Photo Credit: Fed. Bureau of Investigation, White Collar Crime: Health Care Fraud, https://www.fbi.gov/investigate/white-collar-crime/health-care-fraud (last visited Sep. 10, 2025).

Authored by: Sarah K. Conway

On February 18, 2025, the First Circuit joined two of its sister circuits in ruling that the 2010 amendment to the Affordable Care Act (“ACA”) imposed a “but-for” causation standard for determining whether a violation of the Anti-Kickback Statute may also create liability under the False Claims Act.[1] The Anti-Kickback Statute (“AKS”) makes it a crime to knowingly and willfully solicit or receive “any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind” in exchange for payment made under a federal health care program.[2] Conversely, the False Claims Act (“FCA”) is a civil statute that imposes liability for knowingly presenting false or fraudulent claims to the federal government for payment or approval.[3]

Although distinct, these health care fraud and abuse laws are often interwoven.  The most prominent example of this link is inscribed in the 2010 amendment to the ACA, which allows criminal violations under the AKS to form the basis of civil liability under the FCA.[4] The amendment specifically states that a claim “that includes items or services resulting from a violation” of the AKS will constitute a false or fraudulent claim sufficient to also impose liability under the FCA.[5] Recently, this “resulting from” language within the amendment has become the center of an ongoing circuit split that asks whether the language was intended to impose a “but-for” causation requirement or some lesser causation standard.[6] 

The differences in these standards can be vast.  For instance, a but-for causation standard requires the plaintiff to prove that, without the defendant’s action, they would not have sustained the alleged injuries.[7]  Compare this standard with a “causal link” standard which merely requires some recognizable link between “the alleged kickbacks and the medical care received by at least one of [the defendant’s] federally insured patients.”[8]  Defining the precise causation standard is crucial as it impacts the evidentiary burden for plaintiffs along with the breadth of potential liability for defendants.[9] 

This burden of proof analysis took center stage in the First Circuit case of United States v. Regeneron Pharmaceuticals.[10] At issue in this case is an alleged violation of the AKS that stems from Regeneron’s prescriptions of a costly drug used to treat neovascular age-related macular degeneration.[11] This drug, called Eylea, is administered in office via an injection that costs $1,850 per patient, per dose.[12] As the First Circuit notes, “Medicare Part B has spent over $11.5 billion on Eylea,” making the drug an economic powerhouse for manufacturers like Regeneron.[13]  According to the government, Regeneron developed a rebate scheme to induce Medicare Part B beneficiaries to purchase Eylea by refunding any co-pays associated with the prescription.[14] The alleged refunds were not made directly to beneficiaries.[15] Rather, they took the form of donations to a charity that provides financial assistance to those suffering with the same disease Eylea is designed to treat.[16]  While genuine donations to charitable foundations are permitted under federal law, the Department of Health and Human Services (“HHS”) has warned about the fine line between donations and so-called “rebate conduits,” such as the one Regeneron allegedly developed.[17]

At trial, the government argued that Regeneron’s AKS rebate scheme was sufficient to form the basis of an FCA claim because the words “resulting from” in the 2010 amendment merely require a causal link between patient exposure to the rebate scheme and provider claims for reimbursement.[18] The government’s adoption of this lesser causation standard aligned with that of the Third Circuit, which held that but-for causation was “too exacting” of a standard.[19] Contrarily, Regeneron argued that actual influence or causation, also termed but-for causation, must exist to link a violation of the AKS to an FCA claim.[20] Regeneron’s position aligned with that of the Sixth and Eighth Circuits, which both interpreted the phrase “resulting from” to indicate a but-for causation requirement.[21] 

Upon review, the First Circuit sided with Regeneron’s interpretation—and by extension the Sixth and Eighth Circuits—and ruled that the “resulting from” language imposed a “requirement of actual causality, which in [the] ordinary course takes the form of but-for causation.”[22]  The First Circuit emphasized that the Supreme Court has regularly held the phrase “resulting from” to constitute a but-for causation requirement absent textual indication to the contrary.[23] Despite this, the government continued to argue that imposition of a but-for causation requirement would upend the false certification theory of FCA liability.[24] While the First Circuit agreed that there had been no change to false certification case law which would impose a but-for causation requirement, it clarified that liability under the false certification theory is distinct from liability brought under the 2010 amendment.[25] In other terms, the 2010 amendment offers an alternative pathway for establishing a violation of the FCA that does not require the same elements as the false certification theory.[26]

Other circuits have held similarly to the First.[27]  For example, in 2024, the Seventh Circuit interpreted the phrase “resulting from” to require a causal nexus between a defendant’s violation of the FCA and their involvement with an illegal kickback scheme.[28] Although the Supreme Court has yet to weigh-in on the issue, the ongoing circuit split seems to be gaining enough traction to place it on the Court’s radar.  The resolution of the split is likely to have monumental repercussions for health care attorneys.  If the Supreme Court were to side with the majority and impose a but-for causation requirement, there will be an increased burden on whistleblowers and the government to present evidence of a genuine connection between an AKS violation and the associated false claims.[29]  This heightened causation requirement would also provide defense teams with another avenue to combat AKS based FCA claims, ultimately tipping the burden of proof scale for such health care fraud cases in favor of defendants.[30]

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[1] United States v. Regeneron Pharms., Inc., 128 F.4th 324, 336 (1st Cir. 2025).

[2] 42 U.S.C. § 1320a-7b(b).

[3] 31 U.S.C. § 3729(a)(1).

[4] Patient Protection & Affordable Care Act, Pub. L. No. 111-148, § 6402(f)(1), 124 Stat. 119, 759 (2010) (codified as amendment at 42 U.S.C. § 1320a-7b(g)).

[5] 42 U.S.C. § 1320a-7b(g) (emphasis added).

[6] Regeneron Pharms., Inc., 128 F.4th at 326; see also Andrew McGirty, Cracking Causation: The Need for a Workable Link Between the Anti-Kickback Statute and False Claims Act, 74 Case W. Rsrv. L. Rev. 429, 452-57 (discussing the opinions of the First, Third, Sixth, and Eighth Circuits).

[7] Univ. of Tex. S.W. Med. Ctr. v. Nassar, 570 U.S. 338, 346-47 (2013); Stuart M. Speiser, Charles F. Krause & Alfred W. Gans, 3 American Law of Torts § 11:6 (Monique C. M. Leahy, ed., 2025); see also Robin Dembroff & Issa Kohler-Hausmann, Supreme Confusion About Causality at the Supreme Court, 25 CUNY L. Rev. 57, 69-70 (2022) (discussing the but-for causation test under modern tort law and approaches to alleviating its ambiguity).

[8] United States ex rel. Greenfield v. Medco Health Sols., 880 F.3d 89, 100 (3d Cir. 2018).

[9] See, e.g., Nassar, 570 U.S. at 358 (“Even if the employer could escape judgment after trial, the lessened causation standard would make it far more difficult to dismiss dubious claims at the summary judgment stage.”); Nesbitt v. Candler Cnty., 945 F.3d 1355, 1358 (11th Cir. 2020) (“To avoid losing, [Plaintiff] argues for application of the motivating factor standard.  That more plaintiff-friendly standard requires only a showing that the protected conduct ‘was a motivating factor for any employment [decision].’” (second alteration in original) (quoting Nassar, 570 U.S. at 349)).

[10] Regeneron Pharms., Inc., 128 F.4th at 327-38.

[11] Id. at 326.

[12] Id.

[13] Id.

[14] Id. at 326-27.

[15] Id.

[16] Regeneron Pharms., Inc., 128 F.4th at 327.

[17] Id.; Publication of OIG Special Advisory Bulletin on Patient Assistance Programs for Medicare Part D Enrollees, 70 Fed. Reg. 70623-03 (Nov. 22, 2005).

[18] Regeneron Pharms., Inc., 128 F.4th at 327; see Greenfield., 880 F.3d at 100 (“A kickback does not morph into a false claim unless a particular patient is exposed to an illegal recommendation or referral and a provider submits a claim for reimbursement pertaining to that patient.” (emphasis added)).

[19] Greenfield, 880 F.3d at 100.

[20] Regeneron Pharms., Inc., 128 F.4th at 327-38; see United States ex rel. Martin v. Hathaway, 63 F.4th 1043, 1052 (“The ordinary meaning of ‘resulting from’ is but-for causation.”).

[21] Martin, 63 F.4th at 1052-53; United States ex rel Cairns v. D.S. Med., LLC, 42 F.4th 828, 834 (8th Cir. 2022).

[22] Regeneron Pharms., Inc., 128 F.4th at 330.

[23] Id. at 329.

[24] Id. at 333 (“Under [the false certification] pathway, it is not the AKS violation itself that renders the claim false.  Rather, it is the false representation that there is no AKS violation.”)

[25] Id. at 334.

[26] Id. 333-34.

[27] Stop Ill. Health Care Fraud, LLC v. Sayeed, 100 F.4th 899, 908 (7th Cir. 2024).

[28] Id. at 908-09 (acknowledging the current circuit split but declining explicitly adopt a precise standard for causation); see also United States ex rel Wilkerson v. Allergan Ltd., No. 22-CV-3013, 2025 WL 1181010, at *9-10 (N.D. Ill. Apr. 23, 2025) (relying on Regeneron in holding that “resulting from” indicates a but-for causation requirement).

[29] Compare Greenfield, 880 F.3d at 97 (finding that neither the Anti-Kickback Statute nor False Claims Act “requires a plaintiff to show that a kickback directly influenced a patient’s decision to use a particular medical provider”), with D.S. Med., LLC., 42 F.4th at 836-37 (“[W]hen a plaintiff seeks to establish falsity or fraud through the 2010 amendment, it must prove that a defendant would not have included particular ‘items or services’ but for the illegal kickbacks.”).

[30] See Hathaway, 63 F.4th at 1054 (requiring the government establish at least “one claim for reimbursement identified with particularity . . . that would not have occurred anyway” to meet causation requirements under an AKS-based FCA claim).

Photo Credit: Cara Halligan, Protecting Democracy Through Checks and Balances, The Hawk, https://sjuhawknews.com/36446/opinions/protecting-democracy-checks-balances/ (last visited Aug. 17, 2025).

Authored by: Bennett N. Vest

On June 27, 2025, the Supreme Court addressed the issue of whether federal district courts could issue universal injunctions in Trump v. Casa, Inc.[1] In a 6-3 decision, authored by Justice Barrett, the Court reversed the courts of appeals and granted the government’s applications for partial stays because (1) the government was likely to succeed on the merits that universal injunctions were beyond the power of federal courts under the Judiciary Act and (2) that the government showed a likelihood of irreparable harm.[2]

On January 20, 2025, President Trump issued an executive order revoking automatic birthright citizenship for children born in the United States with alien parents.[3] Almost as soon as President Trump signed the order, many states and groups filed for universal injunctions in federal district courts to stop the President from enforcing the executive order.[4] Three district courts issued universal injunctions against the executive branch and the president, and the court of appeals denied the government’s partial petition to stay.[5] The Supreme Court heard oral arguments on the case after the government filed emergency appeals.[6]

District courts issuing universal injunctions are relatively new, but they have become increasingly popular since George W. Bush’s presidency. [7] They block the executive branch from implementing its own policies that are “unconstitutional.”[8] In the first one hundred days of President Trump’s second term, 25 universal injunctions were issued against President Trump and the Executive Branch.[9] Under the Judiciary Act, federal courts have power over cases “in equity,” but the question is whether universal injunctions are included as part of their equitable powers.[10]

 Without addressing the substance of the executive order, the majority opinion only addressed the power of federal district courts to issue universal injunctions.[11] Under a historical analysis, the majority opinion rejected the dissents arguments that universal injunctions (1) have a historical basis in American law, (2) provide complete relief for parties, and (3) serve “important policy objectives.”[12] Going back to the Court of Chancery in England, the majority opinion concluded that universal injunctions were not historically part of our system of law.[13] Moreover, our current system distinguishes complete relief from universal relief by providing aggregated relief in the form of class action lawsuits or formerly Bills of Peace in England.[14] Therefore, the government proved that it was likely that the Judiciary Act did not include universal injunctions as a form of equitable relief.

