Photo Credit: Justice at JetBlue, JetBlue Crewmembers Deserve More from Northeast Alliance, IAMAW 141(Feb. 28, 2022), https://iam141.org/jetblue-crewmembers-deserve-more-from-northeast-alliance/.

Authored by: Cody P. Csulak

On March 3, 2025, American Airlines officially filed a petition for a writ of certiorari to the U.S. Supreme Court in order to have a First Circuit Court of Appeals decision reversed regarding its Northeast joint venture with JetBlue Airways.[1] In their petition, American Airlines argues that the First Circuit decision “invalidated a joint venture . . . that increased marketwide competition among all airlines in the congested Northeast without any price increases solely because it reduced competition between the two joint venture partners.”[2] They further argued the First Circuit’s holding “flouts basic antitrust principles, creates two circuit splits, and threatens to wreak havoc on productive collaborations of all shapes and sizes.”[3]

American Airlines’ petition comes as no surprise, since the joint venture between them and JetBlue Airways was announced in July 2020 and was later approved by the U.S. Transportation Department at the end of Trump’s first administration in January 2021.[4] Months later the Department of Justice, then under President Joe Biden, along with six states, filed suit in an effort to “unwind the deal” and argued the joint venture was a “de facto merger” that “remove[d] incentives for [the two airlines] to compete.”[5] The primary allegation was that the joint venture “violated section one of the Sherman Act, which prohibits ‘contract[s], combination[s] . . ., or [conspiracies], in restraint of trade or commerce.’”[6]

Under the Northeast Alliance (“NEA”) “the carriers effectively agreed to operate as a single airline with respect to most of their routes in and out of Boston and New York City.”[7] The optics surrounding the NEA were under suspicion, as American is “arguably the largest airline in the world and one of four airlines that collectively control[s] around eighty percent of domestic air travel,” while JetBlue is “the sixth largest airline in the U.S.”[8] Prior to entering into the NEA, American and JetBlue were leading competitors in the Northeast and would react to each other regarding “any fare or schedule change by the other carrier in the same market.”[9] With the active competition, both airlines were experiencing limits on access to gates, as well as limitations on their abilities to operate at the airports in the Northeast with the routes they could offer.[10]

This competition led American and JetBlue to enter into the NEA, as American had done a similar joint venture with Alaska Airlines on the West Coast that led to positive results.[11] The only difference between the two agreements was that American and Alaska were “not direct competitors prior to the WCIA, which instead was meant to leverage their complementary networks.”[12] However, in July 2020, the NEA was established, and it included “’codesharing, schedule coordination, revenue sharing, reciprocal loyalty benefits, and joint corporate customer benefits.”[13] In practice the NEA provided an opportunity for both airlines to “pool airport infrastructure, including slots and gates.”[14]

The DOJ’s lawsuit resulted in a month-long bench trial, which included “testimony by two dozen witnesses, most of whom were either executives of the defendants or experts paid for their testimony by one side or the other.”[15] The District Court, after digesting all the evidence, determined that the NEA violated the Sherman Act, and therefore was “PERMANENTLY ENJOINED.”[16] The injunction ordered both airlines to “cease all coordination of schedules, routes, or any effort to allocate markets,” as well as prohibiting them “from entering into any arrangement substantially similar to the NEA.”[17] The rationale behind the injunction was explained by Judge Sorokin, who stated that “[t]he NEA, operating as it was designed and intended by American and JetBlue, substantially diminishe[d] competition in the domestic market for air travel.”[18] Explaining further, Sorokin stated that American and JetBlue “replac[ed] full-throated competition with broad cooperation.”[19] After the injunction was entered JetBlue exited the NEA, which then left American as the only remaining defendant in the action.[20]

This decision by the district court was viewed as “a victory for President Joe Biden’s administration, [who had] taken a hard line on consolidation and tie-ups in the aviation industry.”[21] Merrick Garland, who was the U.S. Attorney General at the time, stated the decision was “a win for Americans who rely on competition between airlines to travel affordably.”[22] American then appealed to the United States Court of Appeals for the First Circuit.[23]

On appeal, American’s primary argument was that there was “legal error” in “the district court’s rule-of-reason analysis.”[24] Primarily, American argued that “joint ventures like the NEA are ‘not usually unlawful,’” so the district court “erroneously subjected the NEA to “quick look condemnation.”[25] The First Circuit Court of Appeals found American’s argument “unavailing on multiple levels.”[26] They started their analysis explaining that just because the NEA is a joint venture does not mean it is subjected to a different level of antitrust scrutiny or a different analysis, as the analysis of a joint venture is “aimed at substance rather than form.”[27] Looking further, the rule-of-reason analysis is a “’fact-specific assessment’ that varies based on ‘the circumstances, details, and logic of a restraint.’”[28]

In reaction to American’s claim that the district court took a “quick look,” the Court stated that the “NEA merited a less ‘deep and searching analysis,’” as the trial was a month long, which allowed the court to see the NEA’s effects on competition.[29]

The First Circuit Court of Appeals additionally disagreed with American’s argument “that the district court unlawfully treated the NEA’s empirical effects on output on price as immaterial.”[30] They had multiple reasons to disagree with American, since the NEA did have negative effects on the market, but primarily that American did not argue that there was error in the district court’s finding that the NEA “led to decreased capacity, lower frequencies, or reduced consumer choices on multiple routes, including some that are heavily traveled.”[31] Despite this, American continued to argue that the NEA resulted in “increased capacity in the form of ‘more flights, more seats, more routes, shorter connections, better frequent flyer benefits, and more choices.’”[32] The only issue with their contention was that the district court had “expressly rejected as unreliable” the evidence that American offered in support of their claims.[33]

The First Circuit Court of Appeals further backed up their support of the district court decision by explaining that the “NEA’s market allocation resides near the anticompetitive end of the spectrum” and that the district court decision “rests on stable footing.”[34] Overall, American lost on appeal, as the First Circuit explained that “an agreement between two powerful competitors sharing revenues and divvying up highly concentrated markets” is violative of the Sherman Act.[35]

With Trump back in office, American appealed to the U.S. Supreme Court in an effort to have the First Circuit decision reversed.[36] American’s primary argument is that the NEA was “designed to increase market-wide competition among all airlines” as well as “expand customer options in the Northeast.”[37] Since American is one of three “global network carriers” operating in the United States, along with Delta Airlines and United Airlines, their stated goal with the NEA was to create “a more formidable competitor in the region.”[38] It appears as if American is throwing a “hail mary” with the hopes that “the arrival of the Trump administration could set American’s petition up for more success.”[39]            

Overall, what happens with American’s appeal to the U.S. Supreme Court remains to be seen, but if taken up by the Court their decision will demonstrate the effects of the Executive on appeals, as well as how the Department of Justice operates under different Presidents.

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[1] Nate Raymond & David Shepardson, American Airlines asks US Supreme Court to reverse ruling barring JetBlue alliance, Thomson Reuters (March 3, 2025, 4:58 PM).

[2] Petition for Writ of Certiorari, at 2, Am. Airlines Grp. Inc. v. U.S, 121 F.4th 209 (1st Cir. 2024) (No. 24-938).

[3] Id.

[4] Raymond & Shepardson, supra note 1.

[5] Diane Bartz & David Shepardson, American and JetBlue airlines must end alliance, US judge rules, Thomson Reuters (May 19, 2023, 7:23 PM).

[6] United States v. Am. Airlines Grp. Inc., 121 F.4th 209, 218 (1st Cir. 2024) (quoting 15 U.S.C. § 1).

[7] Id. at 215.

[8] Id. (quoting U.S. v. Am. Airlines Grp. Inc., 675 F. Supp. 3d 65, 73 (D. Mass. 2023)).

[9] Id. at 215-16 (quoting Am. Airlines Grp. Inc., 675 F. Supp. 3d at 77, 80).

[10] Id. at 216.

[11] Id.

[12] Am. Airlines Grp. Inc., 121 F.4^th at216.

[13] Id. at 217 (quoting Am. Airlines Grp. Inc., 675 F. Supp. 3d at 84).

[14] Id. at 217 (quoting Am. Airlines Grp. Inc., 675 F. Supp. 3d at 85).

[15] Am. Airlines Grp. Inc., 675 F. Supp. 3d at 74.

[16] Id. at 128.

[17] Am. Airlines Grp. Inc., 121 F.4th at 221.

[18] Am. Airlines Grp. Inc., 675 F. Supp. 3d at 128.

[19] Id.

[20] Am. Airlines Grp. Inc., 121 F.4th at 221.

[21] Bartz & Shepardson, supra note 5.

[22] Id.

[23] See Am. Airlines Grp. Inc., 121 F.4th at 215.

[24] See id. at 221.

[25] Id. (quoting Broad Music, Inc. v. Columbia Broad. Sys. Inc., 441 U.S. 1, 23).

[26] Id.

[27] Id. at 221-22 (quoting Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 760).

[28] Id. at 222 (quoting Ohio v. Am. Express Co., 585 U.S. 529, 541; Cal. Dental Ass’n v. FTC, 526 U.S. 756, 781).

[29] Am. Airlines Grp. Inc., 121 F.4that 222 (quoting Am. Airlines Grp., 675 F. Supp. 3d at 112).

[30] Id.

[31] Id. (quoting Am. Airlines Grp., 675 F. Supp. 3d at 92).

[32] Id. at 223.

[33] Id.

[34] Am. Airlines Grp., 121 F.4th at 224.

[35] Id. at 227.

[36] Raymond & Shepardson, supra note 1.

[37] Id.

[38] Am. Airlines Grp., 121 F.4th at 215; Cudahy, Sean Cudahy, American Airlines petitions Supreme Court to reverse ruling on Northeast Alliance with JetBlue, The Points Guy (March 5, 2025).

[39] Cudahy, supra note 38.

Photo Credit: Jason Silva, What is the Role of a Digital Forensics Expert Witness?, Cornerstone Discovery (Sep. 27, 2016), https://cornerstonediscovery.com/what-is-the-role-of-a-digital-forensics-expert-witness/

Authored by: James David Greene III

Rule 704(b) of the Federal Rules of Evidence eliminates an expert witness from being able to “state an opinion about whether the defendant did or did not have a mental state or condition that constitutes an element of the crime charged[.]”[1] In Diaz v. United States, the court took on the issue of whether an expert witness could testify to a group of people’s mental state other than the defendant in conformity to Rule 704(b).[2] The Court’s holding will impact the future of expert witness’s ability to testify and strategy used by prosecutors in establishing the necessary mental elements of a charged offense.

