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Legal & Privacy Brief

2026-08-01

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Show Notes - 2026-08-01

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Legal & Privacy Brief - August 1, 2026

Today: RealPage settles rental price-fixing antitrust class action for $359.9 million with claims due January 29, 2027. California legislators advance AB 1709 social media age restrictions despite First Amendment and privacy concerns from EFF. The Senate Commerce Committee prepares to consider the SCREEN Act, which would impose sweeping age-verification requirements on any online service hosting sexually explicit content, extending far beyond adult websites to platforms like Netflix and Reddit.

Enforcement Actions

$359.9M RealPage Antitrust Class Action Settlement

RealPage has agreed to pay $359.9 million to settle a class action lawsuit alleging rental price-fixing. The settlement provides benefits to affected renters who can submit claims through January 29, 2027. The case alleges that RealPage's software enabled landlords to coordinate rental pricing in violation of antitrust laws, artificially inflating housing costs across multiple markets.

Johnson & Johnson $5.5B Talc Settlement

Johnson & Johnson announced a $5.5 billion settlement to resolve tens of thousands of lawsuits alleging its talcum powder products caused ovarian cancer. The settlement represents one of the largest product liability resolutions in recent years and addresses claims that the company failed to warn consumers about potential health risks associated with talc-based products.

Litigation Updates

Third Circuit Raises Bar for RICO Pharmaceutical Fraud Class Actions

In re Avandia Marketing, 2026 WL 2093904 (3d Cir. July 21, 2026). The Third Circuit vacated and remanded a district court's class certification for third-party payors pursuing RICO claims against GlaxoSmithKline over alleged misrepresentations of Avandia's cardiovascular risks. The unanimous panel held that common issues did not predominate because prescribing decisions are not one-dimensional, internal GSK marketing studies failed to isolate fraudulent marketing effects from general marketing, and the plaintiffs could not prove reliance without statistical evidence that the defendant's conduct caused the injuries.

Uber Massachusetts Misclassification Class Action

A new class action lawsuit alleges Uber Technologies misclassifies its drivers as independent contractors when they should be classified as employees under Massachusetts law. The lawsuit follows a pattern of gig economy worker classification litigation across multiple states, with plaintiffs seeking employee benefits, wage protections, and reimbursement for business expenses.

Supreme Court Second Amendment Cases

The Supreme Court decided two Second Amendment cases this term. In United States v. Hemani (June 18), the Court unanimously held that the federal government cannot prohibit someone who uses marijuana every other day from possessing a firearm, rejecting the government's historical analogy to habitual drunkard laws. In Wolford v. Lopez (June 25), the Court struck down 6-3 a Hawaii law prohibiting firearms on private property open to the public without explicit owner consent, finding no relevantly similar historical analogues. Justice Alito clarified the Bruen framework's plain text inquiry consists of three questions: whether the law applies to "the people," concerns "Arms," and restricts keeping or bearing arms.

Federal Judges Condemn DOJ "Unlawful, Unethical, and Unseemly" Conduct

Federal judges across multiple circuits are questioning whether DOJ lawyers can be trusted to tell the truth or uphold legal norms, explicitly challenging the "presumption of regularity" that judges must presume the government acts in good faith. ProPublica reviewed hundreds of cases and found more than 40 in which judges referenced the presumption of regularity since Trump retook office. In Rhode Island, Trump-appointed Judge Mary McElroy rebuked federal prosecutors for withholding information and misrepresenting facts in a transgender healthcare investigation, writing that the discrepancy between expected conduct and DOJ tactics is "unsettling" and that the presumption of regularity "no longer holds."

Regulatory Guidance

Palestinian Authorities Seek Supreme Court Relief on $656M Judgment

The Palestine Liberation Organization and Palestinian Authority asked the Supreme Court to halt a $656 million judgment in a lawsuit filed by Americans killed or wounded in attacks in Israel while they prepare a petition for review. The emergency appeal follows a lower court reinstating damages after the Supreme Court ruled in June 2025 that the lawsuit under the Anti-Terrorism Act could proceed. The Palestinian authorities argued that paying the judgment now would "destabilize critical government services" and "jeopardize regional security."

CISA Warns of Water System Attack Spike

The Cybersecurity and Infrastructure Security Agency reported a significant increase in malicious activity targeting water utilities and warned facilities to remove publicly exposed programmable logic controllers and operational technology from the internet immediately. The threat actor has modified passwords to lock out operators and disconnected PLCs by changing IP addresses, resulting in boil water notices and sustained manual operations. More than 30 Minnesota community water systems were affected by coordinated attacks beginning July 26, with utility companies in at least seven states reporting incidents. The FBI, EPA, and CISA are investigating whether the attacks are linked to Iran-linked hackers.

Finland to Disconnect Fiber-Optic Link to Russia

Finland's national electricity transmission operator Fingrid will disconnect a fiber-optic telecommunications link to Russia when the current lease agreement expires at year-end. The two telecommunications connections were part of cross-border electricity transmission infrastructure that ceased operating in 2022 following Russia's invasion of Ukraine. The physical infrastructure has since been dismantled. Fingrid expects the impact on telecommunications connectivity between the two countries to be very limited, though Russian sources suggest it could reduce redundancy for international internet traffic serving northwestern Russia.

