Commercial Litigation Update

Today, an evenly divided 4–4 U.S. Supreme Court, with Justice Barrett having recused herself, decided in Oklahoma Statewide Charter School Board v. Drummond to leave in place the holding of the Oklahoma Supreme Court blocking an effort in that state to create the nation’s first faith-based charter school. 

This tie leaves open the question of whether states with taxpayer-funded charter school programs are constitutionally required to incorporate religious institutions. The one-line per curiam order gives no indication of how the Justices voted in the case, although the Chief Justice’s questioning during the oral argument—noting that governmental oversight of a charter school is a far greater connection to religion than merely appropriating money from which the school benefits—suggests that he joined the three jurisprudential liberals.

Justice Barrett’s recusal is attributed to her friendship with an advisor to the Catholic school at the center of the case, and leaves open the question of whether she would participate in a future case raising the establishment issue. Note that both the Chief Justice and Justice Barrett are practicing Catholics. We have some evidence of what the Chief Justice thinks with respect to the involvement of government in religious schools, but we don’t yet know Justice Barrett’s view.

In Part One of this series, we discussed the May 12, 2025, U.S. Department of Justice Criminal Division’s new guidance memo on white-collar enforcement priorities in the Trump 2.0 Administration entitled “Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime.” In this new DOJ memo, and in an accompanying speech by Matthew R. Galeotti, the Trump Administration’s appointed Head of the Criminal Division, the DOJ announced its priorities and areas of focus for white collar enforcement.

In Part Two of this series, we address the DOJ’s changes made the same day to its Corporate Enforcement and Voluntary Disclosure Policy (“the CEP”), contained within the Justice Manual. The revised CEP provides additional benefits to companies that self-disclose and cooperate. In his May 12^th speech, Galeotti asserted that prior versions of the CEP were “unwieldy and hard to navigate” and noted that the DOJ seeks to be “as transparent as [it] can to companies and their counsel about what to expect under [DOJ’s] policies.” As part of this effort to increase transparency, the revised CEP includes a flowchart of potential outcomes should a company decide to make a voluntary self-disclosure as well as definitions of key terms such as “Voluntary Self-Disclosure,” “Full Cooperation,” “Timely and Appropriate Remediation” and “Providing Cooperation Credit.”

New episode of our video podcast, Speaking of Litigation: What if the key to navigating your most complex legal challenges lies in the capabilities of artificial intelligence (AI)?

Join Epstein Becker Green attorneys Alkida Kacani and Christopher Farella as they sit down with Jonathan Murphy, Senior Manager of Forensics at BDO, to examine how AI is revolutionizing the practice of law.

Discover how advanced technologies are refining e-discovery, optimizing predictive analytics, and transforming document review processes. The discussion also takes a deep look into the ethical considerations of integrating AI into legal work, from safeguarding sensitive information to maintaining professional standards in a highly dynamic field.

Late on Friday, May 16, in the case of A.A.R.P. v. Trump, the U.S. Supreme Court enjoined the Trump administration from carrying out further deportations under the Alien Enemies Act of 1798 (the “Act”) of 176 Venezuelan detainees currently held in Texas.

The 7–2 majority (Kavanaugh, J., concurring) criticized the administration and the U.S. Court of Appeals for the Fifth Circuit for their earlier handling of the case. Indeed, the detainees were being put on buses for deportation as the case was being considered by the Supreme Court.

While only last month, the Court allowed the president to invoke the Act to speed alien removals while litigation continues in lower courts, the Court also commanded that those threatened with removal should receive notice that they are subject to the Act and entitled to a “reasonable” opportunity to challenge their removal before the federal court where they are being detained. The administration had argued that the president had summary power to expeditiously deport alleged members of the gang Tren de Aragua.

When multiple forces act on an object, its direction of motion is determined by the net force, which is the vector sum of all individual forces.  When this happens within our federal government, we call it “interesting times.”

Not unlike other areas of the United States federal government of late, the U.S. Copyright Office has been thrown into turmoil following a stunning sequence of events this past week.  As reported in multiple news outlets:

• On Thursday, May 8, 2025, President Donald Trump fired Librarian of Congress Carla Hayden, the first woman and the first African American to be librarian of Congress.^[i] The Library of Congress is the larger federal agency within which the U.S. Copyright Office resides.

The most anticipated event at the U.S. Supreme Court today was the oral argument in the birthright citizenship case.

While the question of birthright citizenship, which the Romans called jus soli, is important both in terms of constitutional law and American customs and mores, the underlying question in the case raises a procedural issue that will affect the litigators who follow this blog the most.