In Diaz, a United States citizen, Delilah Diaz, was arrested while trying to cross the United States border at a port of entry from Mexico.[3] When Mrs. Diaz got to the port of entry, she was asked to role her window down by a border patrol agent.[4] The agent heard what he described as a “crunch-like” sound coming from inside the door when the window was rolled down.[5] This resulted in the agent performing a series of binary searches on the vehicle, which indicated the presence of narcotics in the door panels of the car.[6] The agents found fifty-six packages of methamphetamine weighing approximately fifty-four pounds with an estimated street value of $368,550.[7] Diaz denied knowing anything about the drugs and told agents she was driving her boyfriend’s car, whom she had only met “two, three times tops.”[8]

Diaz was charged with “importing methamphetamine in violation of 21 U.S.C. §§ 952 and 960” which require her to have “knowingly” transported the drugs.[9] At trial, Diaz claimed she was a “blind mule”[10] and, therefore, could not be convicted under the statute with which she was charged.[11] The government called Special Agent Andrew Flood as an expert witness in the field of “Mexican drug-trafficking organizations.”[12] Agent Flood planned to testify that Mexican drug traffickers “generally do not entrust large quantities of drugs to people who are unaware they are transporting them.”[13] Diaz, of course, objected to this testimony arguing that it violated Rule 704(b).[14] She argued that Agent Flood could not testify that anyone who possessed drugs while crossing the border knew they possessed the drugs because this would include him saying that she had a necessary mental condition for the crime in violation of the rule.[15] The District Court judge ruled that Agent Flood could not testify that all drug mules know they have drugs, but only that most drug mules know they are in possession of drugs.[16] Diaz was subsequently convicted and sentenced to eighty-four months in prison.[17]

The Court held that Agent Flood’s testimony did not violate Rule 704(b) because he testified that “most” drug mules know they have drugs on them, not all.[18] Justice Thomas explained that Agent Flood only testified a majority of drug mules know they have drugs, thereby leaving open the possibility that Diaz was not a part of the majority.[19] The jury was still left with the question: “Is Diaz like the majority of couriers? Or, is Diaz one of the less-numerous-but-still-existent couriers who unwittingly transport drugs?”[20] Therefore, the jury was left with the ultimate question of whether Diaz had the required state of mind and Agent Flood’s testimony did not violate Rule 704(b).[21]

The practical impacts brought by the Court’s ruling in Diaz can be seen from various sides of the issue. First, the Court’s decision will likely embolden the government to call expert witnesses for every criminal case where a charge requires a mental state instead of relying on evidence that requires the jury to infer mental state. Justice Gorsuch argues this as an unfavorable consequence in his dissenting opinion.[22] He points out that the government chose the type of evidence to put forward in establishing the mental state requirement by calling Agent Flood as an expert witness.[23] The government had plenty of other evidence to suggest that Diaz was aware of the drugs, but they chose not to use those available means.[24] Instead, the government relied on expert testimony about what the majority of drug mules know. [25]

The consequences can be seen clearly from a hypothetical. Suppose a man named George is indicted for purchasing a stolen airplane that had been flown from Oregon to Florida in violation of federal law.[26] To be found guilty, the government would have to prove George knew the plane was stolen when he acquired it.[27] George contends at trial that he had no idea the plane was stolen because he relied on an airplane broker to purchase the plane. The government found text messages, phone calls, and emails showing George knew the plane was stolen and was excited to be able to get such a great deal. However, instead of presenting this evidence to the jury to show George knew the plane was stolen, the government calls their own FBI agent to say in his experience, “Most people buying stolen planes know they are buying stolen planes.” This style of proving the mental requirement may seem to some as lazy and, as Justice Gorsuch argues, is not within the history of the American “commitment” to the mens rea requirement.[28]

The second, and “other side of the coin,” consequence may be seen from the same hypothetical with slightly modified facts. The benefit of this ruling is that the government is provided a remedy if they find themselves with little to no admissible evidence of the mens rea requirement. Suppose the same hypothetical occurs, but the government does not have any of the text messages, phone calls, or emails detailing George’s knowledge that the plane is stolen. Instead, the government has text messages between George and his wife discussing how he is about to “buy this stolen plane for pennies on the dollar.” Naturally, when the government calls George’s wife to testify, she invokes spousal privilege, and the government has nothing to go off. They know that George knew the plane was stolen, but do not have an admissible way to prove it. Under Diaz, the government may call an expert to testify that “most people in George’s shoes” know they are buying a stolen plane.

The Court’s recognition that Rule 704(b) is a narrow exception to Rule 704(a) results in more options for the government when tasked with proving a defendant’s requisite mental state. This development is likely to lead to a more robust approach by government prosecutors to show juries the likelihood a defendant violated the law. Ultimately, Diaz’s holding strengthened the government by allowing them discretion in how to prove their case.

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[1] Fed. R. Evid. 704(b).

[2] 602 U.S. 526 (2024).

[3] Id. at 528.

[4] Id.

[5] Id.

[6] Id. at 529.

[7] Id.

[8] Diaz, 602 U.S. at 529.  

[9] Id.

[10] See Walter Gonclaves, Busted at the Border: Duress and Blind Mule Defenses in Border-Crossing Cases, The Champion, Feb. 2018, at 46 (defining a blind mule as “a person used by criminals to transport drugs who does not know he is carrying them”).

[11] Diaz, 602 U.S. at 529.

[12] Id. at 530.

[13] Id.

[14] Id.

[15] Id.

[16] Id. (emphasis added).

[17] Diaz, 602 U.S.at 531.

[18] Id. at 536.

[19] See id. (“Here, by contrast, Agent Flood asserted that Diaz was part of a group of persons that may or may not have a particular mental state.”).

[20] Id.

[21] Id.

[22] Id. at 550 (Gorsuch, J., dissenting) (“Yes, proving a defendant’s mental state at trial can require work. Normally, it will require the government to resort to circumstantial evidence and inference. After all, defendants in life do not confess their inner thoughts on the stand nearly as often as they do in courtroom dramas. But there is nothing new about any of that.”).

[23] Diaz, 602 U.S. at 551.

[24] Id. at 550 (discussing that the government had the following evidence to argue Diaz knew she was in possession of the drugs: the 54 pounds of drugs were worth $360,000, she has numerous holes in her story, multiple cell phones were in the car, one of which was locked, and she had no access to it).

[25] Id. at 551.

[26] See 18 U.S.C. § 2313(a) (“Whoever receives, possesses, conceals, stores, barters, sells, or disposes of any motor vehicle, vessel, or aircraft, which has crossed a State or United States boundary after being stolen, knowing the same to have been stolen, shall be fined under this title or imprisoned not more than 10 years, or both.”).

[27] Id.

[28] See Diaz, 602 U.S. at 552 (Gorsuch, J., dissenting) (“None of this serves our criminal justice system well . . . Allowing into our proceedings speculative guesswork about a defendant’s state of mind diminishes the seriousness due them . . . It undermines our historic commitment that mens rea is a necessary component of every serious crime by turning the inquiry into a defendant’s mental state from an exacting one guided by hard facts and reasonable inferences into a competing game of ‘I say so.’”).

Photo Credit: Mario Conti, The consumer experience, Mario Conti (Mar. 17, 2017), http://www.marioconti.com/the-consumer-experience/.

Authored by: Carrye Ann Rainer

On March 21, 2025, the Supreme Court rendered its decision in one of the term’s two pivotal white-collar cases, Thompson v. United States.[1] In a unanimous opinion authored by Chief Justice John Roberts, the Court clarified that a federal statute criminalizing the knowing issuance of false statements to influence certain regulators and entities, including lenders and financial institutions, applies solely to statements that are factually false.[2] It does not extend to statements that, while literally true, may nonetheless be misleading.[3] This ruling reversed the Seventh Circuit’s decision convicting Patrick Thompson under 18 U.S.C. § 1014.[4]

Between 2011 and 2014 Thompson secured three loans from a bank, amounting to $219,000.[5] Following the bank’s failure in 2017, the Federal Deposit Insurance Corporation (“FDIC”) assumed responsibility for collecting the outstanding loans.[6] Thompson contested the balance of $269,120.58 on his invoice, asserting that he had only borrowed $110,000.[7] He reiterated this claim in multiple communications with FDIC contractors.[8] He subsequently settled his debt with the FDIC for $219,000, an amount that, notably, matched the precise principal sum of the loans he had obtained but purportedly failed to remember.[9] However, any elation he may have derived from his thousands in interest savings was likely cut short, as he was indicted on two counts of violating 18 U.S.C. § 1014.[10] The statute at hand prohibits “knowingly mak[ing] any false statement or report . . . for the purpose of influencing in any way the action of . . . the Federal Deposit Insurance Corporation . . . upon any . . . loan.”[11]

A jury subsequently convicted Thompson, and he sought acquittal, contending that his statements were not false, as he had indeed borrowed $110,000 initially, despite the larger amount he later owed.[12] Although Thompson acknowledged that his statements may have been misleading, he argued that he could not be convicted of making statements because his misrepresentations to the FDIC were “literally true.”[13] The lower courts rejected Thompson’s motion, concluding that the Seventh Circuit does not mandate literal falsity to establish a violation of § 1014, and the misleading statements alone are sufficient to support a conviction.[14]

On appeal, the Supreme Court reversed, holding that § 1014 criminalizes only false statements, not statements that are misleading but literally true.[15] The key issue of this case ultimately turned on whether the ordinary meaning of “false” encompasses statements that are factually true yet misleading.[16] Justice Roberts, in illustrating how even technically accurate statements can be deceptive, referenced a particularly colorful hypothetical, which the government conceded at oral argument. In this example a doctor assures a patient, “I’ve done a hundred of these surgeries,” without disclosing that ninety-nine of those patients had died. While the statement is factually true, it is nonetheless misleading, as it could lead the listener to infer a record of success rather than failure. [17] With that recognition in mind, Roberts quickly dismissed the government’s argument, which he characterized as relying on a “dictionary in [one] hand” and a “thesaurus in the other.”[18]

The government had contended that “false” could simply mean “deceitful” and that “false” and “misleading” have historically been treated as synonymous.[19] The Court, however, was unpersuaded, noting that the government’s reasoning did little more than highlight the considerable overlap between the two terms, rather than demonstrating that they are legally interchangeable.[20] The Court reasoned that the government’s arguments simply bring light to the “substantial overlap” between the terms at issue. However, the overlap between the terms is irrelevant, and erroneously interpreting the word “false” to be synonymous with “misleading” would thus make the inclusion of “misleading” in the statutes in question superfluous.[21]

Justice Alito and Justice Jackson each authored separate concurring opinions, offering distinct perspectives on the Court’s reasoning. Justice Alito underscored the significance of context in determining whether a misleading statement rises to the level of a falsehood under the law.[22] Justice Jackson, meanwhile, wrote separately to highlight that the jury instructions in Thompson had been properly framed, as they referred exclusively to false statements without conflating them with misleading ones.[23] In her view, this left the Seventh Circuit with little to address on remand beyond affirming the District Court’s judgment upholding the jury’s guilty verdict.[24]

The Supreme Court’s decision in Thompson is poised to prompt increased resistance to broad prosecutorial interpretations of federal criminal statutes, particularly in cases involving false statement charges. This ruling is likely to embolden defendants to challenge expansive readings of fraud statutes, advocating for a more restrictive definition of what constitutes a false statement. Additionally, its implications may extend beyond the criminal context, as defendants seek to apply a narrower interpretation to regulatory civil enforcement actions by federal agencies.

