This article is Part XI of the Musings on Contracts series by Glenn D. West, which explores the unique contract law issues the author has been contemplating, some focused on the specifics of M&A practice, and some just random.

What does a hypothetical, annoyingly intrusive, know-it-all person, who observes your and your counterparty’s negotiations and makes unrequested and purportedly authoritative suggestions about specific provisions to include in your contract, have to do with the implied covenant of good faith and fair dealing in Delaware? In other words, what does Lord Justice MacKinnon’s “officious bystander” analogy from the 1939 English case of Shirlaw v. Southern Foundries (1926) Ltd.^[1] have to do with Delaware’s particular approach to the implied covenant? The answer was provided by Vice Chancellor Laster in a recent Delaware Court of Chancery decision, Guilbeau v. Footprint International Holdco, Inc.^[2]

A Basic Primer on Delaware’s Approach to the Implied Covenant

As everyone should know, Delaware, like many other (but not all)^[3] states, purports to recognize that “[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement.”^[4] But however lofty and far-reaching that concept may sound, and no matter how often it may be invoked by a plaintiff as “an equitable remedy for rebalancing the economic interests [of the contracting parties] after events that could have been anticipated but were not,”^[5] the Delaware Supreme Court has declared that “the covenant functions as a limited ‘gap-filler’: it enforces the parties’ reasonable expectations in circumstances that they could not foresee and did not address in their written agreement, but it may not be used to rewrite or contradict express terms.”^[6] Thus, despite its name, the implied covenant of good faith and fair dealing, as applied in Delaware and perhaps elsewhere, does not appear to create an actual implied obligation requiring contracting parties to perform their contract fairly and in good faith.

Indeed, the Delaware Supreme Court has “repeatedly emphasized that the implied covenant’s gap-filling power is a ‘limited and extraordinary remedy’; a ‘cautious enterprise’ that applies only where there is a true contractual gap about how to handle an unforeseen event.”^[7] It is “reserved for developments that could not have been anticipated, not developments that the parties simply failed to consider.”^[8]

There are two primary circumstances in which the implied covenant can apply in Delaware:

The first is when a contract allocates discretionary authority to one party over a central aspect of the contract. When the party exploits that discretion in a manner that defeats the “overarching purpose” of the bargain, courts may imply a requirement that such discretion be exercised reasonably and in good faith to ensure that the discretionary power is applied consistently with what reasonable parties would have agreed to at signing. . . .

The second use is . . . to address unforeseen developments—contingencies neither anticipated nor resolved by the contract—that threaten the parties’ bargained-for economic expectations. The law recognizes that “[n]o contract, regardless of how tightly or precisely drafted it may be, can wholly account for every possible contingency.” When such an unanticipated development arises, “the court has in its toolbox the implied covenant of good faith and fair dealing to fill in the spaces between the written words.”^[9]

The Claims in Footprint International

Footprint International involved a dispute over a “cram-down financing.”^[10] The plaintiffs were early investors in the company’s Class A preferred stock. In connection with their original investment, they entered into a Governance Agreement that was subsequently amended several times. Pursuant to the Governance Agreement, the majority of the Class A preferred stock “designated” one director of the company (“Class A Director”). In early versions of the Governance Agreement, the Class A preferred stockholders were granted a “liquidation preference equal to 1.4x of the purchase price plus the top spot in the liquidation distribution waterfall.”^[11] And importantly, the Governance Agreement “prohibited the Company from changing the Class A stock’s ‘rights, powers or preferences’ except with approval from a Board majority that included the affirmative vote of the Class A Director.”^[12]

When the company faced a severe liquidity crisis and potential insolvency, it entered into a series of financing transactions, the last of which (“Class F Financing”) “had a devastating effect on the Class A Stockholders.”^[13] The Governance Agreement was effectively amended so that it “eliminated all of the Class A protections[;] [i]t also eliminated the Class A Director.”^[14] But it appears that the Class A Director had voted in favor of these amendments.

The plaintiffs, who were the early-stage Class A stockholders, sued, claiming, among other things, that the Governance Agreement contained implied covenants that the “Class A Director was to act in the best interests of the Class A stockholders [and] . . . vote against any transactions that would harm the Class A stockholders.”^[15] They also argued that the Governance Agreement contained an implied covenant that effectively granted the Class A stockholders a veto over any amendment that would defeat their preferences and allow the issuance of other stock superior to the Class A stock.^[16] They further argued that the parties to the Governance Agreement “had an implied obligation to use their discretionary rights so as to protect and preserve the Class A stockholders’ rights.”^[17]

The defendants moved to dismiss these claims at the pleading stage. And Vice Chancellor Laster granted the defendants’ motion to dismiss, finding that “[n]one of the allegedly implied terms is reasonably conceivable.”^[18]

Vice Chancellor Laster’s Explanation of Delaware’s Jurisprudence on the Implied Covenant

In rejecting the plaintiffs’ claims on a motion to dismiss, Vice Chancellor Laster made several important observations regarding Delaware’s limited “gap-filling” approach to the implied covenant of good faith and fair dealing.

First, invoking the implied covenant involves a three-step process. The court must initially determine whether the contract contains a gap. Next, the court must determine whether that gap should be filled. Lastly, the court must determine which implied term should fill that gap.^[19]

Second, Vice Chancellor Laster made clear that the implied covenant can be invoked only after “the court has determined what the contract explicitly contemplates”^[20] because “it cannot be invoked where the contract itself expressly covers the subject at issue.”^[21] Only then can a determination be made as to whether a gap exists to be filled by the implied covenant.

Third, “[t]he implied covenant seeks to enforce the parties’ contractual bargain by implying only those terms that the parties would have agreed to during their original negotiations if they had thought to address them.”^[22]

Fourth, even when a contract appears to contain a contractual gap, there may be built-in contract-law default provisions that fill the gap, and the parties negotiating the contract were presumed to have made those provisions part of their contract because “[p]arties negotiate in the shadow of default principles of law.”^[23] And those default principles appear to include prior judicial precedent interpreting an agreement containing similar provisions.^[24]

For example, Delaware precedent holds that the term affiliates in a restrictive provision of a contract can be deemed to include not only affiliates existing on the contract date but also persons who thereafter become affiliates.^[25] Failing to state whether future affiliates are included does not create a gap to be filled. Delaware precedent fills that purported gap because by failing to exclude future affiliates, the drafters have included them.^[26] Thus, when using specific terms without qualifications or exceptions, you may be adopting prior judicial interpretations of those terms into your contract.^[27]

Fifth, Vice Chancellor Laster noted that the oft-repeated statement that the implied covenant can only be applied in situations where the parties “could not have anticipated” the situation that ultimately confronted the parties is not “literally true because the Delaware Supreme Court has recognized that the ‘parties occasionally have understandings or expectations that were so fundamental that they did not need to negotiate about those expectations.’“^[28] Furthermore, “[t]erms so obvious that both sides implicitly understood them are, necessarily, terms that could have been anticipated[;] [i]ndeed, they were both anticipated and known, yet the implied covenant can address them because they were so basic that no one would have thought to include them in the agreement.”^[29]

Lastly, applying the implied covenant to a party’s exercise of its discretion is not as far-reaching as it might seem. As other cases have made clear, even when applied to discretionary acts, the implied covenant is still only a gap filler—“if the scope of discretion is specified, there is no gap in the contract as to the scope of the discretion, and there is no reason for the Court to look to the implied covenant to determine how discretion should be exercised.”^[30] Moreover, Vice Chancellor Laster made clear that a party may exercise its discretion to advance its self-interest without violating the implied covenant of good faith and fair dealing. What it cannot do, however, is “wield a discretionary contractual right like a mafia gangster by using it to inflict harm on the counterparty unless the counterparty does what it wants.”^[31]

English Law Provides Helpful Guidance in Applying Delaware’s Gap-Filling Approach to the Implied Covenant

Although English law has not fully embraced the implied covenant of good faith and fair dealing,^[32] Vice Chancellor Laster noted that “English law has developed helpful answers that go beyond the current state of Delaware jurisprudence” in determining when contractual terms should be implied in a contract generally.^[33]

Vice Chancellor Laster then quoted from a “leading Privy Council judgment” as follows:

[F]or a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that “it goes without saying”; (4) it must be capable of clear expression; [and] (5) it must not contradict any express term of the contract.^[34]

Regarding the “issue of obviousness,” Vice Chancellor Laster next quoted Lord Justice MacKinnon’s well-known (at least to English lawyers) “officious bystander test”:

Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying; so that, if, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in their agreement, they would testily suppress him with a common “Oh, of course!”^[35]

Vice Chancellor Laster then summarized the English approach to implying terms as follows:

Thus, under English law, “a term should not be implied into a detailed commercial contract merely because it appears fair or merely because one considers that the parties would have agreed [to] it if it had been suggested to them.” The term must also “be so obvious as to go without saying or to be necessary for business efficacy.” The additional requirements limit the court’s flexibility in deploying the implied covenant, but using more tractable concepts than Delaware law has yet deployed.^[36]

Vice Chancellor Laster then “borrowed” the English framework for implying terms generally to assess whether the plaintiffs’ asserted implied terms were appropriate under Delaware’s approach to the implied covenant of good faith and fair dealing. Indeed, he repeatedly asked in the opinion whether the parties to the Governance Agreement would have responded with a unanimous “Of course!” if an “officious bystander” observing their negotiations had suggested the specific terms that the plaintiffs claim were implied.^[37]

The answer in most cases was not “of course,“ but instead was “of course not.” But by asking the question, Vice Chancellor Laster was using this English framework to assist in doing what the Delaware Supreme Court had previously decreed that the implied covenant of good faith and fair dealing was “well suited” to do—i.e., “imply contractual terms that are so obvious . . . that the drafter would not have needed to include the conditions as express terms in the agreement.”^[38]

There Was No Implied Covenant That the Class A Director Was Only Tasked with Acting on Behalf of the Class A Stockholders

Delaware law makes clear that corporate directors “owe fiduciary duties to the entity and the entire body of stockholders generally rather than to individual stockholders or stockholder subgroups.”^[39] That requirement is a built-in default rule. Although the Governance Agreement did not specify the Class A Director’s duties, there was no gap in the agreement for the implied covenant to fill—the law filled the gap.

The plaintiffs sought to make the Class A Director a “constituency director,” a concept Delaware law has rejected in the corporate context.^[40] A director with contractual duties to act only in the best interest of the Class A stockholders would be placed “in the impossible position of serving two masters: The Class A Director would simultaneously owe a contractual obligation to pursue the best interests of the Class A stockholders plus a fiduciary obligation to pursue the best interests of the Company and all of its stockholders.”^[41]

Vice Chancellor Laster then applied the English law approach to implied terms to reject the plaintiffs’ efforts to show that the Governance Agreement contained a gap by failing to specify the duties of the Class A Director:

Borrowing from English law, the parties to the original negotiation would not regard a constituency-director provision as necessary to give business efficacy to their agreement, nor as so obvious that “it goes without saying.” If an officious bystander observing the negotiations proposed the provision, the parties would not respond with a loud, “Of course!” They would recognize that the provision could create problematic conflicts and necessitate a suite of additional contractual workarounds.^[42]

The Class A Stockholders Had No Implied Veto Right

The Governance Agreement contained an explicit suite of protective provisions, all based on the requirement that the Class A Director approve the listed actions. However, the Class A stockholders had not bargained for approval of those actions by the Class A stockholders. The Class A stockholders’ efforts to suggest that their failure to bargain for stockholder consent rights created a gap that needed to be filled were rejected. But for the sake of argument, Vice Chancellor Laster assumed there was a gap and then asked whether “it should be filled.”^[43] 

And again, Vice Chancellor Laster looked to the English law approach to implied terms for his answer:

[I]magine the original bargaining position and ponder whether, if the issue had come up at that time, the parties would have readily agreed to the specific vetoes the plaintiffs now want. It is not reasonably conceivable that the other parties would have readily agreed. Having granted the Class A protections, they would almost certainly want something in return for conferring additional rights on the Class A stockholders. To the same effect, if an officious bystander observing the negotiation suggested clarifying the [Governance] Agreement to require specific Class A stockholder approval, the parties would not respond with a united, “Of course!” Although the plaintiffs might have endorsed that view, the other parties would not. They would say something like, “You already have these protections, so why do you need more?” At best, further negotiation would have ensued. It is therefore not reasonably conceivable that the implied covenant can support the implicit veto rights.^[44]

The Implied Covenant’s Application to Discretionary Rights

Although “a party can wield a discretionary contractual right to protect its own interests[,]”^[45] the implied covenant limits the exercise of that discretionary right so that it cannot be used “maliciously and without contractual justification.”^[46] And again, Vice Chancellor Laster turned to the “officious bystander test” to illustrate why this must be so:

Given their agreed common purpose, a party in the original bargaining position would expect that the counterparty would not use a discretionary right to destroy the contractual relationship maliciously and without any justification rationally related to the shared contractual purpose. That premise is so basic that asking for a commitment against malicious action would be unthinkable. Framed from the English law perspective, a party to the negotiation who raised the issue would be met with the response that “it goes without saying.” If an officious bystander observing the negotiation suggested confirming that the contract prohibited a party from using a discretionary right to destroy the contractual relationship, both sides would immediately say, “Of course!”^[47]

But here, the plaintiffs could not show that the discretionary rights had, in fact, been exercised “maliciously and without any justification rationally related to the parties’ shared contractual purpose.”^[48] The company needed financing, and the defendants exercised their discretion in favor of the Class F Financing over other financing options. The fact that other financing options may have offered better opportunities for returns to the Class A stockholders did not appear to factor into the implied covenant analysis—that might await a subsequent decision on the fiduciary duty claims.^[49] But the implied covenant as applied to the exercise of discretionary rights only required the exercise of those rights to have “a contractually grounded reason for pursuing the Class F Financing.”^[50] Thus:

Facing a situation where the Company could fail and the investors end up with nothing, the defendants could properly exercise their contractual rights to obtain the financing the Company needed. It is not inferable that the defendants approved the Class F Financing for the sole purpose of harming the Class A stockholders, so the claim based on the discretionary-exercise version of the implied covenant fails.^[51]

Concluding Observations

I am currently working with coauthors on a proposed article with the working title “Making Sense of the Implied Covenant of Good Faith and Fair Dealing.” Based on informal surveys of academics and practitioners, there appears to be a general lack of understanding of the implied covenant, and I think the courts are confused at times as well. Vice Chancellor Laster’s recent opinion in Footprint International is a helpful step in providing some clarity on the extremely limited nature of the implied covenant, at least in Delaware.^[52]

