Minimum Competence

Andrew and Gina Leahey

Minimum Competence is your daily companion for legal news, designed to bring you up to speed on the day’s major legal stories during your commute home. Each episode is short, clear, and informative—just enough to make you minimally competent on the key developments in law, policy, and regulation. Whether you’re a lawyer, law student, journalist, or just legal-curious, you’ll get a smart summary without the fluff. A full transcript of each episode is available via the companion newsletter at www.minimumcomp.com. www.minimumcomp.com

  1. Legal News for Tues 3/31 - DOL Wants Crypto in 401(k)s, FTC Privacy Settlement with OkCupid, and GA Gas Tax Holiday Disaster

    HÁ 12 H

    Legal News for Tues 3/31 - DOL Wants Crypto in 401(k)s, FTC Privacy Settlement with OkCupid, and GA Gas Tax Holiday Disaster

    This Day in Legal History: Dominion of Newfoundland Becomes 10th Province On March 31, 1949, the Dominion of Newfoundland officially entered Confederation, becoming Canada’s tenth province under the terms negotiated with the government of Canada. This union followed a series of national referendums in Newfoundland, where voters ultimately chose confederation over alternatives such as responsible government or economic union with the United States. The legal foundation for this transition was established through the British North America Act 1949, which amended Canada’s constitutional framework to admit Newfoundland as a province. These Terms of Union set out the division of powers, financial arrangements, and transitional provisions necessary to integrate Newfoundland into the Canadian federation. One key legal issue involved the assumption of Newfoundland’s public debt by Canada, which required careful fiscal and statutory planning to ensure a smooth transition. The agreement also guaranteed certain social benefits, including family allowances, aligning Newfoundland residents with federal welfare programs already in place across Canada. Additionally, the Terms addressed transportation links, committing Canada to maintaining ferry services and improving infrastructure between Newfoundland and the mainland. Legal provisions were also made for the continuation of Newfoundland’s existing laws until they could be harmonized with Canadian federal and provincial statutes. The union raised constitutional questions about federalism, particularly how a previously self-governing dominion would adapt to a provincial role within Canada’s system. It also required coordination between British and Canadian authorities, as Newfoundland had been under direct British administration prior to confederation. The involvement of British Parliament underscored the imperial legal framework still governing such transitions at the time. Over time, Newfoundland’s legal system was gradually aligned with Canadian norms, though some regional distinctions persisted. This event illustrates the complexity of constitutional amendment and territorial integration within a federal system, particularly when sovereignty is partially transferred. It highlights how legal agreements can structure not only governance but also economic and social policy for newly incorporated regions. The Terms of Union remain a foundational legal document in Newfoundland and Labrador’s relationship with Canada today. The U.S. Department of Labor has proposed a rule that would expand access to alternative investments in retirement plans, but the shift raises real concerns—especially because it opens the door to assets like cryptocurrency. Framed as a clarification of fiduciary duties under the Employee Retirement Income Security Act, the proposal creates a “safe harbor” process that makes it easier for plan managers to justify including complex and higher-risk investments. At its core, the rule emphasizes that fiduciary responsibility is about process, not outcomes. That means as long as plan fiduciaries can show they considered factors like performance, fees, liquidity, valuation, and complexity, their decisions may be presumed prudent—even if the investments themselves are volatile or difficult to value. The proposal also reinforces that no category of investment is off-limits, explicitly rejecting any per se restrictions. That neutrality is doing a lot of work: in practice, it signals that assets like private equity, and notably digital assets such as crypto, can now be more comfortably included in 401(k)-style plans. Supporters argue this expands diversification and potential returns, but the tradeoffs are significant. Many of these alternative assets are less transparent, harder to price, and more illiquid than traditional investments—risks that are especially concerning in retirement accounts designed for long-term stability. Crypto, in particular, introduces extreme volatility and regulatory uncertainty, which may sit uneasily with ERISA’s protective purpose. The rule also appears designed to curb the rise in fiduciary litigation by giving courts a reason to defer to plan managers who follow the outlined process. While that may reduce frivolous lawsuits, it could also make it harder for participants to challenge genuinely risky or poorly performing investment choices. In effect, the proposal shifts the balance: it gives fiduciaries more flexibility and legal cover, but potentially at the cost of exposing retirement savers to more complex and speculative assets. The big question is whether procedural compliance should be enough when the underlying investments themselves may carry substantial and unfamiliar risks. BREAKING: DOL Proposes Rule To Expand Alternative Investments In Retirement Plans - Law360 Match Group has agreed to settle a lawsuit brought by the Federal Trade Commission over allegations that its OkCupidplatform improperly shared user data. According to regulators, the company allowed a third party, Clarifai, to access sensitive information from millions of users in 2014 without proper disclosure. This data reportedly included photos, demographic details, and location information, despite privacy policies suggesting otherwise. Under the settlement, Match Group is barred from misrepresenting how it handles user data and must implement compliance measures to ensure its privacy practices align with its public statements. The company did not admit liability as part of the agreement but could face financial penalties if it violates the terms in the future. The settlement still requires court approval. OkCupid stated that it has since improved its privacy protections and that the conduct at issue does not reflect its current practices. Match Group settles US FTC claims it illegally shared OkCupid user data | Reuters In my column for Bloomberg this week, I argue that Georgia’s gas tax holiday is poorly timed, arriving not during a routine price increase but at the onset of a global, war-driven supply shock. While the policy may appear to offer immediate relief at the pump, I explain that higher prices actually play a necessary role in a market economy by signaling scarcity and pushing consumers to reduce demand. By lowering gas prices artificially, the state disrupts that signal, encouraging more consumption when conservation is most needed. I point out that this kind of intervention weakens the natural coordination between supply and demand, keeping consumption higher than the market can sustain and ultimately prolonging the imbalance. Rather than solving the problem, it risks shifting it into the future in the form of tighter supplies or even shortages. I also note that policies like this are politically attractive because they are visible and easy to implement, but that same visibility effectively subsidizes fuel use at the worst possible moment. Drawing on the experience of the 1970s energy crisis, I argue that similar efforts to shield consumers from rising prices led to distortions, long lines, and delayed adjustment rather than lasting relief. I describe the gas tax holiday as “affordability theater,” giving the illusion of help while masking the underlying scarcity and potentially leading to higher costs later. At the same time, I highlight how broader policy choices are working against long-term solutions by discouraging alternative energy sources and making substitutes like electric vehicles less accessible. I acknowledge that rising gas prices create real hardship, especially for lower- and middle-income households, but I argue that relief should be targeted and delivered through mechanisms like refundable tax credits or commuter benefits. This approach would help households manage costs without incentivizing additional fuel consumption. I also emphasize the need for policies that actively reduce demand, such as investing in public transit, encouraging remote work, and promoting conservation. Finally, I argue that any revenue gains from higher prices should be used to strengthen infrastructure and energy resilience rather than masking current problems. I conclude that while supply shocks inevitably bring economic pain, delaying adjustment through misguided policies will only make the consequences more severe in the long run. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    7 min
  2. HÁ 1 DIA