To grant the partial stays for the government, the government also had to provide enough evidence to suggest that the executive branch was likely to suffer “irreparable harm” if the stay was not granted.[15] The Court ruled that universal injunction by itself causes irreparable harm because it cannot enforce its own policies.[16]

Justice Thomas, Alito, and Kavanaugh wrote separate concurring opinions, with Justice Gorsuch joining Justice Thomas’ concurrence and Justice Thomas joining Justice Alito’s concurrence.[17]  Justice Thomas advocated for a “plaintiff-specific injunction” while Justice Alito focused on third-party standing and class certification.[18] Finally, Justice Kavanaugh’s concurrence focused on the Supreme Court’s power to rule on such injunctions and equitable relief.[19] In opposition to the majority’s ruling, Justice Sotomayor, joined by Justice Kagan and Jackson, and a separate dissent by Justice Jackson, uphold universal injunctions as an appropriate equitable remedy, but the majority of the dissenting opinions focus on the substance of the executive order.[20]

This ruling comes at a time where the concept of federalism and the power of the presidency are constantly being challenged by President Trump. To date, President Trump is on pace to set a record number of executive orders during his second term.[21] These orders have caused disagreements amongst his “political enemies” over politics and policy, and these battle are being played out in venues favorable to the Plaintiffs, resulting in universal injunctions being granted.[22] As a result of “weaponizing the courts,” there is increasing skepticism that the courts are not impartial but rather that they impose their own political beliefs.[23] Even some members of the Supreme Court have made these accusations of their own colleagues by stating their recent rulings favor of President Trump.[24]

Beyond Casa, the question remains whether Executive Order 14160 is constitutional. Justice Barrett and the other justices joining the majority opinion did not opine or indicate how it would rule on that issue, but the dissenting opinions make it clear that they believe President Trump and the executive branch overstepped their constitutional bounds.[25] It is plausible that the Court would rule that Executive Order 141460 exceeds constitutional bounds in the future.  However, the Casa decision limited district courts’ powers to issue universal injunctions. It does not suggest that district courts cannot rule that executive orders are unconstitutional, but that the remedy needs to be more specific or tailor to the person or persons seeking the relief. With the Supreme Court defining the powers of federal courts, the hope is that courts will not be used as much for favorable rulings and the three branches of government can operate more effectively within their defined constitutional powers.

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[1] See 145 S. Ct. 2540 (2025).

[2] See id. at 2549.

[3] Exec. Order No.14160, 90 Fed. Reg. 8449 (Jan. 20, 2025) (restricting birthright citizenship when “(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”).

[4] See Mike Catalini, 22 States Sue to Stop Trump’s Order Blocking Birthright Citizenship, AP News (Jan. 21, 2025), https://apnews.com/article/birthright-citizenship-trump-executive-order-immigrants-fc7dd75ba1fb0a10f56b2a85b92dbe53.

[5] See Casa, Inc. v. Trump, 763 F. Supp. 3d 723 (D. Md. 2025); Washington v. Trump, 765 F. Supp.3d 1142 (W. D. Wash. 2025); Doe v. Trump, 766 F.Supp.3d 266 (D. Mass 2025).

[6] See Casa, Inc., 145 S. Ct. at 2540.

[7] See id. at 2553 (stating that universal injunctions were not used until the 20th century).

[8] Id. at 2548.

[9] See Joanna R. Lampe, Nationwide Injunctions in the First Hundred Days of the Second Trump Administration, Congressional Research Service (updated May 16, 2025)https://www.congress.gov/crs-product/R48476.

[10] See Casa, Inc., 145 S. Ct. at 2551.

[11] See id. at 2562-63.

[12] Id. at 2554.

[13] See id. at 2551.

[14] See id. at 2555.

[15] Id. at 2562.

[16] See Casa, Inc., 145 S. Ctat 2562.

[17] See id. 145 S. Ct. at 2563 (Thomas, J., concurring); Casa, Inc., 145 S. Ctat 2565 (Alito, J., concurring); Casa, Inc., 145 S. Ctat 2567 (Kavanaugh, J. concurring).

[18]  See Casa, Inc., 145 S. Ct. at 2565.

[19] See id. at 2567.

[20]  See id. at 2574 (Sotomayor, J. dissenting); Casa, Inc., 145 S. Ctat 1596 (Jackson, J., dissenting).

[21] See Bert Jensen, Everything’s an ‘Emergency’: How Trump’s executive order record pace is testing the courts, USA Today, (April 5, 2025), https://www.usatoday.com/story/news/politics/2025/04/05/trump-executive-orders-lawsuits-emergencies/82792612007/.

[22] See Katrina Kaufman & Matt Clark, The Courts Where Nationwide Injunctions are Originating, CBS News (May 15, 2025, 11:12 P.M.), https://www.cbsnews.com/news/courts-nationwide-injunctions-originating/.

[23] See Benedict Vigers & Lydia Saad, Americans Pass Judgement on Their Courts, Gallup (Dec. 16, 2024), https://news.gallup.com/poll/653897/americans-pass-judgment-courts.aspx.

[24] Trump v. U.S., 603 U.S. 593, 684 (2024) (highlighting that Justice Sotomayor stated that the majority’s opinion made the president “a king above the law”).

[25] See Casa, Inc.,145 S. Ct. at 2674.

Photo Credit: Kevin Dietsch/Getty Images, Photograph of demonstrators outside of the U.S. Supreme Court during arguments regarding a Tennessee law banning controversial gender-affirming care for trans youth in U.S. Department of Justice backs out of Tennessee transgender care case (Dec. 4, 2024), https://tennesseelookout.com/2025/02/07/u-s-department-of-justice-backs-out-of-tennessee-transgender-care-case/.

Authored by: Arielle H. Foster

On March 22, 2023, Tennessee’s Senate Bill 0001 (SB1) was passed, amending the Tennessee Code to prohibit healthcare workers from performing on or administering to a minor certain medical procedures if the purpose of the procedures is to enable the child to “identify with, or live as, a purported identity inconsistent with the minor’s sex.”[1] Following the SB1’s enactment, three families raising transgender youth and a Memphis doctor sued the state of Tennessee in 2023, and the federal government, under President Biden’s administration, stepped in to carry the plaintiff’s challenge. [2] The U.S. Supreme Court heard argument on December 4, 2024 and two months later, the U.S. Department of Justice under President Trump’s administration withdrew their challenge of the Tennessee law stating “the government’s previously stated views no longer represent the United States’ position.”[3] Regardless, the Supreme Court continued toward a ruling, noting that the Government did not request a dismissal and rather requested “prompt resolution” as the ruling will control many pending cases in lower courts.[4]

In a slip opinion decided on June 18, 2025, the U.S. Supreme Court voted in a 6-3 decision to uphold the Tennessee law, ruling that the “law prohibiting certain medical treatments for transgender minors is not subject to heightened scrutiny under the Equal Protection Clause of the Fourteenth Amendment and satisfies rational basis review.”[5] In their opinion, Justice Roberts noted that laws containing “sex-based classifications” are subject to intermediate scrutiny, requiring the State to show the “classification serves important governmental objectives and that the discriminatory means employed are substantially related to the achievement of those objectives.”[6] However, the Court disagreed with Plaintiff’s argument that heightened scrutiny was warranted as this law relies on sex-based classifications, finding that SB1 prohibits the administration of puberty blockers and hormones to “minors for certain medical uses, regardless of a minor’s sex.”[7]

The Supreme Court determined that the only two classifications incorporated in SB1 are (1) based on age, as treatments can be administered to adults, but not minors; and (2) the basis of medical use, as the use of these procedures may be used to treat conditions in minors, but not to treat children for the purpose of treating gender dysphoria or gender identity disorders; both of which are only subject to a rational basis review.[8] Finding that Tennessee established a “legitimate, substantial and compelling interest in protecting minors from physical and emotional harm,” and acknowledges Tennessee’s finding that “the prohibited medical treatments are experimental, can lead to later regret, and are associated with harmful-and sometimes irreversible-risks.”[9]

The plaintiffs further argued that SB1 discriminates against transgender individuals, which constitute a “quasi-suspect class” and thus warrants higher scrutiny, but the Supreme Court again disagreed.[10] The Court emphasized that regulating a medical procedure that only one sex can undergo does not trigger higher scrutiny unless it is a pretext for invidious sex discrimination.[11] This does not qualify as such, because SB1 is not excluding an individual from eligibility because of their sex, “but rather ‘remove[d] one physical condition . . . from the list of compensable disabilities,” ultimately stating that individuals aren’t excluded from medical treatments on the basis of being transgender, it is simply removing those diagnoses from the treatable conditions.[12]

Justice Sotomayor dissented, claiming that the law “expressly classifies on the basis of sex and transgender status.”[13] She was joined by her fellow democratic party appointees, Justices Kagan and Jackson, in explaining that: [i]n addition to discriminating against transgender adolescents, who by definition ‘identify with’ an identity ‘inconsistent’ with their sex, that law conditions the availability of medications on a patient’s sex. Male (but not female) adolescents can receive medicines that help them look like boys, and female (but not male) adolescents can receive medicines that help them look like girls.”[14]

Tennessee is one of 27 states that restrict medical care for transgender youth, and this Supreme Court ruling could affect dozens of states.[15] The Tennessee Attorney General, Jonathan Skrmetti, praised the Supreme Court’s ruling, calling it a “historic Supreme Court win” and further stated, “the common sense of Tennessee voters prevailed over judicial activism.”[16] Alternatively, however, transgender-rights activists called this decision “a punch in the gut for the transgender community,” as she believes the prohibited care in this case is “life-saving” in many cases.[17]

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[1] S.B. 0001, 113th Gen. Assemb., 1st Extra.. Sess. (Tenn. 2023), https://legiscan.com/TN/bill/SB0001/2023 (summarizing Senate Bill 0001 as enacted); SB0001 Bill Summary, Tenn. Gen. Assemb., https://wapp.capitol.tn.gov/apps/Billinfo/default.aspx?BillNumber=SB0001&ga=113 (last visited Aug. 11, 2025).

[2] Sam Stockard, U.S. Department of Justice backs out of Tennessee transgender care case, Tenn. Lookout, Feb. 7, 2025, https://tennesseelookout.com/2025/02/07/u-s-department-of-justice-backs-out-of-tennessee-transgender-care-case/.

[3] Id.

[4] Id.

[5] United States v. Skrmetti, 145 S. Ct. 1816, 1821 (2025); Greg Stohr, Supreme Court Upholds Curbs on Care for Transgender Minors, Bloomberg News, Jun. 18, 2025, https://www.bloomberglaw.com/product/blaw/bloombergterminalnews/bloomberg-terminal-news/SY2382DWLU68?criteria_id=8ca6b6280b2dc7ead434cbe7e4f43497.

[6] Skrmetti, 145 S. Ct. at 1828-29 (quoting J. Ginsburg in United States v. Virginia, 518 U.S. 515, 533).

[7] Id. at 1829.

[8] Id.

[9] Id. at 1832.

[10] Id.

[11] Id. at 1833.

[12] Skrmetti, 145 S. Ct. at1833.

[13] Id. at 1868; Stohr, supra note 5.