Indeed, the implied covenant of good faith and fair dealing in Delaware may be a misnomer. There does not appear to be any overriding covenant implied in contracts in Delaware that requires contracting parties to act in good faith or with fair dealing. Instead, the implied covenant is simply a means of implying terms in a contract that are necessary to give full effect to the parties’ expressly agreed terms—i.e., “[t]he doctrine . . . operates only in that narrow band of cases where the contract as a whole speaks sufficiently to suggest an obligation and point to a result, but does not speak directly enough to provide an explicit answer.”^[53]

As one commentator has suggested, “[t]o display good faith in contract performance is simply to recognize the authority of the contract, and hence the authority of one’s counterparty to insist on performance according to the contract’s terms.”^[54] And those terms include both the express terms and those implied terms necessary to give effect to the express terms and which “are so obvious . . . that the drafter would not have needed to include the conditions as express terms in the agreement.”^[55] Thus framed, is the implied covenant of good faith and dealing all that different from the English law approach to implied terms generally?^[56]

And if you are curious about what may have prompted Vice Chancellor Laster to look to the English decisions on implied terms as a helpful guide to implying terms to fill gaps for purposes of the implied covenant of good faith and fair dealing in Delaware, he credits “nerdy discussions” with a “learned commentator on contract law” that were “unconnected to this or another case.”^[57] If you are curious who that might have been, see footnote 78 of Vice Chancellor Laster’s opinion in Footprint International.^[58]

1. [1939] 2 KB 206, 227. ↑

2. No. 2024-0968-JTL, 2026 WL 1180159 (Del. Ch. Apr. 30, 2026). ↑

3. Except with respect to contracts governed by the Uniform Commercial Code and those involving “special relationships,” the Texas Supreme Court has explicitly “rejected the argument that [it] should imply into contracts a covenant that would require the parties not to do anything that injures the right of another party to receive the benefits of the agreement.” Barrow-Shaver Resources Co. v. Carrizo Oil & Gas, Inc., 590 S.W.3d 471, 490–491 (Tex. 2019); see also English v. Fischer, 660 S.W.2d 521, 522 (Tex. 1983) (adopting such a “novel concept [of good faith and fair dealing] . . . would abolish our system of government according to the settled rules of law and let each case be decided upon what might seem ‘fair and in good faith,’ by each fact finder.”). But is the version of the implied covenant as adopted in Delaware the same version that Texas rejected? ↑

4. Restatement (Second) of Contracts § 205 (Am. L. Inst. 1981). ↑

5. Johnson & Johnson v. Fortis Advisors LLC, 352 A.3d 229, 255 (Del. 2026). ↑

6. Id. at 251. ↑

7. Id. at 254. ↑

8. Id. at 259. ↑

9. Id. at 253–54. ↑

10. Guilbeau v. Footprint Int’l Holdco, Inc., No. 2024-0968-JTL, 2026 WL 1180159, at *2 (Del. Ch. Apr. 30, 2026). ↑

11. Id. ↑

12. Id. ↑

13. Id. at *8. ↑

14. Id. ↑

15. Id. at *10. ↑

16. Id. ↑

17. Id. at *19. ↑

18. Id. at *10. This decision did not resolve all the claims made by the plaintiffs. See id. at *1 n.1. The court separately denied the defendant’s motion to dismiss the plaintiffs’ breach of fiduciary duty claims. See Guilbeau v. Footprint Int’l Holdco, Inc., No. 2024-0968-JTL, 2026 WL 1329169 (Del. Ch. May 11, 2026). ↑

19. Footprint Int’l, 2026 WL 1180159, at *10. ↑

20. Id. at *11. ↑

21. Id. at *10. ↑

22. Id. ↑

23. Id. at *11 (quoting New Enter. Assocs. 14, L.P. v. Rich, 292 A.3d 112, 138 (Del. Ch. 2023)). ↑

24. See Symbiont.IO, Inc. v. Ipreo Holdings, LLC, No. 2019-0407-JTL, 2021 WL 3575709, at *31 (Del. Ch. Aug. 13, 2021), discussed in Glenn D. West, When Is a Person’s Status as an Affiliate Relevant?, Weil Glob. Priv. Equity Watch (Sept. 9, 2021). ↑

25. See Symbiont.IO, 2021 WL 3575709, at *31. ↑

26. Id. ↑

27. Another example is where a charter or limited liability company (“LLC”) agreement prohibits amendments that would adversely impact the rights and preferences of a stockholder or LLC member, but does not specifically prohibit those consequences from being obtained through a merger. The doctrine of “independent legal significance” may well permit a merger to strip those rights even when a direct amendment would require the consent of the affected stockholders or members. See Elliott Assocs., L.P. v. Avatex Corp., 715 A.2d 843, 855 (Del. 1998) (“The path for future drafters to follow in articulating class vote provisions is clear. When a certificate . . . grants only the right to vote on an amendment, alteration or repeal, the preferred have no class vote in a merger. When a certificate . . . adds the terms ‘whether by merger, consolidation or otherwise’ and a merger results in an amendment, alteration or repeal that causes an adverse effect on the preferred, there would be a class vote.”). Even though it has been suggested otherwise, the implied covenant does not appear to treat the failure to specify a merger in such circumstances as a gap to be filled. See D. Gordon Smith, Independent Legal Significance, Good Faith, and the Interpretation of Venture Capital Contracts, 40 Willamette L. Rev. 825 (2004); David I. Albin & Cole Mayhew, USA-Connecticut Trends and Developments: Recent Developments on the Implied Covenant of Good Faith and Fair Dealing and Their Implications for Connecticut Law, Chambers & Partners Prac. Guide: Corp. M&A 2026 (Apr. 21, 2026). ↑

28. Footprint Int’l, 2026 WL 1180159, at *13. ↑

29. Id. ↑

30. McKenzie v. BDO USA, P.C., No. 2025-0264-LWW, 2026 WL 191010, at *5 (Del. Ch. Jan. 26, 2026) (citations omitted). But depending on the facts, merely using the term “sole discretion” may not be sufficient to avoid the gap-filling imposition of the implied covenant to constrain the exercise of that discretion. See Glenn D. West, Musings on the Exercise of “Sole Discretion,” Weil Glob. Priv. Equity Watch (Aug. 29, 2022). ↑

31. Footprint Int’l, 2026 WL 1180159, at *22. ↑

32. See Yam Seng Pte Ltd. v. Int’l Trade Corp. Ltd., [2013] EWHC 111 (QB), at paras. [119]–[154]; Bristol GroundSchool Ltd. v. Intelligent Data Capture Ltd., [2014] EWHC 2145, at paras. [175], [196]; Ellis v. John Benson Ltd., [2025] EWHC 2096 (KB), at paras. [249]–[265]; see also Maud Piers, Good Faith in English Law—Could a Rule Become a Principle?, 26 Tul. Eur. & Civ. L. F. 123 (2011) (discussing the then current state of the law in England regarding the principle of good faith); David B. Kierans & Julia Kappler, Good Faith in Canadian Contract Law, Bus. L. Today (Apr. 20, 2016) (discussing both Canadian and UK law). For a more recent take on the Canadian perspective, see Brandon Kain, Marina Sampson & Foti Vito, Recent Developments in the Law of Good Faith—Key Takeaways, McCarthy Tetrault Insights (May 4, 2026). ↑

33. Footprint Int’l, 2026 WL 1180159, at *14. ↑

34. Id. (quoting BP Refinery (Westernport) Pty Ltd v. Shire of Hastings (1977) 180 CLR 266, 282–83). ↑

35. Id. (quoting Shirlaw v. S. Foundries (1926) Ltd., [1939] 2 KB 206, 227). ↑

36. Id. (quoting Marks & Spencer plc v. BNP Paribas Sec. Servs. Tr. Co. (Jersey) Ltd., [2015] UKSC 72, at paras. [21], [23]). ↑

37. Id. at *17, *19, *22. ↑

38. Dieckman v. Regency GP LP, 155 A.3d 358, 361 (Del. 2017). ↑

39. Footprint Int’l, 2026 WL 1180159, at *15. ↑

40. Id. In most private equity deals, the holding company would have been an LLC, not a corporation, and while the implied covenant would still apply, the parties could most likely have members exercising the approval rights with all fiduciary duties waived. See Del. Code § 18-1101(c) (“To the extent that, at law or in equity, a member or manager or other person has duties (including fiduciary duties) to a limited liability company or to another member or manager or to another person that is a party to or is otherwise bound by a limited liability company agreement, the member’s or manager’s or other person’s duties may be expanded or restricted or eliminated by provisions in the limited liability company agreement; provided, that the limited liability company agreement may not eliminate the implied contractual covenant of good faith and fair dealing.”). ↑

41. Footprint Int’l, 2026 WL 1180159, at *16. ↑

42. Id. at *17. ↑

43. Id. at *19. ↑

44. Id. ↑

45. Id. at *22. ↑

46. Id. ↑

47. Id. ↑

48. Id. ↑

49. Id. at *1 (“The court will issue a separate decision addressing the fiduciary and related claims.”). And on May 11, 2026, the court did issue a separate decision regarding the fiduciary duty claims. See Guilbeau v. Footprint Intern’l Holdco, Inc., C.A. No. 2024-0968-JTL, 2026 WL 1329169 (Del. Ch. May 11, 2026). In denying the motion, in part, to dismiss the plaintiffs’ claim for breach of fiduciary duty against five of the ten directors of the company, Vice Chancellor Laster held that:

    Five of the ten directors inferably faced a conflict of interest for purposes of the Class F Financing. The plaintiffs therefore succeeded in rebutting the business judgment rule. Entire fairness inferably applie[d] to the Class F Financing.
    . . .
    The Class F Financing was inferably unfair. It was inferably coercive and did not offer all stockholders an opportunity to participate on the same terms. The plaintiffs have stated a claim for breach of fiduciary duty under the entire fairness test.

    Id. at *26 and *32. ↑

50. Footprint Int’l, 2026 WL 1180159, at *22. ↑

51. Id. ↑

52. Footprint International follows another recent decision by Vice Chancellor Laster addressing the implied covenant in Delaware, Calumet Capital Partners LLC v. Victory Park Capital Advisors, LLC, 353 A.3d 88 (Del. Ch. 2026). ↑

53. Airborne Health, Inc. v. Squid Soap LP, 984 A.2d 126, 146 (Del. Ch. 2009). ↑

54. Daniel Markovits, Good Faith As Contract’s Core Value, 2021 Mich. St. L. Rev. 1, 18 (2021). ↑

55. Dieckman v. Regency GP LP, 155 A.3d 358, 361 (Del. 2017). ↑

56. The English approach to implying terms has even been described by one commentator as providing “gap fillers.” See Piers, supra note 32, at 157. One may well additionally ask whether, if the implied covenant of good faith and fair dealing (under Section 205 of the Restatement (Second) of Contracts) has the limited meaning ascribed to it by the Delaware courts, is it really that different from the concept of supplying an omitted term necessary to give effect to the contract under Section 204 of the Restatement (Second) of Contracts. See Restatement (Second) of Contracts § 204 (Am. L. Inst. 1981) (“When the parties to a bargain sufficiently defined to be a contract have not agreed with respect to a term which is essential to a determination of their rights and duties, a term which is reasonable in the circumstances is supplied by the court.”). Moreover, did Texas reject a different version of the implied covenant of good faith and fair dealing than the version currently being applied in Delaware? See supra note 3. ↑

57. Footprint Int’l, 2026 WL 1180159, at *14 n.78. ↑

58. Id. ↑

At the recent Tokyo Business and Rule of Law Forum, Alejandro Ponce, Executive Director of the World Justice Project (“WJP”), issued a stark warning: “A weak rule of law is a direct business problem. When everyone—including government—is not held accountable to clear, equally applied rules, the private sector loses the confidence required for long-term planning.”

The data confirms instability is accelerating. According to the WJP Rule of Law Index^® 2025, 68% of countries saw their scores decline this year—a significant jump from 57% in 2024. While building stable institutions is a slow, iterative process, the current trend shows that dismantling them occurs much more swiftly.

As lawyers, who ourselves have taken a solemn oath to defend the Constitution and the rule of law, we must heed the warning that the erosion of judicial independence and civil justice represents a critical threat to the democratic and economic stability we are sworn to protect.

A rise in authoritarianism is driving the rule of law recession

An expansion of authoritarian trends—namely, a reduction in civic space and weakening checks and balances—has been the primary force behind this downturn, with deep declines in factors measuring Constraints on Government Powers, Open Government, and Fundamental Rights.

The critical pillars of government accountability have eroded in most countries:

• Legislative and judicial oversight are losing their ability to check executive power, declining in 61% of countries.
• Independent auditing of government actions fell in 61% of countries.
• Fundamental freedoms, specifically expression, assembly, and participation, have shrunk in nearly 75% of nations, stifling the public debate necessary for a healthy democracy.

Judicial independence, the last line of defense against executive overreach, is weakening

The Index shows that judiciaries are losing ground to executive overreach, with rising political interference across justice systems. Indicators measuring whether the judiciary limits executive power and whether civil and criminal justice are free from improper government influence declined in 61%, 67%, and 62% of countries, respectively.

For the business community, the decline of civil justice in 68% of countries is particularly concerning. This weakening is reflected in longer court delays, less effective mediation, and increased government interference in legal outcomes.

Rule of law in the U.S. continues to decline

Rule of law in the United States continued to decline for the third consecutive year, falling in seven of the eight factors measured. Indeed, in the latest report, the United States was one of the ten countries with the largest declines in rule of law. This decline was driven specifically by weakening fundamental rights and a lack of effective constraints on government powers, as well as the perception that government officials are not sanctioned for misconduct. The U.S. currently ranks twenty-seventh out of the 143 countries and jurisdictions surveyed.

In the latest World Justice Project report, the United States was one of the 10 countries with the largest decline in rule of law.

U.S. rule of law saw the sixth largest decline of the 143 countries assessed, behind only the Russian Federation, Sudan, Mozambique, Togo, and Mexico. Source: © World Justice Project, WJP Rule of Law Index 2025.

Seven of eight rule of law factors declined in the United States from 2024 to 2025.

U.S. scores for seven of the eight rule of law factors dropped by between 0.01 and 0.04; only Order and Security showed no change. Source: © World Justice Project, WJP Rule of Law Index 2025.

The continuing decline in the U.S. rule of law score was driven specifically by weakening fundamental rights and a lack of effective constraints on government powers.

From 2016 to 2015, U.S. scores for fundamental rights and constraints on government powers dropped from 0.75 to 0.65 and 0.81 to 0.63, respectively. Source: © World Justice Project, WJP Rule of Law Index 2025.

