2026-08-17

Kalshi's Washington Ban, Meta's Trial, and Lilly's Retatrutide Suits: Litigation Tracker - Week of August 11

Six material developments from August 11-17, 2026, spanning AI trade-secret and copyright-evidence disputes, platform youth-safety and prediction-market regulation, and two pharma cases involving Celgene CVRs and unauthorized retatrutide sales.

Industry Litigation Tracker @NeoDrop Official

Coverage window: August 11-17, 2026. Six material developments made the cut: two AI disputes over trade-secret pleading and evidence preservation, two tech-platform cases that test product access and youth-safety remedies, and two pharma matters that put drug distribution and contingent-value rights back in court. The week's strongest signals are procedural: a case allowed to proceed, a sanctions fight over a large evidence sample, a jury trial beginning, a state injunction against a prediction market, an appellate reversal, and six newly filed suits.

At a glance

Case	Sector	Current stage	Why it matters	Next milestone
o9 Solutions Inc. v. SAP SE et al., 3:25-cv-03245	AI / trade secrets	Northern District of Texas magistrate judge says the case should move forward	Tests how an AI-software company can plead trade secrets allegedly carried by former employees to a larger enterprise-software rival	District-court handling of the recommendation and merits discovery; date not publicly reported 1 2
News publishers v. OpenAI and Microsoft	AI / copyright evidence	OpenAI opposes sanctions in the Southern District of New York	Puts preservation duties and model-assisted search claims under pressure in a large training-data copyright MDL	Ruling on the sanctions request; date not publicly reported 3
In re Social Media Adolescent Addiction/Personal Injury Products Liability Litigation, 4:22-md-03047	Tech / youth safety	Jury impaneled in the Northern District of California	Moves platform-design and youth-harm theories into a landmark federal trial involving Meta and TikTok	Trial proceedings; Law360 reported the jury was ready to begin, with trial expected to start August 19 4
Washington v. Kalshi	Tech / prediction markets	King County Superior Court issued a preliminary injunction	Directly tests whether federal commodities-market regulation preempts state gambling and consumer-protection law	IP/residency geofence by August 19; multi-source geofencing by September 2 5 6
UMB Bank, N.A. v. Bristol-Myers Squibb Company et al.	Pharma / CVR litigation	Second Circuit reverses dismissal and revives the shareholder suit	Keeps alive a roughly $6.7 billion dispute over whether BMS delayed approvals tied to Celgene contingent-value rights	Proceedings on remand; schedule not publicly reported 7 8
Eli Lilly's retatrutide suits	Pharma / drug distribution	Six federal suits newly filed against U.S. sellers	Extends the fight over unauthorized access to an unapproved obesity drug from public warnings into direct litigation against compounding pharmacies, medical spas, and online sellers	Individual responses, injunction requests, and case numbers were not publicly reported 9 10

AI sector cases

o9 Solutions v. SAP: the trade-secret case clears an early pleading hurdle

Parties and forum. o9 Solutions Inc. is suing SAP SE and three former employees in the U.S. District Court for the Northern District of Texas. The public Law360 case page identifies the action as o9 Solutions Inc v. SAP SE et al., case no. 3:25-cv-03245, and lists the nature of suit as the federal Defend Trade Secrets Act. The accessible report does not identify the three former employees by name. 1 2

Central dispute. Law360 describes o9 as an artificial-intelligence software company that alleges the former employees took trade secrets to SAP. The accessible materials do not disclose the alleged secret categories or the specific SAP product at issue, so the merits should not be read beyond that allegation. 1

What happened. On August 12, Law360 reported that a federal magistrate judge said the case should move forward. The report links to a recommendation, while the public case page lists U.S. District Judge Sam A. Lindsay and the action's November 25, 2025 filing date. The report does not establish from the accessible text whether the district judge has adopted the recommendation. 1 2

Business impact. For AI-software companies, the immediate risk is the cost of discovery around employee access, recruiting, customer relationships, product plans, and internal permissions. For a larger enterprise-software defendant, the case shows how hiring or integrating a small AI vendor's former staff can become evidence about what the new employer knew and when.

Precedent value. This is an early procedural signal, not a ruling that the information qualifies as a trade secret or that SAP misappropriated it. Its value lies in the pleading and discovery threshold: courts may allow a fast-moving AI company to test alleged information transfer even when the public record has not yet exposed the technical detail. The eventual treatment of specificity, independent economic value, and reasonable secrecy measures will matter more than this week's recommendation.

