Deregulation and Preemption of State Laws in the Railroad Industry: When Less May Be Better Than None

Wednesday, March 26th, 2025

Article originally featured in the Legal Backgrounder, Vol. 40 No. 3 from the Washington Legal Foundation

One may have missed the Executive Order issued February 19, 2025, entitled “Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulator Initiative” (“Executive Order”).[1]  It orders agency heads to identify regulations to target for deregulatory action.  Although that may be a substantial opportunity for certain heavily regulated industries, those same industries and their regulators should be careful that the unintended consequence is not more regulation at the state and local level.  The railroad industry is such an industry; the Federal Railroad Administration (“FRA”) is such a regulator.

The Executive Order

The administration previously had announced that an agency may adopt a new regulation only if it repeals ten existing regulations.[2]  The Executive Order upped the emphasis on deregulation.  Specifically, the Executive Order gave agencies 60 days from the date of the order to identify seven classes of regulations.  Those classes included: (i) regulations that impose significant costs upon private parties that are not outweighed by public benefits; (ii) regulations that harm the national interest by significantly and unjustifiably impeding technological innovation, infrastructure development, disaster response, inflation reduction, research and development, economic development, energy production, land use, and foreign policy objectives; and (iii)  regulations that impose undue burdens on small business and impede private enterprise and entrepreneurship.[3]  Thereafter agency heads and the Office of Information and Regulatory Affairs have 60 days to develop an agenda that seeks to rescind or to modify these regulations.

There are undoubtedly legacy regulations promulgated by the FRA or the Department of Homeland Security (“DHS”) that meet the criteria listed in the Executive Order.  The rail industry has long targeted these regulations and may see the Executive Order as the next good opportunity to have the FRA or DHS repeal some of their regulations.  But, there is risk that repeal could result in State regulation if done carelessly.

The Federal Rail Safety Act

FRSA contains an express preemption provision that governs the relationship between federal regulation by the two agencies and state regulation of railroad safety.[4]  This preemption provision establishes the balance between national uniformity of laws and regulations and state-level regulation in railroad safety matters.  FRSA preemption is valuable to the rail industry, which has invoked it successfully to stop state regulation.  Based on a variety of existing federal regulations, courts have held that it preempts State attempts to regulate train speeds,[5] warning devices at railroad-highway crossings,[6] and blocked crossings,[7] among others.

Section 20106 of Title 49 provides that laws, regulations, and orders related to railroad safety or to railroad security shall be nationally uniform to the extent practicable.[8]  At the same time, it provides that a “State may adopt or continue in force a law, regulation, or order related to railroad safety or security until the Secretary of Transportation (with respect to railroad safety matters), or the Secretary of Homeland Security (with respect to railroad security matters), prescribes a regulation or issues an order covering the subject matter of the State requirement.”[9]  Additionally, a “State may adopt or continue in force an additional or more stringent law, regulation, or order related to railroad safety or security when the law, regulation, or order— (A) is necessary to eliminate or reduce an essentially local safety or security hazard; (B) is not incompatible with a law, regulation, or order of the United States Government; and (C) does not unreasonably burden interstate commerce.”  49 U.S.C. 20106(a)(2).

If a federal law contains an express preemption clause, it does not immediately end the inquiry because the question of the substance and scope of Congress’ displacement of state law still remains.[10] Congressional intent is determined by the language of the statute itself, and through the structure and purpose of the federal law.  Interpreting the language of the FRSA preemption provision, the Supreme Court has observed that the provision does not employ the broad term “relate to” but rather limits preemptive effect to those regulations “covering” the same subject matter as the state law in question.[11]  It held that “‘covering’ is a more restrictive term which indicates that the preemption applies only if the federal regulations substantially subsume the subject matter of the relevant state law.”

Does FRSA Preemption Still Apply After a Deregulatory Action?

As the railroad industry considers whether to petition either agency to repeal legacy regulations, a fundamental and unresolved question is whether FRSA preemption will still preempt States from regulating the area that the repealed regulation covered.  There are no examples that define the contours of preemption after repeal of a rail safety regulation.

A Ninth Circuit case, in which the FRA and the industry attempted to assert that FRSA preemption applied when the FRA considered regulating but declined to adopt a rule, may be instructive of the risk.  When considering and withdrawing a proposal to regulate the size of a train crew, FRA’s Order noted that then “nine states have laws in place regulating crew size” and stated that the Order’s intent is “to preempt all state laws attempting to regulate train crew staffing in any manner.”[12]  FRA explicitly intended its “notice of withdrawal to cover the same subject matter as the state laws regulating crew size and therefore expects it will have preemptive effect.”[13]

The Ninth Circuit rejected FRA’s attempt to negatively or implicitly preempt state regulation when withdrawing the proposed regulation.[14]  The Court held that “Congress limited the preemptive effect of an FRA order by providing in § 20106(a)(2) that states may ‘continue in force an additional or more stringent law’ that is ‘necessary to eliminate or reduce an essentially local safety or security hazard’ and ‘is not incompatible with a [federal] law, regulation, or order.’”  The state regulation “is preempted only when incompatible with the FRA’s decision.” Id. at 1180.  “The Order, although declaring it ‘negatively preempt[s] any state laws’ concerning crew staffing, does not address why state regulations addressing local hazards cannot coexist with the Order’s ruling on crew size.”  Id.

If a proposed and not adopted rule does not preempt state regulation, how will courts view an instance in which an agency withdraws its regulatory design over a safety issue by repealing an existing regulation?  Does a withdrawn regulation still “cover the subject matter”?  The risk is that the industry would lose the express preemption of § 20106 when the agency repeals a regulation, and the industry would be left arguing a theory of implied preemption.  Such a theory would likely be weaker given the FRSA preemption provision and the legal presumption against preemption.

Thinking Ahead

The industry and the agencies should proceed deliberately and consider steps to reduce the risk of state regulation as an unintended consequence of seeking deregulation at the federal level.  First, the rail industry should be sure the targeted legacy regulation is significant enough to justify the legal fight to follow if States step into the area.  Second, the industry should propose revisions to regulations that make them less restrictive rather than propose outright repeals.  Third, the agency should heed the lessons of the Ninth Circuit case.

[1] https://www.whitehouse.gov/presidential-actions/2025/02/ensuring-lawful-governance-and-implementing-the-presidents-department-of-government-efficiency-regulatory-initiative/
[2] https://www.whitehouse.gov/fact-sheets/2025/01/fact-sheet-president-donald-j-trump-launches-massive-10-to-1-deregulation-initiative/
[3] Of the four other classes two may be potentially relevant here (i) regulations that are based on anything other than the best reading of the underlying statutory authority or prohibition and (ii) regulations that implicate matters of social, political, or economic significance that are not authorized by clear statutory authority.
[4] The Interstate Commerce Commission Termination Act (“ICCTA”) also includes a preemption provision that the railroad industry argues may also apply to certain safety regulations.  49 U.S.C. 10501(b).  There may be preemption under ICCTA but it would require a more complex analysis in the safety realm.
[5] See e.g., CSX Transportation v. Easterwood, 507 U.S. 658, 664 (1993) (“Easterwood”); Seyler v. Burlington Northern Santa Fe Corp., 102 F. Supp.2d 1226 (D. Kan. 2000).
[6] See e.g., Armijo v. Atchison, Topeka & Santa Fe Ry., Co., 754 F. Supp. 1526 (D.N.M. 1990).
[7] For a good overview of Section 20106, see People v. Burlington Northern Santa Fe R.R., 209 Cal. App.4th 1513 (2012); Village of Mundelein v. Wisconsin Cent. R.R., 882 N.E2d 544 (Ill. 2008).
[8] See, Frank J. Mastro, Preemption Is Not Dead: The Continued Vitality of Preemption Under the Federal Railroad Safety Act Following the 2007 Amendment to 49 U.S.C. § 20106, 37 Transp. L. J. 1 (2010).
[9] Infermo v. N.J. Transit Rail Operations, Inc., 2012 U.S. Dist. LEXIS 8151 (D. Ct. NJ 2012).
[10] Altria Group v. Good, 555 U.S. 70, 76 (2008).
[11] Easterwood, 507 U.S. at 664.
[12] 84 Fed. Reg. 24,735 at 24,741.
[13] Id. at 24,741.  It may be worth considering what would have happened if the FRA has adopted a regulation that said a minimum on one trained crew is required.  State regulation would have been preempted.
[14] Transp. Div. of the Int’l Ass’n of Sheet Metal, Air, & Transp. Workers v. FRA, 988 F.3d 1170 (9^th Cir. 2021).

