditional McDonnell Douglas burden-shifting framework for Title VII claims applies to claims of discrimination under the PDA.  A plaintiff can state a prima facie case of discrimination under the PDA by showing that she was denied an accommodation for her pregnancy, and that the employer accommodated others who were “similar in their ability or inability to work.”  If and when the plaintiff makes that showing, the burden then shifts to the employer to justify its refusal to accommodate by relying on legitimate, nondiscriminatory reasons.[16]  If such reasons are offered, the plaintiff can seek to show that the proffered reasons were pretextual.[17]  Under the PDA, then, there is no standalone duty to accommodate a pregnant employee; instead, employers only must accommodate pregnant employees insofar as they accommodate other employees who are “similar in their ability or inability to work.”

The ADA

The Americans with Disabilities Act of 1990 (the “ADA”) prohibits discrimination on the basis of disabilities and requires covered employers to provide reasonable accommodations to qualified employees with disabilities.[18]  To count as a “qualified individual” entitled to the ADA’s protections, a plaintiff must be able to “perform the essential functions of the employment position” “with, or without reasonable accommodation.”[19]

The ADA specifies that a “reasonable accommodation” may include “making existing facilities used by employees readily accessible to and usable by individuals with disabilities” as well as “job restructuring, part-time or modified work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices, appropriate adjustment or modifications of examinations, training materials or policies, the provision of qualified readers or interpreters, and other similar accommodations for individuals with disabilities.”[20] Some courts have held that the provision of leave also can be a reasonable accommodation under the ADA.[21]  Significantly, the ADA does not require employers to provide employees with the accommodation of their choice,[22] nor does it require employers to offer employees accommodations in any preferred order (e.g., to offer a job modification before offering a job reassignment).

Under the ADA, an employer has an affirmative duty to accommodate a woman’s pregnancy-related medical restrictions only to the extent that they qualify as a disability.[23]    “Pregnancy-related conditions can qualify” as a disability if they cause “a physical or mental impairment that substantially limits one or more major life activities of [the] individual.”[24]  But not all pregnancy-related conditions will cause “a substantial limitation of a major life activity.”[25]  The ADA therefore does not require that reasonable accommodations be provided for all pregnancy-related medical conditions; rather, those conditions must be assessed on a case-by-case basis to determine whether they qualify as a disability under the ADA.

The PWFA thus differs from both the PDA and the ADA in several important respects:

(1) Under the PWFA, a woman’s pregnancy-related medical restrictions no longer must rise to the level of a disability in order to warrant accommodation (as required by the ADA), nor is the duty to accommodate a pregnant employee dependent on whether the employer accommodates other employees who are “similar in their ability or inability to work” (as required by the PDA).

(2) Under the PWFA, employers are prohibited from requiring qualified employees “to take paid or unpaid leave if another reasonable accommodation can be provided.”[26]  In effect, this means that employers may only require an employee to take leave as a last resort if there are no other reasonable accommodations that can be provided absent undue hardship.  (Employers may, of course, offer leave as an accommodation to the extent the employee herself prefers leave).

(3)  Under the PWFA, employers must accommodate pregnant employees even if they cannot perform the essential functions of their positions so long as their inability to do so is for a “temporary period” and that essential job function can performed in “the near future,” if the inability to perform the essential function can be reasonably accommodated.[27]  The PWFA thus goes beyond the ADA, which only requires accommodation to the extent the individual “can perform the essential functions of the employment position that [she] holds or desires.”[28]

State Laws Regarding The Accommodation Of Pregnancy

Prior to the PWFA’s passage, states had adopted varying approaches to the accommodation of medical restrictions resulting from pregnancy.

Five states—Alabama, Georgia, Indiana, Mississippi, and North Carolina—have no laws prohibiting discrimination on the basis of pregnancy or requiring private employers to provide accommodations for pregnant employees.  In these states, prior to the passage of the PWFA, employers’ only obligations with respect to the accommodation of pregnant employees were those imposed by the ADA and the PDA.

Six states—Alaska, Arkansas, Florida, Idaho, Wisconsin, and Wyoming—prohibit discrimination on the basis of pregnancy, but do not have specific accommodation requirements for pregnancy-related medical conditions that are applicable to private employers.[29]

Four states—Arizona, Michigan, Ohio, and Texas—require that pregnant employees be treated the same for employment-related purposes as non-pregnant persons who are similar in their ability or inability to work, but do not otherwise require the provision of reasonable accommodations for pregnancy-related medical conditions.  In other words, these states have laws that closely mirror the text of the PDA insofar as they require employers to provide reasonable accommodations for pregnancy-related medical restrictions only to the extent that they provide such accommodations for similar, non-pregnancy-related medical restrictions.[30]

The remaining thirty-five states and the District of Columbia impose affirmative obligations on private employers to make reasonable accommodations for pregnancy-related medical restrictions.  But these jurisdictions take varying approaches with respect to what, precisely, is required.  For example, certain states require reasonable accommodations only if the employee is able to perform the essential functions of the original position with those accommodations.[31]  By contrast, in other states, accommodations may be required even for employees who cannot perform the essential functions of a job.[32]  The PWFA now will set a minimum federal “floor” as to what is required when a pregnant employee requests an accommodation.  However, employers should still consider state accommodation laws to the extent they impose requirements that are more generous than those under the PWFA.

Takeaways for Employers

As the PWFA’s June 23, 2023 effective date approaches, employers should consider the following:

• Review and update accommodation policies to ensure compliance with the PWFA;
• Train Human Resources and management personnel involved in evaluating accommodation requests to ensure they understand the requirements of the PWFA;
• Identify the “essential functions” of positions to determine if they may be restructured or amended temporarily for a pregnant employee in need of a reasonable accommodation, and consider documenting essential functions in job descriptions;
• Consider what types of temporary light duty assignments may be offered to pregnant employees in need of a reasonable accommodation; and
• Consider asking pregnant employees about their accommodation preferences and do not assume that a pregnant employee wants leave as an accommodation (even if paid).

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[1] Pregnant Workers Fairness Act, H.R. 2617-1626, 117th Cong. § 103(1) (signed into law December 29, 2022).

[2] H.R. 5647, 112th Cong. (introduced May 8, 2012).

[3] H.R. 2617-1626, 117th Cong. § 102(2)(B), 102(3).

[4] Id. § 103(1).

[5] Id. § 102 (7).

[6] Id. § 103(4).

[7] Id. § 103(3), (5).

[8] Id. § 102(6).

[9] Id. § 104(a)(1).

[10] Id. § 104(g).

[11] Id. § 105(a).

[12] 42 U.S.C. § 2000e(k).

[13] Id.

[14] 575 U.S. 206, 221 (2015).

[15] Id.

[16] See id.

[17] See id. at 228.

[18] 42 U.S.C. § 12112.

[19] Id. § 12111(8).

[20] 42 U.S.C. § 12112(9).

[21] See, e.g., Wilson v. Dollar General Corp., 717 F.3d 337, 344–45 (4th Cir. 2013) (“For purposes of the ADA, ‘reasonable accommodations’ may comprise [of] ‘permitting the use of accrued paid leave or providing additional unpaid leave for necessary treatment.’” (quoting 29 C.F.R. § 1630.2(o))).

[22] See generally Noll v. Int’l Bus. Machines Corp., 787 F.3d 89, 95 (2d Cir. 2015),

[23] See, e.g., Richards v. City of Topeka, 173 F.3d 1247, 1250 (10th Cir. 1999) (explaining that the plaintiff’s pregnancy, which “did not impair or substantially limit a major life activity [or] impair her ability to work,” did not qualify as a disability under the ADA).

[24] Spees v. James Marine, Inc., 617 F.3d 380, 396–97 (6th Cir. 2010).

[25] Serednyj v. Beverly Healthcare, LLC, 656 F.3d 540, 554 (7th Cir. 2011).

[26] H.R. 2617-1626, 117th Cong. § 103(4).

[27] Id. § 102(6).

[28] 42 U.S.C. § 12111(8).

[29] Alaska Stat. § 18.80.220(a)(1) (unlawful for an employer to “discriminate against a person . . . in a term, condition, or privilege of employment because of the person’s . . . pregnancy”); Ark. Code §§ 16-123-102(1), 107 (prohibiting discrimination “because of . . . gender” and defining “[b]ecause of gender” to include “on account of pregnancy, childbirth, or related medical conditions”); Fla. Stat. § 760.10(1)(a) (unlawful to “discriminate against any individual with respect to compensation, terms, conditions, or privileges of employment, because of . . . pregnancy”); Stout v. Key Training Corp., 144 Idaho 195, 198 (2007) (prohibition against gender discrimination includes discrimination on the basis of pregnancy, interpreting Idaho Stat. § 67-5009); Wis. Stat. § 111.36 (prohibiting discrimination “against any woman on the basis of pregnancy”); Wyo. Stat. § 27-9-105 (prohibiting discrimination “in matters of compensation or the terms, conditions or privileges of employment against . . . any person otherwise qualified, because of . . . pregnancy”).

[30] Ariz. Rev. Stat. § 41-1463(G) (“Women who are affected by pregnancy or childbirth or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work, and subsection J, paragraph 3 of this section may not be interpreted to allow otherwise.”); Mich. Comp. L. § 37.2202(1)(d) (prohibiting employer from “[t]reat[ing] an individual affected by pregnancy, childbirth, or a related medical condition differently for any employment-related purpose from another individual who is not so affected but similar in ability or inability to work, without regard to the source of any condition affecting the other individual’s ability or inability to work”); Ohio Rev. Stat. § 4112.01(B) (“Women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work”); Tex. Lab. Code § 21.106(b) (“A woman affected by pregnancy, childbirth, or a related medical condition shall be treated for all purposes related to employment, including receipt of a benefit under a fringe benefit program, in the same manner as another individual not affected but similar in the individual’s ability or inability to work.”).

[31] N.M. Stat. § 28-1-2(R) (“‘[R]easonable accommodation’ means modification or adaptation of the work environment, work schedule, work rules or job responsibilities, and reached through good faith efforts to explore less restrictive or less expensive alternatives to enable an employee to perform the essential functions of the job.” (emphasis added)); N.D. Century Code § 14-02.4-03.2 (illegal to fail to provide “reasonable accommodations for an otherwise qualified individual … because that individual is pregnant”); id. § 14-02.4-02(12) (“‘Otherwise qualified person’ means a person who is capable of performing the essential functions of the particular employment in question.” (emphasis added)).

[32] For example, New Jersey law refers to the ability to perform essential job requirements only as a “factor[] to be considered” in analyzing whether the provision of a reasonable accommodation would pose an undue hardship.  See N.J. Rev. Stat. § 10:5-12(s) (“[I]n determining whether an accommodation would impose undue hardship on the operation of an employer’s business, the factors to be considered include: . . . the extent to which the accommodation would involve waiver of an essential requirement of a job as opposed to a tangential or non-business necessity requirement.”).

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The following Gibson Dunn attorneys assisted in preparing this client update: Jason C. Schwartz, Katherine V.A. Smith, Molly T. Senger, David Schnitzer, Anna Casey, and Emily Lamm.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. To learn more about these issues, please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Labor and Employment practice group, or Jason Schwartz and Katherine Smith.

Jason C. Schwartz – Co-Chair, Labor & Employment Group, Washington, D.C.
(+1 202-955-8242, [email protected])

Katherine V.A. Smith – Co-Chair, Labor & Employment Group, Los Angeles
(+1 213-229-7107, [email protected])

© 2023 Gibson, Dunn & Crutcher LLP

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Please note, prior results do not guarantee a similar outcome.

SEC Update

Recently adopted and proposed rules and comment letter trends.

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PANELISTS:

Mike Titera is a partner in the Orange County office of Gibson, Dunn & Crutcher and a member of the Firm’s Securities Regulation and Corporate Governance Practice Group. His practice focuses on advising public companies regarding securities disclosure and compliance matters, financial reporting, and corporate governance. Mr. Titera often advises clients on accounting and auditing matters and the use of non-GAAP financial measures. He also has represented clients in investigations conducted by the Securities and Exchange Commission and the Financial Industry Regulatory Authority. Mr. Titera’s clients range from large-cap companies with global operations to small-cap companies in the pre-revenue phase. His clients operate in a range of sectors, including the retail, technology, pharmaceutical, hospitality, and financial services sectors.

Stephen W. Fackler is a partner in the Firm’s Palo Alto and New York offices and Co-Chair of Gibson Dunn’s Executive Compensation and Employee Benefits Practice Group. Mr. Fackler has extensive experience nationwide advising public and private companies, private equity funds and boards of directors on compensation and benefits matters. He also regularly advises senior executives on their employment and severance arrangements, and directors in connection with compensation and indemnification arrangements. Mr. Fackler serves as Chair of the Certification Council for the Certified Equity Professional Institute, the leading certification program in the United States for stock plan professionals. He also serves as outside counsel for the Global Equity Organization, the leading international trade association for stock plan professionals.

Daniela L. Stolman is a partner in Gibson Dunn’s Century City office and a member of the firm’s Private Equity, Mergers and Acquisitions, Capital Markets and Securities Regulation and Corporate Governance practice groups. She advises companies and private equity firms across a wide range of industries, focusing on public and private merger transactions, stock and asset sales, and public and private capital-raising transactions. Ms. Stolman also advises public companies with respect to securities regulation and corporate governance matters, including periodic reporting and disclosure matters, Section 16, Rule 144, and insider trading. Ms. Stolman has been named as a “Rising Star” by Southern California Super Lawyers since 2014. The Deal also named her as a “Rising Star,” which recognizes new M&A partners who are ‘deemed by The Deal to be one of the most promising of 2019.’ She was named a 2019 “Rising Star” by Law360 for private equity. The list recognizes “attorneys under 40 whose legal accomplishments transcend their age.”

Victor Twu is an associate in the Orange County office of Gibson, Dunn & Crutcher, where he currently practices in the firm’s Corporate Department. His practice is focused on securities regulation and corporate governance (including matters relating to ESG and sustainability, investor engagement, shareholder activism) and other general corporate matters. Mr. Twu has assisted clients of all sizes, ranging from pre-IPO companies to large-cap companies with global operations. His clients operate in a variety of sectors, including retail, technology, and life sciences. Mr. Twu earned his J.D. from the University of California, Berkeley, School of Law in 2016, where he served as a member of the Asian American Law Journal and the Berkeley Journal of Entertainment & Sports Law.

Florentino Salazar is an associate in the Los Angeles office of Gibson, Dunn & Crutcher. He is a member of the firm’s Corporate Department and a member of the firm’s Executive Compensation and Employee Benefits Practice Group. His practice focuses on all aspects of executive compensation and employee benefits. Mr. Salazar’s practice encompasses tax, ERISA, accounting, corporate, and securities law aspects of equity and other incentive compensation plans and executive employment and severance arrangements. Prior to joining Gibson, Dunn & Crutcher, Mr. Salazar was a corporate associate in the Executive Compensation Group at Davis Polk & Wardwell in New York. Mr. Salazar received his law degree from Columbia Law School in 2013 where he was a Harlan Fiske Stone Scholar and served as Executive Editor of the Columbia Human Rights Law Review. He earned a Master of Arts in Special Education from Loyola Marymount University in 2010 and a Bachelor of Arts from Yale University in 2008.