The U.S. score for the subfactor “Government officials are sanctioned for misconduct” continued to decline.

The United States scored 0.52 for the subfactor Government Officials Are Sanctioned for Misconduct, down from 0.69 in 2016. Source: © World Justice Project, WJP Rule of Law Index 2025.

WJP Rule of Law Index 2025: Key Findings Summary

The WJP Rule of Law Index provides data on eight factors: Constraints on Government Powers, Absence of Corruption, Open Government, Fundamental Rights, Order and Security, Regulatory Enforcement, Civil Justice, and Criminal Justice. Scores range from 0 to 1, where 1 signifies the highest possible adherence to the rule of law. This year, the Index covers 143 countries and jurisdictions.

• Top-Ranked Countries: Denmark (1), Norway (2), Finland (3), Sweden (4), New Zealand (5).
• Bottom-Ranked Countries: Venezuela (143), Afghanistan (142), Cambodia (141), Haiti (140), Nicaragua (139).
• Top Decliners: The most significant decliners include the Russian Federation (-4.9%), Sudan (-4.4%), and Mozambique (-3.9%).
• Top Improvers: Countries with the largest improvements include the Dominican Republic (2.1%), Senegal (1.6%), and Sierra Leone (1.4%).

Explore the full rankings and findings of the 2025 WJP Rule of Law Index at the World Justice Project website.

“These findings and data are important for both businesses and business lawyers,” said John H. Stout, of counsel at Fredrikson & Byron P.A. and co-chair of the American Bar Association Business Law Section’s Rule of Law Working Group. “This information is critical to both as they give legal advice and make business decisions about whether to increase or decrease their investment in a particular country.”

About the World Justice Project:

The World Justice Project (WJP) is an independent, nonpartisan, multidisciplinary organization working to create knowledge, build awareness, and stimulate action to advance the rule of law worldwide.

This article is part of a series on the rule of law and its importance for business lawyers created by the American Bar Association Business Law Section’s Rule of Law Working Group. Read more articles in the series.

Some people just seem to know instinctively where the career pathways can be found in the legal profession, and how to travel them successfully. But I did not, and it’s possible that you may not either. If that sounds familiar, and if you have ever wondered about whether a clerkship for a federal judge might be for you, then please keep reading so that I can share some personal reflections and practical tips on the who, what, when, where, why, and how of becoming and serving as a law clerk to a federal judge.

First, let me provide some context. I am a federal judge and sit in the United States Bankruptcy Court for the Eastern District of New York, in Brooklyn, NY. Our court is a unit of the federal district court, and like all bankruptcy courts, we handle all of the bankruptcy cases that are filed in the district, from the biggest corporate Chapter 11 case to the individual case of the person who is just trying to get a fresh start in a Chapter 7 or 13 case. All bankruptcy cases are federal, and all bankruptcy issues come to our court.

I generally have three law clerks, with some serving in two-year term law clerk positions and others serving in one-year temporary law clerk positions. In the past, I have also had a career law clerk from time to time; this is a phrase we use in the federal system for someone who stays with a judge from year to year. I also hire two to three term law clerks each year. I typically hire at least one of those law clerks in the fall, to begin one year later, in the following fall. I may hire one or two more law clerks depending on the caseload and the level of available funding. Sometimes those additional positions are partially paid, sometimes those positions are fully paid, and sometimes those law clerks work as volunteers with stipends from their law schools, or, if they are at a firm, with the expectation of receiving a public service bonus when they finish.

So, with that background, let’s dive into the who, what, when, where, why, and how of serving as a law clerk to a federal judge.

Who should consider applying to be a law clerk to a federal judge?

Let’s start with who might consider seeking a federal judicial clerkship. Too often, it may seem that these positions are for someone else—someone with better grades, law review experience, connections with faculty, things like that. But there are as many paths to these positions as there are federal judges, and even within a particular judge’s chambers, most judges consider a broad range of criteria in assessing clerkship applicants.

So, if you are drawn to the idea of working full-time in the federal judiciary, in a judge’s chambers, with the opportunity to do the work of the justice system on a daily basis, then you—yes, you—should consider applying to be a law clerk to a federal judge.

What does a law clerk to a federal judge do?

Every chambers is different, but still, there are some common themes in the work of a law clerk to a federal judge. My law clerks help me with absolutely all of the work of chambers, including researching motions, drafting bench memos, attending court hearings, and drafting orders and decisions. For me, court hearings and the work that comes before and after them, including bench memos and preparing orders, are a big part of what we do. I could have thirty or more matters on a given day’s calendar, and I will decide most of these from the bench. A law clerk helps me to prepare for each and every one of these matters and assists with drafting the order after the matter is decided, based on our review of the record, our knowledge of the case—including the bigger picture, and the arguments we hear that day.

In the bankruptcy world, we spend a good deal of time in the courtroom, and we tend to see our cases in the courtroom much more frequently than in civil litigation in the district court. Whether the matter is a very complex summary judgment motion in a $500 million adversary proceeding or a motion to dismiss brought by a debtor in their own Chapter 7 bankruptcy case, a bench memo of some sort is prepared.

One of my law clerks always accompanies me in the courtroom while I am on the bench—this can be very helpful when an unexpected question comes up. And sometimes during a hearing, it is helpful to have the law clerk’s perspective and judgment on how to decide a matter or manage a situation. This can be some of the most interesting work done by the law clerk, and it can be a very special learning experience as well. You learn so much from spending dozens of hours in a courtroom, seeing how the legal system can work when it works at its best, and appreciating the role of the lawyers and the court in making that happen. As the law clerk observing proceedings, you appreciate how lawyers can do their work very well indeed, and you also see situations where you will realize that you could do a better job. No matter what, it is our job to treat people with the utmost respect and make them feel, win or lose, that they have never been treated better. And of course, every case is our most important case.

We also try to think about how we can make the system work as well as possible. In this respect, my law clerks help me with work we do in connection with pro bono organizations that provide lawyers and support for people who can’t afford counsel. I teach a seminar at one of the New York area law schools, and sometimes I look to my law clerks for teaching ideas since they are a lot closer to the law school experience than I am. My clerks also help me prepare for my work with judges from other countries; from time to time they have assisted me with hosting delegations from Europe, South America, the Middle East, and China. They work with our interns, who come from U.S. law schools and universities, and also from law schools outside the United States. The clerks learn how to supervise and mentor our interns, and they discover that they are ready to be mentors, even just one year out of law school. And finally, my law clerks assist with every other thing that needs to be done in chambers, whatever it may be. They help me get through a long day, brainstorming with everyone in my chambers on how to get our work done. There is simply nothing that I do as a judge that my law clerks don’t help me with.

I often hold settlement conferences in my own cases, and occasionally, I serve as a mediator in cases that are referred to me by my judicial colleagues. Sometimes my law clerks will assist with that work as well. I like the clerks to have that experience because this type of problem-solving in dispute resolution is a significant part of what lawyers do, and more and more, a significant part of what judges should do. Indeed, every spring, my law clerks attend a week-long commercial mediation training program offered by the New York State Bar Association. When the clerks return from that training, they have gained new skills in seeing a dispute from the perspective of each of the parties, identifying both positions and interests, and managing a case in a way that permits, and even promotes, the parties reaching a resolution. So on a typical day, they might spend some time in court, some time in chambers, some time with the interns, and some time with me.

What does this look like from the law clerk’s perspective? I hope that for my law clerks, a typical day is a day where they know that they are going to make a difference. They will likely spend some time in the courtroom, prepare files, talk through issues, interact with interns, help solve an unexpected case issue, and coordinate with me and our extraordinary courtroom deputy, who serves as the chambers interface with the bar. We all prepare as best we can, and we all must be prepared for the unexpected as well.

When does it make sense to pursue an application to be a law clerk to a federal judge?

Many law students think about pursuing a clerkship directly after law school, and that can make a lot of sense. After all, clerking can be a very logical and natural transition from legal education to law practice. Law schools provide support for clerkship applicants, and professors who may serve as mentors, recommenders, and coaches may be just down the hall.

Others may plan to apply for clerkships after a few years of private practice—and indeed, many judges specifically seek out applicants with that kind of practical professional experience. To be sure, it can be challenging to interrupt your practice path for what may seem like a detour. But your experience in practice may well make you a stronger applicant, and a more effective law clerk, too.

The fact is, there is no wrong time to pursue an application to be a law clerk to a federal judge. And if you apply for the year directly following law school and are not successful, you can apply again—and again after that, if it makes sense to do so. The experience that you gain as a law clerk, and even the experience that you gain as an applicant, will help you sharpen your thinking about the law and the justice system and your goals and aspirations in the legal profession. To paraphrase a well-known proverb, while it may seem like the best time to apply for a federal judicial clerkship was last year, or last month, or yesterday, the second-best time is . . . now.

Where should I consider applying for clerkships?

One of the most engaging and least appreciated aspects of serving as a law clerk to a federal judge is that you can do it just about anywhere—from a major metropolis to some national parks. Judges generally do not expect you to be admitted to the bar of the state in which they sit. It can be very helpful if you are familiar with the local legal community—but again, judges do not expect that you will be. You may well choose to seek a clerkship in the city in which you plan to practice. At the same time, a clerkship gives you an opportunity to immerse yourself in a part of the country that is brand-new to you. It may make sense to apply for clerkships in the locale where your law school is located, or where many of its alumni practice. But many other candidates will likely be doing the same thing, so if you seek to distinguish yourself, you should consider whom you would like to work for, and where you might want to live. It’s helpful to be prepared to explain why a particular court and locale appeal to you, including in your cover letter. This is especially so if you do not otherwise have a particular connection to the city or region.

So, think big! Think broad! Be willing to think outside the box! If you are excited about the opportunity to work in that judge’s chambers and live in that community, then you should not hesitate to apply for that position.

Why should I consider applying to be a law clerk to a federal judge?

When I started my clerkship with a district judge, he looked down at me, a full foot and half shorter than he was, and said, “You now have the second-best job a lawyer can have. You are a law clerk to a federal judge.” He then patted himself on the chest and said, “I have the best job. I am a federal judge.” In a nutshell, if you like it, you will love it; it truly is one of the best jobs you can have in the law. You will learn and discover things from your clerkship that will assist you for the rest of your career. I still discover things I learned as a law clerk in the mid-1980s that inform me, inspire me, and make me want to skip on the way to work and sing on the way home. Being a part of the federal courts is truly a privilege, the best kind of public service, and a great job, too.

On a practical level, as a law clerk, you will learn how to synthesize information quickly and get to the point—and that is an invaluable skill for a practicing lawyer. At the same time, you will learn not to leap to conclusions but to assess a file and form a judgment quickly, carefully, and confidently so that you are able to defend it when questioned. If you work for a judge who is in the courtroom a lot, you will see fabulous lawyering and you will learn from watching that. You will also see, hopefully not too often, lawyers who will make you think, “I can do this better than they can do it—right now.” Knowing how to be comfortable when you walk into a courthouse or courtroom is a wonderful skill, and the earlier in your career that you can learn it, the better. You will read great briefs and not so great ones. And you will learn through experience that many people do not always give a final read-through to the documents that they file—and hopefully, you will never make that mistake yourself!

And you will form a lifelong relationship with your judge, who will be your mentor, supporter, cheerleader, reference, and sounding board for life. We like to say in our chambers that “chambers is forever,” and as a law clerk, you become a part of a chambers family. You will have the benefit of that chambers experience and those relationships for your entire professional life. As just one example, I recently had the opportunity to administer the oath of office as a New York State Court of Claims judge to one of my former law clerks, who is now serving as a judge. I can’t think of a more special moment to share with a former law clerk than to see her become a judge herself, and I could not have been more proud of her.

Of course, you will also learn a good deal of substantive law, in more areas than you can imagine. In this court in particular, you will get smart about deals, and you will get smart about litigation. You will identify problem-solving as a big part of being a lawyer, which will forever make your clients grateful. And you will have a lot of fun.

Another reason to consider a clerkship is that it may well open doors for you, in the near term and down the road, too. Again, looking to my own law clerks as examples, many have gone on to practice in law firms, from the largest global “big law” firms to boutique specialty firms, and everything in between. Several have gone on to do other clerkships with other federal courts, and in the state court as well, including the Commercial Division of the New York Supreme Court in Manhattan, one of the preeminent business courts in the country. Several of my former law clerks have gone into public interest work and public service. One was the first bankruptcy court law clerk to be selected to be a Supreme Court Fellow. At least one is a journalist. And as noted, one former law clerk is now a judge, and I suspect that others will follow.

How do I apply to be a law clerk to a federal judge?

Our hiring process begins with the “OSCAR System,” the web-based resource that the federal courts use for the electronic submission of clerkship applications to federal judges. Many—perhaps most—federal judges use this system to receive applications. If you have identified a particular judge to whom you would like to apply and do not see the judge listed on OSCAR, it may make sense to contact chambers to determine whether the judge is currently considering applications and how they would like to receive them.

In my hiring process, we rely on OSCAR and also occasionally receive applications by mail, both electronic and paper. We encourage everyone to apply via OSCAR, and ask for applicants to submit a cover letter, a résumé, college and law school transcripts, a writing sample, and references. We receive many applications for each position, review them carefully, and call a small number of individuals in for interviews.

An interview is generally a very important part of the clerkship hiring process. You should expect to interview with the judge and also with the judge’s current team of law clerks, and each of these interviews matters. In my chambers, when you interview to be my law clerk, it’s a half-day, in-person enterprise. And everyone in chambers is involved. You will interview with me of course, and also with each of the current law clerks. References can be very important, as the judge will rely on them to get a better sense of the applicant from people who have taught or worked with them for a period of time. Deciding who to hire as my law clerks is probably the single most important decision I make every year because they are my chambers team and we depend on each other enormously.

What do federal judges look for in their law clerks? There are some common denominators. Academic performance and consistency are important, of course. But law school grades are not the only thing that matters. Like many judges, I look for trends in an applicant’s academic performance, as well as how well the applicant has done. If you are getting B’s and C’s, rather than A’s and B’s, it is going to be difficult to be considered seriously for a law clerk position. But you may have a great opportunity to serve as an intern for a federal judge, and that may then lead to other opportunities.

Course selection is also something to consider, and some law school courses may prove to be especially helpful to an aspiring law clerk. One is civil procedure, as well as any advanced procedure classes that may be offered. Federal courts and federal jurisdiction are also important subjects and may help to demonstrate your interest in courts and court processes. And in light of the problem-solving nature of trial courts, including district and bankruptcy courts, a negotiation or mediation course may provide helpful perspective as well. Most important, especially in the second and third year, is to take the classes you love, that you are excited about, that challenge you to do your best and most critical thinking and writing, and that remind you of all the reasons you wanted to be a lawyer. In the end, any class that helps you learn to write, research, think, and exercise judgment as a functioning, articulate professional is helpful.