U.S. Companies and U.S. Persons No Longer Required to Report Under Corporate Transparency Act

Tuesday, March 25th, 2025

On March 21, 2025, the Financial Crimes Enforcement Network (“FinCEN”) issued an Interim Final Rule which serves as an update to reporting requirements under the Corporate Transparency Act (“CTA”). The update revised the definition of “reporting company” to only include entities formed under the laws of a foreign country AND that are registered to do business in the United States. Additionally, U.S. persons that beneficially own foreign entities do not need to report under the CTA. This update removed U.S. entities from the definition of “reporting companies,” removing any obligation of U.S. entities to file beneficial ownership reports under the CTA.

Reporting companies (as updated) registered to do business in the United States prior to the issuance of the Interim Final Rule must file beneficial ownership reports no later than 30 days from March 21, 2025. Reporting companies formed after the issuance of the Interim Final Rule have 30 calendar days from the date their registration is effective.

FinCEN is soliciting comments on the rule and intends to finalize it this year.

For now, U.S. entities are off the hook for beneficial ownership reporting, but until the Interim Final Rule is finalized, former reporting companies should stay apprised of updates as they come.

To view the official notice from FinCEN and stay up to date with CTA developments visit www.fincen.gov/boi.

Fourth Circuit Allows Administration to Implement Anti-DEI Orders Pending Appeal

Tuesday, March 18th, 2025

On March 14, 2025, a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit granted the Trump Administration’s motion to stay enforcement of a district court’s preliminary injunction against three aspects of President Trump’s executive orders (EOs) banning “illegal” diversity, equity, and inclusion (DEI) preferences and programs.

Key points of the ruling:

1. The stay allows the Trump Administration to resume implementation of certain challenged aspects of EOs 14151 and 14173, i.e., the termination of equity-related grants or contracts, the ability to require certifications from government contractors that they do not operate programs promoting “illegal DEI” and to develop plans for enforcing the provisions related to “illegal DEI.”
2. The panel’s order did not provide a detailed explanation for how the administration had made a “strong showing that it is likely to succeed on the merits” in order to justify the stay. To the contrary two of the concurring opinions made it clear they had reserved judgment on the merits until the court received additional briefing and further proceedings could be held.
3. Each of the three judges issued concurring opinions with notable remarks:

• Chief Judge Albert Diaz acknowledged the lack of a definition of illegal DEI leaves an unclear scope of programs targeted for elimination and potential Fifth Amendment vagueness concerns, and suggested that the First Amendment should “provide room of open discussion and principled debate about DEI programs,” as well as to “freely consider how to continue empowering historically disadvantageous groups, while not reducing individuals within those groups “to an assigned racial [or sex-based] identity.”
• Judge Pamela Harris cautioned that “what the Orders say on their face and how they will be enforced are two different things,” and that agency actions beyond the Orders’ narrow scope may raise serious First Amendment and Due Process concerns. She also noted that she agreed with Judge Diaz that “people of good faith who work to promote diversity, equity and inclusion deserve praise, not opprobrium.”
• Judge Allison Rushing questioned the scope of the nationwide injunction that seeks to enjoin all federal agencies, even those not named as parties, and expressed his view that the government was likely to succeed in demonstrating that the challenged provisions of the EO do not violate the constitution. He further questioned the case’s ripeness and the plaintiffs’ standing absent any action to implement the provisions in question and argued that a judge’s opinion that “DEI  programs ‘deserve praise not opprobrium’ should play absolutely no role in deciding the case.”

4. The stay of the injunction will remain in place pending further legal briefs are submitted by the parties and further legal proceedings are conducted by the 4^th Circuit Court of Appeals.

Implications for employers and federal contractors:

1. Employers should continue to conduct privileged assessments of their employment practices and in particular any DEI-related programs, preferences and initiatives.
2. Federal contractors should anticipate potential agency requests for certification on new contracts or grants issued on or after April 21, 2025, regarding compliance with federal anti-discrimination laws. As a reminder, affirmative action plans based on race, color, sex, sexual preference, national origin or ethnicity are no longer authorized under federal law as EO 11246 has been revoked, and the 4^th Circuit’s ruling does not alter this change in the law.  Likewise, any programs or initiatives provide employment-related preferences based on race, color, sex, sexual preference, nation origin or ethnicity will be subject to close scrutiny under federal anti-discrimination laws.
3. The situation remains fluid and in-house attorneys will need to continue to closely monitoring developments in this area.

This ruling represents a significant development in the ongoing legal battle over President Trump’s executive orders targeting DEI programs in the federal government and beyond. The case highlights the complex interplay between executive power, civil rights laws, and constitutional concerns surrounding DEI initiatives.

Gentry Locke attorneys are actively monitoring developments and are ready to assist. Contact us today.

Photo from Dolores M. Harvey/Shutterstock.

2025 Post Session Legislative Update

Thursday, February 27th, 2025

The Virginia General Assembly Adjourned Sine Die on Saturday, February 22. As the political focus of Virginia shifts to the coming statewide and House of Delegates races, let’s look at significant policy decisions the General Assembly made. Over the coming weeks, Governor Youngkin will take action on the bills sent to his desk. His deadline for action is March 24. The General Assembly will have a Reconvene Session on April 2 to respond to his amendments and vetoes. All laws signed by the Governor will take effect July 1 of this year unless otherwise stated in the legislation. It should be noted that the General Assembly has put in place a Special Session to meet at some point this year to address actions at the federal level that could impact the state budget.

Below are updates on legislative initiatives mentioned in the original Pre-Session Report we released, along with some additional bills that generated robust discussion and interest.

Artificial Intelligence

Over the past year, the Joint Commission on Technology and Science (JCOTS) met to discuss legislation carried over from the 2024 Session. All four of the refined bill concepts were recommended by the Commission.

• HB697(Maldonado)/SB571(Ebbin): This legislation makes it a Class 1 misdemeanor to use synthetic media for committing a crime offense involving fraud. Also, it allows civil action against the person who violates this code section. Lastly, it calls on the Attorney General to establish a workgroup to study Virginia’s AI laws. Status: Concepts reintroduced as HB2124 and SB1053 have passed both chambers with widespread bi-partisan support and are on the Governor’s desk.

• SB164(Reeves): Creates property rights for people to own their digital replications of themselves for commercial use. Allows these digital creations to be licensed and provides a legal framework for unauthorized use. Status: Concepts reintroduced as SB1421. The Senate Bill was passed by indefinitely (8-7). HB2462 (Glass) tackled this issue differently. It passed the House (55-41). HB2462 was put into conference following Senate amendments conforming it to Senator Reeves’ introduced bill but failed to generate a conference report.

• SB487(Aird): Establishes standards for public bodies that use AI systems to make “high-risk” decisions to avoid algorithmic discrimination. A high-risk decision is considered material or legal and impacts education, employment, finance, or housing. The concern is based on fears of biased data that will negatively impact a person because of their gender, race, etc. It also seeks to establish a workgroup to study the impact on local governments. Status: Concepts reintroduced as SB1214 and passed the Senate 40-0. It was later left in the House Appropriations Committee.
• HB747(Maldonado): Regulates high-risk decision-making AI systems private entities use to prevent algorithmic discrimination. This includes disclosure to a consumer when AI is being used, allowing a person to opt out in favor of human review. Status: Concepts reintroduced as HB2094 and passed the House 51-47. This legislation passed the Senate with a substitute that added a definition for facial recognition technology. The legislation passed and is on the way to the Governor’s desk.

Blockchain

Delegate Dan Helmer introduced legislation, HB1796, to permit Decentralized Autonomous Organizations (DAOs) to operate in Virginia. A DAO is an organization that is managed through computer programs where financial resources and voting are tracked through blockchain. Three states currently recognize DAOs as legal entities: Tennessee, Vermont, and Wyoming. Status: This legislation was passed with a reenactment clause. This means, in its current state, the bill would have to pass the General Assembly again next Session. It is on the Governor’s Desk.

Car Tax

The Governor’s amendments to the biannual budget seek to provide car tax relief. He addresses this issue by creating a $1.1 billion fund for income tax credits—individual taxpayers earning $50,000 or less will qualify for $150 in tax credits. Joint filers will qualify for $300 if their income is $100,000 or less. Status: The final conference report used the $1.1 billion as rebates of $200 for individuals and $400 for joint filers to be issued by October 15, 2025, and increases in the refundable portion of the Earned Income Tax Credit (EITC) to

20% of the federal credit.