U.S. Cyber Command Plans Silicon Valley Office

U.S. Cyber Command is establishing a satellite office in Silicon Valley to build relationships with the tech sector and support its Cyber Innovation Warfare Center. The office, dubbed Cyber Command-West, will initially co-locate at the Defense Innovation Unit with a handful of personnel before expanding. The innovation hub aims to accelerate cyber weapons and online tactics, bridging the gap between technology demonstration and federal procurement. The expansion reflects efforts to strengthen partnerships with private sector firms and access Silicon Valley talent for cyber operations.

Privacy Developments

California AB 1709 Amended But Still Threatens Free Speech and Privacy

California lawmakers amended AB 1709, but EFF warns the bill remains a ban on social media access for youth under 16 that threatens privacy and First Amendment rights of all Californians. Section 22683 prohibits platforms from offering "addictive features" to users under 16, defining "addictive feeds" so broadly it covers virtually every functional recommendation algorithm, including basic inputs like who a user follows or what posts they like. Although the bill references AB 1043's age-signaling framework, Section 22684 explicitly requires platforms to verify user ages and makes platforms liable every time a person under 16 passes an age check. In practice, platforms will likely require government-issued IDs or biometric scanning, creating massive honeypots of sensitive personal data and destroying online anonymity. The amendments also create legal confusion, introducing provisions that conflict with already enacted legislation like SB 976.

The SCREEN Act Threatens Privacy Far Beyond Adult Websites

The Senate Commerce Committee is set to consider S. 737, the SCREEN Act, which would require online services to verify users' ages before accessing sexually explicit content. Unlike state age-verification laws, the SCREEN Act has no requirement that a significant portion of the website consist of sexually explicit content harmful to minors. The bill would apply to streaming services like Netflix and social media platforms like Reddit, Discord, or Bluesky if they host any adult content. The bill explicitly states that requiring users to confirm they are not minors "shall not be sufficient," meaning platforms must verify ages using methods tied to real identities. The bill provides only weak data protection requirements, allowing third-party age-verification services to collect extensive personal information, use it for any purposes they deem reasonable, and retain it as long as possible. The bill also requires age verification for traffic from known VPN addresses, discouraging use of VPNs that millions rely on for privacy, security, and preventing data tracking.

The CHATBOT Act Forces Federal Parental Monitoring Systems

The recently introduced CHATBOT Act would require every covered AI chatbot to build federally prescribed "family account" systems providing parents access to a full record of teen conversations and tools to monitor, analyze, and understand those conversations at scale. The bill mandates alerts if teens attempt to bypass or disable parental controls. This isn't an optional parental-control feature but a required monitoring infrastructure that every covered AI provider must build and present as part of the parental consent process. The mandated data collection creates new privacy and security risks, as permanent centralized records of teen AI conversations become valuable targets for hackers, identity thieves, civil litigants, and others. The bill takes COPPA's structure, which applies to children aged 12 and under, and extends verifiable parental consent requirements to older teenagers, a dramatic expansion that will likely cause AI companies to bar teens from having accounts.

EFF Guide to Recording Law Enforcement

EFF released a comprehensive guide affirming that all Americans have a First Amendment right to record law enforcement, including local police and federal officers from ICE and CBP. Nine federal appellate courts have recognized this right, which extends to bystanders and people recording their own interactions with law enforcement in public or private places where the recorder has a legal right to be. Courts hold that wiretap laws do not prohibit civilians from audio recording law enforcement because officers exercising official duties, particularly in public, do not have a reasonable expectation of privacy. However, behavior that obstructs or interferes with effective law enforcement or public safety is not protected, and officers may order movement for public safety reasons. Law enforcement may not search cell phones or devices without a warrant based on probable cause from a judge, even if the person is under arrest. Individuals may refuse requests to review or delete recordings and refuse to unlock phones or provide passcodes.

Policy Changes

Supreme Court International Law Hostility

SCOTUSblog analysis highlights the Supreme Court's increasing hostility to international law and human rights protections, noting the Court's "decent respect to the opinions of mankind" has been missing. The Court has repeatedly rejected International Court of Justice rulings on the Vienna Convention of Consular Relations, making the United States the only one of 182 state parties to repudiate the ICJ's holdings. The pattern extends beyond human rights to investment treaties, where the Court applies domestic contract law principles rather than distinctive treaty interpretation principles used by the rest of the world. The analysis warns this parochialism undermines international cooperation and isolates the United States from global legal consensus.

Anthropic v. U.S. Department of War Hearing

Lawfare live-blogged a hearing from the U.S. District Court of the Northern District of California where Anthropic argued its motion for summary judgment challenging the Department of Defense's designation of the company as a supply chain risk. Judge Lin granted a preliminary injunction in favor of Anthropic last March. The parties agree the case is now ready for final decision on the merits based on the written record. Anthropic has a similar suit pending in the D.C. Circuit challenging a supply-chain risk designation Secretary Pete Hegseth made under 41 U.S.C. § 4713.

Ukraine Battlefield Openness and AI Access Policy Implications

TechDirt analysis contrasts Ukraine's open battlefield technology access with Washington's approach to AI governance. Ukraine puts its best tools in the hands of whoever can use them through a public leaderboard ranking drone teams, a marketplace letting frontline units order drones directly from hundreds of manufacturers, and TrophyLab platform sharing captured Russian weapons data with allied militaries and partner-country firms under published criteria. Washington is drifting toward concentrating powerful AI capability in a few chosen hands through the June executive order's "trusted partners" arrangement, a classified process with no published criteria. The analysis argues that capability does the most good spread widely under transparent rules rather than concentrated among those already best equipped through undefined discretion.

Compliance Takeaways