[14] Skrmetti, 145 S. Ct. at 1868.

[15] Stohr, supra note 5.

[16] Id.

[17] Id.

Photo Credit: Building a Workers’ Comp Policy for GA Staffing Agencies, Work Comp Options Program (Aug. 5, 2025), https://workcompoptions.com/building-a-workers-comp-policy-for-ga-staffing-agencies/.

Authored by: Brady W. Heard

Background of Alabama’s Workers’ Compensation Act

Since the adoption of Alabama’s first Workers’ Compensation Act in 1919, the Alabama legislature has provided a statutory remedy for individuals sustaining injuries while in the line and scope of their employment.[1] The codification of a statutory compensation scheme serves as a means to ensure that workers receive adequate monetary relief, in lieu of potentially receiving inconsistent or inadequate remedies through the common law system.[2] Prior to codifying Alabama’s Workers’ Compensation Act (“the Act”), employers were capable of asserting several “common-law defenses,” ultimately preventing employees from recovering monetary relief for their on-the-job injuries.[3] Before the codification of Alabama’s Workers’ Compensation Act, employers and co-employees could assert the common-law defenses of “contributory negligence, assumption of risk, and [the] fellow servant doctrine” to limit recovery for workplace injuries.[4]

Two key features of the Act—which have recently become a point of contention—are the exclusivity provision[5] and the non-severability clause.[6] The exclusivity provision ultimately bars a litigant from initiating a negligence action against their employer to recover damages for injuries or death resulting from a workplace accident.[7] In other words, the exclusivity provision provides a blanket of substantive immunity for employers receiving coverage under the Act, shielding the employer from the exorbitant costs of litigation, unpredictable pay-outs due to the growing trend of nuclear verdicts, and detrimental impacts to commercial productivity that constantly having to litigate workplace injuries would incur.[8] At the same time, the provision ultimately preserves the efficacy of the State’s judicial system, by ensuring the courts are not bogged down by excessive cases. The tradeoff is that employees may receive less than desirable monetary relief afforded by the Act; however, where an employee would be without due compensation until the entering of a final judgment under the common-law system, the Act guarantees that an employee will receive weekly compensation until the conclusion of their workers’ compensation case.[9]

The art of encouraging legislative reform has oft been left to lobbyists and the judiciary.[10] Remaining mindful of the centuries-old doctrine of stare decisis, the latter has been successful in orchestrating reform through masterfully crafted opinions, nudging legislatures to enact change, all the while showing deference to constitutionally vested powers of the coequal branches of government.

However, as of late, a concerted effort has commenced across the state of Alabama to abrogate its Workers’ Compensation Act. Through creative and carefully crafted arguments, challenges have been launched questioning the constitutional standing of the Act.[11] Below is a detailed analysis of the most recent case the Alabama Supreme Court has reviewed regarding the constitutionality of Alabama’s Workers’ Compensation Act.

Crenshaw v. Sonic Drive in of Greenville, Inc.

In Crenshaw v. Sonic Drive in of Greenville, Inc., the Alabama Supreme Court was tasked with determining the constitutionality of Alabama’s Workers Compensation Act.[12] Crenshaw involved a minor’s parent bringing a negligence action against Sonic, due to injuries the minor sustained  from an accident “‘arising out and in the course of [the minor’s] employment’ with [the restaurant].”[13]  Although the events giving rise to the plaintiff’s cause of action occurred while in the line and scope of their employment, the plaintiff’s complaint was devoid of any request for relief via workers’ compensation benefits.[14] Subsequently, Sonic filed a dispositive motion contending that the plaintiff, by asserting a cause of action under the common law theory of negligence, failed to state a claim upon which relief may be granted because the plaintiff’s negligence claim is “barred by the exclusive remedy provision of the Act.”[15]

Crenshaw contends that the Act specifically violates Article I, § 13, of the Alabama Constitution of 2022,[16] because the Act does not contain a mutually elective feature allowing an employee to voluntarily “opt out of [workers’ compensation] coverage.”[17] Crenshaw supports his position by focusing on two decisions from 1978, namely, Grantham v. Denke[18]and Pipkin v. Southern Electrical & Pipefitting Co.[19] The court in Crenshaw acknowledged that the Grantham and Pipkin courts ultimately determined that the Act violated Article  I, § 13 of Alabama’s Constitution[20]; however, the Crenshaw court notes Crenshaw is mistaken in the controlling law, because the “seminal decision regarding challenges to the Act made under § 13”[21] is Reed v. Brunson.[22]

In Reed, the court recognized that Grantham and Pipkin used the “‘common-law-rights approach’ in evaluating whether [the Act] . . . violated § 13.”[23] However, the Reed court explains that in similar challenges to the constitutionality of statutory provisions, the Alabama Supreme Court subjects constitutional challenges, particularly proclaiming violations the “open courts doctrine,” to the “vested rights approach.”[24] Thus, the Crenshaw court elected that the constitutional challenge to the Act should be subjected to scrutiny under the “common-law-rights approach” and the “vested rights approach.”[25]

Under the common law rights approach, legislation will ultimately survive scrutiny and be deemed constitutional if it satisfies one of the two following conditions: “(1) [t]he right is voluntarily relinquished by its possessor in exchange for equivalent benefits or protection, or (2) [t]he legislation eradicates or ameliorates a perceived social evil and is thus a valid exercise of the police power.”[26]

Previously, the court applied the “vested rights approach,” which allows for the Act to “pass[] constitutional muster with respect to Article I, § 13” if “[the plaintiff’s] injuries occurred after the Act became law . . . .”[27] The Crenshaw court ultimately subjected the plaintiff’s constitutional challenge to both the common-law-rights and vested-rights approaches to determine the constitutionality of the Act.[28] The court determined that the Act survives constitutional scrutiny under the vested rights approach, because “[the employee’s] workplace injury occurred after the Act became law. Thus, [the plaintiff] did not have a vested right in a cause of action when the Act was enacted.”[29]

When evaluating the case under the common-law-rights approach, the court determined it was unnecessary to consider the first prong of the two-part test, because the Act only needs to pass one part of the disjunctive test.[30] The court reasons that since the Act satisfies the “the police-power condition” a discussion of the first condition is pretermitted.[31] In reaching this conclusion, the court relied on the legislative intent of the act[32] and a treatise on Alabama’s Workers’ Compensation.[33] Ultimately, the court determined that the exclusivity provision of the Act, was a valid exercise of the legislature’s police power, because the provisions guarantees that an injured employee will receive compensation without the need for incurring extensive legal expenses or having to face the high probability of a disfavorable outcome under the common law system.[34]

Conclusion

The Alabama Supreme Court’s decision in Crenshaw v. Sonic Drive in of Greenville, Inc., underscores the necessity of preserving the statutory compensation scheme, guaranteeing employees adequate monetary relief for workplace injuries, while at the same time illustrating the court’s deference to legislative policy choices in the field of workers’ compensation. By reaffirming that the Act withstands constitutional scrutiny under both the vested-rights and common-law-rights approaches, the court not only preserved the quid pro quo structure of workers’ compensation, but also reinforced the principle that balancing employee remedies with employer liability rests primarily with the legislature.

---

[1] 1 Michael Roberts, Alabama Tort Law § 13.01 (7th 2022).

[2] See Steven W. Ford & James A. Abernathy, II, Historical Development of Alabama’s Workers’ Compensation Law: Remedies Existing Prior to Workers’ Compensation Legislation, 61 Ala. Law. 48, 50 (“The beneficent purposes of the Alabama Act are: to provide certain relief to workers . . . avoid delay of relief associated with taking a tort claim to trial . . . [and] shift[ing] the burden of industrial injuries on the industry that caused the injury.”).

[3] Id.

[4] Id.

[5] Ala. Code § 25-5-52.

[6] Ala. Code § 25-5-17 (“The provisions of this act are expressly declared not to be severable. If any provision of this act shall be adjudged to be invalid by any court of competent jurisdiction, then this entire act shall be invalid and held for naught.”); see also Lawrence T. King, A Tort Defense in Crisis? The Defense That is the Alabama Workers’ Compensation Act, 81 Ala. Law. 136, 137 (quoting Clower v. CVS Caremark Corp., No. 2013-904687 (Jefferson CO. Cir. Ct., Order of May 8, 2017) (Judge Ballard) (“Because the Court finds those statutes to be unconstitutional, the entire Workers’ Compensation Act is declared unconstitutional because of the non-severability statute . . . .”)). Judge Ballard’s ruling was ultimately abandoned due to the parties executing a settlement of all claims prior to the implementation of the ruling or before initiating an appeal of the underlying case. See King, supra.  

[7] Ala. Code § 25-5-52 (“[N]o employee of any employer subject to this chapter, nor the personal representative, surviving spouse, or next of kin of the employee shall have a right to any other method, form, or amount of compensation or damages for an injury or death occasioned by an accident or occupation disease . . . resulting from and while engaged in the actual performance of his or her employment . . . .”).

[8] See Chapman v. Railway F. Co., 101 So. 879, 881 (Ala. 1924) (quoting Jensen v. Southern Pacific Co., 109 N.E. 600, 602 (N.Y. 1915) (“It protects both employer and employee, the former from wasteful suits and extravagant verdicts, the latter from the expense, uncertainties, and delays of litigation in all cases, and from the certainty of defeat if unable to establish a case of actionable negligence.”)).

[9] Id. at §§ 25-5-57(a)(1)-(2); see also 1 Temple Trueblood, Alabama Employment Law                           § 11.02(2)(b) (Mathew Bender) (“[W]age loss benefits are only received following a three-day waiting period.”).

[10] Thomas W. Merrill, Symposium: Justice Stevens and the Chevron Puzzle, 106 Nw. U.L. Rev. 551, 563 (2012).

[11] See e.g., Clower v. CVS Caremark Corp., No. 2013-904687 (Jefferson Co. Cir. Ct., Order of May 8, 2017) (challenging the constitutionality of the $220 per week cap on benefits for permanent partial disability and the Act’s statutory cap on attorney’s fees); Taylor v. Cloud Enterprises Corp., Inc., No. 2023-902537 (Jefferson Co. Cir. Ct., dismissed Mar. 6, 2024) (challenging the constitutionality of the Act because of the $220 per week cap for permanent partial disability benefits, the inability for employees to opt out of coverage, and the Act is “so eroded that it no longer affords an adequate quid pro quo”); Larry Huey v. Stryker Trailers, LLC., No. 2023-900328 (Calhoun Co. Cir. Ct., dismissed Dec. 4, 2023), appeal docketed, No. 2024-0083 (Ala. Feb. 13, 2024), No. 2024-0083 (Ala. dismissed May 28, 2024) (challenging the constitutionality of the Act because of the $220 per week cap for permanent partial disability benefits, the inability for employees to opt out of coverage, and the Act is “so eroded that it no longer affords an adequate quid pro quo”); Weaver v. Frank Norton, LLC, No. 2024-901440 (Jefferson Co. Cir. Ct., dismissed Aug. 5, 2024); Carter-Shepherd v. Royal Furniture Co., No. 2022-900008 (Jefferson Co. Cir. Ct., Order Mar. 21, 2025), appeal docketed, (Ala. Civ. App., Apr. 14, 2025) (challenging the constitutionality of Ala. Code § 25-5-90(a), the attorney fee cap);

[12] No. SC-2024-0081, 2024 Ala. LEXIS 197, at *1 (Dec. 6, 2024).

[13] Crenshaw, 2024 Ala. LEXIS 197, at *1.

[14] Id.

[15] Id. at *1-2 (citing Ala Code §§ 25-5-52 to -53).

