2022 Insights 2023

To Our Purchasers and Different Pals

Bradley J. Butwin Chair At O’Melveny all of us share a standard aim: serving to you obtain your most vital goals. Which means we deal with every new 12 months as a possibility to take inventory and put together you for a bunch of challenges—some acquainted, some unprecedented. And it’s why we’re focusing this publication not on the 12 months that simply ended however the one which lies forward. Given the sheer variety of main authorized and regulatory modifications with the potential to have an effect on your online business, we invited a lot of our legal professionals to share their views on alternatives and challenges that probably will probably be prime of thoughts for many people within the close to future. As you assessment Insights 2023, think about it each a sampling of issues to return and an invite to succeed in out and interact with us a couple of future that a few of us anticipate with enthusiasm and a few with a measure of trepidation, maybe inevitable after three years of a life-changing pandemic. Our authors, just like the subjects they’ve chosen, are a various group reflecting our perception that collaboration amongst individuals with completely different expertise and viewpoints conjures up essentially the most inventive options and one of the best outcomes. So, no matter whether or not you strategy 2023 with a glass half full or half empty, all your mates at O’Melveny think about our continued collaboration with you a cause to anticipate the highway forward with confidence and pleasure. Might your new 12 months convey you nice success and well-being,

Insights Desk of Contents

2023

1 1 Antitrust Enforcement A Vigorous Enlargement of Competitors Regulation Katrina Robson | Ian Simmons | Julia Schiller VIDEO PLACEHOLDER

2 Authorities enforcers reinvigorating—some would say rewriting—antitrust legislation. A 12 months and a half in the past, the brand new administration made headlines with its Government Order on Selling Competitors within the American Financial system, a blueprint for the vigorous “whole-of-government” enforcement of the antitrust legal guidelines. It was greater than rhetoric. Since then, authorities enforcers have been selling a brand new imaginative and prescient of competitors legislation, one that appears past the welfare of customers to the safety of particular person companies and their employees. The enforcers’ theories eschew the long-established concentrate on worth, high quality, and amount to embrace broader objectives of social justice. They’re reinvigorating—some would say rewriting—antitrust legislation. 01

3 Monopsony or Purchaser-Energy Theories, Particularly within the Labor Context. These instances allege that opponents have agreed to limit employee compensation or that events are merging to extend their energy to artificially depress wages. Principal Road Protectionism. These instances tackle the so-called “too large to fail” phenomenon by: difficult vertical mergers, which develop the scale of a enterprise with out consolidating a selected market; scrutinizing horizontal mergers, notably people who contain incentives for analysis and innovation; viewing merger efficiencies with elevated skepticism; exploring refusal-to-deal theories when corporations use their energy to hobble nascent opponents; and reintroducing felony legal responsibility for monopolization. Shaping the New Financial system. One other iteration of Principal Road protectionism, these instances goal technological innovators which have earned a loyal client following and have allegedly leveraged that place to buttress their core enterprise and take management of different markets. Lurking within the subtext are questions over the function of information, privateness, and synthetic intelligence within the economics of antitrust: What counts as “fee”? How can a “free” good or service develop into anticompetitive (if in any respect)? And is a diminution in privateness protections a aggressive hurt? Directing Millennial-Period Financial Theories. These instances goal to develop the legislation that governs a altering financial system. For instance, two-sided markets, and the legislation governing them, date again effectively earlier than social media. However the dynamics of two-sided transaction platforms, a digital-age growth, have put stress on courts to elucidate how the legislation ought to be superior to outline these markets, measure aggressive hurt, and assess damages. O’Melveny contains a ‘distinguished antitrust workforce with complete litigation experience and a powerful merger clearance apply, dealing with main international transactions.’ —Chambers USA Antitrust was designed to evolve with financial realities. It started as a statute only some sentences lengthy. However what adopted—each legislatively and judicially—covers volumes. This most up-to-date period of reinterpretation has spawned new and aggressive approaches to enforcement:

4 Antitrust Enforcement Attaining victory within the 1st jury trial of a 2-sided market case To execute this far-reaching agenda, enforcers have used each software at their disposal in methods unseen for years—invoking the Sherman Act for felony monopolization claims, broadening the appliance of the Federal Commerce Fee Act to a variety of “unfair practices,” reinvigorating the Clayton Act’s prohibition on interlocking directorates, and reviving the Robinson-Patman Act for rebates and costs paid to pharmacy profit managers. And whereas their efforts in opposition to brandname Fortune 100 corporations have acquired essentially the most consideration, enforcers have been equally energetic in investigating or prosecuting claims in opposition to smaller corporations, comparable to building contractors and healthcare staffing corporations. Additional, on the behest of the present administration, enforcers have introduced a selected curiosity in agriculture, airways, info know-how, prescribed drugs and healthcare, and telecommunications. Briefly, corporations throughout the financial system— particularly these launching strategic initiatives or shifting enterprise practices or insurance policies—should think about each conventional antitrust guidelines and the rules rising from the current flood of enforcement efforts. Realizing methods to construe company pointers, coverage directives, and public statements will assist corporations assess potential antitrust threat, leverage case legislation to defend present enterprise fashions, and endorse long-term, procompetitive enterprise initiatives that won’t name for expensive course corrections. Firms should think about each conventional antitrust guidelines and the rules rising from the current flood of enforcement efforts. Highlights embrace: 6 antitrust trials over an 11-month interval Securing acquittal within the 1st Justice Division felony Antitrust prosecution to ever go to a third trial

5 Observe What You Preach As ESG Expectations Rise, So Do the Dangers of Not Measuring Up John Rousakis | Hannah Y. Chanoine | Eric Rothenberg VIDEO PLACEHOLDER