Next milestone. Watch for district-court action on the recommendation and the first merits-discovery schedule. No public date was reported. 2

News publishers v. OpenAI: the 20-million-chat sample becomes a sanctions fight

Parties and forum. OpenAI is defending copyright litigation brought by The New York Times and other news organizations in the U.S. District Court for the Southern District of New York. The public materials identify The New York Times Company v. Microsoft Corporation et al., 1:23-cv-11195, and also identify The Intercept Media, Inc. v. OpenAI, Inc. et al., 1:24-cv-01515, among the related proceedings. Judge Sidney H. Stein is handling the matter described by Law360. 3

Central dispute. The immediate fight is not whether the publishers ultimately prove that training or output practices infringed copyright. It is whether OpenAI complied with a preservation order and accurately described its ability to search for potentially copyrighted material in a roughly 20 million-chat evidence sample. The publishers seek sanctions that could restrict OpenAI's ability to rely on that sample. OpenAI denies violating the order or misrepresenting its search capability. Those positions are party arguments, not findings. 3

What happened. On August 14, OpenAI urged the court to reject the sanctions bid. The motion puts evidence preservation, search methodology, and the reliability of model-related records directly before the court while the underlying copyright cases continue. No ruling on sanctions was reported in the accessible coverage. 3

Business impact. The cost is broader than this MDL. Companies developing or deploying generative AI need a defensible retention map for chats, training inputs, evaluation records, logs, and deleted or transformed data. A court that treats search limits or preservation failures as sanctionable can increase the value of ordinary operational telemetry and make litigation holds part of product architecture rather than a later legal overlay.

Precedent value. The key question is whether a court will impose meaningful litigation consequences when an AI company says its systems cannot search or reconstruct a large evidence set in the way an opposing party requests. A sanctions ruling could influence how courts assess technical impossibility, good-faith preservation, and proportionality in AI copyright cases. It would still be a case-management ruling, not a final copyright rule.

Next milestone. The next public checkpoint is the Southern District of New York's ruling on the sanctions request. The accessible report gives no hearing or decision date. 3

Tech-platform cases

Meta's youth-addiction MDL: jury selection turns a theory about design into a trial record

Parties and forum. The federal MDL is captioned In re Social Media Adolescent Addiction/Personal Injury Products Liability Litigation, case no. 4:22-md-03047, in the U.S. District Court for the Northern District of California. Law360's August 12 report identifies Meta Platforms, Instagram, and TikTok among the companies involved and says the case concerns allegations that their social-media products harm children's mental health. 4

Central dispute. The litigation targets the design and operation of social-media products, including theories about addictive features and youth harm. This is distinct from a single user's post or an isolated moderation decision: the legal exposure turns on what the companies allegedly built, measured, promoted, or failed to change. The allegations remain to be proved at trial. 4

What happened. On August 12, the court impaneled a jury. Law360 reported that the federal trial was ready to begin and that trial proceedings were expected to start August 19. The Ninth Circuit separately rejected an attempt by Meta and TikTok to use Section 230 to stop related state claims at the interlocutory stage, holding that the statute operates as an affirmative defense rather than an immunity from suit. 4 11

Business impact. A trial record can expose product metrics, design decisions, age-assurance practices, safety testing, and internal assessments of adolescent use. The exposure is also cumulative: a plaintiff-side theory that survives early motion practice can force companies to defend the same design choices across MDLs, state enforcement actions, and consumer-protection cases.

Precedent value. The jury verdict will be more important than jury selection, but the move to trial already shows that platform-design theories are not being screened out at the threshold. The combination of a live trial and the Ninth Circuit's Section 230 ruling keeps the central boundary in view: whether claims about the company's own product architecture can proceed even when the company invokes a statute associated with third-party speech.

Next milestone. Trial proceedings are the immediate milestone, with Law360 reporting an expected August 19 start. The case number and trial posture should be used to distinguish this MDL from separate state AG actions involving youth safety. 4

Washington v. Kalshi: state gambling law reaches a federally regulated prediction market

Parties and forum. Washington Attorney General Nick Brown sued Kalshi in King County Superior Court. Judge John McHale issued a preliminary injunction. The accessible reports do not provide a full public caption or docket number. 5 6

Central dispute. Washington alleges that Kalshi's prediction-market contracts amount to illegal gambling and deceptive or unfair practices under state law. Kalshi argues that the Commodity Futures Trading Commission has exclusive jurisdiction over its exchange and that state gambling laws cannot control it. 5

What happened. The state court ordered Kalshi to stop offering, accepting, or facilitating wagers in Washington on sports, elections, politics, entertainment, culture, technology, science, and specified mentions. The order says Kalshi is not licensed by the state Gambling Commission and is not registered to conduct business in Washington. It also found that advertising the contracts as legal betting was likely to mislead a reasonable consumer. 5 6

Current stage and deadlines. The preliminary injunction requires an IP-address and residency-based geofence by August 19 and a multi-source geofencing solution by September 2. The order allows users to exit positions they already hold and warns of penalties of up to $120,000 per day if Kalshi fails to complete the ordered geofencing by September 2. Kalshi said it disagreed with the decision and was considering its legal options. 5 6

Business impact. The order puts geolocation, residency verification, advertising language, and market catalog controls on the critical path for prediction-market operators. It also creates operational separation between exiting an existing position and preventing new participation, which matters for compliance design and customer communications.

Precedent value. The judge concluded at the preliminary stage that the Commodity Exchange Act did not preempt Washington's gambling law because it contains no express preemption language and preserves state and court jurisdiction. That is a significant state-federal boundary signal, but it is not a final nationwide ruling. The case is one part of a broader conflict among state regulators, the CFTC, and prediction-market operators.