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Attorney-Client Privilege for in House Counsel: Ethical and Practical Considerations

Attorney-Client Privilege for in House Counsel: Ethical and Practical Considerations will address the intersection of attorney ethics and the attorney-client privilege and work product doctrines, with particular focus on how they apply to the day-to-day work of in-house counsel, including advising internal business partners, conducting internal investigations, and working with auditors and outside consultants.

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PANELISTS:

Diana M. Feinstein is a partner in the Los Angeles office of Gibson, Dunn & Crutcher. She is a member of the firm’s Securities Litigation and White Collar Defense and Investigations Practice Groups. Ms. Feinstein’s practice focuses on complex litigation, including securities litigation and high-value commercial litigation. She also focuses on white collar defense and investigations. She has handled matters across a variety of industries, including financial services, technology, entertainment, insurance, healthcare, transportation, real estate, manufacturing, and consumer products. Ms. Feinstein has represented clients in state and federal courts and before arbitration panels in a variety of matters across the United States in cases involving breach of contract, shareholder disputes, breach of fiduciary duty claims, fraud claims, securities law violations, employment disputes and other matters. She is highly experienced in business cases involving large teams of lawyers, often litigating in multiple fora, and frequently with the added complication of government investigations or enforcement actions.

Joseph R. Rose is a partner elect in the San Francisco office of Gibson, Dunn & Crutcher. He is a member of Gibson Dunn’s Litigation, Labor and Employment, Class Actions, Antitrust and Competition, and Law Firm Defense Practice Groups. Mr. Rose’s practice focuses on complex commercial litigation, high-stakes employment disputes, class actions, antitrust matters, and law firm defense. He has experience at all stages of litigation, including obtaining key victories at trial and winning pivotal motions to dismiss and to defeat class certification. Mr. Rose also regularly guides clients through internal investigations, and has achieved favorable resolution of state and federal government and regulatory inquiries on behalf of technology companies, financial institutions, healthcare organizations, and manufacturers.

Casey J. McCracken is a partner elect in the Orange County office of Gibson, Dunn & Crutcher LLP and a member of the Litigation and Intellectual Property practice groups. His practice focuses on complex commercial litigation, with a focus on technology litigation, including patent litigation, software copyright, contract disputes, and licensing. Casey has successfully represented clients in numerous high-stakes intellectual property cases and several trials, including “bet the company” cases and cases alleging damages over $1 billion. His work spans a variety of technologies, including cellular network technology, software, digital devices, smartphones, medical devices, and mechanical apparatuses. Casey also has substantial experience litigating business contract and tort claims that often accompany patent and copyright infringement suits, including breach of contract, false advertising, unfair competition, and interference. Additionally, he has also represented technology companies and their directors in class actions, including, data privacy, employment discrimination and breach of fiduciary duty cases.

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Navigating Through Changing Business / Economic Cycles

Members of Gibson Dunn’s Business Restructuring and Reorganization Group will address legal and ethical issues that are triggered when companies are in financial distress.  This includes an in-depth discussion of specific issues with respect to fiduciary duties that directors and shareholders should consider when a company is facing financial trouble or insolvency.  In addition, the presentation will analyze how contractual relationships with companies in distress may be impacted by actual or threatened bankruptcy proceedings, and how companies can best protect themselves in the event a key customer or other relationship party files for chapter 11.

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PANELISTS:

Robert A. Klyman is a partner in the Los Angeles office of Gibson, Dunn & Crutcher and Co-Chair of Gibson Dunn’s Business Restructuring and Reorganization Practice Group. In his international practice, Mr. Klyman represents companies, lenders, ad hoc groups of secured and unsecured creditors, acquirers and boards of directors in all phases of restructurings and workouts. His experience includes representing lenders and bondholders in complex workouts; advising debtors in connection with traditional, prepackaged and ‘pre-negotiated’ bankruptcies; counseling strategic and financial players who acquire debt or provide financing as a path to take control of companies in bankruptcy; structuring and implementing numerous asset sales through Section 363 of the Bankruptcy Code; and litigating complex bankruptcy and commercial matters arising in chapter 11 cases, both at trial and on appeal.

Michael Neumeister is a partner in the Los Angeles office of Gibson, Dunn & Crutcher. He is a member of the Business Restructuring & Reorganization Group and the Corporate Department. Mr. Neumeister has a wide array of experience in representing clients in bankruptcy and restructuring matters in many different industries. His representations have included representing debtors and lenders in in-court and out-of-court restructurings, and buyers in large and small bankruptcy sales. Mr. Neumeister also has a broad range of experience litigating bankruptcy and other distressed debt issues in bankruptcy court, state court, and in courts of appeal. Mr. Neumeister is currently a member of the Financial Lawyers Conference, the American Bankruptcy Institute, Turnaround Management Association, and the Los Angeles County Bar Association.

Matthew G. Bouslog is of counsel in the Orange County office of Gibson, Dunn & Crutcher where he practices in the firm’s Business Restructuring and Reorganization Practice Group. Mr. Bouslog specializes in representing companies in complex restructuring matters. Mr. Bouslog has been recognized since 2021 in Best Lawyers: Ones to Watch for his work in (i) Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law, (ii) Mergers and Acquisitions Law, and (iii) Real Estate Law. Mr. Bouslog frequently represents debtors, creditors, and other interested parties in out-of-court and in-court restructurings, distressed acquisitions, and bankruptcy-related litigation. A significant number of Mr. Bouslog’s matters have involved cross-border issues. In addition to Mr. Bouslog’s restructuring expertise, he has represented lenders and borrowers in real estate and other finance transactions.

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Post-Pandemic Wellness: Attorney Mental Health 101

The Attorney Mental Health 101 course is designed to help legal professionals recognize signs and symptoms of mental health distress and use resources to provide appropriate and confidential support. Participants will be provided with action plans for various mental health distresses to include, depression, anxiety, panic attack, co-morbidity of mental disorders and much more. Additional skills will be taught including empathetic communication/listening skills and appropriate methods for self-care following the application of Mental Health First Aid.

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PANELISTS:

Tiaunia N. Henry is a partner in Gibson, Dunn & Crutcher’s Los Angeles office where she is a member of the firm’s Litigation Department with a diverse practice that focuses primarily on complex business litigation, including antitrust, breach of contract and transnational cases. As an experienced litigator and trial attorney, she has represented clients in various industries including the oil and gas, medical device, media and entertainment, semiconductor, paper manufacturing and information technology consulting industries. Ms. Henry has extensive experience representing multinational corporations, both foreign and domestic, in disputes that involve litigation pending in multiple jurisdictions, including the development of legal strategies to avoid inconsistent rulings, preclusion of claims, and/or waiver of defenses in subsequent litigation.

Melanie Gertz is an associate in the San Francisco office of Gibson, Dunn & Crutcher. She currently practices in the firm’s Corporate Department. Ms. Gertz’s practice is focused on capital markets transactions and mergers & acquisitions, and includes representation of clients in connection with corporate governance and Exchange Act reporting matters​.

James Keshavarz is the Chief Wellness Officer for Gibson Dunn, and is a Doctor of Psychology candidate, has his MBA in Health Care Management and a MS in Exercise Science and Health Promotion. James is also an appointed American Bar Association Commission on Lawyers Assistant Programs Committee member and the Chair of the Institute for Well-Being in Law Awards Committee. As a student of psychology, James specializes in intrinsic motivation, transformational leadership, and emotional intelligence.Prior to working for Gibson Dunn James was a practicing Exercise Physiologist specializing in injury prevention and performance enhancement. James was also an adjunct instructor of Kinesiology and Health Sciences at Glendale Community College and was awarded the Distinguished Professor Award in 2019.

Serving in the United States Air Force Reserves, James was awarded the Airman of the Year award in 2018 for the work he did to improve resiliency for the 452nd Air Mobility Wing. He was also awarded the Air Force Humanitarian Medal in 2022 for the work he did in response to the COVID-19 pandemic.

Working with Global Wellness Manager Melissa de Carvalho, James has a passion for improving work-life synergy for the legal professionals at Gibson Dunn by implementing benefits and programs that improve mental health and overall well-being.

Qualifications:

• Mental Health First Aid Instructor – National Council For Mental Well-being
• Master Resilience Trainer – United States Air Force
• Injury Prevention & Performance Enhancement Specialist – National Academy of Sports Medicine
• Basic Life Support Instructor – American Heart Association

Education:

• AS – Healthcare Management – College of the Air Force
• BA – History (Pre-Law) – California State University of Los Angeles
• MS – Exercise Science and Health Promotion – PennWest California
• MBA – Healthcare Management – California Coast University
• PsyD – Psychology – University of Arizona (In Progress)

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Privacy in 2023: Compliance and Product Counseling in the New Year

We will discuss effective product counseling, particular with respect to privacy considerations.  We will first discuss what is privacy compliance and product counseling, how to provide advice, and what to consider.  Next, we will dive into the specifics of privacy compliance and product counseling issues for the new year, as multiple new laws come into effect, and litigation waves force new areas of focus.  Finally, we will discuss pointers on key issues keeping counsel up at night, including trends on addressing some of the thornier areas of compliance and product development.

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PANELISTS:

Cassandra Gaedt-Sheckter is a partner in the Palo Alto office of Gibson, Dunn & Crutcher. She practices in the firm’s Privacy, Cybersecurity and Data Innovation group, with a focus on data privacy, cybersecurity and data regulatory litigation, enforcement, transactional, and counseling representations. Ms. Gaedt-Sheckter has substantial experience advising companies on privacy and cybersecurity issues, including relating to legal and regulatory compliance with the California Consumer Privacy Act (CCPA), General Data Protection Regulation (GDPR), Children’s Online Privacy Protection Rules (COPPA), and other federal, state, and international laws and regulations. She also has extensive experience counseling on data breach response management and notification concerns, and privacy and cybersecurity compliance risk assessments. Ms. Gaedt-Sheckter further represents clients across industries—including consumer product, software, manufacturing, home appliance service, and healthcare companies—in the context of product and program development, merger and acquisition privacy and cybersecurity due diligence, and pre-litigation negotiation. She has significant experience in all aspects of litigation—particularly relating to privacy, cybersecurity, and patent claims—serving as lead associate on expert and fact discovery and pre-trial hearings and briefing, and participating in multiple bench and jury trials.

Vivek Mohan is a partner in Gibson Dunn’s Palo Alto office, where he is Co-Chair of the Artificial Intelligence and Automated Systems practice and a member of the Privacy, Cybersecurity and Data Innovation practice. Vivek advises clients on legal, regulatory, compliance, and policy issues on a global scale with a focus on cutting-edge technology issues. His practice spans regulatory response, counseling, advocacy, and transactional matters allowing him to provide clients with strategic advice whether they are responding to a regulatory inquiry, setting up a privacy program, responding to a data breach, or selling the company. During his time at Apple, Vivek managed a team of lawyers responsible for privacy counseling for all software, biometric, augmented reality (AR), artificial intelligence/machine learning (AI/ML), and search products, and served as lead counsel for information security.

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AAPI Attacks and Moving Beyond

This course will provide a general overview of discrimination and prejudice against Asian American and Pacific Islander (AAPI) communities is not a new phenomenon.  Yet the COVID-19 pandemic has brought with it a resurgence in anti-AAPI harassment and hate crimes, and, too, broader attention to a longstanding problem and an updated call to action.  This presentation will first outline the magnitude of the problem, both the historical background of racism against AAPI communities and the more recent wave of anti-Asian hate crimes that began in early 2020 and has continued through 2022.  We will then examine the various implicit biases that may cause, perpetuate, or fail to combat continued anti-AAPI violence, discuss the Firm’s efforts, in particular the founding of the Alliance of Asian American Justice and the work by Firm attorneys done in coordination with the Alliance, and will conclude by outlining possible paths forward as we continue to combat anti-AAPI hate.

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PANELISTS:

Debra Wong Yang is a partner in Gibson, Dunn & Crutcher’s Los Angeles office. Reflective of her broad practice and comprehensive abilities, Ms. Yang is Chair of the Crisis Management Practice Group, former Chair of the White Collar Defense and Investigations Practice Group, which includes the FCPA Practice Group, and former Chair of the Information Technology and Data Privacy Practice Group. She is also a member of the firm’s Executive Committee. Drawing on her depth of experience and record of success, Ms. Yang focuses part of her practice on strategic counseling. She leads critical representations, both high profile and highly confidential, involving a wide variety of industries, economic sectors, regulatory bodies, law enforcement agencies, global jurisdictions and all types of proceedings. Her clients are in the private and public sectors. She guides teams of attorneys and outside consultants in the development and implementation of strategies to achieve the most favorable outcomes, greatest protection of reputational interests, and minimizing of harm to the business assets. Ms. Yang has a strong background in addressing andresolving problems across the white collar litigation spectrum, including through corporate and individual representations, internal investigations, crisis management and compliance.

Robert K. Hur is a partner in the Washington, D.C. office of Gibson, Dunn & Crutcher, and Co-Chair of the Firm’s Crisis Management Practice Group. A seasoned trial lawyer and advocate, he brings decades of experience in government and in private practice, including service in senior leadership positions with the U.S. Department of Justice, to guide companies and individuals facing white-collar criminal matters, regulatory proceedings and enforcement actions, internal investigations, and related civil litigation. He is also a member of the firm’s White Collar Defense and Investigations Practice Group and the National Security Practice Group. Prior to joining Gibson Dunn, Mr. Hur served as the 48th United States Attorney for the District of Maryland. Presidentially appointed and unanimously confirmed by the United States Senate, he served from 2018 to 2021 as the chief federal law enforcement officer in Maryland, setting strategic priorities for and supervising one of the largest and busiest U.S. Attorney’s Offices in the nation. During his tenure as United States Attorney, the Office handled numerous high-profile matters including those involving national security, cybercrime, public corruption, and financial fraud. In pursuit of sophisticated and impactful cases, Mr. Hur partnered closely with other enforcement agencies including the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Department of Health and Human Services Office of Inspector General, and the Maryland Attorney General’s Office. He also hired dozens of attorneys from diverse backgrounds to bring the Office to its maximum staffing level and as a member of the Attorney General’s Advisory Committee, counseled the Attorney General on matters of policy, procedure, and management.

Poonam Kumar is of counsel in the Los Angeles office of Gibson, Dunn & Crutcher and a member of its White Collar Defense & Investigations and Litigation practice groups. She is a former federal prosecutor with significant first-chair trial experience and an extensive background in handling high-stakes criminal and civil matters across a broad range of practice areas. From 2014 to 2022, Poonam served as an Assistant United States Attorney in the United States Attorney’s Office for the Central District of California where she investigated and prosecuted complex financial crimes, including corporate and securities fraud, embezzlement, healthcare fraud, bank fraud, import/export crimes, tax crimes, and money laundering. Poonam was a Deputy Chief of the Major Frauds section where she supervised a large team of federal fraud prosecutors. Representative matters from her time at the U.S. Attorney’s Office include the investigation and prosecution of a multinational scheme to inflate revenue of a company publicly traded on a foreign exchange and to evade nearly $2 billion in import duties as well as the conviction at trial of a South Korean official for laundering bribes he received in connection with his government position. For her work with the Department of Justice, Poonam received the United States Attorney General’s John Marshall Award for Outstanding Achievement in 2020.

