Intellectual Property

Chinese Utility Model Patents: A Smart Tool or a Strategic Risk?

Authors: G. Harley Blosser, Erin Perry

September 23, 2026

When developing a patent strategy in China, many foreign applicants focus exclusively on invention patents. However, China’s utility model patent system can offer significant advantages for the right innovations, particularly in industries where products evolve quickly and speed to market matters.

Often described as protection for “small inventions,” utility model patents cover technical solutions related to the shape or structure of a product. Unlike invention patents, they are not subject to substantive examination before grant, resulting in a much faster and less expensive path to obtaining patent rights.

One of the key benefits of a Chinese utility model application is speed. While an invention patent may take several years to issue, a utility model can often be granted within months. For companies seeking rapid protection against competitors or looking to strengthen their position before a product launch, this accelerated timeline can be highly valuable. Utility models are also generally less expensive to obtain and maintain, making them an attractive option for protecting incremental innovations and building larger patent portfolios.

Another advantage is that utility models can protect practical improvements that may not satisfy the higher inventive-step requirements applied to invention patents. Mechanical devices, manufacturing equipment, consumer products, and other hardware-based innovations are often good candidates for utility model protection.

That said, utility models are not without drawbacks. They provide a shorter term of protection, lasting only 10 years from filing compared to the 20-year term available for invention patents. In addition, utility models are limited to certain product-based inventions and cannot be used to protect methods, processes, or many software-related innovations.

Companies should also remember that the absence of substantive examination can be a double-edged sword. Although it enables faster grant, it can also make utility models more vulnerable to validity challenges during enforcement. Competitors frequently scrutinize utility model patents and may seek invalidation when litigation arises.

For many applicants, the most effective approach is not choosing between a utility model and an invention patent, but using both. A dual-filing strategy can provide immediate protection through a utility model while the corresponding invention application undergoes examination, allowing companies to secure early rights without sacrificing the possibility of longer-term protection.

Ultimately, Chinese utility model patents are best viewed as a strategic tool rather than a substitute for invention patents. For physical products and incremental innovations, they can provide fast, cost-effective protection and valuable business leverage in one of the world’s largest markets.

Additionally, several other major economies also have some versions of utility model patenting available with similar operating principles for how they work, and with the same pros and cons. If you are interested in seeing if a utility model patent in China or other jurisdictions could benefit you, please reach out to our IP team.

Professional Liability

Common Claims Against Insurance Brokers: Three Reoccurring Theories of Liability

Author: Katrina Smeltzer

September 17, 2026

Insurance professionals occupy a critical position in the insurance marketplace. As intermediaries between policyholders and insurers, insurance professionals owe duties of care and diligence that, when breached, can give rise to professional liability exposure. Brokers’ obligations vary by jurisdiction. Yet, three categories of claims appear regularly in litigation against brokers: (1) the failure to advise on adequate coverage limits; (2) misrepresentation or omission of policy exclusions; and (3) errors in policy placement and documentation.

The Failure to Advise on Adequate Coverage Limits

When a policyholder suffers a loss that exceeds the limits of the insurance policy, that policyholder frequently looks to the insurance broker, asking why that broker did not recommend higher policy limits.

At its core, this claim rests on the theory that the broker, as a professional with specialized knowledge, had a duty to assess the client’s risk profile and counsel the client on appropriate insurance amounts. Some courts recognize such a claim when a broker holds him or herself out as an expert advisor—rather than a mere order-taker—finding then that the broker assumes an affirmative obligation to evaluate the client’s needs and recommend suitable policy limits. In those jurisdictions recognizing this rule, damages can be substantial and are often measured by the gap between the inadequate policy limits and the actual loss sustained.

Brokers defending against these claims frequently argue that the client was informed of available options and elected lower limits based on cost considerations, making thorough documentation of coverage discussions and client decisions a critical risk management practice.

Misrepresentation or Omission of Policy Exclusions

A second common theory of liability involves allegations that a broker misrepresented the scope of coverage or failed to disclose material policy exclusions.

Policyholders in these cases typically allege that they relied on the broker’s description of what the policy covered, only to discover after a loss that a key exclusion barred their claim. These disputes often center on whether the broker explained the significance of exclusions—such as those for flood, mold, cyber incidents, or professional misconduct—before the policy was bound.

For brokers, the lesson is straightforward: if the broker undertakes to explain coverage and exclusions, then clearly and contemporaneously document all communications regarding coverage limitations and ensure that clients acknowledge their understanding of what is and is not covered.

Errors in Policy Placement and Documentation

The third recurring category encompasses operational and administrative failures in the policy placement and retention process. These claims may involve a broker who placed coverage with an unauthorized or financially unstable insurer, failed to timely bind or renew a policy, procured a policy that did not match the terms quoted or requested, or made clerical errors in the application that resulted in a coverage denial.