Speaking for myself, I want to meet and consider the people who have done more than just do very well in undergraduate and law school, and the people who have done things in addition to just going to school, whether before or after their law school education. In terms of experience, I have hired law clerks directly from law school, I have hired law clerks who are completing clerkships with other judges, and I have hired law clerks who have practiced for several years.

As I consider applications, I try to get a sense of the person’s life story and why they are interested in serving as a law clerk. From their cover letters, résumés, recommendations, courses, and law school activities, I try to get a sense of whether this is someone who will love the work of our court, being a part of our chambers, and feeling that public service is truly important. I look for applicants who like the idea of going to work every day and making a difference in the justice system, in the work of companies large and small, and in the lives of ordinary people who are trying to get a second chance at life. If I get a sense that the law clerk prospect is someone who will love that, and who is interested in the position for all of those reasons, that is probably someone I will want to meet and interview.

Finally, don’t rule out applications to courts outside the federal system. In many of the state courts, including in New York, there are court attorneys who work from year to year supporting the judges in their chambers. These are very interesting career positions and sometimes are a pathway to the state court bench. Similarly, in some federal courts of appeal, there are staff attorney law clerks who work with the entire court.

There are also other roles within the court system for attorneys. For example, we have a pro se attorney who works several hours a day with an “open door” office for pro se access; our court’s pro se attorney was one of the first in the country and has become a model for other courts. Court administration, including the clerk of court, chief deputy, and district and circuit executive’s offices, can also provide a very interesting public service career path.

* * *

Finally, here are some parting thoughts for anyone who is considering applying for a federal judicial clerkship, or any other dream position in the legal profession—because serving as a law clerk, or as a judge someday down the road, is truly a dream job.

First, do not let anyone tell you that you cannot do it. Put another way, don’t reject yourself! Be sure to do as well as you can in law school, because your grades matter. Remember to tell your story, to share what excites you, and remember too why you went to law school. Studying is important, of course—but is not the only important thing. Try to stay involved with all of the things that you love to do in your community.

Next, don’t worry if you aren’t perfect—no one is. I have had wonderful law clerks who were on law review, and I have had wonderful clerks who were not on law review. I have had wonderful law clerks who had perfect GPAs from their first semester of law school, and I have had wonderful law clerks whose transcripts told me that the first semester was hard for them, but they figured it out, and excelled in the end.

In addition, be open to relocating to a different part of the country. You will parachute into that legal community in a very engaging way, and you will be part of the federal court. You will immediately get to know the bar. You will be a part of the chambers community, which is like a little family. And who knows, maybe you will live there for the rest of your professional career!

Be open to possibilities. I was among the least likely bankruptcy court judge applicants you can imagine—I had no experience in bankruptcy court and had never practiced bankruptcy law—but something about this “second-chance” court seemed very special to me, and I was lucky enough to be appointed.

And finally, always have faith in yourself. Here’s one more story to illustrate that. I still remember one late evening many years ago—decades ago, actually!—I was applying for scholarships to help pay for college. One seemed especially unlikely, and I was on the verge of abandoning the application. But my mother quietly said, “They have to pick someone, and it might as well be you!” Figuring that I had nothing to lose, I applied for that unlikely scholarship —and I got it.

So, if you think that a federal judicial clerkship is for you, apply! The judge has to pick someone, and it might as well be you!

This article is related to a CLE program that took place during the ABA Business Law Section’s 2026 Spring Meeting. To learn more about this topic, listen to a recording of the program, free for members.

Effective April 18, 2026, the Nationwide Multistate Licensing System (“NMLS”) implemented changes to the Individual (MU2 and MU4) Disclosure Questions along with definitional updates that also apply to Company (MU1) and Branch (MU3) Disclosure Questions that will impact existing licensees (“Update”). The Update requires disclosure question updates for individuals identified as control persons, branch managers, licensed Mortgage Loan Originators, and qualifying individuals who have MU2 profiles associated with a company’s license. The NMLS Glossary of terms was also updated to amend existing definitions and incorporate new definitions.

The NMLS is the system of record for non-depository, financial services licensing or registration for participating state or territorial governmental agencies, including the District of Columbia and U.S. Territories of Puerto Rico, the U.S. Virgin Islands, and Guam. In these jurisdictions, NMLS is the official system through which companies and individuals apply for, amend, renew and surrender license authorities managed through NMLS. These agencies require companies seeking licensure maintained through the NMLS, the individuals designated as control persons, branch managers, licensed Mortgage Loan Originators, and qualified individuals of such companies to answer Disclosure Questions pertaining to various topics, including criminal, civil, and regulatory items that may impact licensure, and make updates to maintain the accuracy of these answers on the NMLS.

The Update requires individuals with associated MU2/MU4 profiles to review their existing information compared to the new Disclosure Questions and the updated terms in the Glossary. For example, the existing term “financial services-related” is no longer applicable in the Individual (MU2/MU4) context, and a new term, “financial services,” was added to the MU2/MU4. However, the term “financial services-related” still applies in the Company (MU1) Disclosure Question context. Terms such as “found,” “order,” and “governmental entity” are equally applicable between the Company (MU1) and Individual (MU2/MU4) Disclosure Questions.

While the Update largely reformats and clarifies existing questions, this is not entirely the case, and the changes may in some instances implicate new disclosures. It is important to note in this regard that the revised questions are retroactive and that the scoping of some questions has been narrowed. If revisions are required due to the changes, the commentary describing the changes recommends not adding a new explanation, but rather updating the existing fields in the Explanation section of the Disclosure Questions where applicable. If there is any change in an existing response, the explanation should be updated accordingly. It is our understanding that any previously uploaded documents and associated explanations will be available to be “matched” to “yes” answers for the new disclosure questions.

The NMLS materials regarding the Update indicate an August 31, 2026, deadline for compliance, which is likely realistic for individual Mortgage Loan Originators or other individuals associated with companies that are not often making updates in the NMLS. However, the updates may be more time sensitive from the Company licensing perspective if a company has upcoming filings, given that the licensed entity will not be able to make any filings of any kind in the system until the Disclosure Questions for all individuals associated with the Company-level record are updated. The procedural consequence of the update requirements is that the updates essentially halt the licensee’s ability to respond to regulator inquiries via the NMLS or submit new license filings until all associated individuals have updated and attested to their individual filings.

The Conference of State Bank Supervisors has published materials on NMLS to assist with this process.

U.S. lawyers advising clients that interact with the European digital market are increasingly encountering the regulatory structure created by the European Union Digital Services Act. The statute does not impose a single set of obligations on every company that sells products or offers services connected to Europe. Instead, it regulates defined categories of intermediary services and assigns duties according to the role a company plays within the digital ecosystem.

Some U.S. companies operate hosting services, online platforms, or online marketplaces and therefore carry direct responsibilities under the Act, while others participate as merchants, advertisers, or rights holders using systems operated by third parties. Understanding this distinction at the outset allows counsel to determine whether the client is a direct duty holder, an indirectly affected commercial participant, or a rights holder seeking enforcement, and it frames how notice procedures, documentation practices, and regulatory oversight will shape intellectual property disputes within the European digital environment.

The European Union Digital Services Act has changed the environment in which online intellectual property disputes occur. For many years lawyers treated online enforcement largely as a private exchange between rights holders and online platforms through notice practice. The Digital Services Act places those same disputes inside a regulatory system that examines how intermediary service providers operate, how decisions are documented, and whether moderation procedures follow defined standards.^[1] For U.S. lawyers advising clients that interact with the European digital market, the practical question is not simply whether a company does business in Europe. The starting point is determining whether the client falls within the categories of intermediary services regulated by the statute.

The Digital Services Act applies to defined actors rather than to companies in general. Under Article 3, intermediary services are services that transmit, store, or provide access to information supplied by users, including hosting services, online platforms, and online marketplaces.^[2] However, many U.S. businesses interact with the European market without becoming direct duty holders under the Act. In practice, lawyers usually encounter three different client positions. Some clients operate online platforms or hosting services and therefore carry direct statutory obligations. Other clients sell products, advertise, or conduct business through online platforms operated by others. A third group consists of rights holders seeking to remove infringing material or counterfeit listings. Distinguishing among these positions is essential because the legal responsibilities and risk exposure differ significantly.

Clients that operate intermediary services face the most direct regulatory exposure. Their obligations depend on the type of intermediary service they provide and, for the largest services, whether they are designated as “very large online platforms” or “very large online search engines”;^[3] in this regard, for instance, the systemic risk governance, mitigation measures, and auditing expectations created by the statute apply specifically to those very large services. For other intermediary service providers, the focus is narrower and centers on procedural compliance, transparency, and cooperation with authorities, but these requirements still affect day-to-day operations.

From a practical enforcement standpoint, one of the most important provisions for lawyers advising both hosting providers (including online platforms) and rights holders is the notice and action procedure. Article 16 establishes the elements that a notice must contain to be treated as sufficiently precise and substantiated.^[4] The notice must, inter alia, identify the specific content in question, explain why the material is alleged to be unlawful, and provide contact information for the complaining party. In practice this means that intellectual property complaints sent into the European system must be drafted carefully. Incomplete or vague notices may not trigger the same online platform obligations that lawyers often assume exist under earlier notice-based systems. For this reason, Article 16 provides a direct obligation upon providers of hosting services (including online platforms) to maintain an accessible, user-friendly electronic mechanism designed to facilitate the submission of such sufficiently precise and adequately substantiated notices.

A simple example illustrates how the process operates. A trademark owner identifies a counterfeit product listing on an online marketplace and submits a notice, through the platform’s notice mechanism, identifying the listing, the protected mark, and the reasons why the product is alleged to be illegal. If the notice satisfies Article 16, the online platform evaluates the content and decides whether to remove or restrict it. If the online platform takes such kind of action, the Digital Services Act requires the decision to be explained.

In particular, Article 17 requires a clear and specific statement of reasons when, inter alia, content is removed or restricted.^[5] For lawyers advising online platforms, this means moderation decisions should not exist only inside internal dashboards or automated filters. The statement of reason must be capable of explanation and shall at least contain the content required by Article 17(3), including, where the decision is based on the alleged incompatibility of the information with the provider’s terms and conditions, a reference to the relevant contractual ground and an explanation of why the information is considered incompatible with it. This requirement also affects litigation strategy because the record created by the platform may become part of later disputes.

The Act also lays down additional obligations for online platforms, including, inter alia, the requirement under Article 20 to maintain internal complaint handling systems. Article 20 gives users the ability to challenge moderation decisions.^[6] As a result, a takedown request may begin a structured review process rather than ending the matter. Lawyers representing rights holders should expect that users may contest removal decisions, while lawyers representing online platforms should ensure that review systems are consistent, documented, and aligned with the requirements of Article 20.

For marketplace operators, the Act lays down additional obligations that are of immediate relevance for intellectual property enforcement. Article 30 introduces trader traceability obligations for online marketplaces.^[7] Platforms must, inter alia, collect, retain, and verify identifying information about business sellers. This requirement directly affects how marketplaces onboard merchants and maintain records. From an enforcement perspective it also assists in identifying repeat infringers and tracking sellers engaged in counterfeit activity. Lawyers advising brand owners frequently view this provision as one of the most operationally significant aspects of the statute.

The Digital Services Act also connects intermediary service providers’ governance with European fundamental rights principles. For instance, Article 14 requires intermediary service providers to describe moderation policies in their terms and conditions and to apply restrictions diligently, objectively, and proportionately, with due regard to the rights and legitimate interests of all parties involved, including fundamental rights, such as the freedom of expression, freedom and pluralism of the media, and other fundamental rights and freedoms as enshrined in the Charter of Fundamental Rights of the European Union.^[8] This provision creates risk not only when enforcement activity appears inconsistent with the intermediary service provider’s terms and conditions, but also where those rules (or their application in a particular case) are difficult to defend as diligent, objective, proportionate, and compatible with the rights and legitimate interests of the parties involved, including fundamental rights. For example, a removal decision may be difficult to defend if it cannot be tied to the platform’s published terms and conditions, or if those rules (or their applications) are inconsistent with the Act’s legal framework.

Public enforcement is coordinated through national Digital Services Coordinators and the European Commission. These authorities supervise compliance, may require intermediary service providers to supply information about their systems and decisions, and can impose enforcement measures and penalties where violations occur.^[9] Lawyers should therefore view intermediary service providers’ governance not only as an internal compliance function but also as a system that public authorities may examine. Thus, intellectual property disputes can trigger broader questions about whether the intermediary service provider’s processes comply with the statute.

U.S. intermediary service providers that are not established in the European Union but offer services to users in the European Union must also address the legal representative requirement in Article 13. Non-European providers must designate a representative within the Union who can receive communications from regulators and coordinate compliance matters.^[10] This requirement effectively connects foreign service providers to the European enforcement framework by ensuring an EU-based point of contact, even when their headquarters remain outside the Union.

For practicing lawyers, several practical steps follow from these provisions. Clients operating hosting services should review their notice intake procedures and the way moderation decisions are documented and explained—and, when operating as online platforms, their complaint-handling systems—to ensure they reflect the statutory framework. Online marketplace operators should also confirm that seller verification and recordkeeping systems meet the trader traceability rules. Rights holders should prepare enforcement notices that clearly identify infringing content and provide adequate reasoning. Businesses using third-party platforms should also understand how platform compliance systems may affect listings, account actions, and dispute resolution.

The larger lesson is straightforward. The Digital Services Act has not eliminated traditional intellectual property enforcement strategies, but it has placed them inside a governance structure that public authorities can review. Lawyers advising U.S. companies that interact with the European digital market should focus on how their clients fit within the statute, how intermediary service providers’ processes operate in practice, and whether those processes can withstand regulatory scrutiny.

Conclusion

The Digital Services Act places online intellectual property enforcement inside a defined governance structure rather than leaving it as a private exchange between rights holders and intermediary service providers. In particular, hosting providers must assess legally sufficient notices and explain moderation decisions, online platforms must also maintain internal review systems, and online marketplaces must verify the identity of commercial sellers. Public authorities in the European Union may request information about these processes and evaluate whether intermediary service providers apply their rules consistently and proportionately.

For U.S. lawyers, the central task is determining where a client fits within the statutory framework and advising from that position. This may involve building compliant procedures for intermediary service providers, preparing precise enforcement notices, or advising businesses that depend on third-party platforms. When that role-based analysis is done well, the Digital Services Act becomes a workable structure for managing cross-border intellectual property enforcement with greater clarity and predictability.