Cynthia Chen McTernan is an associate in the Los Angeles office of Gibson, Dunn & Crutcher. She is a member of the Firm’s Litigation, Class Actions, and Labor & Employment Practice Groups. Ms. McTernan has represented clients in a wide range of complex litigation and has significant experience in all phases of litigation in both state and federal courts. Ms. McTernan was recognized inThe Best Lawyers in America® 2022 and 2023 “Ones to Watch” in Commercial Litigation. Ms. McTernan serves on the Board of Directors for Cancer Support Community Los Angeles, which provides comprehensive care and support to those impacted by cancer, with a focus on under-resourced communities.

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Supreme Court Roundup

This presentation will review statistics and trends from the October 2021 term and preview key cases in the October 2022 term in the fields of intellectual property, constitutional law, voting rights, administrative law, and employment law.

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PANELISTS:

Blaine H. Evanson’s practice focuses on complex commercial litigation both in the trial court and on appeal. He is a member of the firm’s Appellate and Constitutional Law, Class Actions, Labor and Employment, and Intellectual Property practice groups. Mr. Evanson has represented clients in a wide variety of appellate matters in the Supreme Court of the United States and federal and state appellate courts around the country. He has briefed several dozen appeals across almost every federal court of appeals and many state appellate courts, and has argued several appeals in the Ninth Circuit and California’s Courts of Appeal. In the trial court, Mr. Evanson has broad commercial litigation experience, particularly with complex motion practice before, during, and after trial.

Lauren Blas is a partner in the Los Angeles office of Gibson, Dunn & Crutcher where her practice focuses on class actions, labor and employment litigation, and complex commercial litigation in the trial courts and on appeal. In 2021, Ms. Blas was recognized as a “Rising Star” by Law360, which recognizes top litigators and dealmakers practicing at a level usually seen from veteran attorneys. She was also recognized by The Best Lawyers in America® 2021 “Ones to Watch” in Labor and Employment and has been named a “Rising Star” in Class Actions/Mass Torts and Appellate Litigation in Southern California by Super Lawyers Magazine for multiple years. Ms. Blas represents clients in class actions in state and federal court and has litigated a wide range of appellate matters as well. She has special expertise in California employment class actions and class actions under California’s consumer protection statutes, including the Unfair Competition Law, the False Advertising Law, and the Consumers Legal Remedies Act.

Elizabeth A. Dooley is a senior associate in the San Francisco office of Gibson, Dunn & Crutcher LLP. Her practice primarily focuses on appellate and employment matters. She is a member of the Firm’s Hiring Committee. Ms. Dooley’s appellate experience includes arguing before the Ninth Circuit Court of Appeals and authoring briefs filed in the United States Supreme Court as well as state and federal appellate courts. Having spent law school and the entirety of her legal career in California, Ms. Dooley has particularly robust experience before the Ninth Circuit and the California Courts of Appeal. From 2013-2014, Ms. Dooley clerked for the Honorable Kim McLane Wardlaw of the Ninth Circuit Court of Appeals and from 2015-2016, Ms. Dooley clerked for Ninth Circuit Judge, Hon. Michele T. Friedland. Ms. Dooley’s labor & employment experience includes extensive motions practice at the trial court level and appellate work in both state and federal courts—including taking matters directly from a successful dispositive motion through defense on appeal. Ms. Dooley’s experience also includes litigating large, complex putative class actions and collective actions in federal courts, including in cases involving alleged discrimination and alleged independent contractor misclassification.

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ESG Opportunities & Pitfalls

ESG (Environmental, Social, Governance) is becoming an increasingly important area as consumers and investors are demanding that companies take actions to invest in new ESG technology and initiatives.  This presentation will cover drivers for why ESG matters for public companies, how companies should draft disclosures around ESG, and some areas currently seeing increased litigation around ESG topics and tips to try to minimize litigation risk.

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PANELISTS:

Perlette Jura is a partner in Gibson Dunn’s Los Angeles and Washington, D.C. offices. Her practice focuses on complex trial and appellate litigation. She co-chairs the firm’s Transnational Litigation Group and its Environmental Social Governance practice. She has played a key role in a number of the firm’s most high-profile transnational, environmental and technology-driven matters. Ms. Jura has extensive experience working with the food and beverage, agricultural, aerospace, automotive, emerging technology and energy industries. In 2021, Lawdragon featured Ms. Jura on their “Global Litigation 500” list and in 2022-2023 named her as one of the “500 Leading Litigators in America”, which recognizes those who specialize in international arbitration, public international law and advise leading corporations. She was recognized by Benchmark Litigation as one of the “Top 250 Women in Litigation” in 2019, 2020, 2021, and 2022. Benchmark Litigation has also featured Ms. Jura as a California “Litigation Star” for 2023. The Los Angeles Business Journal named Ms. Jura to its list of “Most Influential Women Lawyers” in Los Angeles, featuring 50 of the most accomplished female attorneys working in the region. In 2020, BTI Consulting Group honored Ms. Jura a Client Service All-Star, an attorney “who stand[s] above all the others in delivering the absolute best in client service.”

Aaron Briggs is a partner in Gibson Dunn’s San Francisco office and a member of the firm’s Securities Regulation and Corporate Governance Practice Group. Mr. Briggs’ practice focuses on advising technology, life sciences and other companies and their boards of directors on a wide range of securities and governance matters, including ESG, corporate governance, SEC disclosure and compliance, shareholder activism, executive compensation, investor communications, disclosure effectiveness and stakeholder engagement matters. Prior to re-joining the firm in 2018, Mr. Briggs served as Executive Counsel – Corporate, Securities & Finance at General Electric.

Emily Riff is an associate in the Denver office of Gibson, Dunn & Crutcher, where she is a member of the firm’s Litigation Department, with a particular focus on class actions and complex civil litigation. Ms. Riff has substantial experience representing clients at the trial and appellate level. In the technology space, she has litigated high-profile matters for clients in a range of cutting-edge cases, including many involving Section 230 of the Communications Decency Act as well as other theories of liability under ever-changing state and federal law. Ms. Riff has also represented companies involving claims related to consumer protection, particularly in high-stakes and multi-jurisdictional class actions, and has developed comprehensive strategies to address novel theories of liability and to leverage the procedural complexities involved in these multi-jurisdictional matters. In addition to litigating these matters, she also provides counseling and advice to clients on a wide range of environmental, social, and governance issues.

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MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 8.0 credit hours, of which 2.5 credit hours may be applied toward Ethics and Professionalism; 1.0 credit hour may be applied toward Diversity, Inclusion and Elimination of Bias; 1.0 credit hour may be applied toward Cybersecurity-General; and 3.5 credit hours may be applied toward the areas of Professional Practice. These courses are approved for transitional/non-transitional credit.

Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact [email protected] to request the MCLE form.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 8.0 credit hours, of which 1.0 credit hour may be applied toward the Elimination of Bias requirement, 1.0 credit hour may be applied toward the Competence Issues requirement, 1.5 credit hours may be applied toward the Ethics requirement, and 4.5 credit hours may be applied toward the General requirement.

California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

In this complementary webcast, Gibson Dunn covers what you need to know about the congressional investigations landscape in the 118th Congress, which is scheduled to convene on January 3, 2023. The Gibson team discuss the nuts and bolts of congressional investigations, including committee authorities and witness defenses and how disputes play out in practice. The team drills down on recent legal developments that impact committee authorities and strategic considerations. We also cover new leadership on key committees in the House and Senate and how that leadership will affect investigations in the coming two years. The team then discusses what investigations to expect from the most active investigative committees as well as what investigations have been launched already. Finally, the webcast provides practical guidance to help you prepare for and navigate challenging congressional inquiries.

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PANELISTS:

Machalagh Carr is General Counsel for the Office of the Republican Leader at the U.S. House of Representatives. Previously, she served as General Counsel & Parliamentarian for the U.S. House of Representatives Committee on Ways and Means, where she handled all legal and procedural issues for the Committee. Before that, she was the Oversight Staff Director at the Committee where she led the subcommittee in its investigations and oversight of all issues within the Committee’s jurisdiction. She also previously served as the Director of Oversight and Investigations for the U.S. House of Representatives Committee on Oversight and Government Reform and as Senior Oversight Counsel at the Committee on Natural Resources.

Michael Bopp is a partner in the Washington, D.C. office of Gibson, Dunn & Crutcher. He chairs the Congressional Investigations Practice Group practice and he is a member of the White Collar Defense and Investigations Crisis Management Practice Groups. He also co-chairs the firm’s Public Policy Practice Group and is a member of its Financial Institutions Practice Group. Mr. Bopp’s practice focuses on congressional investigations, internal corporate investigations, and other government investigations. Michael spent more than a dozen years on Capitol Hill including as Staff Director and Chief Counsel to the Senate Homeland Security and Governmental Affairs Committee under Senator Susan Collins (R-ME).

Thomas G. Hungar is a partner in the Washington, D.C., office of Gibson, Dunn & Crutcher . His practice focuses on appellate litigation, and he assists clients with congressional investigations and complex trial court litigation matters as well. He has presented oral argument before the Supreme Court of the United States in 26 cases, including some of the Court’s most important patent, antitrust, securities, and environmental law decisions, and he has also appeared before numerous lower federal and state courts. Mr. Hungar served as General Counsel to the U.S. House of Representatives from 2016-2019, working closely with various House committees in their oversight and investigative activities and related litigation.

Roscoe Jones is a partner in Gibson, Dunn & Crutcher’s Washington, DC office, co-chair of the Firm’s Public Policy Practice Group, and a member of the Congressional Investigations Practice Group. Mr. Jones’s practice focuses on promoting and protecting clients’ interests before the U.S. Congress and the Administration, including providing a range of public policy services to clients such as strategic counseling, advocacy, coalition building, political intelligence gathering, substantive policy expertise, legislative drafting, and message development .Roscoe spent a decade on Capitol Hill as a chief of staff, legislative director and senior counsel advising three US Senators and a member of Congress, including Senators Feinstein, Booker and Leahy and Rep. Spanberger.

Amanda H. Neely is of counsel in the Washington, D.C. office of Gibson, Dunn & Crutcher and a member of the Public Policy Practice Group and Congressional Investigations Practice Group. Amanda previously served as Director of Governmental Affairs for the Senate Homeland Security and Governmental Affairs Committee and General Counsel to Senator Rob Portman (R-OH), Deputy Chief Counsel to the Senate Permanent Subcommittee on Investigations, and Oversight Counsel on the House Ways and Means Committee. She has represented clients undergoing investigations by congressional committees including the Senate Permanent Subcommittee on Investigations and the Senate Health, Education, Labor, and Pensions Committee.

Danny Smith is of counsel in the Washington, D.C. office of Gibson, Dunn & Crutcher and a member of the Public Policy practice group. Danny’s practice focuses on advancing clients’ interests before the U.S. Congress and the Executive Branch. He provides a range of services to clients, including political advice, intelligence gathering, policy expertise, communications guidance, and legislative analysis and drafting. Prior to joining Gibson Dunn, Danny worked for Senator Cory Booker (D-NJ) for nearly a decade, most recently as his Chief Counsel on the Senate Judiciary Committee, Subcommittee on Criminal Justice and Counterterrorism.

As many countries continue to loosen COVID-19 related restrictions, lawmakers and regulators around the world face corruption challenges accompanying renewed economic activity and aggressive market expansion, while starting to address the unique bribery and corruption cases that arose during a near-global shutdown that was accompanied by record levels of government spending. This webcast will explore the approach taken by emerging markets in addressing these challenges and examine the trends seen in FCPA and local anti-corruption enforcement actions.

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PANELISTS:

Kelly Austin leads Gibson, Dunn & Crutcher’s White Collar Defense and Investigations practice for Asia, is a global co-chair of the Firm’s Anti-Corruption & FCPA practice, and is a member of the Firm’s Executive Committee. Ms. Austin is ranked annually in the top-tier by Chambers Asia Pacific and Chambers Global in Corporate Investigations/Anti-Corruption: China. Her practice focuses on government investigations, regulatory compliance and international disputes. Ms. Austin has extensive expertise in government and corporate internal investigations, including those involving the FCPA and other anti-corruption laws, and anti-money laundering, securities, and trade control laws.

Joel M. Cohen is a partner in Gibson Dunn & Crutcher’s New York office and Co-Chair of the firm’s global White Collar Defense and Investigations Practice Group.  Mr. Cohen’s successful defense of clients has been noted in numerous feature articles in the American Lawyer and the National Law Journal, including for pretrial dismissal of criminal charges and trial victories.  He is highly-rated in Chambers and named by Global Investigations Review as a “Super Lawyer” in Criminal Litigation.  He has been lead or co-lead counsel in 24 civil and criminal trials in federal and state courts, and he is equally comfortable in leading confidential investigations, managing crises or advocating in court proceedings.  Mr. Cohen’s experience includes all aspects of FCPA/anticorruption issues, in addition to financial institution litigation and other international disputes and discovery.

Benno Schwarz is a partner in the Gibson, Dunn & Crutcher Munich office and Co-Chair of the firm’s Anti-Corruption & FCPA Practice Group, where his practice focuses on white collar defense and compliance investigations. Mr. Schwarz is ranked annually as a leading lawyer for Germany in White Collar Investigations/Compliance by Chambers Europe and was named by The Legal 500 Deutschland 2021 and The Legal 500 EMEA 2021 as one of four Leading Individuals in Internal Investigations, and also ranked for Compliance. He is noted for his “special expertise on compliance matters related to the USA and Russia.” Mr. Schwarz advises companies on sensitive cases and investigations involving compliance issues with international aspects, such as the implementation of German or international laws in anti-corruption, money laundering and economic sanctions, and he has exemplary experience advising companies in connection with FCPA and NYDFS monitorships or similar monitor functions under U.S. legal regimes.

Patrick Stokes is a partner in Gibson, Dunn & Crutcher’s Washington, D.C. office. He is the Co-Chair of the Anti-Corruption and FCPA Practice Group and a member of the firm’s White Collar Defense and Investigations, Securities Enforcement, and Litigation Practice Groups. Mr. Stokes’ practice focuses on internal corporate investigations, government investigations, enforcement actions regarding corruption, securities fraud, and financial institutions fraud, and compliance reviews. He has tried more than 30 federal jury trials as first chair, including high-profile white-collar cases, and handled 16 appeals before the U.S. Court of Appeals for the Fourth Circuit.  Mr. Stokes regularly represents companies and individuals before DOJ and the SEC, in court proceedings, and in confidential internal investigations.

Oliver Welch is a partner in the Hong Kong office, where he represents clients throughout the Asia Pacific region on a wide variety of compliance and anti-corruption issues and trade control laws. Mr. Welch regularly counsels multi-national corporations regarding their anti-corruption compliance programs and controls, and assists clients in drafting policies, procedures, and training materials designed to foster compliance with global anti-corruption laws. Mr. Welch frequently advises on anti-corruption due diligence in connection with corporate acquisitions, private equity investments, and other business transactions

Katharina Humphrey is a partner in Gibson, Dunn & Crutcher’s Munich office. She advises clients in Germany and throughout Europe on a wide range of compliance and white collar crime matters. Ms. Humphrey regularly represents multi-national corporations in connection with cross-border internal corporate investigations and government investigations. She also has many years of experience in advising clients with regard to the implementation and assessment of compliance management systems.

