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Utah Legislature - 2026 General Session Wrap Up

March 16, 2026 – Dorsey Law & Policy Notebook

by Cloe Nixon

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At midnight on March 6 the Utah Legislature adjourned sine die after passing 542 total bills – approximately 53% of the 1,015 bills introduced this session. A full list of bills that passed the Legislature and were sent to the Governor may be found here. The Governor has 20 days following adjournment to take action on the bills that passed.

While the Governor has vetoed a number of proposals in past years, in a recent interview Governor Cox dubbed the 2026 Session as the “best session” he’s been involved in as Governor. This is high praise in itself, and when paired with positive feedback from across the political aisle, including Salt Lake City Mayor Erin Mendenhall stating this was “one of the most productive legislative sessions that we’ve had,” it reflects the largely positive responses to the legislature’s efforts over the 45-day session and the enacted policies that will continue to shape the entirety of Utah’s landscape.

As is often the case, what did not pass this session was equally important as what did pass. This session, the legislature appears to have struck the right balance between enacting policies with industry support, working with business and industry associations to reach workable compromises on key issues, and pausing proposals that require additional time for negotiation.

Below we have provided an overview of the final outcomes for the bills of interest highlighted in our weekly updates and provided additional resources for issue and industry specific legislative recaps.

A final thanks to members of the business community for dedicating time and resources to engage in the legislative process. Sharing your technical expertise helps legislative proposals find their mark, limits unintended consequences, and ultimately shapes stronger policy outcomes.

Outcomes on Priority Bills from Legislative Watchlist

In our weekly updates throughout the session, we have included a number of “bills we are watching,” and referenced proposals of particular significance. Below we have compiled a table overviewing the final outcomes for each of these proposals.

