Regulatory Litigation

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In its recent decision in Office of the Attorney General v. PFLAG, Inc., the Texas Supreme Court addressed the scope of the attorney general’s (AG) authority to issue civil investigative demands (CIDs) under the Deceptive Trade Practices Act (DTPA). The dispute arose against the backdrop of State v. Loe, a case challenging Texas’s statutory ban on certain gender-affirming medical treatments for minors. PFLAG, a nonprofit involved in that litigation, received a CID issued by the Office of the AG (OAG) based on statements made in a supporting affidavit, which led the OAG to assert that PFLAG may have information relevant to potential misrepresentations by medical providers to insurance companies.

The Illinois attorney general (AG) recently filed a brief defending the Illinois Interchange Fee Prohibition Act (IFPA) in an appeal arising out of litigation captioned Illinois Bankers Association v. Raoul. The AG asked the Seventh Circuit to affirm a lower court’s decision to uphold the IFPA’s ban on certain interchange fees, also known as card “swipe” fees. The industry argues that the law is unconstitutional or inconsistent with federal law. The AG also asked the Seventh Circuit to overturn the lower court’s decision that the act’s data usage limitation is preempted by federal law.

The Supreme Court’s February 20, 2026, decision in Learning Resources, Inc. v. Trump upended the legal basis for billions of dollars in tariffs on imports imposed by the Trump administration. The Court held that the International Emergency Economic Powers Act (IEEPA) did not authorize the sweeping tariff regime, but it did not address how past collections should be refunded, leaving refund mechanics and timing to be worked out through U.S. Customs and Border Protection (CBP) in coordination with the U.S. Court of International Trade (CIT). While the ruling opened the door for importers to seek substantial refunds from the federal government, including through developing CBP refund procedures and related CIT orders, it also created a new front of litigation risk for companies that passed tariff costs through to consumers.

Graham K. Bryant, former principal deputy solicitor general and director of Virginia Appellate Litigation in the Office of the Attorney General of Virginia, has joined Troutman Pepper Locke’s Regulatory Investigations, Strategy + Enforcement (RISE) practice group and Virginia Appellate team. Graham’s practice centers on Virginia-focused appellate and regulatory matters, drawing on his experience handling high-stakes constitutional and policy litigation in Virginia’s courts and in federal courts, including multiple matters before the U.S. Supreme Court.

Today, the Securities and Exchange Commission’s (SEC) Division of Enforcement announced significant updates to its Enforcement Manual, the first comprehensive revision since 2017. These changes, which will now be reviewed annually, are designed to promote greater fairness, transparency, and efficiency in SEC investigations and enforcement actions.

The Financial Industry Regulatory Authority (FINRA) has proposed a sweeping update to how broker‑dealers handle outside business activities and private securities transactions. FINRA seeks to consolidate and replace Rules 3270 (Outside Business Activities of Registered Persons) and 3280 (Private Securities Transactions of an Associated Person) with a single new rule: Rule 3290 (Outside Activities Requirements). The proposal preserves the core investor protection concepts of the existing rules but refocuses them on investment‑related activities.

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After a four-day trial, Iowa Attorney General (AG) Brenna Bird obtained a ruling and judgment against Omaha-based stem cell businesses and its owner/CEO for deceptively marketing “regenerative medicine” stem cell injections to Iowans. The court ordered more than $800,000 in restitution, $180,000 in civil penalties, including enhanced civil penalties for targeting elderly persons, and permanently enjoined the company from committing acts or practices that the court deemed in violation of the Iowa Consumer Fraud Act.

What Happened:

A unanimous panel of the U.S. Court of Appeals for the Fourth Circuit revived a suit against certain pharmaceutical distributors brought under West Virginia public nuisance law. The panel held that the effects of over-distributing prescription opioids may constitute a public nuisance under West Virginia law, defined distributors’ duties under the Controlled Substances Act (CSA), and held that abatement may include monetary funding to remediate alleged community harm. Notably, the Fourth Circuit’s decision comes after the West Virginia Supreme Court declined to determine the scope of West Virginia public nuisance law, and as a result, the decision refused to limit the scope of public nuisance law without guidance from the West Virginia Supreme Court.

On October 7, 2025, Kalshi, a platform specializing in prediction market trading, filed a lawsuit against the Ohio Casino Control Commission (OCCC) and Ohio attorney general (AG), alleging that their regulatory actions overstep state authority. The complaint seeks to block enforcement of a cease-and-desist order that was issued by the OCCC in the spring, which accused Kalshi of “operating online sports gaming” and warned Ohio licensees that partnering with Kalshi could jeopardize their licensing status and integrity.