Ning Ning, an associate in the Hong Kong office, advises clients on government and internal investigations, compliance counseling, and compliance due diligence matters across the Asia-Pacific region. Ms. Ning is a native Mandarin speaker and has extensive experiences in China-related investigations and compliance matters.

Karthik Ashwin Thiagarajan, an of counsel in the Singapore office, assists clients with investigations in the financial services, information technology, electronics and fast-moving consumer goods sectors in India and Southeast Asia. He advises clients on internal investigations and anti-corruption reviews in the region. A client praised him for being “on top of his trade” in the India Business Law Journal’s 2019 “Leaders of the pack” report.

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MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 2.0 credit hour, of which 2.0 credit hour may be applied toward the areas of professional practice requirement. This course is approved for transitional/non-transitional credit.

Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact [email protected] to request the MCLE form.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 2.0 hour.

California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

We are pleased to provide you with Gibson Dunn’s Accounting Firm Quarterly Update for Q4 2022. The Update is available in .pdf format at the below link, and addresses news on the following topics that we hope are of interest to you:

• PCAOB Confirms China Access as Congress Shortens HFCAA Period
• PCAOB Proposes New Quality Control Standard
• 2023 SEC and PCAOB Budgets and Strategic Plans Finalized
• PCAOB Bars Indemnification in Certain Enforcement Orders
• New York State and City Employment Regulations Move Forward
• FAR Council Proposes to Require GHG Emissions Reporting
• Supreme Court to Address ’33 Act Standing in Direct Listings
• Important Privilege Cases Heard in the European Court of Justice and Supreme Court
• Monica Loseman Named to Financial Accounting Standards Advisory Council
• Other Recent SEC and PCAOB Regulatory Developments

Read More

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Accounting Firm Advisory and Defense Group:

James J. Farrell – Co-Chair, New York (+1 212-351-5326, [email protected])

Ron Hauben – Co-Chair, New York (+1 212-351-6293, [email protected])

Monica K. Loseman – Co-Chair, Denver (+1 303-298-5784, [email protected])

Michael Scanlon – Co-Chair, Washington, D.C.(+1 202-887-3668, [email protected])

© 2023 Gibson, Dunn & Crutcher LLP

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Please note, prior results do not guarantee a similar outcome.

On 12 January 2023, the Singapore International Commercial Court (SICC) launched a model clause for arbitration-related matters under the International Arbitration Act, confirming that parties may select the SICC as their choice of court.

The clause, which the Singapore International Arbitration Centre (SIAC) will adopt as part of its model arbitration clause,[1] reads:

“In respect of any court proceedings in Singapore commenced under the International Arbitration Act 1994 in relation to the arbitration, the parties agree (a) to commence such proceedings before the Singapore International Commercial Court (“the SICC”); and (b) in any event, that such proceedings shall be heard and adjudicated by the SICC.”

The model clause was promulgated by a Working Group which included Paul Tan, Partner in Gibson Dunn’s Singapore office.  The Working Group is chaired by Justice Philip Jeyaretnam SC, the current President of the SICC.

The launch event was held at the Singapore Supreme Court, and was attended by Singapore’s Second Minister for Law Edwin Tong SC, Justice Philip Jeyaretnam SC, SAIC’s Chief Executive Officer Gloria Lim, and around 100 other leading figures in the Singapore arbitration community. It was also livestreamed to an international audience.

The SICC and its advantages to international parties

The SICC is a division of the Singapore High Court established in 2015 and has the jurisdiction to hear international commercial cases.

In general, cases can be filed directly with the SICC (if it is international in nature) or the General Division of the High Court, and the court has the power to transfer cases from the General Division to the SICC. It is also possible to select the SICC specifically in one’s jurisdiction clause. The latest model clause confirms the ability of parties to also choose the SICC to be supervisory court for international arbitrations seated in Singapore.

The SICC has been hearing an increasing number of arbitration-related matters, although they have generally been transferred from the General Division.

There are several advantages of the SICC to international parties.

• First, proceedings before the SICC will be heard by judges drawn from a bench comprising Singapore judges and international judges. They include many former or sitting judges from both the civil law and common law jurisdictions. Depending on the complexity of the matter, a case may be heard before 1 or 3 judges at first instance. Matters decided by the SICC may also be appealed to the Court of Appeal, unless this has been expressly excluded.
• Second, cost recovery is higher in the SICC. A recent decision by the Court of Appeal has confirmed that successful parties will be awarded their reasonable costs by reference to what has in fact incurred, in line with the practice of arbitral tribunals.[2]
• Third, the procedural rules are more inline with international best practices. For example, rules on discovery follow those usually adopted in international arbitrations. In particular, it does not provide for general discovery; only specific discovery. It is also possible to either apply for or agree to the proceedings being confidential and private.
• Fourth, parties in cases before the SICC may also be represented by registered foreign lawyers of their choice in “offshore cases”. Offshore cases are defined as either being governed by a law other than Singapore law, or having no other connection to Singapore other than Singapore law as the governing law.

Although arbitration-related matters are not generally considered offshore cases, where foreign law is relevant, registered foreign lawyers or legal experts are also permitted to appear as co-counsel in the SICC without parties having to file expert reports.

Last year, the SICC expanded its jurisdiction to hear restructuring and insolvency matters and also appointed Christopher Scott Sontchi, the former Chief Judge of the United States Bankruptcy Court, City of Delaware. In such matters, parties may be represented by registered foreign lawyers, save in relation to any specific Singapore law arguments.[3]

Gibson Dunn’s experience before the SICC

Gibson Dunn’s lawyers have experience representing clients in the SICC. Paul Tan, who joined Gibson Dunn’s Singapore office in November 2022, argued the first commercial trial in the SICC to reach a full judgment, and has successfully defended and challenged arbitral awards in the SICC.

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[1] https://www.sicc.gov.sg/docs/default-source/guide-to-the-sicc/sicc-siac-media-release_launch-of-the-jurisdiction-model-clause-(final).pdf

[2] Senda International Capital Ltd v Kiri Industries Ltd [2022] SGCA(I) 10

[3] https://www.sicc.gov.sg/docs/default-source/sicc-resources/media-release_new-sicc-rules-(without-contact-details)-(1).pdf

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Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s International Arbitration practice group, or any of the following:

Paul Tan – Singapore (+65 6507 3677, [email protected])
Cyrus Benson – London (+44 (0) 20 7071 4239, [email protected])
Penny Madden KC – London (+44 (0) 20 7071 4226, [email protected])
Jeff Sullivan KC – London (+44 (0) 20 7071 4231, [email protected])
Philip Rocher – London (+44 20 7071 4202, [email protected])
Rahim Moloo – New York (+1 212-351-2413, [email protected])

For Singapore-related disputes news, you may subscribe to Paul Tan’s channel at https://t.me/singaporedisputes.

© 2023 Gibson, Dunn & Crutcher LLP

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Please note, prior results do not guarantee a similar outcome.

In this recorded webcast, Gibson Dunn provides an in-depth discussion of the latest trends and hot topics in internal investigations. The webcast covers recent developments around maintaining privilege during investigations – including a discussion of In re Grand Jury, which the Supreme Court has agreed to hear and that could reshape the law applicable to mixed business and legal, or “dual-purpose” communications – as well as best practices for conducting internal investigations via video-conference in a post-COVID world. We also dive deep into thorny questions of how to structure and conduct an investigation, including who at the company should be involved, how quickly investigations should be completed, what should and should not be shared with Executive Branch agencies, and when to provide separate counsel for employees. Finally, we also discuss the trends we are seeing from the government – including DOJ, SEC, FTC, Congress and state attorneys general – in terms of how they are conducting investigations and what they expect out of internal investigations.

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PANELISTS:

F. Joseph Warin is chair of the 250-person Litigation Department of Gibson, Dunn & Crutcher’s Washington, D.C. office, and he is co-chair of the firm’s global White Collar Defense and Investigations Practice Group. Mr. Warin’s practice includes representation of corporations in complex civil litigation, white collar crime, and regulatory and securities enforcement – including Foreign Corrupt Practices Act investigations, False Claims Act cases, special committee representations, compliance counseling and class action civil litigation.

Michael Bopp is a partner in the Washington, D.C. office of Gibson, Dunn & Crutcher. He chairs the Congressional Investigations Subgroup and he is a member of the White Collar Defense and Investigations Crisis Management Practice Groups. He also co-chairs the firm’s Public Policy Practice Group and is a member of its Financial Institutions Practice Group. Mr. Bopp’s practice focuses on congressional investigations, internal corporate investigations, and other government investigations.

Laura Jenkins Plack is a senior associate in the Denver office of Gibson, Dunn & Crutcher. Ms. Plack is a member of the firm’s Litigation Department, with an emphasis on white collar defense and investigations and complex commercial litigation. Ms. Plack represents companies and executives in federal and state court, and before the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the U.S. Federal Trade Commission, congressional committees, and various international authorities.

Reid Rector is a senior associate in the Denver office of Gibson, Dunn & Crutcher, where he is a member of the firm’s Litigation Department. His practice focuses on government investigations and litigation with DOJ, the FTC, and state attorneys general for companies in the health care and technology industries, including health care fraud and abuse investigations, data security and consumer protection investigations, and related complex civil litigation and class actions.

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MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1.0 credit hour, of which 1.0 credit hour may be applied toward the areas of professional practice requirement. This course is approved for transitional/non-transitional credit.

Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact [email protected] to request the MCLE form.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 1.0 hour.

California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

Under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”; Art. 5 Art. V (2) lit. b)) and German law (Section 1059 of the German Procedural Code (“ZPO”), corresponding to Article 34 UNCITRAL Model Law), state courts are, in principle, prohibited from fully reviewing an arbitral award on the merits (prohibition of a révision au fond). German state courts can only examine whether the arbitral award violates German public policy (ordre public). The traditional standard applied in this context has been whether the recognition and enforcement was “obviously incompatible with essential principles of German law”.

Overview

While in its decision of September 27, 2022, Case No. KZB 75/21, the Cartel Senate of the German Federal Court of Justice (“BGH”) implicitly reaffirmed the jurisdiction of arbitral tribunals over alleged violations of certain antitrust provisions, it also held that arbitral awards in case of alleged violations of such provisions are subject to a full judicial review on the merits by the state courts, thus in practice diluting the general prohibition of a révision au fond. In other words, while the ruling strengthens arbitration agreements in relation to a potentially anti-competitive behavior, the German courts will review awards like they would with state court decisions to ensure compliance with German public policy. Although the BGH’s decisions was rendered in a setting aside procedure, it is very likely that it would also apply to proceedings on the recognition and enforceability of an arbitral award.

Factual Background

Respondent is the owner of a quarry leased to Claimant. Respondent terminated the lease agreement with Claimant as threatened after Claimant – contrary to Respondent’s “suggestion” – did not merge with another company. Subsequently, the German Federal Cartel Office (“BKArtA”) imposed a fine on Respondent for violating Section 21 (2) No. 1 of the German Act against Restraints of Competition (“GWB”).

Respondent, nonetheless, initiated arbitration proceedings against Claimant for eviction from the property and re-terminated the lease agreement. The arbitral tribunal in its award ruled that Claimant had to vacate the property, because the second termination validly terminated the lease. The tribunal found that the second termination did not violate Section 21 (2) No. 1 GWB.[1]

Claimant then requested before the Frankfurt Higher Regional Court to set aside the arbitral award. The Frankfurt Higher Regional Court, however, dismissed this motion (decision of April 22, 2021 – 26 Sch 12/20). It ruled that, although the provisions of Sections 19, 20, 21 GWB were part of the substantive public policy (ordre public), the arbitral award would not obviously violate antitrust provisions.

The Decision of the German Federal Court of Justice

Upon Claimant’s further appeal, the BGH ruled that an arbitration award relating to antitrust provisions is effectively subject to a full judicial review on the merits by the state courts, with regard to both the factual findings and the interpretation of antitrust law. It put forward the following reasons:

• Sections 19, 20 and 21 GWB which allow the cartel authorities to prohibit (and ultimately fine) certain anti-competitive behavior are fundamental rules of the German legal system and protect not only the interests of the parties, but also the public interest of effective competition in markets for goods and services. If such fundamental rules are in question, the prohibition of a révision au fond does not apply. Thus, the recognition and enforcement of arbitral awards is excluded if Sections 19, 20, 21 of the GWB have been applied incorrectly.
• Unlike in state court proceedings, in arbitration proceedings the public interest in effective competition is neither sufficiently protected by the cartel authorities and their enforcement proceedings, nor by the European Court of Justice. Only state courts are entitled to refer a matter to the ECJ to obtain its decisions on the binding interpretation of European anti-trust law. Arbitral tribunals, in contrast thereto, are not entitled to make such a referral.
• Sections 19, 20, 21 of GWB require a more extensive scrutiny because such matters are regularly characterized by complex factual and legal circumstances.
• A full judicial review by state courts is in line with the intention of the legislator: By eliminating the old Section 91 GWB (according to which certain contracts with anti-competitive effect were not arbitrable) in 1997, the German legislator wanted to ensure that arbitral tribunals considered violations of competition law in the same way as state courts, and that subsequently arbitral awards were fully reviewed in terms of their compliance with competition law in recognition and enforcement proceedings.

In the case at hand, this full judicial review concluded that the arbitral award had violated the German ordre public, because the arbitral tribunal had failed to apply antitrust law correctly. The termination of the lease agreement had violated Section 21 (2) GWB.

Relevance of This Ruling for Arbitration in Germany, and Further Perspectives

This ruling is the first ruling of the BGH which allows a full judicial review of arbitral awards in the case of potential violation of fundamental rules of the German legal system. This category is new and had not played any role in the recognition and enforcement of arbitral awards (both under Section 1059 ZPO and Art. 5 Art. V (2) lit. b ) in the past. Also, the BGH seems to have effectively abolished the statutory requirement that such violations have to be obvious.

It is unclear what other provisions are fundamental rules of the German legal system, or whether such rules only originate from the sphere of antitrust law; this remains to be seen in the future. In light of the murky standards the BGH seems to apply in this respect, German courts are in jeopardy to step out of line with the state courts in other jurisdictions when it comes to granting arbitral awards recognition and enforceability. However, it is also well possible that this decision of the Cartel Senate of the BGH is an “outlier”. It is difficult to imagine that the Senate of the BGH, which normally has the BGH-internal jurisdiction over the review of arbitration cases, would go as far as the Cartel Senate and dilute the prohibition of révision au found in a similar way.

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[1]  Sec. 21 (2) GWB: “Undertakings and associations of undertakings may not threaten or cause disadvantages, or promise or grant advantages, to other undertakings in order to induce them to engage in [anti-competitive] conduct…”

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Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these issues. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s International Arbitration practice group, or the following authors:

Finn Zeidler – Frankfurt (+49 69 247 411 530, [email protected])
Annekathrin Schmoll – Frankfurt (+49 69 247 411 533, [email protected])

Please also feel free to contact the following practice leaders:

International Arbitration Group:
Cyrus Benson – London (+44 (0) 20 7071 4239, [email protected])
Penny Madden KC – London (+44 (0) 20 7071 4226, [email protected])
Jeff Sullivan KC – London (+44 (0) 20 7071 4231, [email protected])

© 2023 Gibson, Dunn & Crutcher LLP

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Please note, prior results do not guarantee a similar outcome.