    Legal News for Mon 3/30 - Bank of America Settles with Epstein Victims, Law Firms Challenge Trump EOs, Elizabeth Holmes Sentence Reduced

    This Day in Legal History: Ronald Reagan Assassination Attempt On March 30, 1981, Ronald Reagan was shot in an assassination attempt outside the Washington Hilton Hotel in Washington, D.C. The attack was carried out by John Hinckley Jr., who fired multiple shots as the president exited an event. Reagan was seriously wounded but survived after emergency surgery, while others, including Press Secretary James Brady, were also injured. The incident immediately triggered a high-profile federal criminal case against Hinckley. During trial, Hinckley’s defense team argued that he was legally insane at the time of the shooting. The jury ultimately returned a verdict of not guilty by reason of insanity in 1982. This outcome shocked the public and sparked widespread debate about the use and limits of the insanity defense in criminal law. Critics argued that the standard allowed dangerous individuals to avoid accountability, while supporters emphasized the importance of recognizing severe mental illness in legal responsibility. In response, Congress and many states moved to tighten the rules governing insanity defenses. One major reform was the passage of the Insanity Defense Reform Act of 1984, which made it harder for defendants to succeed with such claims in federal court. The law shifted the burden of proof to defendants and narrowed the definition of legal insanity. The case also influenced how courts evaluate expert psychiatric testimony. Over time, Hinckley remained confined to a psychiatric institution rather than a traditional prison. His gradual release decades later continued to raise legal and ethical questions about mental illness and public safety. This event remains a defining moment in modern criminal law because it reshaped how courts balance mental health and criminal responsibility. Bank of America has agreed to pay $72.5 million to settle a proposed class action lawsuit alleging it helped facilitate Jeffrey Epstein’s sex trafficking activities. The agreement, filed for preliminary approval in New York federal court, does not include any admission of wrongdoing by the bank. The plaintiff, identified as Jane Doe, described the settlement as a meaningful recovery for survivors. The proposed class includes women and girls who were abused by Epstein or his associates, including those who received compensation tied to sexual activity. Payments to class members will vary based on factors such as the severity and duration of abuse and any cooperation with investigations. Doe alleged that Bank of America ignored warning signs and allowed suspicious financial transactions linked to Epstein’s operations, including accounts opened in her name despite red flags. The bank denied facilitating any illegal conduct but stated the settlement allows it to resolve the matter and provide closure. The plaintiff’s attorneys may seek up to 30% of the settlement fund in fees. The court had previously dismissed claims against another defendant, Bank of New York Mellon, and narrowed the case against Bank of America. The judge also rejected an effort by the bank to pause proceedings while related government matters were clarified. The plaintiff and her legal team weighed the risks of trial, including the possibility of a lengthy appeals process that could delay compensation for survivors. As part of the settlement process, a fund administrator will determine individual awards using specific criteria tied to each claimant’s experience. The case highlights ongoing legal efforts to hold financial institutions accountable for their potential role in enabling trafficking networks. BofA Will Pay $72.5M In Deal Ending Epstein Ties Allegations - Law360 Four major law firms—Jenner & Block LLP, WilmerHale, Susman Godfrey LLP, and Perkins Coie LLP—have asked the D.C. Circuit to uphold lower court rulings that invalidated executive orders issued by Donald Trump targeting them. The firms argue the orders were unconstitutional, claiming they violated the First Amendment and other protections by restricting their ability to practice law. The measures included suspending security clearances, limiting access to federal buildings, and penalizing the firms for their clients and legal work. The firms contend the orders were retaliatory, pointing to Trump’s criticism of their pro bono work and connections to investigations involving him. They argue the government cannot punish lawyers for representing certain clients or expressing particular viewpoints. Each firm emphasized that the orders interfere with core legal principles, including the right to counsel, free association, and access to the courts. The U.S. Department of Justice initially sought to drop its appeal of the lower court decisions but quickly reversed course and is now defending the executive orders. The firms highlighted this reversal as evidence that the orders are legally weak. They also argue that the government has failed to meaningfully dispute claims that the orders were motivated by retaliation. The dispute is now before the U.S. Court of Appeals for the D.C. Circuit, with oral arguments scheduled for May. The outcome could have significant implications for executive power and the independence of the legal profession. Firms Targeted By Trump Urge DC Circ. To Uphold EO Rulings - Law360 Law firms targeted by Trump ask court to uphold rulings blocking executive orders | Reuters A federal judge reduced the prison sentence of Elizabeth Holmes by one year, lowering her term from just over 11 years after applying updated federal sentencing guidelines. Holmes had requested a two-year reduction, but the court granted only a partial decrease despite opposition from prosecutors. The judge found that although her fraud caused approximately $452 million in investor losses, prosecutors failed to show that any individual victim suffered “substantial financial hardship,” which is required under the revised guidelines. The court emphasized that financial harm must be evaluated relative to each victim’s wealth, noting that large losses do not automatically qualify as substantial hardship for wealthy investors. Because the government did not provide specific evidence of such harm, Holmes qualified for a reduced sentence as a nonviolent, first-time offender. However, the judge limited the reduction to one year to maintain deterrence and reflect the seriousness of her conduct. Holmes was convicted in 2022 of defrauding investors in Theranos, the blood-testing startup she led alongside Ramesh Balwani. While her conviction included four counts of investor fraud, she was acquitted or not convicted on other charges. She began serving her sentence in 2023. Prosecutors argued against reducing her sentence, citing the scale of the losses, her limited restitution payments, and concerns about potential future misconduct. Holmes countered that investors knowingly took risks and were not financially devastated. The judge ultimately agreed that the legal standard for “substantial financial hardship” was not met. Elizabeth Holmes Gets 11-Year Prison Sentence Cut By A Year - Law360 UK This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    6 min
  3. HÁ 4 DIAS

    Legal News for Fri 3/27 - Anthropic Blacklisting Blocked, Musk Challenges Fraud Verdict over Zing, Wells Fargo ERISA Mortgage Suit Revived