[16] Ala. Const. art. I, § 13 (“That all courts shall be open; and that every person, for any injury done him, in his lands, goods, person, or reputation, shall have a remedy by due process of law; and right and justice shall be administered without sale, denial, or delay.”).

[17] Crenshaw, 2024 Ala. LEXIS 197, at *4 (“[O]nly an employer, not an employee, may choose to completely opt out of coverage under the Act.”).

[18] 359 So. 2d 785 (Ala. 1978).

[19] 358 So. 2d 1015 (Ala. 1978).

[20] Crenshaw, 2024 Ala. LEXIS 197, at *4-8.

[21] Id. at *8-9.

[22] 527 So. 2d 102 (Ala. 1988).

[23] Crenshaw, 2024 Ala. LEXIS 197, at *8-9.

[24] Id. (discussing how the court in Reed applied both the “common-law-rights approach” and the “vested rights approach”).

[25] Id. at *21.

[26] Id. at *14 (quoting Reed, 527 So. 2d at 352).

[27] Id. at *13-4 (“When a duty has been breached producing a legal claim for damages, such claimant cannot be denied the benefit of his claim for the absence of a remedy. But this provision does not undertake to preserve existing duties against legislative change made before the breach occurs. There can be no claim for damages to the person or property of anyone except as it follows the breach of a legal duty.”).

[28] Id. at *21-3.

[29] Id. at *22.

[30] Id. at *26.

[31] Id.

[32] Id. at *29 (“The intent of the Alabama Legislature in adopting the exclusivity provisions of the Act was to provide complete immunity to employers and limited immunity to officers, directors, agents, servants or employees of the same employer . . . for all causes of action except those based on willful conduct.”).

[33] Id. at *35 (quoting 1 Terry A. Moore, Alabama Workers’ Compensation §§ 1:4 and 1:5 (2d ed. 2013)) (“By adhering to the concept of fault, Alabama courts assured that most workers who were injured on the job would not receive financial relief from employers. In most cases, employment-related injuries did not arise out of the employer’s negligence. By relying on the concept of negligence . . . the Alabama courts practically foreclosed employees from meaningful redress for the injuries they suffered due to their employment.”).

[34]  Id. at *34-7.

Photo Credit: Michelle Rippy, The Ghost Guns Haunting National Crime Statistics, Federation of American Scientists, (June 6, 2023), https://fas.org/publication/the-ghost-guns-haunting-national-crime-statistics/.

Authored by: Ashley B. Carroll

Ghost guns have been a rising threat to society with the number recovered by law enforcement growing from nearly 1,600% from 2017 to 2023.[1] A study conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) found that during that period 92,702 ghost guns  “which can be obtained without background checks and do not contain serial numbers, were recovered and reported to law enforcement.”[2] Ghost guns recovered in crimes from this timeframe grew exponentially from 1,629 to 27,490.[3] Among the recovered materials, “1,700 of them have been tied to homicides, while another 4,000 have been linked to a number of other violent crimes.”[4] Additionally, the ATF found that there was an astonishing increase of 784% of illicit machine gun conversion devices from 658 in 2019 to 5,816 in 2023.[5] ATF’s director, Steven Dettelbach, voiced his concern over this issue and in his perspective the study supports the need for more regulation especially pertaining to “the need for background checks before firearms are sold.”[6] He stressed the involvement of ghost guns being entangled with another major concern inflicting the United States stating, “[t]he data show[s] that in 60% of trafficking investigations, the end recipient of a trafficking firearm is a convicted felon.”[7]

Ghost guns, an informal expression denoting the more technical term privately made firearms (PMFs), “are firearms (including a frame or a receiver) that have been completed, assembled or otherwise produced by a person other than a licensed manufacturer.”[8] These ghost guns are typically produced and sold by licensed manufacturers without any serial numbers.[9] The ATF has recognized 10 different types of PMFs to include: “pistol, revolver, rifle, shotgun, frame or receiver, machinegun conversion device (MCD), destructive device, machinegun, firearm silencer, and any other weapon.”[10] The ATF points out however, that not all of these devices are illegal or are required to be branded with a serial number.[11]

The Gun Control Act of 1968 (GCA) was passed to prevent firearms from landing in the hands of criminals and to aid law enforcement in investigative measures involving firearms.[12] The GCA accomplished this by requiring the firearm industry to comply with stricter licensing requirements and regulation which barred the sale of firearms and ammunition to felons and other prohibited persons.[13] Firearm as defined in the GCA is “(A) any weapon (including a starter gun) …which will or is designed to or may readily be converted to expel a projectile by the action of an explosive; [and] (B) the frame or receiver of any such weapon.”[14] With the rapid development of weapon parts kits that have changed the way guns are made and sold, it has provided a way for these ghost guns, typically assembled at home, to evade the GCA’s definition of a firearm.[15] In 2022, in order to address concerns surrounding this issue, the ATF established a rule that would alter the interpretation of the GCA “to cover weapon part kits that are ‘designed to or may readily be converted to expel a projectile’[16] and ‘partially complete, disassembled, or nonfunctional’[17] frames or receivers.”[18] This decision sparked widespread controversy among gun manufacturers alongside others who protested this change by filing “a facial challenge under the American Procedure Act, arguing that the GCA cannot be read to reach weapon parts kits or unfinished frames or receivers.”[19] The district court ruled in favor of the gun manufacturers and vacated ATF’s new interpretation of the rule.[20] The Fifth Circuit affirmed this decision, “holding that § 921(a)(3)(A) categorically does not reach weapon parts kits regardless of completeness or ease of assembly, and that § 921(a)(3)(B) reaches only finished frames and receivers.”[21]

The conflict surrounding the regulation of ghost guns was recently decided on March 26, 2025, in the Supreme Court case of Bondi v. VanDerStok.[22] The Court first addressed subsection (A) of §921(a)(3) which sets out two requirements.[23] The first requires a weapon to be present.[24] The second requires that the weapon “be able to expel a projectile by the action of an explosive, deigned to do so, or susceptible of ready conversion to operate that way.”[25] Those opposed to the interpretation of this subsection under §478.11’s new provisions contend that no weapon parts kits can successfully satisfy the two requirements as noted above.[26] The Polymer80’s “Buy Build Shoot” kit is presented as an example to show that there are in fact at least some weapon parts kits that do satisfy both of the requirements.[27]

Three points are raised in support of the “Buy Build Shoot” kit along with other weapon parts kits satisfying the two requirements under subsection (A) of §921(a)(3).[28] The first point considers the plain language of the word weapon itself.[29] The Court recognizes the word weapon as an artifact noun – “a word for a thing created by humans. Artifact nouns are typically ‘characterized by an intended function,’ rather than by ‘some ineffable “natural essence.'”‘[30] A “Buy Build Shoot” kit, as the Court describes, clearly fits into this definition; even though it might take time to assemble, it is sold with all of the essential components and “its intended function as [an] instrument of combat is obvious.”[31] The second point looks to how the statute itself addresses the word weapon.[32] The term weapon in the statute includes “a starter gun” within its definition.[33] A starter gun does not come ready to use live fire and would require assembly in order to be used for that purpose; yet before it is assembled, “the statute teaches that . . . it is a ‘weapon’ before anyone invests that work.”[34] This same logic, the Court asserts, should be applied on weapon part kits such as the “Buy Build kit”.[35] The third point also looks to the words in the statute that include weapons that are “‘designed’ to accomplish that function (“‘expel a projectile by the action of an explosive'”) or ‘capable of being readily . . . converted’ to do so.”[36] This language, known as the “ready conversion” test, has been applied to starter guns.[37] The “Buy Build Shoot” kit, for example, passes this test as it can be readily converted into a firearm without any “more time, effort, expertise, or specialized tools to complete” compared to a starter gun.[38]

The Court then moved to examine whether subsection (B) of § 921(a)(3) regarding frames or receivers is facially inconsistent with ATF’s new interpretation in § 478.12(c).[39] To decipher this, the complete frame of a Glock-variant firearm and a partially complete Polymer80 frame were compared.[40] The main difference, the Court pointed out, are tabs located on the Polymer80 frame that “‘are easily removable by a person with novice skill using common tools . . . within minutes.”[41] After the tabs are removed a “few holes are drilled for the pins that hold [other] parts in place . . . [and] the Polymer80 product is a fully functional frame.”[42] Just as the word weapon above was defined as an artifact noun, the terms “frame’ and “receiver” in subsection (B) are also artifact nouns. Under this reasoning, the Court maintains these terms can be described as partially completed items which qualifies the Polymer80 to fall within this definition.[43] The use of the word frame and receiver, under the GCA in other sections, was also supportive to the Court’s analysis.[44] They look to how these words were interpreted under §923(i) that includes some unfinished frames or receivers within the definition stating, “it is hard to see how those same words might bear a more restrictive meaning when they appear just a few sections away in § 921(a)(3)(B).”[45] In this instance the Court rejects the “categorical conclusion” of the GCA regulating only finished frames or receivers and interprets it to regulate “at least some ‘partially complete’ frames or receivers.”[46]

The Court in VanDerStok has recognized that subsequent cases may give rise to additional and more complex questions regarding the control of ghost guns under ATF’s regulations.[47] In June, following this decision, gun manufacturer plaintiffs in VanDerStok, along with others, moved “for a preliminary injunction on the grounds that [this new ATF] rule violates the Fifth Amendment’s Due Process Clause and the Second Amendment.[48] Additionally, the Trump administration may decide to intervene by repealing the new rule.[49] The Attorney General, under the current administration, has been ordered to review ATF rules passed during the Biden Administration to ensure they are consistent with the Second Amendment and gun rights.[50]

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[1] Sarah N. Lynch, Number of Ghost Guns Recovered at Crime Scenes has Surged since 2017, Study Shows, Reuters, (Jan. 8, 2025), https://www.reuters.com/world/us/number-ghost-guns-recovered-crime-scenes-has-surged-since-2017-study-shows-2025-01-08/.

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Lynch, supra note 1.

[7] Id.

[8] Gun Control Act, Bureau of Alcohol, Tobacco, Firearms, and Explosives, https://www.atf.gov/rules-and-regulations/laws-alcohol-tobacco-firearms-and-explosives/gun-control-act (last visited October 5, 2025).

[9] Id.

[10] Id.

[11] Id.

[12] Pub. L. No. 90-618, 82 Stat.1213 (1968).

[13] Gun Control Act, Bureau of Alcohol, Tobacco, Firearms, and Explosives, https://www.atf.gov/rules-and-regulations/laws-alcohol-tobacco-firearms-and-explosives/gun-control-act (last visited October 5, 2025).

[14] 18 U.S.C. § 921(a)(3); See Bondi v. VanDerStok, 604 U.S. 458 (2025).

[15] VanDerStok, 604 U.S. at 458.

[16] 27 C.F.R. § 478.11; VanDerStok, 604 U.S. at 458.

[17] 27 C.F.R. § 478.12(c); VanDerStok, 604 U.S. at 458.

[18] VanDerStok, 604 U.S. at 458.

[19] Id.

[20] Id.

[21] Id.

[22] Id.

[23] Id. at 468.

[24] VanDerStok, 604 U.S. at 468.

[25] Id.

[26] Id.

[27] See id. (The “‘Buy Build Shoot’ kit comes with ‘all of the necessary components to build’ a Glock-variant semiautomatic pistol. And it is so easy to assemble that, in an ATF test, an individual who had never before encountered the kit was able to produce a gun from it in 21 minutes using only ‘common’ tools and instructions found in publicly available YouTube videos.”)

[28] Id. at 470-72.

[29] Id. at 470.

[30] VanDerStok, 604 U.S. at 470.

[31] Id. at 471.

[32] Id.

[33] 18 U.S.C. § 921(a)(3)(A); VanDerStok, 604 U.S. at 471.