6 Firms giant and small wish to display accountable company conduct, however an ESG label can come at a value. Because the stress to fulfill ESG expectations will increase, so do the potential dangers for failing to measure up. Buyers, regulators, workers, and the general public now intently scrutinize ESG-related statements, demand extra disclosure, and, more and more, take authorized motion in the event that they don’t like what they see. 02

7 Voluntary ESG Disclosures Can Invite Regulatory Scrutiny and Litigation. Final 12 months, the SEC charged mining big Vale S.A. with making false and deceptive statements about dam security—not in required firm filings however in voluntary sustainability studies and ESG-related shows and webinars. The costs relate to a dam collapse that killed 270 individuals and led to a lack of US$4 billion in market capitalization. The case is a warning that regulators will look past obligatory regulatory filings for statements which may mislead traders. “Greenwashing” Lawsuits on the Rise. ESGadjacent statements are additionally more and more the goal of client class actions and regulatory motion. As corporations have acknowledged the worth of inexperienced branding, they’ve been hit with a rising variety of “greenwashing” claims beneath consumer-protection legal guidelines. In these instances, regulators and personal plaintiffs seize on imprecise labeling statements—comparable to “sustainable,” “recyclable,” “responsibly sourced,” or “carbon impartial”— to allege that buyers are misled into shopping for merchandise. Upcoming revisions to the FTC’s Inexperienced Guides are more likely to end in an additional bump in these lawsuits. The Greens Guides, which offer steering on how customers are more likely to interpret sure sustainability claims and the way these claims may be substantiated, are within the strategy of being up to date, with the company requesting public feedback by February 21, 2023. Amongst different modifications, new steering on carbon offsets and “web zero” emissions representations are anticipated, with corporations dealing with potential publicity to enforcement actions and client class actions for alleged failures to conform. Firms trying to reduce litigation dangers ought to think about sustaining dependable knowledge that assist their sustainability-related statements, guarantee compliance with federal steering and state legislation, and supply aspirational quite than definitive statements on ESG attributes. As corporations navigate this more and more complicated ESG panorama, they need to think about these litigation tendencies and upcoming reporting modifications to make sure that their duty initiatives entice the proper of consideration: O’Melveny’s ESG Job Pressure can help shoppers in navigating the complicated regulatory and litigation panorama as they appear to border ESG benchmarks and disclosure commitments.

8 Observe What You Preach Obligatory ESG Provide-Chain Diligence is Coming (at Least within the EU). Together with minding their voluntary statements, corporations that do enterprise within the EU will quickly have extra required ESG disclosures. The EU has proposed a Company Sustainability Due Diligence Directive that may add necessities for bigger EU corporations and non-EU corporations with €150 million of enterprise within the EU (or much less for sure sectors deemed excessive threat). These corporations must establish precise or potential hostile human rights and environmental impacts in their very own operations and all through their worth chains, take steps to forestall or mitigate these impacts, and produce local weather plans demonstrating that their enterprise fashions are appropriate with the transition to a sustainable financial system and with limiting international warming to 1.5 levels Celsius. That is considered one of a number of directives anticipated to be enacted that may considerably enhance diligence and reporting burdens on corporations positioned or working within the EU, and follows comparable legal guidelines already in place in member states France and Germany. Efforts to Harmonize Sustainability Reporting Requirements are Growing. Requirements for voluntary statements will change too. A lot of the largest public corporations now voluntarily report ESGrelated info primarily based on requirements set by the International Reporting Initiative. In 2022, the Worldwide Sustainability Requirements Board (ISSB) launched drafts of its personal reporting requirements for sustainability and climate-related disclosures. The ISSB goals to harmonize the varied voluntary requirements, a course of that would form the obligatory disclosure efforts underway within the EU, the UK, and the US. With US corporations more likely to develop into topic to EU reporting beneath the brand new supply-chain directive, harmonized requirements ought to cut back reporting burdens. Buyers, regulators, workers, and the general public now intently scrutinize ESG-related statements, demand extra disclosure, and, more and more, take authorized motion in the event that they don’t like what they see. 7 of O’Melveny’s workplaces worldwide are LEED-certified and our New York workplace makes use of 100% renewable wind power.

9 Junaid Chida | Phillip Oldham | Arthur V. Hazlitt Clear Power’s Brilliant Future Not Even a Recession Can Forged Shade VIDEO PLACEHOLDER

10 Every single day, the world strikes nearer to a clean-energy future. And because the unprecedented shift away from fossil-based fuels and towards zero-carbon sources continues, it’s the personal sector, not governments, main the way in which. Throughout all sectors of the worldwide financial system, companies hope to chop their web carbon emissions to zero within the not-too-distant future. Capital suppliers and Wall Road traders have pushed a lot of this transformation, which now extends even to conventional power corporations. Not within the fingers of early adopters and pureplay renewable power builders, the transition to zero-carbon power has gone mainstream. 03