Policy AreaBill Number & TitleSponsorFinal VersionDescription Outcome
BusinessHB 175: Public Funds and Political Activities AmendmentsRep. Trevor LeeOriginalThis bill would have prohibited an entity from receiving a government contract or state grant if they: participate in a political campaign, devote more than an insubstantial part of the entity's activities to attempting to influence legislation, or if their primary objective can only be attained by legislative action or inaction. It would prohibit a current or prospective government contractor or grant recipient from making a contribution to a political entity or to another person for a political purpose.Did Not Pass
BusinessSB 179: Wage AmendmentsSen. Nate BlouinOriginalIf enacted, this bill would require that an employer include information relating to wages and other compensation in a job listing; increases the minimum wage in the state to $20 per hour; prohibits that the Labor Commission from establishing a minimum wage that is lower than $20 per hour; requires that the commission adjust the minimum wage for inflation at least once per year.Did Not Pass
Business / AI Pricing RegulationSB 293: Consumer Pricing Data AmendmentsSen. Heidi Balderree1st Sub.This bill would have restricted suppliers from using a consumer's personal data (biometrics/purchase history) to set prices for goods or services; established a three year retention of data used by the automatic pricing system; provided enforcement mechanisms for the Division of Consumer Protection; among other provisions. The 1st Sub. was not adopted and the bill failed to pass out of the Senate.Did Not Pass
Business / AI Pricing RegulationSB 177: Product Pricing AmendmentsSen. Stephanie Pitcher1st Sub.This bill would have required suppliers to display disclaimers when using algorithmic pricing to set the price of goods or services (with exceptions) and provided the Division of Consumer Protection enforcement power.Did Not Pass
Business / Consumer ProtectionHB 29: Unfair and Deceptive Pricing AmendmentsRep. Tyler ClancyOriginalThis bill would have prohibited hidden fees by requiring the clear and conspicuous disclosure of the total price in an offer or advertisement of a product;Did Not Pass
Business / Labor & EmploymentHB 203: Noncompete AmendmentsRep. Tyler Clancy1st Sub.This bill was a key focus of the business community this session. If enacted, the bill  would prohibit employers from enforcing a non-compete agreement if the employee is: nonexempt, a full-time student engaging in an internship or other short-term employment, eighteen years or younger, their total earnings are less than $155,000 per year, or if the agreement would restrict an employee's ability to work more than 25 miles from a specific geographic location. The 1st Sub. of the bill reflected some of the changes requested by the business community, including removing the garden leave clause but ultimately the bill pulled from the House 3rd Reading Calendar by the Sponsor to allow more time for discussions and negotiations with the business community over the interimDid Not Pass
Civil Law / Tort ReformSB 211: Tort AmendmentsSen. Kirk A. Cullimore1st Sub.This was a priority concern for the business community. If enacted, this bill would have: 1. Limited what juries can hear about insurance and paid medical bills. 2. Prevented settlement decisions based on discounted medical costs. 3. Increased potential liability exposure and insurance costs, which could ultimately increase insurance costs for Utah businesses.Did Not Pass
Civil Law / Tort ReformSB 280: Damages AmendmentsSen. Ronald WintertonOriginalThis bill would have established a statutory framework for the determination of recoverable medical damages in civil actions in alignment with core holdings from the Utah Supreme Court’s ruling in Gardner v. Norman (October 2025) and was viewed by the business community as a reasonable alternative to various tort reform proposals.Did Not Pass
Critical MineralsSB 254: Extracted Natural Resources AmendmentsSen. Ann Millner4th Sub.This bill was one of the most significant policies of the 2026 session and establishes the statutory framework to catalyze the state's goal of becoming a major global producer of critical minerals. Facilitates faster permitting by the Department of Environmental Quality and the Division of Oil, Gas, and Mining; establishes the Critical Minerals Council, including establishing the council's operations, powers, and duties; addresses areas of coordination by certain council members, establishes a process to designate critical mineral zones, including providing for property tax differential revenue; provides for the creating of a clearinghouse of data to be known as the "Critical Minerals Atlas"; addresses the creation of the Minerals for Industrial, National, and Economic Security Center; creates the Critical Minerals Development Account; and modifies the tax credit for mining exploration, among other provisions.Passed
Gov. OperationsSB 298: Programmable Money AmendmentsSen. Keven StrattonEnrolledThis bill: defines terms; excludes programmable money from the standard definition of money; prohibits a person from requiring the use of programmable money for a transaction unless the person also offers a free, non-digital alternative, among other provisions.Passed
HousingHB 68: Housing AmendmentsRep. Cal Roberts6th SubConsolidates existing state housing programs into one entity under the Governor’s Office of Economic Opportunity and creates the Division of Housing and Community Development within the GOEO.Passed
ImmigrationHB 571: Immigrant AmendmentsRep. Trevor LeeOriginalThis bill would have prohibited money transmitters from sending funds for unauthorized aliens.Did Not Pass
Labor & EmploymentHB 294: Employer Verification AmendmentsRep. Tiara AuxierAmendedThis bill would have lowered the employer verification threshold from 150 to 100 employees, requiring private employers who employ 100+ employees to register with a status verification system to verify the federal legal working status of any new employee after July 1, 2027. The bill originally set the threshold at 50 employees and was amended multiple times to increase the proposed threshold to 100, then 125 employees before failing.Did Not Pass
Labor & EmploymentHB 245: Construction Wage Standard ActRep. Tyler Clancy1st Sub.This addressed wage standards for construction projects; directed the Labor Commission to determine the wages for the occupations a construction project required for each county; established: a wage minimum that a contractor may pay a qualifying employee; a recordkeeping requirement; and the penalties for noncompliance; and made technical and conforming changes.Did Not Pass
Land OwnershipHB 291: Security and Land Restriction AmendmentsRep. Candice PierucciAmendedThis bill would lower the percentage of ownership a restricted foreign entity may maintain in a separate entity before the separate entity is considered a restricted foreign entity from 51% to 25% ownership interest.Passed
TaxesHB 161: Property Tax ModificationsRep. Jill KofordOriginalIf the accompanying referendum HJR 7 was passed by voters, this bill would have increased the residential property tax exemption from 45% to 60% and likely shifting a greater portion of the tax burden from residential to commercial properties.Did Not Pass
TaxesSB 60: Income Tax Rate AmendmentsSen. Dan McCayOriginalThis bill amends the income tax rate provisions and reduces the corporate and individual income tax rates from 4.5% to 4.45% for the 2026 tax year.Passed
TaxesHB 441: Property Transaction AmendmentsRep. Jill KofordOriginalThis bill would have required the seller or the closing agent make available information about the property, including sales price, to a countyDid Not Pass
assessor when ownership of property is transferred.
TaxesHB587: Income Tax Amendments (R&D Expensing Decoupling)Rep. Steve EliasonSub. 2If enacted, this bill would lower Utah's corporate and individual income tax rate from 4.5% to 4.45% and create a Utah add back for domestic research and development expenses if they are fully deducted federally, allowing these expenses to be amortized over 60 months. The 2nd Sub. for this bill removed the R&D decoupling provisions.Did Not Pass
TaxesSB 116: Income Tax Rate ModificationsSen. Lincoln Fillmore1st Sub.This bill would have allowed for a reduction of the income tax when the state revenue exceeded the forecasted revenue.Did Not Pass
TaxesSB 287: Targeted Advertising TaxSen. Mike McKellEnrolledThis bill creates a new statewide tax on targeted digital advertising delivered in Utah by large advertising platforms and establishes a dedicated revenue stream to fund specified youth and community programs. Beginning January 1, 2027, an annual tax will be levied on "targeted advertising entities.Passed
Taxes/Child CareHB 190: Childcare Business Tax CreditRep. Jason Thompson2nd Sub.This bill increases the amount of nonrefundable corporate and individual income tax credits to 30% of the qualified child care expenditures if they qualify as an eligible small business; repeals the requirement for an employer to have claimed the tax credit for construction expenditures in order to claim the tax credit for child care expenditures.Passed
Technology / AIHB 286: Artificial Intelligence Transparency AmendmentsRep. Doug Fiefia1st Sub.This bill would have enacted the AI Transparency Act relating to transparency and whistleblower protections for frontier artificial intelligence models and required "large frontier developers" to publish safety plans for chatbots with 1M+ subscribers, publish summaries of risk assessments for certain AI models; file reports with Utah's Office of Artificial Intelligence Policy, among other provisions, and would have established civil penalties for violations. The bill sponsor pulled the bill from consideration due to a formal request from the White House to Legislative Leadership to not move forward with the proposal.Did Not Pass
Technology / AIHB 438: Artificial Intelligence AmendmentsRep. Doug Fiefia5th Sub.If enacted, this bill would have enacted the Companion Chatbot Safety Act to regulate operators of companion chatbots and protect consumers. This bill: defines terms; requires operators of companion chatbots to comply with the Utah Consumer Privacy Act; establishes disclosure and data protection requirements for operators; establishes additional safety requirements for operators serving minor users; authorizes rulemaking for age assurance and safe harbor standards; requires annual reporting by operators to the Office of Artificial Intelligence Policy; grants enforcement authority to the Division of Consumer Protection; provides for administrative fines and civil penalties; establishes safe harbor provisions for operators; and provides a severability clause.Did Not Pass

