4th Circuit Court of Appeals: Eminent domain, prescription drugs, more

Arbitration; illusory

BOTTOM LINE: Where an arbitration policy could be unilaterally modified without any meaningful limitation, it was illusory, and thus unenforceable, under Maryland law.

CASE: Trimble v. Entrata, Inc., Case No. 25-1975 (filed Aug. 11, 2026) (Judges Niemeyer, THACKER) (Judge RUSHING dissents).

FACTS: Appellant Entrata, Inc. operated an online portal that appellee Kaitlyn Trimble utilized to pay her residential rent between 2023 and 2024. Appellant charged users a convenience fee each time they used the portal to pay their rent. Appellee, on behalf of herself and all others similarly situated, sued appellant seeking to recover the convenience fees, alleging that appellant is an unlicensed collection agency.

Appellant moved to compel arbitration. The district court declined to compel arbitration, finding that the arbitration provision contained in the portal’s terms and conditions, which are hyperlinked on the rent payment page, was unenforceable for lack of mutual consideration.

 LAW: “Under Maryland law, a promise to arbitrate is illusory — and thus cannot constitute the consideration necessary to support a binding contract — if [one party] reserves the right ‘to alter, amend, modify, or revoke the Arbitration Policy . . . at any time with or without notice.’” Here, the appellant’s terms include a change clause that expressly gives it the unfettered discretion to unilaterally modify the arbitration agreement without any meaningful limitation.

The change clause provided: “[a]t [ResidentPortal], [users] are bound by the version of this Agreement that is in effect on the date of [the user’s] visit. This Agreement may change from time to time, so please review it when you visit [ResidentPortal].” Under a plain reading, a person who visits ResidentPortal is automatically bound by the change clause the moment ResidentPortal is accessed.

The fact that users must click the assent button as part of the user interface in order to make rental payments does not alter the fact that any user paying rent is already bound by any modified terms merely by visiting ResidentPortal in the first instance. This court has repeatedly held this type of “change in terms” clause to constitute an illusory promise under Maryland law.

There is no language in the change clause requiring appellant to provide its users with notice before or even after modifying the terms. Rather, the only reference to notice in the terms is found in the notices clause, which states that appellant will provide “any notices regarding [ResidentPortal] by posting them on [ResidentPortal]” and instructs users that they “must check [ResidentPortal] for notices, and [users] will be considered to have received a notice when it is posted on [ResidentPortal].”

But it also provides that the terms automatically apply if and when appellee visits ResidentPortal. So, there was no way for appellee to receive notice of modifications or review them without automatically assenting to them. Therefore, the purported ability of appellee to opt out of accessing the website and thereby decline the modified terms is illusory because it exists solely at appellant’s pleasure. Also problematic is that the sweeping grant of unilateral authority appellant reserved in its terms does not impose any kind of meaningful limitation on appellant.

Appellant nevertheless contends that each time appellee accessed ResidentPortal and made a rental payment, she entered into a new and separate contract with appellant as opposed to there being an ongoing service agreement between the parties. Again, this court disagrees. The relationship between the parties is an ongoing one, rather than a “one-off” contract, and appellant intended for any modifications to expand upon their ongoing contractual relationship.

Affirmed.

DISSENT: The majority misreads § 3 of the appellant’s terms. Though that section allows appellant to modify the parties’ arbitration agreement, any modifications apply only prospectively. The arbitration agreement is therefore not illusory.

Moreover, even accepting the majority’s reading that § 3 allows retroactive modifications, the arbitration agreement is still not illusory because any modifications become binding only once a customer revisits ResidentPortal. Because it is the customer—not appellant—who controls whether any modifications to the arbitration agreement become binding, the arbitration agreement is not illusory.

Criminal; evidentiary hearing

BOTTOM LINE: Where the district court dismissed an inmate’s 28 U.S.C. § 2255 claim without holding an evidentiary hearing, it did not err. The record conclusively showed the inmate could not satisfy the two prongs of his ineffective-assistance-in-pleading claim.

CASE: United States v. Flood, Case No. 23-7032 (filed Aug. 13, 2026) (Judges Wilkinson, RICHARDSON) (Judge HEYTENS dissents).

