Commercial Litigation Update

Artificial intelligence is moving beyond standalone large language model wrappers toward collections of specialized AI agents that reason, act, and collaborate to achieve complex outcomes. This multi-agent vision, articulated in Google’s Introduction to Agents whitepaper,[1] marks a subtle, but seismic, shift in how businesses will deploy AI; and spotlights nuanced legal challenges that litigators and in-house counsel should start addressing now.

[1] https://www.kaggle.com/whitepaper-introduction-to-agents (last visited January 21, 2026).

Contrary to the presupposition of many, the U.S. Supreme Court did not render a decision on Friday resolving the question of the president’s authority to impose tariffs through executive orders and related questions concerning the extent to which congressional mandates should be required.

Instead, the Court issued a 5–4 decision in the case of Bowe v. United States. Resolving a substantial split among the circuit courts, the Supreme Court held, per Justice Sotomayor, that a provision of the Antiterrorism and Effective Death Penalty Act (AEDPA) requiring federal courts to dismiss certain previously raised habeas corpus claims applies only to state prisoners’ applications.

In the wake of this country’s longest federal shutdown, federal courts were facing unprecedented decision-making whether to stay civil proceedings implicating federal employees and agencies.

The Anti-Deficiency Act prohibits federal agencies from spending beyond their allotted funding and simultaneously restricts federal employees from working on a volunteer basis. The Act provides, in relevant part:

An officer or employee of the United States Government or of the District of Columbia government may not accept voluntary services for either government or employ personal services exceeding that authorized by law except for emergencies involving the safety of human life or the protection of property.

31 U.S.C. § 1342 (emphasis added).

During lapses in federal funding, voluntary services are only authorized in very limited circumstances, but the parameters of the “safety of human life” or “protection of property” exceptions have not been uniformly defined nor applied across the courts.

On December 11, 2025, the U.S. Food and Drug Administration (“FDA”) announced in a letter to the dietary supplement industry that it is actively considering requests to amend its dietary supplement labeling regulation at 21 C.F.R. § 101.93(d), which governs placement of the disclaimer required for structure/function claims under the Dietary Supplement Health and Education Act of 1994 (“DSHEA”).

The regulation currently requires the DSHEA disclaimer—which states that the product has not been evaluated by FDA and is not intended to diagnose, treat, cure, or prevent disease—to appear on each panel of a product label where a qualifying structure/function claim is made.

Based on its initial review, FDA indicated that removing the “each panel” requirement would be consistent with the DSHEA, could reduce label clutter and unnecessary costs, and would align with the agency’s historical enforcement posture, noting that the requirement has rarely, if ever, been enforced. FDA further stated that, absent significant concerns, it is likely to propose formal rulemaking to amend the regulation.

As previously reported on June 3, 2024, the January 1, 2024 amendments to CPLR 2106 revised the statutory language required for attorney affirmations in New York.

At that time, we cautioned that attorney affirmations relying on the traditional “under the penalty of perjury” language could be deemed defective under the amended statute, which now requires revised language that the statements are affirmed, among other things, “under the penalties of perjury under the laws of New York, which may include a fine or imprisonment.” Since then, as anticipated, courts have begun to strictly enforce the revised requirements, with several rejecting affirmations that fail to incorporate the updated statutory verbiage. However, recent decisions suggest that—at least in some circumstances—such defects may be curable.

The U.S. Court of Appeals for the First Circuit recently provided important clarity—and welcome relief—for clinical laboratories facing False Claims Act (“FCA”) allegations based on a lack of medical necessity for processing tests ordered by a physician. In a case of first impression, United States ex rel. OMNI Healthcare, Inc. v. MD Spine Solutions LLC,[1] the First Circuit held that clinical laboratories may rely on an ordering physician’s determination that lab tests billed to Medicare are medically necessary. The First Circuit held that laboratories need not second-guess a physician’s certification absent red flags or suspected improper conduct. While the First Circuit’s decision does not relieve clinical laboratories of their existing obligation under the FCA to ensure they are not submitting a false claim to government payors, it provides much-needed clarity for clinical laboratories across the country on what constitutes the knowing submission of false claims to the government and highlights several practical takeaways for managing compliance risk.

The SCOTUS Today series doesn’t usually report on U.S. Supreme Court opinions relating to its interim orders, e.g., orders dealing with stays.

However, given the newsworthiness of the President’s efforts at deploying State National Guard units in areas of increasing civil unrest, yesterday’s decision by a sharply divided Court in Trump v. Illinois is worthy of mention.

Thus, we note that the Court has refused to allow President Trump to deploy National Guard troops in Chicago, dealing a setback to his attempts to use the military in U.S. cities. 

On October 4, 2025, the President called 300 members of the Illinois National Guard into active federal service to protect federal personnel and property in and around Chicago. He supplemented that contingent on the next day with members of the Texas National Guard. President Trump claimed reliance on 10 U.S.C. §12406(3), which empowers him to federalize members of the Guard if he is “unable with the regular forces to execute the laws of the United States.” The Illinois District Court, later essentially affirmed by the U.S. Court of Appeals for the Seventh Circuit, issued a temporary restraining order barring the federalization and deployment of the Guard in Illinois.

In denying a stay of the orders below, the Supreme Court focused on the meaning of the term “regular forces” in §12406(3). The government argued “that the term refers to civilian law enforcement officers, such as those employed by Immigration and Customs Enforcement or the Federal Protective Service.” The respondents, tracking the Illinois District Court, argued that the term refers to the regular forces of the U.S. military.

Mass arbitration has quickly evolved into a major pressure point for companies, with filings surging into the hundreds of thousands each year. In a May 2025 infographic, the American Arbitration Association (AAA) reported receiving 82 consumer mass arbitrations that involved 247,327 individual filings. Only a small percentage of these individual claims—about 10% for consumer cases and 1% for employment cases—advanced through the AAA’s updated mass arbitration process. The top industries where mass arbitrations arose in the year 2024 were gaming and entertainment, telecommunications, healthcare, financial services, and tech. Projections for 2025 are expected to increase as mass arbitrating has become a growing litigation strategy, aimed at overwhelming companies with high volumes of filings. 

Although the window for filing lawsuits under the Child Victims Act (CVA) closed over four years ago, thousands of cases remain pending in courts throughout New York State.  Many of those cases involve public school districts. 

While we U.S. Supreme Court practitioners and observers await decisions in several already-argued cases of great significance regarding the separation of powers and executive authority, the Court this morning issued a per curiam opinion in the somewhat obscure case of John Doe v. Dynamic Physical Therapy, LLC.