Industry and Issue Specific Legislative Recaps

For additional reference, we have compiled a list of issue specific legislative recaps and analysis of major policy developments during the 2026 Utah General Legislative Session. These resources were prepared by industry associations, universities, media outlets, advocacy organizations, and government agencies.

We are grateful to the authors and organizations listed below for their insights into legislative outcomes across key policy areas including tax policy, natural resources, energy, housing, education, and local government affairs.

Business, Taxes, and State Budget

Utah Chamber of Commerce.
2026 Legislative Update: Week 7. Utah Chamber of Commerce.
https://www.utchamber.com/blog/2026-legislative-session-week-7-update/

Deseret News.
“Why Don’t Utah Lawmakers Cut Property Taxes?” Deseret News.
https://www.deseret.com/utah/2026/03/05/why-utah-lawmakers-dont-cut-property-taxes/

Utah Governor’s Office of Planning and Budget.
Sine-Nara to the 2026 Utah General Session. State of Utah Budget Office.
https://budget.utah.gov/sine-nara-to-the-2026-utah-general-session/
This post summarizes the state budget adopted by the legislature, including tax policy changes and major appropriations. The FY 2027 state budget totals approximately $31.6 billion, including $12.4 billion from state funds.

KSL News.
“Here Are the Biggest Spending and Tax Cuts Approved by the Utah Legislature This Year.” KSL.com.
https://www.ksl.com/article/51457411/here-are-the-biggest-spending-and-tax-cuts-approved-by-the-utah-legislature-this-year

Natural Resources, Water, Air Quality, and Land Use

Utah State University – Institute of Land, Water, and Air.
This Week in Utah’s Land, Water, and Air — March 6, 2026. Utah State University.
https://www.usu.edu/ilwa/

Deseret News.
“A Look at Utah’s Biggest Environment and Land Bills in 2026.” Deseret News.
https://www.deseret.com/utah/2026/03/07/utah-environment-land-bills-2026/

Transportation, Infrastructure, Planning, and Regional Development

Wasatch Front Regional Council.
2026 Legislative Wrap-Up. Wasatch Front Regional Council.
https://wfrc.org/legislative-wrap-up/

This summary highlights legislation affecting transportation funding, regional planning initiatives, housing supply, and infrastructure investment across the Wasatch Front region.

Energy Policy and Critical Minerals

Fox 13 News Utah.
“2026 Utah Legislature Focuses on Energy and Technology.” Fox 13 News.
https://www.fox13now.com/news/politics/2026-utah-legislature-energy-technology

Deseret News.
“Legislation Envisions Utah Being a Key Critical Minerals Player.” Deseret News.
https://www.deseret.com/utah/2026/02/18/utah-critical-minerals-legislation/

Utah Clean Energy.
2026 Legislative Tracker. Utah Clean Energy.
https://utahcleanenergy.org/2026-legislative-tracker/

