Month: March 2026

(Reuters) – A U.S. appeals court on Friday threw out a Federal Trade Commission order barring TurboTax maker Intuit from advertising its popular tax preparation software as “free” when many taxpayers are​ineligible.

In a 3-0 decision, the 5th U.S. Circuit Court of Appeals​in New Orleans said it violated the constitutional separation of powers ⁠for an FTC administrative law judge to decide deceptive advertising claims.

Intuit had ​been appealing a January 2024 FTC order, which followed an earlier ruling from an administrative​law judge, barring it from marketing any service as free unless it was free to everyone, or the company clearly disclosed what percentage of taxpayers qualified.

The FTC said Intuit deceived consumers​during six years of marketing into believing all TurboTax products were free,​with some ads saying TurboTax was “free, free, free, free.” It called the character of the Mountain View, ‌California-based ⁠company’s violations “egregious.”

Intuit had advertised its TurboTax Free Edition across a variety of media, but usually said the product was free only for taxpayers with “simple” returns.

Circuit Judge Edith Jones wrote for the appeals court that the FTC must pursue deceptive advertising​claims in federal​courts, where the ⁠agency may face a higher burden of proof.

She cited a 2024 U.S. Supreme Court decision curbing the Securities and Exchange Commission’s ​use of in-house judges to enforce laws.

Jones called it premature to ​grant Intuit’s ⁠request to dismiss the FTC case. She returned the matter to the FTC for further proceedings.

The FTC did not immediately respond to requests for comment. In a ⁠blog​post, Intuit general counsel Kerry McLean said the​FTC claims were meritless, and the company said it has “always been clear, fair and transparent” with customers.

Reuters) – Music publishers Universal Music Group, Concord and ABKCO have asked a judge in California to rule that U.S. copyright law does not insulate artificial intelligence startup Anthropic from​liability for copying their song lyrics to train its AI-powered chatbot Claude.

The publishers’, filed on Monday ‌in federal court in San Jose, tees up a critical question in the legal battle between creators and tech companies: Does the doctrine of “fair use” apply to the copying of millions of copyrighted works to train AI models?

The publishers argued in Monday’s filing that Claude’s​AI-generated lyrics are not fair use because they are derivatives of the publishers’ lyrics that “compete with and​dilute the market” for them. The publishers also said that Claude unlawfully reproduces their lyrics ⁠on demand without permission.

Spokespeople for Anthropic did not immediately respond to a request for comment on the motion on​Tuesday.

The plaintiffs said in a statement that Anthropic has “committed copyright infringement on a massive scale” and that the evidence was “overwhelming.”

The ​lawsuit is one of dozens of disputes between copyright owners such as authors and news outlets and tech giants including OpenAI, Microsoft and Meta Platforms over the training of their AI systems. Amazon and Google-backed Anthropic was the first major AI company to settle one​of the cases, agreeing last year to pay a group of authors $1.5 billion to resolve a class-action lawsuit.

The music publishers sued​Anthropic in 2023, alleging that it infringed their copyrights in lyrics from at least 500 songs by musicians including Beyonce, the Rolling ‌Stones ⁠and the Beach Boys.

All of the pending cases will likely revolve around whether AI systems make fair use of copyrighted material by using it to create new, transformative content. The publishers asked U.S. District Judge Eumi Lee on Monday to rule before trial that Anthropic infringed their copyrights and reject Anthropic’s fair use defense.

Anthropic has denied the allegations, but​has not yet argued for​fair use in the ⁠music publishers’ case. U.S. District Judge William Alsup in San Francisco said in a separate case last year that Anthropic’s use of books for AI training was “quintessentially transformative,” siding with the​company on the issue.

Alsup and another judge in Lee’s Northern California court issued diverging rulings ​on fair ⁠use in AI training. The publishers said on Monday that unlike the authors in those cases, their record of Claude reproducing their work on demand is “overwhelming.”

The case is Concord Music Group Inc v. Anthropic PBC, U.S. District Court for the Northern ⁠District of​California, No. 5:24-cv-03811.

(Reuters) – Major U.S. home real estate brokerages Compass, eXp, Redfin and two others must face a lawsuit by buyers accusing them of conspiring to fix commissions and inflate home prices,​a federal judge ruled on Tuesday.

In her order, U.S. District Judge LaShonda Hunt in Chicago ‌allowed most of the claims brought by 32 homebuyers to proceed against the brokerages, which also include Weichert Realtors, and United Real Estate Group.