    This Day in Legal History: United States v. Cruikshank On March 27, 1876, the U.S. Supreme Court decided United States v. Cruikshank, a ruling that exposed the Court’s deep reluctance to enforce the promises of Reconstruction. The case arose from the Colfax Massacre, where dozens of Black citizens were murdered by white supremacists attempting to overturn a contested election. Federal prosecutors secured convictions under the Enforcement Act, aiming to protect Black citizens’ constitutional rights in the face of organized racial violence. The Supreme Court, however, dismantled those convictions with striking indifference to the underlying atrocities. The Court held that the Fourteenth Amendment constrained only state action, not the conduct of private individuals, effectively shielding perpetrators of racial terror from federal accountability. It further ruled that rights such as assembly and bearing arms were not protected from state interference through the Constitution at that time. This narrow interpretation gutted federal enforcement power at precisely the moment it was most needed. The decision ignored the reality that state authorities in the South were often unwilling—or actively refusing—to protect Black citizens. Critically, the Court’s reasoning elevated formal legal distinctions over the lived experience of widespread, systematic violence. By insisting on a rigid state-action requirement, the justices created a legal loophole large enough to permit organized terror campaigns to flourish unchecked. The ruling signaled to white supremacist groups that federal intervention would be weak or nonexistent. In doing so, it contributed directly to the collapse of Reconstruction-era protections and the rise of Jim Crow. The long-term consequences were profound, as Cruikshank became a cornerstone for limiting civil rights enforcement for decades. It delayed meaningful federal protection of individual rights until well into the twentieth century. Modern constitutional law has largely rejected its reasoning through incorporation doctrine, yet its impact remains a stark reminder of how judicial decisions can entrench injustice. A federal judge in California issued a preliminary injunction blocking the Trump administration from labeling Anthropica national security supply chain risk, finding the move was likely unconstitutional retaliation. The dispute arose after Anthropic pushed back during contract negotiations with the government, arguing it should be allowed to limit how its AI system Claude is used, particularly for mass domestic surveillance and autonomous weapons. Shortly after the company made its position public, the administration directed agencies to stop using its tools and moved to formally designate it as a security risk. Judge Rita F. Lin concluded that Anthropic is likely to succeed on its claims, emphasizing that the government appeared to be punishing the company for publicly criticizing its contracting stance. She found that the measures were not closely tied to genuine national security concerns and instead resembled retaliation for protected speech. The court stressed that while the government is free to choose its vendors, it cannot take additional punitive steps that violate constitutional protections. The ruling also found that the designation was likely unlawful under the Administrative Procedure Act and potentially violated due process because Anthropic had no opportunity to respond. The judge noted that branding a company as a national security threat for expressing disagreement raises serious constitutional concerns. The injunction blocks enforcement of the directive and prevents further action against the company while the case proceeds. The decision highlights broader tensions between government control over AI use and private companies’ efforts to impose ethical limits. It also underscores concerns that government retaliation could chill public debate about AI safety. The administration must now report back to the court on its compliance with the order. Anthropic Blocks Pentagon’s ‘Orwellian’ Security Risk Label - Law360 US judge blocks Pentagon’s Anthropic blacklisting for now | Reuters A lawyer for Elon Musk has asked a federal judge to review a jury verdict that found him liable for defrauding Twitter investors during his acquisition of the platform, now known as X. The request focuses in part on the jury’s use of the number “$4.20” on the verdict form, which Musk’s attorney argued was an intentional joke that showed bias and suggested the jury was trying to “send a message” rather than decide the case impartially. Musk’s legal team claims this, along with other alleged trial issues, undermines the integrity of the verdict and warrants further judicial review by Judge Charles Breyer. The verdict, issued on March 20, found Musk liable for certain public statements he made about the prevalence of bots on the platform during the acquisition process, which investors argued harmed the company’s stock price. Potential damages in the case could reach as high as $2.5 billion. Attorneys for the investors strongly rejected Musk’s arguments, calling them baseless and accusing him of attacking the jury instead of accepting responsibility. They emphasized that the verdict followed substantial evidence presented at trial. The dispute stems from claims that Musk publicly criticized Twitter to renegotiate or exit the deal, ultimately affecting shareholders who sold at lower prices. While the jury found him liable for some statements, it did not conclude that he engaged in a broader scheme to defraud. Musk urges judge to review Twitter verdict, accuses jury of ‘mocking’ him | Reuters The U.S. Court of Appeals for the Second Circuit revived part of an ERISA class action against Wells Fargo and Ocwen Financial Corp., overturning a lower court decision that had dismissed the case before trial. The lawsuit was brought by trustees of a union pension fund, who claim the companies mishandled subprime mortgages tied to the fund’s investments in mortgage-backed securities. The appellate court found that the trial judge made a key mistake in concluding that none of the underlying mortgages qualified as ERISA plan assets. While the court agreed that some mortgage-backed securities—specifically those structured as notes—are not plan assets, it ruled differently for securities issued as trust certificates. In those instances, the underlying mortgages can count as plan assets because the investment structure gives the pension fund an equity-like interest in the trust. This distinction matters because ERISA fiduciary duties apply only to plan assets. By recognizing that certain underlying mortgages fall within that definition, the court reopened the possibility that the companies could be held liable for breaching fiduciary duties. The pension fund alleges that the defendants mishandled loans during the 2007–2009 financial crisis, including pushing borrowers into foreclosure, which harmed the fund’s investments. The court declined to decide whether Ocwen acted as an ERISA fiduciary, noting that the lower court had not addressed that issue. As a result, the case will return to the trial court for further proceedings on the revived claims. ​​2nd Circ. Reopens Mortgage-Backed Securities ERISA Suit - Law360 This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    7 min
  4. HÁ 5 DIAS

    Legal News for Tues 3/26 - Meta and Google Liable for Addictive Design, SCOTUS Narrows ISP Piracy Liability, and Maduro's Narcoterrorism Case is Thin