11 And past including new tax credit and enhancing present ones, the IRA creates larger flexibility and new alternatives for shoppers to seize the worth of tax credit utilizing buildings tailor-made to their funding objectives. As an example, the IRA permits taxpayers to switch many of those tax credit to 3rd events and, in additional restricted situations, to say refundable credit and obtain money funds from the Treasury. By permitting traders to understand worth from tax credit in these new methods, the IRA will make renewable tasks enticing to a broader array of traders and finally encourage further funding within the trade. Together with supporting funding in wind, photo voltaic, and different power tasks that historically have been and can proceed to be supported by tax incentives, the IRA additionally creates vital tax credit for nuclear power tasks, which can probably encourage further growth of these tasks. Mixed, these credit and incentives are a recreation changer for utilities. One main, built-in utility, for instance, has projected that its nuclear crops in North and South Carolina will qualify for nuclear manufacturing tax credit of a number of hundred million {dollars} a 12 months starting in 2024. The utility may even have as much as 17 gigawatts of related solar energy over the following 10 years, with every gigawatt of photo voltaic equal to about US$60 million in annual manufacturing tax credit. And the utility estimates that it may additionally make as much as US$4.5 billion of storage investments over the following 10 years to qualify for funding tax credit. Whereas personal trade and traders prepared the ground, governments are pitching in, too. The newly enacted Inflation Discount Act (IRA) quantities to one of the consequential clean-energy payments in current reminiscence, respiration new life into present tax credit for confirmed renewable power sources, comparable to wind, photo voltaic, and energy-storage options; creating new alternatives for funding in novel applied sciences; and boosting incentives for producing electrical automobiles. O’Melveny’s power group shines with ‘the experience, firepower and bench to deal with any scenario.’ —Chambers USA

12 Clear Power’s Brilliant Future The IRA’s construction additionally means it ought to proceed to incentivize renewable power funding even when the US financial system slides right into a recession. Historically, serving to the atmosphere is given low precedence throughout difficult financial durations. However the IRA’s incentives will proceed no matter any downturn. As an example, by permitting builders and house owners to switch tax credit and declare sure refundable credit, the IRA expands the scope of taxpayers that may reap the benefits of these credit past corporations with ample tax capability to profit from tax credit. We stand at an inflection level within the international power market: a confluence of confirmed inexperienced applied sciences, technological breakthroughs within the design and producer of enormous storage battery programs, and the rising adoption of hydrogen. All this spells transformative change—change that we’re already seeing with our shoppers on the bottom. This transition, like every other, may have ups and downs, however there are great alternatives for entities which might be capable of reap the benefits of the private and non-private incentives which were created on this area. There are great alternatives for entities capable of reap the benefits of the private and non-private incentives created within the power area. The Inflation Discount Act quantities to one of the consequential clean-energy payments in current reminiscence.

13 William Ok. Pao | Invoice Martin | Scott Sugino Crypto Crackdown Regulating a Publish-FTX World VIDEO PLACEHOLDER

14 What occurs to crypto if the SEC leans more durable on enforcement to control the market? The query of what is going to occur to the crypto market in 2023 if courts rule that digital property are, in actual fact, securities, emboldening the SEC, is now not the query. Or no less than not the one query, as a result of, securities or not, investigators and regulators— at each the federal and state ranges—won’t hesitate to pursue any firm within the cyberworld. The SEC hasn’t waited for any courtroom to rule on crypto, and after the astonishing collapse of FTX in November, no regulatory company will hesitate to research any entity within the digital asset world. The SEC, for one, had already been taking a tough line, initiating enforcement actions throughout broad components of the trade. And, in 2023, all regulators—the DOJ, the CFTC, FinCEN, the CFPB, and the IRS—are more likely to proceed the aggressive crack down. 04

15 Why? First, there are such a lot of individuals dropping a lot cash in crypto that calls to research and implement will drown out these demanding new rules; and second, the SEC likes the rule it has: Howey, a four-prong take a look at primarily based on a 1946 Supreme Court docket case, is what now determines whether or not an asset is a safety and topic to SEC oversight. And even when the SEC did hearth up its regulation machine tomorrow, nothing would probably be adopted in 2023. The truth is, the SEC has doubled down on enforcement, beefing up its crypto staffing—even hiring blockchain specialists—and in mild of FTX’s demise, extra investigators are certainly on the way in which. There are entire swaths of the crypto enterprise that haven’t been intensely investigated…but. On the daybreak of the crypto-universe, investigators had straightforward selecting: the fraudsters, dissemblers, and get-rich-quick schemers weren’t laborious to identify. With the collapse of Terra, Celsius, and FTX—which many had thought was the golden little one of crypto— regulators will now probably take a tough take a look at everybody, giving nobody the good thing about the doubt. The trade has misplaced two-thirds of its worth in a single 12 months—from US$2.25 trillion in December 2021, to lower than US$800 billion in December 2022. For a time, many questioned whether or not the practice had left the station: certainly regulators wouldn’t take motion that may threaten a US$2 trillion-plus trade. Now, customers and traders have taken heavy losses and Congress and others are questioning the place have been the regulators. If there’s ever a time to behave, it’s now. Cries that the SEC is “regulating via enforcement” as a substitute of by guidelines and rules will probably be heard once more in 2023, although new guidelines and rules are unlikely to be forthcoming. O’Melveny is ‘capable of finding easy and sensible options to complicated issues.’ —Consumer testimonial, Chambers FinTech

16 Crypto Crackdown In 2022, regulators accused crypto corporations of, amongst different offenses, providing unregistered securities, manipulating the market, and buying and selling unregulated derivatives—commonplace working procedures within the crypto world. As enforcement ramps up, who will cease the regulators? Definitely not those that misplaced cash or authorities officers performing on behalf of those that misplaced cash. This isn’t to say that the businesses may have easy crusing in 2023. Attorneys representing digital asset tasks are an increasing number of subtle, and tasks whose very existence are threatened may have no selection however to push again in opposition to the regulators. With the frenzy of enforcement to return, there’ll certainly be a regulators’ turf battle. It’s also doable that the turf will relocate—to, say, someplace hotter. There are locations comparable to Bermuda and the Bahamas with climates extra receptive to digital merchandise, the place there may be much less to concern from US regulators. However as losses mount within the midst of a crypto winter, heat locations could also be more durable and more durable to search out. After FTX’s astonishing collapse, no regulatory company will hesitate to research any entity within the digital asset world. For the fifth consecutive 12 months, O’Melveny has been named among the many prime legislation corporations serving fintech corporations. —Chambers FinTech