Next milestone. August 19 is the first compliance checkpoint; September 2 is the more consequential multi-source geofencing deadline. Any appeal or federal preemption ruling will determine whether the order remains a state-specific operating constraint or becomes part of a broader national split. 5

Pharma and biotech cases

UMB Bank v. Bristol-Myers Squibb: the Second Circuit revives the Celgene CVR dispute

Parties and forum. UMB Bank, N.A., acting for former Celgene shareholders, is suing Bristol-Myers Squibb Company. The dispute returns to the federal district court after a unanimous three-judge decision by the U.S. Court of Appeals for the Second Circuit. Public docket indexes identify the district action as 1:24-cv-08668; the accessible news reports do not provide a separate appellate docket number. 7 8

Central dispute. The roughly $6.7 billion suit accuses BMS of delaying federal approval of three drugs after its $80.3 billion acquisition of Celgene in 2019. Celgene shareholders who held contingent-value rights were entitled to an additional $9 per share if BMS obtained timely U.S. regulatory approvals. The shareholders say the delay kept BMS from meeting the condition for payment. Those are allegations in the underlying suit, not a merits finding. 7

What happened. On August 13, the Second Circuit held that the lower-court judge erred in dismissing the case. The appeals court found that UMB Bank was entitled to represent the Celgene shareholders as trustee despite an error in how the appointment was made. The ruling restores the action; it does not decide whether BMS intentionally delayed approvals or whether the CVR payment condition was breached. 7

Business impact. CVRs can make regulatory timing part of the economic consideration in a major acquisition. The revived suit increases the importance of documenting drug-development decisions, approval sequencing, and board-level communications when an acquisition includes contingent payments tied to regulatory milestones.

Precedent value. The immediate holding is about trustee standing and the consequences of an appointment error, not about drug approval strategy. The larger signal is practical: a procedural defect in the representation of CVR holders may not end a high-value shareholder action before the underlying evidence is tested. Any later ruling on good-faith efforts, control over approval timing, or contractual conditions would be more consequential for future life-sciences deals.

Next milestone. The case proceeds on remand. The accessible reports do not give a new discovery, hearing, or trial date. 7

Eli Lilly's retatrutide suits: unauthorized access becomes direct litigation

Parties and forum. Eli Lilly filed six suits against U.S. companies it accuses of selling unauthorized versions of retatrutide. The reports describe a mix of compounding pharmacies, medical spas, and online sellers, but the accessible materials do not disclose the individual defendants, captions, court assignments, or case numbers. This is a deliberate evidence boundary: the cases are public as a group, while the six identities are not public in the sources reviewed. 9 10

Central dispute. Lilly says the defendants marketed or sold retatrutide products even though the obesity drug remains under clinical development and has not received regulatory approval. STAT reported that retatrutide was still in Phase 3 trials for obesity, type 2 diabetes, and related conditions. The accessible reports do not provide enough complaint text to state each cause of action or the precise relief requested. 9

What happened. The filings were reported on August 12. They mark an escalation from public warnings and market policing to direct claims against sellers before the product has completed the regulatory process. No merits ruling, injunction, settlement, or defendant response was reported in the accessible coverage. 9 10

Business impact. The cases raise near-term compliance and reputation risk for businesses selling, compounding, marketing, or referring patients to unapproved obesity-drug products. For Lilly, direct suits may help identify channels and preserve evidence about marketing claims. For pharmacies and medical spas, the litigation risk turns on sourcing, labeling, promotional language, and whether a product is represented as retatrutide rather than on the drug's eventual commercial success.

Precedent value. The filings themselves do not establish a new legal standard. Their importance is operational and strategic: a branded drugmaker is using litigation to police an unapproved market while clinical development is still underway. The eventual complaint theories and any preliminary-injunction rulings will show how courts treat the boundary between lawful compounding, chemical or research sales, and consumer-facing marketing of an investigational medicine.

Next milestone. The first defendant responses, requests for emergency relief, and public docket captions will determine the legal theories. The accessible reports did not publish those dates or details. 9

Cases to watch

Kalshi. The August 19 and September 2 geofencing deadlines are the clearest near-term operational tests in the week's docket. 5
Meta MDL. The August 19 trial start will turn product-design and youth-safety allegations into a record that other state and federal plaintiffs can use. 4
OpenAI publishers MDL. The sanctions ruling will show how much technical detail a court expects from an AI company defending its preservation and search process. 3
BMS-Celgene CVRs. Remand proceedings will determine whether the appellate standing correction leads to discovery on regulatory timing and contingent-payment conditions. 7
Lilly retatrutide. The first public complaint captions and requests for emergency relief will reveal whether the six suits share a legal theory or are tailored to different seller types. 9
o9 Solutions v. SAP. The district court's treatment of the magistrate recommendation will set the pace for discovery in an AI trade-secret case where the public record still contains little technical detail. 2

This week's docket is defined by who gets to keep operating while the legal theory is tested. Kalshi faces immediate geographic restrictions, Meta and the news publishers are moving into evidence-heavy proceedings, and the pharma disputes show two opposite postures: a major shareholder case revived on appeal and six new suits with almost no public procedural detail yet.