In recent years, regulatory action has been on the upswing in New York, with state and city administrative agencies and officials adopting increasingly aggressive roles in governing virtually every industry across the state. As a result, now more than ever it is essential for those working in regulated industries—whether on the legal or business side—to understand their legal options in challenging New York state and city agency rules, regulations, determinations, and other executive actions and policies. The primary vehicle for mounting such a challenge is the Article 78 action, a type of summary proceeding brought in New York State Supreme Court.

In this one-hour webcast, three of our most experienced attorneys in the field of challenging government action in New York—partners Mylan Denerstein and Akiva Shapiro, and of counsel Paul Kremer—provide practical and strategic guidance for the successful prosecution of Article 78 actions. Drawing on real-world examples from their practice, they discuss the primary strategic issues that should be considered in deciding whether to bring an Article 78 challenge (versus, for example, a suit in federal court); provide a roadmap for litigating Article 78 proceedings and keys to success; and discuss the procedural hurdles government actors often raise in defending against these actions, and ways of overcoming those hurdles. The program is beneficial to anyone working in a regulated industry or otherwise affected by actions taken by New York city and state agencies and officials, as well as for practitioners.

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PANELISTS:

Mylan L. Denerstein is a litigation partner in the New York office of Gibson, Dunn & Crutcher. Ms. Denerstein is a Chair of the Public Policy Practice Group and a member of the Crisis Management, White Collar Defense and Investigations, Financial Institutions, Labor and Employment, Securities Litigation, and Appellate Practice Groups. Ms. Denerstein leads complex litigation and internal investigations, representing companies confronting a wide range of legal issues, in their most critical times. Ms. Denerstein is known not only for her effective legal advocacy, but also for her ability to solve problems. In addition, Ms. Denerstein is Global Chair of the Firm’s Diversity Committee and Co-Partner-in-Charge of the New York office. Ms. Denerstein was previously a member of the Firm’s Executive Committee. In 2022, Ms. Denerstein was appointed to serve as the independent NYPD Monitor to oversee the court ordered reform process. Previously, Ms. Denerstein has served in a wide variety of roles in government, including as Counsel to the New York State Governor, as an Executive Deputy Attorney General in the New York Attorney General’s Office, and as Deputy Commissioner for Legal Affairs for the New York City Fire Department.

Akiva Shapiro is a litigation partner in Gibson, Dunn & Crutcher’s New York office, Chair of the Firm’s New York Administrative Law and Regulatory Practice Group, Co-Chair of its Religious Liberty Working Group, and a member of the Firm’s Appellate and Constitutional Law, Media, Entertainment and Technology, and Securities Litigation Practice Groups, among others. Mr. Shapiro’s practice focuses on a broad range of high-stakes constitutional, administrative, commercial, and appellate litigation matters. He is regularly engaged in front of New York’s trial courts, federal and state courts of appeal, and the U.S. Supreme Court.

Paul J. Kremer is Of Counsel in the New York office of Gibson, Dunn & Crutcher. He is a member of Gibson Dunn’s Litigation, Intellectual Property, and Crisis Management Practice Groups, where he focuses on contract, lease, and license disputes; patent infringement cases; and state and local regulatory challenges. Mr. Kremer represents a diverse array of clients engaged in high-stakes commercial litigation, from New York City park trustees and private real estate developers to Fortune 100 technology companies and prestige television networks. In 2019, he was instrumental in defending against Article 78 challenges seeking to halt construction of the New York Islanders’ arena project.

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MCLE CREDIT INFORMATION:

This program has been approved for credit in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1.0 credit hour, of which 1.0 credit hour may be applied toward the areas of professional practice requirement. This course is approved for transitional/non-transitional credit.

Attorneys seeking New York credit must obtain an Affirmation Form prior to watching the archived version of this webcast. Please contact [email protected] to request the MCLE form.

Gibson, Dunn & Crutcher LLP certifies that this activity has been approved for MCLE credit by the State Bar of California in the amount of 1.0 hour.

California attorneys may claim “self-study” credit for viewing the archived version of this webcast. No certificate of attendance is required for California “self-study” credit.

Brussels partner Christian Riis-Madsen, of counsel Stéphane Frank and associate Tine Rasmussen are the authors of “Parsing European Guidance For Leniency In Cartel Probes” [PDF] published by Law360 on January 16, 2023.

On December 21, 2022, Governor Hochul signed into law Senate Bill S9427A, which amends the New York Labor Law requiring covered employers to list salary ranges in job postings and advertisements.  The State law, which is scheduled to go into effect on September 17, 2023, largely tracks the New York City Pay Transparency Law that went into effect on November 1, 2022, but it has some notable differences.

Covered Employers

The law covers employers in New York with at least four employees, without specifying whether all employees, or only those employed in New York, count toward the threshold.  Significantly, unlike the New York City law, independent contractors are not counted.

Covered Positions

The law applies to jobs that can or will be performed, at least in part, in New York State.  The law likely covers job postings for remote positions performed from New York.  However, it does not elaborate on the extent to which it applies to remote positions that could conceivably be performed from New York, even if they are ultimately performed from other states.

Employer Obligations

The law requires employers to disclose “compensation ranges” in advertisements and job postings for such positions, including those for new hires and internal promotions.  The compensation range is the lowest and highest annual salary or hourly range of compensation that the employer believes in “good faith” to be accurate at the time of the advertisement or posting.  For commission-based positions, employers may satisfy the disclosure requirement by stating in writing that the compensation shall be based on commission.

Unlike the City law, the State law also requires covered employers to:  (1) include the job description in the posting or advertisement, if a job description exists; and (2) maintain a history of compensation ranges and job descriptions, if the descriptions exist, for covered positions.  The law does not specify for how long employers must maintain these records.

The law also expressly prohibits employers from retaliating against applicants or employees who exercise their rights, including by filing a complaint with the New York State Department of Labor (NYDOL) regarding an actual or potential violation of the pay transparency requirements.

Enforcement and Penalties

The sole enforcement mechanism under the State law resides with the NYDOL, which can impose civil penalties for violations of the pay transparency requirements.  NYDOL penalties are capped at one thousand dollars for an initial violation, two thousand dollars for second violations, and three thousand dollars for subsequent violations.  Notably, unlike the City law, the State law does not give employers an opportunity to cure first-time violations before the imposition of any civil penalty.

The State law does not provide a private right of action for a violation.  This contrasts with the City law, which permits employees (but not applicants) to file civil lawsuits against employers.

Compliance With The Patchwork of Pay Transparency Laws

New York’s law is part of a recent wave of pay transparency laws enacted at the state and local level.  In addition to states like California and Colorado, localities in New York, including New York City, Albany County, Westchester County, and Ithaca, have adopted pay transparency requirements.

Significantly, the State law contains an express provision stating it shall not supersede or preempt any local laws, rules or regulations.  Therefore, by way of example, employers in New York City will be required to comply with both the state and city pay transparency requirements.  Employers in Westchester County, however, will likely only be covered by the State law since the Westchester pay transparency law states that it “shall be null and void on the day that State-wide legislation goes into effect” that is “either the same or substantially similar” to the local ordinance.

Key Takeaways

The State law directs the NYDOL to promulgate applicable rules and regulations, so guidance may be forthcoming.  Until then, covered employers in New York State should take steps to ensure compliance with the new pay transparency requirements starting in September.

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The following Gibson Dunn attorneys assisted in preparing this client update: Harris Mufson, Danielle Moss, Alex Downie, and Michael Wang.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. To learn more about these issues, please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Labor and Employment practice group, or the following:

Zainab N. Ahmad – New York (+1 212-351-2609, [email protected])

Mylan Denerstein – New York (+1 212-351-3850, [email protected])

Gabrielle Levin – New York (+1 212-351-3901, [email protected])

Danielle J. Moss – New York (+1 212-351-6338, [email protected])

Harris M. Mufson – New York (+1 212-351-3805, [email protected])

Jason C. Schwartz – Co-Chair, Labor & Employment Group, Washington, D.C.
(+1 202-955-8242, [email protected])

Katherine V.A. Smith – Co-Chair, Labor & Employment Group, Los Angeles
(+1 213-229-7107, [email protected])

© 2023 Gibson, Dunn & Crutcher LLP

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Please note, prior results do not guarantee a similar outcome.

As has been the case for the last few years, 2023 will bring a variety of employment law changes for California employers. Below, we outline several new laws that require attention from California employers for the new year: (1) pay scale disclosure requirements, (2) pay data and recordkeeping requirements, (3) expanded leave protections, (4) expanded anti-discrimination and retaliation laws, (5) minimum wage increases, and (6) local and industry specific changes. California employers should review their policies and practices to evaluate whether any updates need to be made.

I. Pay Scale Disclosure Requirements

As of January 1, 2023, employers of 15 or more employees (with at least one in California) are now required to publish pay scales for open positions in any job postings, regardless of whether such postings appear on an internal or external job site.[1]  The statute does not specify who qualifies as an employee for purposes of meeting the “15 or more employees” threshold, but the California Labor Commissioner interprets this requirement to mean at least one employee currently located in California.[2]  Further, the pay scale must be included in the job posting “if the position may ever be filled in California, either in-person or remotely.”[3]

Additionally, all employers, regardless of their size, must provide the pay scale for an employee’s current position upon request, and must also provide a pay scale for the position to which an applicant has applied “upon reasonable request.”[4]

For additional details on these measures, and the potential penalties for failing to abide by them, see Gibson Dunn’s October 11, 2022, client alert.

II. Pay Data Report and Recordkeeping Requirements

Beginning on May 10, 2023, all employers with 100 or more employees (with at least one in California) must submit an annual pay data report to the California Civil Rights Department (previously known as the Department of Fair Employment and Housing) that is based on a “snapshot” of W-2 earnings during a single pay period from October through December of the previous calendar year.[5]  Although the Department has not yet published guidance interpreting the new law, the Department’s guidance for the law’s prior iteration provides that employers are covered if they have 100 or more employees total with at least one employee in California.[6]  The guidance also directs employers to include remote employees in pay data reports if the employees are assigned to a California establishment, regardless of whether they reside in California, or if the employees reside in California but are assigned to an establishment in another state.[7]

Previously, pay data reports were only required from employers with 100 or more employees who were covered by annual EEO-1 Employer Information Report requirements.  These employers were permitted to submit their annual EEO-1 report to satisfy California’s pay data reporting obligations, if desired.  The revised California law creates an independent obligation for employers with 100 or more employees to provide a pay data report regardless of their federal EEO-1 reporting status, and removes the option to submit an EEO-1 report in lieu of the California pay data report.[8]  Practically this means that, absent an applicable exception, almost all employers of 100 or more employees with at least one employee in California will be required to create and provide both an annual EEO-1 report and a California pay data report on a yearly basis.

Employers who are required to submit a pay data report must break out the number of employees by race, ethnicity, and sex in a series of job categories, and must report the number of employees by race, ethnicity, and sex whose earnings fall within each of the pay bands prescribed in the Bureau of Labor Statistics’ Occupational Employment Statistics survey.[9]  Note for employers who have previously been complying with this reporting requirement, there is a new mandate that employers identify the median and mean hourly pay rate for each combination of race, ethnicity and sex (inter-sectionally) for each job category.[10]

In addition, employers with multiple establishments must continue to submit a separate report for each establishment.[11]  Employers will no longer be required to submit a consolidated report that includes all employees across establishments as the existing law required.[12]

For additional details on these measures, and the potential penalties for failing to abide by them, see Gibson Dunn’s October 11, 2022, client alert.

III. Expanded Leave Protections

A. Leave to Care for “Designated Person”

As of January 1, 2023, qualifying employees are now eligible to take leave under the California Family Rights Act (“CFRA”) and sick time under the California Labor Code to care for a “designated person.”[13]  Under the CFRA, a designated person is “any individual related by blood or whose association with the employee is the equivalent of a family relationship.”[14]  Under Labor Code section 245.5(c)(8), however, a designated person is any “person identified by the employee at the time the employee requests paid sick days.”  Under both the CFRA and Labor Code, employers may limit employees to one designated person per 12-month period.[15]

B. Bereavement Leave

As of January 1, 2023, employers with five or more employees must provide eligible employees with at least five days of unpaid bereavement leave upon the death of the employee’s family member, defined as a spouse, child, parent, sibling, grandparent, grandchild, domestic partner or partner-in-law.[16]  The five days need not be taken consecutively.[17]  Eligible employees are those who have been employed for at least 30 days prior to the start of the leave, and the leave must be completed within three months of the death.[18]

IV. Expanded Anti-Discrimination and Retaliation Laws

A. Contraceptive Equity

As of January 1, 2023, the Contraceptive Equity Act prohibits employers from requiring applicants or employees to disclose information relating to reproductive health decision-making, and from discriminating against applicants or employees based on reproductive health decision-making.[19]  “Reproductive health decision-making” includes but is not limited to “a decision to use or access a particular drug, device, product, or medical service for reproductive health.”[20]

B. Emergency Conditions

As of January 1, 2023, employers may not take adverse action or threaten adverse action against employees who refuse to report to or leave a workplace due to a “reasonable belief that the workplace or worksite is unsafe” because of an “emergency condition.”[21]

An emergency condition includes: “(i) conditions of disaster or extreme peril to the safety of persons or property at the workplace or worksite caused by natural forces or a criminal act,” and “(ii) an order to evacuate a workplace, a worksite, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act.”[22]  “Health pandemic[s]” are explicitly excluded from the definition of emergency condition.[23]  A “reasonable belief that the workplace or worksite is unsafe means that a reasonable person, under the circumstances known to the employee at the time, would conclude there is a real danger of death or serious injury if that person enters or remains on the premises.”[24]

Additionally, employers are prohibited from preventing “any employee from accessing the employee’s mobile device or other communications device for seeking emergency assistance, assessing the safety of the situation, or communicating with a person to verify their safety.”[25]

V. Minimum Wage Increases

As of January 1, 2023, all California employers must offer a minimum wage of at least $15.50.[26]  As a reminder, several localities, cities, and counties have higher minimum wages than the state’s rate, including, at present: Alameda, Belmont, Berkeley, Burlingame, Cupertino, Daly City, East Palo Alto, El Cerrito, Emeryville, Foster City, Fremont, Half Moon Bay, Hayward, Los Altos, Los Angeles (city and unincorporated county), Malibu, Menlo Park, Milpitas, Mountain View, Novato, Oakland, Palo Alto, Pasadena, Petaluma, Redwood City, Richmond, San Carlos, San Diego, San Francisco, San Jose, San Leandro, San Mateo, Santa Clara, Santa Monica, Santa Rose, Sonoma, South San Francisco, Sunnyvale, and West Hollywood.[27]

VI. Local and Industry-Specific Changes

California employers should also double check whether there are any new ordinances effective in localities in which they operate or whether there are any new, industry-specific laws.  For example, while the below does not cover all of the 2023 local and industry-specific changes, retailers operating in the City of Los Angeles should be aware that there are new rules for scheduling retail workers, and agricultural employers throughout the state will be required to comply with new union certification rules and overtime requirements.