The decision in Thompson follows a series of recent Supreme Court rulings that have limited the scope of federal fraud and corruption laws. Notably, in Ciminelli v. United States, the Court unanimously rejected the “right to control” theory as a valid basis for liability under the federal wire fraud statute.[25] Similarly, in Percoco v. United States, the Court struck down as unconstitutionally vague the “dominion and control” and “special relationship” test used to impose liability on private individuals allegedly influencing government affairs.[26] Additionally, in Kelly v. United States, the Court held that to sustain a conviction under federal fraud statutes, the government must demonstrate that the defendant engaged in deception for the purpose of obtaining property.[27] Together, these decisions reflect the Court’s ongoing trend of restricting overly expansive applications of federal fraud and corruption statutes, signaling heightened scrutiny of prosecutorial discretion in white-collar criminal cases.Thompson v. United States marks a significant development in the interpretation of false statement charges, particularly under § 1014.

By reinforcing the requirement that prosecutors prove actual falsity rather than relying on ambiguous or misleading statements, the Supreme Court has set a precedent that could impact a wide range of white-collar cases. This decision serves as a reminder of the importance of precise legal standards in financial fraud prosecutions and may lead to increased scrutiny of government charging decisions. Moving forward, defense teams will likely leverage Thompson to challenge allegations that lack clear evidence of falsity, potentially reshaping how these cases are litigated. As courts and prosecutors adjust to this ruling, its broader implications on financial fraud enforcement remain to be seen.

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[1] 145 S. Ct. 821 (2025).

[2] Id. at 828-29.

[3] Id.

[4] Id. at 824.

[5] United States v. Thompson, No. 21-cr-00279-1 2022, WL 1908896, at *1 (N.D. Ill. June 3, 2022).

[6] Thompson, 145 S. Ct. at 824.

[7] Id.

[8] Id.

[9] Id. at 824-25.

[10] Id. at 825.

[11] 18 U.S.C. § 1014.

[12] United States v. Thompson, 89 F.4th 1010, 1015 (7th Cir. 2024).

[13] Id.

[14] United States v. Thompson, No. 21-cr-00279-1 2022, WL 1908896, at *13 (N.D. Ill. June 3, 2022).

[15] Thompson, 145 S. Ct. at 828-29.

[16] Id. at 826.

[17] Id.

[18] Id.

[19] Id.

[20] Id. at 827.

[21] Thompson, 145 S. Ct. at 827 (citing Gustafson v. Alloyd Co., 513 U.S. 561, 574 (1995) (“[T]he Court will avoid a reading which renders some words altogether redundant.”)).

[22] Thompson, 145 S. Ct. at 829-30 (Alito, J., concurring).

[23] Id. at 830 (Jackson, J., concurring).

[24] Id. at 831.

[25] 598 U.S. 306, 317 (2023).

[26] 598 U.S. 319, 333 (2023).

[27] 590 U.S. 391, 404 (2020).

Photo Credit: What it takes to move up as a sales representative, Career Builder, https://www.careerbuilder.com/advice/blog/what-it-takes-to-move-up-as-a-sales-representative.

Authored by: Taylor A. Franklin

In 1938, Congress passed the Fair Labor Standards Act (FLSA), which was signed into law by President Franklin Roosevelt.[1] FLSA establishes minimum wage and overtime pay.[2] FLSA establishes the requirements for exemptions from the minimum wage and maximum hour requirements.[3] FLSA requires employers to meet the minimum wage maximum hour requirements unless the employee is an executive, professional, or computer and outside sales  employee.[4] FLSA generally requires overtime pay when a covered employee works more than 40 hours per week.[5] However, Congress recognized that a minimum wage and overtime pay would be impractical or inappropriate for some jobs.[6] Therefore, FLSA exempts various types of employees from the minimum-wage requirement and the overtime-pay requirement.[7] An employer alleged of violating 29 USC § 207 has the burden to show that an exemption applies.[8] Employers alleging that their employee falls under the “outside salesmen” position must prove that their job is to primarily make sales and regularly work away from the employer’s place of business. [9]

In E.M.D. Sales, Inc. v. Carrera, a group of three EMD  sales representatives sued E.M.D. Sales (“EMD”) for failing to pay them overtime under the FLSA.[10] The sales representatives were all assigned to service a “route” of stores.[11] EMD, a Latin American, Caribbean, and Asian food product distributor delivers directly to chain and independent grocery stores.[12] These representatives were responsible for traveling their routes and providing supplementary services – spending most of their time working out of the office.[13] Each representative completed “inventory management” tasks which consisted of replenishing depleted products, removing damaged or expired items from the shelves, issuing credits to stores for the removed items, and submitting orders for additional EMD products.[14] Although both parties agreed that servicing chain stores was at least half of the sales representatives’ jobs, the district court found that the plaintiffs spent most of their time at those stores, emphasizing that the division of labor matters.[15] Both sides strongly disputed this, as plaintiffs could make some sales to independent stores, but time spent at chain stores, where product selection was determined by corporate buyers and EMD management, meant fewer sales opportunities and thus less commission.[16] The sales representatives worked approximately 60 hours per week, earning compensation on a commission basis.[17] EMD did not pay them hourly or provide overtime compensation.[18] The sales representatives filed suit because they were denied that wage.[19]

While EMD did not dispute the hours worked without overtime pay, they argued that they were not liable for overtime compensation because the sales representatives’ positions qualified for the “outside salesmen” exemption under 29 U. S. C. §207(a)(1).[20] However, the United States District Court for the District of Maryland found for the group of sales representatives and held EMD liable because they did not prove that they were exempt by “clear and convincing evidence” that the employees were outside salesmen.[21] After the district court ruling, EMD appealed to the Fourth Circuit arguing that the district court used the wrong standard and should have applied the preponderance of the evidence standard.[22] The Fourth Circuit held that the district court applied the correct standard and affirmed their judgment.[23] EMD subsequently appealed the decision to the Supreme Court.[24]

The Supreme Court resolved the circuit split and emphasized that, when Congress enacted the Fair Labor Standards Act in 1938, the preponderance of the evidence standard was established as the default standard of proof in civil proceedings.[25] The Court further noted that the preponderance standard allows both parties in a typical civil action to “share the risk of error in roughly equal fashion.”[26] However, the Court may require a heightened standard of proof if: (1) a provision of the US Code or Congress uses a term with a settled common law meaning requires it, (2) the Constitution requires it, or (3) the government seeks to take “unusual coercive action” against an individual.[27] The Court concluded that the default preponderance of the evidence standard applies when an employer seeks to prove that an employee is exempt from the Fair Labor Standards Act and none of the aforementioned criteria apply.[28]

Although the employees argued that the clear and convincing standard should apply because the FLSA prioritizes the public’s interest in a well-functioning economy in which workers are guaranteed a fair wage, the Court was unconvinced.[29]  The Court determined that the legislation should be enforced as intended with the traditional default standard of evidence because the FLSA reflects a balancing of competing interests.[30] Additionally, the employees argued that the FLSA’s minimum wage and overtime pay rights are not waivable and therefore separate from other rights subject to a preponderance threshold; nevertheless, the Court stated that the waivability of a right does not affect the applicable standard of proof.[31] Finally, the Court rejected the contention that FLSA lawsuits require a higher threshold due to the employer’s control over evidence and the possibility of low income for plaintiffs.[32] Therefore, the Court held that the preponderance-of-the-evidence standard applies when an employer seeks to prove an employee is exempt from the minimum wage and overtime provisions of the FLSA, and remanded the case for further proceedings consistent with their decision.[33]

Several organizations filed amicus briefs in support of the petitioners, arguing that the standard of proof should be preponderance of the evidence, consistent with established precedent, rather than the higher clear and convincing standard.[34] For example, the National Association of Wholesaler-Distributors and International Foodservice Distributors Association strongly pushed for this position as outside salespeople play a unique role in today’s businesses.[35] Similarly, the National Federation of Independent Business also filed an amicus brief discussing the disproportional impact on small businesses.[36] The Court’s decision provides more uniformity for enforcing the statute by clarifying that the preponderance of the evidence standard applies for employers proving their burden that an employee is exempt from the FLSA provisions on minimum wage and overtime pay.[37] Although there were concerns that EMD Sales, Inc. v. Carrera would make it difficult for employers to prove exemptions, increasing the risk of costly litigation[38] and the likelihood of forum shopping,[39] the Court’s decision resolved these concerns. The decision now ensures that the burden of proof for FLSA exemption claims reflects a balanced interest between employers and employees.

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[1] E.M.D. Sales Inc. v. Carrera, 604 U.S. 45, 47 (2025).

[2] Id. 

[3] Id.

[4] U.S. Dep’t of Labor, Fact Sheet #17A: Overtime Pay Requirements of the Fair Labor Standards Act (FLSA) (2008).

[5] 29 U.S.C. § 207(a)(1).

[6] E.M.D. Sales Inc., 604 U.S. at 2.

[7] See 29 U.S.C. §§ 213(a)-(b).

[8] E.M.D. Sales Inc., 604 U.S. at 48; Corning Glass Works v. Brennan, 417 U.S. 188, 196-97 (1974).

[9] 29 C.F.R. § 541.500(a); E.M.D. Sales Inc., 604 U.S. at 48; Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 148 (2012).

[10] Carrera v. E.M.D. Sales Inc., 75 F.4th 345, 347 (4th Cir. 2023).

[11] See id. at 349.

[12] Id.

[13] Id.

[14] Id.

[15] See id.

[16] Carrera, 75 F.4^th at 349.

[17] See id.

[18] Id.

[19] Id. at 350.

[20] Id.

[21] Id.

[22] Carrera, 75 F.4^th at 350.

[23] Id.

[24] E.M.D. Sales Inc., 604 U.S. at 49.

[25] Id.

[26] Id. at 50.

[27] Id. at 50-51.

[28] Id. at 52.

[29] Id.

[30] E.M.D. Sales Inc., 604 U.S. at 53.

[31] Id.

[32] See id. at 53-54 (“But in Title VII cases too, employers control ‘most of the cards,’ and plaintiffs may be low-income.”). (quoting Murray v. UBS Securities, LLC, 601 U.S. 23, 36 (2024)).

[33] Id. at 54.

[34] E.g., Brief for The United States as Amici Curiae Supporting Petitioners, E.M.D. Sales Inc. v. Carrera, 604 U.S. 45 (2025) (No. 23-217).

[35] Brief for National Association of Wholesaler-distributors and International Foodservice Distributors Association as Amici Curiae Supporting Petitioners, E.M.D. Sales Inc. v. Carrera, 604 U.S. 45 (2025) (No. 23-217).  

[36] Brief for the Chamber of Commerce of the United States of America, et al. as Amici Curiae Supporting Petitioners, E.M.D. Sales Inc. v. Carrera, 604 U.S. 45 (2025) (No. 23-217).