    This Day in Legal History: Camp David Accords On March 26, 1979, Egypt and Israel formally signed the Camp David Accords, marking a historic breakthrough in international law and diplomacy. The agreement followed years of conflict between the two nations, including multiple wars that had destabilized the region. Brokered by U.S. President Jimmy Carter, the negotiations took place at the presidential retreat in Maryland. Egyptian President Anwar Sadat and Israeli Prime Minister Menachem Begin played central roles in reaching the accord. The resulting treaty established a framework for peace and normalized diplomatic relations between the two countries. It also included provisions for Israel’s withdrawal from the Sinai Peninsula, which had been occupied since the Six-Day War. In exchange, Egypt became the first Arab nation to officially recognize Israel. The agreement demonstrated the power of sustained negotiation and third-party mediation in resolving entrenched disputes. It also highlighted the role of international agreements as binding legal instruments between sovereign states. The treaty had lasting implications for Middle Eastern geopolitics and influenced future peace efforts in the region. While controversial at the time, it ultimately reduced the likelihood of further large-scale conflict between the two nations. The accords earned Sadat and Begin the Nobel Peace Prize, underscoring their global significance. The Camp David framework remains a key example of how diplomacy can achieve outcomes that military action cannot. A California jury in Los Angeles found Meta Platforms and Google liable for harming the mental health of a woman who said she became addicted to their platforms as a child. The jury awarded $3 million in compensatory damages and an additional $3 million in punitive damages, effectively doubling the total award. Responsibility was split with Instagram accounting for 70% of the harm and YouTube 30%. Jurors concluded that both companies were negligent in designing their platforms and failed to warn users about potential dangers. They also found that the companies’ conduct involved malice, fraud, or oppression, justifying punitive damages. This case is the first bellwether trial among thousands of similar lawsuits, making it an important test for future litigation against social media companies. The verdict increases potential legal exposure for these companies, which could face billions in liability nationwide. During trial, the plaintiff’s attorneys argued that platform features like algorithms, autoplay, and infinite scroll were intentionally designed to be addictive. The defense countered that social media addiction is not a recognized condition and pointed to other factors in the plaintiff’s life that could explain her mental health struggles. Jurors were influenced by a combination of evidence, including internal company materials and testimony from executives and former employees. Some jurors expressed skepticism about testimony from Meta CEO Mark Zuckerberg. The relatively modest punitive damages award reflected hesitation about granting a large sum to a single individual. Both companies have stated they disagree with the verdict and plan to appeal. The case could shape how courts evaluate claims about the harmful design of social media platforms. Jury Doubles Damages Against Meta, Google In LA Bellwether - Law360 US jury verdicts against Meta, Google tee up fight over tech liability shield | Reuters The U.S. Supreme Court unanimously overturned a lower court ruling that had held Cox Communications liable for its customers’ music piracy. The justices ruled that simply knowing customers may engage in copyright infringement is not enough to establish liability. Instead, there must be proof that the company intended to promote or encourage the illegal activity. The decision sends the case back to the Fourth Circuit for reconsideration under this clarified standard. The dispute originated from a 2019 jury verdict that ordered Cox to pay $1 billion to music companies, including Sony Music Entertainment, for contributory and vicarious copyright infringement. While the appellate court had upheld part of that ruling, the Supreme Court found that the legal standard for contributory infringement had been applied too broadly. Justice Clarence Thomas, writing for the Court, emphasized that providing a general service—even with awareness of misuse—does not automatically create liability. The ruling marks the Court’s first major examination of secondary copyright liability in years and draws on earlier cases like Sony Corp. of America v. Universal City Studios and MGM Studios Inc. v. Grokster, Ltd.. A concurring opinion by Justice Sonia Sotomayor agreed with the outcome but warned that the majority may have limited other ways to hold companies accountable, such as aiding-and-abetting theories. The decision is seen as a significant win for internet service providers, who argued that broader liability would force them to cut off users based on unproven accusations. At the same time, the music industry expressed concern that the ruling could weaken protections against widespread copyright infringement. The case highlights ongoing tension between protecting intellectual property and maintaining practical limits on intermediary liability. High Court Reverses Music Piracy Liability Ruling Against Cox - Law360 Ousted Venezuelan president Nicolás Maduro is facing U.S. criminal charges, including narcoterrorism, in a case that could test a rarely used federal law with a limited track record at trial. Prosecutors allege that Maduro led a conspiracy to traffic cocaine in coordination with groups such as the Revolutionary Armed Forces of Colombia (FARC), which the United States has labeled a terrorist organization. Maduro has pleaded not guilty and denies the allegations, claiming they are politically motivated. The narcoterrorism statute, enacted in 2006, targets drug trafficking tied to terrorism but has produced few successful trial outcomes. Of the small number of convictions obtained, some have later been overturned due to unreliable witness testimony. This history highlights a major challenge for prosecutors: proving that a defendant knowingly connected drug activity to terrorist operations. Legal experts note that this “knowledge” requirement is the most difficult element to establish in court. Maduro also faces additional charges, including drug trafficking and money laundering, which could still result in severe penalties even if the narcoterrorism count proves difficult. The law carries a mandatory minimum sentence of 20 years, reflecting its seriousness. Prosecutors may rely on testimony from former Venezuelan officials, though the credibility of such cooperating witnesses could be heavily scrutinized. The case underscores broader tensions in applying U.S. criminal law to international actors and complex geopolitical conduct. It also demonstrates how expansive definitions of terrorism can complicate prosecutions. Ultimately, the outcome may shape how aggressively the U.S. uses narcoterrorism charges in future cases. Maduro case to test US narcoterrorism law with limited trial success | Reuters This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    6 min
  5. HÁ 6 DIAS

    Legal News for Weds 3/25 - Baltimore Sues xAI over Deepfakes, Meta $375m Judgement for Teen Harm, Anthropic v. Pentagon and Law Firms Decline to Provide DEI Data