Housing Policy

Wasatch Advocates for Livable Communities.
“Key Housing and Land Use Measures Signal Growing Legislative Focus During the 2026 Utah Session.” Wasatch Advocates for Livable Communities.
https://www.wasatchadvocates.org/key-housing-and-land-use-measures-signal-growing-legislative-focus-during-the-2026-utah-session/

Salt Lake Tribune.
“Here’s What Utah Lawmakers Did — and Didn’t — Pass This Year to Address the Housing Crisis.” Salt Lake Tribune.
https://www.sltrib.com/news/politics/2026/03/07/utah-housing-lawmakers-pass-bills-to-increase-supply/

Education and Higher Education

Utah Education Association.
“Tax Cuts Limit Education Investment in 2026 Session.” Utah Education Association.
https://www.myuea.org/news-publications/education-news/tax-cuts-limit-education-investment-2026-session

Utah System of Higher Education.
2026 Legislative Update — Week 7. Utah System of Higher Education.
https://ushe.edu/2026-legislative-update-week-7/

The update summarizes legislative appropriations affecting higher education, including more than $86 million in new ongoing funding for the Utah System of Higher Education, along with research funding and technical college investments.

Sutherland Institute.
“What Did Utah Lawmakers Accomplish on Education This Session?” Sutherland Institute.
https://sutherlandinstitute.org/utah-education-legislation-2026-session/

Bills Affecting Utah Courts

Utah State Bar.
“Utah State Bar Position on Package of Bills Affecting Utah Courts (Updated).” Utah State Bar.
https://www.utahbar.org/utah-state-bar-position-on-package-of-bills-affecting-utah-courts/

This update summarizes proposed legislation affecting judicial administration, court procedures, and the structure of Utah’s judicial system.

Local Government and Municipal Affairs

Salt Lake City Council.
2026 State Legislative Session Synopsis. Salt Lake City Council Legislative Affairs Office.
https://www.slc.gov/council/2026-state-legislative-session/

Additional legislative recaps from state and local entities and industry groups are expected following the conclusion of the session and may provide further analysis of legislation affecting municipal governance, economic development, and industrial policy.