[37] See E.M.D. Sales Inc., 604 U.S. at 54.

[38] Rachel Mackey, NACo Legal Advocacy: EMD Sales, Inc. v. Carrera, National Association of Counties (Aug. 6, 2024)  https://www.naco.org/news/naco-legal-advocacy-emd-sales-inc-v-carrera.

[39] Jon O. Shimabukuro, FLSA Exemptions and Burdens of Proof: E.M.D. Sales, Inc. v. Carrera, Congressional Research Service (2024), https://www.everycrsreport.com/files/2024-10-31_LSB11243_003d32f4b96da1cb41815de3d54d1a891c95f8b3.pdf.

Photo Credit: Jabin Botsford, President Donald Trump signs executive orders at the White House on Monday (photograph), in Here are the executive actions and orders Trump signed on Day 1, The Washington Post (Updated Jan. 23, 2025), https://www.washingtonpost.com/politics/2025/01/20/trump-executive-orders-list/.

Authored by: Kramer B. Mittendorf

Since the start of President Donald Trump’s second term, he has signed 99 executive orders (“EOs”).[1] Among them are orders establishing the Department of Government Efficiency (EO 14158), banning biological men from competing in women’s sports (EO 14201), and prohibiting transgender people from serving in the United States’ military (EO 14183).[2] On January 20, 2025, President Trump issued Executive Order 14160, titled “Protecting the Meaning and Value of American Citizenship”[3] (hereinafter “The Citizenship Order”). The Citizenship Order, slated to have prospective effect only, seeks to eliminate birthright citizenship as proscribed in the 14th Amendment of the United States Constitution.[4] In a nutshell, the Citizenship Order, if enforced, would deny U.S. citizenship to children born in the U.S. based on the immigration and/or resident status of a child’s parents at the time of said child’s birth.[5]

President Trump’s Citizenship Order has been met with strong resistance since its issuance. Federal district courts in Washington, Maryland, and Massachusetts held that the Citizenship Order was unconstitutional and granted separate preliminary injunctions universally blocking the Citizenship Order from taking effect.[6] President Trump filed a motion to stay the injunction granted in Massachusetts, which spans 18 states across the country, but his motion was denied in New Jersey, et al. v. Trump.[7] Shortly thereafter, he and his administration asked the Supreme Court to limit the enforceability of the injunction to the areas where those seeking the injunctions actually lived, which would allow the Citizenship Order to take effect in other States.[8] If the Supreme Court does ultimately decide to hear argument on the Citizenship Order, the Court would almost certainly hold that the Citizenship Order is in-fact unconstitutional as a violation of the 14th Amendment and long-standing precedent.

Without a doubt, President Trump’s high usage of EOs has been a defining characteristic of his second presidency up to this point. However, history reveals that presidents have wielded their executive authority through executive orders long before Trump occupied the White House. For reference, while in office, Franklin D. Roosevelt issued 2,023 EOs, Lyndon B. Johnson issued 325 EOs, and Ronald Reagan issued 381.[9] More recently, former presidents such as Bill Clinton, George W. Bush, and Barack Obama issued 364, 291, and 277 EOs, respectively.[10] Therefore, while President Trump’s EOs may be considered more controversial than those of his predecessors, it is unfair to criticize his overall use of EOs when prior presidents have also used them extensively. This practice of issuing large numbers of EOs, employed by the current president and past presidents alike, raises several key questions: What is the source of a president’s authority to issue EOs? What are the limits of this power? And why have presidents continued to exercise it at such a high degree?

Origins of Presidential Authority to Issue Executive Orders.

Article II, Section 1 of the United States Constitution states that “[t]he executive power shall be vested in a President of the United States of America.”[11] The Constitution proceeds to list several powers exclusively belonging to the president which includes: being the “Commander in Chief,” the power to pardon those charged with violating federal law, making treaties with foreign nations, appointing “Judges of the supreme Court” and other Officers, and the power to veto bills passed by Congress.[12] Notably, nowhere in the text does the Constitution explicitly authorize the president to issue executive orders. Nevertheless, the foundation for the president’s authority to issue EOs stems from a combination of the president’s broad “executive power” granted in Article II, Section 1, and the duty granted to the President in Article II, Section 3 to “take Care that the Laws be faithfully executed.”[13] In addition to this Constitutional basis, the president’s power to issue EOs may also be authorized by an act of Congress.[14] Justice Hugo Black articulated this point in Youngstown Sheet and Tube Co. v. Sawyer when he said “[t]he President’s power, if any, to issue the order must stem either from an act of Congress or from the Constitution itself.”[15]

Limitations on the President’s Authority to Issue Executive Orders.

In Youngstown, the Court reviewed a constitutional challenge to an EO signed by President Harry Truman.[16] The EO in controversy demanded that the government “take possession of and operate most of the Nation’s steel mills” to ensure the continued production of steel, amidst ongoing labor disputes, during a time of War.[17] The Court held that President Truman’s EO was unconstitutional because it was not supported by any provision of the Constitution, including the President’s expansive military powers, nor was it directed by an express grant of power by Congress.[18] The Court noted that taking “possession of private property in order to keep labor disputes from stopping production” is Congress’ job rather than the President’s and drew a distinction between a President rightfully “see[ing] that the laws are faithfully executed” and engaging in unconstitutional lawmaking.[19] Justice Jackson, in his famous concurring opinion, wrote that a President’s powers exist on a spectrum.[20] Presidential authority is at its maximum when the president “acts pursuant to an express or implied authorization of Congress,” and is at its “lowest ebb” when the president “takes measures incompatible with the expressed or implied will of Congress.”[21] When Congress is silent on a particular matter, the president operates in a “zone of twilight.”[22] Congress may also “override an executive order” by passing new, opposite laws in certain circumstances.[23] In summary, executive orders are limited to the bounds of the Constitution and Congress, and are scrutinized for exceeding these bounds by the judiciary.

Making Sense of Why Executive Orders are Heavily Featured in our Government.

With the way America’s system of government is organized, the ability to legislate is a difficult process. As is often the case, the sitting President belongs to a different political party than the party holding a majority in the House or Senate. This pits the executive and legislative branches against each other, with the executive branch unable to implement certain policies through the traditional congressional process. As a result, presidents have issued EOs as a work around Congress which explains why executive orders typically represent the individual viewpoint of the President who issues it as opposed to the views of congressmen and women from both sides of the aisle. The divisive political climate of the last 15 years has further influenced recent presidents to issue EOs with EOs being used recently to backtrack the work done by the departing president and so on. If both sides are unable to work together and bills cannot make it through a bi-partisan Congress, EOs may serve as the only method of achieving anything during a presidential term. Right now, of course, Republicans maintain control of both the House and the Senate which suggests that presidents issue large numbers of EOs regardless of the state of power in Congress. The historical data mentioned above shows EOs have been issued by presidents in large numbers throughout history and based on what’s happening today, it appears this trend will continue into the foreseeable future.

---

[1] 2025 Donald J. Trump Executive Orders, Federal Register, https://www.federalregister.gov/presidential-documents/executive-orders/donald-trump/2025 (last visited March 27, 2025).

[2] Id.

[3] Exec. Order No. 14160, 90 FR 8449 (Jan. 20, 2025).

[4] Id.; U.S. Const. amend. XIV, § 2 (“All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”).

[5] Id. (“Among the categories of individuals born in the United States and not subject to the jurisdiction thereof, the privilege of United States citizenship does not automatically extend to persons born in the United States: (1) when that person’s mother was unlawfully present in the United States and the father was not a United States citizen or lawful permanent resident at the time of said person’s birth, or (2) when that person’s mother’s presence in the United States at the time of said person’s birth was lawful but temporary (such as, but not limited to, visiting the United States under the auspices of the Visa Waiver Program or visiting on a student, work, or tourist visa) and the father was not a United States citizen or lawful permanent resident at the time of said person’s birth.”).

[6] Washington, et al. v. Trump, No. C25-0127-JCC, 2025 WL 272198, (W.D. Wash. Jan. 23, 2025); CASA, Inc. v. Trump, No. DLB-25-201, 2025 WL 408636, (Feb. 5, 2025); Doe v. Trump, No. 25-10135-LTS, 2025 WL 485070, (D. Mass. Feb. 13, 2025).

[7] No. 25-1170, 2025 WL 759612, (1st Cir. March 11, 2025).

[8] Amy Howe, Trump asks Supreme Court to step in on birthright citizenship, SCOTUSblog (Mar. 13, 2025, 4:37 PM), https://www.scotusblog.com/2025/03/trump-asks-supreme-court-to-step-in-on-birthright-citizenship/; Scott Bomboy, Birthright citizenship cases arrive at the Supreme Court, National Constitutional Center (Mar. 14, 2025), https://constitutioncenter.org/blog/birthright-citizenship-cases-arrive-at-the-supreme-court.

[9] Presidential Documents, Federal Register, https://www.federalregister.gov/presidential-documents (last visited March 27, 2025).

[10] Id.

[11] U.S. Const. art. II, § 1, cl. 1.

[12] U.S. Const. art. II, § 2, cl. 1-2; U.S. Const. art. I, § 7, cl. 2.

[13] U.S. Const. art. II, § 3.

[14] Scott Bomboy, Defining the president’s constitutional powers to issue executive orders, National Constitutional Center (Jan. 29, 2025), https://constitutioncenter.org/blog/defining-the-presidents-constitutional-powers-to-issue-executive-orders.

[15] 343 U.S. 579, 585 (1952).

[16] Id. at 582.

[17] Id.

[18] Id. at 585-89.

[19] Id. at 587.

[20] Youngstown, 343 U.S. 579 at 634-35 (Jackson, J., concurring).

[21] Id. at 635-37.

[22] Id. at 637.

[23] Scott Bomboy, Defining the president’s constitutional powers to issue executive orders, National Constitutional Center (Jan. 29, 2025), https://constitutioncenter.org/blog/defining-the-presidents-constitutional-powers-to-issue-executive-orders.

Photo Credit: Rhame & Gorrell Wealth Management, What You Need To Know About The SECURE Act 2.0, https://rgwealth.com/insights/what-you-need-to-know-about-the-secure-act-2-0/

Authored by: Mary-Michael Rhodes

The SECURE Act.

In 2019, Congress passed the Setting Every Community Up for Retirement Enhancement Act (hereinafter the “Act”) as part of a spending and tax extension bill. The Act, commonly referred to as the SECURE Act, was aimed to do exactly what it was named for – allowing widespread ability for Americans to save for their retirement.[1] More specifically, the Act was enacted in the hopes of allowing easier ability to employers to offer tax advantageous retirement plans and making it easier for employees to participate in those plans.[2] The Act was enacted to address the increasingly low number of working individuals who had adequate retirement savings.[3] At the end of 2022, Congress passed the SECURE 2.0 Act[4] (hereinafter “SECURE 2.0”) which added numerous provisions to the Act.[5]

New Requirements Under SECURE 2.0.