That is the question of whether cases involving injunctive or declaratory relief should be resolved by the issuance of nationwide injunctions and orders, or just be limited to the actual parties and the district in which the case is at bar. The consolidated cases currently before the Court could be decided expeditiously. In any event, we shall follow developments closely and report promptly when a decision is issued.

For today, only one decision was forthcoming, with Justice Kagan writing for a unanimous Court in Barnes v. Felix, a not-insignificant case that reads like a law school exercise, but a very vivid and immediate one. Law enforcement officer Roberto Felix, Jr., pulled Ashtian Barnes over for suspected toll violations. Barnes ignored the officer’s order to exit the vehicle and began to drive away. Felix immediately jumped onto the doorsill and fired two shots into the car, fatally wounding Barnes, who was able to stop the car before he died. The entire encounter took five seconds, and only two seconds elapsed from the time the officer stepped onto the doorsill of the car until he fired.

On May 12, 2025, the U.S. Department of Justice’s Criminal Division released a new guidance memo on white-collar enforcement priorities in the Trump Administration entitled “Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime.” In this memo, and the accompanying speech by Matthew R. Galeotti, the Trump  Administration’s appointed Head of the Criminal Division, the DOJ reiterated its previously stated commitment to prosecuting illegal immigration, drug cartels, and transnational criminal organizations. For the first time in the new Administration, however, the DOJ clearly articulated new white-collar enforcement priorities, directing Criminal Division white-collar prosecutors to follow three core tenets: focus, fairness, and efficiency. As detailed below, the new memo sets forth the following three priorities:

1. Focus on High-Impact Waste, Fraud, and Abuse Harming Vulnerable Taxpayers

It should be no surprise that the administration is targeting actors that profit through “waste, fraud, and abuse.” The memo sets clear priorities for its prosecutors to investigate, listing as the #1 priority health care fraud and federal program and procurement fraud.  The memo goes on to provide a top 10 list of “high-impact areas”, with “trade and customs fraud, including tariff evasion” as #2.  Heavy focus is given to fraud perpetrated by foreign actors and conduct threatening U.S. national security. Also listed is fraud victimizing U.S. investors, including elder fraud and Ponzi schemes. Appearing as #8 on the list is violations of the Controlled Substances Act and the Federal Food, Drug and Cosmetic Act, including the creation of counterfeit pills laced with fentanyl and the “unlawful distribution of opioids by medical professionals and companies.”

The U.S. Supreme Court did not publish any opinions last week, but I note with sadness the death of retired Justice David Souter on May 8.

I got to know Justice Souter first during his vetting in 1990. Then and thereafter, he always had a kind word when we met. Once, in his pronounced Yankee accent, he said to me, "We haven't seen much of you lately at the Court." I responded that "it was more of your doing than mine," referencing the "cert. denieds" that were issued in the cases in which I mostly represented respondents, as well as a few petitioners. We had a good laugh at that. Over the course of his tenure, he moved from right-of-center to center-left but always maintained a cordial yet reserved tone and demeanor.

Today, the U.S. Supreme Court again decided only a single case, that of Feliciano v. Department of Transportation, and, to many Court observers, the most interesting thing about it is the lineup of Justices—one that contradicts common stereotypes as to how the Justices align with respect to statutory interpretation.

The decision, while particularly important to military reservists who work for the federal government, is hardly a front-page matter to most people. Today’s holding is simple: a federal civilian employee who is a reservist called to active duty pursuant to “any other provision of law . . . during a national emergency,” as described in 10 U.S.C. §101(a)(13)(B), is entitled to differential pay if the reservist’s service temporally coincides with a declared national emergency without any showing that the service bears a substantive connection to a particular emergency. “Differential pay” closes the gap between the reservist’s civilian government pay and his or her military pay while serving on active duty “during a national emergency.”

In its 2022 decision in Becerra v. Empire Health Foundation, for Valley Hospital Medical Center, the U.S. Supreme Court held that the phrase “entitled to [Medicare Part A] benefits” applied to “all those qualifying for the program, regardless of whether they are receiving Medicare payments for part or all of a hospital stay.” 597 U. S. 424, 445 (2022) (quoting §1395ww(d)(5)(F)(vi)(I); alteration in original).

In doing so, the Court left open the question of what it means to be “entitled to supplementary security income [SSI] benefits . . . under subchapter XVI.” §1395ww(d)(5)(F)(vi)(I).

Today, in Advocate Christ Medical Center v. Kennedy, the Court, in a 7–2 decision (with Justice Barrett writing for the majority and Justice Jackson, joined by Justice Sotomayor, dissenting), held “that a person is entitled to such benefits when she is eligible to receive a cash payment during the month of her hospitalization.” Today’s decision continues the unbroken string of losses that the petitioner hospitals have suffered in this litigation at both the administrative and judicial levels.