Data Centers

On December 9, 2024, the Joint Legislative Audit and Review Commission (JLARC) reported on Virginia’s world-leading data center industry and policy options for the General Assembly to consider how best to handle the industry moving forward. Northern Virginia accounts for 13% of global data center operational capacity, the world’s single largest market. Data centers are estimated to contribute $9.1 billion in GDP annually to the Commonwealth’s economy. The most substantial aspect of the report is the impact industry growth will have on energy consumption. The report states that left unconstrained, data center projects will increase energy demand by +183% between now and 2040. Much of the industry’s new site growth is expected along the I-95 corridor. The list of policy options made by the Commission may be read here. Status: Numerous data center bills were introduced during this Session based on the JLARC report. Below are a few of note.

• HB1601(Thomas)/SB1449(Ebbin) Provides that before any approval of a rezoning application, special exception, or special use permit for the siting of a new high energy use facility (HEUF) shall collect certain information. Status: HB1601 Passed the House (57-40). SB1449 Passed the Senate (33-6-1). They were put into conference and passed by the General Assembly. They are on the Governor’s desk.

• HB2084(Shin) Directs the SCC to determine if the utilities need new and additional classifications for energy customers. Status: Passed the House (61-35). It then passed the Senate with a substitute (24-16). Following conference it passed the General Assembly in its House-approved form.

• SB960(Perry) Directs the SCC to initiate proceedings to determine if the current allocation of costs among its customers is appropriate to ensure data centers are not being subsidized. Status: This legislation was put into conference with HB 2084. It did not report from the conference.

• SB1047(Roem) Directs the Department of Energy to evaluate and asses demand response programs. Status: Passed the Senate (21-17). It passed the House (53-44). The bill is on the Governor’s desk.

NOVA Casino

Following extensive legislative actions, studies from JLARC, and referendums by localities, Virginia has five permitted casinos in as many localities: Bristol, Danville, Norfolk, Petersburg, and Portsmouth. During the 2024 Session, Senator Marsden introduced SB675, which enables a casino in Northern Virginia. This legislation failed to pass, but similar legislation was introduced during this Session.  Status: SB982 (Surovell) passed the Senate (24-16) but was left in the House Committee on Appropriations.

Oak Hill Farm Park

Delegate Lopez introduced legislation to authorize the Department of Conservation and Recreation to acquire Oak Hill Farm as a state park for preservation. This property is 1,240 acres and includes James Monroe’s home. Status: The legislation passed the House 99-0. After lengthy discussions in Senate Finance and Appropriations regarding the project’s long-term viability, it was reported. It was later recommitted to the committee, killing the legislation.

Rental Algorithm Pricing

Several bills were introduced in this Session to regulate the use of algorithms for setting rental pricing. These bills, HB 1870 (Callsen), HB 2047 Anthony, and SB 1400 (Salim), are looking to address concerns raised from recent federal investigations and lawsuits surrounding this practice. Status: All failed to report but will be studied by the Joint Commission on Technology and Science.

Sanctuary Cities

Under budget Item 377 in the Governor’s proposed amendments to the biannual budget, there is language that compels officials to comply with ICE and directs the withholding of payments for failure to comply. This is one of many policy decisions that will nationalize legislative policy discussions during this Session.

F.1. Any Director, Superintendent, sheriff, or other official in charge of a facility in which an alien is incarcerated shall comply with lawful U.S. Immigration and Customs Enforcement detainers and shall provide at least 48-hour prerelease notification to U.S. Immigration and Customs Enforcement.

2. If any Director, Superintendent, sheriff, or other official in charge of a facility is in violation of F.1. or if a local law enforcement agency, sheriff’s office, or official in charge of a facility, pursuant to adoption of a local ordinance, procedure, policy, or custom prohibits or impedes communication or cooperation with U.S. Immigration and Customs Enforcement, the Director of the Department of Criminal Justice Services shall withhold reimbursements due to a locality under Title 9.1, Chapter 1, Article 8, Code of Virginia, and the Compensation Board shall withhold per diem payments for financial assistance to local or regional jails.

Status: This language was not included in the budget conference report.

Solar-Siting

The reconstituted Commission on Electric Utility Regulation took on numerous policy questions impacting the regulation and permitting of Virginia’s energy industry. One prominent question is how to balance the Commonwealth’s renewable energy goals created in the Virginia Clean Economy Act and surging energy demand with local land use decision-making. There has been a sharp decline in solar projects approved by local governments and a sharp increase in onerous zoning ordinances. The CEUR made recommendations on these issues. Status: SB1190 (Deeds) and HB2126 (Sullivan) were introduced to capture the recommendations of CEUR. Both were substantially amended throughout the process. SB1190 failed to report from the Floor. HB2126 failed to report from Subcommittee.

Additionally, there was legislation to set standard ordinances for siting, HB2438 (Mundon King). This legislation passed the House (48-46) but failed to report from Senate Commerce and Labor (7-7-1).

Speed Cameras

Senate Bill 1233 (Williams-Graves) incorporates portions of HB2041 (Seibold). The final version asses a $100 fine regardless of if the pedestrian is properly in a crosswalk. It also permits law enforcement to install recording devices at pedestrian crossings and stop sign violations within previously approved monitoring areas. Lastly, the legislation puts in place a rigorous process for speed cameras to be approved, limits their profitability, and puts a due process framework in place. Status: This legislation is on the Governor’s desk.

Standard Deduction

Governor Youngkin has called on the General Assembly to permanently increase the standard deduction from $3,000 for single filers and $6,000 for couples to $8,500 and $17,000, respectively. This change expires on January 1, 2026. As of this posting, Senator Suetterlein introduced SB782 to accomplish this initiative. Status: SB782 failed to report from committee. The final budget conference report increased the standard deduction over the current biennium. The deduction is $8,750 for individuals and $17,500 for joint filers.

Taxes on Tips

Senate Minority Leader Ryan McDougle and Delegate Chad Green have introduced SB763/HB1562. This legislation provides an income tax deduction for cash tips received and is a major initiative in Governor Youngkin’s 2025 Legislative Agenda. This proposal is anticipated to return $70 million annually to taxpayers. The Virginia Department of Taxation and the Virginia Employment Commission estimate that more than 250,000 Virginia workers receive tips as part of their employment. Status: It is not included in the final budget conference report.

Virginia Military Survivors and Education Program (VMSDEP)

Following the 2024 General Assembly Session, numerous meetings were held regarding the long-term feasibility of VMSDEP. This program is designed to provide educational benefits to the surviving family members and dependents of military service members who are killed in action, are permanently disabled due to service, or are classified as missing in action. The Governor announced an additional $120 million and long-term sustainable funding from VA529 surpluses. No policy changes on how the program is implemented were presented. Status: HB1694 (Askew) requires the Department of Veterans Services and the State Council of Higher Education for Virginia to coordinate to report no later than December 15 of each year on persons eligible for the program and an estimate of how many enrolled in higher education using the tuition waiver. The bill passed unanimously. There was also $ 100 million in funding provided in the budget conference report.

Zach is a part of our Gentry Locke Consulting team that is affiliated with Gentry Locke’s Government & Regulatory Affairs Practice Group. To learn more about Zach and our Gentry Locke Consulting team, check out their website here.

Beneficial Ownership Information Reporting Once Again Required Under the Corporate Transparency Act and Potential for a Legislative Deadline Extension

Thursday, February 20th, 2025

On February 17, 2025, in the case of Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex), the U.S. District Court for the Eastern District of Texas, Tyler Division issued an order granting the U.S. Department of the Treasury’s motion to stay the January 7, 2025 nationwide injunction of reporting requirements under the Corporate Transparency Act (“CTA”) pending appeal. This order marks an end to the final standing injunction blocking enforcement of reporting requirements under the CTA by the Financial Crime Enforcement Network (“FinCEN”).

On February 19, 2025, FinCEN posted an update addressing the reinstatement of reporting requirements. In their announcement, FinCEN extended the deadline for reporting companies to file their beneficial ownership information reports (“BOI”) to March 21, 2025. FinCEN also noted that it will “assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.” (www.fincen.gov/boi, accessed February 19, 2024).

What does the update mean for reporting companies who have yet to file their BOI? Reporting companies should make plans to have their BOI filed with FinCEN by March 21, 2025 because there is no guarantee that another delay will occur. FinCEN has allowed itself latitude for additional modifications to the March 21 deadline in their February 19, 2025 alert, but again, it is not guaranteed.

What is next for the Corporate Transparency Act?

The expedited timeline for appeal with the Fifth Circuit Court of Appeals is unchanged:

• briefing due February 28, 2025
• oral arguments set for March 3, 2025

It is not clear what the outcome of the appeal will be, but regardless of the outcome, we can expect that there will be an appeal to the Supreme Court of the United States.