Firm Highlights

Event/Resource

Corporate Counsel Symposium 2026 Materials Hub

Materials Symposium Agenda Sessions 8:30 am - 9:30 am CT Session A: The Corporate Compass: Finding True North When Ethical Duties Conflict Philip Kaplan, Senior Legal Counsel, Howden Re Lucia Suljic, Vice President, Corporate Legal, Canon USA Nicole Stanton, Partner & Deputy General Counsel, Dorsey & Whitney LLP This panel addresses ethical obligations of in-house counsel, including balancing obligations and duties that may conflict with each other. How should a responsible in-house lawyer deal with those challenging situations? Rather than stick to an academic discussion, this panel will revolve around a series of practical scenarios that are designed to be realistic and timely, including situations where counsel is asked to represent both the company and an individual, how and when to disclose uncomfortable facts and inconvenient documents, issues involving changing firms and companies, and multijurisdictional practice. The panel will feature discussion from two experienced in-house lawyers and Dorsey’s Deputy General Counsel. Session B: Managing Rapid Regulatory Change in International Trade and Cross-Border Investment Nathan Brower, Executive Vice President, General Counsel, Nature’s Sunshine Greg Ogunsanya, Senior Vice President, General Counsel and Corporate Secretary, H.B. Fuller Kathryn Wood, Senior Vice President & General Counsel, DecoPac, Inc. Dave Townsend and Lawrence Ward, Dorsey & Whitney LLP This program is designed for attorneys advising on cross-border transactions, international trade, regulatory compliance, and corporate governance matters. Panelists will examine recent developments in U.S. trade and investment law and policy, as well as their impact on international collaborations, corporate compliance, and mergers and acquisitions. The discussion will explore how general counsel and in-house legal teams assess and manage evolving trade-related risks within their organizations. Particular focus will be given to developments during the first two years of the second Trump Administration, including changes in tariff policy, tariff refunds, export controls, economic sanctions, and national security reviews of foreign investment. Through a discussion of regulatory trends and practical case studies, attendees will gain a deeper understanding of the legal risks and compliance obligations associated with cross-border business activities, and hear about practical strategies for advising clients and managing compliance obligations in a rapidly changing trade and investment environment. 9:45 am - 10:45 am CT Session A: The Elon Musk Cases: What Tesla and Twitter Can Teach Your Board of Directors Loren Unterseher, Managing Partner, Oxbow Industries, LLC Shulamite White, Chief Legal Officer and Head of People, Motive Technologies Kirsten Schubert, Tom Swigert, and Jonathan Van Horn, Dorsey & Whitney LLP Recent cases involving Elon Musk and his businesses have had significant impact on principles governing board of directors’ fiduciary duties and corporate processes. This panel will examine recent litigation involving Elon Musk, Tesla, and Twitter, and its effects on the law governing the duties of directors and executives, including the executive compensation and director compensation processes, conflicts that may arise when a single executive has control over multiple businesses, and the ramifications of tweets or other public statements by an executive. Session B: All Eyes on DEI: Managing Diversity Efforts Amid Regulatory Scrutiny and Potential Litigation Maggie Dalton, Senior Commercial Attorney, Cargill; Board Co-Chair, Twin Cities Diversity in Practice Laura A. Vannelli, Legal Counsel, Mayo Clinic Susan Lorenc and Jack Sullivan, Dorsey & Whitney LLP The legal and regulatory landscape surrounding diversity, equity, and inclusion (DEI) initiatives has changed dramatically over the past two years. Law firms and legal departments are continuing to grapple with how to recruit, retain, and develop talent from a wide range of personal backgrounds, in a world where previously accepted recruiting and employment practices are facing increased scrutiny and litigation. This program will provide a practical overview of the current legal regime, including recent federal enforcement actions and litigation trends associated with DEI initiatives. Panelists will discuss practical ways in which organizations can pursue and retain legal talent and increase inclusion while minimizing legal, business, and reputational risk. 11:00 am - 12:00 pm CT Session A: Governance in an Age of Increasing Unpredictability James Chosy, Senior Executive Vice President and General Counsel, U.S. Bancorp Todd Hartman, Executive Vice President and Chief Legal and Risk Officer, Best Buy Co., Inc. Alan Rosselot, Associate General Counsel & Assistant Secretary, Delta Air Lines, Inc. Cam Hoang and Robert Rosenbaum, Dorsey & Whitney LLP More than ever, ensuring that boards are well-informed and forward-thinking is critical to a company’s success. Join our panel of corporate governance experts as they share their experiences advising boards through crisis and unpredictable events; capitalizing on, but also checking, disruptive technologies; and positioning the company to succeed in an environment of shifting government priorities. Session B: A Day in the Life of a Trademark, Copyright & Advertising Attorney: A Hypothetical Case Study Alexander Kim, Vice President and General Counsel, Binks Nate Whitaker, Chief Legal Officer and General Counsel, Crumbl Cathy Dahl and Tiffany Shimada, Dorsey & Whitney LLP What issues are companies facing daily while developing rights in intellectual property, protecting those rights, and staying in compliance with myriad potential issues related to advertising, social media, relationships with influencers, and environmental or governmental claims? This panel will feature two in-house counsel who are navigating these issues, utilizing a hypothetical case study, with the support of two Dorsey attorneys helping to develop a roadmap for meeting business objectives and minimizing the risk of claims. 12:00 pm - 1:15 pm CT Keynote Address Dr. Rebecca Heiss, Stress Physiologist Dr. Rebecca Heiss is a stress physiologist, author, and sought-after speaker who helps audiences transform fear and stress into fuel for greater performance and resilience. Her research has been recognized as “transformative” by the National Science Foundation, and she is the author of two books, Springboard and Instinct. Through her Fear(less) message, Rebecca inspires audiences with practical, science-based strategies to train our brains to work for us – not against us – and navigate change and uncertainty with greater confidence.

The image shows photovoltaic solar panels in sunset converting sunlight into clean, renewable electricity.

Insights

Energy Law: Month in Review - October 2026

News

Dorsey Celebrates Pro Bono Week and Honors Attorneys and Business Professionals for Impactful Pro Bono Work

News

Dorsey & Whitney Advises Beijing Xunzhong on Two Consecutive H Share Placings Raising HK$418.5 Million