Section 101 of SECURE 2.0 expanded automatic enrollment in retirement plans by amending the Internal Revenue Code (“Code”) to add section 414A.[6] Automatic enrollment is a common method by which employers may automatically deduct from an employee’s wages elective deferrals in order to allow for easy participation and increase employees’ retirement savings.[7] Under the provisions in section 414A, certain retirement plans are required to automatically enroll employees.[8] Participants in plans subject to the automatic enrollment requirement will now have to expressly opt out of participating rather than opting in.

Following the enactment of SECURE 2.0, a cash or deferred arrangement (“CODA”) will be treated as qualified CODAs, as defined by 401(k), or annuity contracts, as defined in 403(b), only if they meet the automatic enrollment requirements.[9] As such, SECURE 2.0 requires newly established 401(k) and 403(b) plans which do not meet an exception to include an automatic enrollment feature – an eligible automatic contribution arrangement (“EACA”).[10]

The Code defines an EACA as an employer retirement plan which allows a participant to elect for their employer to make contributions either directly to the plan or to the participant in cash equivalent to a uniform percentage of the employee’s compensation until the employee explicitly chooses otherwise.[11] EACAs must comply with the notice requirements prior to the start of the plan year in order to allow for the employee to opt out or elect to have the contributions made at a percentage other than the uniform percentage under the plan.[12] Pursuant to this requirement, the majority of employers who established either a 401(k) plan or a 403(b) plan on December 29, 2022, or later must include in their 2025 plans an EACA.[13]

In addition to the general requirements for EACAs, plans subject to SECURE 2.0 will be required to comply with certain additional requirements in order to properly be considered an EACA.[14] These requirements include the ability for employees to make permissible withdrawals,[15] the uniform percentage contributed is within a certain range,[16] and the amounts invested are done according to regulation.[17]

A. Permissible Withdrawals.

In order for an EACA to satisfy the permissible withdrawal requirement, the plan must allow for employees to make such withdrawals as defined by section 414(w)(2) of the Code.[18] The Code defines permissible withdrawals as any withdrawal from an EACA that is made as a result of an employee’s election to do so and such a withdrawal consists of funds that the employee elected to contribute to the plan equivalent to the plan’s uniform percentage.[19] Further, the employee must elect to make such a withdrawal no later than 90 days after the first automatic contribution made under the arrangement.[20] This date is recognized to be the date that the automatic contribution would have been included in the employee’s gross income otherwise.[21]  The amount that may be withdrawn is limited to the automatic contributions made under the arrangement.[22] If these requirements are satisfied, the employee can take out their initial automatic contributions without being penalized.

B. Uniform Percentage Contribution.

Under the SECURE 2.0 automatic enrollment requirements, plans must specify the percentage of an employee’s income to be deducted and automatically contributed to the retirement plan.[23] To comply with the uniform percentage contribution requirement of SECURE 2.0, the initial contribution percentage must be between three percent (3%) and ten percent (10%) for the first year in order for to have an EACA.[24] In order to not be subject to compliance with this requirement, the participant must either opt out or explicitly elect to make contributions at a different rate.[25] Further, the uniform contribution percentage must increase by one percent (1%) each plan year until it reaches ten percent (10%), but may not continue in such a manner once it reaches fifteen percent (15%).[26] This rate increase will not be required if the plan’s contribution percentage started at ten percent (10%) or the participant explicitly opts out of such an increase.[27] If any EACA is for a plan year which ended before January 1, 2025, the fifteen percent (15%) requirement will be replaced by a ten percent (10%) contribution percentage requirement.[28]

C. Investments.

Plans subject to SECURE 2.0 must ensure that the amounts which are automatically contributed are done so in accordance with the EACA, are invested properly, and are in compliance with 29 C.F.R. § 2550.40c-5, which is the default requirement that applies where the participant does not elect for the contribution to be invested in an alternative manner.[29] In the event that no election is made, the contributions that are automatically made under the plan will be considered to meet the investment requirements.[30]

Exceptions to SECURE 2.0.

There are exceptions to the automatic enrollment requirements under SECURE 2.0 for retirement plans established prior to the enactment of the statute, plans of small businesses, plans of new businesses, church plans, and governmental plans.[31] Section 414A of the Code specifically provides that the automatic enrollment requirements under SECURE 2.0 will not be applied to any simple plans;[32] any qualified CODAs or annuity contracts purchased under a plan established prior to December 29, 2022;[33] any governmental or church plans;[34] any qualified CODA or annuity contracts purchased under a plan maintained by an employer who has existed for less than three years;[35] or any qualified CODA or annuity contract purchased under a plan maintained by an employer with ten or less employees.[36]

Under this exception, a simple plan will not be subject to the automatic enrollment requirements under Section 414A(b) in order for the arrangement to be treated as a qualified CODA or an annuity contract.[37] To qualify as a simple plan, the plan must meet the contribution, exclusive plan, and vesting requirements specified in the section.[38] A simple plan subject to this exception must comply with the requirements under section 401(k)(11) of the Code.[39]

This exception provides for plans established prior to December 29, 2022, to receive “grandfather” status and therefore not be subject to the automatic enrollment requirements.[40] However, where a plan falls under an exception to the automatic enrollment requirements solely due to its date of establishment, this exception will not apply where an employer adopts such a plan after December 29, 2022, if it is maintained by multiple employers.[41] In the event of adoption of a multiple employer plan (“MEP”) after the enactment of SECURE 2.0, the plan will be subject to the automatic enrollment requirements of section 414A(a).[42]

Included in the exceptions to the automatic enrollment requirement, SECURE 2.0 provides for the exception of any church or governmental plans. A church plan is defined by the Code as a retirement plan that is established and maintained for employees of a church or a group of churches that is tax-exempt.[43] A plan will not be considered a church plan where it is established and maintained for the benefit of employees who are otherwise employed by unrelated businesses or where less than substantially all of the employees do not meet the employee requirements provided in section 414(e).[44] A governmental plan is defined by the Code as any plan which is established and maintained by the government or any agency of the United States for its employees.[45] Where the plan meets the requirements to constitute a church plan or governmental plan, it will not be subject to the automatic enrollment requirements of SECURE 2.0.[46]

The final subset of plans subject to exception from the automatic enrollment requirements of SECURE 2.0 consists of new and small businesses.[47] Pursuant to this exception, any qualified CODA or annuity contract under a plan that has been in existence for under three years will not be subject to the automatic enrollment requirements.[48] Further, any qualified CODA or annuity contract under a plan that is maintained by an employer who has ten or fewer employees.[49] As with the simple plan exception, there is a caveat to the new and small business exception. Where the plan is maintained by multiple employers, the small business exception requirements will be applied independently from the new business exception requirements to each employer.[50] In the event that one employer is subject to the automatic enrollment requirements, they will be considered to maintain a separate plan in regard to this small and new business exception.[51]

Conclusion.

Beginning on January 1, 2025, any plans that are not subject to one of the exceptions under SECURE 2.0 will be required to comply with the additional requirements for automatic contribution to employer retirement plans.[52] Any employer that maintains a retirement plan that is subject to this statute must comply with these requirements going forward in order to avoid costly penalties.[53] As such, it is important for employers to understand what action is necessary under these newly enacted requirements. Given the overall simplicity of the statute when broken down, compliance should come easily and

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[1] Christopher Sonzogni, SECURE Act: What It Means, How It Works, and Rationale, Investopedia (Feb. 1, 2025), https://www.investopedia.com/secure-act-4688468#:~:text=The%20SECURE%20Act%20was%20designed,annuities%20through%20xed%20retirement%20plans..

[2] Sonzogni, supra note 1.

[3] Sonzogni, supra note 1 (“A 2018 study by Northwestern Mutual found that one in five Americans have no retirement savings at all, while one in three of those closest to retirement age has less than $25,000 saved.”).

[4] See generally SECURE 2.0 Act of 2022 (2022).

[5] U.S. S. Comm. on Fin., https://www.finance.senate.gov/download/retirement-section-by-section-;Sonzogni, supra note 1.

[6] SECURE 2.0 Act of 2022 § 101 (2022); see also Tom Morgan, I.R.S. Notice 2024-2, https://www.irs.gov/pub/irs-drop/n-24-02.pdf.

[7] Eric Droblyen, SECURE 2.0’s Automatic Enrollment Mandate for 401(k)(s) – What Employers Need to Know, Employee Fiduciary (Mar. 26, 2024), https://www.employeefiduciary.com/blog/secure-2.0-automatic-enrollment.

[8] See generally 26 U.S.C. § 414A; see also Automatic Enrollment Requirements Under Section 414A, 90 Fed. Reg. 3092, 3092 (proposed Jan. 10, 2025).

[9] I.R.C. § 414A(a).

[10] I.R.C. § 414A(b)(1); Rachel Fetters, Mandatory Automatic Enrollment Under SECURE 2.0, Ascensus (Oct. 17, 2024), https://thelink.ascensus.com/articles/2024/10/16/mandatory-automatic-enrollment-under-secure-20.

[11] I.R.C. § 414(w)(3).

[12] I.R.C. § 414(w)(4).

[13] Fetters, supra note 5.

[14] I.R.C. § 414A(b)(1).

[15] I.R.C. § 414A(b)(2).

[16] I.R.C. § 414A(b)(3).

[17] I.R.C. § 414A(b)(4).

[18] I.R.C. § 414A(b)(2).

[19] I.R.C. § 414(w)(2)(A).

[20] I.R.C. § 414(w)(2)(B).

[21] Automatic Contribution Arrangements, 74 Fed. Reg. 8200, 8205 (Feb. 24, 2009).

[22] I.R.C. § 414(w)(2)(C).

[23] Droblyen, supra note 8.

[24] I.R.C. § 414A(b)(3)(A)(i).

[25] I.R.C. § 414A(b)(3)(A)(i).

[26] I.R.C. § 414A(b)(3)(A)(ii); U.S. S. Comm. on Fin., supra note 5.

[27] I.R.C. § 414A(b)(3)(A)(ii).

[28] I.R.C. § 414A(b)(3)(B).

[29] I.R.C. § 414A(b)(4).

[30] Id.

[31] U.S. S. Comm. on Fin., supra note 5.

[32] I.R.C. § 414A(c)(1).

[33] I.R.C. § 414A(c)(2)(A)(i)-(ii).

[34] I.R.C. § 414A(c)(3).

[35] I.R.C. § 414A(c)(4)(A).

[36] I.R.C. § 414A(c)(4)(B).

[37] I.R.C. § 414A(c)(1); I.R.C. § 414A(a).

[38] I.R.C. § 401(k)(11)(A).

[39] I.R.C. § 414A(c)(1).

[40] I.R.C. § 414A(c)(2)(A).

[41] I.R.C. § 414A(c)(2)(B).

[42] Id.

[43] I.R.C. § 414(e)(1).

[44] I.R.C. § 414(e)(2).