Unlike the advisory claims described above, these are often straightforward negligence claims premised on the broker’s failure to execute a ministerial task with reasonable care. Robust internal workflows, checklists, and quality control procedures are essential safeguards against this category of exposure.

Appellate and Complex Litigation

Odenwald on Appeal: Don’t Overlook the Reply to Affirmative Defenses

Author: Kurt S. Odenwald, Judge (retired)

September 15, 2026

A plaintiff who intends to rely on estoppel to overcome a defendant’s statute-of-limitations affirmative defense must plead that affirmative avoidance in a timely reply. In Wilkerson v. Wilkerson, No. SD39231 (Mo. App. S.D. Sept. 2, 2026), the Missouri Court of Appeals emphasized the consequences of overlooking that requirement: the plaintiff waived an estoppel defense paving the way for the Court to affirm summary judgment by the trial court for the defendants.

The case concerned a tract of land over which the plaintiff sought to impose a constructive or resulting trust. The Amended Petition asserted alternative theories of recovery, including unjust enrichment, breach of a confidential or fiduciary relationship, and declaratory judgment. In their Amended Answer, the defendants also raised the affirmative defenses that the plaintiff’s theories were barred by the ten-year statute of limitations in § 516.010 and the five-year statute of limitations in § 516.120.

The plaintiff did not file a reply to the Amended Answer. The defendants subsequently moved for summary judgment based on their statute of limitations defenses. The plaintiff admitted each of the defendants’ seven statements of uncontroverted material fact and submitted eight additional statements of fact, which the defendants also admitted. There being no genuine issue of material fact, trial court granted summary judgment in favor of defendants. A defendant seeking summary judgment on an affirmative defense must establish undisputed facts supporting that properly pleaded defense. To obtain judgment disposing of the entire case, the defendant must demonstrate that the plaintiff cannot recover under any pleaded theory. Here, the defendants’ limitations defenses and summary judgment motion addressed all of the plaintiff’s theories.

On appeal, the plaintiff’s sole point did not challenge the merits of the defendants’ statute of limitations defenses. Instead, plaintiff maintained that the defendants were estopped from asserting those defenses because the defendants made affirmative representations to plaintiff that induced plaintiff to delay in filing suit. Critically, plaintiff’s argument, even if credible, was reliant on an affirmative avoidance defense that the plaintiff had never pleaded.

Rule 55.01 requires a party to plead an affirmative avoidance to a matter alleged in a preceding pleading. And that means any preceding pleading. Rule 55.08 expressly includes estoppel among the affirmative defenses and avoidances that must be pleaded and requires supporting factual allegations. When invoked to defeat a statute-of-limitations defense, estoppel is an affirmative avoidance. But an avoidance to an affirmative defense must be pleaded in a timely reply or it is waived. Allen v. Titan Propane, LLC, 484 S.W.3d 902, 905 (Mo. App. S.D. 2016). Because the plaintiff had not filed a reply pleading estoppel, he could not rely on that avoidance to defeat summary judgment. See Montgomery v. Coreslab Structures (Missouri), Inc., 697 S.W.3d 766, 773–74 (Mo. App. 2024).

The decision also underscores that de novo review of summary judgment by the appellate court does not eliminate preservation requirements. The plaintiff did not present estoppel to the trial court through a reply, and the trial court had never ruled on that issue. The appellate court therefore rejected plaintiff’s estoppel argument and affirmed the trial court’s entry of summary judgment.

Lesson Learned: When reviewing an answer or amended answer, counsel should identify any affirmative defense that calls for an affirmative avoidance, calendar the reply deadline, and plead the facts supporting the avoidance. Waiting until summary judgment or appeal to raise an otherwise viable avoidance defense risks losing the defense before its merits can be considered.

Employer Law

Illinois Takes Another Step Forward for Working Mothers of Infants

Author: Rebecca Wohltman

September 10, 2026

Illinois recently passed the Family Neonatal Intensive Care Act (https://sandbergphoenix.com/illinois-family-neonatal-intensive-care-act-now-in-effect/), providing new parents who have an infant in the NICU was job-protected, though unpaid, leave.

Effective earlier this year, on January 1, 2026, Illinois also granted additional protections to mothers who are breastfeeding their babies.

The Illinois Nursing Mothers in the Workplace Act requires employers with more than five (5) employees to provide reasonable, paid break times – at the employee’s regular pay rate – for the mother to pump breast milk for up to one (1) year following the birth of a child.

Importantly, the breaks under this Act do not count as Family and Medical Leave Act time. This is an additional requirement employers must comply with. Employers cannot require breastfeeding mothers to use FMLA time before being eligible under this Act.