There is potential for a legislative delay to the reporting deadline currently working its way through the U.S. Senate. The Protect Small Business from Excessive Paperwork Act of 2025, H.R. 736, seeks to extend the deadline under the CTA for reporting companies formed prior to January 1, 2024 until January 1, 2026. Below is a timeline of the bill as of the posting of this article:

• January 24, 2025: bill was introduced into the U.S. House of Representative
• February 10, 2025: bill was passed by the House
• February 11, 2025: bill received by the U.S. Senate and referred to the committee on Banking, Housing, and Urban Affairs

There is undoubtedly more to come for the CTA and reporting companies should continue to monitor their reporting obligations by visiting FinCEN’s official website at www.fincen.gov/boi.

If you have any questions, please email us at CTA@gentrylocke.com.

Your Legal Duty to Remove Snow and Ice from Vehicles

Wednesday, February 19th, 2025

In the wintertime, weather advisories are often issued cautioning drivers to be extremely careful on roads and interstates. Snow and ice on these surfaces can result in extremely low friction between the tire and the pavement, often resulting in horrible crashes and sometimes involving serious bodily injury or death.

Unfortunately, it is not only the snow and ice on the road surfaces that pose a substantial danger. Snow and ice left on a vehicle – such as a car, tractor-trailer, bus, or RV – can be the source of a catastrophic accident. Snow and ice can weigh a tremendous amount and be in a very hard solid state. As the vehicle accelerates, the wind will begin to try and separate the snow and ice from the top of the vehicle. When this occurs, the snow and ice can be flipped backwards off the vehicle, going through the air and causing vehicles behind it to attempt evasive action, which can result in a serious crash. The snow and ice sometimes strikes the vehicle and penetrates the windshield, thereby causing immediate injury to the occupants of the vehicle and often resulting in a secondary crash when the operator loses control. In two reported cases, the driver of the vehicle struck by snow and ice suffered serious eye injuries – with one becoming completely blind in one eye.[1]

Both traffic laws and civil negligence law require motorists to remove snow and ice from their vehicles.

I. Traffic Laws Requiring Removal of Snow & Ice from Vehicles

Many states have traffic laws designed to keep drivers from taking or failing to take any action when it comes to objects obstructing vision out of their vehicle. Under Virginia law, it is illegal for a driver to allow objects to “substantially obstruct the driver’s clear view of the highway through the windshield, the front side windows, or the rear window.”[2] Obviously, snow and ice would qualify for this prohibition. Therefore, under Virginia law, snow and ice must be cleaned off of these surfaces before operating the vehicle. Failure to do so can result in a traffic infraction, a fine up to $250, and court costs.[3]

II. Civil Obligation to Remove Snow & Ice from Vehicles

If snow or ice breaks loose from a vehicle, causing another vehicle to crash or its occupants to be injured, then the driver who failed to properly clean the vehicle (and/or his or her company) can be sued and held liable for any personal injury and property damages caused by the failure to remove the snow and ice. This is negligence, just like a driver who rear-ends another motorist or a driver who runs a red light and T-bones another motorist. Therefore, all Virginia motorists have a civil legal obligation to reasonably remove snow, ice, and any other dangerous and unsecured objects from their vehicle that may cause injury to others when the vehicle is in operation. Motor vehicles of all shapes and sizes can and must be rendered free of snow and ice prior to operation.

A. What to Do if You or Your Vehicle are Injured from Snow/Ice Falling from Another Vehicle

If you are a victim of the negligence of another driver who failed to properly clean the surface of their car, truck, etc., prior to using the roads and highway, you should immediately do the following:

1. Call the police and report the accident;
2. Contact emergency services and get the help you and/or your passengers need for any injuries you suffered;
3. Attempt to get the name and/or the description of the vehicle and/or driver of the vehicle from which the snow or ice originated;
4. Contact your insurance company to advise them of the accident and of your need for towing, a rental vehicle, and potentially vehicle repair; and
5. Contact a personal injury attorney experienced in handling negligence cases resulting from similar situations.

B. What to Do if You Cannot Identify the Negligent Driver

Frequently, the driver and passengers of the victim’s vehicle often have no idea of the identity of the vehicle from which the ice or snow broke loose and caused the accident. The at-fault driver then becomes a “John Doe.” You obviously cannot seek compensatory damages from someone you cannot identify or locate. However, our law provides for a very powerful cure for that problem. A portion of your auto insurance policy is designed specifically for this purpose. It is called Uninsured Motorist Coverage (UM).

If you have a Virginia insurance policy, then you are already paying for this benefit because all Virginia auto insurance policies have some level of uninsured motorist coverage by default.[4] All Virginia auto insurance policies issued or renewed on or after January 1, 2025 will have at least $50,000 in uninsured motorist coverage.[5]

The way this works is that you file a lawsuit against “John Doe,” you serve the lawsuit on your own insurance company, and your insurance company defends “John Doe.”[6] But won’t that claim increase your insurance premiums? No, your insurance company cannot raise your insurance rates for filing a John Doe or uninsured motorist claim, unless you were at fault for the accident.[7]

The major problem we have observed over the years is that the average person does not purchase enough uninsured motorist coverage to protect against serious injuries or death. The $50,000 in minimum coverage can be exhausted from medical bills from a helicopter flight or a single hospital visit, let alone provide for a catastrophically injured person with ongoing medical needs or replace the income of a lost family member. Every driver who cares about themselves, their family, their friends – or anyone else who rides in their vehicle – should have at least $1 million in uninsured/underinsured motorist coverage. This amount of coverage is usually obtained through purchasing an umbrella policy that has a uninsured/underinsured motorist coverage endorsement. Currently, the cost of this coverage is approximately $200-$500 per year, depending on the insurer. Do not let anyone talk you into not securing this important coverage to protect you, your family, and your passengers.

Insurance is something you hope you will never use – just like an attorney. However, when something tragic happens, you almost always need both!

For further information about this topic or if you or a loved one has been injured due to someone else’s negligence, our experience personal injury attorneys are here to help. Stay safe, drive responsibly, and protect yourself this winter. Contact us today.

[1] See Alaska Freight Lines v. Harry, 220 F.2d 272, 273 (9th Cir. 1955); Kimmel v. Pontiakowski, 2014 U.S. Dist. LEXIS 147452, at *1-2 (M.D. Pa. Oct. 16, 2014).
[2] Va. Code § 46.2-1054.
[3] See Va. Code § 46.2-113; Va. Code § 18.2-11(d).
[4] See Va. Code § 38.2-2202(B) (stating that an insured can elect to reduce the limits of uninsured/underinsured motorist coverage, “BUT NO LOWER THAN THE FINANCIAL RESPONSIBILITY LIMITS REQUIRED BY § 46.2-472”).
[5] See id.; Va. Code § 46.2-472(B).
[6] See Va. Code § 38.2-2206(E) (“If the owner or operator of any vehicle causing injury or damages is unknown, an action may be instituted against the unknown defendant as “John Doe” and service of process may be made by delivering a copy of the motion for judgment or other pleadings to the clerk of the court in which the action is brought. Service upon the insurer issuing the policy shall be made as prescribed by law as though the insurer were a party defendant. The provisions of § 8.01-288 shall not be applicable to the service of process required in this subsection. The insurer shall have the right to file pleadings and take other action allowable by law in the name of John Doe.”).
[7] Va. Code § 38.2-1905(A).

Administrative Law Update – University of Richmond Law Review

Wednesday, February 12th, 2025

Gentry Locke is honored to announce the publication of the first Administrative Law update in the Annual Survey of Virginia Law since 2014. Noah Sullivan was chosen to pen this first update in ten years because of his unique perspectives on administrative law and regulatory issues. Sullivan has practiced administrative law in the private sector and also been “in the room where it happens” in the Virginia Governor’s office. While Virginia administrative law has been stable, Virginia politics have not. The state’s political dynamics have significantly changed in the last ten years. This article predicts that, because of those trends, the next ten years will not be so quiet on administrative law.

Read more to learn about Administrative Law case updates, legislative updates, significant developments and more here: Administrative Law Update – Annual Survey of Virginia Law

2025 Virginia General Assembly Crossover Update

Thursday, February 6th, 2025

Tuesday, February 4, was the midway point for the Virginia General Assembly, known as “Crossover.” Each chamber will now only deal with legislation that originated from the other. Over 2,000 bills, constitutional amendments, and joint study resolutions were introduced for consideration. This number has been significantly diminished and will continue to be before the General Assembly adjourns Sine Die on February 22. Below are updates on legislative initiatives previously mentioned in the Pre-Session Report.