1. Regulation EU 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market for Digital Services and Amending Directive 2000/31/EC (Digital Services Act), 2022 O.J. (L 277) 1. This regulation establishes the legal framework governing intermediary services operating in the European Union and introduces transparency, accountability, and procedural obligations for digital service providers. ↑

2. Id. art. 3. Article 3 provides the statutory definitions used throughout the regulation, including intermediary services, hosting services, and online platforms. These definitions determine whether a service falls within the categories regulated by the Digital Services Act. ↑

3. Id. art. 33. Article 33 authorizes the designation of very large online platforms and very large online search engines based on the number of active recipients of the service in the European Union. See also id. arts. 34 through 43, which establish the additional obligations imposed on those designated services, including systemic risk assessment, mitigation measures, independent audits, and enhanced transparency requirements. ↑

4. Id. art. 16. Article 16 establishes the notice and action mechanism for hosting services (including online platforms) and sets out the elements required for a notice to be considered sufficiently precise and adequately substantiated, including identification of the specific information alleged to be illegal and an explanation of the reasons why the notifier alleges that information to be illegal. ↑

5. Id. art. 17. Article 17 requires hosting and online platforms to provide a statement of reasons whenever they restrict access to or remove information supplied by a recipient of the service, including an explanation of the decision and the legal or policy grounds relied upon. ↑

6. Id. art. 20. Article 20 requires online platforms to maintain an internal complaint handling system through which users may challenge content moderation decisions and obtain review within the platform’s procedures. ↑

7. Id. art. 30. Article 30 establishes traceability obligations for traders using online marketplaces and requires marketplaces to collect, verify, and retain identifying information concerning business sellers before allowing them to offer goods or services through the platform. ↑

8. Id. art. 14. Article 14 requires providers of intermediary services to include information in their terms and conditions regarding content moderation policies, procedures, and tools, and to apply those restrictions in a diligent, objective, and proportionate manner with due regard for the rights and legitimate interests of all parties involved. ↑

9. Id. arts. 49–51, 56. These provisions establish the supervisory and enforcement structure of the Digital Services Act, including the designation and authority of Digital Services Coordinators in each Member State, investigative and information-gathering powers, coordination among national authorities, and the supervisory role of the European Commission with respect to certain services. ↑

10. Id. art. 13. Article 13 requires providers of intermediary services that are established outside the European Union but offer services within the Union to designate a legal representative in the European Union who may be addressed by competent authorities and who facilitates regulatory communication and compliance. ↑

Since withdrawing its proposed rule broadly banning noncompetes in September 2025, the Federal Trade Commission (“FTC”) has made clear that it will instead bring to bear its enforcement resources against what it deems anticompetitive worker noncompete agreements. The FTC’s latest related enforcement action, announced on April 15 via press release, is against the pest-control company Rollins, which allegedly employs more than 18,000 U.S.-based workers. Simultaneously, the agency announced that it had issued letters to thirteen additional pest-control companies warning them that its review of noncompetes in the pest-control industry “suggests they are not reasonably necessary to promote any procompetitive aims,” and that the FTC suspects the pest-control industry of using anticompetitive noncompetes. The letters instruct recipients to undertake a comprehensive review of their employment agreements, including any restrictive covenants.

The noncompetes at issue in the Rollins action allegedly prohibit employees from working in the pest-control industry for two years following the conclusion of their employment, usually within a seventy-five-mile radius from the location at which the employee worked. Additionally, the FTC claims that the company generally did not give employees any incremental consideration, whether in the form of additional compensation or any other benefit.

The Rollins action is similar to the FTC’s 2025 complaint and consent decree against a large pet cremation company. In both cases, the agency defines noncompetes as contract terms that, following the conclusion of employment with one employer, restrict the worker’s freedom to accept employment with competing businesses, to start a competing business, or otherwise to compete with the former employer post-employment. Both actions allege that the employers required virtually all of their personnel to agree to noncompetes, including low-skilled and low-wage employees, without individualized consideration of roles.

Both complaints allege that the challenged restrictive covenants are anticompetitive because they alter the bargaining position between employees and their employers and negatively impact the employees. Specifically, the FTC charged that employees bound by noncompete agreements are in a worse position to negotiate better terms of employment in the industry at issue (pet cremation or pest-control) due to the noncompete agreements’ denying them access to job opportunities and restricting their mobility. Further, the agency contends that noncompete agreements likely cause lower wages and salaries, reduced benefits, less favorable working conditions, and personal hardship to employees.

In 2025, the FTC issued similar warning letters to health care employers. Also in 2025, the agency challenged the blanket use of no-hire provisions in agreements with customers of a building services company. Although these no-hire provisions were not identical to the worker noncompetes challenged in the pest-control and pet cremation industries, they shared many of the same characteristics: they too allegedly applied to workers regardless of skill or wage level, and they were viewed by the FTC as reducing mobility, lowering wages and benefits, and creating less favorable working conditions and personal hardship for employees. In all three cases, the agency also claimed that the restrictions harmed competition in the market for the employers’ products or services by directly or indirectly impeding the entry and expansion of competing businesses.

The Rollins action and warning letters are also consistent with the FTC’s message from its January 2026 public workshop titled “Moving Forward: Protecting Workers from Anticompetitive Noncompete Agreements.” The workshop outlined the FTC’s approach to enforcement following its abandonment of the noncompete ban and broad rulemaking. The program included remarks by the FTC’s two current commissioners confirming that the agency intends to aggressively enforce antitrust violations posed by noncompete agreements even after the vacatur of its broad Non-Compete Clause Rule. However, the FTC’s future enforcement will be on a case-by-case basis, as opposed to a broad ban.

Chairman Andrew N. Ferguson framed the FTC’s strategy as using “the tools Congress actually gave us,” namely bringing individual enforcement cases. He emphasized that the agency would not step back from this charge, stating that the “days of unreflective, unjustified, and anticompetitive noncompete agreements are over.” Ferguson noted that Congress could, alternatively, choose to ban noncompetes outright. Commissioner Mark R. Meador added that noncompetes are especially likely to raise competitive concerns when they extend beyond one to two years after employment, reach geographic areas beyond the employer’s market, or restrict workers from engaging in unrelated lines of business.

The FTC’s 2025 warning letters to health care staffing companies, 2026 warning letters to pest-control firms, consent decrees, and workshop all confirm that the FTC’s retreat from its attempted nationwide ban does not signal an end to federal scrutiny of noncompete agreements. The agency continues to encourage workers and others to anonymously report potentially anticompetitive restrictions on employee movement.

The agency has explained that it will consider (a) whether purported procompetitive justifications are legitimate and (b) whether less restrictive alternative measures can incentivize any associated procompetitive investments. Employers must also consider the evolving landscape of state laws governing the use and scope of worker noncompetes, including recent Virginia and Maryland legislation.

For workers, the FTC’s sustained enforcement activity confirms that noncompete agreements—particularly those imposed on low-wage or low-skilled employees without individualized justification or additional compensation—are vulnerable to challenge. Workers subject to such agreements are encouraged to report potentially anticompetitive restrictions to the FTC and to consult counsel regarding the enforceability of any covenants restricting their post-employment mobility.

For employers, the central message is that the FTC will continue to bring individual enforcement actions, and employers should review existing noncompete and related restrictive covenant templates to ensure they satisfy existing state and federal guidance. The FTC’s latest enforcement action serves to again remind employers that they must not only be vigilant in monitoring the patchwork of rapidly evolving state and local noncompete laws, but must also stay alert to the FTC’s focus on policing the use of noncompetes within particular industries. If the applicable states’ laws permit the use of noncompetes, employers that cannot demonstrate legitimate, narrowly tailored procompetitive justifications for their noncompetes face exposure—both from the FTC and from employees who may seek relief under applicable law.

For its recipient, a certiorari petition can be an anticlimax. After years of successful litigation, you and your client deserve a break but do not get one. Ninety-odd days after you celebrated a hard-fought victory in the federal court of appeals or state supreme court, you receive an impressively printed petition for writ of certiorari to the U.S. Supreme Court. After reporting on the petition to your client, who hoped to have heard the last of the case, you reassemble your appellate team and ponder what to do.

The odds are in your favor. The Supreme Court denies the vast majority of requests for review: 1,305 of the 1,369 so-called paid (i.e., nonindigent) certiorari petitions or appeals acted on during the Court’s 2024 term were turned down. An even higher proportion of the 2,652 in forma pauperis (“IFP”) cases were unsuccessful.^[1] In fact, during the tenure of Chief Justice Roberts, the number of cases set for argument in the Supreme Court has trended downward, from ninety in the 2005 term to sixty-nine in the 2023 term.^[2] Many of the cases accepted for argument, moreover, are those in which the federal government has sought or supported review; or they involve constitutional, civil rights, or criminal matters. Few are civil business cases like yours.^[3]

So, the odds are with you. But that almost increases the pressure. Your client will not be happy if lightning strikes. It will not want to incur the expense of another round of briefing and oral argument just to put at risk a favorable judgment. And what is worse than a lawyer who fumbles a virtual sure thing?

What should you do to maximize the chance that no four justices—enough to grant certiorari—see yours as that rare case deserving the Court’s plenary attention?

Start with what the other side must do—that is, with what you want to prevent. A petitioner for certiorari bears a heavy burden to persuade the Court to select its case for review out of the many thousands of petitions filed. Understanding the nature of that burden is crucial to writing a successful brief urging denial of certiorari (called a “brief in opposition”).

The major peculiarity of petitioning for certiorari is that the merits of a case are not the main thing. They are not a reliable indicator of whether the Court will grant the writ. True, in the cases it hears, the Court often determines that the judgment below was incorrect. The Court reversed or vacated (at least in part) forty-four (75 percent) of the fifty-nine cases reviewed on writ of certiorari and decided with a full opinion during the 2024 term.^[4] But, at the petition stage, there is no straightforward relationship between the merits and whatever review will be granted. The reason for this—and it is an awkward concept for many lawyers—is that the Supreme Court does not regard its principal job to be the correction of errors.

What Is Not Certworthy?

Instead of seeking merely to correct erroneous decisions, the Court is looking, Chief Justice Roberts has said, for “conflicting decisions on the same law that have to be fixed.”^[5] The best candidates for review thus “take[] a view of the law at odds with those expressed by other federal courts of appeals” on a “vitally important” issue.^[6] Selecting these inevitably takes some measure of discretion. Indeed, Justice Harlan thought “the question whether a case is ‘certworthy’” to be “more a matter of ‘feel’ than of precisely ascertainable rules.”^[7]

Intuition plays a role, but it is a patterned kind of intuition: most cases in which certiorari is granted fall into one of three well-established categories (discussed at length and in all their variations in the Supreme Court practitioner’s bible, Supreme Court Practice by Stephen M. Shapiro et al.^[8]). These categories are (1) cases raising an important federal law question over which a conflict has developed among the federal circuit or state supreme courts, (2) cases in which the lower court reached a decision in conflict with governing Supreme Court precedent, and (3) cases squarely presenting an important issue of federal law with significant practical consequences.^[9]

Therefore, although the correctness of the judgment below is certainly of some importance—even where there is a clear circuit conflict, the justices may prefer to take a case to reverse rather than affirm—it is rarely controlling. A petitioner for certiorari—your opponent—must thus do more than show the Court that the decision below was wrong. An effective petition for certiorari must also demonstrate that one or more of the established factors making for “certworthiness” are present. As a corollary, the job of the brief in opposition is to show not only that the decision below was correct, but (more important) either that certworthiness factors are absent or (if some are present) that the case is not worth the Court’s attention.

When Is It Beneficial to Waive the Brief in Opposition?

To talk about the content of a brief in opposition, however, is to get ahead of the game. The first question to ask after studying the petition is whether the Court will really need any further persuasion to deny certiorari—or whether the petitioner has already done that job for you. In short, do you need to file anything at all?

It remains true today, as Justice Harlan complained seven decades ago, that “a great many petitions for certiorari reflect a fundamental misconception as to the role of the Supreme Court” and stand no chance of being granted.^[10] Some petitions from state courts fail to identify any federal issue, even though they bristle with a multiplicity of questions presented (itself a sign of a poor petition). Others argue only that the decision below was wrong, or leave no doubt that the issues raised are of little consequence beyond the particular facts of the case. Petitioners routinely fail to show that the questions presented arise out of a conflict in the courts of appeals or state supreme courts, have previously been settled by the Supreme Court in a way that is contrary to the decision below, or involve issues of general importance that are ripe for Supreme Court review.

About 97 percent of petitions for certiorari “are denied at a preliminary stage, without joint discussion among the Justices, as lacking any reasonable prospect of certiorari review.”^[11] As Justice Brennan recalled, about 90 percent of IFP and 60 percent of paid petitions are so “utterly without merit” as to require a “minimum of time and effort” to determine that denial was the proper disposition; he himself often decided that a case was not certworthy by doing nothing more than reading the questions presented.^[12]

If you believe that the petition for certiorari in your case will receive this dismissive treatment, compare notes with lawyers who are farther removed from the case and who have had the opportunity to develop a “feel” for certworthiness. Have an experienced Supreme Court practitioner, a past law clerk, or an alum of the Solicitor General’s Office read the opinion below and the petition. If there is general agreement that the petition is obviously meritless, talk to your client about whether the time and expense of preparing and printing a brief in opposition is warranted. No rule requires that the respondent file a brief in opposition (except in capital cases).^[13] If the petition in your case is so plainly meritless that the Court will not need the assistance of a brief in opposition, you may wish to waive your response. The solicitor general (“SG”) and state attorneys general often do this.

One way to waive is simply to allow the period for response to elapse without filing a brief. A much more helpful and courteous course, which is required if your client has a parent corporation or if a public company owns at least 10 percent of your client’s stock,^[14] is to write a letter to the Clerk of the Supreme Court (“Clerk”) (be sure to serve it on opposing counsel). It should say something such as “Because this case clearly does not warrant review by the Supreme Court, respondent does not intend to respond to the petition for certiorari unless requested to do so by the Court.” Such a letter tells the Clerk that the respondent received service, and it identifies the respondent’s counsel of record.^[15] It also must identify all parties not named in the petition, as well as their stock ticker symbols, and include any applicable Rule 29.6 disclosure statement.^[16]

The Clerk prefers a respondent to file its waiver letter as soon as possible after receipt of the petition. This is because the Clerk may circulate the petition to the justices immediately after receiving the waiver letter instead of waiting until the time for response expires.^[17] This may be an important factor if you want to move rapidly to enforce a judgment in your favor—especially when a Court recess looms. For example, when a petition is filed close to the long summer recess, quickly filing a waiver can reward you with a June denial of certiorari and avoid the long wait until the first October order list.