The plaintiffs, seeking to represent at least thousands of home buyers in a class action, contend that​sellers are inflating home prices to offset the cost of commissions that the defendants require​buyers to pay their agents, driving up the overall cost of buying a ⁠home.

Redfin in a statement said its goal is to save consumers in real estate fees and “there is​a complete disconnect between our business model and the plaintiffs’ senseless claims in this case.”

Compass, eXp, Weichert ​and United Real Estate did not immediately respond to requests for comment. The companies have denied any wrongdoing.

Lead attorneys for the buyers also did not immediately respond to requests for comment.

Hunt found the plaintiffs had plausibly alleged the companies were​conspiring on commission requirements and were not independently following industry rules.

She also dismissed or trimmed some antitrust​claims under the laws of Florida, Missouri, Tennessee and other states.

In February, U.S. real estate brokerage Keller Williams agreed ‌to pay $20 ⁠million to settle claims against it in the lawsuit. Keller Williams, which markets itself as the largest real estate franchise by agent count, also said it would cooperate with the buyers.

The National Association of Realtors and some major brokerages have been hit with separate antitrust lawsuits by home sellers claiming damages in​connection with commission fees.​Many of those cases ⁠have resulted in settlements totaling hundreds of millions of dollars. The trade association denied any wrongdoing in that settlement.

(Reuters) The U.S. government’s work to build a four-part system to refund $166 billion in illegal tariff collections with interest is between ‌40% and 80% complete, according to a court filing on Thursday.

Brandon Lord, an official with U.S. Customs and Border Protection, said in a court filing the agency is developing an online claim portal for importers and brokers to submit refund requests.

Once submitted, the claims will go through​processing, review and refunding, according to the filing. Lord said in a filing last week the system could​be operating as soon as mid-April.

Lord’s filing at the U.S. Court of International Trade was made to ⁠comply with an order issued last week by Judge Richard Eaton as part of his directive to refund tariff payments.

Most ​U.S. tariffs were struck down by the Supreme Court in February, dealing a blow to President Donald Trump’s central economic ​policy. However, the Supreme Court did not provide guidance on refunding the tariff payments that had been collected from importers since February 2024.

Many large importers such as FedEx sued CBP to protect their right to a refund, which Trump said could take up to five years. Many​smaller importers feared the cost of the refund process would outweigh the benefits of trying to get reimbursed.

Eaton last week ordered ​CBP to begin processing refunds using its existing system, but the agency instead proposed a new process that would be ready to ‌accept refund ⁠applications as soon as next month and would not require importers to sue.

Lord said in Thursday’s filing the least developed part of the system was the mass processing portion, which was 40% complete, while the most developed portion was the review portion, which was 80% complete.

CBP did not say how quickly refunds would be paid. More than 330,000 importers paid​the tariffs on 53 million shipments​and only around 21,000 ⁠were registered with its system to receive a refund, according to a court filing last week.

Refunds will only be issued to importers who paid them. Consumer groups and lawmakers have​urged companies to pass along the refunds to consumers, although there is no obligation to​do so.

FedEx and ⁠Costco have been sued by customers for refunds and FedEx has said it will reimburse customers, while Costco said it will use the refunds to lower prices.

After the Supreme Court struck down the tariffs, Trump ordered new 10% tariffs under a decades-old authority meant ⁠to address​a balance-of-payments emergency.

States and private businesses have sued to challenge those ​tariffs, which they argue were also illegally imposed.

In addition, the Trump administration has started investigating unfair trade practices of major trading partners, a step toward imposing​tariffs under a law that has withstood legal challenges.

(Reuters) UBS agreed in principle​to settle a lawsuit by whistleblower Trevor Murray, a ‌former bond strategist who said the Swiss bank fired him in retaliation for refusing to publish misleading research reports, ending a long-running case that went to the​U.S. Supreme Court.

The parties resolved their differences through mediation, and​expect within 30 days to sign a final settlement ⁠resolving the more than 13-year-old dispute, according to a joint letter​filed on Wednesday in Manhattan federal court. U.S. District Judge Katherine​Polk Failla ordered the case’s dismissal on Thursday.

Robert Herbst, a lawyer for Murray, declined to comment. UBS and its lawyers did not immediately respond to​requests for comment.

Murray claimed that members of UBS’ commercial mortgage-backed securities​desk pressured him to “skew” his research to support the bank’s trading positions and ‌product ⁠offerings.

He worked mainly in Manhattan before being fired in February 2012, and sued six months later.

UBS has said it fired Murray in the course of eliminating thousands of jobs, following a $2.3 billion loss at​a London trading​desk, not ⁠because of his whistleblowing.