17 Greta Lichtenbaum | Sid Mody | John Dermody US Nationwide Safety’s Impression on Commerce with China VIDEO PLACEHOLDER

18 With the geopolitical rivalry between the US and China escalating, President Biden toured Taiwanese chipmaker TSMC’s future manufacturing plant in Arizona late final 12 months, touting the corporate’s plans to speculate US$40 billion on upgrades and growth—one of many largest international direct investments in US historical past. Greeting Biden on the occasion, TSMC’s chairman thanked him personally for the US authorities’s “continuous collaboration.” 05

19 These cumulative actions are having profound impacts on the know-how growth methods of corporations that function in each america and China, in addition to their capability to supply services and products in these markets. As famous within the Biden Administration’s current Nationwide Safety Technique, China’s emergence as each the “most consequential competitor” and “one of many largest buying and selling companions” would require approaches that “fall exterior the bounds of present guidelines and rules.” Because the Administration pursues “accountable competitors” with China, corporations ought to anticipate that US nationwide safety technique will proceed to form how the federal government regulates home and international know-how, notably if there’s a nexus to China or different nations of concern, comparable to Russia. The next developments illustrate how US coverage will affect choices on each home and outbound funding, provide chain, exports, and imports: Commerce. The Division of Commerce has begun implementing the CHIPS Act, which appropriated US$52.7 billion to assist the American semiconductor trade. That funding goals to not simply buoy producers, however incentivize the event of the semiconductor ecosystem, which incorporates suppliers, workforce growth, and analysis and growth. It additionally comes with strings connected. Along with limitations on investing in and doing enterprise with China, Commerce will prioritize tasks that comply with info safety requirements, provide chain safety, and cybersecurity greatest practices. These The US authorities’s assist for TSMC exemplifies the extent to which nationwide safety issues about China have pushed successive US administrations to pursue industrial incentives, novel regulatory regimes, and impose heightened restrictions associated to know-how and infrastructure. US workplaces amongst “the elite” for worldwide commerce: export controls and financial sanctions. —Chambers USA

20 Nationwide Safety situations are designed to concurrently develop and safeguard the home semiconductor trade—a direct intervention by america available in the market that represents a marked shift in industrial coverage. Wielding one other regulatory stick, Commerce is within the remaining phases of implementing its info and communications know-how provide chain rules to handle threats posed by way of sure international know-how and software program purposes in america. The rules will set up a regime for reviewing and doubtlessly prohibiting the usage of sure international know-how, notably the place it creates a threat that adversaries may exploit People’ delicate knowledge. Trade & Safety. In October 2022, the Biden Administration took one other step towards undermining Chinese language advances in excessive tech by implementing new restrictions on China’s entry to US semiconductor applied sciences. Commerce’s Bureau of Trade and Safety imposed a sequence of controls on the export of superior computing and semiconductor manufacturing objects to China in addition to transactions associated to supercomputer end-uses in China. Geared toward addressing US nationwide safety and international coverage issues over China’s strategic and army objectives, these measures search to limit China’s “capability to acquire superior computing chips, develop and keep supercomputers, and manufacture superior semiconductors.” They complement prior rulemakings designed to limit exports for army use and to corporations that additional Chinese language strategic pursuits, in addition to financial sanctions and import restrictions designed to counter perceived systematic Chinese language authorities human rights violations. FCC. In November 2022, the Federal Communications Fee issued a Report and Order that may severely prohibit the import and use of sure international know-how perceived to be a nationwide safety menace—specifically, telecommunications and video surveillance know-how produced by Huawei, ZTE, Hytera, Dahua, and Hikvision. The order builds on Trumpera restrictions that prohibit the usage of these applied sciences by the US authorities and federal contractors. It could successfully prohibit the American public from utilizing this know-how primarily based on nationwide safety issues, an strategy that’s markedly broader than the prevailing restrictions. The Nationwide Safety Technique asserts that america “should put money into our innovation and industrial energy, and construct our resilience, at house.” Between semiconductor restrictions, export controls and financial sanctions, CHIPS Act implementation, and supply-chain restrictions, nationwide safety issues are more and more driving US financial coverage. As companies consider their threat and industrial development methods, they need to think about how nationwide safety points—notably these associated to know-how—will form the regulatory and aggressive atmosphere. Because the Biden Administration pursues “accountable competitors” with China, corporations ought to anticipate that US nationwide safety technique will proceed to form how the federal government regulates home and international know-how.

21 Local weather Change Heating Up Water Wars Clashes Throughout the US Barton “Buzz” Thompson | Heather Welles VIDEO PLACEHOLDER

22 Water wars—fought for hundreds of years within the American West—at the moment are raging throughout the nation, as states and water customers battle over diminishing provides. In 2022, 85% of the nation suffered abnormally dry or drought situations. Local weather change is no less than a part of the explanation, elevating the specter of even worse shortages sooner or later. Not solely are droughts extra frequent and extra extreme, however increased temperatures are additionally lowering snowfall, growing evaporation, and producing larger demand at the same time as provides decline. 06