International law firm Dorsey & Whitney LLP acted as Hong Kong legal advisors to Beijing Xunzhong Communication Technology Co., Ltd. (“Xunzhong”) as to Hong Kong law in connection with two consecutive placings of new H shares under general mandate (the “First Placing” and the “Second Placing”, respectively, and together, the “Placings”). Xunzhong’s H shares are listed on the Main Board of the Hong Kong Stock Exchange (Stock Code: 2597). Winbull Securities International (Hong Kong) Limited acted as sole overall coordinator and placing agent on both Placings. The First Placing of 11,190,000 new H shares at HK$28.20 each was completed on September 17, 2026, followed by the Second Placing of 3,550,000 new H shares at HK$29.00 each on October 30, 2026. The Placings raised approximately HK$315.56 million and HK$102.95 million in gross proceeds, respectively, or approximately HK$418.51 million in aggregate (approximately HK$415.96 million in aggregate net proceeds). Both Placings were conducted under the same general mandate granted by shareholders at Xunzhong’s 2025 annual general meeting, and each was completed within one week of the signing of its placing agreement. Completing placings in consecutive months is relatively uncommon in the Hong Kong market, and doing so called on the technical depth of Dorsey’s Hong Kong Capital Markets team. Working closely with Xunzhong to understand its business needs and prepare the transaction documents, the team addressed in quick succession the remaining capacity under the general mandate, disclosure of the use of proceeds and the maintenance of Xunzhong’s public float, enabling both Placings to be completed seamlessly. “We are pleased to have advised Xunzhong on both Placings,” said Rachel Han, Partner and Co-Head of Dorsey’s Asia Capital Markets practice. “We appreciate the trust placed in our team and the close collaboration among all parties involved. We look forward to supporting Xunzhong as it continues to execute its growth strategy and pursue future capital markets opportunities.” Xunzhong is principally engaged in cloud-based communications services and enterprise digitalization services in the PRC. As disclosed in its announcements, the net proceeds of the First Placing are allocated to developing Xunzhong’s new computing power operation services business, while those of the Second Placing will be used to integrate model-as-a-service (MaaS) and AI agent capabilities into its existing cloud communications platform-as-a-service (PaaS) platform and software-as-a-service (SaaS) products. Approximately 55% of the net proceeds of the Second Placing will be used for computing power equipment upgrades for the MaaS system, approximately 35% for MaaS, PaaS and SaaS platform upgrades, and approximately 10% for working capital and general corporate purposes. With a single MaaS platform and shared computing power supporting its PaaS and SaaS offerings, Xunzhong intends for its MaaS, PaaS and SaaS capabilities to complement and reinforce one another, and to address customer needs from multiple angles, from embedding AI in customer communications and business workflows to maintaining stable performance at scale and keeping customer data within controlled environments. Partner and Co-Head of Dorsey’s Asia Capital Markets practice Rachel Han and Of Counsel in the Capital Markets and Corporate Compliance group Carlton Ng, along with Associate Kristy Ting, led the Dorsey Hong Kong Capital Markets & Corporate Compliance group in advising Xunzhong on both Placings.

News

Partner Mark Churchman Recognized in Financier Worldwide’s Power Players: Private Equity 2026

Insights

Minnesota Consumer-Fraud Enforcement: Disclaimers Won’t Cure Deception, and Penalties Can Add Up