In February 2024, the Supreme Court reinstated a more than $2.6 million award for Murray, including ​a $903,300 jury verdict for back pay, saying a​federal law ⁠protecting financial whistleblowers didn’t require them to prove their firings were motivated by retaliatory intent.

One year later, the federal appeals court in Manhattan set ⁠aside ​the award, citing defective jury instructions. ​The Supreme Court declined to hear Murray’s subsequent appeal.

(Reuters) – An appeal containing fake case citations that misrepresent the law can be dismissed as frivolous, a U.S. federal appeals court panel said in a decision sanctioning​two attorneys who submitted filings that bore hallmarks of artificial intelligence “hallucinations.”

The Cincinnati-based 6th U.S. Circuit Court of Appeals ‌said on Friday that attorneys Van Irion and Russ Egli “sullied the reputation of our bar, which now must litigate under the cloud of their conduct.”

The court said it found more than two dozen fake citations and misrepresentations of fact in the appeal, which involved an incident at a fireworks​show hosted by the city of Athens, Tennessee.

The appeals court in a prior order in the case asked the attorneys​how they vetted their briefs for accuracy and whether they used generative AI to write the filings. ⁠The attorneys did not answer the court’s questions about AI, and instead challenged the lawfulness of the order.

The two attorneys must reimburse​Athens for its legal work on the appeal, and also must individually pay $15,000 each to the appeals court as a punitive sanction,​according to the order.

Egli and Irion in a statement on Tuesday said they “categorically” deny the court’s allegations of citing fake cases, and also contend they were denied a meaningful chance to respond to the panel’s questions.

“We are pursuing all available legal remedies to challenge this procedurally deficient order and defend the​integrity of the judicial process,” the lawyers’ statement said.

Irion told Reuters that:

“the Circuit Court is ignoring its own rules, and clerks​are signing substantive orders without authorization.”

Athens Mayor Larry Eaton in a statement on Monday said the appeals court in a related order upheld the dismissal ‌of several ⁠lawsuits against the city over the 2022 fireworks event. Eaton called the decision “reassuring.”

The sanctions decision comes as more courts grapple with fake case citations and other errors attributable to generative artificial intelligence platforms, which sometimes fabricate information. Lawyers are not prohibited from using AI tools but are bound to safeguard the accuracy of their submissions, and dozens of attorneys have been sanctioned in recent years for submitting AI-generated​material that they failed to vet.

Irion ​and Egli had the appeals ⁠court’s demand for details about how they prepared their filings partly on the grounds that doing so would violate protections for attorneys’ work-product and communications with clients.

The 6th Circuit panel, Circuit Judges John​Bush, Jane Branstetter Stranch and Eric Murphy, said:

“whether and how the briefs were cite-checked does not​implicate conversations regarding ⁠legal advice.”

“Most litigants caught submitting fake cases have apologized and sought forgiveness, rightly recognizing the seriousness of their misconduct,” Bush wrote for the panel.

The judges said by contrast:

“Irion and Egli scolded this court and accused it of engaging in a vast conspiracy to harass them.”

The case is ⁠Whiting v.​City of Athens, 6th U.S. Circuit Court of Appeals, No. 25-5424.

(Reuters) – A group of 24 U.S. states sued President Donald Trump’s administration on Thursday in the first legal challenge to his newly imposed 10% global tariffs, alleging that the president cannot sidestep a recent U.S. Supreme Court ruling that invalidated most of his previous tariffs on imported goods by citing new legal authority.

The Democratic-led states, including New York, California and Oregon, argue the new tariffs, which Trump announced immediately after the high court ruling on February 20, are also illegal. The tariffs were imposed for 150 days under the Trade Act of 1974, which is meant to address short-term monetary emergencies, not routine trade deficits that arise when a wealthy nation like the United States imports more than it exports, according to the states’ lawsuit filed in the New York-based U.S. Court of International Trade.

Oregon Attorney General Dan Rayfield said during a press conference that Trump’s latest tariffs are an attempted “end run” around working with Congress, as the U.S. Constitution requires.

Make no mistake about it, President Trump’s signature economic policy is historically unpopular and is costing Americans, our business, and us as states hundreds of billions of dollars. It cannot continue just because a few of Trump’s lawyers have found a way to twist words and craft a legal argument.

White House spokesperson Kush Desai said in a statement that the administration will vigorously defend the president’s action in court.

The President is using his authority granted by Congress to address fundamental international payments problems and to deal with our country’s large and serious balance-of-payments deficits.