The Act does not specify the length or frequency of breaks to pump breast milk that an employer must provide the employee. Employers should be cautious about setting rigid policies. Instead, employers and employees should clearly communicate expectations and needs to find a schedule that is mutually workable.

As a working mom of young kids, I am excited to see statutes like this one enacted. My hope is that we continue to see more support given to working parents.

Appellate and Complex Litigation

Missouri Court of Appeals Stress that Trial Courts Have Broad Discretion to Grant a New Trial Notwithstanding the Verdict

Author: Kurt S. Odenwald, Judge (retired)

September 8, 2026

In K.W. v. St. Louis Children’s Hospital, et al., ED113441, the Missouri Court of Appeals, Eastern District, confirmed a trial court’s very broad discretion when granting a new trial on the ground that the jury’s verdict was against the weight of the evidence. The case also underscores an important appellate point: when reviewing an order predicated on the weight of the evidence, the appellate court does not view the record in the light most favorable to the jury verdict. Instead, the court views the evidence and all reasonable inferences in the light most favorable to the trial court’s decision to grant a new trial.

Background

The plaintiff brought a product-liability action against manufacturers of preterm infant formula, alleging the formula caused the plaintiff to develop a severe gastrointestinal condition.

The jury returned a verdict for the defendants. The trial court later granted the plaintiff’s motion for new trial on several grounds, including its determination under Rule 78.02 that the verdict was against the weight of the evidence. The defendants appealed.

Nearly Unfettered Discretion

The Eastern District began its analysis underscoring an established principle of Missouri law: a trial court has exceptionally broad discretion to grant a new trial when the trial court concludes that the jury’s verdict is against the weight of the evidence. Quoting prior authority, the Court described that discretion as “nearly unfettered.” As long as the plaintiff presented sufficient evidence at trial to make a submissible case, the trial court’s determination that the verdict was against the weight of the evidence ordinarily will not be disturbed absent a clear abuse of discretion—even if the appellate judges might have reached a different conclusion themselves.

That distinction matters because, in this context, weighing evidence is fundamentally the role of the trial court. It is not the role of the appellate court to reweigh competing testimony or independently determine which side presented the more persuasive case.

The Critical Question on Appeal: Was There Sufficient Evidence to Make a Submissible Case?

The defendants argued, among other things, that the jury’s return of a defendant’s verdict demonstrated that plaintiff had not presented sufficient evidence to support the claims. The Eastern District emphasized that a jury’s return of a defense verdict does not mandate a finding that the plaintiff failed to make a submissible case. Those are separate inquiries. When reviewing the grant of a new trial on weight-of-the-evidence grounds, the appellate court must determine from the record if sufficient evidence existed to submit the plaintiff’s claims to the jury. In making that determination, the appellate court must view the evidence and reasonable inferences in the light most favorable to the trial court’s order granting the new trial.

The Court expressly rejected an evidentiary analysis that would view the evidence in the light most favorable to the jury verdict – an analysis benefiting the defendants – explaining that doing so would apply the wrong standard of review. After examining the record before it, the Eastern District concluded that the record contained sufficient evidence to make a submissible case on the plaintiff’s claims.

How Much Explanation Must the Trial Court Give in its Order?

The defendants also challenged the trial court’s cursory explanation for granting the new trial, noting that Rule 78.03 requires an order granting a new trial to specify the ground or grounds on which the ruling is based. Failure to identify the grounds can render the order presumptively erroneous under Rule 84.05(c). Here, the trial court’s order merely recited that the verdict was against the weight of the evidence and that a new trial was warranted under Rule 78.02.

The Eastern District acknowledged that the trial court’s explanation was brief but held that the explanation was nevertheless sufficient. The Court clarified that in granting a new trial on weight-of-the-evidence grounds, the trial court is not required to present a detailed evidentiary analysis, explain the trial court’s mental process, or identify precisely why certain evidence outweighed other evidence. Under the requirements of Rule 78.03, it is enough for the trial court to succinctly state that the verdict was against the weight of the evidence.

Why Grants and Denials of a Motion for New Trial Are Treated Differently

This appellate decision reflects an important asymmetry in Missouri law. Appellate courts are generally more deferential to a trial court’s grant of a new trial on weight-of-the-evidence grounds than to a trial court’s denial of a new trial on weight-of-the-evidence grounds. This deference flows from a trial judge’s personal and first-hand observation of the witnesses and their testimony. Because the trial judge is entrusted with assessing the qualitative weight of the evidence, appellate courts are averse to substituting their own assessment of a “dry” record for the personal observations and assessment of the trial judge.