Waiving response displays the proper disdain for a frivolous petition. And it is not the risk one might imagine: a respondent can be sure of an opportunity to file a brief in opposition if the justices surprisingly do find something of interest in the case. A summary of the Court’s current procedures for handling certiorari petitions shows why, but it also shows that a waiver must be approached with care.

The Court’s Procedures for Addressing Certiorari Petitions

Once a week throughout the year, the Clerk circulates papers to the justices for paid cases in which a brief in opposition or waiver letter has been received or the time for response has expired.^[18] There is another weekly circulation of IFP cases. The circulated cases are divided among the law clerks to the seven justices who currently combine their clerks’ efforts at the petition stage into what is called the “cert pool.” A single law clerk from the cert pool is assigned to each case and writes a memorandum, known as a “pool memo,” to guide the justices who participate in this arrangement. The pool memo discusses the certworthiness of the petition and makes a recommendation as to its disposition. (Justices Alito and Gorsuch are the only justices who currently do not participate in the pool. Their clerks read all the petitions themselves.)

The cert pool ensures that each set of certiorari-stage submissions receives more detailed attention than would occur if clerks or justices in every chambers had to read the papers in each of the more than seventy-five cases circulated each week. The pool clerk has time to study cases alleged by petitioners to be in conflict and even to do research independent of the briefs. On the debit side, the pool arrangement means that the most careful attention to the petition (and to your brief in opposition, if you file one) comes from a single law clerk, who will recommend to the justices in the pool whether to grant the writ.

After the pool memos are distributed to participating chambers, clerks annotate the memos, paying special attention to anything in the case that might interest their own justice. The justices then review the annotated memos themselves prior to conference. Pool memos have become an important element in the Court’s review of certiorari petitions. In many cases, the justices begin and end with the annotated memos, never reviewing the petition.^[19] The justices are most likely to go beyond the pool memo and read the briefs where the certiorari decision appears close or where the pool memo has recommended a grant.

On the basis of the pool memo, their clerks’ annotations, and (where necessary) their own review of the briefs, the justices decide whether a petition should be discussed and voted on at conference. The chief justice compiles a list of cases he believes should be set for a conference discussion—called the “discuss list”—and circulates it to other members of the Court, any one of whom may add a case to the list. Any case not appearing on the discuss list is “dead listed” for denial without a conference vote. Justice Kagan estimates that just “a few hundred” of the “thousands and thousands” of petitions for certiorari filed each year make it to the discuss list.^[20]

What Is the “Discuss List”?

The Court’s current handling of the discuss list has great importance for a respondent considering whether to waive its brief in opposition. At present, the Court does not include any petition on the discuss list until a response has been filed.^[21] Thus, if the pool memo writer (or, after reading the pool memo, one of the justices) believes that, despite a waiver of a brief in opposition, the petition should be included on a discuss list for a conference vote, he or she will ask the Clerk to “call for a response.”

A request for a response obviously must be taken seriously. It is not necessarily bad news, however. It does not mean that a grant is imminent, or even that it is under consideration. After all, the origin of the request will usually be some concern of a single law clerk or, less often, a single justice. It may be perfectly clear to most justices that there is nothing to the petition. Even the requester may only want some clarification. In fact, a response sometimes may be sought because the petition is so unclear that the law clerk writing the pool memo simply cannot understand the case. In such circumstances, the Court may need the respondent’s help to identify the issues and determine a proper disposition.

You will know neither the source of the request for a response nor the reason for it. Such a request can therefore be unnerving. If you were careful in deciding to waive a brief in opposition, there is little reason to fear that you have prejudiced your case by waiver itself. Chances are that the Court is looking for clarification rather than weighing a grant.

There is a modest danger in waiving. If you waived a case that was not frivolous, there may be a remote risk of prejudice. The pool memo writer or even some justices may already have developed a bent toward a grant, based on reading the petition alone, that you will now have to counteract. This possibility cautions care in your initial determination whether to waive and counsels filing a brief in opposition when in doubt.

Preparing the Brief in Opposition

If you don’t waive, what does drafting a brief in opposition involve? The brief is limited to 9,000 words and is due thirty days after receipt of the petition or of the Court’s request for a response.^[22]

Your brief in opposition should be low-key, befitting the trivial issue the petitioner has tried to foist on the Court. A tone of bemusement, of a patient adult dealing with a confused child, is about right. You will rarely need the full word count (although a long brief showing in nauseating detail why a petition is uncertworthy may sometimes be thought effective to deaden any spark of interest in the case). “A brief in opposition should be stated briefly and in plain terms”^[23] and focused on the precise problem at hand. This is not a place for an extended disquisition on the governing legal principles. As E. Barrett Prettyman Jr. has warned, if the justices and their clerks finish reading your brief “more impressed with the importance of the case than they were when they finished the petition,” you have made a mistake.^[24]

Take pains to deter any would-be amici. You don’t need their help right now. Their participation at this stage could serve to suggest that the petition raises an issue with broad impact and might thus be self-defeating. Mishandled amicus support for a respondent—the opponent of certiorari—has been shown actually to increase the likelihood of a grant.^[25]

The parts that may be included in a brief in opposition are, in order: (1) questions presented, which may either track the petitioner’s formulation or, more usefully, restate the issues for clarity and in less loaded language; (2) a Rule 29.6 statement of a corporate respondent’s parents and public companies owning at least 10 percent of the respondent’s stock, as well as their respective stock ticker symbols; (3) tables of contents and authorities; (4) a formal description of the opinions below; (5) a jurisdictional statement; (6) any statutes or other relevant provisions not set out in the petition; (7) a statement of facts; (8) an argument section, often headed “Reasons for Denying the Petition”; and (9) a formal conclusion requesting denial of the writ. Some of these sections may be omitted if the respondent has nothing to add to the petition.^[26]

If you are lucky, you may not need to do more than explain why the Court lacks jurisdiction. There is nothing more to say if there is a decisive jurisdictional defect. In particular, check whether the petition was timely filed; in civil cases, this is a jurisdictional requirement, and no excuses are accepted.^[27] An untimely petition is not always caught by the Clerk, who may assume that a petition filed more than ninety days after entry of judgment is proper because a petition for rehearing was filed in the lower court.^[28]

Are Any Issues Unreviewable?

Beyond the timeliness of the petition, consider whether the issues presented have become moot. If so (or if the issues later become moot), the Court cannot reach the merits. Indeed, a clear-cut mootness problem might even persuade the Court to bypass other jurisdictional issues that it might otherwise have been inclined to resolve against you.^[29]

In a case coming from a state court, examine, too, whether the judgment rests on an independent and adequate state law ground—one over which the Supreme Court lacks jurisdiction. A substantial number of petitions are filed each year that raise only state law issues or seek review of a decision based in the alternative on a state law ground. They can be knocked out quickly.

Win on the Facts

In most cases, more will be required—starting with a factual statement. In rare cases, when you are satisfied with the petitioner’s treatment of the facts, you can omit the statement from the brief in opposition.^[30] Even if the petitioner’s statement is faulty, some recommend keeping the brief in opposition short by simply referring the Court to a satisfactory summary of the facts in an opinion below.^[31]

Almost always, however, something can be made of the facts. Perhaps they are complex (the Court prefers factually straightforward cases); your statement should convey that. Perhaps the petition is interlocutory and key facts remain unresolved so that the Court’s decision on the merits might not affect the outcome of the litigation. Perhaps you can emphasize facts that distinguish your case from others said to be in conflict. Perhaps a full account of the facts will show that the case is unusual and that the issues are not of general importance. In any event, you almost certainly will want to present the facts to the Court with your own nuances and free of the petitioner’s inevitable slant.

Certainly, if there is any factual misstatement in the petition, correct it in your brief in opposition. If you try to bring the misrepresentation to the Court’s attention at the merits stage, you may find that the point is deemed waived. Rule 15.2 says that “[c]ounsel . . . have an obligation . . . to point out in the brief in opposition, and not later, any perceived misstatement made in the petition.”^[32]

Infrequently, facts outside the record may show lack of certworthiness. You may have found statistics that demonstrate the practical insignificance of the question presented. The petitioner may have made statements to the press that contradict its submissions to the Court about the importance of the issue. Refer to these in the argument section of your brief rather than in the statement of facts—but exercise this option with discretion.

Reasons to Deny the Petition

The heart of the brief in opposition is the “Reasons for Denying the Petition” section—the argument. A demonstration that the decision below was absolutely right is one, though subsidiary, reason why the Court may not wish to review the case. The brief in opposition should therefore include a concise defense of the judgment below, either under a separate heading (usually at the end, befitting its secondary status) or possibly incorporated into your explanation that certworthiness is absent. If the opinion below is the work of a respected jurist or strong appellate panel, it doesn’t hurt to remind the Court subtly of its provenance. If you were less fortunate, do not limit yourself to defending the decision below on its own terms. If the lower court’s reasoning is indefensible, argue that the judgment is nevertheless correct on other grounds. Remember also to point out any absurd consequences that would follow from the rule urged by the petitioner.

But, for reasons mentioned before, your focus usually should not be the merits of the underlying decision. A more compelling reason for the Court to deny review is that there is some barrier to reaching the merits at all. The issues raised in the petition may be beside the point because the lower court gave alternate grounds of decision that are sufficient to support its judgment. If so, point that out early in the brief in opposition. If the lower court did not pass on the merits of the question presented because the petitioner did not raise (or failed to preserve) the issue, make that point early too. A crisp procedural defect of this sort is worth pages of argument defending the correctness of the decision below, and you must raise it in the brief in opposition or risk waiving it.^[33]

The main job of a brief in opposition is to show that the petition fails to satisfy the criteria for certworthiness. Where possible, directly refute any claim that the questions presented have split the federal circuits or state supreme courts, are issues of great practical importance, or have already been addressed by the Supreme Court and decided contrary to the judgment below.

Are the Conflicts Real?

Frequently, you will be able to show that the petitioner is wrong to say that one or more of these certworthiness criteria are present. For example, petitions for certiorari often contain “dubious” claims about circuit splits that do not actually exist.^[34] One study concluded that although about 60 percent of petitions for certiorari allege a split in the courts as to the question presented, the conflict is real in only 6 percent of those cases.^[35] Ask whether the alleged conflict is a “square” one—would the other court have decided your case differently? Maybe the different outcomes are attributable to different facts and not legal disagreement. Often, cases alleged to be in conflict are actually distinguishable on the facts or the law. Sometimes only dicta are inconsistent.

Even where there is a square conflict, it must be at a sufficiently authoritative level of the legal system to warrant review. Some petitioners rely on conflicts among federal district court decisions, but the Court very rarely intervenes in such situations because the courts of appeals can iron out inconsistencies.

A claim that the questions presented are “important” enough for Supreme Court review is likewise susceptible to disproof. You can point out in the brief in opposition that the issue has never (or only rarely) arisen in the courts, that the lower courts are consistent in their approach to the question, or that the facts of the case are unusual. Sometimes, by citing past denials of certiorari on precisely the same issue, you can remind the Court that it has previously found the questions presented unworthy of review.

Do not despair if there is a clear split among the circuits or state supreme courts or the petition raises a question of obvious practical importance. Even in such cases, review is discretionary, and it is often denied. In fact, Justice Kavanaugh has complained that the Court is declining review of “the kind of nuts and bolts cases” that garner little public attention but cause confusion in the law.^[36] In his view, the Court should decide between seventy and seventy-five cases each term, up from about sixty now.

Is It the Right Time to Decide?

Another method of avoiding certiorari is to suggest that the Court’s intervention would be untimely. Certiorari in your case may seem unnecessary, for example, because a conflict has only recently developed. If so, you can argue that it may still be corrected without the Court’s intervention. Conversely, you might point out that the conflict is old and has proven tolerable.

Other timeliness considerations abound. The Court may decline to review a case in apparent conflict with one of its own decisions if the case seems unlikely to spawn recurring problems or does not provide an occasion to reconsider a particularly dubious decision. The Court often bypasses even federal constitutional or statutory questions of large consequence until they have “percolated” in the lower courts long enough to define the problem and air competing views.^[37] Impending legislative attention to an important issue may also lead the Court to take a wait-and-see approach.^[38]

Where a petition accurately identifies a conflict or an important issue, you also may want to argue that your particular case is not a good vehicle for settling the problem. In potentially certworthy cases, demonstrate (if you can) that the case is factually or procedurally murky; the Court has a distinct preference for “clean” cases. If the petition mischaracterizes the facts, say so; the Court wants to deal with settled facts, not ongoing factual disputes. Point out ambiguities in the opinions below that may complicate the Court’s job. If the case is an interlocutory appeal, emphasize that fact, and point out that the issue presented may take on a different aspect as the case proceeds in the trial court.^[39] Remember, the presumption is against a grant, and the Court is looking for reasons to deny the petition.

Dealing with Amicus Briefs and the Solicitor General

Studies have shown that the filing of amicus briefs in support of a petition increases the likelihood that the petition will be granted.^[40] Amicus briefs urging a grant need not be filed at the same time as the petition. Rather, they must “be filed within 30 days after the case is placed on the docket or a response is called for by the Court, whichever is later.”^[41] In addition, most amici must provide at least ten days’ notice of their intent to file a brief.^[42] This lets you request an extension of time so that you can address amicus briefs in your opposition.^[43] Do so, but quickly dispose of amicus arguments so as not to suggest they are important.

Your suit may involve only private parties, but if the issue raised in the petition is of consequence to the federal government and appears potentially certworthy, the Court may postpone action until it has heard from the SG. If three justices vote for this at the conference, the Court will issue an invitation to the SG to file a brief “expressing the views of the United States.” This is quite common, for example, where a plausible petition raises a question about the implementation of a federal program (such as Medicaid) or the interpretation of a statute enforceable by the United States (such as the antitrust laws).

If it serves your interest, it is sometimes possible to forestall a call for the SG’s views by persuading the Court that the government’s position—at least on the merits—already is well-known. To do this, summarize the government’s views in your brief in opposition and include in an appendix any supporting documentation, such as government briefs filed in the lower court or in other cases, government reports, or congressional testimony.^[44] Alternatively, you may seek to lodge those materials with the Clerk pursuant to Rule 32.3.

The SG’s view on whether a case merits review carries great weight with the Court.^[45] In addition, when drafting an invited certiorari brief, the SG likely will develop a merits position that will persist in any later filings. Therefore, if the Court has issued an invitation, the respondent should work hard to convince the SG that the petition is not certworthy and that the merits favor the respondent. This may be done by letter or sometimes through a meeting with the SG’s staff assigned to the case.