[45] I.R.C. § 414(d).

[46] I.R.C. § 414A(c)(3).

[47] I.R.C. § 414A(c)(4).

[48] I.R.C. § 414A(c)(4)(A).

[49] I.R.C. § 414A(c)(4)(B).

[50] I.R.C. § 414A(c)(4)(C).

[51] Id.

[52] I.R.C. § 414A(b).

[53] Droblyen, supra note 7.

Photo Credit: Puppet Nerd, How Much Does A Puppet Cost?, (last updated December 6, 2021), https://puppetnerd.com/how-much-does-a-puppet-cost/.

Authored by: Bailey L. Fisher

From class actions to multidistrict litigation (“MDL”), the world of complex litigation in the United States is constantly evolving.[1] The second decade of the 21st century brought many things to the United States– one being third-party lenders.[2] Third-party lenders are entities that finance litigation, often providing funds to law firms or directly to plaintiffs.[3] Naturally, third-party financing in complex cases comes with skepticism from individuals around the legal community.[4] What are the consequences of allowing third-party lenders to fund complex cases, and what can we expect in the future?

Third-party lenders had earlier success in other areas, like Australia and the United Kingdom.[5] With the rise of complex litigation in the United States came opportunities for third-party lenders.[6] The success of third-party litigation funding can largely be attributed to the rise in efforts to solve inequities commonly observed during litigation when companies are able to drown their civil opponents in a sea of costly discovery.[7]  In the words of Judge Jeffrey Cole of the United States District Court for the Northern District of Illinois, Eastern Division, “[c]reative businessmen, ever alert to new opportunities for profit, perceived in this economic inequality a chance to make money and devised what has come to be known as third-party litigation funding, where money is advanced to a plaintiff, and the funder takes an agreed upon cut of the winnings.”[8] While third-party financing may seem like a life vest for plaintiffs, it does not come without concerns, questions, and skepticism.[9]

In the murky waters of complex litigation, one thing is clear—third-party lenders are not bound by the Model Rules of Professional Conduct.[10] However, the attorneys who use them are.[11] Comment 14 to Rule 1.8 of the Model Rules of Professional Conduct states, “[b]ecause third-party payers frequently have interests that differ from those of the client, including interests in minimizing the amount spent on the representation and in learning how the representation is progressing, lawyers are prohibited from accepting or continuing such representations unless the lawyer determines that there will be no interference with the lawyer’s independent professional judgment and there is informed consent from the client.”[12] Attorneys must act in the best interests of their clients when using third-party financing in order to avoid violating their duties to the Bar, especially when it comes to fee sharing and control over the litigation.[13]

In In re Agent Orange Product Liability Litigation, the issue of “whether an undisclosed, consensual fee sharing agreement, which adjusts the distribution of court awarded fees in amounts which represent a multiple of the sums advanced by attorneys to a class for litigation expenses, satisfies the principles governing fee awards and is consistent with the interests of the class” was addressed.[14] In Agent Orange, the fee sharing agreement involved a return on investment.[15] The Second Circuit found that the fee-sharing agreement “places class counsel in a position potentially in conflict with the interests of the class,” as it could lead to an incentive to settle early when the promised return is met, making the settlement offer outweigh the risks of continuing litigation.[16] The court also found that fee sharing agreements must be presented to the court for approval at the time the agreement is formulated.[17] Because third-party litigation funding involves a return on investment, procedures to place clients’ interests first and prevent undue influence should be in place.[18]

In In re Pork Antitrust Litigation, Burford Capital provided financing for MDL.[19] Pursuant to its financing agreement, Burford Capital was granted veto power over settlements.[20] The United States District Court for the Middle District of Minnesota refused to approve conduct that allowed third-party financers to control litigation.[21] Quoting Maslowski v. Prospect Funding Partners LLC, the court stated that courts must “be careful to ensure that litigation financiers do not attempt to control the course of the underlying litigation.”[22]

Questions as to matters of discoverable materials when parties contract with third-party lenders have resulted from the rise in third-party litigation funding.[23] In Miller UK Ltd. v. Caterpillar, Inc., the United States District Court for the Northern District of Illinois, Eastern Division, addressed these issues.[24] Citing multiple articles and commentary on this topic,[25] the opinion in Miller noted the role of the legislature in resolving this societal question, and thus the court refused to comment on the merits or “societal value” of third-party litigation funding.[26] However, the court in Miller did hold that the work product doctrine protects work product in cases involving third-party funding, as long as precautions are taken to not substantially increase the likelihood of opponents receiving the information.[27]

Some state legislatures have enacted laws combatting or restricting the scope of third-party litigation funding.[28] For example, Indiana enacted House Bill 1160, which limits thirty party lender’s access to data, prevents third-party lenders from influencing decisions in lawsuits, and requires disclosure of the financing agreement.[29] States, such as Louisiana, West Virginia, Montana, and Wisconsin have enacted similar laws.[30] Many other states have discussed passing similar legislation.[31]

Attorneys must be able to adapt to the changing tides of complex litigation, especially in the age of third-party financing agreements. For plaintiffs, third-party litigation funding is an extremely attractive method for financing expensive cases and combatting wealthy entities. For defendants, third-party financing can be an obstacle to overcome. Both sides must be cognizant of the changing landscape of funding, especially considering rules, legislation, and comments to the Model Rules of Professional Conduct. Remaining up to date on these changes will allow plaintiffs to protect themselves from attacks by the defense. Defense attorneys should be prepared with relevant arguments, especially when seeking materials during discovery. To protect themselves from violating ethical rules or laws, plaintiff attorneys should disclose financing agreements to the court, shield the third-party from decision making and planning decisions, and create a method for paying third-party lenders that is in the best interests of their clients. The bottom line is this: do not be a puppet and let the third-party financer pull the strings in litigation.

---

[1] See Joseph Ostoyich & Becca Brett, US Class Actions: Where We’ve Been and Where We Might Be Headed: Part 3: What Lies Ahead for Class Actions?, Clifford Chance (March 4, 2025), https://www.cliffordchance.com/insights/resources/blogs/group-litigation-and-class-actions/2025/03/us-class-actions-where-we-have-been-and-where-we-might-be-headed-part-3-what-lies-ahead-for-class-actions.html (“The landscape of class action litigation in the United States has undergone significant changes over the past few decades, from an infrequently used tool to an explosion of class actions so great it required the use of MDLs to manage the burdens on the judiciary to the backlash and tightening of class certification standards.”).

[2] Mark Behrens, Third-Party Litigation Funding: A Call for Disclosure and Other Reforms to Address the Stealthy Financial Product That Is Transforming the Civil Justice System, 34 Cornell J.L. & Pub. Pol’y 1, at 4 (2024) (“Large-scale TPLF began in Australia, made its way to the United Kingdom, and arrived in the United States about a decade ago.”).

[3] What You Need to Know About Third Party Litigation Funding, U.S. Chamber of Commerce Institute for Legal Reform (June 7, 2024), https://instituteforlegalreform.com/what-you-need-to-know-about-third-party-litigation-funding/ (“Litigation Funders: Entities that advance money to plaintiffs or law firms to cover litigation or other costs on a non-recourse basis contingent on the outcome of the case.”).

[4] See id.

[5] Mark Behrens, supra n. 2, at 4.

[6] See Miller UK Ltd. v. Caterpillar, Inc., 17 F. Supp. 3d 711, 718 (N.D. Ill. 2014).

[7] Id. (“Where a defendant enjoys substantial economic superiority, it can, if it chooses, embark on a scorched earth policy and overwhelm its opponent.”).

[8] Id.

[9] See id. (“Third party litigation funding is a relatively new phenomenon in the United States. The business model has generated a good deal of commentary about and controversy over its intrinsic value to society (or lack thereof depending on one’s perspective) and the discoverability of the actual funding contract and information turned over to prospective funders by a party’s lawyer during negotiations to secure financing.”).

[10] See Model Rules of Pro. Conduct r. 1.8, cmt. 14 (Am. Bar Ass’n). 

[11] Id.

[12] Id.

[13] See id.; see In re Agent Orange Prod. Liab. Litig., 818 F.2d 216 (2d Cir. 1987); see In re Pork Antitrust Litig., No. CV 18-1776 (JRT/JFD), 2024 WL 2819438 (D. Minn. June 3, 2024).

[14] Agent Orange, 818 F.2d at 221-22.

[15] Id. at 223-24.

[16] Id. at 224.

[17] Id. at 226.

[18] See id.

[19] Pork Antitrust, at *1.

[20] Id.

[21] Id. at *4.

[22] Id.; see Maslowski v. Prospect Funding Partners LLC, 944 N.W.2d 235, 241 (Minn. 2020).

[23] See Miller,17 F. Supp. 3d at 711.

[24] Id.

[25] Id. at 718 n.1.

[26] Id. at 742.

[27] Id. at 735-37 (first citing Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 1428 (3rd Cir. 1991); and then quoting Appleton Papers, Inc. v. E.P.A., 702 F.3d 1018, 1025 (7th Cir. 2012)).

[28] New Legislation in Indiana, Louisiana, and West Virginia Addresses Secretive Third Party Litigation Funding, U.S. Chamber of Commerce Institute for Legal Reform (July 25, 2024), https://instituteforlegalreform.com/blog/new-legislation-in-indiana-louisiana-and-west-virginia-addresses-secretive-third-party-litigation-funding/.

[29] Id.

[30] Id.

[31] More States Pushing Back on Third-Party Litigation Funding, Claims and Litigation Management Alliance (April 23, 2024), https://www.theclm.org/Magazine/articles/more-states-moving-to-regulate-third-party-litigation-funding-of-plaintiffs-lawsuits/2923#:~:text=Considering%20the%20mixed%20results%20in,but%20none%20of%20those%20passed.