Practice Takeaways

K.W. offers several useful reminders for both trial and appellate lawyers:

A trial court has extremely broad discretion to grant a new trial when it finds the verdict to be against the weight of the evidence.
The threshold appellate question for a challenge to the trial court’s grant of such motion is whether plaintiff presented sufficient evidence to make a submissible case.
The appellate court views the evidence in the light most favorable to the trial court’s ruling, not the jury verdict.
The appellate court does not reweigh the evidence.
A trial court need not provide a lengthy explanation when granting a new trial on weight-of-the-evidence grounds; identifying that ground can be sufficient.
The return of a jury verdict for the defendant does not of itself demonstrate that the plaintiff failed to make a submissible case.

The bottom line is that under Missouri law, when a trial judge concludes a jury’s verdict is against the weight of the evidence, appellate courts give that determination substantial deference and will not reweigh the evidence adduced at trial.

Tax Law

Illinois Decouples from IRC Section 1202

Author: Rebecca Wohltman

August 24, 2026

Section 1202 of the Internal Revenue Code allows non-corporate taxpayers to exclude gain from the sale or exchange of qualified small business stock (“QSBS”) in a C Corporation, provided certain conditions are met.

In order to qualify as QSBS, the stock must have been originally issued by the C Corporation to the taxpayer (or may have been acquired by gift or inheritance if the stock was originally issued to the transferor), the C Corporation meets the requirements of a qualified small business, and the C Corporation is engaged in an active business.

If a taxpayer meets these requirements, and certain other requirements, and the taxpayer sells his or her QSBS, the taxpayer can exclude 50% of his or her gain after holding the stock for three (3) years; 75% of his or her gain after holding the stock for four (4) years; and 100% of the gain after holding the stock for five (5) years. This gain exclusion is limited to the greater of $15 million or ten (10) times the taxpayer’s basis in the stock.

Unfortunately for Illinois taxpayers, for tax years ending on or after December 31, 2026, Illinois is decoupling from Section 1202. While Illinois taxpayers can still take advantage of Section 1202 on their federal tax returns, when they prepare their Illinois income tax returns, they will need to include the full gain on the sale of QSBS in their Illinois base income.

Section 1202 remains an advantageous provision for qualifying taxpayers. If you are considering selling your C Corporation, be sure to evaluate whether you might be able to structure to the transaction to take advantage of QSBS – even if you cannot use this benefit for Illinois income tax purposes.

Reach out to our Sandberg Phoenix tax law team to learn more on this topic.

Corporate Law, Real Estate

And Then, It Was FinCEN, Again…

Author: Ryan A. Featherstone

August 17, 2026

“Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security.” – Scott Bessent, U.S. Secretary of the Treasury

On August 11, 2026, FinCEN reversed course and permanently ruled that U.S. companies and persons are no longer required to file the extensive beneficial ownership information (BOI) previously required to be reported under the authority of the Corporate Transparency Act (CTA). Additionally, FinCEN said it was going to dump the previously submitted personal information from the government’s online database.

Interestingly, the Secretary also commented that this was part of the administration’s promise to cut red tape. All good. However, for anyone who may be involved in real estate transactions, the natural next question is, what about FinCEN’s Residential Real Estate (RRE) reporting rule? Similarly, this rule requires that any cash or private financed transaction (i.e. non-institutional lender) at any price that includes a business entity (or even a trust) is again required to report an extensive amount of information about the buyer, the seller, and the transaction itself to the same governmental database. The theory is that institutional lenders use Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) programs and risk-based borrower screening, so those types of deals have been exempted.

In Flowers Title Companies v. Bessent (E.D. Tex., March 19, 2026), the court vacated the RRE rule nationwide, holding that FinCEN exceeded its Bank Secrecy Act statutory authority because the agency failed to show how non-financed residential real estate transactions are categorically “suspicious” under the law. Therefore, since March 19th, real estate professionals have not had to concern themselves with the reporting requirements.

However, on May 11, 2026, the government appealed the Flowers court’s vacatur of the RRE rule. Interestingly, while the Secretary recently discussed red tape motivations for doing away with reporting requirements under the Corporate Transparency Act, he made no such comments regarding the RRE rule, and the government’s appeal is still moving forward.

So why the contradiction and apparent tension between the two? No conclusive answer yet from the Secretary, but the likely culprits are the following:

(1) Different statutory authority. BOI reporting was required under the Corporate Transparency Act, which became law in 2021. The RRE rule derives from the Bank Secrecy Act, signed into law by Richard Nixon in 1970.

(2) Different national security rationale. The RRE rule was specifically designed to close a gap that allows foreign actors from adversarial nations to purchase residential property near military installations, intelligence facilities, and critical infrastructure through anonymous LLCs and trusts. The government could argue this is a more targeted, concrete national security concern than the broad anti-money-laundering rationale behind the CTA’s universal beneficial ownership registry.