23 Areas of the South, Southeast, Midwest, and Excessive Plains additionally have been parched final 12 months. Following many years of restricted rainfall, the 2 main reservoirs on the Colorado River—the lifeblood of the Southwest—are approaching “useless pool” ranges, which might minimize off each water availability and hydroelectric manufacturing. Scientists estimate that the West has not been this dry in additional than 1,200 years. When tensions between states spill over, the disputes fall beneath the unique jurisdiction of the US Supreme Court docket. Mississippi has sued Tennessee, arguing earlier than the Court docket that town of Memphis was stealing its groundwater as a result of town’s wells have been inflicting groundwater beneath Mississippi to stream throughout the border into Tennessee. And Florida sued Georgia, alleging that Georgia’s rapacious thirst for water dramatically diminished Apalachicola River flows, harming each the river’s ecosystem and Florida’s oyster fisheries in Apalachicola Bay. Even voluntary agreements, which have been as soon as profitable in resolving interstate water disputes, are failing to avert new lawsuits within the face of droughts and different shortages. Because the early twentieth century, states have agreed to Congressionally permitted “interstate compacts” to keep away from the time, price, and threat of litigation. These compacts spell out how a lot water every state can divert from shared rivers and resolve different disagreements. However when shortages hit, states usually discover themselves unable to agree on precisely what the compacts require, and so they find yourself earlier than the Supreme Court docket in any case. Within the final decade, the Supreme Court docket has needed to resolve disputes over each the Yellowstone River Compact (Montana, North Dakota, and Wyoming) and the Pecos River Compact (New Mexico and Texas). Lately, the dwindling waters of the Colorado River have generated heated disputes over the which means of the Colorado River Compact, which has guided river operations for a century. It stays to be seen whether or not that compact additionally comes beneath the scrutiny of the justices. Whiskey is for consuming; water is for preventing over. —Mark Twain Virtually no a part of the nation has been spared lately. California endured the driest three years in its recorded historical past from 2020-22.

24 Local weather Change Heating Up Water Wars Shortages have prompted other forms of litigation as effectively. As local weather change reduces floor provides, customers usually flip to groundwater. Overpumping may end up in falling groundwater tables and numerous related issues, together with floor subsidence. So, not surprisingly, groundwater adjudications, during which courts resolve disputes over groundwater withdrawals, are additionally on the rise. California hoped to keep away from such lawsuits by passing a legislation in 2014 that requires native businesses to sustainably handle the state’s groundwater basins, however the administration of that legislation has already led to 6 new groundwater lawsuits, and much more are probably. Water shortages have additionally led Indian tribes to file claims to water as a matter of treaty rights and federal legislation. The Supreme Court docket just lately agreed to listen to a case involving the Navajo Nation’s declare to Colorado River water. Lastly, environmental organizations and governmental businesses are bringing lawsuits to make sure that water customers go away ample water in rivers and streams to guard freshwater ecosystems within the face of local weather change. Briefly, local weather change is driving extreme drought in an increasing number of components of america. In response, water customers and environmental advocates are turning to the courts to say no matter they’ll of the shrinking provides. The disputes—a few of which contain tons of of events—are complicated sufficient to make even negotiating voluntary settlements an extended and costly course of. Events who get out forward of those points and concentrate on problemsolving can higher management their destiny and attain favorable resolutions. O’Melveny is without doubt one of the few main legislation corporations with a devoted water apply, drawing on 100+ years of expertise advising trade shoppers. In 2022, 85% of the US suffered abnormally dry or drought situations.

25 Monica Hwang | Silvia Smith Outlook for Liquefied Pure Fuel Trade Tonnes to Speak About VIDEO PLACEHOLDER

26 The previous 12 months noticed a exceptional turnaround within the liquefied pure fuel (LNG) market, with a dramatic enhance in demand for growth of US LNG tasks. Excessive LNG and fuel costs in Europe, pushed even increased by Russia’s invasion of Ukraine, made clear to importing nations the necessity to increase their power safety by creating extra LNG provide sources. Builders of US LNG export tasks captured nearly all of long-term LNG contracts concluded final 12 months, making 2022 a banner 12 months for the trade. However as a brand new 12 months begins, the LNG trade grapples with a number of key uncertainties. 07

27 Arbitrage Alternatives in Europe Might Turn out to be Extra Elusive. The present growth started in 2021 with the spike in European fuel costs, then took off after the invasion of Ukraine centered consideration on energy-supply safety. LNG sellers responded shortly to increased European fuel costs, delivery extra LNG and diverting different out there cargos to the continent. However a number of elements have now made it more durable to capitalize on continued excessive costs in Europe. Chief amongst them is decreased demand, which has been reported and is anticipated to proceed. The push to provide Europe with LNG may be overwhelming the capability of the continent’s infrastructure. At one level this fall, greater than 30 LNG ships have been reported to be anchored off the Spanish coast, awaiting their turns on the few out there LNG unloading terminals. And as soon as that cargo is unloaded, there could also be points with scarcity or lack of downstream pipeline capability to move the pure fuel to the place it’s most wanted. Within the 12 months forward, these in search of arbitrage alternatives might want to pay nearer consideration to location-specific import capability and pricing variations. -200 -100 0 100 200 300 400 500 600 -12 -8 -4 0 4 8 12 16 20 Q1 2021 Q2 Q3 This autumn Q1 2022 Q2 Evolution in fuel costs (Q1 2021=100) Y-o-y change in consumption in bcm United States China OECD Europe India Asian spot worth North American spot worth European spot worth Supply: “Fuel Market Report, This autumn-2022 together with International Fuel Safety Assessment 2022.” Worldwide Power Company, Fuel, This autumn.