Artificial Intelligence

Over the past year, the Joint Commission on Technology and Science (JCOTS) met to discuss legislation carried over from the 2024 Session. All four of the refined bill concepts were recommended by the Commission.

• HB697(Maldonado)/SB571(Ebbin): This legislation makes it a Class 1 misdemeanor to use synthetic media for committing a crime offense involving fraud. Also, it allows civil action against the person who violates this code section. Lastly, it calls on the Attorney General to establish a workgroup to study Virginia’s AI laws. Status: Concepts reintroduced as HB2124 and SB1053 have passed the House 87-9 and 39-0.
• SB164(Reeves): Creates property rights for people to own their digital replications of themselves for commercial use. Allows these digital creations to be licensed and provides a legal framework for unauthorized use. Status: Concepts reintroduced as SB1421 and HB2411 (Glass). The Senate Bill was passed by indefinitely (8-7). The House Bill failed to report from the Appropriations Committee.
• SB487(Aird): Establishes standards for public bodies that use AI systems to make “high-risk” decisions to avoid algorithmic discrimination. A high-risk decision is considered material or legal and impacts education, employment, finance, or housing. The concern is based on fears of biased data that will negatively impact a person because of their gender, race, etc. It also seeks to establish a workgroup to study the impact on local governments. Status: Concepts reintroduced as SB1642 and passed the Senate 40-0.
• HB747(Maldonado): Regulates high-risk decision-making AI systems private entities use to prevent algorithmic discrimination. This includes disclosure to a consumer when AI is being used, allowing a person to opt out in favor of human review. Status: Concepts reintroduced as HB2094 and passed the House 51-47.

Car Tax

The Governor’s amendments to the biannual budget seek to provide car tax relief. He addresses this issue by creating a $1.1 billion fund for income tax credits—individual taxpayers earning $50,000 or less will qualify for $150 in tax credits. Joint filers will qualify for $300 if their income is $100,000 or less. Status: Both the House and Senate budgets repurposed the $1.1 Billion as rebates of $200 for individuals and $400 for joint filers to be issued by October 15, 2025, and increases in the refundable portion of the Earned Income Tax Credit (EITC) to 20% of the federal credit.

Data Centers

On December 9, 2024, the Joint Legislative Audit and Review Commission (JLARC) reported on Virginia’s world-leading data center industry and policy options for the General Assembly to consider how best to handle the industry moving forward. Northern Virginia accounts for 13% of global data center operational capacity, the world’s single largest market. Data centers are estimated to contribute $9.1 billion in GDP annually to the Commonwealth’s economy. The most substantial aspect of the report is the impact industry growth will have on energy consumption. The report states that left unconstrained, data center projects will increase energy demand by +183% between now and 2040. Much of the industry’s new site growth is expected along the I-95 corridor. The list of policy options made by the Commission may be read here. Status: Numerous data center bills were introduced during this Session based on the JLARC report. Below are the bills that remain.

• HB1601(Thomas)/SB1449(Ebbin) Provides that before any approval of a rezoning application, special exception, or special use permit for the siting of a new high energy use facility (HEUF) shall collect certain information. Status: HB1601 Passed the House (57-40). SB1449 Passed the Senate (33-6-1).
• HB2084(Shin) Directs the SCC to determine if the utilities need new and additional classifications for energy customers. Status: Passed the House (61-35).
• SB960(Perry) Directs the SCC to initiate proceedings to determine if the current allocation of costs among its customers is appropriate to ensure data centers are not being subsidized. Status: Passed the Senate (26-13-1).
• SB1047(Roem) Directs the Department of Energy to evaluate and asses demand response programs. Status: Passed the Senate (21-17).

NOVA Casino

Following extensive legislative actions, studies from JLARC, and referendums by localities, Virginia has five permitted casinos in as many localities: Bristol, Danville, Norfolk, Petersburg, and Portsmouth. During the 2024 Session, Senator Marsden introduced SB675, which enables a casino in Northern Virginia. This legislation failed to pass, but similar bills are expected to be introduced this year.  Status: SB982 (Surovell) passed the Senate (24-16).

Sanctuary Cities

Under budget Item 377 in the Governor’s proposed amendments to the biannual budget, there is language that compels officials to comply with ICE and directs the withholding of payments for failure to comply. This is one of many policy decisions that will nationalize legislative policy discussions during this Session.

F.1. Any Director, Superintendent, sheriff, or other official in charge of a facility in which an alien is incarcerated shall comply with lawful U.S. Immigration and Customs Enforcement detainers and shall provide at least 48-hour prerelease notification to U.S. Immigration and Customs Enforcement.

2. If any Director, Superintendent, sheriff, or other official in charge of a facility is in violation of F.1. or if a local law enforcement agency, sheriff’s office, or official in charge of a facility, pursuant to adoption of a local ordinance, procedure, policy, or custom prohibits or impedes communication or cooperation with U.S. Immigration and Customs Enforcement, the Director of the Department of Criminal Justice Services shall withhold reimbursements due to a locality under Title 9.1, Chapter 1, Article 8, Code of Virginia, and the Compensation Board shall withhold per diem payments for financial assistance to local or regional jails.

Status: Removed from House and Senate Budgets.

Solar-Siting

The reconstituted Commission on Electric Utility Regulation took on numerous policy questions impacting the regulation and permitting of Virginia’s energy industry. One prominent question is how to balance the Commonwealth’s renewable energy goals created in the Virginia Clean Economy Act and surging energy demand with local land use decision-making. There has been a sharp decline in solar projects approved by local governments and a sharp increase in onerous zoning ordinances. Potential recommendations are expected at the Commission’s final meeting before Session later today. The Commission’s meeting may be viewed here. Status: SB1190 (Deeds) and HB2126 (Sullivan) were introduced to capture the recommendations of CEUR. Both were substantially amended throughout the process. SB1190 failed to report from the Floor. HB2126 failed to report from Subcommittee. Additionally, there is legislation to set standard ordinances for siting, HB2438 (Mundon King). This legislation passed the House (48-46).

Standard Deduction

Governor Younkgin has called on the General Assembly to permanently increase the standard deduction from $3,000 for single filers and $6,000 for couples to $8,500 and $17,000, respectively. This change expires on January 1, 2026. As of this posting, Senator Suetterlein has introduced SB782 to accomplish this initiative. Status: SB782 failed to report from committee. The House and Senate budgets made adjustments to the standard deduction by increasing the current biennium deduction to $8,750 for individuals and $17,500 for joint filers.

Taxes on Tips

Senate Minority Leader Ryan McDougle and Delegate Chad Green have introduced SB763/HB1562. This legislation provides an income tax deduction for cash tips received and is a major initiative in Governor Youngkin’s 2025 Legislative Agenda. This proposal is anticipated to return $70 million annually to taxpayers. The Virginia Department of Taxation and the Virginia Employment Commission estimate that more than 250,000 Virginia workers receive tips as part of their employment. Status: Both bills failed to report from committee.

Virginia Military Survivors and Education Program (VMSDEP)

Following the 2024 General Assembly Session, numerous meetings were held regarding the long-term feasibility of VMSDEP. This program is designed to provide educational benefits to the surviving family members and dependents of military service members who are killed in action, are permanently disabled due to service, or are classified as missing in action. The Governor announced an additional $120 million and long-term sustainable funding from VA529 surpluses. No policy changes on how the program is implemented were presented. There will likely be legislation introduced to decide the program’s long-term viability. Status: HB1694 (Askew) requires the Department of Veterans Services and the State Council of Higher Education for Virginia to coordinate to report no later than December 15 of each year on persons eligible for the program and an estimate of how many enrolled in higher education using the tuition waiver. Budget discussions are still ongoing.

Zach is a part of our Gentry Locke Consulting team that is affiliated with Gentry Locke’s Government & Regulatory Affairs Practice Group. To learn more about Zach and our Gentry Locke Consulting team, check out their website here.

Practical Advice for Virginia Private Sector Employers Regarding their DEI Policies & Practices

Tuesday, February 4th, 2025

Article by Todd Leeson[1]

There is much confusion regarding whether private sector employers are able to maintain policies regarding Diversity, Equity and Inclusion (DEI) in the workplace.  I have been following the public policy and legal issues surrounding DEI for years.  I have also closely scrutinized the activities over the last few weeks including the Executive Orders (EOs) recently issued by President Trump.  This article is the combination of my experience, as well as dozens upon dozens of articles and legal authorities I have studied. It is not exhaustive, but is intended to convey my primary thoughts at this time.