Trump’s February 20 executive order imposed a 10% tariff on imports, but U.S. Treasury Secretary Scott Bessent said Wednesday that those rates would likely rise to 15% later this week.

CENTRAL PILLAR

Trump has made tariffs a central pillar of his foreign policy in his second term, claiming sweeping authority to issue tariffs without input from Congress. But the Supreme Court on February 20 handed Trump a stinging defeat when it struck down a huge swath of tariffs he had imposed under the International Emergency Economic Powers Act, ruling that the law did not give him the power he claimed.

Trump responded by criticizing the justices who ruled against him and announcing new duties under Section 122 of the Trade Act of 1974, a law that – like IEEPA – had never before been used to impose tariffs in the U.S. Trump has also imposed other tariffs, on imports like autos, steel and aluminum, under more traditional legal authority. Those tariffs are safer from legal challenges.

Section 122 authority allows the president to impose duties of up to 15% for up to 150 days on any and all countries to address “large and serious” balance of payments issues. It does not require investigations or impose other procedural limits. After 150 days, Congress would need to approve their extension.

The balance-of-payments deficit measures in the Trade Act are primarily meant to address “archaic” monetary risks that existed when foreign governments could trade in their dollars for gold held by the U.S., according to the states. Trump, however, has misapplied that standard in an attempt to instead address U.S. “trade deficits,” which occur when a nation imports more than it exports, according to the states.

The states that filed the lawsuit include 22 states with Democratic attorneys general and two, Pennsylvania and Kentucky, with Democratic governors and Republican attorneys general. They are asking the court to issue an order that would block the new tariffs and order any tariff payments already made under Section 122 authority to be refunded.

Meanwhile, the court is grappling with about 2,000 lawsuits from businesses seeking refunds for more than $130 billion in IEEPA tariff payments made by importers before the Supreme Court’s February ruling. On Wednesday, the court ordered U.S. Customs to begin processing tariff refunds.

(Westlaw) American Transit Insurance Co. must cover Uber Technologies Inc. in 23 lawsuits brought by individuals who allege they were injured in accidents caused by the company’s independent drivers, a Manhattan federal judge has ruled.

Uber Technologies Inc. et al. v. American Transit Insurance Co., No. 24-cv-1207, 2026 WL 587834 (S.D.N.Y. Mar. 3, 2026)

U.S. District Judge Analisa Torres of the Southern District of New York said March 3 that Uber sufficiently demonstrated that ATIC had breached its duty to defend and indemnify the ride-hailing giant and is liable for damages because the underlying suits clearly trigger coverage.

Car crash claims

New York drivers who are licensed by the city’s Taxi & Limousine Commission to operate for-hire vehicles are required to carry a minimum of $100,000 in commercial automobile liability insurance to protect them against bodily injury and property damage claims.

In contracting to drive for Uber, drivers also must agree to add the company as an additional insured under their policies.

The coverage dispute stems from nearly two dozen New York state court lawsuits brought by riders or third parties who allege they were injured in a motor vehicle accident caused by an Uber driver.

All of the suits allege that the driver was using Uber’s “rides platform” app when the accident occurred and that Uber is vicariously liable for the driver’s conduct.

Uber tendered the actions to ATIC for defense and indemnification. However, the insurer disclaimed coverage entirely, forcing Uber to pay substantial funds to defend itself, according to the ride-share company.

Uber sued ATIC in February 2024, alleging that the underlying plaintiffs’ bid to hold it vicariously liable for the drivers’ conduct triggered coverage because the policies define “insured” to encompass “anyone liable for the conduct of an ‘insured'” to the extent of that liability.

The complaint sought a declaration that the insurer acted in breach of contract and is obligated to defend and indemnify Uber in the underlying suits.

Ultimate liability ‘not a consideration’

In granting Uber’s motion for summary judgment, Judge Torres agreed with the company that the underlying claims clearly triggered ATIC’s duty to defend and indemnify it.

ATIC argued that Uber does not qualify as an insured because undisputed evidence shows that the company cannot be held liable for the conduct of its co-defendant independent drivers.

But the judge said ATIC cannot make such an assumption in assessing its coverage obligations. Rather, its duty to defend exists regardless of whether Uber ultimately escapes liability in the underlying litigation, she said.

As the New York Court of Appeals has made quite clear, ‘the ultimate responsibility of the insured is not a consideration’ when a complaint’s allegations are sufficient to trigger the duty to defend.