(3) Different scope and scale. The CTA’s BOI reporting applied to an estimated 32+ million small businesses across virtually every industry, whereas the RRE rule targets a narrower category of transactions, i.e. private-financed/cash residential real estate transfers to entities and trusts and imposes its obligations on real estate closing professionals rather than on business owners generally.

Is there a formal legal contradiction here that would estop the government from defending the RRE rule? Likely not. But is it a meaningful rhetorical and substantive inconsistency that the Flowers plaintiffs and their counsel will exploit in the appeal? Almost certainly yes. The government will need to articulate a principled distinction for why entity-based reporting is an unacceptable burden for small businesses under the CTA but a justified burden for title companies and closing agents under the BSA; and Secretary Bessent’s own recent words certainly will make that task harder.

Have questions about FinCEN reporting requirements or how these developments may impact your business or real estate transactions? Contact the Sandberg Phoenix team to discuss how we can help.

Intellectual Property

Navigating Stormy Waters: The Protect College Sports Act Would Usher in Sweeping Antitrust Changes to College Sports—but Would It Resolve Class of 2022 Eligibility Lawsuits?

Author: Neil Blackmon

August 12, 2026

Despite boisterous support from President Trump and over 16 hours of floor debate, the United States Senate declined to vote on or pass the Protect College Sports Act prior to the Senate recess. On the bright side for the President and the bill’s supporters, who hail from both sides of the aisle, Senate Majority Leader John Thune has teed the bill up for a vote after the Senate returns from recess in mid-September.

The Protect College Sports Act (PCSA) legislation is being hailed by supporters and the President as an essential measure that would put guardrails around the escalating college athletics arms race as the industry continues to adjust to the modern world of name, image, and likeness (NIL) compensation where schools can finally, lawfully compensate the players whose talents helped build the billion-dollar college sports universe. The bill also codifies the settlement in House v. NCAA, permitting revenue sharing between schools and student athletes, subject to certain payment caps.

But if passed, what will the PCSA accomplish? More importantly, would the passage of the PCSA truly stem the riptide of litigation that has rocked the college sports world over the past several years?

The PCSA, which also promises to reshape the NIL deals many outsiders blame for spiraling costs in college athletics, takes direct aim at the antitrust scrutiny and ever-evolving eligibility framework that has created a torrent of litigation since the Supreme Court’s decision in NCAA v. Alston, 594 U.S. 69 (2021) holding that the NCAA’s various compensation restrictions were subject to “rule of reason” antitrust scrutiny.

Alston didn’t usher in the world of NIL to college sports, but the unanimous Supreme Court decision subjecting NCAA compensation rules to antitrust scrutiny was just the beginning of an avalanche of court rulings using antitrust rule of reason analysis to award athletes backpay and overturn other NCAA rules, from compensation caps to transfer restrictions to NIL funding to eligibility restrictions.

The PCSA takes direct aim at the antitrust arguments that have helped college athletes gain leverage and earn money in an industry where they previously had none, despite their talents as players being the sun around which collegiate athletics orbit. It also addresses college athlete eligibility, in a straightforward effort to reform an arcane and confusing web of rules the NCAA has preferred to litigate rather than clarify. The outcome of September’s PCSA vote may create lasting changes in the landscape of college sports. But will it slow the rising tide of litigation on eligibility issues? We explore each issue below.

The PCSA would create lasting changes to the college sports antitrust landscape

The PCSA contains two antitrust exemptions. While one concerns only television rights under the Sports Broadcasting Act of 1961, the other relates to NCAA rule enforcement and promises to be extremely impactful in stemming the tide of antitrust litigation against the NCAA in the status quo.

Under Section 118 of the PCSA, the NCAA, conferences, and member institutions receive an antitrust exemption for enforcing or complying with “rules of bylaws”, including PCSA provisions related to agent registry requirements (Section 103), a prohibition on mid-season coaching departures (Section 110), transfer restrictions (Section 112), eligibility rules (Section 113), PCSA guidelines and rules governing athlete compensation caps (Section 114), the revenue-sharing ceiling (Section 115), and anti-tampering provisions (Section 117). The exemption requires rules implementing these provisions of the PCSA, but the functional effect of Section 118 of the PCSA is to immunize the NCAA from the category of Section 1 Sherman Act challenges that resulted in Alston and its progeny. While Section 119 preserves private causes of action for non-compliance with the PCSA’s affirmative requirements, separate causes of action rooted in anticompetition, antitrust arguments are abolished.

While amendments to the bill have come at a frenetic pace and are expected to continue as opposition to the PCSA escalates over the recess, there’s no question that the PCSA would undermine the antitrust pathway utilized by many college athletes to fight for the opportunity to use the intercollegiate athletics market to maximize their earnings and negotiate for better economic opportunities. By giving the NCAA an antitrust shield from rules it promulgates without giving athletes a sword in which to negotiate that shield through alternative dispute resolution processes or collective bargaining, Congress is essentially allowing the NCAA’s rulemaking authority to dictate the terms of all future college athletic market restraints.