For purposes of this article, the three primary EO’s to note are as follows:

• Executive Order 14173: “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” issued January 21, 2025.
• Executive Order 14151: “Ending Radical and Wasteful Government DEI Programs and Preferencing,” issued January 20, 2025.
• Executive Order 14168: “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,’ issued January 20, 2025.

Executive Orders cannot replace or overrule laws enacted by Congress, state laws, or decisions of the United States Supreme Court.  For example, Title VII of the Civil Rights Act of 1964 remains settled law: employers cannot discriminate against persons, or condone harassment, on the basis of their race, sex, national origin, or religion.  (Likewise, pursuant to the Age Discrimination Employment Act, Americans With Disabilities Act, and Pregnant Workers Fairness Act, employers cannot discriminate against persons on the basis of their age, disability, pregnancy, childbirth, or related medical conditions.)

Moreover, in Bostock v. Clayton County, 590 U.S. 644 (2020), the U.S. Supreme Court held that “sex” discrimination under Title VII included discrimination against a person due to his or her sexual orientation or gender identity.  In addition, the Virginia Human Rights Act expressly prohibits discrimination on the basis of “sexual orientation” and “gender identity.”  (More on this topic later in the article.)

For additional context, recall that in Students for Fair Admissions v. Harvard, 600 U.S. 181 (2023), the U.S. Supreme Court held that colleges could not make admission decisions based on an applicant’s race.  This was not an employment case.  But much has been written regarding its potential applicability to Title VII cases in the workplace.

These EO’s do not invalidate all private sector DEI initiatives.  Here is the operative language:

“I further order all agencies to enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.  (emphasis added).  EO 14173.”

The EO further objected to those entities who have adopted “dangerous, demeaning, and immoral race and sex based preferences under the guise of DEI.”  (emphasis added).

The EO’s require the Attorney General to publish a proposed enforcement report within 120 days with a “plan of specific steps or measures to deter DEI programs . . . that constitute illegal discrimination or preferences.”  Thus, we should receive more specific content regarding the Administration’s position after May 2025.

So, the key question is this: what DEI practices are “illegal?”

Let’s take the most obvious examples of policies that are “illegal.”

• There can be no “set-asides.” For example, an employer cannot hold a position open for a person based on his or her race, sex or other protected class.
• There can be no “quotas.” An employer cannot have a policy stating that it will strive to employ (or promote) a certain percentage of women or minorities in management.  Similarly, a business should not have aspirational targets or goals that reward diversity—for example, an employer should not link a manager’s pay to his or her results in promoting or retaining females or minority employees.
• There can be no preferences. This is analogous to the SFAA college admissions decision.  An employer cannot break a tie or give a “plus” to an applicant or employee based on his or her protected class (e.g., race or sex).  [On January 28, 2024, Mark Cuban posted on X (Twitter) that while he only hired that the best persons, “race and gender can be part of the equation.”  Then EEOC Commissioner Andrea Lucas (now the acting EEOC Chair) replied that he was “dead wrong on black-letter Title VII law.”]

Another example of a policy or program that would likely be deemed “illegal” would be a leadership development program limited to female managers.  Likewise, it is likely not permissible to have an internship or scholarship program restricted by race (or any other protected class).

As we evaluate the shifting landscape, here’s an important concept to follow:  Employers must ensure that their hiring practices, evaluations, and promotion protocols are based on individual merit, skills and performance.  The National Society for Human Resource Management (SHRM) organization recently opined as follows:

“SHRM recommends that all private companies evaluate their inclusion and diversity initiatives to ensure that they provide equal access to opportunities, skills development, and do not give special advantages to one person or group over another, avoiding any perception of identity-based favoritism.”

“How to Adjust your DEI Initiatives Under Trump’s New Guidelines,” (January 28, 2025, accessed at SHRM.org.)

Private employers are urged not to overreact.  As Vicki Lipnic, a former Republican EEOC Commissioner, recently noted: “You always have to parse, what do people mean by DEI.  You could have 20 different kinds of corporate programs that would fall under the category.”  “How Trump’s Assault on DEI Will Ripple Across Corporate America,” (Wall St. Journal, Jan. 24, 2025).  In other words, it would be a mistake for an employer to suddenly disband or scrap its entire “DEI” plan as a knee-jerk reaction to the show of force from the Trump Administration.  If an employer acts rashly, it could also suggest to current employees that its existing plan was unlawful and/or that it is no longer committed to having a more inclusive or diverse workforce.

So What Policies or Initiatives Should an Employer Keep or Adopt?

Employers can and should cast a wide net in their recruitment efforts.   The business case for maintaining a “diverse” workforce cannot be plausibly refuted.  Employers should seek to attract and hire the best candidates from a broad cross-section of available resources.  As Benjamin Spencer, the Dean of William & Mary’s Law School, wrote:

“The objective of any hiring process is to acquire excellence. . . . But excellence doesn’t simply mean hiring the person with the best grades, the highest scores, or the most awards.  I have interviewed top students whom I would never hire because they lacked maturity, judgment, empathy, personality, perspective or experience. . . . . No demographic group has a monopoly on talent.  The excellence that employers seek doesn’t exclusively or predominately reside within a single demographic of the population. . . . A hiring process that produces a monolithic group of employees isn’t yielding the most qualified people for the positions.  . . . Firms will need to work harder to ensure that they get exposed to a robust pool of prospective hires.”

“Throw Out the Diversity Playbook and Reimage Inclusive Hiring,” (published in Bloomberg Law News, November 10, 2023).                

Employers can and should continue their EEO education, training and commitment.  “DEI” training is another concept fraught with sensational headlines and frequent misinformation.  Let’s break it down.

It remains unlawful for an employer to permit an employee to be subjected to discrimination or harassment based on a protected class (e.g., sexual harassment).  To this end, employers must continue to publish and follow their EEO policies and complaint process.  Moreover, employers must educate their employees, and train their managers on company policy and protocol.  Virtually every week an aggrieved person obtains a substantial verdict or settlement in a discrimination or harassment case against an employer because a supervisor is found to have disregarded or violated an employer’s EEO policy.  Simply put, businesses need to stay the course, and take proactive measures in support of their EEO commitment.

To be sure, some employers have gone too far in their “DEI” training.  It is not prudent for employers to permit training in which white, male managers are essentially told that they are perceived to be “racist” or “sexist” in their past actions.  Indeed, there are pending lawsuits in which employees have plausibly alleged that an employer’s DEI/EEO training went too far.  See, e.g.,  Pumariega v. Basis Glo. Techs., 2024 U.S. Dist. Lexis 190747 (N. D. Il. Oct. 21, 2024)(employee plausibly alleged his termination was in retaliation for his complaints that the company’s DEI training conflicted with his religious beliefs).

While the details matter, it is my judgment that employers can continue to include “implicit bias” education as part of its EEO training.  (A few years ago, I was at my local YMCA and struck up a conversation with a man who noted he just moved to the region.  When I asked what brought him here, he responded his “spouse obtained a great job here.”  I asked, “what does she do?”  He responded that “he was recruited here by a [local company].”  I learned an important lesson that day.

Employers can and should continue their efforts to be Inclusive and Welcoming to All.  This is another topic in which there has been some confusion, and mis-steps.  Perhaps it is best to illustrate this point with an obvious example.  Not everyone in your workplace is a Christian who celebrates Christmas.  If you promote your company’s annual “Christmas” party, there are likely some employees who will feel left out.  In my judgment, it is not wise for business executives to cater to the “majority” and/or to proclaim “that’s just the way it is.”

Walmart has recently garnered publicity (positive and negative) after announcing some specific changes to its DEI initiatives.  In partial response to criticism it received, Walmart responded, “we’re the same company with the  . . . same commitment to creating a sense of belonging for all of our associates .”  “Shareholders Chide Walmart CEO Following Recent DEI Rollback,” (Bloomberg Law, Daily Labor Report, Jan. 15, 2025).  I believe this is a helpful (and lawful) statement.

It has been reported that Federal Agencies are no longer permitted to highlight celebrations such as Black History month.  On this point, it was encouraging to see Virginia Governor Glenn Youngkin highlight the significance of Black History Month in official postings on February 1, 2025.  There is no compelling reason that a private employer cannot also note a holiday or celebration that has some significance or relevance to its employees.

Let’s return to the concept that employers should cast a wide net to attract “excellent” employees. Having invested the time, money and resources to do so, it is equally important to adopt sound practices to retain your best employees.  We are not talking about preferences.  Instead, businesses are well advised to maintain a welcoming and inclusive environment for all their employees.