Photo Credit: Paige Pfleger, The Supreme Court Will Decide if Domestic Abuse Orders Can Bar People From Having Guns. Lives Could Be at Stake., ProPublica (Nov. 3, 2023, 6:00 AM), https://www.propublica.org/article/us-vs-rahimi-gun-rights-domestic-violence-converge-supreme-court-case

Authored by: Anna L. Dozier

United States v. Rahimi is a significant Supreme Court case decided 8-1 regarding the rights and protections of the Second Amendment concerning domestic violence.[1] The Second Amendment provides that “a well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”[2] The question raised in Rahimi is whether a federal statute prohibiting an individual at the mercy of a restraining order due to domestic violence from being in possession of a firearm is consistent with the Second Amendment.[3] 18 U.S.C. § 922 (g)(8) prevents any person subject to a domestic violence restraining order from possessing a firearm, punishable by up to 15 years in prison, if three requirements are met: (1) before the order is entered, the defendant must receive actual notice and must have an opportunity to contest or be heard, (2) the order must include a prohibition of the defendant from “harassing, stalking, or threatening an intimate partner . . . or child of such intimate partner” or acting in such a way to put either of them in “reasonable fear of bodily injury,” and (3) the order finds that the defendant poses a “credible threat to the physical safety of such intimate partner or child” or “by its terms explicitly prohibits the use, attempted use, or threatened use of physical force . . . that would reasonably be expected to cause bodily injury.”[4]

At the center of this case is Zackey Rahimi, charged with violating 18 U.S.C. § 922. Rahimi challenged the prima facie constitutionality of this statute, arguing that it violated the Second Amendment on its face.[5] In 2019, Rahimi began arguing with his girlfriend, the mother of his child, in a park where he dragged her to his car and shoved her in, causing an injury to her head while an onlooker watched.[6] Upon noticing the individual, Rahimi reached to pull out his gun from the car, giving his girlfriend an opportunity to run; however, he then fired his gun, unclear if it was aimed either towards her or the onlooker.[7] His girlfriend then sought a restraining order even after Rahimi threatened to shoot her if she reported the incident.[8] After Rahimi declined to contest, a restraining order was placed on him, finding that his violence was “likely to occur again” and he was a “credible threat” to the “physical safety” of his girlfriend, an intimate partner.[9] This triggered the suspension of his gun license for two years, the duration of the restraining order.[10] A few months later, Rahimi approached his girlfriend’s house and tried to contact her through social media multiple times in violation of the restraining order.[11] A few months after that, he threatened a different woman with a gun.[12] While being arrested for this assault, the police found he was involved in several more shootings in Texas, including ones from a drug deal and road rage.[13] While conducting a lawful search of Rahimi’s house, the police found weapons, ammunition, and a copy of the restraining order.[14]

Rahimi was then charged with unlawful firearm possession under the statute, and the district court subsequently denied Rahimi’s motion to dismiss the indictment on his argument that the statute violated the Second Amendment.[15] Consequently, he plead guilty while appealing with the same facial challenge.[16] After his appeal was denied, Rahimi petitioned for a rehearing en banc.[17] While awaiting a decision on his appeal, the Supreme Court decided New York State Rifle & Pistol Assn., Inc. v. Bruen,[18] where the Court ruled that federal restrictions on firearms must be “consistent with the Nation’s historical tradition of firearm regulation.”[19] As a result, Rahimi was granted a new panel to hear the arguments, and the court reversed its decision, finding that 18 U.S.C. § 922 (g)(8) “does not fit within our tradition of firearm regulation.”[20] Subsequently, the Supreme Court granted certiorari.[21]

Writing for the majority opinion, Chief Justice John Roberts upheld 18 U.S.C. § 922 (g)(8), concluding that it does not, on its face, violate the Second Amendment, noting that our Nation’s history is not unfamiliar with restricting firearm use for violent individuals.[22] The right to keep and bear arms under the Second Amendment is a fundamental right that ensures Americans’ means of self-defense, however, this right is not without limits.[23] The most recent test for the constitutionality of Second Amendment restrictions is found in Bruen, where the Supreme Court instructed lower courts to base their decisions on the “historical tradition of firearm regulation.”[24] Unfortunately, lower courts have interpreted this to exclude the evolution of legislation that restricts only the use of “muskets and sabers,” a suggestion that the Court denies in Rahimi.[25] The Supreme Court in District of Columbia v. Heller[26] clarified that the Second Amendment extends beyond just the weapons that existed at our Nation’s founding, and it permits updated legislation to apply protections of our modern weapons that were not in existence at our Nation’s founding.[27]

Clarifying Bruen, the Supreme Court reiterates that in considering whether a regulation aligns with our nation’s history, the courts must decide if the regulation is “relevantly similar,”[28] not a “historical twin,”[29] to the traditional permits of our laws.[30] In doing so, the courts should faithfully discern the balance between our nation’s founding principles and the modern circumstances we currently face.[31] In a facial challenge like Rahimi’s, a defendant must “establish that no set of circumstances exists under which the Act would be valid,”[32] meaning the Government must only demonstrate that the Act is constitutional in any set of circumstances.[33] The statute is constitutional as applied to the circumstances in Rahimi.[34]

The majority opinion examines the history of early English law and American common law regarding restrictions on arms for violent individuals to determine whether 18 U.S.C. § 922 (g)(8) is relevantly similar to founding traditions and, therefore, constitutional on its face.[35] The Court uses two examples from English law that were incorporated into American common law: surety laws and going armed laws.[36] Surety laws were preventative measures allowing a judge to order an individual, including a spouse, to post a bond if the individual was suspected of committing future violence and misusing firearms.[37] While surety laws aimed to protect against future misconduct by violent individuals, going armed laws worked to punish those individuals for affrays.[38] The prohibition on affrays could require those who armed themselves to instill terror in others to forfeit their arms.[39] Drawing from these historical traditions, the Supreme Court in Rahimi finds that it is “common sense” that an individual may be disarmed if they pose a “clear threat of physical violence to another.”[40] 18 U.S.C. § 922 (g)(8) is not identical, but still relevantly similar to the surety and going armed laws, as all work to restrict firearms in the context of threats of physical violence.[41] Thus, this federal statute does not violate the Second Amendment when a court temporarily disarms an individual who poses a credible threat of physical violence.[42]

Justice Clarence Thomas respectfully dissents, arguing that 18 U.S.C. § 922 (g)(8) targets the core of the Second Amendment, and the majority failed to identify any historical traditions or laws that support or are relevantly similar to the statute.[43] He critiques the majority for upholding this statute, as it automatically strips individuals of a right without proper due process.[44] Justice Thomas asserts that the Government cannot remove the right to keep and bear arms from those subject to a restraining order if the individual has never been convicted of a crime.[45] He does not dispute that Bruen requires firearm regulations to align with our Nation’s traditions.[46] Still, he finds the majority’s reliance on the early traditions of surety laws and going armed laws undermines the purpose of the Second Amendment, as those traditions feed the dangerous idea that Congress can disarm those deemed dangerous or unfit.[47] He warns of a future where the Rahimi decision will “risk the Second Amendment rights of many more.”[48]

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[1] 602 U.S. 680 (2024).

[2] U.S. Const. amend II.

[3] Rahimi, 602 U.S. at 684-86.

[4] 18 U.S.C. § 922 (g)(8)(A-C).

[5] Rahimi, 602 U.S. at 689.

[6] Id. at 686.

[7] Id.

[8] Id.

[9] Id. at 686-87.

[10] Id. at 687.

[11] Rahimi, 602 U.S. at 687.

[12] Id.

[13] Id.

[14] Id. at 688.

[15] Id. at 68-89.

[16] Id. at 689.

[17] Rahimi, 602 U.S. at 689.

[18] 597 U.S. 1 (2022).

[19] Rahimi, 602 U.S. at 689; Bruen, 597 U.S. at 24.

[20] Rahimi, 602 U.S. at 689.

[21] Id.

[22] Id.

[23] District of Columbia v. Heller, 554 U.S. 570, 626 (2008).

[24] Bruen, 597 U.S. at 17.

[25] Rahimi, 602 U.S. at 691-92.

[26] 554 U.S. at 570.

[27] Rahimi, 602 U.S. at 691-62.

[28] Bruen, 597 U.S. at 29.

[29] Id. at 30.

[30] Rahimi, 602 U.S. at 692 (emphasis added).

[31] Bruen, 597 U.S. at 29; Rahimi, 602 U.S. at 692.

[32] United States v. Salerno, 481 U.S. 739, 745 (1987).

[33] Rahimi, 602 U.S. at 693.

[34] Id.

[35] Id. at 693-94.

[36] Id. at 693, 697.

[37] Id. at 695-97.

[38] Id. at 697.

[39] Rahimi, 602 U.S. at 697.

[40] Id. at 698.

[41] Id. at 699.

[42] Id.

[43] Id. at 751.

[44] Id. at 748.

[45] Rahimi, 602 U.S. at 777.

[46] Id. at 750.

[47] Id. at 774.

[48] Id. at 777.

Photo Credit: The Federalist Society, Muldrow v. St. Louis [SCOTUSbrief], YouTube (July 29, 2024), https://www.youtube.com/watch?v=oM4XOc7tLm0

Authored by: Sydney F. Jeffcoat

Under Title VII, it is illegal for any employer to “fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion sex, or national origin.”[1] Thus, to comply, an employer cannot discriminate against an employee or potential employee based on one of those characteristics. Although this may seem like a plain and simple law to follow, courts across the country have struggled to define when an employee or potential employee is harmed because of one of these characteristics.[2] As a result, the Court sought to clarify the appropriate standard in Muldrow v. City of St. Louis.[3]

In Muldrow, Sergeant Jatonya Clayborn Muldrow, alleged that her employer, the St. Louis Police Department, discriminated against her based on her sex.[4] For almost ten years, Sergeant Muldrow served as an officer in the Intelligence Division of the St. Louis Police Department.[5] Muldrow’s commander left the Intelligence Division in 2017 and informed her successor that Muldrow was a great employee.[6] Disregarding the previous commander’s comments, the new commander transferred Muldrow out of the Intelligence Division and replaced her with a male officer.[7] Muldrow was then assigned to a position in the St. Louis Police Department’s Fifth District.[8]

As a result, many parts of Muldrow’s job changed. First, her job duties changed, as she was no longer able to work on public corruption and human trafficking cases and instead supervised the everyday activities of the neighborhood patrol officers.[9] Second, she now spent most of her time performing administrative tasks.[10] Third, she was stripped of her FBI credentials and her unmarked take-home vehicle.[11] Lastly, she began to work a sporadic schedule as compared to a traditional Monday to Friday schedule.[12] The only consistency that remained after the reassignment was her compensation and rank.[13] As a result, Muldrow sued the St. Louis Police Department alleging that she was transferred due to her sex.[14] The district court granted summary judgment and the Eight Circuit Court of Appeals affirmed because Muldrow could not show that her reassignment resulted in a “materially significant disadvantage.”[15] The United States Supreme Court granted certiorari.[16]

In Muldrow, the Court looked at the text of the statute to determine the appropriate standard for a Title VII claim.[17] In its analysis, the Court stated that the high bar of demonstrating that a change in employment must result in a “materially significant disadvantage” is nowhere to be found in the legislative text.[18] In an effort to make the standard as simple as the legislative text, the Court stated that a plaintiff must only show that “some harm” resulted from a change in employment.[19] The Court reasoned that the new standard will force the beholder of the claim to examine all kinds of disadvantages, not just materially significant disadvantages.[2o] However, this standard seems to make the test just as subjective as it was before. The only guidance the Court gave about how to apply this new standard is that the change must be “disadvantageous.”[21] While the bar is clearly much lower, defining what “some harm” is will most likely be an obstacle to the lower courts.[22] Is this standard too simple?[23] Will it lead to a flood of litigation in the courts?[24] Will this new standard even change the outcomes of Title VII claims?[25] These are the types of questions that the concurring opinions sought to address, but they will likely have to be addressed again in the future.