    This Day in Legal History: Triangle Shirtwaist Factory On March 25, 1911, the devastating Triangle Shirtwaist Factory fire unfolded in New York City, marking a turning point in American labor law. A fire broke out on the upper floors of a garment factory, trapping workers inside due to locked exit doors and inadequate safety infrastructure. In total, 146 workers lost their lives, many of them young immigrant women who had limited means of escape. The horrifying conditions quickly became public knowledge and sparked widespread outrage. Investigations revealed that existing labor laws were poorly enforced and insufficient to protect workers in rapidly industrializing cities. In response, New York State created the Factory Investigating Commission to examine workplace conditions and recommend reforms. Over the next few years, the commission helped draft more than 30 new laws addressing fire safety, sanitation, and building access. These legal reforms significantly strengthened the regulatory role of the state in protecting workers. The tragedy also energized the labor movement, giving momentum to unions advocating for safer conditions and fair treatment. Courts and lawmakers increasingly recognized that employers had a responsibility to anticipate and prevent workplace hazards. The legacy of the Triangle fire continues to influence occupational safety standards and legal frameworks governing employer liability today. Baltimore has filed a lawsuit against xAI over its Grok platform, alleging it can create nonconsensual sexualized deepfake images from ordinary photos. The complaint, brought by the city’s mayor and council, claims the technology has been used to generate explicit images of both adults and minors. Officials argue this exposes residents to harassment, emotional harm, and privacy violations. The city also alleges that Grok was marketed as a safe and regulated platform despite lacking meaningful safeguards. According to the filing, users can request the tool to “nudify” images of third parties, including private individuals and children. The complaint estimates that millions of sexualized images were generated shortly after a key feature was launched, including thousands appearing to depict minors. Baltimore claims that even casual users of X may encounter such content without seeking it out. The lawsuit further argues that users’ personal photos could be altered into explicit deepfakes without their consent or knowledge. Baltimore contends this contradicts the companies’ public claims about preventing harmful and illegal content. The city accuses the defendants, including X and SpaceX, of engaging in deceptive and unfair business practices. It is seeking penalties and a court order requiring changes to the platform. Officials emphasized that deepfakes involving minors can cause long-term psychological harm and are difficult to control once circulated. The case is part of a broader wave of scrutiny, as regulators and private plaintiffs in the U.S. and Europe have also raised concerns about Grok’s capabilities. Baltimore Takes XAI To Court Over Grok’s Sexual Deepfakes - Law360 A New Mexico jury has ordered Meta Platforms Inc. to pay $375 million after finding the company misled the public about the risks its platforms pose to teenagers. The verdict followed a six-week trial and focused on claims brought by the state’s attorney general. Jurors concluded that Meta engaged in both unfair practices and unconscionable conduct. They calculated damages based on tens of thousands of violations, applying the maximum statutory penalty for each. The state argued that Meta failed to adequately protect minors from harmful content, including bullying, sexual exploitation, and material related to self-harm. It also claimed the company allowed children under 13 to use its platforms despite official restrictions. According to the plaintiffs, Meta internally recognized these risks but presented a more reassuring picture to the public. Evidence at trial suggested that algorithm-driven content feeds increased compulsive use among teens. The state characterized this design as contributing to addiction and loss of user control. Meta countered that it has invested heavily in safety measures and employs thousands of people to monitor and remove harmful content. The company maintained that it has been transparent about the challenges of moderating online platforms. Despite these arguments, the jury ruled in favor of the state. Meta has said it will appeal the decision. The case is part of a broader wave of litigation across the country targeting social media companies over alleged harm to young users. Meta Owes $375M In NM Trial Over Harm To Teens - Law360 Meta ordered to pay $375 million in New Mexico trial over child exploitation, user safety claims | Reuters A federal judge has expressed skepticism about the Pentagon’s decision to blacklist Anthropic, suggesting it may have been retaliation for the company’s public stance on AI safety. During a hearing in California, the judge indicated the designation appeared intended to “cripple” the company after it raised concerns about military uses of artificial intelligence. Anthropic had refused to allow its AI systems to be used for surveillance or autonomous weapons, citing safety and ethical risks. The U.S. Department of Defense labeled Anthropic a national security supply-chain risk, a designation that can block companies from receiving certain government contracts. Anthropic argues this move exceeded the authority of Pete Hegseth and caused significant financial and reputational harm. The company claims the action was unprecedented and followed a contract dispute with the military. It also alleges it was not given an opportunity to challenge the designation before it was imposed. In its lawsuit, Anthropic contends the government violated its First Amendment rights by retaliating against its views on AI safety. It also raises a Fifth Amendment due process claim, arguing it was denied fair procedures. Government lawyers responded that the designation was justified because Anthropic’s resistance created potential risks to military systems. They argued the Pentagon must ensure that critical technologies remain secure and reliable. The judge has not yet issued a final ruling but is considering whether to temporarily block the designation while the case proceeds. The dispute highlights growing tensions between AI companies and the government over military applications of emerging technologies. US judge says Pentagon’s blacklisting of Anthropic looks like punishment for its views on AI safety | Reuters Nearly 50 U.S. law firms declined to provide demographic data for a major 2025 diversity survey conducted by the National Association for Law Placement, resulting in a significant drop in reported information. The number of participating firms fell from the previous year, reducing the dataset by about 29% and excluding tens of thousands of lawyers. The organization attributed this shift to growing political and regulatory pressure on diversity, equity, and inclusion (DEI) efforts. Under the current administration, federal agencies have increased scrutiny of law firm hiring and diversity practices. The U.S. Equal Employment Opportunity Commission requested detailed hiring data from major firms, while the Federal Trade Commission warned firms that certain DEI-related practices could raise antitrust concerns. In response, many firms have scaled back public references to DEI or altered their policies. Some have also entered agreements with the administration to avoid penalties tied to their diversity initiatives. The reduced participation in the survey may limit transparency for law students and others who rely on the data to evaluate employers. It also affects the ability to track diversity trends across the legal profession. While the available data suggests that racial diversity among associates and summer associates declined in 2025, the smaller dataset makes year-to-year comparisons less reliable. Large firms, which typically report higher diversity levels, were disproportionately absent from the data. Facing DEI pressures, some law firms shield data in latest diversity survey | Reuters This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    8 min
  6. 24 DE MAR.

    Legal News for Tues 3/24 - SCOTUS Asylum Case, More Harvard Probes, NCAA vs. DraftKings and Fixing NY's Estate Tax