[34] VanDerStok, 604 U.S. at 471.

[35] Id.

[36] 18 U.S.C. §921(a)(3)(A); VanDerStok, 604 U.S. at 471-72.

[37] VanDerStok, 604 U.S. at 472.

[38] Id.

[39] Id. at 477.

[40] Id. at 478.

[41] Id. at 478-79.

[42] Id. at 479.

[43] VanDerStok, 604 U.S. at 479.

[44] Id.

[45] Id.

[46] 27 C.F.R. § 478.12; VanDerStok, 604 U.S. at 477.

[47] VanDerStok, 604 U.S. at 473.

[48] Andrew Touma, How are States Responding to VanDerStok, Duke Center for Firearms Law, (Aug. 27, 2025), https://firearmslaw.duke.edu/2025/08/how-are-states-responding-to-vanderstok.

[49] Id.

[50] Id.

Photo Credit: How We Can Help: Business Loan Solutions, Pure Business Finance (September 29, 2025), https://purebusinessfinance.co.uk/business-loans/.

Authored by: Benjamin Cole Parker

If payday loans grew up and went to business school, they’d look a lot like merchant cash advances, and bankruptcy courts generally aren’t buying such a disguise.

A merchant cash advance (“MCA”) is a substitute form of financing used by businesses to quickly obtain lump sums of cash in exchange future accounts receivables and sales, plus fees.[1] MCAs can prove useful, as they offer rapid funding, repayments tied solely to sales, and easy qualification criteria – especially for businesses with poor credit.[2] Nevertheless, the cash injections afforded by MCAs carry “plainly exorbitant”[3] rates, impede cash flow with high payment frequency, and can leave a business vulnerable due to lax industry regulations.[4] With the line on MCAs blurred between a loan or a sale, the bankruptcy world is seeing ripple effects.

In examining an MCA through a bankruptcy lens, the categorization of the advance as a sale or loan has differing implications for the makeup of the bankruptcy estate.[5] Further, the categorization governs the application of the automatic stay, disputes over cash collateral, preferential transfer claims, as well as the debtor’s ability to challenge claims particularly those of usurious interest.[6] Courts ordinarily focus on three factors when analyzing whether the MCA agreement is a loan or sale: (1) whether a reconciliation provision exists; (2) whether there is a finite term; and (3) whether there is recourse in the event of bankruptcy.[7] Importantly, a key distinction lies in whether the “lender ‘is absolutely entitled to repayment under all circumstances.’”[8] Recent trends show that courts are increasingly characterizing these advances as loans, triggering usury laws. [9] Shouldn’t courts embrace such a recharacterization to shield small businesses from exploitation to predatory rates?

On one hand, loan rate caps can safeguard small businesses from abusive lending practices; on the other, lenders offering MCAs might become more selective in lending and could constrain the total credit they made available. As of early 2023, 29% of small businesses cited lack of capital as a reason for failure.[10] In Haymount Urgent Care, the MCAs provided the company a much needed source of cash flow during a period of ‘economic strain’ in spite of allegations of disproportionate fees.[11] So which interest ultimately tips the scale: the risk of reduced credit extensions or the threat of loans burdened with excessive rates?

Recent caselaw does not indicate there is a clear consensus.  However, some courts are showing a growing trending toward classifying the advances as loans. The United States Court of Appeals for the Second Circuit recently upheld the district court’s decision in Fleetwood Servs. LLC, ruling that the MCA was a usurious loan.[12] The district court’s rationale rested on the fact that pursuant to the agreement, “there are virtually no circumstances where, if the accounts receivable would not be sufficient to pay the Purchased Amounts, Richmond would not be absolutely entitled to repayment of that amount by Fleetwood.[13] Alternatively, the U.S. Bankruptcy Court for the Northern District of Illinois found that the MCAs were not loans under New York law but instead sales “in exchange for a portion of [] future receivables…”[14] Still, the judgments and settlements of 2025 keep the ball of uncertainty rolling.

Earlier this year, the New York Attorney General’s (“NYAG”) office cracked down on Yellowstone Capital for over predatory loans the firm made to over 18,000 small businesses across the nation.[15] These predatory loan agreements falsely used MCA language – e.g. “Purchase and Sale of Future Receivables – in order to lure businesses in and impose inflates rates.[16] NYAG’s office and Letitia James unveiled a judgment and settlement against Yellowstone Capital as well as its affiliates and officers for over $1 billion in its campaign to squash such predatory lending.[17] The settlement highlights the force with which states are cracking down on exploitative financing, but ironically, the NYAG’s office explicitly stated they do not condemn MCA practice as a whole.[18] There is no question that certain MCA use is highly criticized, but there seems to be little doubt that such lending offers critical financing for small businesses needed alternative funding.

Following such an enormous settlement, a New York court ruled on September 24, 2025, in an important state law decision, that a cash advance transaction between Apollo Funding and Dave Reilly was not a loan.[19] Using the three-factor test, the judge found no evidence of a disguised loan since the agreement allowed adjustments of payment, did not have a fixed term, and did not make bankruptcy an event of default.[20] Such a ruling complicates the trend of characterizing the agreements as loans but underscores the fact that carefully drafted agreements can still be found to be true sales of receivables.[21] Per the NYAG’s office, lenders “would be well served to review their contractual arrangements and operations in light of the issues that the identified in the Yellowstone complaint.”[22]

Ultimately, the MCA landscape remains subject to a delicate balancing scale. There is little doubt that courts are increasingly scrutinizing such agreements, and the Yellowstone settlement seems to indicate that state officials are now on high alert regarding these transactions. Two questions appear to be at the front line of the MCA conversation: (1) how will lenders adjust their pricing, scheduling, and agreement standards to account for heightening scrutiny from authorities, and (2) how far will judges and regulators go in cracking down on predatory prices without suppressing legitimate MCA financing? The future remains anything but certain, yet courts and regulators alike are beginning to sketch the outline of the alternative financing landscape. One thing is certain: the façade of predatory lenders passing of exploitative loans as equitable receivers is nearing an end.

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[1] Update on Merchant Cash Advances: Quick Money Paybacks Are Still Hell, Branson Law, PLLC (March 17, 2025), https://www.bransonlaw.com/blog/update-on-merchant-cash-advances-quick-money-paybacks-are-still-hell.

[2] Eddie Rybarski et al., The Pros and Cons of Merchant Cash Advances, ondeck (August 22, 2024), https://www.ondeck.com/resources/pros-and-cons-merchant-cash-advances.

[3] Haymount Urgent Care PC v. GoFund Advance, LLC, 609 F. Supp. 3d 237, 250 (S.D.N.Y. 2022).

[4] Jamie Johnson et al., Pros and Cons of Merchant Cash Advance Loans, Business.com, (April 28, 2025), https://www.business.com/articles/pros-and-cons-of-merchant-cash-advance-loans.

[5] See Robert D. Aicher William J., Characterization of A Transfer of Receivables As A Sale or A Secured Loan Upon Bankruptcy of the Transferor, 65 Am. Bankr. L.J. 181, 185 (1991) (underscoring the fact that UCC reflects no intention to provide guidance on the sale/loan categorization).

[6] In re Shoot The Moon, LLC, 635 B.R. 797, 835 (Bankr. D. Mont. 2021) (holding that a downward adjustment of the MCA fee was warranted).

[7] Lateral Recovery, LLC v. Cap. Merch. Servs., LLC, 632 F. Supp. 3d 402, 452 (S.D.N.Y. 2022).

[8] Id.

[9] Id. at 466.

[10] Maddie Shepherd, Small Business Lending Statistics and Trends, fundera by nerdwallet (January 23, 2023), https://www.fundera.com/resources/small-business-lending-statistics.  

[11] 609 F. Supp. 3d 237 at 172.

[12] Fleetwood Servs., LLC v. Richmond Cap. Grp. LLC, No. 22-1885-CV, 2023 WL 3882697, at *2 (2d Cir. June 8, 2023), Aff’g Fleetwood Servs., LLC v. Ram Cap. Funding, LLC, No. 20-CV-5120 (LJL), 2022 WL 1997207, at *20 (S.D.N.Y. June 6, 2022).

[13] Fleetwood Servs., LLC, No. 20-CV-5120 (LJL), 2022 WL 1997207, at *13.

[14] In re Hill, 589 B.R. 614, 630 (Bankr. N.D. Ill. 2018).

[15] Parag Patel et al., NY Attorney General Secures $1 Billion-Plus Judgment For Illegal Loans Misrepresented as Merchant Cash Advances, Latham and Watkins LLP, Global Fintech and Digital Assets Blog (February 7, 2025), https://www.fintechanddigitalassets.com/2025/02/ny-attorney-general-secures-1-billion-judgment-for-illegal-loans-misrepresented-as-merchant-cash-advances.

[16] Id. (“Overcollection from merchants was a frequent occurrence, such as daily payments debited from merchants’ bank accounts even after the agreed amount was paid back in full.”)

[17] Id.

[18] Id.

[19] Apollo Funding Co. v. Dave Reilly Constr., LLC, No. 2024-03453, 2025 WL 2714439, at *2 (N.Y. App. Div. Sept. 24, 2025).

[20] Id.

[21] Id.

[22] Parag Patel, supra note 15 (noting that various states continue to scrutinize MCAs).

Photo Credit: Josh Moon, High chemical levels in water near Decatur landfill concern environmental group, ADEM, Alabama Political Reporter, June 25, 2020, https://www.alreporter.com/2020/06/25/high-levels-of-chemicals-in-groundwater-at-decatur-landfill-concerns-environmental-group-adem/.

Authored by: Jaylee R. Schroeder

For the first time in 20 years, the U.S. Environmental Protection Agency (EPA) established enforceable limits on the levels of six different perfluoroalkyl and polyfluoroalkyl substances (PFAS) that can be in drinking water under the final National Primary Drinking Water Regulation (NPDWR) by 2029.[1] PFAS, also known as forever chemicals, are a group of almost 15,000 synthetic chemicals that are in hundreds of daily household items, foods, water sources, and soil.[2] They are resistant to disintegration, remain in the environment for an unknown amount of time, and accumulate within the body.[3] PFAS in very low concentrations can cause harm to “the reproductive system, [have] developmental effects, increase risk of certain cancers, reduce immune response . . . increase cholesterol levels” and have been linked to numerous other health conditions.[4] Fifty percent of the nation’s rivers and streams contain PFAS, which serves an estimated 200 million Americans, as well as 20% of private wells being contaminated.[5] They are estimated to be detectable in the bloodstream of 98% of Americans.[6] This amount of inadvertent absorption is concerning as no amount of PFAS are considered to be safe for consumption.[7] There is still uncertainty surrounding exactly how dangerous PFAS are and how best to protect human health and the environment from them.  