FACTS: James Flood is serving a life sentence for the kidnapping and killing of Eric Hayes. He moved to vacate his sentence under 28 U.S.C. § 2255, claiming that his trial counsel rendered ineffective assistance by failing to resolve his case with a plea agreement. The district court denied the claim without an evidentiary hearing. Flood says that was an error because the record contained factual disputes that only a hearing could resolve.

LAW: When a convict files a § 2255 motion, the district court must hold a hearing, “[u]nless the motion and the files and records of the case conclusively show that the prisoner is entitled to no relief.” Here, the district court asked for additional briefing and expansion of the record before denying Flood’s § 2255 claim. It even held a non-evidentiary hearing.

So the denial in this case is akin to a grant of summary judgment: If the record conclusively shows that Flood was not entitled to relief on his Sixth Amendment claim—meaning that the record, crediting Flood’s factual allegations and drawing all reasonable inferences in his favor, leaves no genuine dispute of material fact—then the district court could deny the motion without an evidentiary hearing.

Absent that showing, denying the claim without a hearing is an abuse of discretion. The hearing question and the merits merge because a hearing is owed only when crediting the movant would entitle him to relief. So to decide whether the district court abused its discretion by denying Flood’s claim without an evidentiary hearing, the court must assess whether the record conclusively showed that Flood could not satisfy the two prongs of his ineffective-assistance-in-pleading claim.

When bringing a Sixth Amendment ineffective-assistance claim, the convicted defendant bears the burden of showing (1) “counsel’s performance was deficient” and (2) “the deficient performance prejudiced the defense.” Here, the record conclusively shows that Flood’s claim fails twice over—on performance and on prejudice—so the district court was not required to hold a hearing before denying his § 2255 motion.

In his brief, Flood says that his counsel rendered ineffective assistance “when they failed to seek a plea agreement.” He also says counsel “never even engaged in plea discussions.” But in the same brief, Flood acknowledges that when the government approached his counsel about the prospect of a plea, his counsel met with the prosecutors to discuss a potential plea agreement. In those discussions, the government made clear “that in order to receive an offer, Mr. Flood would have to proffer.”

However Flood frames counsel’s alleged deficiency, the claim fails. Read as a charge that counsel “never even engaged in plea discussions,” it founders on the record. Read instead as a charge that counsel, having met with prosecutors to discuss a plea, should have done something more or pressed harder, it identifies no act or omission that fell outside the wide range of reasonable professional assistance.

Even if Flood could clear the performance prong, the record conclusively shows that he cannot establish prejudice. The record conclusively shows no reasonable probability that Flood would have accepted the kind of plea offer the government was willing to make.

Nothing in the record—no affidavit, no allegation no reasonable inference—shows a reasonable probability that either (1) the government would have considered a plea offer that did not involve a proffer and cooperation or (2) Flood would have accepted an offer that required a proffer and cooperation. And while Flood contends that the record contains disputes of material fact that would permit a finding of prejudice, he is wrong.

Affirmed.

DISSENT: I would vacate and remand for an evidentiary hearing. Under this court’s precedent, such “a hearing is required when a movant presents a colorable Sixth Amendment claim showing disputed facts beyond the record, or when a credibility determination is necessary to resolve the claim.”

 The district court did not apply that standard in determining whether Flood’s case warranted a hearing. That alone was an abuse of discretion. What is more, the district court also erred by disregarding record evidence “suggesting [Flood] would have accepted [a plea] offer”—evidence that rendered the court’s no-prejudice holding untenable.

Employment; failure to accommodate

BOTTOM LINE: Where the evidence suggested a man who could no longer work as a pest control technician following a workplace accident could have performed the essential functions of customer service roles, but the employer failed to engage in the interactive dialogue, the district court wrongly granted the employer’s motion for summary judgment.

CASE: Dieng v. Orkin, LLC, Case No. 25-1221 (filed Aug. 5, 2026) (Judges Gregory, BERNER) (Judge QUATTLEBAUM concurring in part, concurring in the judgment in part and dissenting in part).