    This Day in Legal History: Exxon Valdez On March 24, 1989, the oil tanker Exxon Valdez ran aground on Bligh Reef in Alaska’s Prince William Sound, spilling millions of gallons of crude oil into the surrounding waters. The disaster quickly became one of the most devastating environmental crises in United States history, contaminating vast stretches of coastline and severely impacting wildlife and local communities. In the immediate aftermath, attention turned not only to cleanup efforts but also to the legal consequences for Exxon. Federal and state authorities pursued claims under environmental statutes, while thousands of private plaintiffs, including fishermen and Alaska Natives, filed civil lawsuits seeking compensation for economic and ecological harm. The litigation that followed raised complex questions about corporate responsibility and the scope of damages available under maritime law. A central issue was whether punitive damages—intended to punish especially reckless conduct—could be imposed on Exxon for the actions of the ship’s captain. The case eventually reached the U.S. Supreme Court in Exxon Shipping Co. v. Baker, where the Court addressed the proper limits of punitive damages in maritime cases. In a closely watched decision, the Court reduced the punitive damages award, holding that it should be roughly equal to the compensatory damages awarded to plaintiffs. This ruling had lasting implications for how courts evaluate excessive punitive damages and balance punishment with fairness to defendants. Beyond the courtroom, the spill prompted Congress to pass the Oil Pollution Act of 1990, which strengthened federal authority to prevent and respond to oil spills. The Act also expanded liability for companies and created a trust fund to ensure prompt cleanup and compensation. Together, the disaster and its legal aftermath reshaped environmental regulation, corporate accountability, and the development of modern tort law in the United States. The U.S. Supreme Court is preparing to hear arguments on whether the Trump administration can limit the processing of asylum claims at the U.S.-Mexico border. At the center of the case is a policy known as “metering,” which allowed immigration officials to turn away asylum seekers when border facilities were considered too overwhelmed to handle additional applications. This policy had been used in a more informal way starting in 2016 and was formalized during Trump’s first term, before being rescinded by President Joe Biden in 2021. The legal dispute focuses on how to interpret federal law requiring that migrants who “arrive in the United States” be allowed to apply for asylum and be inspected by immigration officials. A key question is whether individuals stopped on the Mexican side of the border can be considered to have “arrived” under the statute. A federal appeals court previously ruled that the government must process asylum seekers even if they are waiting at official border crossings, finding that the metering policy violated the law. The Trump administration disagrees, arguing that “arriving” requires actually entering U.S. territory, not merely approaching it. Officials have indicated they may reinstate the policy if conditions at the border justify doing so. The case, originally brought by an advocacy group, could significantly shape how asylum law is applied at the border. This dispute highlights a broader pattern of ongoing legal battles over immigration policy before the Supreme Court. The Court has recently sided with Trump in several emergency rulings on related issues, including deportation practices and limits on temporary protected status. Additional cases involving birthright citizenship and protections for certain migrant groups are also scheduled for review. US Supreme Court to weigh Trump’s power to limit asylum processing | Reuters The Trump administration has opened two new federal investigations into Harvard University, intensifying its broader scrutiny of elite U.S. schools. The Department of Education’s civil rights office is examining whether Harvard violated federal law by discriminating based on race, color, or national origin. One investigation focuses on whether the university continues to use race in admissions despite the Supreme Court’s 2023 decision ending affirmative action. The second probe looks into allegations of antisemitism on campus, following reports that both Jewish and Muslim students experienced harassment. Harvard has denied wrongdoing, stating it complies with the law and is taking steps to address discrimination while defending its institutional independence. These new investigations add to ongoing legal conflict between the federal government and the university. The administration has already filed lawsuits seeking financial penalties and documents related to admissions practices, while negotiations to resolve the disputes have stalled. The probes are part of a wider campaign by the Trump administration targeting universities over issues such as campus protests, diversity initiatives, and federal funding. Critics argue these actions threaten academic freedom, free speech, and student privacy, while supporters say they are necessary to enforce civil rights laws. Some settlements with other universities, including large financial payments, have raised concerns about setting precedent for costly agreements. Trump administration launches more probes into Harvard | Reuters The National Collegiate Athletic Association has filed a lawsuit against DraftKings, accusing the company of improperly using trademarks tied to its college basketball tournament. The dispute centers on well-known phrases such as “March Madness,” “Final Four,” “Elite Eight,” and “Sweet Sixteen,” which the NCAA argues are being used without authorization in DraftKings’ betting promotions. The lawsuit, filed in federal court, seeks to stop DraftKings from using these terms and also requests monetary damages. The NCAA claims that DraftKings’ marketing falsely suggests a connection or endorsement between the organization and the betting platform, which it says harms its reputation. It also argues that sports betting—especially “prop bets” focused on individual player performance—can threaten the integrity of games and expose student-athletes to harassment or undue pressure. The NCAA has long opposed partnerships with gambling companies for these reasons. DraftKings disputes the claims, arguing that its use of the terms is descriptive and protected under the Constitution, rather than a violation of trademark law. The company maintains it is simply identifying the events on which users can place bets. This case comes amid a surge in sports betting, with billions of dollars expected to be wagered on the tournament, and reflects broader tensions between sports organizations and the gambling industry. NCAA sues to block DraftKings from using ‘March Madness’ trademarks | Reuters In my Bloomberg column this week, I examine New York City Mayor Zohran Mamdani’s proposal to sharply lower the state’s estate tax exemption to $750,000 and the broader issue it raises about how the U.S. tax system treats inherited wealth. I argue that Mamdani is right to highlight a fundamental imbalance: wealth passed down across generations is often taxed more lightly than income earned through work. However, I contend that his current proposal is poorly targeted and risks burdening middle-class households, particularly in a high-cost market like New York, where even modest homes can exceed the proposed threshold. I explain that estate taxes are one of the few tools available to address intergenerational wealth concentration, but they must be carefully designed to avoid unintended consequences. A major flaw in the proposal is its low exemption level, which could capture asset-rich but cash-poor individuals, forcing difficult financial decisions such as selling homes or small businesses. I also highlight a structural problem in New York’s existing estate tax system—the so-called “cliff”—where slightly exceeding the exemption can trigger taxes on the entire estate, creating sharp and arbitrary increases in liability. I note that this cliff encourages costly estate planning strategies that do little to benefit the broader economy while allowing those with resources to minimize their tax burden. Expanding the tax without fixing this issue would likely worsen these inefficiencies and inequities. While critics argue that higher estate taxes could drive wealthy residents out of the state, I suggest that the real issue is not whether to tax inherited wealth, but how to do so effectively. I conclude that a better approach would involve lowering the exemption more moderately, eliminating the estate tax cliff, and focusing higher tax rates on very large estates in the tens of millions. I also suggest policymakers consider special rules for illiquid assets like primary residences and closely held businesses. Overall, I argue that estate taxes can play a meaningful role in reducing dynastic wealth—but only if they are structured in a way that is fair, predictable, and politically sustainable. Mamdani’s NY Estate Tax Exemption Should Target Dynastic Wealth This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    8 min
  7. 23 DE MAR.