28 Outlook for Liquefied Pure Fuel Trade Elevated Credit score Prices Might Deter New Market Entrants. The expansion of US LNG tasks and shorter-term, spot market transactions have introduced new gamers into the LNG trade, which has traditionally been comprised of a small “membership” of individuals. However the current spike in LNG costs may, paradoxically, push new entrants out or make it more durable for them to enter the market. A cargo of LNG valued at US$100 million or much less only a few years in the past can now be value US$200 million or extra, and that soar in valuation means extra onerous credit score necessities for consumers. Within the spot market, consumers usually must safe a standby letter of credit score for 100% or extra of the cargo worth. Creditworthiness can be paramount for any purchaser within the long-term market, and consumers with out investment-grade credit score rankings are dealing with much more stringent necessities. These necessities have the potential to bolster historic obstacles to entry, deterring and even stopping new gamers from collaborating within the LNG trade. Excessive Costs Might Delay LNG Conversions Exterior of Europe. As exporters divert LNG cargos to Europe, the place costs are highest, consumers elsewhere are having a tough time securing spot cargos. Which will gradual the event of LNG infrastructure elsewhere. Potential consumers, who would have in any other case contemplated making the gasoline swap to LNG for energy era, might rethink that technique if they can’t safe LNG cargos. And sponsors of LNG import terminals might need to shelve or scrap their plans, as European nations have secured all out there floating storage and regasification models (FSRUs) essential to implement the gasoline switching. FSRU Availability and Necessities as of August 2022 Laid up Contract ending Working as LNG service On order or in conversion 0 5 10 15 20 25 30 FSRU availability Europe–agency FSRU Europe–no agency FSRU Remainder of the world– agency FSRU FSRU commitments (excl. South and Southeast Asia) Underneath building–agency FSRU Underneath building–no agency FSRU Deliberate–no agency FSRU South and Southeast Asia FSRU tasks Variety of vessels Supply: “Fuel Market Report, This autumn-2022 together with International Fuel Safety Assessment 2022.” Worldwide Power Company, Fuel, This autumn. Observe: Standing as of August 31, 2022.

29 Development Price Will increase Might Delay Progress. The entrance runners among the many US LNG venture builders have began refreshing their building price estimates and finalizing engineering, procurement, and building (EPC) contracts. As they accomplish that, increased building prices may have an effect on contract negotiations with LNG consumers and finally delay growth. For its Port Arthur LNG venture, Sempra Infrastructure just lately introduced finalized contracts of US$10.5 billion for 13.5 million tonnes of annual LNG manufacturing capability. That’s about US$778 per tonne of annual capability, up about 6% from the US$733 per tonne of annual capability that Sempra paid for its firstwave US LNG venture, Cameron LNG. US LNG Tasks Achieved File Low Per-Unit Construct Prices of Liquefaction Capability LNG Tasks, $/tpa*, 2014-18 *Tpa stands for tonne of annual liquefaction capability. Gorgon Prelude FLNG Wheatstone Ichthys Queenland Curtis PNG Yamal Donggi-Senoro Pacific LNG Gladstone Angola LNG Tangguh Enlargement Corpus Christi Section 1 Petronas PFLNG1 Sabine Cross Prepare 5 Elba Island Petronas PFLNG2 Freeport Cameron LNG Cove Level Corpus Christi Section 2 Bintulu Prepare 9 Caribbean FLNG Golar FLNG Sabine Cross Trains 1-4 550 600 600 625 667 710 733 799 825 832 884 968 1044 1053 1154 1291 1300 1305 1311 1349 1412 1929 1987 2000 2106 Australia Remainder of the world US Supply: Oxford Institute for Power Research

30 Outlook for Liquefied Pure Fuel Trade To safe financing, builders want long-term contracts with anticipated revenues ample to cowl building prices. Within the case of Port Arthur LNG, Sempra has began changing its introduced heads of agreements into definitive long-term contracts, with pricing that takes under consideration the finalized EPC contract worth. For US venture builders which have already introduced definitive long-term contracts, they might must renegotiate these offers if the contract costs don’t cowl EPC contract prices. As tasks progress, trade watchers will probably be to see remaining EPC contract costs and whether or not consumers will stay dedicated within the face of worth negotiations or renegotiations. A number of US LNG Export Tasks Might Attain the End Line. After finalizing EPC contracts and longterm contracts with LNG consumers, venture builders face one remaining take a look at earlier than they’ll begin building: finalizing financing. That’s no small feat, as Tellurian’s failed try at procuring financing for its Driftwood venture in 2022 demonstrated. In September, Tellurian deserted a plan for a shortterm debt financing and canceled two of its unique long-term offtake contracts. That setback means that builders want longer contracts to assist financing. Whereas Tellurian’s now-scrapped contracts have been 10-year offers, most definitive, long-term offtake contracts signed by different US LNG tasks in 2022 have ranged from 15 to twenty years. By all market indications, the monetary markets are flush with capital in search of the precise funding alternatives, and a number of US LNG tasks have introduced their intention to finalize financing within the coming 12 months. With acceptable structuring, the LNG trade may simply see a repeat of the primary wave of US LNG, with a number of tasks getting the inexperienced mild in 2023. O’Melveny’s Texas workplaces top-ranked for power: ‘The workforce just isn’t solely very skillful and educated, but in addition has a knack for locating sensible options.’ —Consumer testimonial, Chambers USA

31 After Dobbs How Firms Facilitate Entry to Abortion Care Meaghan VerGow VIDEO PLACEHOLDER

32 As co-counsel with the Heart of Reproductive Rights, O’Melveny represented the abortion supplier in Dobbs v. Jackson Ladies’s Well being Group. Because the Court docket’s determination, we’re serving to employers, well being insurers, and different affected shoppers deal with the myriad authorized points raised by the ruling. 08