It is equally important to contact the agency with primary responsibility for subject matter of the case (including the responsible division of the Justice Department). The agency’s position will be influential with the SG, and agency staff may produce the first draft of the government’s brief.^[46] Think, too, about contacting other government agencies that may support your position with the SG, especially if the primary agency is against you, urging the SG to recommend a grant.

The Court does not always heed the SG’s invited views. If the SG comes down against you, you should file a Rule 15.8 supplemental memorandum responding to the government’s brief. To be of any use, your memorandum usually must be prepared quickly. You should determine from the Clerk when the petition for certiorari will be set for conference and ensure that your supplemental brief arrives in ample time to be circulated to the justices before the conference vote is taken. If you can get your brief on file before the papers in the case are circulated to the justices,^[47] so much the better.

GVRs and Holds

Having the petition granted is not the only bad outcome you want to ward off by filing a brief in opposition. Besides the petitions the Court grants to decide on the merits after full briefing, another fifty to one hundred or more cases each term are disposed of summarily on the basis of the submissions at the petition stage. Sometimes the Court will summarily reverse, but, in most of its summary decisions, the Court grants the petition, vacates the judgment below, and then remands the case for reconsideration in light of a recent Supreme Court decision. This disposition is referred to as a “GVR.” A GVR is certainly not equivalent to a reversal on the merits—after remand, the lower courts often adhere to their earlier views—but it does put your judgment at risk and can rekindle the litigation.

If three justices believe that the Court’s resolution of a case awaiting argument or decision may settle (or affect) the issues raised in a petition, their votes suffice to “hold” the petition—delay acting upon it—until that case is decided.^[48] If the anticipated decision materially changes the law applied by the lower court in the “held” case, the Court will then dispose of the petition by GVR.^[49] A petition may also be held so it can be discussed in conference along with other petitions raising similar issues. If one of the petitions is granted, the others will then be held pending the outcome of the granted case. The Court does not announce that it is holding a petition. But you will know that your case is being held if it is not disposed of on the order list following the conference at which it was considered.

The Court often holds cases and then hands down GVRs; it prefers to let the lower courts determine the impact of any new precedent.^[50] For example, it GVR’d no fewer than a dozen cases for reconsideration in light of its reassessment of the deference owed to an administrative agency’s interpretation of the law in Loper Bright Enterprises v. Raimondo.^[51]

Sometimes a petition will signal the potential relevance of a pending decision or similarities with other petitions, but you cannot rely upon this. If there are similar cases pending, it is likely that the justices and their clerks will be aware of them, even if the petition in your case has not drawn the connection. The only sure means of tracking down such connections is to search the Court’s docket (which is available on the Court’s website) to identify petitions or cases set for argument that might cause your case to be held. You should deal with the supposed relationship explicitly in your brief in opposition; explain why your case is different from, and cannot conceivably be affected by, the outcome in other pending matters.

If you discover that there are a lot of similar petitions pending in circumstances that suggest one will be granted and the others held, discuss another option with your client. Rather than letting others who may have different interests control the Supreme Court litigation, consider filing a brief urging the Court to hear your case to affirm on the merits.

And, if you nonetheless still want to argue that the petition should be denied, remember that if it is instead held, you can file an amicus brief in the granted case. Opposing certiorari is an unusual process, with its own rules for success. With more than 4,000 petitions filed annually, most litigators will at some point need to master its peculiarities.

* * *

For the respondent, the costs of misunderstanding the Supreme Court’s case selection principles can be high. The good news is that this is one area in which the Supreme Court is not especially secretive. The grounds for a denial of certiorari are well understood. The road map is there. Follow it.

1. The Supreme Court, 139 Harv. L. Rev. 430, 438 (2025). ↑

2. See U.S. Supreme Court, U.S. Courts, at tbl.A-1 (Sept. 30, 2006; Sept. 30, 2024). ↑

3. See Robin S. Conrad, The Roberts Court and the Myth of a Pro-Business Bias, 49 Santa Clara L. Rev. 997, 1001–02 (2009). ↑

4. The Supreme Court, supra note 1, at 439. ↑

5. Interview by Lawrence J. Vilardo with John G. Roberts, Chief J., in Buffalo, N.Y. (May 7, 2025). ↑

6. Apache Stronghold v. United States, 145 S. Ct. 1480, 1480 (2025) (Gorsuch, J., dissenting from the denial of certiorari). ↑

7. John Marshall Harlan, Manning the Dikes, 13 Rec. N.Y. City Bar Ass’n 541, 549 (1958). ↑

8. Stephen M. Shapiro et al., Supreme Court Practice §§ 4.3–4.15 (11th ed. 2019). ↑

9. See Sup. Ct. R. 10. ↑

10. Harlan, supra note 7, at 549. ↑

11. Code of Conduct for Justices, Sup. Ct. U.S. 11 cmt. (Nov. 13, 2023). ↑

12. William J. Brennan, The National Court of Appeals: Another Dissent, 40 U. Chi. L. Rev. 473, 476–78 (1973). ↑

13. See Sup. Ct. R. 15.1. ↑

14. See id. r. 15.9. ↑

15. See id. r. 9. ↑

16. See id. r. 15.9. ↑

17. Id. r. 15.5. ↑

18. See id.; Memorandum from Scott S. Harris, Clerk of the U.S. Sup. Ct., Concerning the Deadlines for Cert Stage Pleadings and the Scheduling of Cases for Conference 3 (Jan. 2023) [hereinafter Harris Memorandum]. ↑

19. See Interview by Steven Pearlstein with Elena Kagan, Assoc. J., at George Mason University (Nov. 18, 2019). ↑

20. Id.; see also Gregory A. Caldeira & John R. Wright, The Discuss List: Agenda Building in the Supreme Court, 24 L. & Soc. Rev. 807, 808 (1990). ↑

21. See Harris Memorandum, supra note 18, at 4–5. ↑

22. Sup. Ct. R. 15, 33.1(g). ↑

23. Id. r. 15.2. ↑

24. E. Barrett Prettyman Jr., Opposing Certiorari in the United States Supreme Court, 61 Va. L. Rev. 197, 198 (1975). ↑

25. Caldeira & Wright, supra note 20, at 824, 828. ↑

26. Sup. Ct. R. 15.3, 24.2. ↑

27. See id. r. 13.2. ↑

28. See id. r. 13.3. ↑

29. See Acheson Hotels, LLC v. Laufer, 601 U.S. 1 (2023). ↑

30. See Sup. Ct. R. 24.2. ↑

31. Stewart A. Baker, A Practical Guide to Certiorari, 33 Cath. U.L. Rev. 611, 627 (1984). ↑

32. Sup. Ct. R. 15.2. ↑

33. See id. ↑

34. Deborah Beim & Kelly Rader, Legal Uniformity in American Courts, 16 J. Empirical Legal Stud. 448, 451–52 (2019); see also Ryan C. Black & Ryan J. Owens, Agenda Setting in the Supreme Court: The Collision of Policy and Jurisprudence, 71 J. Pol. 1062, 1069 (2009). ↑

35. Caldeira & Wright, supra note 20, at 820. ↑

36. Maureen Groppe & Serena Lin, Justice Kavanaugh on Why the Supreme Court Should Take More Cases—and Whether He’s a Swiftie, USA Today, May 10, 2024. ↑

37. See, e.g., McCrory v. Alabama, 144 S. Ct. 2483, 2483 (2024) (mem.) (statement of Sotomayor, J., respecting the denial of certiorari) (voting “to deny this petition” where “claims like [petitioner’s] have yet to percolate sufficiently through the federal courts”). ↑

38. See generally H. W. Perry Jr., Deciding to Decide: Agenda Setting in the United States Supreme Court 216–70 (1991). ↑

39. See Shapiro et al., supra note 8, § 4.18. ↑

40. See Allison Orr Larsen & Neal Devins, The Amicus Machine, 102 Va. L. Rev. 1901, 1936–40 (2016). ↑

41. Sup. Ct. R. 37.2. ↑

42. See id. ↑

43. See Shapiro et al., supra note 8, § 6.40. ↑

44. See generally id. § 6.24. ↑

45. See David C. Thompson & Melanie F. Wachtell, An Empirical Analysis of Supreme Court Certiorari Petition Procedures: The Call for Response and the Call for the Views of the Solicitor General, 16 Geo. Mason L. Rev. 237, 276 (2009) (reporting that the Court grants 75 percent of petitions when the SG has filed an amicus brief in support of the petitioner and denies 80 percent of petitions when the SG supports the respondent). ↑

46. See id. at 288. ↑

47. Sup. Ct. R. 15.5. ↑

48. 1 Bennett Boskey, West’s Federal Forms: Supreme Court § 9:1, n.22 (6th ed. 2025). ↑

49. See Lords Landing Vill. Condo. Council of Unit Owners v. Cont’l Ins. Co., 520 U.S. 893, 896 (1997) (per curiam); see also Flowers v. Mississippi, 136 S. Ct. 2157, 2157–58 (2016) (mem.) (Alito, J., dissenting from the decision to grant, vacate, and remand). ↑

50. See Wellons v. Hall, 558 U.S. 220, 225–26 (2010) (per curiam). ↑

51. 603 U.S. 369 (2024). ↑

In my article “How Will the Recent Amendments to Illinois’s BIPA Affect the Use of Biometric Data?”^[1] I reported on the Illinois State Legislature’s changes in Senate Bill 2979 to the Illinois Biometric Information Privacy Act (“BIPA”). The changes were effective on August 2, 2024. One of those changes amended the limits on damages to one recovery per violation per person, regardless of the number of instances of collections of biometric information using the same method.^[2] A recent decision of the U.S. Court of Appeals for the Seventh Circuit held that the change in damages applies retroactively to cases pending when the BIPA amendments became effective.

In Clay v. Union Pacific Railroad Co.,^[3] the Court of Appeals consolidated three interlocutory appeals posing a common legal question of whether the BIPA amendment effective August 2, 2024, applies retroactively to cases pending when it was enacted. In its analysis, the Court distinguished between legislative amendments that are procedural or substantive, stating, “Crucially, the Supreme Court of Illinois treats remedial changes as procedural, not substantive.”^[4] The Court determined that the amendment to the damages section in BIPA (740 ILCS 14/20) was remedial and stated, “Illinois courts have consistently ruled that they ‘can apply retroactively statutory changes to procedural or remedial provisions, whether they are outright repeals or amendments.’ We take this principle as the rule of decision for this case.”^[5]

The Court of Appeals held:

Because the amendment to Section 20 of BIPA constitutes a remedial change, Illinois courts would have us apply it to cases pending when it was enacted. A plaintiff who alleges thousands of claims under BIPA Section 15 is only “entitled to, at most, one recovery under” Section 20. We hold that this amendment applies retroactively because it impacts only the statutory damages available to plaintiffs—it does not change BIPA’s substantive standards of liability.

The district courts in all three cases erred by holding otherwise. On remand, the district courts may need to reevaluate how this holding affects other aspects of these cases, including subject matter jurisdiction. But for now, it is enough to note that these courts, and others dealing with similar cases, must ensure they follow the latest guidance of the legislature when calculating damages under BIPA Section 20.^[6]

The BIPA damages discussed in Clay are limited to 740 ILCS 14/20 (as amended):

(b) For purposes of subsection (b) of Section 15 [740 ILCS 14/15], a private entity that, in more than one instance, collects, captures, purchases, receives through trade, or otherwise obtains the same biometric identifier or biometric information from the same person using the same method of collection in violation of subsection (b) of Section 15 has committed a single violation of subsection (b) of Section 15 for which the aggrieved person is entitled to, at most, one recovery under this Section.

(c) For purposes of subsection (d) of Section 15, a private entity that, in more than one instance, discloses, rediscloses, or otherwise disseminates the same biometric identifier or biometric information from the same person to the same recipient using the same method of collection in violation of subsection (d) of Section 15 has committed a single violation of subsection (d) of Section 15 for which the aggrieved person is entitled to, at most, one recovery under this Section regardless of the number of times the private entity disclosed, redisclosed, or otherwise disseminated the same biometric identifier or biometric information of the same person to the same recipient.^[7]

The bottom line is that even though the BIPA damages and consequences are limited by the 2024 BIPA amendment, they can, depending on the facts, still be substantial and may include, the following, for each “person aggrieved by a violation” of BIPA as stated in 740 ILCS 14/20(a):

1. For a negligent violation: liquidated damages of $1,000 or actual damages, whichever is greater.
2. For an intentional or reckless violation: liquidated damages of $5,000 or actual damages, whichever is greater.
3. Reasonable attorneys’ fees and costs, including expert witness fees and other litigation expenses.
4. Other relief, including an injunction, as the state or federal court may deem appropriate.

Rosenbach v. Six Flags Entertainment Corporation,^[8] a seminal case in the history of BIPA litigation that had substantial consequences in the law, concerned only a single plaintiff, Stacy Rosenbach, as Mother and Next Friend of Alexander Rosenbach. If a business has multiple employees, customers, or other third parties, and collects and/or uses their biometric information subject to BIPA, the damages for a BIPA violation could become substantial.

While biometric information offers many valuable opportunities for businesses, their employees, and customers, businesses and their legal advisors need to confirm that the business’s use complies with all applicable laws (including but not limited to BIPA) concerning use of biometric information, including, without limitation, in connection with artificial intelligence systems.

1. Published in the ABA publication Business Law Today on September 4, 2024. Note, the author has been writing about the intersection of biometric data and the law since 2019. A partial list of those articles is linked here. ↑

2. 740 ILCS 14/20 (Right of action) (amended effective Aug. 2, 2024). ↑

3. Clay v. Union Pac. R.R. Co., 171 F.4th 975, 2026 U.S. App. LEXIS 9487 (7th Cir. Apr. 1, 2026). ↑

4. Id. at *9. ↑

5. Id. at *10 (citation omitted) (quoting People v. Glisson, 782 N.E.2d 251, 257 (Ill. 2002)). ↑

6. Id. at *20–21. ↑

7. 740 ILCS 14/20 (Right of action) (amended effective Aug. 2, 2024) (emphasis added). ↑

8. Rosenbach v. Six Flags Ent. Corp., 129 N.E.3d 1197 (Ill. 2019). See “Biometric Information – Permanent Personally Identifiable Information Risk” published in the ABA publication Business Law Today on January 28, 2019. ↑

Mediation, ordinarily a voluntary dispute resolution process, is private, informal, confidential, and nonbinding. A mediator, as a professional neutral facilitator, assists disputing parties in reaching an agreement to settle part or all of their differences. This process allows the parties to self-determine the outcome without the formal rules of evidence or procedure used in a court proceeding.