The PCSA will still fuel litigation, of course. For example, the PCSA avoids critical questions about whether student athletes are employees, all while restricting player movement and capping compensation without giving athletes a bargaining framework. These questions will invite judicial scrutiny. But if the PCSA passes, a short-term reduction in antitrust litigation against the NCAA is highly likely, if not inevitable.

What impact would the PCSA have on immediate eligibility questions?

One area of constant litigation the PSCA attempts to address is eligibility.

The NCAA recently shifted course from its longstanding, confusing, and arbitrary as applied world of redshirts[1] and waivers to a more coherent five-year rule (colloquially called “5 for 5”) which ties five-years of eligibility to college enrollment and age. Under the new 5-year rule, a student-athlete who meets all other NCAA eligibility requirements and enters college no later than the academic year after their 19th birthday generally will have up to five years of eligibility, subject to a handful of carefully crafted exemptions.

The rule was simple enough, and a welcome change, except that the NCAA arbitrarily declined to provide a fifth year of college eligibility to athletes in the Class of 2022, almost all of whom qualify under the rule’s plain language, having enrolled four years ago. The new five-year rule does allow current Class of 2023 members a fifth year and promises the opportunity for a fifth year to student athletes in the class of 2024 and beyond as well.

The Class of 2022, having already suffered the competitive disadvantage of competing against players in the Classes of 2017-2020 who received fifth or sometimes sixth or seventh years of eligibility under a blanket COVID waiver system, have understandably sued, arguing that the NCAA’s exclusion of the Class of 2022 is arbitrary and unlawful and forecloses their access to the market for intercollegiate athletics.

Thus far, the athletes have won the day in court, securing a federal injunction (under appeal to the Tenth Circuit at the time of this writing) enjoining the NCAA from prohibiting Class of 2022 athletes from competing in a fifth year of collegiate athletics “under the Rule or any NCAA bylaw.” Class of 2022 athletes have also prevailed in a host of state court actions, securing relief ranging from temporary injunctions allowing them to compete in a fifth year to relief allowing certain Class of 2022 athletes to enter the transfer portal outside the NCAA’s transfer portal period.

Rather than backtrack on the exclusion of the Class of 2022 from the new, otherwise sensible five-year rule, the NCAA has vowed to never surrender, fighting each case in court. The plain language of the PCSA makes that decision extremely curious.

Under Section 113(b) of the PCSA seems to plainly include the Class of 2022 within its eligibility definition. As currently constructed, the section reads:

(b) Years of eligibility. —

(1) IN GENERAL. —Subject to paragraph (2), a student athlete is eligible to compete in intercollegiate athletic competition for a maximum of 5 calendar years beginning on, whichever occurs first—

the beginning of the academic year following the 19th birthday of the student athlete; or

the date the student athlete initially enrolls full time at an institution.

Textually, that does not appear to create any ambiguity. The Class of 2022 is eligible, without exception. The NCAA could, presumably, argue that a Class of 2022 athlete is not a “student athlete” as defined by the PCSA, but that definition only requires (1) enrollment as a full-time student and (2) satisfactory progress towards a degree. As such, a Class of 2022 player enrolled and working on a degree would, under the PCSA definition, clearly qualify as a “student athlete” under the PCSA as currently drafted.

Ultimately, the NCAA’s most sensible solution would be to abandon opposition to Class of 2022 eligibility

Given the plain language of the PCSA seems to ponder an eligible Class of 2022, passage (and timely adoption and implementation) of the PCSA would likely stabilize Class of 2022 eligibility issues. Whether the PCSA passes Congress and is implemented in time to assure Class of 2022 athletes can participate in the upcoming athletic year is another question, one that can only be answered inside the Beltway.

But what if the NCAA disagrees with a reading of the PCSA making Class of 2022 athletes eligible?

Given the NCAA has lobbied so hard for the PCSA, it seems odd that they’d aggressively litigate Class of 2022 eligibility, which appears to be contemplated and resolved in the Class of 2022’s favor by prospective legislation.

Then again, the NCAA’s scorched earth litigation strategy on Class of 2022 eligibility issues has never made much sense. Whether through federal or state courts or Congressional action, the Class of 2022 seems likely to play, and the NCAA’s continued opposition to that reality seems Sisyphean at best.

Indeed, whatever outcome occurs in the Tenth Circuit in Wisne, Class of 2022 athletes who adopt belt and suspenders strategies and, rather than rely solely on federal courts, seek relief in state court remain immensely likely to receive temporary restraining orders declaring them eligible to compete in a fifth season. The NCAA could thus win the Wisne battle and lose the war.