    Legal News for Mon 3/23 - Musk Securities Fraud, WH Push to Override State AI Regulations and SCOTUS Fight Over TN Mail-in Ballots

    This Day in Legal History: ACA Signed into Law On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act, marking a transformative moment in American legal and social policy. The statute, widely known as the Affordable Care Act (ACA), sought to expand access to health insurance and reduce overall healthcare costs. Central to the law was the individual mandate, which required most Americans to obtain health insurance or face a financial penalty. The ACA also significantly expanded Medicaid eligibility, allowing millions of low-income individuals to gain coverage. Another key provision prohibited insurance companies from denying coverage based on preexisting conditions, reshaping longstanding industry practices. Almost immediately after its passage, the law faced a wave of legal challenges from states, private parties, and advocacy groups. Critics argued that Congress had exceeded its authority under the Commerce Clause by compelling individuals to engage in commerce. The dispute reached the Supreme Court in the landmark case of NFIB v. Sebelius. In a closely divided decision, the Court held that the individual mandate could not be sustained under the Commerce Clause. However, Chief Justice John Roberts authored the controlling opinion that upheld the mandate as a valid exercise of Congress’s taxing power. The Court also addressed the ACA’s Medicaid expansion, ruling that Congress could not coerce states into expanding coverage by threatening existing Medicaid funding. This aspect of the decision reinforced limits on federal power under the Spending Clause and preserved a degree of state sovereignty. The ACA continued to generate litigation in subsequent years, including challenges to its subsidy structure and individual mandate enforcement. Despite these legal battles, the law remains a central feature of the U.S. healthcare system. Its passage and judicial review reshaped modern constitutional interpretation, particularly regarding the balance between federal authority and individual liberty. A California federal jury found that Elon Musk committed securities fraud in connection with his $44 billion attempt to acquire Twitter. After roughly 20 hours of deliberation, the jury concluded that two of Musk’s May 2022 tweets misled investors about the status of the deal and the prevalence of fake or spam accounts on the platform. In particular, his statement that the deal was “temporarily on hold” while awaiting bot data was deemed materially misleading. The jury also found liability for a later tweet suggesting bots made up at least 20% of users and that the deal could not proceed without proof. However, jurors rejected the broader claim that Musk engaged in an overall scheme to defraud investors. They also declined to find liability for statements he made at a tech conference, determining those remarks were not proven to be fraudulent. The class of affected investors included those who traded Twitter stock or related options between May and October 2022 and claimed they suffered losses due to artificially depressed prices. While the jury did not calculate a final damages figure, plaintiffs’ counsel estimated potential damages at about $2.6 billion. The verdict form instead required jurors to assess damages across 98 separate trading days, meaning total compensation will depend on individual trading activity. Plaintiffs’ attorneys characterized the decision as a win for market integrity, emphasizing that even high-profile figures must comply with securities laws. Musk’s legal team, by contrast, downplayed the outcome and indicated plans to appeal. The case featured testimony from Twitter executives, deal advisers, and co-founder Jack Dorsey, as well as disputes over whether Twitter accurately reported bot activity. Jury Says Musk Defrauded Twitter Investors In $44B Buyout - Law360 The White House, under Donald Trump, released a legislative framework urging Congress to override state-level artificial intelligence regulations in favor of a single national standard. The administration argues that a patchwork of state laws creates unnecessary obstacles for innovation and weakens the United States’ ability to compete globally in AI development. At the same time, the proposal preserves certain areas of state authority, including laws addressing fraud, consumer protection, child safety, zoning, and state government use of AI. The framework also addresses intellectual property concerns, recommending that courts continue to decide whether training AI systems on copyrighted material violates the law. It suggests Congress consider mechanisms that allow creators to collectively negotiate compensation from AI companies without triggering antitrust issues. Additionally, it calls for federal protections against unauthorized AI-generated replicas of individuals’ likeness, voice, or identity, while allowing exceptions for news and satire. Another key focus is infrastructure, with proposals to prevent rising electricity costs from being passed on to consumers as AI data centers expand. The plan encourages faster federal permitting and supports alternative energy solutions to power AI development. It also includes provisions aimed at preventing government pressure on tech companies to censor speech and ensuring that federal data can be used to train AI systems. The proposal has drawn mixed reactions. Industry groups and several Republican lawmakers praised the approach as promoting innovation through lighter regulation. In contrast, consumer advocates and Democratic lawmakers criticized it as favoring large technology companies while removing important state-level protections. Some Democrats have introduced legislation to block the initiative and preserve states’ authority to regulate AI. White House Pushes Congress To Override State AI Laws - Law360 UK The U.S. Supreme Court is hearing a case involving Mississippi’s law that allows certain mail-in ballots to be counted if they are postmarked by Election Day but arrive up to five business days later. The dispute stems from a challenge brought by Republican groups, including the Republican National Committee, which argue that the law conflicts with federal election statutes. The Trump administration is supporting this challenge, continuing its broader push to restrict mail-in voting. Mississippi enacted the rule in 2020, during the COVID-19 pandemic, with bipartisan support. It applies to limited categories of voters, such as the elderly, disabled individuals, and those temporarily away from home. However, in 2024, the U.S. Court of Appeals for the Fifth Circuit ruled that the law likely violates federal law, which it interpreted as requiring ballots to be both cast and received by Election Day. The court concluded that states cannot extend the deadline for receiving ballots beyond that date. The Supreme Court is now reviewing Mississippi’s appeal of that decision, with potentially broad implications. Roughly 30 states and Washington, D.C. have similar policies that count ballots arriving after Election Day if they were mailed on time. A ruling against Mississippi could therefore force significant changes to voting procedures nationwide and limit the use of mail-in ballots. The case also reflects ongoing political disputes over election integrity and access to voting. Republicans have raised concerns about the security of mail-in ballots, while critics argue that restrictions could reduce voter participation. The outcome of this case may clarify how federal election law interacts with state authority over voting procedures. US Supreme Court weighs Republican bid to limit mail-in voting | Reuters This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    7 min
  8. 20 DE MAR.

    Legal News for Fri 3/20 - Court Blocks HHS Anti-trans Care Move, States Sue over Media Merger, VAT Outsourcing in the Netherlands and Rulemaking Dynamics Revealed