Judge Torres said, quoting Colon v. Aetna Life & Casualty Insurance Co., 66 484 N.E.2d 1040 (N.Y. 1985).

She further ruled that Uber is permitted to select independent counsel of its choice to defend the subset of underlying suits that allege theories of direct liability against the company.

This is so, she said, because ATIC’s interests conflict with Uber’s in those actions given that the ride-hailing company is insured under the policies “only to the extent that Uber is liable under the vicarious liability theory, but not any direct liability theory.”

Attorneys with Perkins Coie LLP represented Uber. Daniel Wagner London and Robert S. Nobel of London Fischer LLP represented ATIC.

(Reuters) – ChatGPT maker OpenAI has been accused in a new lawsuit of practicing law without a U.S. license and helping a former disability claimant breach a settlement and flood a federal court docket with meritless filings.

Nippon Life Insurance Company of America alleged on Wednesday in a lawsuit filed in federal court in Chicago that OpenAI wrongfully provided legal assistance to a woman who sought to reopen a lawsuit that was already settled and dismissed.

ChatGPT is not an attorney.

Although OpenAI has shown ChatGPT can pass an attorney bar exam, Nippon said, “it has not been admitted to practice law in the State of Illinois or in any other jurisdiction within the United States.”

The lawsuit seeks an order declaring that OpenAI violated Illinois’ unauthorized practice of law statute, as well as $300,000 in compensatory damages and $10 million in punitive damages.

OpenAI in a statement on Thursday said

this complaint lacks any merit whatsoever.

A lawyer for Nippon, a subsidiary of the Japanese insurer Nissay, said the company was declining to comment.

Nippon claimed OpenAI encouraged the woman, an employee of a logistics company that had insurance coverage through Nippon, to press ahead in her already-settled disability case. Nippon said it spent significant time and resources and racked up substantial fees responding to the woman’s ChatGPT-powered filings.

The lawsuit appears to be one of the first cases to accuse a major AI developer of engaging in the unauthorized practice of law through a consumer‑facing chatbot.

It comes as the technology’s rapid adoption for legal filings has led to mounting AI “hallucinations” in court filings, leading judges to sanction litigants and lawyers for submitting filings with fabricated case citations or other unverified material produced with generative AI tools.

The case stems from filings by the employee after she settled her long‑term disability benefits suit with prejudice in January 2024, according to Nippon. The woman is not a defendant in the lawsuit.

Nippon said the woman last year uploaded an email from her then-lawyer into ChatGPT, which allegedly validated her concerns about the advice she was being given. The woman fired her lawyer and moved to reopen her closed case using ChatGPT, the lawsuit said.

A judge denied that bid in February 2025, but Nippon said the plaintiff then filed a new case and dozens of motions and notices that the company contends served “no legitimate legal or procedural purpose.” Nippon claims ChatGPT drafted those papers.

Nippon said OpenAI amended its policies in October to bar users from using the platform for legal advice, but alleged it previously had no such prohibitions.

The case is Nippon Life Insurance Company of America v. OpenAI Foundation and OpenAI Group PBC, U.S. District Court, Northern District of Illinois, No. 1:26-cv-02448.

For plaintiff: Justin Wax Jacobs of Nippon Life Insurance Company of America, and Christopher Assise of Sidley Austin

For defendant: No appearances yet

Read more:

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Law firm’s AI experiment gives lawyers a break from billable hours

Lawyers accused of AI misuse in FIFA case fined $24,400

(Reuters) – U.S. banking regulators clarified on Thursday that banks should not have to hold additional capital against losses when dealing with blockchain-based securities, saying their rules are “technology neutral.”

The Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency issued new guidance clarifying that they will not distinguish between tokenized securities and traditional securities when it comes to bank capital.

The agencies said they were issuing the document due to increasing interest from banks in representing ownership rights in tokenized securities.

The technologies used to issue and transact in a security do not generally impact its capital treatment.

Buoyed by President Donald Trump’s pro-crypto stance and his administration’s push for friendly regulations, the crypto industry last year rushed to capitalize on a global surge in enthusiasm for the sector, with companies like Robinhood, Kraken and Gemini launching tokenized stocks in Europe.

The industry says tokenized shares – blockchain-based instruments that track traditional equities – could revolutionize stock markets by allowing shares to be traded 24/7 and settled instantly, boosting liquidity and reducing transaction costs.

A few companies have issued their own experimental stock tokens on the blockchain – software that acts as a shared digital ledger – but most tokenized shares are pegged to public companies and issued by third parties. Other companies, including BlackRock and Franklin Templeton, offer tokenized treasury products.