What makes the NCAA’s fight all the odder is that age-based eligibility reform was a wonderful, meritorious idea that is a dramatic, needed improvement on the inconsistent and arbitrary status quo, where five-year basketball pros could gain eligibility but athletes who played only minutes as 18-year-old freshmen were forced to hope for a waiver. Consistency and fairness are admirable eligibility goals and long overdue reforms.

Instead, the NCAA fights on, once again at the expense of the Class of 2022. What’s more, the damage from the NCAA’s litigious strategy isn’t just an eligibility issue; It’s a financial one. The NCAA negotiated specifically for revenue-sharing abilities in the House v. NCAA settlement framework. Class of 2022 athletes have had only 1 year of access to that remunerative structure. Every enrolled athlete after them will have the opportunity to access the revenue-sharing structure for 5 years. In other words, the NCAA isn’t just fighting tooth and nail in court to deny Class of 2022 athletes a year of eligibility every class after them will receive. It’s fighting to deny them access to a concrete, known financial benefit.

Why the NCAA would target one class of athletes in this way will never make sense. The ultimate question is whether the courts or Congress will finally stop them

[1] Under the NCAA’s old system, a “redshirt” was a season that does not count against afforded eligibility years.

Professional Liability

Will the New PCAOB Ethics Standard Increase Auditor Malpractice Claims?

Author: Chad Smith

August 12, 2026

The Public Company Accounting Oversight Board’s new ethics standard, EI 1000 (Integrity and Objectivity), will govern how registered public accounting firms and associated persons exercise judgment, manage disagreements, escalate issues, consult, and document decisions. This new ethics standard becomes effective December 15, 2026. EI 1000 replaces ET 102 and aligns terminology and scope with QC 1000 as part of the PCAOB’s modernized quality control and ethics package approved by the U.S. Securities and Exchange Commission. The central question for accounting firm leadership and risk managers is whether EI 1000’s expanded documentation and structured processes will increase exposure to auditor malpractice claims. The short answer: the standard will materially expand the evidentiary record, which both strengthens compliance defenses and provides plaintiffs a more detailed roadmap.

What EI 1000 Changes

EI 1000 articulates core duties of integrity and objectivity and operationalizes them through required steps for disagreements, escalation, consultations, conflicts, subordination of judgment, and pairs these steps with extensive required documentation.

The Documentation Effect: More Evidence for Both Sides

The enhanced documentation obligations under EI 1000 and QC 1000 requires detailed records about the design, implementation, and evaluation of quality control systems, which must be retained for seven years. These records can evidence due care and professional skepticism for defense teams, while also supplying contemporaneous facts and decision making detail that plaintiffs may use to plead claims. Training, governance, and QC reporting can serve as compliance defenses, yet these same records may be cited to allege knowledge and failure to act. Importantly, under the new standard certifications will be deemed violative only if knowingly false or reckless.

Liability Outlook: Why Claims May Rise

EI 1000 will increase auditing standards for objectivity and documentation, creating a detailed paper trail that may impact liability because the standard requires comprehensive system documentation and expanded responses to deficiencies. The resulting records may provide plaintiffs with a documentation roadmap for bringing professional liability claims, making preparation essential.

Readiness Actions for Accounting Firms

A readiness assessment should focus on policies, training, conflicts management, documentation protocols, engagement deficiency responses, and escalation pathways, coordinated early with counsel on governance and evidentiary strategies anchored to EI 1000.

Key Takeaways

EI 1000 expands structured processes and documentation around integrity, objectivity, disagreements, consultations, and escalation. These elements collectively increase the available evidence to both plaintiffs and defendants in any subsequent dispute.

The same records that demonstrate compliance can be used to allege knowledge, failure to act, or improper subordination of judgment. This dual-use evidentiary effect is amplified by seven-year retention requirements.

A readiness assessment targeted at EI 1000 focus areas is recommended. Early alignment of policies, training, conflicts management, and documentation practices, coordinated with counsel, should position accounting firms to reduce risk and be better prepared to defend unforeseen future claims effectively.

Appellate and Complex Litigation

Fail to Stay the Judgment, Lose the Appeal? Southern District Applies the Acquiescence Doctrine

Author: Kurt S. Odenwald

August 11, 2026

In Carol DeVoy and Stephanie DeVoy, Co-Trustees of the Barnett Family Trust v. Carmen Lisek, SD39171, the Missouri Court of Appeals, Southern District, addressed the intersection of two important appellate principles: the need to timely seek a supersedeas bond to prevent execution on the judgment that is at issue on appeal and the rule that a party who voluntarily acquiesces in a judgment may lose the right to challenge that judgment on appeal.

The result was consequential. Because Appellants failed to seek a supersedeas bond before filing their notice of appeal and later surrendered property awarded to Respondents by the judgment, the Southern District held that Appellants acquiesced in the judgment’s validity. Consequently, their appeal was dismissed as moot.