The EPA has the authority to set national standards for the amount of contaminants that can found in drinking water under the Safe Drinking Water Act (SDWA) and can require the monitoring of public water systems for the levels of specified PFAS.[8] They also can investigate and require clean-up measures or reimbursement for clean-up measures from responsible parties that have released hazardous substances in the air, soil, water, and groundwater under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).[9] Currently under the new NPDWR, public water systems have until 2027 to complete initial monitoring and will then be subject to ongoing compliance monitoring, must provide the public with the levels of PFAS in their drinking water, and have until 2029 to implement solutions, to take action to reduce elevated PFAS levels and must notify the public of any violations.[10] In contrast, waste materials containing PFAS alone do not have any regulatory requirements by the EPA regarding their treatment, destruction, and disposal as they are not considered to be hazardous.[11] The EPA has designated two PFAS, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), as hazardous under CERCLA, which will require reporting of any known releases of those chemicals.[12] The EPA has also proposed listing more PFAS as hazardous under the Resource Conservation and Recovery Act (RCRA).[13]

Alabama administers all of the major federal environmental laws, including the Clean Water and Safe Drinking Water acts.[14] The Alabama Department of Environmental Management (ADEM) was created with the passage of the Alabama Environmental Management Act in 1982 to create a comprehensive program that oversees all of the state’s environmental management.[15] Currently, ADEM follows the EPA’s NPDWR and the Fifth and Sixth Unregulated Contaminant Monitoring Rule to monitor new unregulated PFAS contaminants and identifies future potential ones to monitor.[16] ADEM is also the state agency responsible for enforcing regulations of the disposal of solid and hazardous waste under the federal Solid Waste Disposal Act.[17] The Alabama Hazardous Waste Management and Minimization Act of 1978 was enacted to “encourage the minimization of hazardous waste generation, transportation, and land disposal.[18] ADEM requires a facility that wishes to discharge pollutants into the state’s water sources to obtain a National Pollutant Discharge Elimination System (NPDES) permit.[19] Businesses are also required to get a State Indirect Discharge (SID) permit if they discharge large amounts of wastewater into treatment facilities.[20] Alabama Code § 22-22A-5(18)(c) gives ADEM the authority to impose civil penalties on landfills for violations of hazardous waste regulations that can be no more than $25,000.00 for each separate violation and a total amount of no more than $250,000.00.[21] ADEM cannot fine or make responsible parties clean-up PFAS pollution that has been released into ground water or other bodies of water because the EPA has not set any enforceable limits.[22] While PFAS are mainly being regulated for the potential health hazards of people through clean drinking water, that still leads to questions about the long-term effects of PFAS contamination in other under-regulated water sources.

As of now, there are three main technologies, that are used to destroy or contain PFAS waste: thermal treatment, landfills, and underground injection.[23] While incineration is the most common way that PFAS are destroyed, it still disperses PFAS into the air and there is uncertainty surrounding the amount of pollution it generates based on limited research.[24] Since destroying PFAS is limited, PFAS-containing waste are also sent for disposal in hazardous waste landfills. When a landfill is selected as the disposal option and PFAS levels are elevated, the EPA recommends using hazardous waste landfills because they have leachate emission protections, but PFAS emissions have been found to be more elevated than previously known.[25] Underground injection wells are used to protect underground sources of drinking water and have the lowest potential for environmental releases since they are deep below the surface. Problems with this option include a limited number of wells accepting PFAS, well location issues, and transportation possibly not being feasible.[26] Every type of destroying or disposal technique has some type of environmental impact and involves a balancing act of what is the best course of action to cause the least amount of damage possible.

Landfills are a major source of PFAS pollution, stemming both from products being flushed down household drains and from other states transporting PFA-laden waste to be disposed of in Alabama’s landfills instead of their own. [27] While landfills are strategically built to be long-lasting and are considered to be the safest option for disposal, they always have a risk of contamination from failing over time.[28] One such example is the Emelle commercial hazardous waste landfill, which has recently received over 38,500 gallons of firefighting foam that contained PFAS from a Wisconsin clean-up project.[29] While there are no current reports of contamination of drinking water, the landfill has a history of environmental violations, including cancer-causing PCBs leaching into wells, drainage ditches, and swamps located outside the landfill.[30] Another example is in Tallassee, Alabama, where a recent lawsuit has been filed against Stone’s Throw Landfill for knowingly releasing cancer-causing PFAS leachate into the local water supply by failing to make repairs that would’ve prevented the contamination.[31] Leachate is a black, foul-smelling liquid that is “formed when water seeps through landfill material and takes on the chemical characteristics of the waste through which is passes,” and is toxic to human health because it generally contains PFAS and other pollutants.[32] Stone’s Throw Landfill sits at a particularly troublesome location at the top of a ridge, leading to polluted water draining from the landfill.[33]

Decatur, Alabama has had a persistent PFAS problem that has led to numerous lawsuits. In 2019, 3M had to pay the West Morgan East Lawrence Water Authority a $35 million settlement for drinking water contamination of PFAS that “enter[ed] the Tennessee River from a landfill, groundwater, and runoff.”[34] In 2020, an abandoned landfill was found to have high levels of PFAS and PFOS in water flowing from the landfill.[35] ADEM responded that they are working with the EPA to develop a plan for the contamination but notes that it cannot impose fines or force remediation efforts by the responsible parties or issue contamination warnings to the public because the EPA has not set “acceptable PFAS/PFOS limits for ground water or bodies of water.”[36] Another major settlement against 3M was reached in 2023 for $98.4 million for more PFAS contamination into the Tennessee River from a chemical plant.[37] The settlement amounts went to water agencies and environmental groups in order to fund resolutions like new filtration systems or to fund cleanup costs, but leaves residents having to pursue legal recourse individually for their resulting health problems.[38] Large settlements from these environmental violation suits mainly benefit large corporations involved with the communities still suffering from the long-term effects of the pollution.         

The problem of PFAS contamination in Alabama is far from over, with at least four water systems still having reported concentrations of PFAS up to 40 parts per trillion.[39] Landfills in Alabama are still having continuous pollution problems, with most “solutions” by ADEM consisting of repeated small fines.[40] Since PFAS chemicals must be removed by specialized means, it is an expensive task to build and maintain removal equipment, which could take years for the agencies to acquire enough funding.[41] While the EPA has taken a progressive step towards PFAS regulation with the NPDWR and listing two PFAS chemicals as hazardous, there still needs to be more research concerning how dangerous PFAS are to human health in order to expand the regulations as needed.

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[1] Per- and Polyfluoroalkyl Substances (PFAS), EPA (Feb. 19, 2025),  https://www.epa.gov/sdwa/and-polyfluoroalkyl-substances-pfas; Bennet Goldstein, Wisconsin PFAS cleanup shifts toxic burden to Alabama’s Black Belt, Wisconsin Watch (Oct. 25, 2023), https://pbswisconsin.org/news-item/wisconsin-pfas-cleanup-shifts-toxic-burden-to-alabamas-black-belt/, (“It warned against consuming more than 0.004 parts per trillion (ppt) and 0.02 ppt of the two compounds . . . equat[ing] to about 4 drops and 20 drops of water in 1,000 Olympic-sized swimming pools.”)

[2]Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS), Nat’l Inst. of Env’t Health Sciences (Mar. 6, 2025), https://www.niehs.nih.gov/health/topics/agents/pfc#:~:text=Per%2D%20and%20polyfluoroalkyl%20substances%20(PFAS,degrade%20easily%20in%20the%20environment.

[3] Id.

[4] Id.

[5] Morgan Coulson, The Omnipresence of PFAS – and What We Can Do About Them, John Hopkins Bloomberg School of Public Health (Mar. 28, 2024), https://publichealth.jhu.edu/2024/what-to-know-about-pfas.

[6] Nat’l Inst. of Env’t Health Sciences, supra note 2; Coulson, supra note 5.

[7] Wisconsin Watch, What should I do about PFAS in my water?, PBS Wisconsin (Nov. 28, 2022), https://pbswisconsin.org/news-item/what-should-i-do-about-pfas-in-my-water/.

[8] EPA, supra note 1; Safe Drinking Water Act, EPA (Jan. 23, 2025), https://www.epa.gov/sdwa/overview-safe-drinking-water-act#:~:text=The%20Safe%20Drinking%20Water%20Act%20(SDWA)%20was%20originally%20passed%20by,(pdf)%20(368.27%20KB).

[9] Elizabeth Haskins & Noelle E. Wooten, PFOA and PFOS Are Now Hazardous Substances Under CERCLA, Baker Donelson (July 8, 2024), https://www.bakerdonelson.com/pfoa-and-pfos-are-now-hazardous-substances-under-cercla.

[10] Per- and Polyfluoroalkyl Substances (PFAS) in Drinking Water, ADEM (last visited Mar. 27, 2025), https://web-prd.adem.alabama.gov/water/and-polyfluoroalkyl-substances-pfas-drinking-water#:~:text=In%20accordance%20with%20ADEM%20Admin,documents%20for%20your%20water%20system.

[11] Elizabeth Haskins & Noelle E. Wooten, Is “Forever” Really Forever? EPA’s New Guidance on PFAS Destruction and Disposal, Baker Donelson (July 16, 2024), https://www.bakerdonelson.com/Is-Forever-Really-Forever-EPAs-New-Guidance-on-PFAS-Destruction-and-Disposal#:~:text=EPA’s%20updated%20Interim%20Guidance%20reviews,underground%20sources%20of%20drinking%20water.

[12] Haskins & Wooten, supra note 11.

[13] Haskins & Wooten, supra note 11.

[14] ADEM Overview, ADEM (last visited Mar. 27, 2025), https://web-prd.adem.alabama.gov/adem-overview.

[15] Id.

[16] Id.

[17] Chemical Waste Management, Inc., Consent Order No. 23-XXX-CHW, https://adem.alabama.gov/newsEvents/notices/sep23/pdfs/9chem.pdf.

[18] Alabama Code § 22-30-2(2023) – Legislative Findings, JUSTIA (last visited Mar. 27, 2025), https://law.justia.com/codes/alabama/title-22/title-1/chapter-30/section-22-30-2/#:~:text=It%20is%20also%20the%20intent%20of%20the,consistency%20with%20the%20Federal%20Hazardous%20Waste%20Management.

[19] NPDES Permits, Alabama Department of Environmental Management (last visited Mar. 27, 2025), https://adem.alabama.gov/programs/water/permitting.cnt.

[20] State Indirect Discharge (SID) Permit Information, Alabama Department of Environmental Management (last visited Mar. 27, 2025), https://adem.alabama.gov/programs/water/sidinfo.cnt.

[21] Ala. Code § 22-22A-5(18)(c).

[22] Josh Moon, High chemical levels in water near Decatur landfill concern environmental group, ADEM, Alabama Political Reporter (June 25, 2020), https://www.alreporter.com/2020/06/25/high-levels-of-chemicals-in-groundwater-at-decatur-landfill-concerns-environmental-group-adem/.

[23] Haskins & Wooten, supra note 11.

[24] Interim Guidance on the Destruction and Disposal of Perfluoroalkyl and Polyfluoroalkyl Substances and Materials Containing Perfluoroalkyl and Polyfluoroalkyl Substances – Version 2 (2024), Interim Guidance For Public Comment at 12, (Apr. 8, 2024), https://www.epa.gov/system/files/documents/2024-04/2024-interim-guidance-on-pfas-destruction-and-disposal.pdf; Coulson, supra note 6; Goldstein, supra note 1.

[25] Haskins & Wooten, supra note 11.

[26] Id.

[27] Coulson, supra note 5; Goldstein, supra note 1.

[28] Sarah Whites-Koditschek, Alabama Has Become the Nation’s Toxic Waste Disposal, Governing (Oct. 20, 2023), https://www.governing.com/infrastructure/alabama-has-become-the-nations-toxic-waste-disposal.

[29] Goldstein, supra note 1.

[30] Goldstein, supra note 1; Curt Davidson, Emelle, Alabama: Home of the Nation’s Largest Hazardous Waste Landfill, University of Michigan (Mar. 20, 2017), http://umich.edu/~snre492/Jones/emelle.htm.

[31] Press Release, Beasley Allen Files Lawsuit Against Tallassee Landfill Leaking Toxic Pollutants Into Local Water Supplies, Beasley Allen Law Firm (Feb. 14, 2023), https://www.beasleyallen.com/article/beasley-allen-files-lawsuit-against-tallassee-landfill-leaking-toxic-pollutants-into-local-water-supplies/.

[32] Id.