33 Publish-Dobbs, O’Melveny helps employers, well being insurers, and different affected shoppers deal with the myriad authorized points raised by the ruling. Q: How have corporations responded to Dobbs? A: Many corporations have been ready for this, and when the Dobbs determination was introduced, they took steps to assist abortion rights and to guard workers’ entry to abortion care even when these workers reside in states with new restrictions. One frequent strategy has been to offer a profit as a part of workers’ well being protection that reimburses lined people for the price of touring to a location the place they’ll entry abortion care. So, for instance, an worker who lives in Idaho might be reimbursed for the price of touring to California, along with getting reimbursed for the process itself. Q: What dangers do corporations providing abortion- care advantages face? A: There’s nonetheless some uncertainty about whether or not and to what extent states will pursue the argument that providing the profit violates state legislation. Usually, states might regulate the advantages in totally insured plans (i.e., these during which an employer purchases insurance coverage from an insurance coverage firm), however ERISA preempts state regulation of the advantages for self-insured plans (i.e., these during which an employer supplies the well being advantages on to workers). Self-insured plans have extra flexibility in the advantages they’ll supply, however some states might, nonetheless, assert that corporations that sponsor, insure, or administer a journey profit are criminally aiding and abetting entry to abortion care. That argument may elevate unsettled ERISA preemption questions in addition to thorny constitutional points. For now, there’s no technique to eradicate threat, however by being aware of the state-level constraints, you’ll be able to construction a profit program in a means that limits threat. The US Supreme Court docket’s determination in Dobbs v. Jackson Ladies’s Well being Group overturned the constitutional proper to abortion established in Roe v. Wade in 1973. Whereas the Dobbs determination affected many on a deeply private degree, it additionally modified the authorized panorama, with the authority to control reproductive well being care now left largely to the states. Whereas some states have strictly restricted, banned, and even criminalized the process, others have added protections to make sure continued abortion entry.

34 After Dobbs The authorized panorama stays fluid. States proceed to enact legal guidelines regulating abortion care, and litigation is affecting how these legal guidelines function on the bottom. There are rising conflict-of-laws points as states enact competing necessities. There has additionally been exercise on the federal degree, with corporations aware that the steering and enforcement efforts on the federal aspect might change as effectively. Many corporations, together with health-care corporations, have needed to reorganize their enterprise actions in opposition to the backdrop of those unresolved points. They’re eager to know the authorized boundaries to allow them to facilitate entry to abortion care the place doable. Q: Given this uncertainty, how can corporations mitigate the dangers of offering abortion-care advantages? A: Most vital is a cautious evaluation of the legal guidelines that will apply to the corporate, its workers, and its advantages plan. For now, there’s no technique to eradicate threat, however by being aware of the statelevel constraints, you’ll be able to construction a profit program in a means that limits threat, or that no less than places you in the identical class as most different employers who’re attempting to perform this aim. Q: What are among the authorized developments we should always look out for within the 12 months forward? A: I might count on to see battles over crossborder entry to abortion care. The FDA just lately licensed elevated entry to one of many main abortion-inducing drugs, which can immediate disputes over state-law dishing out limitations. And as many state legislatures reconvene for the primary time because the Dobbs determination, we’ll see whether or not there may be political urge for food for finely tuned restrictions concentrating on the options that corporations have adopted over the previous 12 months to facilitate entry to abortion care. O’Melveny has an extended historical past defending abortion rights, from main precedentsetting litigation to partnering with neighborhood and professional bono organizations on key initiatives.

35 SCOTUS’s Unprecedented Strategy to Precedent Jeffrey L. Fisher VIDEO PLACEHOLDER

36 The Supreme Court docket’s willingness—some say, eagerness—to jettison longstanding precedent is shaking the foundations of constitutional jurisprudence. Distinguished examples embrace the Court docket’s current determination overruling Roe v. Wade and the instances this Time period difficult decades-old choices on affirmative motion. However the Court docket has additionally begun taking a brand new strategy to precedent in a much less observed, however maybe extra vital means. Specifically, the Court docket has proven an growing willingness to reassess statutory choices. And the place a majority concludes that the reasoning of such previous choices is inconsistent with fashionable rules of statutory interpretation, the Court docket has refused to increase these choices in any means. 09

37 The framework the Court docket established 20 years in the past for implementing the implied causes of motion in these statutes strongly steered the reply was sure. Justices Kavanaugh and Gorsuch, nonetheless, equipped the pivotal votes in opposition to the plaintiff on the bottom that judicially implied causes of motion themselves are unjustified. Equally, in Vega v. Tekoh, the Court docket thought of whether or not 42 U.S.C. § 1983 supplies a treatment for violations of the Court docket’s well-known Miranda rule—the rule requiring that cops warn custodial suspects of their rights earlier than questioning them. Miranda is one other decadesold rule that a number of Justices imagine to be of questionable origin, and plenty of Justices likewise query whether or not Part 1983 is really meant to permit damages actions for violations of constitutional rights. A majority of the Court docket thus declined to endorse a statutory treatment for violations of the Miranda rule. At oral argument, Justice Kavanaugh encapsulated his strategy to Miranda: “Settle for it, however don’t lengthen it.” This new strategy to precedent upends the normal understanding that previous Supreme Court docket choices ought to be understood as not simply deciding specific instances, but in addition establishing authorized guidelines that should be utilized every time sound logic dictates. As Justice Alito put it only a few years in the past, when the Court docket decides a case, “We are able to’t simply say that on the actual information right here,” one occasion wins. “We now have to have a rule that may be utilized in different instances.” It now appears, nonetheless, {that a} Court docket majority is ready to deal with a rising variety of previous choices as relevant solely to their very own specific information. This new apply has profound implications for people, companies, and all different events with instances earlier than the Court docket—or with points that might be headed there. For one factor, it’s vital to have legal professionals who perceive and know methods to converse the Court docket’s fashionable language of statutory interpretation. On this sense, Supreme Court docket counsel is one other type of native counsel. O’Melveny as soon as once more named to The Nationwide Regulation Journal’s Appellate Scorching Listing, a choose group of essentially the most energetic and influential corporations on the Supreme Court docket. Take final Time period’s determination in Cummings v. Premier Rehab Keller. The query there was whether or not recipients of federal funds that discriminate in opposition to people due to their race, intercourse, or incapacity—in violation of Title IV, Title IX, and associated statutes—should pay damages for a plaintiff’s ensuing emotional misery