    We’ve launched a new project: FRTracker.app. It’s a platform designed to help track what’s happening across the regulatory state—rulemakings, agency actions, and the steady flow of activity coming out of administrative agencies. The goal is straightforward: make it easier to see what’s changing, when it’s changing, and why it matters. If you’re an attorney, journalist, or researcher working in this space, we’d encourage you to take a look. And as always, feedback is not just welcome—it’s essential. The website is FRTracker.app and we look forward to hearing from you or, if all is in order, your finding a way to make use of it in your practice area or work. Thanks so much! This Day in Legal History: First Official Meeting of the US Republican Party On March 20, 1854, the newly formed Republican Party held its first official meeting in Ripon, Wisconsin, marking a pivotal moment in American legal and political history. The party emerged in direct response to the passage of the Kansas–Nebraska Act, a controversial law that allowed new territories to decide the legality of slavery through popular sovereignty. This legislative shift effectively repealed the Missouri Compromise, which had previously set geographic limits on slavery’s expansion. The outrage among anti-slavery activists, lawyers, and former members of existing parties led to a rapid political realignment. Legal debates at the time centered on Congress’s authority over the territories and whether slavery could be restricted as a matter of federal law. These were not abstract questions—they went directly to the structure of the Constitution and the balance of power between federal authority and local control. The formation of the Republican Party reflected a growing belief that existing legal frameworks had failed to contain the spread of slavery. Within a few years, the party would become a major political force, culminating in the election of Abraham Lincoln in 1860. By his reelection campaign in 1864, however, Lincoln ran under the banner of the National Union Party, a wartime coalition of Republicans and pro-Union Democrats. That shift did not necessarily reflect a rejection of the Republican Party itself, but it did signal unease with factionalism and the limits of party identity during a constitutional crisis. The rebranding was a strategic and legal-political move: to broaden support for the Union, stabilize governance, and frame the election as a referendum on national survival rather than partisan ideology. The legal disputes surrounding slavery, territorial governance, and federal authority would ultimately be resolved not just through legislation or court decisions, but through war and constitutional amendment. The Thirteenth Amendment to the United States Constitution would later eliminate slavery nationwide, fundamentally reshaping American law. What began as a meeting in a small Wisconsin town became a turning point in the legal history of the United States, illustrating how statutory change can rapidly destabilize existing legal and political orders. A federal judge in Oregon ruled that the Department of Health and Human Services cannot enforce a policy aimed at restricting gender-affirming care for minors, siding with 21 states and the District of Columbia. The challenged policy, issued by HHS Secretary Robert F. Kennedy Jr., declared such care unsafe and ineffective and warned that providers could lose access to Medicare and Medicaid funding. The states argued the policy was unlawful because it bypassed required rulemaking procedures and interfered with their authority to regulate medical practice. Judge Mustafa T. Kasubhai granted summary judgment to the states and rejected the federal government’s attempt to dismiss the case. While the court has not yet issued a full written opinion, it signaled that the policy will be formally invalidated, with further briefing ordered on the scope of relief. The states emphasized that the policy placed healthcare providers in a difficult position by threatening funding while conflicting with state laws that protect access to gender-affirming care. The federal government argued the policy was merely advisory and not subject to judicial review, but the court was not persuaded. State attorneys general described the ruling as a rejection of federal overreach and an affirmation that such healthcare remains lawful. The decision preserves access to care for transgender minors in the plaintiff states, at least for now. This case turns in part on whether the HHS policy qualifies as a “final agency action” that must go through notice-and-comment rulemaking under the APA. The states argued that even if labeled as guidance, the policy had real legal consequences—namely, threatening loss of federal funding—making it effectively binding. Courts often look beyond labels to the practical effect of agency actions, and here the judge appeared to agree that the policy could not avoid APA requirements simply by being framed as a statement rather than a formal rule. This issue, central to the dispute, frequently arises in challenges to modern administrative action. HHS Can’t Block Trans Care Under Kennedy Edict, Court Says - Law360 A coalition of eight states has sued to block Nexstar Media Group’s $6.2 billion acquisition of Tegna, even after the deal received approval from both the Department of Justice and the Federal Communications Commission. The states argue the merger would create excessive concentration in local television markets, giving the combined company control over stations reaching roughly 80% of U.S. households. They contend this market power would allow Nexstar to raise prices for cable and satellite providers and reduce competition for broadcast content. The lawsuit also raises concerns about the impact on local journalism, with state enforcers warning that consolidation could lead to newsroom cuts and less coverage of local issues. DirecTV filed a parallel challenge, similarly arguing that the deal would increase costs, reduce competition, and lead to more frequent service disruptions. Despite these objections, the FCC approved the merger with conditions, including the divestiture of several stations and commitments related to pricing and local news. Nexstar defended the deal as necessary to sustain local broadcasting and improve its ability to deliver journalism at scale. The case highlights a growing divide between federal regulators and state enforcers, with states increasingly willing to challenge mergers even after federal clearance. It also reflects broader concerns about consolidation in media markets and its downstream effects on both pricing and the availability of local news. States Sue To Block $6.2B Tegna Acquisition Despite Feds’ OK - Law360 In this piece I wrote for Forbes, I look at the Netherlands’ decision to outsource the core infrastructure of its value-added tax (VAT) system to the U.S.-based company FAST Enterprises. This is not just a software contract—FAST is responsible for operating, maintaining, and running key components of the Dutch VAT system remotely. Given that VAT generates roughly €1.5 billion per week in revenue, the arrangement creates a situation where a critical stream of government funding depends, at least in part, on a system controlled outside the country. I explain that this introduces a new kind of risk: technical dependency can quickly become financial dependency. If VAT collection is disrupted for any reason, the government cannot simply pause operations—it must borrow, and markets may react immediately. That turns what appears to be an IT issue into a fiscal and potentially geopolitical one. The broader argument is that this reflects a deeper shift in how states operate. What looks like routine modernization is actually a trade-off between efficiency and control. By adopting what I describe as “VAT-as-a-service,” the Netherlands has effectively externalized part of its tax infrastructure, raising questions about who ultimately controls a core sovereign function. I also place this in a geopolitical context, noting that reliance on foreign-operated infrastructure can create indirect leverage, even without any explicit “off switch.” The concern is less about intentional disruption and more about exposure—legal, regulatory, or systemic—that comes with cross-border dependence. Finally, I argue that this is not just a Dutch issue but a European trend, as governments increasingly rely on private and often non-domestic vendors for critical systems. The key takeaway is that tax infrastructure decisions should be evaluated not just on cost and efficiency, but on sovereignty, jurisdiction, and contingency planning. Dutch VAT-As-A-Service And The Quiet Outsourcing Of Tax Sovereignty Apologies for a double dose of me today – I wrote a piece for Yale’s Journal of Regulation Notice & Comment blog examining how regulatory obligations change during notice-and-comment rulemaking. The core argument is that most analyses look at the wrong unit—entire rules—when the real substance of regulation lies in the individual obligations imposed on regulated parties. By breaking rules down into sentence-level commands, the analysis tracks what actually happens to those obligations from proposal to final rule. The data shows that only about one-third of proposed obligations survive into final rules in a recognizable form, while most are eliminated altogether. Agencies are far more likely to remove obligations than to revise them, suggesting that rulemaking operates less like incremental editing and more like a filtering process. At the same time, final rules frequently introduce entirely new obligations that were not present in the proposal. When obligations do carry over, their core legal force—whether something is required, prohibited, or permitted—almost never changes. This indicates that survival tends t

    10 min

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