Misleading advertising claims can lead to costly consequences. In State of Minnesota ex rel. Ellison v. Wall & Associates, Inc., No. A25-2064, 2026 WL 3118291 (Minn. App. Oct. 19, 2026), the Minnesota Court of Appeals recently affirmed a bench trial verdict against a tax-relief company and two executives for violations of the Minnesota Consumer Fraud Act (“MCFA”) and the Minnesota Deceptive Trade Practices Act (“MDTPA”). The decision, which affirmed a substantial restitution and civil penalty judgment, underscores the broad power of the Minnesota Attorney General to act against deceptive sales practices. The decision also offers practical lessons for businesses seeking to reduce liability risks in consumer-facing communications. Background Wall & Associates (“W&A”), a Virginia-based tax-relief company, marketed assistance to taxpayers seeking relief from outstanding federal and state tax liabilities, often with offers in compromise—agreements to settle tax liabilities for less than the amount owed. In its extensive advertising campaigns, W&A represented that its average client received a 90% reduction in their tax debt, that it was a local company with Minnesota offices, that it provided legal services, and that it would “Solve ALL Tax Problems.” In reality, W&A’s promises bore little resemblance to what many clients received. Most of W&A’s clients saw just a 9.5% reduction in federal tax debt and 1.2% in state tax debt. W&A had no permanent Minnesota offices. And W&A provided neither legal representation nor assistance with filing tax returns—those services required referrals to separate firms for an additional fee. All the while, W&A clients paid upfront and recurring fees, including during periods when W&A did no work on their cases. Minnesota Attorney General Keith Ellison sued W&A, its founder and owner Ernest Kenneth Wall, and its president and CEO Patrick Mark Yates, alleging violations of, among other laws, the MCFA and the MDTPA. Following a 12-day bench trial, the district court determined that W&A violated the MCFA and MDTPA through its false and embellished advertising. The district court also held Wall and Yates individually liable for those violations because they directed, participated in, and acquiesced in the violations. The district court ordered injunctive relief, $2.7 million in restitution (with Wall and Yates jointly and severally liable for $1.3 million), and civil penalties of $786,517 against W&A, $415,500 against Wall, and $207,750 against Yates. The district court also awarded over $2.5 million in attorneys’ fees and costs to the state. W&A, Wall, and Yates appealed to the Minnesota Court of Appeals, which affirmed the district court’s decision on October 19, 2026. Although W&A, Wall, and Yates challenged the judgment on numerous grounds, several highlights of the decision provide important takeaways for consumer-facing businesses. Individual Reliance Is Not Required for Statutory Liability W&A argued that Attorney General Ellison had to prove a causal nexus between each violation of the MCFA and MDTPA and the injury to a particular consumer to establish liability. In W&A’s view, this required proof that each injured consumer had personally relied on W&A’s false representation. The Court of Appeals rejected this argument based on the MCFA’s and MDTPA’s plain language, which requires no proof of actual deception or confusion by consumers. The Court of Appeals finally pointed to the Minnesota Supreme Court’s decision in State v. Minnesota School of Business, Inc., which held that when a defendant’s misrepresentations are directed at and affected “a broad group of consumers, proof of direct individual reliance is not required to establish a causal nexus between MCFA violations and the harm suffered by consumers.” 935 N.W.2d 124, 135 (Minn. 2019). The Court of Appeals affirmed, however, that a causal nexus is necessary to support an award of damages under the MCFA and MDTPA. In making that determination, district courts look to various factors, including whether the misrepresentations were “longstanding, pervasive, and widespread in communications directed to consumers,” whether the seller intended and understood that consumers would rely on the misrepresentations, and whether the information was of a kind on which consumers would typically rely. The Court of Appeals’ decision continues Minnesota School of Business’s broad interpretation of liability under the MCFA and the MDTPA. Coordinated marketing campaigns to a “broad group of consumers” may expose businesses to MCFA and MDTPA liability without customer-by-customer proof of injury. That said, a causal nexus remains an element of an MCFA and MDTPA claim, and businesses involved in litigation should build a clear record at trial and on appeal showing how each of the relevant factors bears on the causal-nexus inquiry. Contractual Disclaimers Are Not an Automatic Defense to a Misleading Pitch W&A next argued that disclaimers in its client contracts prevented consumers from claiming they had been misled by its advertising. Reiterating that individual reliance is not required under the MCFA and MDTPA, the Court of Appeals held that a contractual disclaimer does not necessarily defeat a claim based on a conflicting oral representation. And on the facts of this case, the Court of Appeals agreed with the district court that W&A’s contractual disclaimers were insufficient given the extensive misrepresentations by W&A and the unequal bargaining power between it and its customers. This holding confirms that contractual disclaimers are not a cure-all for misleading advertising or sales practices. Businesses should review the entire customer journey, including pre-contract representations, as those representations may survive a contractual disclaimer to the contrary. And if faced with litigation, businesses should build a strong record, both at trial and on appeal, showing why any disclaimer is effective in context. The State Has Broad Authority to Seek Restitution W&A also challenged Attorney General Ellison’s authority to seek restitution under the state’s parens patriae authority to protect residents’ collective interests, arguing that injury to only 228 Minnesotans did not affect a sufficiently substantial segment of the population. The Court of Appeals rejected a simple headcount approach, instead explaining that the state had a legitimate interest in protecting residents’ economic well-being as a whole. In any event, the Court of Appeals held that if restitution was not appropriate under the state’s parens patriae authority, then it would still be appropriate under the Attorney General’s enforcement powers under Minn. Stat. § 8.31. The decision reinforces that the broader and more sustained the deceptive advertising, the stronger the case for restitution to protect Minnesotans’ economic interests. Civil Penalties Accrue Per Violation, Not Per Defendant The Court of Appeals finally rejected W&A’s claim that the Attorney General’s enforcement powers under Minn. Stat. § 8.31 permit only civil penalties of up to $25,000 for each defendant. Rather, the Court of Appeals explained that penalties are limited to $25,000 per violation. Multiple violations can therefore produce substantially greater penalties. The Court of Appeals also rejected the argument that restitution made penalties unnecessary: repaying consumers does not eliminate the need to address gains from deceptive conduct and deter future violations. Final Takeaways Align every consumer-facing communication. Broad and extensive marketing campaigns can expose businesses to stronger enforcement standards under the MCFA and MDTPA, making it critical that consumer communications remain accurate and consistent from the first advertisement through the final sale. Plan for layered enforcement exposure. Penalties under the MCFA and MDTPA can add up quickly: W&A, Wall, and Yates ultimately faced more than $6 million in civil penalties, restitution, and attorneys’ fees. The decision continues a line of Minnesota cases recognizing the Attorney General’s broad consumer-protection authority. Details matter. Although the Attorney General’s enforcement power is broad, it is not boundless. As the Court of Appeals explained, issues of causation, the effectiveness of contractual disclaimers, and the availability of restitution and civil penalties all turn on the specific facts of the case. Effective advocacy at trial and on appeal is critical to developing the facts relevant to liability and damages.