The Public Policy Debate Regarding Transgender Employees.  As noted above, it is unlawful under Federal and Virginia law to discriminate against employees based on their gender identity.  On April 29, 2024, the EEOC issued Enforcement Guidance on Harassment in the Workplace in which it included examples of conduct that constituted discrimination based on an employee’s gender identity.  The EEOC also filed lawsuits against employers alleging discrimination and/or harassment against employees based on their gender identity.

In EO 14168, however, President Trump recently declared new Federal policy that there are only two genders, male and female. Further, the EEOC’s new Acting Chair Andrea Lucas thereafter stated the Trump Administration’s firm position that a female employee, among other rights, has the legal right to a single-sex restroom.

There is, and will continue to be, litigation to establish the contours of these rights.  For example, what if a supervisor objects to referring to an employee by their preferred pronouns because it conflicts with his religious beliefs?  Similarly, what if a female employee objects when a biological male employee, who is transitioning to female, requests to use the women’s restroom?

In my judgment, there are no definite legal answers to these challenging and evolving questions.  Each situation must be evaluated based on the unique circumstances. Employers should engage in an interactive discussion with the key persons to assess whether there is a compromise solution or accommodation that is reasonable or viable.

Thoughts on Whether to Use the “DEI” Label.  I emphasize (again) that there is nothing inherently unlawful for a company to have a “DEI” policy or plan.  It is the specific details of an employer’s plan or policies that matter.  But what about the term itself?  Has “DEI” become too toxic?  Must employers rename their policies?  Here too, there are no definite answers.

“Diversity” should focus on employing well-qualified persons who have varying life experiences.  It may include persons who come from disadvantaged backgrounds, geographic locations, persons with disabilities, veterans, or persons who have excelled in spite of challenges.  In other words, “diversity” must be much broader than just race or sex.

“Equity” is the term that engenders the most controversy because of a misperception of its definition.  Viewed properly, the focus is on “equal opportunity,” not equal outcomes or equal results.  If a disabled employee is able to excel at her job with the aid of a reasonable accommodation (e.g., better lighting or larger computer screen for a visually-impaired employee), this is a prudent (and legally required) step to take.

As we have reviewed, the term “Inclusion” refers to taking measured and meaningful steps to make your employees feel like they are welcomed, celebrated, and that they belong.  In an inclusive or welcoming workplace, everyone is treated as a valuable player on the team.

I am not going to opine regarding what label an employer should use and/or whether it should rename its DEI policy or programs.  The more important point, in my view, is for executives to take a fresh look at their current policies, programs and practices, as well as the culture of the workplace.

(As you may recall, SHRM’s Board announced in July 2024 that it would remove “equity” from the equation and instead focus on Inclusion and Diversity (I&D).  It concluded that the term “equity” caused unnecessary confusion and was better framed as being part of Inclusion.)

The Trump Administration has made it crystal clear that it is looking to make public examples of employers, especially larger employers, who maintain “illegal” DEI policies. To this end, businesses are also well advised to consult with experienced employment counsel, especially if there are concerns that your current policies or practices may have some legal risk.  Engaging employment counsel also allows the employer to maintain an attorney-client privilege that will permit candid and creative communications to assess the best steps to take in response to our shifting political and social landscapes.

President Trump’s high profile and decisive actions, including his flurry of Executive Orders, caught most employers off guard.  These actions (and others to come) cannot be ignored.  On the other hand, businesses should make the time to understand their options, and level of risk.  Employers are more likely to prosper if they invest the time, energy and resources to hire, retain, and promote their best employees.

[1] I appreciate the helpful editorial assistance provided by my daughter, Morgan Leeson, Fuqua School of Business (Duke) MBA Candidate, Class of 2026.

D.C. Plane Crash: What Legal Remedies May Be Available?

Sunday, February 2nd, 2025

On the night of January 29, 2025, one of the most devastating plane crashes in U.S. history took place in Washington, D.C. That evening, a Bombardier CRJ700 plane (American Airlines flight 5342), transporting four crew members and 60 passengers, was flying northbound over the Potomac River and preparing to land at Ronald Reagan Washington National Airport (DCA) on runway 33.[1] As the plane approached the airport, three soldiers aboard a U.S. Army Sikorsky H-60 Black Hawk helicopter were engaged in a training exercise in nearby airspace.[2] The two aircraft collided in mid-air, causing an explosion that sent both aircraft and all passengers into the Potomac River.[3] Now, the tragedy has left the families and friends of 67 people without their loved ones and desperately looking for answers, making the crash the deadliest U.S. aircraft disaster since 2001.[4]

After the initial horror of the crash abates, the attention will and must turn to practical considerations, such as the lost financial support, love, and guidance of the deceased passengers. Unfortunately, even the best legal system in the world can only provide monetary damages to those left behind.

1. The Crash Investigation

Although the D.C. plane crash occurred just a few days ago, the internet is full of many speculative “theories” about the cause(s) of the crash. As wrongful death attorneys that handle plane and helicopter crash cases, we can attest to the fact that aviation crash investigations can be complex and lengthy.

The National Transportation Safety Board (NTSB) is an independent federal agency that is required by law to investigate nearly every aircraft accident in the U.S.[5] 49 U.S.C. § 831.20(a)(3)(i) is particularly applicable to the D.C. plane crash, which authorizes the NTSB and military authorities to jointly investigate “each accident involving a military aircraft and . . . a civil aircraft.” That’s why the NTSB and the Department of Defense are jointly investigating the crash.

However, the NTSB and military authorities are not the only players involved in the D.C. plane crash investigation. The NTSB has indicated that approximately 35 governmental agencies have already been involved in the investigation.[6] In addition to all of these governmental entities, the NTSB also commonly invites the aircraft manufacturers and system companies to provide subject matter expertise in plane crash investigations. Unfortunately, the family members of the victims have no seat at the table and are unable to send their own experts. In this case, the list of third party subject matter experts could be quite long. The sheer number of entities involved demonstrates the complexity of these investigations.

The NTSB has its own Black Hawk certified pilot to help with its independent investigation of the D.C. plane crash.[7] The NTSB has recovered two separate recorders (black boxes) from the CRJ700: (1) a flight data recorder (FDR), and (2) a cockpit voice recorder.[8] The NTSB expects to obtain a full download from the CRJ700’s FDR, which could house up to 2,000 data points.[9] The CRJ700’s cockpit voice recorder had some water intrusion, but the NTSB has a “very high level of confidence” that they will recover the data.[10] The NTSB has also recovered a combined cockpit voice recorder and digital flight data recorder from the Sikorsky H-60.[11] There was no exterior damage to the Sikorsky’s recorder. These black boxes recovered by the NTSB will likely provide significant additional insight into the cause(s) of the crash. What were the pilots saying and doing in the final minutes and seconds of the crash? Did any systems malfunction?

The NTSB’s investigator in charge, Bruce Banning, released the following information after analyzing the CRJ700’s cockpit recorder:

• “Prior to initial descent, the crew briefed the arrival for the troups five arrival followed by an ILS approach to Runway 01 at DCA.”
• 8:15 PM: “The aircraft left 37,000 feet for an initial descent” to Reagan National Airport.
• 8:39:10 PM: “Potomac approach cleared the crew for the Mount Vernon visual Runway 01 approach.”
• 8:43:06 PM: “The crew made initial contact with the DCA tower. The tower controller then asked if the crew could switch to Runway 33. After a brief discussion between the crew, they agreed to Runway 33.”
• 8:45:27 PM: “The autopilot was disconnected.”
• 8:46:01 PM: “A radio transmission from the tower was audible informing PAT 25 that traffic just south of the Wilson Bridge was a CRJ at 1,200 feet circling to Runway 33.”
• 8:46:29 PM: “The crew received a 1,000 foot automated call out.”
• 8:46:47 PM: “DCA tower cleared other jet traffic on Runway 01 for departure with no delay.”
• 8:47:29 PM: “The crew received a 500 foot automated callout.”
• 8:47:39 PM: “A radio transmission from the tower was audible, asking PAT 25 if the CRJ was in sight. One second later, the crew received an automated traffic advisory stating ‘traffic traffic.’”
• 8:47:42 PM: “A radio transmission from the tower was audible, directing PAT 25 to pass behind the CRJ.”
• 8:47:58 PM: “The crew had a verbal reaction and FDR data showed the airplane beginning to increase its pitch.”
• 8:47:59 PM: “Sounds of impact were audible . . . followed by the end of the recording.”[12]

The NTSB generally releases a preliminary report within the first 30 days. But the preliminary report will likely not be definitive about the cause of the crash. For example, the NTSB’s seven page preliminary report about the February 9, 2024, plane crash in Naples, Florida, provided little information about the cause(s) of that crash.[13] The NTSB aims to complete an investigation within 12 to 24 months, at which time it will issue a more detailed probable cause determination and report.[14]

2. Potential Legal Remedies

The NTSB investigation may reveal several proximate causes of the crash. Often, human error and/or mechanical failures are the cause of plane and helicopter crashes. Obviously, the passengers of flight 5342 were completely innocent. If human error was a cause of the D.C. plane crash, then victims’ families will likely be able to pursue negligence claims against the at-fault parties.