[33] Transcript of Env’t Just. Episode Eight, VT. L. SCH. ENV’T LAW CTR., 4-5, 16 (Feb. 2020), https://www.vermontlaw.edu/sites/default/files/2020-02/HHEep8_transcript-environmental-justice.pdf.

[34] 3M, Alabama communities reach $98M pollution settlement, AP News (Oct. 19, 2021), https://apnews.com/article/business-environment-and-nature-alabama-lawsuits-environment-a4dda1162d018987d691064b02873557.

[35] Josh Moon, High chemical levels in water near Decatur landfill concern environmental group, ADEM, Alabama Political Reporter (June 25, 2020), https://www.alreporter.com/2020/06/25/high-levels-of-chemicals-in-groundwater-at-decatur-landfill-concerns-environmental-group-adem/.

[36] Id.

[37] AP News, supra note 34.

[38] Alabama Water Contamination Lawsuits, McCutcheon & Hammer Attorneys At Law (Jan. 8, 2024), https://mhatty.com/alabama-water-contamination-claims/#:~:text=One%20major%20settlement%20was%20reached,from%20the%20affected%20water%20supply.

[39] Dennis Pillion, Alabama utilities struggle to meet new limits on forever chemicals in drinking water, AL.com (Apr. 17, 2024), https://www.al.com/news/2024/04/alabama-utilities-struggle-to-meet-new-limits-on-forever-chemicals-in-drinking-water.html#:~:text=%E2%80%9CSince%202020%2C%20ADEM%20has%20required,to%20help%20them%20remediate%20problems.%E2%80%9D.

[40] Whites-Koditschek, supra note 28.

[41] Pillion, supra note 39.

Photo Credit: First Amendment Center, Mahmoud v. Taylor, in First Amendment Center, Middle Tennessee State University, https://firstamendment.mtsu.edu/article/mahmoud-v-taylor/ (last visited Aug. 23, 2025).

Authored by: Justin P. Martin

The Classroom as a Test of Parental Rights

On June 27, 2025, the U.S. Supreme Court delivered a 6–3 ruling in Mahmoud v. Taylor, holding that parents have a constitutional right under the First Amendment’s Free Exercise Clause to opt their children out of school lessons that conflict with their religious beliefs, specifically instruction using LGBTQ+ themed storybooks.[1] This decision unmistakably reaffirmed principles articulated in Wisconsin v. Yoder, in which the Court held that Amish parents could withdraw their children from school after eighth grade, overriding Wisconsin’s compulsory attendance law because it burdened their religious practices.[2]

The facts of Yoder highlight why the case has become so influential. The Amish community believed that high school education beyond eighth grade conflicted with their religious way of life and threatened the cohesion of their community.[3] Wisconsin law required students to attend school until age 16, but the Amish parents argued that sending their children to public high school would expose them to values and experiences contrary to their faith.[4] The Supreme Court sided with the Amish parents, holding that the Free Exercise Clause protected their right to withdraw their children from school after eighth grade.[5] The Court reasoned that the state’s interest in universal education, while important, was not compelling enough to override the parents’ deeply held religious convictions, and that forcing Amish children to remain in school past eighth grade would substantially burden the practice of their religion.[6]

Why Mahmoud Is Not Just About New Facts

In Mahmoud, Justice Alito’s majority opinion explicitly embraced Yoder as a foundational precedent, rejecting claims that Yoder was unique and reinforcing that its broad principle remains intact.[7] The Court emphasized that when a policy imposes a burden similar to the facts in Yoder, strict scrutiny applies even if the law appears neutral or generally applicable.[8] The ruling highlights that Mahmoud is not simply a case about a single school district or a particular curriculum, but about the enduring principle that the state cannot compel children to participate in educational content that conflicts with sincerely held religious beliefs.[9] By framing the issue as one of fundamental parental authority, the Court extended the logic of Yoder to modern educational contexts, signaling that the balance between religious freedom and state interests must be carefully calibrated whenever schooling intersects with deeply held religious beliefs.

The Lineage: Other Landmark Cases Between Yoder and Mahmoud

Several pivotal Supreme Court decisions serve as stepping stones in this doctrinal arc. Long before Yoder, the Court in Pierce v. Society of Sisters recognized that parents, not the State, hold the primary authority to direct their children’s education.[10] The decision famously declared that “the child is not the mere creature of the state.”[11] In West Virginia State Board of Education v. Barnette, the Court protected students and families from compulsory patriotic rituals, affirming that public schools cannot force students to affirm beliefs contrary to their consciences.[12]

Mahmoud v. Taylor: The 2025 Ruling

In Mahmoud, a group of parents in Montgomery County, Maryland, challenged their school district’s cancellation of opt-out permissions for LGBTQ themed storybook lessons.[13] They argued that forced participation undermined their ability to guide their children’s religious upbringing, a core parental liberty established in Yoder.[14] The lower courts, both the district court and the Fourth Circuit, declined to intervene, deeming exposure to differing viewpoints insufficient to constitute a religious burden.[15] But the Supreme Court reversed, ruling that without notice or opt-out provisions, the policy placed an impermissible burden on religious exercise and therefore violated Yoder’s standard.[16]

Justice Alito underscored that the burden was not merely incidental, but posed a very real threat of undermining the parents’ religious values, mirroring the language used in Yoder.[17] The Court’s ruling indicates that public schools must notify parents and allow opt-outs when instructional materials conflict with sincerely held religious beliefs.[18]

Dissenting Voices and Broader Debate

Justice Sotomayor, joined by Justices Kagan and Jackson, warned in dissent that such notice obligations and opt-outs could saddle schools with untenable administrative demands and undercut the inclusive mission of public education.[19] The dissent further argues that by allowing parents to veto LGBTQ inclusion in classrooms, Mahmoud effectively mandates that schools preemptively remove queer content to avoid compliance burdens.[20]

Conclusion: A Continuum of Parental Rights

From Pierce’s declaration that children are not the State’s property, through Barnette’s safeguard against forced ideological instruction, to Yoder’s recognition of religiously rooted parental autonomy, culminating with Mahmoud, the Supreme Court has long recognized that parents retain fundamental constitutional authority over their children’s moral and spiritual development even within public schools. The Mahmoud decision does more than affirm Yoder. It revives a deeply rooted tradition of parental rights under the Free Exercise Clause, reinforcing that religious liberty does not vanish at the schoolhouse gate.

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[1] See generally Mahmoud v. Taylor, 145 S. Ct. (2025).

[2] Wisconsin v. Yoder, 406 U.S. 205, 219 (1972).

[3] Id.

[4] Id. at 218.

[5] Id. at 219.

[6] Id. at 235.

[7] Mahmoud, 145 S. Ct. at 2357 (“[T]here is no reason to conclude that the [Yoder] decision is ‘sui generis’ or ‘tailored to [its] specific evidence[.]’”).

[8] Id. (“[W]e need not ask whether the law at issue is neutral or generally applicable before proceeding to strict scrutiny”).

[9] Id.

[10] Pierce v. Soc’y of the Sisters of the Holy Names of Jesus & Mary, 268 U.S. 510, 535 (1925).

[11] Id.

[12] W. Virginia State Bd. of Educ. v. Barnette, 319 U.S. 624, 642 (1943).

[13] Mahmoud, 145 S. Ct. at 2363.

[14] Id. at 2358.

[15] Id.

[16] Id.

[17] Id. at 2357 (“We have at times relied on [Yoder] as a statement of general principles.”).

[18] Id. at 2364 (“[T]he Board should be ordered to notify them in advance whenever one of the books in question or any other similar book is to be used in any way and to allow them to have their children excused from that instruction.”).

[19] Mahmoud, 145 S. Ct. at 2381 (Sotomayor, J., dissenting).

[20] Id. at 2382 (Sotomayor, J., dissenting).

Photo Credit: Sheetz v. Cnty. of El Dorado, Cal., The Federalist Society, https://fedsoc.org/case/sheetz-v-county-of-el-dorado-california (last visited Feb. 22, 2025).

Authored by: Annabelle F. Holliday

Trial attorneys are increasingly arguing that government-imposed development fees, especially when disconnected from a development’s actual impact, violate the Fifth Amendment’s Takings Clause. In the landmark decision Sheetz v. County of El Dorado, California, the Supreme Court reinforced the constitutional safeguard provided to property owners under the Takings Clause.[1] This case involved a challenge to a traffic impact fee of $23,420 that El Dorado County imposed on the property owner, George Sheetz, as a condition of the issuance of a building permit for his manufactured home.[2] In his challenge, Sheetz correctly contended that the impact fee was not an individualized assessment of the actual impact of his development, but was instead a legislatively mandated exaction that constituted an unconstitutional taking.[2] The Court unanimously held that permit fees created by legislation are not exempt from the constitutional review applied to administrative action, and that the government cannot extort developers by imposing arbitrary or excessive fees.[4] Undoubtedly, the case will be spawning additional litigation and policy adjustments at the local level as municipalities review their fee programs to ensure compliance with the constitutional requirements cited in the case.

The Court’s decision in Sheetz is built upon the Fifth Amendment and previous Supreme Court holdings that have strengthened property rights and mandated municipalities to only exact fees that are constitutionally permitted.[5] The Takings Clause asserts that the government may not take private property for public use without paying just compensation.[6] Accordingly, in Nollan v. California Coastal Commission, the Court introduced the “essential nexus” test by holding that there must be a legitimate connection between what the government seeks and what it justifies as a regulatory need.[7] Building on Nollan, the Court in Dolan v. City of Tigard introduced the “rough proportionality” test.[8] Here, the Court held that even if a government condition meets the nexus requirement, it must also be roughly proportional to the development’s impact.[9] Several years later, in Koontz v. St. Johns River Water Management District, the Court extended these principles, holding that the monetary exactions, such as impact fees, must also meet the same constitutional scrutiny as physical land dedications.[10] In response, trial attorneys have since leveraged Koontz as a precedent to argue that when governments impose fees or conditions that are not directly related to the specific impact of a proposed development, the government is effectively taking private property without just compensation which is a clear violation of the Fifth Amendment.[11] Consequently, in Sheetz, when the county implemented a flat rate scheme according to type and place of development, and not based on a case-by-case determination of the real traffic impact caused by Sheetz’s development, Sheetz argued that the fees did not meet constitutional standards.[12]

Nonetheless, the lower courts held that fee schedules enacted legislatively were not subject to the same kind of scrutiny as administrative actions.[13] Accordingly, this position effectively permitted El Dorado County to utilize its legislative power to impose a flat fee on developers without necessarily tying it to the precise impacts of an individual development. However, on appeal, the Supreme Court’s decision overturned the lower courts’ distinction.[14] In the opinion written by Justice Barrett and unanimously agreed to by the Court, the Court followed Sheetz’s reasoning and dismissed the contention that a legislative exaction was different than an administrative agency exaction.[15] The Court asserted that the Takings Clause makes no distinction between permit conditions imposed by legislation and those imposed through administrative actions.[16] Thus, this holding requires that if a fee is charged by statute or by an administrative proceeding, it must meet the “essential nexus” and “rough proportionality” tests established in Nollan and Dolan.[17] Accordingly, the holding prevents municipal governments from abusing statutory authority to demand excessive fees from property developers.[18]

Consequently, the Sheetz ruling has significant implications for municipalities that use development fees as a source of revenue for public infrastructure improvements. First, by holding legislatively imposed fees to the same strict constitutional requirements as individually tailored administrative conditions, the Court has established an absolute rule that development fees are to be tied directly to the predicted impact of a development. This decision effectively limits the power of governments to approximate flat or discretionary fees that can be utilized to produce revenue at the expense of property holders without a proportionate public gain. Second, the decision reinforces the doctrine that property rights are sacred. Property rights were included in the Constitution not only to protect private property from unauthorized takings, but also to ensure that governments are accountable if they attempt to encumber property with permit requirements or fees.[19] By addressing and then closing the loophole that allowed legislatures to impose fees without individualized review, the Court is able to reaffirm that government power must be exercised in a way that respects property rights. Lastly, although the Supreme Court’s decision leaves unresolved the specifics of how the “rough proportionality” standard will be applied to various types of developments, it makes clear that any condition on a permit will undergo a proportionality analysis.[20] Undoubtedly, the Court’s decision in Sheetz is a victory for property rights and a firm reaffirmation of the principle that government action, whether legislative or administrative, must be subject to strict constitutional scrutiny. This precedent ensures that any fees imposed by the government must be clearly justified by a direct connection to actual community costs imposed by the property development, and thus protecting property owners from government overreach.[21] For trial attorneys, Sheetz provides a powerful tool to challenge unconstitutional land use regulations and fees, and thus empowering developers and property owners to defend their rights when overreach arises.