Insights

Observations on the SEC’s 2027 Examination Priorities

The SEC’s Division of Examinations (the “Division”) recently announced its examination priorities (“Exam Priorities”) for fiscal year 2027.1 Although many of the Division’s core areas of focus remain consistent with fiscal year 2026, the 2027 Exam Priorities include notable changes and refinements, which we discuss below, along with other key 2027 examination priorities. Dorsey Observations Renewed focus on economic conflicts of interest. After certain economic-incentive topics received less emphasis in the 2026 Exam Priorities2, the Division has again expressly identified economic conflicts as an examination focus. The 2027 Exam Priorities indicate that the Division will prioritize reviewing advisers’ fiduciary obligations relating to economic conflicts of interest raised by fee rebates, fee and expense calculations, cash management, quid pro quo arrangements, and deposits and withdrawals. Greater emphasis on private-fund practices. Building on the private-fund items in the 2026 Exam Priorities, the 2027 Exam Priorities indicate that the Division will assess private-fund disclosures and controls relating to investment allocations, leverage, affiliated service providers, and fees and expenses. The Division also identified investments in private companies through special purpose vehicles (“SPVs”) and loans provided by private funds and business development companies (“BDCs”) as products the Division will scrutinize. Advisers, particularly private-fund advisers, should evaluate whether their disclosures and compliance programs address these areas. Expanded focus on AI-related cybersecurity risks. While the 2026 Exam Priorities focused on advisers’ use of and representations regarding artificial intelligence (“AI”), the 2027 Exam Priorities specifically highlight AI-enabled cybersecurity threats, including AI-generated phishing and synthetic or “deepfake” voice and video used for social engineering. The shift signals that registrants should consider whether their cybersecurity policies and controls adequately address these evolving threats. New focus on proxy advisory firms. The 2027 Exam Priorities state that the Division will examine advisers that rely on proxy advisory firms, including how those advisers evaluate the firms’ recommendations, assess the bases for those recommendations, identify potential conflicts of interest, and determine whether that reliance satisfies applicable legal obligations. Advisers that rely on proxy advisory firms may wish to consider whether their compliance programs address these areas. Updated focus on Regulation S-P and Regulation S-ID. The 2026 Exam Priorities stated that the Division would engage firms during examinations regarding their progress in preparing incident response programs ahead of the compliance dates for the amendments to Regulation S-P and would examine compliance with the amended rule after those dates. The 2027 Exam Priorities indicate that examinations will focus on whether firms have developed, implemented, and maintained reasonably designed policies and procedures addressing administrative, technical, and physical safeguards to protect customer information and that, in accordance with the amended rule, staff will evaluate response program policies and procedures for unauthorized access to or use of customer information, including customer notification procedures and oversight of service providers. With respect to Regulation S-ID, the 2027 Exam Priorities indicate that examiners will assess whether firms are updating their Identity Theft Prevention Program to address emerging risks, such as those related to AI and stolen credentials. Advisers may wish to consider whether their compliance programs address these areas, as applicable. Summary of Other 2027 Examination Priorities Beyond the developments discussed above, many of the Division’s core examination priorities remain consistent with fiscal year 2026. These include investment adviser fiduciary obligations and compliance programs, examinations of never-examined and recently registered advisers, and cybersecurity and operational resiliency. The Exam Priorities are not exhaustive, and examinations will vary based on each registrant’s business, activities and risks. Advisers should consider the 2027 Exam Priorities in reviewing their compliance programs and preparing for potential examinations, including by: Reviewing risk disclosures and controls. The Division states that, when examining advisers to private funds, it will assess whether investment-related risk disclosures are consistent with fiduciary standards and whether compliance policies, procedures, and controls are designed to address both fund-level and investment-level risks. Reviewing disclosures on allocations, leverage, and affiliated service providers. The 2027 Exam Priorities identify disclosures related to certain investments and allocations, the use of debt and fund-level lines of credit, and the use of affiliated service providers as examples. Confirming the accuracy of fee and expense calculations. The Division states that it will assess the accuracy of fee and expense calculations at both the fund and investment levels, and it identifies fee rebates, cash management, quid pro quo arrangements, deposits, and withdrawals as areas in which economic conflicts of interest may affect the impartiality of advice. Reviewing recommendations of illiquid or hard-to-trade products. The Division states that it will prioritize advisers that recommend products that are difficult to trade, have unusual features, or are illiquid, including loans provided by private funds or BDCs and investments in private companies through SPVs. Confirming that the compliance program is implemented and reviewed. The Division states that it will review compliance program components such as marketing, valuation, and custody, as appropriate, and will typically analyze the annual compliance review. It will also focus on compliance practices when advisers have started advising new asset classes or clients or grown through mergers or acquisitions. 1 SEC Division of Examinations 2027 Examination Priorities. 2 See Dorsey’s Client Alert on the SEC’s fiscal year 2026 exam priorities.

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