It will certainly be interesting to see if this new standard results in more confusion amongst the courts because of its subjective nature. There is no doubt that this new standard will make it much easier for plaintiffs to bring a claim under Title VII because of the low bar that must be met. Thus, employers should carefully evaluate any changes to an employee’s job to make sure it does not relate to an employee’s protected status, as even minor changes can now result in a lawsuit due to the low bar.[26] Furthermore, many predict that this decision will have a great impact on Diversity, Equity, and Inclusion hiring programs.[27] In the end, it will depend on how the beholder of the Title VII claim defines “harm” to determine the outcome.

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[1] 42 U.S.C. § 2000e-2(a)(1).

[2] See, e.g., Caraballo-Caraballo v. Correctional Admin., 892 F.3d 53, 61 (1st Cir. 2018) (stating that an employee must show that the action left them with “significantly different responsibilities”); Webb-Edwards v. Orange Cty. Sherriff’s Office, 525 F.3d 1013, 1033 (11th Cir. 2008) (stating that the employee must show that the action resulted in a “serious and material change”); Williams v. R.H. Donnelley, Corp., 368 F.3d 123, 128 (2d Cir. 2004) (stating that an employee must show that the action resulted in a “materially significant disadvantage”); James v. Booz-Allen & Hamilton, Inc., 368 F.3d 371, 376 (4th Cir. 2004) (stating that the employee must show that the action had a “significant detrimental effect”); O’Neal v. Chicago, 392 F.3d 909, 911 (7th Cir. 2004) (stating that an employee must show they suffered a “materially adverse employment action”); Sanchez v. Denver Public Schools, 164 F.3d 527, 532 (10th Cir. 1998) (stating than an employee must show more than a “mere inconvenience or alteration of job responsibilities”).

[3] 601 U.S. 346 (2024).

[4] Id. at 350.

[5] Id.

[6] Id. at 350-51 (“In 2017, the outgoing commander of the Intelligence Division told her newly appointed successor that Muldrow was a ‘workhorse’–still more, that ‘if there was one sergeant he could count on in the Division’, it was Muldrow.”) (quoting Muldrow v. City of St. Louis, No. 4:18-CV-02150-AGF, 2020 WL 5505113, *1 (E.D. Mo. Sept. 11, 2020)).

[7] Muldrow, 601 U.S. at 351.

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id.

[13] Muldrow, 601 U.S. at 351.

[14] Id.

[15] Id. at 352.

[16] Id. at 353.

[17] Id. at 353-54.

[18] Id. at 355 (“There is nothing in the provision to distinguish, as the courts below did, between transfers causing significant disadvantages and transfers causing not-so-significant ones.”).

[19] Muldrow, 601 U.S. at 354 (“To make out a Title VII discrimination claim, a transferee must show some harm respecting an identifiable term or condition of employment.”).

[20] Id. at 355-56 (stating that appellate decisions were reaching different conclusions because “the answers [lied] in the eye of the beholder,” and as a result, workers were required to show a harm “that the statutory text [did] not require”).

[21] Id. at 354.

[22] See id. at 362 (Alito, J., concurring) (“I have no idea what this means, and I can just imagine how this guidance will be greeted by lower court judges.”).

[23] But see id. at 364-65 (Kavanaugh, J., concurring) (arguing that the new standard is not simple enough because the text of the statute does not require a showing of harm once it is proven that an employer’s action is discriminatory).

[24] Id. at 358 (rejecting the defendant’s public policy objection that the new standard will cause “the floodgates [to] open in the way feared”); see also Stephanie L. Adler-Paindiris et. Al., U.S. Supreme Court: Alleging Discriminatory Transfer is Sufficient Harm to Bring Title VII Claim, Jackson Lewis (Apr. 25, 2024), https://www.jacksonlewis.com/insights/us-supreme-court-alleging-discriminatory-transfer-sufficient-harm-bring-title-vii-claim.

[25] Muldrow, 601 U.S. at 363 (Alito, J., concurring) (arguing that this decision will have no effect on Title VII claims because judges will continue to do what they have previously done by using different wording).

[26] Christopher Wilkinson and Jeremy Wright, Muldrow Sets a New Standard for Workplace Discrimination, Perkins Cole (Apr. 24, 2024), https://perkinscoie.com/insights/update/muldrow-sets-new-standard-workplace-discrimination.

[27] See Stephanie L. Adler-Paindiris et. al., U.S. Supreme Court: Alleging Discriminatory Transfer is Sufficient Harm to Bring Title VII Claim, Jackson Lewis (Apr. 25, 2024), https://www.jacksonlewis.com/insights/us-supreme-court-alleging-discriminatory-transfer-sufficient-harm-bring-title-vii-claim; Christopher Wilkinson and Jeremy Wright, Muldrow Sets a New Standard for Workplace Discrimination, Perkins Cole (Apr. 24, 2024), https://perkinscoie.com/insights/update/muldrow-sets-new-standard-workplace-discrimination.

Photo Credit: Fiveable, Courts and Society Review: 6.1 Right to Counsel, (last updated Aug. 20, 2024), https://fiveable.me/courts-society/unit-6/counsel/study-guide/4iKskTZZehZeIIjq.

Authored by Kaitlyn Fowler

The Sixth Amendment provides numerous trial-related protections and hosts one of the most crucial rights for those accused of a crime—the right to “have the Assistance of Counsel for his defence.”[1] This right is guaranteed to anyone being charged with a crime for which “a term of imprisonment is imposed,” regardless of their ability to pay for counsel.[2] If the defendant is unable to pay for counsel, an attorney will be appointed for them.[3] This right “attaches at the initiation of adversarial judicial proceedings, ‘whether by way of formal charge, preliminary hearing, indictment, information or arraignment.’”[4] The caveat for indigent defendants is that they cannot choose their counsel, while those who opt to get a private attorney clearly can.[5]  The constitutionality of this discrepancy has been upheld by the United States Supreme Court due to an indigent defendant not being permitted to “insist on representation by an attorney he cannot afford.”[6]

A further discrepancy regarding the differences between an indigent defendant and one who can afford legal counsel has never directly been addressed by the Supreme Court—whether an indigent defendant has the right to continued representation by counsel who has been appointed to them throughout the course of all proceedings related to the case.[7] This question was recently raised by a man named William Davis (“Davis”), who believes his Sixth Amendment right to counsel was violated when his appointed counsel changed.[8]

Davis was arrested and charged with multiple vehicular offenses on April 20, 2017.[9] Because he was found to be indigent, Davis was appointed Garen Gervey (“Gervey”) as his public defender.[10] Subsequently, “Davis, through counsel, moved for a continuance” due to various scheduling conflicts, which the Court denied.[11] Because Davis’ current attorney would only be able to continue to represent him if granted a continuance, Davis attempted his motion for a second time, asserting that he had a right to continued representation by Gervey.[12] The Court once again denied the motion on the grounds that “‘substitution of one public defender with another does not violate the Sixth Amendment… absent evidence of prejudice.”[13] The Court determined that Davis would not face any prejudice, as the nature of the case was simple enough that a reasonably competent attorney would easily be able to prepare for trial.[14] Davis was subsequently convicted, and the matter was then brought before the Colorado Court of Appeals.[15]

The Court of Appeals sided with Davis and reversed his conviction on the grounds that “indigent defendants have a constitutional right to continued representation by appointed counsel.”[16] The People petitioned the Colorado Supreme Court for review, and it granted certiorari.[17] Ultimately, the Court found a difference between the “right to effective assistance of counsel and the more limited right to choice of counsel.”[18] This limited right to choice of counsel is what ultimately grants the right to continued representation by that specific counselor.[19] The Colorado Supreme Court thus reversed and remanded the decision of the Appellate Court.[20]

A writ of certiorari was then presented to the United States Supreme Court. While awaiting the Court’s decision, several briefs were submitted to the Court, including one from the National Association of Criminal Defense Lawyers (“NACDL”).[21] The NACDL contended that the right to continuous representation should be viewed as even more important in regard to indigent defendants, as they are already “at the mercy of overworked public defenders and court appointed attorneys.”[22] Arguably, these restraints already make it hard for public defenders to advocate zealously for their indigent clients, so the NACDL advocated that absent a clear right to continued representation by appointed counsel, that goal is nearly impossible.[23]

On the contrary, the state of Colorado’s position is that the Court’s prior decisions have already decided this issue—the Sixth Amendment right to counsel does NOT equate to continuity of such counsel.[24] The crux of Colorado’s argument is that the continuity right is contingent on the right to choose one’s counsel.[25] Because indigent defendants do not choose their counsel, rather, counsel is chosen for them, the added right of continuity cannot be said to attach.[26]

Ultimately, the Court denied the petition for certiorari on October 15, 2024. It can be assumed that this is the Court’s way of implicitly siding with Colorado, due to Colorado’s insistence that there was no need to take the case because there is already an answer. All one can do at this point is wait and see if this issue continues to be litigated, as eventually the Court may find a case compelling enough to warrant review. Until then, lower courts will likely continue to interpret and apply contradictory precedents, leading to varied approaches across jurisdictions.

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[1] U.S. Const. amend. VI.

[2] U.S. v. Bryant, 579 U.S. 140, 143 (2016) (citation omitted).

[3] Reynolds v. State, 114 So. 3d 61, 88 (Ala. Crim. App. 2010) (“An indigent defendant who cannot afford to retain an attorney has an absolute right to have counsel appointed by the Court.”) (quotation omitted) (citation omitted).

[4] Joseph P. Van Heest, Rights of Indigent Defendants After Alabama v. Shelton, 63 Ala. Law. 370, 370 (2002) (quoting Kirby v. Illinois, 406 U.S. 682, 689 (1972)).

[5] See Caplin & Drysdale, Chartered v. U.S., 491 U.S. 617, 624 (1989) (“The [Sixth] Amendment guarantees defendants in criminal cases the right to adequate representation, but those who do not have the means to hire their own lawyers have no cognizable complaint so long as they are adequately represented by attorneys appointed by the courts.”).

[6] Wheat v. U.S., 486 U.S. 153, 159 (1988).

[7] Docket No. 23-1096, Pet. at i.

[8] See id.

[9] People v. Davis, Case No. 21SC388, ¶ 3 (Colo. 2023).

[10] Id.

[11] Id. ¶ 4.

[12] Id. ¶ 5.

[13] Id. ¶ 6 (quoting People v. Coria, 937 P.2d 386, 389 (Colo. 1997)).

[14] Id.

[15] Davis, Case No. 21SC388, ¶¶ 8-9.

[16] Id. ¶ 9.

[17] Id. ¶ 10.

[18] Id. ¶ 11.

[19] Id.

[20] Id. ¶ 25.

[21] See Brief of Nat’l Ass’n of Criminal Defense Lawyers as Amicus Curiae in Support of Petitioner, Davis v. Colorado, No. 23-1096 (May 23, 2024).

[22] Id. at 6.

[23] Id. at 7.

[24] See Brief of Colorado in Opposition, Davis v. Colorado, No. 23-1096 (July 8, 2024).

[25] Id. at 7.

[26] Id.