A. Predictive Scheduling for City of Los Angeles Retail Workers

Effective April 1, 2023, retail employers in the City of Los Angeles must provide retail workers with their schedules at least two weeks in advance under the Fair Work Week Ordinance.[28]  Among other requirements, employers must also provide a good faith estimate of a schedule within 10 days of an employee’s request, and must allow employees to decline any changes made to their schedule following the 14 day advance notice period.[29]

B. Unionization and Overtime Changes for Agricultural Workers

Under Assembly Bill 2183, agricultural workers now have the right to vote for or against union representation either by mail or by completing ballot cards to be dropped off by the union at the state Agricultural Labor Relations Board (“ALRB”).[30]  Previously, secret ballot elections were exclusively held at a polling place selected by the ALRB.  Under the new law, agricultural workers may also receive assistance filling out their ballots.[31]  The new law is set to expire in five years on January 1, 2028.[32]

As of January 1, 2023, agricultural employers who employ 25 or fewer employees in California must compensate employees who work over 50 hours per week, or nine hours per day, with overtime (which is 1.5 times their regular rate of pay).[33]  The amount of hours that triggers overtime pay requirements for agricultural employers with 25 or fewer employees in California will continue to decrease until 2025, at which point such employees will be entitled to overtime for work over 40 hours per week or eight hours per day.[34]  This change comes a year after California began requiring agricultural employers with 26 or more employees in California to provide overtime to workers who work over 40 hours per week or eight hours per day.[35]

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[1] Cal. Lab. Code § 432.3(c)(3), (5).

[2] See California Equal Pay Act: Frequently Asked Questions, Department of Industrial Relations, https://www.dir.ca.gov/dlse/california_equal_pay_act.htm.

[3] Id.

[4] Id. § 432.3(c)(1), (2).

[5] Cal. Gov. Code § 12999.

[6] See California Pay Data Reporting: Frequently Asked Questions, Civil Rights Department, available at https://calcivilrights.ca.gov/paydatareporting/faqs/.

[7] Id.

[8] See Legislative Counsel’s Digest, SB 1162.

[9] Id.

[10] Id. § 12999(b)(3).

[11] See Legislative Counsel’s Digest, SB 1162.

[12] Id.

[13] Cal. Lab. Code § 12945.2(b)(5)(B).

[14] Id. § 12945.2(b)(2).

[15] Id. § 12945.2(b)(2); see also Lab. Code § 245.5(c)(8).

[16] Cal. Gov. Code § 12945.7(b).

[17] Id. § 12945.7(c).

[18] Id. § 12945.7(a)(1)(A), (d).

[19] Cal. Gov. Code §§ 12921(a); 12940(a), (c).

[20] Cal. Gov. Code § 12926(y).

[21] Cal. Lab. Code § 1139(b)(1).

[22] Id. § 1139(a)(1)(A).

[23] Id. § 1139(a)(1)(B).

[24] Id. § 1139(a)(2).

[25] Id. § 1139(b)(2)(A).

[26] Cal. Lab. Code § 1182.12(b).

[27] See, e.g., Inventory of US City and County Minimum Wage Ordinances, UC Berkeley Labor Center, available at https://laborcenter.berkeley.edu/inventory-of-us-city-and-county-minimum-wage-ordinances/#s-2.

[28] See generally, Fair Work Week Ordinance, available at https://clkrep.lacity.org/onlinedocs/2019/19-0229_ord_draft_06-23-22.pdf.

[29] Id.

[30] Cal. Lab. Code §§ 1156.35, 1156.36.

[31] Cal. Lab. Code § 1156.36(b)(3)(C)(vi).

[32] Cal. Lab. Code §§ 1156.35(i), 1156.36(n).

[33] Cal. Lab. Code § 860(b)(2).

[34] Id. §§ 860(c)(2), (d)(2).

[35] Id. § 860(d)(1).

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Gibson Dunn’s lawyers are available to assist in addressing any questions you may have about these developments. Please contact the lawyer with whom you usually work in the firm’s Labor and Employment practice group, the authors, or the practice group leaders.

Tiffany Phan – Los Angeles (+1 213-229-7522, [email protected])

Lauren M. Fischer – Los Angeles (+1 213-229-7983, [email protected])

Jason C. Schwartz – Co-Chair, Labor & Employment Group, Washington, D.C.
(+1 202-955-8242, [email protected])

Katherine V.A. Smith – Co-Chair, Labor & Employment Group, Los Angeles
(+1 213-229-7107, [email protected])

© 2023 Gibson, Dunn & Crutcher LLP

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Please note, prior results do not guarantee a similar outcome.

The U.S. Equal Employment Opportunity Commission (“EEOC”) released a draft strategic enforcement plan for 2023 through 2027 (the “SEP”), which outlines its areas of priority and enforcement goals.[1]Within these priorities, the SEP calls out a range of emerging topics including artificial intelligence (“AI”), the recently enacted Pregnant Workers Fairness Act of 2022 (“PWFA”), and lingering issues relating to the COVID-19 pandemic.  The draft is open for a comment period until February 9, 2023 to gather further input from stakeholders.

10 Key Takeaways for Employers

1. Artificial Intelligence (AI): The EEOC plans to focus on the use of AI tools in recruitment, screening, hiring, promotion, and other employment decisions.  Since launching its initiative on algorithmic fairness in October 2021, the EEOC has been increasing its focus on AI.  In May 2022, for example, the EEOC issued its first technical guidance on AI and filed its first enforcement action alleging algorithmic discrimination.[2]  The EEOC also announced a public hearing scheduled for January 31, 2023 regarding the use of automated systems and AI in employment decisions.[3]  The federal government is not the only regulator in this space.  New York City, for example, passed a law that requires employers using AI tools to perform a bias audit and fulfill certain posting requirements.[4]  Employers can expect more cases to be brought by the EEOC in addition to ongoing regulation at the state and local levels.
2. Pay Equity: The EEOC has signaled that it intends to use pay data to identify employers for pay equity cases, using directed investigations and Commissioner charges.  In addition, the SEP suggests that the EEOC will challenge the use of salary history and requests for desired salary when setting pay.  This follows on the heels of many local and state pay transparency laws, including in New York City, California, and Colorado, which require employers to post salary ranges in job advertisements and aim to enable workers to ask about and share their pay with coworkers.[5]
3. Pregnancy Discrimination: The EEOC plans aggressive enforcement of the newly-enacted PWFA, which requires employers to make reasonable accommodations for pregnancy-related medical conditions.[6]  The PWFA also specifically prohibits employers from requiring pregnant employees to take paid or unpaid leave if another reasonable accommodation can be provided.  Notably, the PWFA explains that the EEOC will issue regulations, which will include “examples of reasonable accommodations addressing known limitations related to the pregnancy, childbirth, or related medical conditions,” by December 23, 2023.
4. Current Events: The EEOC will aim to address the discrimination based on race, religion, national origin and gender influenced by or arising as backlash in response to local, national, or global events.
5. Settlement, Confidentiality, Non-Disparagement, and Arbitration Agreements: The EEOC plans to target releases, confidentiality agreements, and arbitration agreements that it believes improperly restrict access to the legal system.  This is part of a broader trend at the state and local level, as well as with other federal agencies like the National Labor Relations Board (“NLRB”), Securities Exchange Commission (“SEC”), and the Federal Trade Commission (“FTC”).[7]  Additionally, the Speak Out Act, which prohibits the enforcement of pre-dispute non-disclosure and non-disparagement clauses in disputes relating to claims of sexual assault or sexual harassment, was signed into law just last month on December 7, 2022.[8]  Although the EEOC’s authority in this area is questionable (and it lost a prior challenge regarding the use of severance agreements[9]), the EEOC will likely continue to bring attention to these types of agreements.
6. Targeted Industries: The SEP identifies the purported lack of diversity in certain industries, such as construction and “high tech” (without any cited evidence), as areas of particular concern.  Indeed, EEOC Chair Burrows has previously spearheaded a hearing to examine purported discrimination in the construction sector with a particular emphasis on women and people of color.[10]  The EEOC has already begun targeting these industries in 2022 and employers can expect the EEOC to continue bringing enforcement actions in this space.
7. Vulnerable Populations: The EEOC defines vulnerable populations who it believes cannot easily obtain relief on their own behalf to include immigrants, individuals with arrest or conviction records, LGBTQI+ individuals, older workers, low-wage workers, Native Americans, and individuals with limited literacy or English proficiency.  This is not a new area of focus, as the EEOC has been focused on expanding access to jobs for workers from underrepresented communities through its Hiring Initiative to Reimagine Equity (“HIRE”) launched in January 2022.[11]
8. Recruitment and Hiring: The EEOC will place special emphasis on recruitment and hiring, aiming to eliminate barriers arising from purportedly exclusionary job advertisements or restrictive or inaccessible application systems.  This focal point is likely to dovetail with the use of emerging technologies such as AI and machine learning.
9. Systemic Harassment: The EEOC likely will look to bring systemic harassment cases on all protected bases as one of its “key subject matter priorities.”  The SEP underscores that the EEOC is determined to “combat this persistent problem,” as over 34 percent of the charges it received between 2017 and 2021 included an allegation of harassment.
10. COVID Again: The EEOC says that while it hopes discrimination directly associated with COVID-19 will decline as the nation recovers from the pandemic, it will maintain its focus on COVID-19-related employment discrimination, including cases relating to vaccine accommodations, medical inquiries, and pandemic-related stereotyping.

__________________________

[1] Draft Strategic Enforcement Plan (Jan. 10, 2023), https://www.federalregister.gov/documents/2023/01/10/2023-00283/draft-strategic-enforcement-plan.

[2] For more information, please see Gibson Dunn’s Client Alert, Keeping Up with the EEOC: Artificial Intelligence Guidance and Enforcement Action.

[3] EEOC, Navigating Employment Discrimination in AI and Automated Systems: A New Civil Rights Frontier, https://www.eeoc.gov/next-commission-meeting.

[4] The law’s enforcement has been postponed until April 15, 2023 (from January 1, 2023) as the City’s Department of Consumer Worker Protection will host a second public hearing on January 23, 2023 regarding the proposed rules aimed at clarifying the many ambiguities in the law.  For more information, please see Gibson Dunn’s Client Alerts, New York City Proposes Rules to Clarify Upcoming Artificial Intelligence Law for Employers, New York City Enacts Law Restricting Use of Artificial Intelligence in Employment Decisions.

[5] For more information, please see Gibson Dunn’s Client Alerts, New York City Enacts Pay Transparency Law Requiring Salary Ranges in Job Postings, California Enacts Pay Transparency and Disclosure Requirements Effective January 1, 2023, Colorado’s Department of Labor and Employment Takes Hard Line on Remote Jobs that Exclude Colorado Applicants to Escape Challenging Aspects of the Equal Pay for Equal Work Act’s Posting Requirements.

[6] For more information, please see Gibson Dunn’s Client Alert, Complying With The Pregnant Workers Fairness Act: Considerations For Employers (Forthcoming).

[7] See, e.g., Non-Compete Clause Rulemaking, Fed. Trade Comm’n (Jan. 5, 2023).  For more information, please see Gibson Dunn’s Client Alert, FTC Proposes Rule to Ban Non-Compete Clauses.

[8] For more information, please see Gibson Dunn’s Client Alert, Biden Signs “Speak Out Act” Limiting the Enforceability of Non-Disclosure and Non-Disparagement Clauses in Sexual Harassment Cases.

[9] EEOC v. CVS Pharmacy, Inc., 809 F.3d 335, 343 (7th Cir. 2015) (affirming dismissal of EEOC’s claim that CVS’ allegedly confusing severance agreements violated Title VII by leading former employees to believe they were prohibited from filing charges with the EEOC).  The Seventh Circuit underscored that the EEOC’s authority under Title VII “does not create a broad enforcement power for the EEOC to pursue non-discriminatory employment practices that it dislikes.”  Id. at 341.

[10] EEOC, EEOC Shines Spotlight on Discrimination and Opportunities in Construction (May 17, 2022), https://www.eeoc.gov/newsroom/eeoc-shines-spotlight-discrimination-and-opportunities-construction.

[11] EEOC, Hiring Initiative to Reimagine Equity (HIRE) Fact Sheet, https://www.eeoc.gov/hiring-initiative-reimagine-equity-hire-fact-sheet.

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The following Gibson Dunn attorneys assisted in preparing this client update: Jason Schwartz, Katherine Smith, Harris Mufson, Molly Senger, Naima Farrell, and Emily Maxim Lamm.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. To learn more about these issues, please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Labor and Employment practice group, or Jason Schwartz and Katherine Smith.

Jason C. Schwartz – Co-Chair, Labor & Employment Group, Washington, D.C.
(+1 202-955-8242, [email protected])

Katherine V.A. Smith – Co-Chair, Labor & Employment Group, Los Angeles
(+1 213-229-7107, [email protected])

© 2023 Gibson, Dunn & Crutcher LLP

Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Please note, prior results do not guarantee a similar outcome.

With Republicans taking control of the U.S. House of Representatives during the 118th Congress, congressional investigations in the House will shift focus from climate change and the Trump Administration to environmental, social, and corporate governance (“ESG”) investing, social media censorship, China, COVID-19 origins and government preventative measures, and the Biden Administration.  With an effective one-seat majority in the Senate, Democrats will have more authority to pursue their ongoing reviews of climate change, healthcare, big tech, and prescription drug costs.  And although both parties are far apart on many issues, it is likely they will find common ground in investigations of the power of technology companies, international corporate and military competition and espionage, and cybersecurity breaches.

Unlike litigation or executive branch investigations, congressional investigations can arise with little warning and immediately attract the media spotlight.  Potential targets must be prepared to respond quickly and appropriately.  Upon receipt of a congressional subpoena or information request letter, targets must develop a full-fledged response strategy, including taking steps to appropriately answer the inquiry as well as create a consistent messaging strategy for media, shareholders, and other investigative bodies that may take an interest once Congress has raised the alarm.  It is critical that targets of congressional investigations understand the norms, rules, and procedures that govern their potential courses of action and know how these unique investigations typically unfold.

To assist potential targets and interested parties in assessing their readiness for responding to a congressional investigation, Gibson Dunn offers our views on the future course of the 118th Congress—its new leadership, rules, and areas of focus.  We also provide a brief overview of how congressional investigations often are conducted, Congress’s underlying legal authorities to investigate, and various defenses that targets and witnesses can raise in response.  In addition, we discuss missteps that investigative targets and witnesses sometimes make, as well as best practices for responding to a congressional request for information.

I. Lay of the Land in the 118th Congress

House of Representatives

As we explained at the start of 116th and 117th congresses, the House adopts new rules and investigative authorities each Congress as part of its organizing process.  The House passed a new Rules package on January 9, 2023, after a historic 15 rounds of voting to elect Speaker Kevin McCarthy (R-CA).  The hard-fought Rules package includes a number of provisions added or modified to secure support from different factions within the Republican Party.

Although Democratic control of a chamber of Congress usually portends more private sector investigations, the new House Republican majority is poised to investigate parts of the private sector with equal vigor.  Big tech, financial services, fintech companies, and corporations with ties to China all are likely to face congressional scrutiny this year.