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[1] See 601 U.S. 267, 279 (2024); U.S. Const. amend. V.

[2] Sheetz, 601 U.S. at 272.

[3] Id.

[4] Id. at 279.

[5] See U.S. Const. amend. V; Dolan v. City of Tigard, 512 U.S. 374, 396 (1994) (stating that the “essential nexus” and “rough proportionality” tests establish the narrow conditions under which the government can lawfully condition permit approval on a property owner dedicating land for public use. First, any required dedication must directly address the negative impacts that the proposed development would have on the public. Second, the government cannot leverage the permitting process to pressure landowners into surrendering property that it would otherwise need to purchase).

[6] U.S. Const. amend. V.

[7] 483 U.S. 825, 841 (1987).

[8] Dolan, 512 U.S. at 391 (“[A] term such as ‘rough proportionality’ best encapsulates what we hold to be the requirement of the Fifth Amendment. No precise mathematical calculation is required, but the city must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development.”).

[9] Id.

[10] 570 U.S. 595, 612 (2013) (“[Holding] that so-called ‘monetary exactions’ must satisfy the nexus and rough proportionality requirements of Nollan and Dolan.”).

[11] Koontz, 570 U.S. at 606.

[12] Sheetz, 601 U.S. at 272.

[13] Id. at 273.

[14] Id. at 279.

[15] Id. at 278.

[16] Id. at 270.

[17] Id.

[18] Id. at 276.

[19] The Editorial Board, The Supreme Court’s Road to El Dorado, Wall Street Journal (Jan. 7, 2024, 4:29 PM), https://www.wsj.com/articles/george-sheetz-v-county-of-el-dorado-property-rights-fifth-amendment-69ebc4c9 (“[A]s James Madison wrote in Federalist No. 10, the ‘great object’ of the Constitution was to secure private property ‘against the danger of such a faction, and at the same time to preserve the spirit and the form of popular government.’”).

[20] Sheetz, 601 U.S. at 284 (Kavanaugh, J., concurring) (“[T]he Court has not previously decided—and today explicitly declines to decide—whether ‘a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development.’”).

[21] Nicole W.C. Yeatman, The government had George Sheetz ‘over a barrel.’ He took his case to the Supreme Court—and won., Pacific Legal Foundation (April 14, 2024), https://pacificlegal.org/sheetz-supreme-court/; Sheetz v. Cnty. of El Dorado: SLF urges Supreme Court to end Takings Clause debate, Southeastern Legal Foundation, https://www.slfliberty.org/case/sheetz-v-county-of-el-dorado/ (last visited Feb. 23, 2025).

Photo Credit: Cody Mello-Klein, Robin Hood or cold-blooded killer? Jury selection and jury nullification will be key in Luigi Mangione’s murder trial, legal expert explains, Northeastern Global News (February 19, 2025), https://news.northeastern.edu/2025/02/19/luigi-mangione-trial-jury/.

Authored by: Kaley E. Breland

As children, we begin to learn some of our most important lessons in morality through the stories of folk heroes. We often continue to search for these larger-than-life characters well into our adult lives, and we generally look to those that represent and fight for a cause that we believe in, even if their actions may be controversial.[1] This raises the question—what happens when someone who society has deemed a modern folk hero is accused of a serious crime, such as murder? Just how far is a jury willing to stretch the law when they are faced with a sympathetic defendant? Is it possible for the defendant to have an impartial and “fair” trial? These are the questions that legal experts are currently grappling with regarding alleged murderer Luigi Mangione—society’s “modern day Robin Hood.”

At 6:44 AM on December 4, 2024, UnitedHealthcare CEO Brian Thompson was fatally shot as he was entering the New York Hilton Midtown by a masked gunman who then fled the scene.[2] The manhunt for the masked shooter lasted for five days before 26-year-old Luigi Mangione was identified and taken into custody on December 9th.[3] Following his arrest, Mangione was charged in a federal court with one count of using a firearm to commit murder, one count of interstate stalking resulting in death, one count of stalking through use of interstate facilities resulting in death, and one count of discharging a firearm that was equipped with a silencer in furtherance of a crime of violence.[4] He has also been indicted by a grand jury in a New York state court on eleven different counts.[5] His state charges include one count of murder in the first degree, which alleges he killed the CEO in an act of terrorism, two counts of murder in the second degree, and various other weapon and forgery charges.[6]

Mangione has been met with an unprecedented level of public sympathy. His supporters liken him to a modern-day Robin Hood, and they justify his alleged actions because they see him as someone who represents their frustrations with both the healthcare industry and the inequality of wealth distribution in the United States.[7] Mangione has received extensive support on social media, where sympathizers make posts that sensationalize Mangione and the motives behind his alleged actions.[8] Many of his supporters have also turned to crowdfunding platforms to raise money to fund Mangione’s defense.[9] Notably, a campaign on the website GiveSendGo raised over $100,000 by December 15, 2024—a mere eleven days after the shooting.[10] As a result of this sympathy, some legal experts have expressed concerns that jury nullification could lead to Mangione’s acquittal.[11]

            Jury nullification is:

[a] jury’s knowing and deliberate rejection of the evidence or refusal to apply the law either because the jury wants to send a message about some social issue that is larger than the case itself or because the result dictated by law is contrary to the jury’s sense of justice, morality, or fairness.[12]

The practice of jury nullification was initially accepted during the American Revolution; however, as the revolution faded, so did the willingness of courts to accept jury nullification, leading to the United States v. Battiste decision, which limited juror independence.[13] In that decision, a Massachusetts district court held that jurors have the power to nullify, but they do not have the moral right to nullify.[14] Further building upon the Battiste holding, the United States Supreme Court in 1895 held that “juries have no right to judge the law,” and the defendant is not entitled to a jury instruction informing jurors of their power to nullify.[15] The majority of courts today follow these holdings when presented with issues of jury nullification.[16]

Some legal experts have expressed concerns that Mangione may not receive a “fair” trial due to the mass amounts of public sympathy he has received, and they cite jury nullification as a huge potential risk.[17] These experts note that social media platforms have amplified the conversation surrounding Brian Thompson’s murder, which has shaped the narrative and also led to the development of polarized opinions on both sides of the issue.[18] As a result of this “trial by media,” activists who sympathize with Mangione’s alleged motives have the ability to “leverage platforms to promote their causes, influencing juror decisions in pursuit of perceived moral justice,” and there have already been instances of these activists advocating for nullification in Mangione’s upcoming trial.[19] Beyond the issue of social media, experts have also noted that a vast majority of Americans have had negative experiences with the American healthcare system, stating that “[i]n New York City, statistically it’s going to be hard to get 12 people where at least some of them are not going to be open to what [Mangione] did.”[20] Overall, these experts warn that the combination of a trial by media and the growing unrest with the American healthcare system could implicate the issue of nullification in Mangione’s trial.

On the other hand, there are some legal experts who do not express the same level of concern about the potential for nullification; rather, they anticipate that the jury will remain loyal to the oath that they took when they were selected to serve on the jury.[21] These experts have warned about the dangers of acquitting Mangione and the impact it could have in encouraging similar attacks in the future.[22] They warn that our legal system is dependent on fair and impartial juries, so setting a precedent that a murderer caught in broad daylight could be acquitted so long as he is sympathetic threatens foundations of our legal system.[23] Syracuse University College of Law professor Gregory Germain notes “[m]any of us hate insurance companies and have had difficult experiences dealing with insurance companies, but that doesn’t mean we think people should be going around murdering insurance executives in the street.”[24]

The trial of Luigi Mangione presents a critical test for the American legal system, highlighting the tension between the rule of law and public sentiment. While his supporters view him as a modern-day Robin Hood, the jury must still determine whether he is guilty of murder based on the evidence presented to them rather than moral justifications. The potential for jury nullification underscores the power and responsibility of jurors in shaping justice, but it also raises concerns about the integrity of our legal system, which relies on juror impartiality. This trial will serve as a case study in how social media, public opinion, and frustrations with systemic issues can influence courtroom proceedings. Ultimately, the outcome of this case will set a precedent for how justice is served when a “trial by media” clashes with the law.

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[1] Peter Suciu, Luigi Mangione Has Become A Social Media Folk Hero, Forbes (December 12, 2024, 9:41 AM), https://www.forbes.com/sites/petersuciu/2024/12/12/luigi-mangione-has-become-a-social-media-folk-hero/ (“The American public has long been captivated by those who seemed to take on the system, even when they employed violence to do so.”).

[2] Chris Looft, Emily Shapiro, & Aaron Katersky, UnitedHealthcare shooting suspect’s timeline before, during, and after the brazen murder, ABC News (December 18, 2024, 9:11 AM), https://abcnews.go.com/US/unitedhealthcare-ceo-shooting-suspects-movements-timeline/story?id=116504579.

[3] Id.

[4] Press Release, U.S. Department of Justice, Luigi Mangione Charged with the Stalking and Murder of UnitedHealthcare CEO Brian Thompson and Use of a Silencer in a Crime of Violence (February 6, 2025) (on file with author).

[5] Emma Tucker, Lauren del Valle, Kara Scannell, & Zoe Sottile, Even for an administrative hearing, Luigi Mangione draws crowds at New York City courthouse, CNN (February 22, 2025,  6:38 AM), https://www.cnn.com/2025/02/21/us/mangione-court-charges-united-ceo-killing/index.html.

[6] Id.

[7] Suciu, supra note 2.

[8] Id.

[9] Peter Suciu, Social Media ‘Sympathy’ For Luigi Mangione Risks Jury Nullification, Forbes (December 16, 2024, 12:12 PM), https://www.forbes.com/sites/petersuciu/2024/12/16/social-media-sympathy-for-luigi-mangione-risks-jury-nullification/.

[10] Id.

[11] Id.

[12] Jury Nullification, Black’s Law Dictionary (12th ed. 2024).

[13] Mary Claire Mulligan, Jury Nullification: Its History and Practice, 33 Colo. Law., Dec. 2004, at 72, 73.

[14] Id. (explaining that the Battiste court was concerned with the uncertainty that results from nullification because it would be “impossible to ascertain the jury’s interpretation of the law”).

[15] Id.

[16] Id.

[17] Suciu, supra note 2.

[18] Id.

[19] Id.

[20] Id.

[21] Safia Samee Ali, Could fandom cause jury nullification in Luigi Mangione trial?, NewsNation (January 29, 2025, 3:02 PM), https://www.newsnationnow.com/crime/fandom-jury-nullification-luigi-mangione-trial/ (“If people think they will get off the hook because a victim is unsympathetic, that may lead to similar attacks . . . In the Mangione case, it’s even more concerning because this appears to be a planned attack.”).

[22] Id.

[23] Id.

[24] Id.