The Underlying Trust Dispute

The case arose from a family trust created by Sarah Jo Barnett for the benefit of her three daughters. As Barnett’s memory and cognitive abilities deteriorated, her granddaughters Megan DeVoy and Carmen Lisek were added as co-trustees. After questionable transfers of trust funds by Lisek out of the Trust bank account, Lisek was removed as co-trustee. Stephanie DeVoy was later added as a co-trustee. Following additional concerns regarding the depletion of the Trust bank account, the DeVoys, as co-trustees of the Trust and under a power of attorney for Barnett, filed suit against Lisek, her husband, and daughter to recover the Trust assets appropriated.

The trial court ultimately found that Lisek and members of her family had exploited a confidential and fiduciary relationship with Barnett and exercised undue influence over her. Among other things, the trial court found that substantial trust funds were transferred to accounts controlled by Lisek, and that trust money was used to purchase a house in Republic, Missouri, and an expensive sewing machine. Based upon that evidence, the circuit court entered judgment for the Trust, ordered Appellants to return the Republic house and sewing machine to the Trust, and also entered a monetary judgment of $252,616.59 against Appellants.

The Critical Post-Judgment Mistake

Appellants filed a notice of appeal challenging the circuit court judgment but did not seek a supersedeas bond before filing their notice of appeal. After Appellants failed to convey the house and sewing machine to the Trust as ordered, Respondents initiated contempt proceedings in an effort to execute on the judgment. Only then did Appellants request a stay of the contempt proceedings and file a motion for a supersedeas bond.

Appellants’ failure to seek a supersedeas bond before filing their notice of appeal was damning because filing a notice of appeal does not stay enforcement of a judgment. Under Rule 81.09(a) and Missouri law, a request for a supersedeas bond must be made before the notice of appeal is filed in order to stay execution of the judgment at issue on appeal.

For that reason, the circuit court denied Appellant’s request for a stay of execution of the judgment because it lacked authority to grant that relief after the notice of appeal had been filed. To avoid being held in contempt, Appellants then delivered the sewing machine and executed a quitclaim deed transferring the Republic house to the Trust. Appellants proceeded with their appeal while the monetary portion of the judgment remained unpaid.

Acquiescence in a Judgment Can End an Appeal

On appeal, the Respondents argued that Appellants transfer of the sewing machine real estate to the Trust constituted the compliance with the underlying judgment which then barred Appellants from attacking the validity of the judgment on appeal.

The Southern District agreed with Respondents emphasizing that Missouri recognizes the acquiescence doctrine, a long-standing rule which holds that a party may not simultaneously accept or recognize the validity of a judgment and then challenge that same judgment on appeal. Undertaking a voluntary act that expressly or impliedly recognizes a judgment’s validity may estop the party from pursuing appellate relief. While Appellants argued that their surrender of the sewing machine and real estate was not truly voluntary because the transfer was made only under a threat of contempt, the Court rejected that distinction noting that Missouri precedent clearly establishes that compliance with a judgment to avoid the possibility of contempt does not render the compliance “involuntary” for purposes of the acquiescence doctrine.

The Unsatisfied Money Judgment Did Not Save the Appeal

Appellants further argued that their appeal remained viable despite the transfer of the sewing machine and real estate because Appellants had not paid the separate monetary judgment entered by the circuit court. In rejecting this argument, the Southern District conclude that the circuit court’s judgment arose from a single theory seeking recovery of trust assets that had been misappropriated—whether those assets remained identifiable property or had to be recovered through a money judgment. Notably, appeal, Appellants sought reversal of the entire judgment on appeal, and not only the monetary component of the judgment.

Under Missouri law, when Appellants transferred the house and sewing machine to the Trust, they voluntarily complied with material portions of the very judgment they claimed was invalid. That conduct was inconsistent with Appellants’ request that the appellate court reverse the circuit court judgment.

The Result

Because Appellants acquiesced in the judgment, they were therefore estopped from challenging its validity and the appeal was dismissed as moot.
Practice Takeaways

DeVoy v. Lisek provides several important reminders:

• Filing a notice of appeal does not automatically stay execution of the judgment.
• Compliance with a judgment while an appeal is pending may constitute voluntary acquiescence subjecting the appeal to dismissal as being moot.
• The desire to avoid contempt does not necessarily make compliance involuntary.
• Acquiescing in material portions of a judgment may still preclude an appellant from challenging the validity of the judgment as a whole.

The broader lesson is simple: Preserving an appeal may require action before the notice of appeal is even filed. Counsel considering appellate review should evaluate immediately not only the deadline for the notice of appeal, but also whether execution must be stayed to prevent post-judgment conduct from undermining the appeal.

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