The House Republican majority is well-equipped to conduct these investigations.  When Democrats took the majority in 2019 after eight years of GOP control, they expanded their investigative tools and continued to add new ones in 2021.  Now that Republicans are in charge, they will have the advantage of those expanded tools.  And, under the Rules package, the House created new investigative bodies that will have authority to review private sector activities.  Moreover, committees will organize over the coming weeks, and additional investigative tools could be added to their arsenals.

Investigative Rules:  Republicans will maintain rules Democrats have implemented over the last two congresses that expanded the House’s investigative authorities.  For example, Republicans will retain broad deposition authority.  Democrats previously expanded the House’s deposition authority by removing the requirement that a member be present during the taking of a staff deposition.  As we previously noted, such broad authority makes it more difficult for minority members to influence or  hinder investigations to which they are opposed.  It is also important to remember that, unlike in the Senate, nearly every House standing committee chair is empowered to issue a deposition subpoena unilaterally, that is, without the ranking member’s consent or a committee vote, after mere “consultation” with the ranking member.

New investigative bodies:  In the 118th Congress Rules package and related resolutions, the House has created three new investigative bodies.  The Committee on Oversight and Accountability—formerly known as the Committee on Oversight and Reform—will have a Select Subcommittee on the Coronavirus Pandemic.  The House Judiciary Committee will have a Select Subcommittee on the Weaponization of the Federal Government.  And the Rules package and a separate House resolution add a new full investigative committee: the Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party.[1]  Although each of these bodies, discussed further below, will aggressively seek information from the Biden Administration, we anticipate they also will gather information from the private sector.

The Select Subcommittee on the Coronavirus Pandemic will investigate the origins of the pandemic, “including . . . the Federal Government’s funding of gain-of-function research”; the use of taxpayer funds to address the pandemic; the implementation and effectiveness of laws and regulations to address the pandemic; the development of vaccines and treatments; the implementation of vaccine policies applied to federal employees and the military; the economic impact of the pandemic; the societal impact of decisions to close schools; executive branch policies related to the pandemic; protection of whistleblowers related to the pandemic; and cooperation by the Executive Branch with oversight of the pandemic response.[2]  Unlike the Select Subcommittee on the Coronavirus Crisis, created by the Democratic-controlled House in the last Congress, this Select Subcommittee will not have its own subpoena authority.  Instead, it will need to request that the chair of the full Committee on Oversight and Accountability issue subpoenas for it.[3]

Likely private sector targets of the Select Subcommittee on the Coronavirus Pandemic include healthcare research companies; medical and pharmaceutical companies; hospitals; and recipients and conduits of various financial aid programs such as the Paycheck Protection Program; the Homeowner Assistance Fund; the airline and national security relief programs; and the Coronavirus Economic Relief for Transportation Services program.

The resolution establishing the Select Subcommittee on the Weaponization of the Federal Government directs it to study and issue a final report on its findings regarding executive branch collection of information on and investigation of U.S. citizens, including criminal investigations; “how executive branch agencies work with, obtain information from, and provide information to the private sector, non-profit entities, or other government agencies to facilitate action against American citizens . . .”; and how the Executive Branch collects and disseminates information about U.S. citizens.[4]  The Select Subcommittee will not have its own subpoena authority, but the chair of the full Judiciary Committee may issue subpoenas for it.[5]  Further, the resolution authorizes the Select Subcommittee to receive information available to the Permanent Select Committee on Intelligence.[6]  Although the Select Subcommittee on the Weaponization of the Federal Government is authorized to investigate ongoing executive branch investigations, we do not expect agencies to provide information on these ongoing investigations.

Although the focus of the Select Subcommittee is on executive branch activity, we anticipate it will gather information from social media companies, financial institutions, fintech companies, telecommunication companies, consulting firms, and non-profit organizations.  The inquiries likely will focus on any collaboration with the federal government in its investigations and any activity that appeared to happen in parallel with government action, as well as financial activity of various targets of the investigations.

The Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party’s “sole authority” will be to “investigate and submit policy recommendations on the status of the Chinese Communist Party’s economic, technological, and security progress and its competition with the United States.”[7]  Unlike the Select Committee on the Climate Crisis, created by the Democrat-controlled House in the 116th Congress, this Select Committee will have the same authorities as standing committees, including subpoena and deposition authority.[8]  As a result, we can expect more of an investigative approach by this new body.  Representative Mike Gallagher (R-WI), a veteran with a background in strategic intelligence and international relations, will chair the Select Committee.

The Select Committee likely will seek information from companies and individuals engaged in business activity in China, including social media companies and software companies; any organizations that have taken steps to appease the CCP in relation to their positions on Taiwan, Nepal, or other interests; and educational and corporate institutions that may have been infiltrated by agents or sympathizers of the CCP.  We also anticipate that they will seek information from financial institutions and telecommunications companies serving any of those previously listed organizations.

Other likely investigative priorities:  The Republican majority in the House has announced its plans to focus on a wide variety of topics.  Big tech will face scrutiny for censorship on various platforms.  Financial companies will have to address their investment strategies in light of Republican opposition to ESG investing.  Fintech companies will face questions regarding de-platforming users, as well as privacy and cybersecurity concerns.  The House also will focus on the Biden Administration, including Hunter Biden’s business dealings, as well as the administration’s border policy, student loan forgiveness program, IRS enforcement priorities and funding, and withdrawal from Afghanistan.

Senate

The Senate Democrats’ new one-seat majority gives them substantially more power to pursue investigations in the 118th Congress than they had previously.  During the last Congress, which was evenly divided between Republicans and Democrats, subpoenas required bipartisan support.  In the 118th Congress, Democratic chairs will be able to issue subpoenas with the majority vote of their committees.  It will take Senate committees several weeks to organize and publish their rules, but the 117th Congress gave them two years to define their priorities, hire staff, and build investigative muscle.  We expect them to get an early and strong start to their investigative agenda in the 118th Congress.

Key committees to watch:  We expect three Senate bodies to be more active than others in their investigations: the Senate Finance Committee, the Senate Homeland Security and Governmental Affairs Committee, and the Permanent Subcommittee on Investigations.

Senator Ron Wyden (D-OR) will continue to serve as Chairman of the Senate Finance Committee.  During the 117th Congress, he investigated pharmaceutical company tax practices; companies that use offshore account reporting; and potential Trump Administration conflicts of interest in international trade.  We anticipate he will continue many of those investigations into the 118th Congress and will use his new subpoena authority as needed.  We also expect to see him pursue investigations into big tech and oil companies.

Senator Gary Peters (D-MI) will continue to serve as Chairman of the Senate Homeland Security and Governmental Affairs Committee (“HSGAC”).  In the last Congress, HSGAC held hearings on COVID-19 preparedness, ransomware attacks enabled by cryptocurrency, and social media’s impact on homeland security.  We expect the Committee to continue its focus on these issues, with potential investigations into cryptocurrencies and social media companies.  Under its jurisdiction over government waste, fraud, and abuse, HSGAC also likely will investigate pandemic relief fraud and ways to mitigate fraud in government programs going forward.

The Senate Permanent Subcommittee on Investigations (“PSI”), a subcommittee of HSGAC, has some of the broadest investigative authorities and jurisdiction in the Senate.  PSI has the responsibility of studying and investigating the efficiency and economy of operations relating to all branches of the government and is also tasked with studying and investigating the compliance or noncompliance with rules, regulations, and laws, investigating all aspects of crime and lawlessness within the United States, which have an impact upon or affect the national health, welfare, and safety, including syndicated crime, investment fraud schemes, commodity and security fraud, computer fraud, and the use of offshore banking and corporate facilities to carry out criminal objectives.  Chaired by Senator Jon Osoff (D-GA), PSI was less active last Congress than under previous Democratic chairmen, but it is likely that he will take advantage of Democrats’ increased authority in the Senate to advance his party’s agenda.

Other investigative bodies to note include the Senate Health, Education, Labor, and Pensions Committee and the Senate Commerce, Science, and Transportation Committee.

Senator Bernie Sanders (I-VT) will be taking over the chairmanship of the Senate Health, Education, Labor, and Pensions (“HELP”) Committee, and we expect he will wield his investigative authorities aggressively.  In particular, he is likely to focus on drug prices, healthcare executive salaries, workers’ rights, and educational and medical debt.

As Chairwoman of the Senate Commerce, Science, and Transportation Committee, Senator Maria Cantwell (D-WA) already has announced hearings related to December’s airline flight cancellations.  She also may find bipartisan support for investigating and legislating on the threats social media platforms pose to children.

Potential Changes to Subpoena and Deposition Authority: We will be closely watching whether Senate Democrats strengthen their investigative arsenal, particularly when it comes to subpoena and deposition authority.  With respect to subpoenas, currently only the Chair of PSI is authorized to issue a subpoena unilaterally, a significant difference with the House where nearly all committee chairs may do so.  Because Senate investigations have historically been more bipartisan than those in the House, there has been a longstanding hesitation on both sides to expand unilateral subpoena power.  It remains to be seen if that philosophy will continue to hold sway in the 118th Congress.

It is also important to keep a close watch on Senate deposition authority. In the last Congress, ten Senate bodies included deposition provisions in their rules: (1) Judiciary; (2) HSGAC; (3) PSI; (4) Aging; (5) Agriculture, Nutrition, and Forestry; (6) Commerce, Science, and Transportation; (7) Ethics; (8) Foreign Relations; (9) Indian Affairs; and (10) Intelligence. Staff is expressly authorized to take depositions in each of these committees other than the Agriculture, Nutrition, and Forestry, Commerce, Science, and Transportation, Indian Affairs, and Intelligence Committees. Note that Senate Rules do not authorize committees to take depositions. Hence, Senate committees cannot delegate that authority to themselves through committee rules, absent a Senate resolution or a change in Senate rules. The committee funding resolution for the 117th Congress, S. Res. 70, explicitly provides deposition authority only for PSI and the Senate Judiciary Committee.

II. Unique Features of Congressional Investigations

As a practical matter, numerous motivations often drive a congressional inquiry, including: advancing a chair’s political agenda or public profile, developing support for a legislative proposal, exposing alleged criminal wrongdoing or unethical practices, pressuring a company to take certain actions, and responding to public outcry.  Recognizing the presence of these underlying objectives and evaluating the political context surrounding an inquiry can therefore be a key component of developing an effective response strategy.

Congress’s power to investigate is broad—as broad as its legislative authority.  The “power of inquiry” is inherent in Congress’s authority to “enact and appropriate under the Constitution.”[9]  And while Congress’s investigatory power is not a limitless power to probe any private affair or to conduct law enforcement investigations, but rather must further a valid legislative purpose,[10] the term “legislative purpose” is understood broadly to include gathering information not only for the purpose of legislating, but also for overseeing governmental matters and informing the public about the workings of government.[11]

Congressional investigations present a number of unique challenges not found in the familiar arenas of civil litigation and executive branch investigations.  Unlike the relatively controlled environment of a courtroom, congressional investigations often unfold in a hearing room in front of television cameras and on the front pages of major newspapers and social media feeds.

III. Investigatory Tools of Congressional Committees

Congress has many investigatory tools at its disposal, including: (1) requests for information; (2) interviews; (3) depositions; (4) hearings; (5) referrals to the Executive Branch for prosecution; and (6) subpoenas for documents and testimony.  If these methods fail, Congress can use its contempt power in an effort to punish individuals or entities who refuse to comply with subpoenas.  It is imperative that targets be familiar with the powers (and limits) of each of the following tools to best chart an effective response:

• Requests for Information: Any member of Congress may issue a request for information to an individual or entity. A request may seek documents or other information.[12] Absent the issuance of a subpoena, responding to such requests is entirely voluntary as a legal matter (although of course there may be public or political pressure to respond).  As such, recipients of such requests should carefully consider the pros and cons of different degrees of
• Interviews: Interviews also are voluntary, led by committee staff, and occur in private (in person or remotely).  They tend to be less formal than depositions and are sometimes transcribed.  Committee staff may take copious notes and rely on interview testimony in subsequent hearings or public reports.  Although interviews are typically not conducted under oath, false statements to congressional staff can be criminally punishable as a felony under 18 U.S.C. § 1001.
• Depositions: Depositions can be compulsory, are transcribed, and are taken under  As such, depositions are more formal than interviews and are similar to those in traditional litigation.  The number of committees with authority to conduct staff depositions has increased significantly over the last few years.  During the 117th Congress, the then-Democratic House majority eliminated the requirement that one or more members of Congress be present during a deposition,[13] which increased the use of depositions as an investigative tool, and we expect this trend will continue in the 118th Congress.  In the 117th Congress, staff of six Senate committees and subcommittees were authorized to conduct staff depositions:  Judiciary; HSGAC; PSI; Aging; Ethics; and Foreign Relations.[14]  Judiciary, however, required that a member be present during deposition, unless waived by agreement of the chair and ranking member.The House Rules Committee’s regulations for staff depositions in the 118th Congress will likely mirror in many respects the regulations issued by that Committee in the 117th Congress.  Significantly, those regulations changed past practice by authorizing the immediate overruling of objections raised by a witness’s counsel and immediate instructions to answer, on pain of contempt.  Those regulations also appeared to eliminate the witness’s right to appeal rulings on objections to the full committee (although committee members may still appeal).  Assuming these changes are preserved in the 118th Congress, as seems likely, they will continue to enhance the efficiency of the deposition process, as prior to the 116th Congress the staff deposition regulations required a recess before the chair could rule on an objection.  Additionally, the regulations for the 116th Congress expressly allowed for depositions to continue from day to day and permit, with notice from the chair, questioning by members and staff of more than one committee.  Finally, the regulations removed a prior requirement that allowed objections only by the witness or the witness’s lawyer.  This change appears to allow objections from staff or members who object to a particular line of questioning.[15]
• Hearings: While both depositions and interviews allow committees to acquire information quickly and (at least in many circumstances) confidentially,[16] testimony at hearings, unless on a sensitive topic, is conducted in a public session led by the members themselves (or, on occasion, committee counsel).[17]  Hearings can either occur at the end of a lengthy staff investigation or take place more rapidly, often in response to an event that has garnered public and congressional concern.  Most akin to a trial in litigation (though without many of the procedural protections or the evidentiary rules applicable in judicial proceedings), hearings are often high profile and require significant preparation to navigate successfully.
• Executive Branch Referral: Congress also has the power to refer its investigatory findings to the Executive Branch for criminal prosecution.  After a referral from Congress, the Department of Justice may charge an individual or entity with making false statements to Congress, obstruction of justice, or destruction of evidence.  Importantly, while Congress may make a referral, the Executive Branch retains the discretion to prosecute, or not.

Subpoena Power

As noted above, Congress will usually seek voluntary compliance with its requests for information or testimony as an initial matter.  If requests for voluntary compliance meet with resistance, however, or if time is of the essence, it may compel disclosure of information or testimony through the issuance of a congressional subpoena.[18]  Like Congress’s power of inquiry, there is no explicit constitutional provision granting Congress the right to issue subpoenas.[19]  But the Supreme Court has recognized that the issuance of subpoenas is “a legitimate use by Congress of its power to investigate” and its use is protected from judicial interference in some respects by the Speech or Debate Clause.[20]  Congressional subpoenas are subject to few legal challenges,[21] and “there is virtually no pre-enforcement review of a congressional subpoena” in most circumstances.[22]

The authority to issue subpoenas is initially governed by the rules of the House and Senate, which delegate further rulemaking to each committee.[23]  While nearly every standing committee in the House and Senate has the authority to issue subpoenas, the specific requirements for issuing a subpoena vary by committee.  These rules are still being developed by the committees of the 118th Congress, and can take many forms.[24]  For example, several House committees authorize the committee chair to issue a subpoena unilaterally and require only that notice be provided to the ranking member.  Others, however, require approval of the chair and ranking member, or, upon the ranking member’s objection, require approval by a majority of the committee.