To the extent that the airplane pilots and/or airline were at fault for the crash, the victims’ families may pursue negligence claims against them. These claims will be governed by D.C. tort law because that is where the crash occurred. The victims’ families will have a right to a jury trial for these claims. Under D.C. law, the legal representative of the decedent’s estate can bring both a wrongful death action and a survival action at the same time.[15] D.C. law provides that recoverable damages in a wrongful death action include “reasonable expenses of last illness and burial” as well as “pecuniary losses resulting from the loss of financial support the decedent could have been expected to provide his next of kin, [and] . . . the value of services the decedent would have provided, including e.g., loss of care, education, training, guidance and personal advice.”[16] In addition to the wrongful death action, the victims’ families may also bring a survival action for any conscious pain and suffering that the decedent suffered prior to his or her death.[17] Over 20 years ago, the D.C. Court of Appeals affirmed judgments for hundreds of thousands of dollars in survival actions where the decedents were only alive for a matter of seconds or minutes after an accident.[18] D.C. wrongful death actions must be filed within two years from the date of death,[19] whereas D.C. survival actions must be filed within three years from the date of injury.[20]

To the extent that the helicopter pilots, air traffic controller, U.S. Army, Federal Aviation Administration, and/or the federal government are at fault for the crash, the victims’ families may pursue negligence claims against the United States under the Federal Tort Claims Act (FTCA). This is because the helicopter pilots were employees of the federal government. Historically, the doctrine of sovereign immunity barred negligence claims against the United Sates for tortious acts by its employees. The FTCA statutorily authorizes victims’ families to sue the United States by specifically providing that the United States is liable “in the same manner and to the same extent as a private individual under like circumstances.”[21]

There are many differences between the FTCA and state/district law negligence claims. Unlike those claims, pre-judgment interest and punitive damages are not available under the FTCA.[22] Additionally, before a lawsuit can be initiated, notice of an FTCA claim must be presented to the appropriate federal agency and denied by the agency in writing.[23] The notice must be presented to the appropriate federal agency “within two years after such claim accrues.”[24] The notice is generally provided to the federal agency responsible via form 95. It is imperative that the notice form be completed with the assistance of an experienced attorney because the form requires the plaintiff to list a total amount for the claim, which cannot be increased at a later point in time, unless “the increased amount is based upon newly discovered evidence not reasonably discoverable at the time of presenting the claim to the federal agency, or upon allegation and proof of intervening facts, relating to the amount of the claim.”[25] Therefore, it is imperative that an experienced and qualified aviation attorney help identify all damages and their impact on survivors as soon as possible.

Any FTCA cases arising out of the D.C. plane crash must be filed in federal court because U.S. district courts have “exclusive jurisdiction of civil actions on claims against the United States, for money damages . . . for . . . personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment. . . .”[26] The FTCA claim will be forever barred unless it is filed “within six months after the date of mailing . . . of notice of final denial of the claim by the agency to which it was presented.”[27] The FTCA claims can only be filed in the federal judicial district either “where the plaintiff resides or wherein the act or omission complained of occurred.”[28] Like any common law negligence claims against non-government individuals and/or entities that may arise from the D.C. plane crash, D.C. substantive tort law will apply to the FTCA claims because “[u]nder the FTCA, courts are bound to apply the law of the state (or here, the district) where the accident occurred.”[29] Importantly, the victims’ families’ will not have a right to a jury trial for their FTCA claims because “any [FTCA] action against the United States . . . shall be tried by the court without a jury.”[30]

To the extent that a mechanical failure is determined to be a cause of the crash, then the families may have products liability claims against the manufacturer(s) and distributor(s) of the defective product(s). Products liability cases can take many forms, and claims of strict liability, negligence, and breach of warranty may be asserted. These claims will also be governed by D.C. law.

If a deceased passenger was traveling for work at the time of the crash, immediate financial support can be obtained through a potential combination of workers’ compensation death benefits and any employer-provided life insurance.

This situation will involve some of the most complex legal issues ever encountered in civil law. For example, who can pursue legal rights? What claims? When can they be made? How will they be made? Where will they be filed? Within what time limit must they be filed against which defendants?

3. Plane Crash Attorneys

Our firm has significant experience handling complex plane crash cases. Our team is headed by Matthew W. Broughton, Esq., who holds an Airline Transport Pilot (ATP) certificate, has over 5000 hours of flight time, has handled many cases involving aircraft disasters over the course of his 40-year career, and has actually landed numerous aircraft on runway 33 at DCA, utilizing both instrument and visual approaches. Our “Go Team” for plane crash cases consists of many experienced wrongful death attorneys, an in-house investigator who has investigated hundreds of accidents over the years, two in-house nurses, paralegals, and legal assistants.

[1] Joel Guinto and James FitzGerald, What We Know So Far About Washington DC Plane Crash, BBC (Jan. 31, 2025).
[2] Cybele Mayes-Osterman & Davis Winkie, Army Helicopter in DC Crash Was on ‘Routine’ Training Flight Carrying Night-Goggles, USA Today (Jan. 31, 2025).
[3] See Security Footage Shows New Angles of D.C. Crash, NBC News (Jan. 31, 2025).
[4] The Associated Press, Collision Between Helicopter and Plane Kills 67 in Nation’s Deadliest Air Disaster Since 2001, AP (Jan. 30, 2025).
[5] See 49 C.F.R. § 831.2(a); 49 C.F.R. § 831.20.
[6] See NTSB Media Briefing 2 – PSA Airlines Bombardier CRJ700 & Sikorsky H-60 Military Helicopter Collision. The agencies and first responders involved include: the Fairfax County Fire and Rescue Department, Arlington County Fire and Rescue, Arlington County Emergency Management, Arlington Police, Alexandria City Fire, Alexandria Police, Virginia State Police, NCR Incident Management Team, the Virginia Department of Emergency Management, the Virginia Department of Transportation, Senator Warner’s Office, MWAA Fire and Rescue Team, MWAA Police, D.C. Fire and Rescue, Prince William Fire and Rescue, Montgomery Fire and Rescue, Prince George Fire and Rescue, Charles County Fire and Rescue, Baltimore Fire, Baltimore Police, Anne Arundel Fire Department, Maryland State Police, Maryland Natural Resource Police, Metropolitan Police Department of the District of Columbia, U.S. Coast Guard, U.S. Army, U.S. Air Force, Federal Bureau of Investigations, Secret Service, Customs and Border Patrol, Park Police, U.S. Department of Defense, Naval District Washington, American Medical Response, and the U.S. Department of Labor.
[7] See NTSB Media Briefing 2 – PSA Airlines Bombardier CRJ700 & Sikorsky H-60 Military Helicopter Collision.
[8] Id.
[9] Id.
[10] Id.
[11] Id.
[12] See Washington Plane Crash: Investigators Release Cockpit Recordings (Feb. 1, 2025).
[13] See Aviation Investigation Preliminary Report, NTSB (2024).
[14] The Investigative Process, NTSB (2025).
[15] See, e.g., District of Columbia v. Hawkins, 782 A.2d 293 (D.C. 2001).
[16] See id. at 303; D.C. Code § 16-2701(b);
[17] See D.C. Code § 12-101; Hawkins, 782 A.2d at 304-05.
[18] Hawkins, 782 A.2d at 304-05.
[19] D.C. Code § 16-2702.
[20] D.C. Code § 12-301(3).
[21] 28 U.S.C. § 2674.
[22] Id.
[23] 28 U.S.C. § 2675(a).
[24] 28 U.S.C. § 2401(b).
[25] 28 U.S.C. § 2675(b).
[26] 28 U.S.C. § 1346(b) (emphasis added).
[27] 28 U.S.C. § 2401(b).
[28] 28 U.S.C. § 1402(b).
[29] See Makarova v. United States, 201 F.3d 110, 114 (2d Cir. 2000) (citing Richards v. United States, 369 U.S. 1, 10-15 (1962)).
[30] 28 U.S.C. § 2402.