The actual conduct of the mediation may vary depending upon the style of the mediator and the nature of the conflicts. For disputes involving business and human rights (“BHR”) violations, these conflicts are known to frequently arise from commercial activities where harm to individuals, communities, or workers infringes on internationally recognized rights and standards (e.g., UN Guiding Principles on Business and Human Rights, OECD Guidelines, ILO Declaration on Fundamental Principles and Rights at Work).^[1]

This article aims to highlight the value of co-mediation in BHR-related disputes, where evaluative and facilitative styles of mediation that are commonly used in legal and transactional cases can complement relational mediation styles typically used in community and workplace conflicts to create a more fair, collaborative, and inclusive dispute resolution experience that benefits all stakeholders.

What Makes Mediating BHR-Related Disputes Different?

BHR-related disputes generally do not have a one-size-fits-all mediation style. Notable types of BHR-related disputes include conflicts relating to labor and employment (e.g., forced labor / modern slavery, child labor, inadequate working conditions, wage issues); environmental and community impact (e.g., harm to local populations through environmental damage); land and indigenous rights (e.g., ownership and cultural rights); and corporate accountability and governance issues (e.g., harms due to lack of remedy for victims, failure to conduct environmental and human rights due diligence). The mediation style used depends on whether the goal is to reach a settlement, establish accountability, or preserve a long-term relationship.

In most cases, facilitative mediation helps parties to better understand each other through guided communications, which are commonly used in labor disputes, supply chain conflicts, and early-stage grievances. However, rights-based violations or significant power imbalances can hinder progress through this approach and thereby require the mediator to take a more active role in assessing claims and predicting legal outcomes by way of reality-checking the parties’ positions through evaluative mediation. Another style known as transformative mediation focuses on empowerment and nonfinancial needs and interests—most often centered in corporate-community conflicts and indigenous rights issues—and aims to address deeper human rights concerns like restoring dignity and establishing mutual understanding. Lesser-known mediation styles that are unique to BHR-related disputes include rights-based and interests-based mediations, where special attention is given to internationally recognized rights and standards and considerations for the broader nonfinancial and social interests of affected parties.

Benefits of Co-Mediation in BHR-Related Disputes

Co-mediation by multiple mediators can add value in BHR-related disputes in a variety of ways. When complex legal, technical, financial, societal, and cultural considerations are present, a co-mediation team can bring different strengths and a more holistic approach to communicating with different stakeholders with varying interests and needs. For instance, one mediator with deep legal expertise or industry knowledge can offer an evaluative style of mediation, while another mediator with high emotional intelligence competency can focus on behavior or relationship management. This complementary approach allows for more nuanced and sensible engagement between and among the various stakeholders.

Another major benefit to co-mediation is its ability to bridge cultural, linguistic, and other relevant gaps. Cross-border commercial disputes frequently involve parties from different traditions and worldviews, negotiation styles, and languages. Having mediators from different cultural backgrounds can help reduce misunderstandings, build trust, and ensure that perceptions of neutrality and legitimacy remain intact among all the parties.

Whether a dispute is cross-border or not, parties that are sensitive about a mediator’s background, viewpoint, and cultural knowledge can benefit from having a co-mediation team with mixed mediation styles to balance those concerns and make the process feel more equitable. Co-mediators can also collectively test ideas, challenge assumptions, and refine strategies in real time.

However, it is important that the co-mediators are complementary in style and aligned in strategy. This requires strong coordination; a well-matched and collaborative co-mediation team can deepen trust, improve communication, and increase the chances of a durable settlement.

In summary, a mediator’s ability to effectively transition between the different mediation styles in BHR-related disputes can significantly impact process and outcomes. The goal is to balance fairness and practical resolution, and the holistic perspective and well-rounded approach that co-mediation brings can help the parties to reach an agreement that is both profitable and principled for all stakeholders—and in a language that understands both the business needs of global commercial operations and the personal needs of communities that support them.

1. A useful resource for understanding BHR issues is the Business and Human Rights Centre, a global organization and knowledge hub that works alongside partners and allies to deliver comprehensive BHR-related news in multiple languages. ↑

An increasing number of states have recently enacted healthcare transaction review laws (“TRLs”). These laws reflect a decisive shift in state health policy. Transactions that historically fell within the domains of corporate law, regulatory licensure transfer oversight, and federal antitrust enforcement are now subject to independent state-level review regimes that often require advance notice; extended waiting periods; and, in some jurisdictions, affirmative pre-closing approval.

These new TRL transaction approval processes, particularly the laws that require pre-closing approval, are more akin to historical certificate of need (“CON”) reviews with new additional review elements. The more intensive processes are designed to take a global view of the effect the transaction might have on the provision of healthcare in a particular state by assessing issues such as cost, quality, access, competition, and health equity.

While healthcare has long been highly regulated, the emergence of TRLs represents not merely incremental oversight, but a structural reconfiguration of regulatory authority over healthcare mergers and acquisitions. In effect, states with TRLs have positioned themselves as gatekeepers of healthcare consolidation, particularly where investor-backed entities, management services organizations (“MSOs”), and complex ownership structures are involved.

This article summarizes how TRLs are structured and examines the additional regulatory burden they impose on transacting parties.

Pre-Closing Notice or Approval as a New Burden

The most immediate and tangible burden imposed by TRLs is procedural, involving mandatory advance notice; prolonged waiting periods; and, in some states, pre-closing approval requirements. Several states—such as California,^[1] Minnesota,^[2] Massachusetts,^[3] New Mexico,^[4] New York,^[5] Oregon,^[6] Illinois, and Nevada^[7]—have enacted laws requiring either pre-closing notice or pre-closing approval.

Other states, including Massachusetts, have enacted legislation introducing more rigorous measures that will lengthen the review process and potentially delay transactions, such as broadening the scope of the Health Policy Commission Cost and Market Impact Review (“CMIR”) process.^[8] Additionally, Rhode Island has promulgated regulations establishing “lack of notification” penalties to ensure compliance.^[9]

These new requirements are often in addition to existing processes related to changes of ownership for a CON, license, or provider number. In many cases, TRL processes represent a significant increase in regulatory burdens compared to existing CON or licensure requirements, extending review periods and necessitating more detailed disclosures. TRL processes also impose substantial additional costs on the buyer, including expenses for market studies, external legal counsel, and consultants, none of which may have otherwise been incurred.

Transactions that previously did not involve executory periods—such as certain mergers or acquisitions of physician groups or MSOs—now often do. Overall, in states with TRLs, the time frame from signing to closing has lengthened, in some cases substantially, ranging from 30 to 180 days for notice^[10] and up to 215 days if a CMIR is initiated.^[11]

Materiality and the Types of Transactions Subject to TRLs

TRLs generally apply to “material transactions” or “material changes,” which are broadly defined to capture transactions deemed significant enough to warrant regulatory oversight. This includes mergers, acquisitions, asset or ownership transfers, changes of control, revenue-sharing arrangements, the formation of new healthcare entities, and real-estate sale-leasebacks that affect healthcare operations. Many states also treat a series of related transactions occurring within a defined period—such as five years—as a single transaction subject to review.^[12] Covered entities can include hospitals, hospital systems, group practices, MSOs, provider-sponsored organizations, health insurance plans, and other affiliated healthcare organizations.

In many states, specific financial thresholds determine which transactions trigger notice or review—for example, $10–$80 million in Minnesota^[13] and $25 million in gross revenues in New York.^[14] Special scrutiny is often given to private-equity-backed transactions, MSOs, and real estate investment trust (“REIT”) deals, with additional notice, approval, or operational requirements imposed when hedge funds, private equity firms, or similar investors are involved.^[15]

At the same time, certain transactions are exempt from TRLs, including those below statutory financial thresholds: for example, California requires notice only for entities meeting specific revenue or asset thresholds,^[16] and Connecticut requires notice only for “material changes” that significantly alter a group practice’s business or structure.^[17] Routine contracts or internal restructurings are generally excluded, as in Minnesota, which exempts corporate restructurings, mortgages, secured loans, clinical trial affiliations, and employment contracts,^[18] and Nevada, which excludes transactions between entities under common ownership or with preexisting relationships.^[19] Other states, such as Indiana, exclude practitioner-owned providers majority-owned by licensed in-state practitioners,^[20] and nonprofit relief exists in California under certain circumstances.^[21]

Comprehensive Scope of Review

The Model Act for State Oversight of Proposed Health Care Mergers, developed by the National Academy for State Health Policy and updated in 2024, provides a harmonized framework for reviewing healthcare transactions.^[22] Many states have incorporated its concepts, emphasizing transparency, corporate changes of control, service line closures, prohibitions of physician non-competes, and private equity oversight.

In general, most TRLs examine a wide range of factors aligned with public policy objectives, including market concentration and competition, transaction history, pricing and cost trends, service quality and patient experience, accessibility and equity, obligations to underserved or government-payer populations, provision of low-margin essential services, consumer protection, compliance with prior regulatory conditions, clinical workforce impacts, financial effects of real-estate arrangements, and the consequences of facility closures.^[23]

As previously discussed, notice and pre-closing requirements vary by state, and disclosure obligations can be extensive, including ownership and control party identification, organizational charts, ownership structures, operational and financial data, transaction agreements, and supporting economic analyses.

Many TRLs provide for public participation through hearings, comment periods, and post-closing reporting to promote transparency—for example, Oregon may hold public hearings,^[24] Indiana publishes ownership information annually,^[25] and New York posts transaction summaries thirty days before closing.^[26]

Enforcement mechanisms include civil penalties, investigations, injunctions, and, in some cases, the authority to block or unwind transactions, although most TRLs restrict enforcement to government authorities and do not confer private rights of action.

Practical Concerns and Conclusion

State healthcare TRLs mark a fundamental shift in the governance of healthcare markets. Through mandatory pre-closing notice or approval, expansive definitions of material transactions, scrutiny of control arrangements, extensive disclosure requirements, and post-closing oversight, states have assumed an intensified gatekeeping role over healthcare consolidation.

From a practical perspective, drags on transaction timing can further deal fatigue and result in additional issues between transacting parties and even busted deals. Beyond the procedural hurdles, these processes also impose additional costs on buyers, which might translate into valuation adjustments, purchase price reductions, or shifts in deal structure as buyers seek to reallocate the regulatory risk or to preserve expected returns. Moreover, the intrusiveness of required disclosures regarding ownership and control structures may discourage parties from pursuing transactions in TRL states altogether. The imposition of post-closing conditions or the possibility of such imposition can lead to additional pre-signing and pre-closing negotiations between the parties about the implications of such conditions. In certain cases, buyers may look to negotiate force majeure–type outs relating to the imposition of significant conditions due to a change in buyer expectations.

It’s clear that for transacting parties, these laws introduce substantial procedural and substantive burdens. For scholars and policymakers, they present a compelling case study in regulatory evolution—where state governments respond to perceived gaps in federal oversight by constructing parallel and sometimes broader regimes of transaction control.

Healthcare transactions in TRL states are no longer governed solely by corporate law, licensure and CON frameworks, and federal antitrust doctrine. There is now a broader, layered state regulatory architecture that reflects an increasingly interventionist conception of the public interest in healthcare markets.

1. Cal. Health & Safety Code § 127507(c)(2) (West 2025). ↑

2. Minn. Stat. § 145D.01, subdivs. 2(b)–(e), 5(a)–(c) (2025) (establishing a minimum sixty‑day notice period for material health-care transactions, allowing the attorney general to extend the review period by up to ninety days and authorizing the attorney general to seek injunctive or equitable relief, including modification or unwinding of a transaction that violates statutory requirements or threatens the public interest). ↑

3. Mass. Gen. Laws ch. 6D, § 13(a) (2025). ↑

4. Health Care Consolidation Oversight Act, N.M. Health Care Auth. (2025) (showing that once a complete notice of a proposed health-care transaction is filed, the authority has a 120‑day review deadline to act). ↑

5. N.Y. Pub. Health Law § 4552(1) (McKinney 2024) (§ 4552 requires notice to the Department of Health at least thirty days before closing of a material transaction and forwarding of the notice to the attorney general; it does not authorize pre‑closing approval). ↑

6. Or. Admin. R. 409‑070‑0030(2) (2025). ↑

7. Nev. Rev. Stat. § 598A.390 (2024); id. § 439A.126. ↑

8. Material Change Notices and Cost and Market Impact Reviews, Mass. Health Pol’y Comm’n (2025). ↑

9. R.I. Code R. § 110-30-00-5.5.6OK. ↑

10. Cal. Health & Safety Code § 127507(c)(2) (West 2025); Conn. Gen. Stat. § 19a‑486i(c) (2024); Or. Admin. R. 409‑070‑0030(2). ↑

11. Material Change Notices and Cost and Market Impact Reviews, supra note 8. ↑

12. Colo. Rev. Stat. § 6‑19‑102(1) (2024). ↑

13. Minn. Stat. § 145D.02, subdiv. 4(b) (2024). ↑

14. N.Y. Pub. Health Law § 4550(4)(b) (McKinney 2024). ↑

15. Cal. Assemb. 1415, § 4, 2025–2026 Reg. Sess. (amending Cal. Health & Safety Code § 127507(c)(2)(A), (h)); S.B. 1998, 104th Gen. Assemb., Reg. Sess. (Ill. 2025) (proposing to amend 740 Ill. Comp. Stat. 10/7.2a); Mass. Gen. Laws ch. 6D, § 11, amended by 2025 Mass. H.R. 5159; Or. Rev. Stat. § 441.510(2)(a), amended by 2025 Or. S. 951 (enrolled). ↑

16. Cal. Code Regs. tit. 22, § 97435(b)–(c) (2025) (material change transactions). ↑

17. Conn. Off. of Health Strategy, Notice of Material Change, CT.gov (last visited Dec. 16, 2025). ↑

18. Minn. Stat. § 145D.01, subdiv. 1(k) (2025). ↑

19. Nev. Rev. Stat. § 598A.370(2) (2025). ↑

20. Ind. Code § 25‑1‑8.5‑2 (2025), amended by Ind. H.R. 1666, § 9 (2025); see also Ind. H.R. 1666, § 9 (2025). ↑

21. Cal. Corp. Code § 5914(c) (West 2025). ↑

22. Nat’l Acad. for State Health Pol’y, Comprehensive Consolidation Model Addressing Transaction Oversight, Corporate Practice of Medicine and Transparency (Nov. 2021; updated July 26, 2024). ↑

23. Id. ↑

24. Or. Admin. R. § 415.501 (15) (2024). ↑

25. Ind. H.R. 1666, § 35(a)(2). ↑

26. N.Y. Pub. Health Law § 4552(2)(b) (McKinney 2024). ↑