38 SCOTUS’s Unprecedented Strategy to Precedent Extra usually, it’s important to understand that even the place the present Court docket just isn’t ready to overrule previous choices, it could, nonetheless, be keen to wall off precedent from any future extensions. The Court docket might even be open to arguments for limiting previous choices to their information— which may be tantamount to overruling them. The duty for events and their counsel is to regulate to this new actuality. It now appears {that a} Court docket majority is ready to deal with a rising variety of previous choices as relevant solely to their very own specific information. O’Melveny scored a hat trick on the Supreme Court docket, successful all 3 instances argued throughout the 2021-22 Time period.

39 Timothy S. Durst | Cason G. Cole Patent Litigation in Texas What Occurred in 2022 and What to Count on Subsequent VIDEO PLACEHOLDER

40 Regardless of an abrupt mid-year judicial order reassigning Western District patent instances—a change many observers thought would minimize off the district’s regular stream of patent litigation—the change to this point has not been as dramatic as some anticipated. However extra modifications more likely to are available in 2023 may additional alter the panorama. For the primary half of 2022, Decide Alan Albright of WDTX presided over all patent instances filed within the Waco Division—roughly 95% of patent instances within the district, and almost one quarter of patent instances nationwide. However in an sudden July 25 order, WDTX Chief Decide Orlando Garcia modified how judges are assigned to patent instances filed in Waco. The order, which applies solely to instances filed in Waco, assigns instances randomly to 12 judges throughout the district. 32 10

41 Decide Albright continues to maneuver his instances alongside. He performed three patent jury trials since July 25, with every leading to findings of infringement and damages awards: US$1.9 million in opposition to an oilfield companies firm, US$274 million in opposition to Lab Corp., and US$949 million in opposition to Intel in spherical three of the VLSI litigation. Plaintiffs have now received 11 of 17 trials; damages awarded have ranged from US$235,000 to US$2.2 billion, with a median of US$14 million. Subsequent door, within the Japanese District of Texas, Chief Decide Rodney Gilstrap continues to preside over 95% of civil instances filed in Marshall. Following the July 25 order, patent filings in Marshall have ticked up barely, with 165 instances in comparison with 147 throughout the identical interval in 2021. Decide Gilstrap took 9 instances to jury verdicts in 2022, with six leading to infringement verdicts—together with a US$31 million award in opposition to Ericsson and a US$218 million award in opposition to PNC Financial institution. Since Decide Garcia’s order, new filings within the WDTX have fallen, although not as precipitously as some initially predicted. Plaintiffs filed about 30% fewer instances in WDTX from July 25 via December 31 in comparison with the identical interval final 12 months, regardless of virtually no year-over-year change within the variety of patent instances filed nationwide. Plaintiffs have been capable of preserve many new instances earlier than Decide Albright by designating them as “associated” to instances he dealt with beforehand. In consequence, half of the 291 instances filed within the Waco Division since July 25 have been assigned to Decide Albright. O’Melveny ‘maintains a powerful foothold in the primary US patent litigation venues, with a concentrate on {hardware} to software program, augmented actuality to streaming video, e-commerce and digital know-how to prescription drugs, performing on the protection and offense aspect alike.’ —Authorized 500 US

42 Patent Litigation in Texas Patent case counts decreased solely barely nationwide in 2022. Plaintiffs filed 5,992 instances in 2022, down from 6,087 instances in 2021. Maybe as a measure of the affect of the WDTX reassignment order, of the highest-volume patent districts, solely the EDTX and Central District of California noticed a rise in filings from July 25 via December 31 in comparison with the prior 12 months. Right here is how the numbers break down: Patent Case Distribution July 25 – December 31 2021 2022 Nationwide 2,641 2,561 W.D. Tex. 434 334 D. Del. 401 263 E.D. Tex. 190 210 N.D. Cal. 74 65 C.D. Cal. 109 122 However the mud hasn’t settled in WDTX. In November 2022, Decide Alia Moses in Del Rio succeeded Decide Garcia because the district’s Chief Decide. On this function, Decide Moses may have affect over case project procedures throughout the district, and in a December 16 standing order, Decide Moses saved in place Decide Garcia’s July 25 order. It stays to be seen, nonetheless, whether or not this coverage will probably be everlasting. There could also be retirements within the district in 2023, which additionally may have an effect on case assignments. For now, litigants ought to assume that the Japanese and Western districts will stay two of the nation’s busiest. In Waco, the “associated instances” phenomenon will take a while to tail off, and it appears probably there will probably be no less than one different shoe to drop with respect to the adjusted case project protocol. And a few WDTX courts exterior of Waco appear to be positioning themselves to deal with patent instances following Decide Albright’s procedures—utilizing the identical magistrates, adopting comparable practices on technical advisors, and even adopting Decide Albright’s particular guidelines, as already occurred in Midland. In the meantime, EDTX continues to see sturdy case filings and appears positioned to seize a sizeable share of instances that plaintiffs might divert away from WDTX. Within the 12 months forward, EDTX and WDTX will proceed to deal with out-sized shares of patent litigation and proceed to exert vital affect over the route of patent legislation.

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