Contempt of Congress

Failure to comply with a subpoena can result in contempt of Congress or a civil enforcement action.  Although Congress does not frequently resort to its contempt power to enforce its subpoenas, it has three potential avenues for seeking to implement its authority to compel testimony and production of documents.

• Inherent Contempt Power: The first, and least relied upon, form of compulsion is Congress’s inherent contempt power.  Much like the subpoena power itself, the inherent contempt power is not specifically authorized in the Constitution, but the Supreme Court has recognized its existence and legitimacy.[25]  To exercise this power, the House or Senate must pass a resolution and then conduct a full trial or evidentiary proceeding, followed by debate and (if contempt is found to have been committed) imposition of punishment.[26]  As is apparent in this description, the inherent contempt authority is cumbersome and inefficient, and it is potentially fraught with political peril for legislators.  It is therefore unsurprising that Congress has not used it since.[27]
• Statutory Criminal Contempt Power: Congress also possesses statutory authority to refer recalcitrant witnesses for criminal contempt prosecutions in federal court.  In 1857, Congress enacted this criminal contempt statute as a supplement to its inherent authority.[28]  Under the statute, a person who refuses to comply with a subpoena is guilty of a misdemeanor and subject to a fine and imprisonment.[29]  “Importantly, while Congress initiates an action under the criminal contempt statute, the Executive Branch prosecutes ”[30]  This relieves Congress of the burdens associated with its inherent contempt authority.  The statute simply requires the House or Senate to approve a contempt citation.  Thereafter, the statute provides that it is the “duty” of the “appropriate United States attorney” to prosecute the matter, although the Department of Justice maintains that it always retains discretion not to prosecute, and often declines to do so.[31]  Although Congress rarely uses its criminal contempt authority, the Senate used it in 2016 against Backpage.com, and the House Democratic majority employed it against a flurry of Trump administration officials, including Attorney General Bill Barr, Secretary of Commerce Wilbur Ross, Secretary of Homeland Security Chad Wolff, political adviser Steve Bannon, and White House Chief of Staff Mark Meadows.  The Department of Justice prosecuted Bannon for defying a subpoena from the Select January 6 Committee.  A jury found him guilty, and his conviction is now on appeal.
• Civil Enforcement Authority: Finally, Congress may seek civil enforcement of its subpoenas, which is often referred to as civil contempt.  The Senate’s civil enforcement power is expressly codified.[32]  This statute authorizes the Senate to seek enforcement of legislative subpoenas in a S. District Court.  In contrast, the House does not have a civil contempt statute, but most courts have held that it may pursue a civil contempt action “by passing a resolution creating a special investigatory panel with the power to seek judicial orders or by granting the power to seek such orders to a standing committee.”[33]  In the past, the full House has typically “adopt[ed] a resolution finding the individual in contempt and authorizing a committee or the House General Counsel to file suit against a noncompliant witness in federal court.”[34]  In the 116th Congress, however, the Chairman of the House Rules Committee took the position that the House rules empower the Bipartisan Legal Advisory Group (“BLAG”; consisting of the Speaker, the Majority and Minority Leaders, and the Majority and Minority Whips) to authorize a civil enforcement action without the need for a House vote.[35]  The House subsequently endorsed that position, and the BLAG authorized at least one civil enforcement action during the 116th Congress.[36]  It seems likely that this authority will be continued in the 118th Congress.

IV. Defenses to Congressional Inquiries

While potential defenses to congressional investigations are limited, they are important to understand.  The principal defenses are as follows:

Jurisdiction and Legislative Purpose

As discussed above, a congressional investigation is required generally to relate to a legislative purpose, and must also fall within the scope of legislative matters assigned to the particular committee at issue.  In a challenge based on these defenses, the party subject to the investigation must argue that the inquiry does not have a proper legislative purpose, that the investigation has not been properly authorized, or that a specific line of inquiry is not pertinent to an otherwise proper purpose within the committee’s jurisdiction.  Because courts generally interpret “legislative purpose” broadly, these challenges can be an uphill battle.  Nevertheless, this defense should be considered when a committee is pushing the boundaries of its jurisdiction or pursuing an investigation that arguably lacks any legitimate legislative purpose.

Constitutional Defenses

Constitutional defenses under the First and Fifth Amendments may be available in certain circumstances.  While few of these challenges are ever litigated, these defenses should be carefully evaluated by the subject of a congressional investigation.

When an investigative target invokes a First Amendment defense, a court must engage in a “balancing” of “competing private and public interests at stake in the particular circumstances shown.”[37]  The “critical element” in the balancing test is the “existence of, and the weight to be ascribed to, the interest of the Congress in demanding disclosures from an unwilling witness.”[38]  Though the Supreme Court has never relied on the First Amendment to reverse a criminal conviction for contempt of Congress, it has recognized that the First Amendment may restrict Congress in conducting investigations.[39]  Courts have also recognized that the First Amendment constrains judicially compelled production of information in certain circumstances.[40]  Accordingly, it would be reasonable to contend that the First Amendment limits congressional subpoenas at least to the same extent.  First Amendment issues arose in several investigations during the 117th Congress and are likely to be implicated by certain investigations in the 118th Congress as well.

The Fifth Amendment’s privilege against self-incrimination is available to witnesses—but not entities—who appear before Congress.[41]  The right generally applies only to testimony, and not to the production of documents,[42] unless those documents satisfy a limited exception for “testimonial communications.”[43]  Congress can circumvent this defense by granting transactional immunity to an individual invoking the Fifth Amendment privilege.[44]  This allows a witness to testify without the threat of a subsequent criminal prosecution based on the testimony provided.  Supreme Court dicta also suggests the Fourth Amendment can be a valid defense in certain circumstances related to the issuance of congressional subpoenas.[45]  The Fourth Amendment has never been successfully employed to quash a congressional subpoena, however.

Attorney-Client Privilege & Work Product Defenses

Although House and Senate committees have taken the position that they are not required to recognize the attorney-client privilege, in practice the committees generally acknowledge the privilege as a valid protection.  Moreover, no court has ruled that the attorney-client privilege does not apply to congressional investigations.  Committees often require that claims of privilege be logged as they would in a civil litigation setting.  In assessing a claim of privilege, committees balance the harm to the witness of disclosure against legislative need, public policy, and congressional duty.  Notably, in 2020, the Supreme Court for the first time acknowledged in dicta that the attorney-client privilege is presumed to apply in congressional investigations.  In Trump v. Mazars, the Supreme Court stated that “recipients [of congressional subpoenas] have long been understood to retain common law and constitutional privileges with respect to certain materials, such as attorney-client communications and governmental communications protected by executive privilege.”[46]  It remains to be seen if members and committee staffers will take the same view going forward.

The work product doctrine protects documents prepared in anticipation of litigation. Accordingly, it is not clear whether or in what circumstances the doctrine applies to congressional investigations, as committees may argue that their investigations are not necessarily the type of “adversarial proceeding” required to satisfy the “anticipation of litigation” requirement.[47]

V. Top Mistakes and How to Prepare

Successfully navigating a congressional investigation requires mastery of the facts at issue, careful consideration of collateral political events, and crisis communications.

Here are some of the more common mistakes we have observed:

• Facts: Failure to identify and verify the key facts at issue;
• Message: Failure to communicate a clear and compelling narrative;
• Context: Failure to understand and adapt to underlying dynamics driving the investigation;
• Concern: Failure to timely recognize the attention and resources required to respond;
• Legal: Failure to preserve privilege and assess collateral consequences;
• Rules: Failure to understand the rules of each committee, which can vary significantly; and
• Big Picture: Failure to consider how an adverse outcome can negatively impact numerous other legal and business objectives.

The consequences of inadequate preparation can be disastrous on numerous fronts.  A keen understanding of how congressional investigations differ from traditional litigation and  executive branch or state agency investigations is therefore vital to effective preparation.  The most successful subjects of investigations are those that both seek advice from experienced counsel and employ multidisciplinary teams with expertise in government affairs, media relations, e-discovery, and the key legal and procedural issues.

* * *

The change in control of the House portends a shift in investigative focus, and this particular Republican majority appears keen to investigate both public and private sector entities.  Senate Democrats will use their enhanced authority to pick up their investigative tempo, as well.  Gibson Dunn lawyers have extensive experience in both running congressional investigations and defending targets of and witnesses in such investigations.  If you or your company become the subject of a congressional inquiry, or if you are concerned that such an inquiry may be imminent, please feel free to contact us for assistance.

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[1]       H.R. Res. 5, 118th Cong. § 5(e)(1) (2023).

[2]       H.R. Res. 5, 118th Cong. § 4(a)(2)(A) (2023).

[3]       H.R. Res. 5, 118th Cong. § 4(a)(3)(A)(ii) (2023).

[4]       H.R. Res. 12, 118th Cong. § 1(b)(1) (2023).

[5]       H.R. Res. 12, 118th Cong. § 1(c)(1)(B) (2023).

[6]       H.R. Res. 12, 118th Cong. § 1(c)(1)(C) (2023).

[7]       H.R. Res. 11, 118th Cong. § 1(b)(2) (2023).

[8]       H.R. Res. 11, 118th Cong. § 1(c)(3) (2023).

[9]       Barenblatt v. United States, 360 U.S. 109, 111 (1957).

[10]     See Wilkinson v. United States, 365 U.S. 399, 408-09 (1961); Watkins v. United States, 354 U.S. 178, 199-201 (1957).

[11]     Michael D. Bopp, Gustav W. Eyler, & Scott M. Richardson, Trouble Ahead, Trouble Behind: Executive Branch Enforcement of Congressional Investigations, 25 Corn. J. of Law & Pub. Policy 453, 456-57 (2015).

[12]     Id.

[13]     See H.R. Res. 6, 116th Cong. § 103(a)(1) (2019).

[14]     See U.S. Senate Committee on Rules and Administration, Authority and Rules of Senate Committees, 2021–2022, S. Doc. No. 117-6 (117th Cong. 2022), https://www.govinfo.gov/content/pkg/CDOC-117sdoc6/pdf/CDOC-117sdoc6.pdf.

[15]     See 165 Cong. Rec. H1216 (Jan. 25, 2019) (statement of Rep. McGovern).

[16]     Bopp, supra note 11, at 457.

[17]     Id. at 456-57.

[18]     Id. at 457.

[19]     Id.

[20]     Eastland v. U.S. Servicemen’s Fund, 421 U.S. 491, 504 (1975).

[21]     Bopp, supra note 11, at 458.

[22]     Id. at 459. The principal exception to this general rule arises when a congressional subpoena is directed to a custodian of records owned by a third party.  In those circumstances, the Speech or Debate Clause does not bar judicial challenges brought by the third party seeking to enjoin the custodian from complying with the subpoena, and courts have reviewed the validity of the subpoena.  See, e.g., Trump v. Mazars, 140 S. Ct. 2019 (2020); Bean LLC v. John Doe Bank, 291 F. Supp. 3d 34 (D.D.C. 2018).

[23]     Bopp, supra note 11, at 458.

[24]     Gibson Dunn will detail these rules when they are finalized in an upcoming publication.

[25]     Bopp, supra note 11, at 460 (citing Anderson v. Dunn, 19 U.S. 204, 228 (1821)).

[26]     Id.

[27]     Id. at 466.

[28]     Id. at 461.

[29]     See 2 U.S.C. §§ 192 and 194.

[30]     Bopp, supra note 11, at 462.

[31]     See 2 U.S.C. § 194.

[32]     See 2 U.S.C. §§ 288b(b), 288d.

[33]     Bopp, supra note 11, at 465.  A panel of the U.S. Court of Appeals for the D.C. Circuit ruled in August of 2020 that the House may not seek civil enforcement of a subpoena absent statutory authority.  Committee on the Judiciary of the United States House of Representatives v. McGahn, 951 F.3d 510 (D.C. Cir. 2020).  On rehearing en banc, the D.C. Circuit reversed, concluding that “the Committee on the Judiciary of the House of Representatives has standing under Article III of the Constitution to seek judicial enforcement of its duly issued subpoena.”  Committee on Judiciary of United States House of Representatives v. McGahn, 968 F.3d 755, 760 (D.C. Cir. 2020) (en banc).

[34]     Bopp, supra note 11, at 465.

[35]     See 165 Cong. Rec. H30 (Jan. 3, 2019) (“If a Committee determines that one or more of its duly issued subpoenas has not been complied with and that civil enforcement is necessary, the BLAG, pursuant to House Rule II(8)(b), may authorize the House Office of General Counsel to initiate civil litigation on behalf of this Committee to enforce the Committee’s subpoena(s) in federal district court.”) (statement of Rep. McGovern); House Rule II.8(b) (“the Bipartisan Legal Advisory Group speaks for, and articulates the institutional position of, the House in all litigation matters”).

[36]     See H. Res. 430 (116th Cong.) (“a vote of [BLAG] to authorize litigation . . . is the equivalent of a vote of the full House of Representatives”); Br. for House Committee at 33, Committee on Ways and Means, United States House of Representatives v. U.S. Dep’t of the Treasury, No. 1:19-cv-01974 (D.D.C. 2019) (stating BLAG authorized suit by House Ways & Means Committee to obtain President Trump’s tax returns pursuant to 26 U.S.C. § 6103(f)).

[37]     Barenblatt, 360 U.S. at 126.

[38]     Id. at 126-27.

[39]     See id.

[40]     See, e.g., Perry v. Schwarzenegger, 591 F.3d 1147, 1173 (9th Cir. 2009).

[41]     See Quinn v. United States, 349 U.S. 155, 163 (1955).

[42]     See Fisher v. United States, 425 U.S. 391, 409 (1976).

[43]     See United States v. Doe, 465 U.S. 605, 611 (1984).

[44]     See 18 U.S.C. § 6002; Kastigar v. United States, 406 U.S. 441 (1972).

[45]     Watkins, 354 U.S. at 188.

[46]     See Mazars, 140 S. Ct. at 2032.

[47]     See In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 924 (8th Cir. 1997).

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The following Gibson Dunn attorneys assisted in preparing this client update: Michael D. Bopp, Thomas G. Hungar, Roscoe Jones Jr., Amanda Neely, Daniel P. Smith, Megan B. Kiernan, and Timofey Velenchuk.

Gibson, Dunn & Crutcher’s lawyers are available to assist in addressing any questions you may have regarding these issues. Please contact the Gibson Dunn lawyer with whom you usually work or the following lawyers in the firm’s Congressional Investigations group in Washington, D.C.:

Michael D. Bopp – Chair, Congressional Investigations Group (+1 202-955-8256, [email protected])

Thomas G. Hungar (+1 202-887-3784, [email protected])

Roscoe Jones, Jr. – Co-Chair, Public Policy Group (+1 202-887-3530, [email protected])

© 2023 Gibson, Dunn & Crutcher LLP

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