FACTS: Plaintiff Ibrahima Dieng suffered a workplace injury while working at defendant Orkin, LLC as a pest control technician. Upon his recovery, plaintiff informed defendant that he was ready to return to work. He could no longer work as a pest control technician, however, because of a disability that resulted from his workplace injury. He repeatedly asked to be reassigned to a less physically demanding position.

Defendant ignored plaintiff’s requests for reassignment and did not reach out to him to discuss light-duty positions. All the while, plaintiff remained on unpaid leave. After 16 months, he submitted his resignation.

Plaintiff sued under the Americans with Disabilities Act, or ADA, alleging that defendant failed to reasonably accommodate his disability and unlawfully terminated him because of his disability. The district court granted summary judgment to defendant on both claims.

LAW: To make out a failure to accommodate claim, plaintiff must show: (1) that he was disabled; (2) that defendant was on notice of his disability; (3) that he was able to perform the essential functions of his position (or his desired position) with or without a reasonable accommodation and (4) that defendant failed to make such an accommodation.

The district court concluded that summary judgment was appropriate because, even with reasonable accommodation, plaintiff could no longer perform the essential functions of his former position as a pest control technician. That is beside the point. The question is whether plaintiff produced evidence that he could perform the essential job functions of either the customer service or the sales representative position, the light-duty positions he requested.

The record evidence supports the conclusion that plaintiff could have performed the essential functions of customer service roles. Plaintiff’s manager, Blake Hunter, testified in his deposition that he could think of no reason plaintiff would not have been a suitable customer service representative. Notably, defendant does not dispute this important fact. As for the sales positions, there are genuine disputes of material fact as to whether plaintiff could have performed the essential functions of these roles.

Turning to the fourth element, the district court noted that, while plaintiff sought an accommodation of reassignment to light-duty work, defendant was not obliged to provide plaintiff’s requested accommodation. The district court concluded that defendant provided plaintiff with a reasonable accommodation of his disability “by permitting him to take unpaid leave for several months.” This court disagrees.

While keeping an employee on indefinite unpaid leave may be a reasonable accommodation under certain circumstances, it was not here. The record is replete with evidence that defendant was on notice that plaintiff’s disability was not temporary and that he was unable to return to his position as a pest control technician.

Plaintiff provided evidence from which a reasonable jury could conclude that defendant did not engage in the interactive process at all, let alone engaging in good faith. No one at defendant made any attempt to speak with plaintiff about his physical limitations or his request for light-duty work. Similarly, although plaintiff provided defendant updates from his physicians regarding his recovery, no one from the company made any effort to speak with plaintiff’s physicians regarding his disabling condition or his need for light-duty work.

Moreover, there is no evidence indicating that anyone at defendant ever responded to communications from plaintiff’s counsel requesting that his client be returned to work in a light-duty position. On this record, a reasonable jury could readily conclude that defendant ignored plaintiff’s repeated requests to return to work in a light-duty position rather than engaging in the interactive process.

Turning to plaintiff’s termination claim, because he does not allege that he was terminated because of his disability nor does his unlawful termination claim fall within the scope of the administrative investigation that could have reasonably been expected to follow his failure to accommodate claim, plaintiff claim for unlawful discharge on the basis of disability was not administratively exhausted.

Vacated and remanded in part and affirmed in part.

CONCUR/DISSENT: I agree with the majority that defendant was entitled to summary judgment on plaintiff’s wrongful termination claim. As to his failure-to-accommodate claim, I agree that the district court erred by granting defendant summary judgment on the entire claim. But I disagree about the scope of the genuine disputes of material fact that remain.

Real Property; eminent domain

BOTTOM LINE: Where a company who has already received federal approval to construct an electrical transmission line was required to conduct certain field surveys before it could obtain approval from Maryland, it was granted permission to enter private land to conduct the surveys.

CASE: PSEG Renewable Transmission LLC v. Arentz Family, LP, Case No. 25-1730 (filed Aug. 6, 2026) (Judges Wilkinson, BERNER) (Judge RICHARDSON concurs in the judgment). 

FACTS: PSEG Renewable Transmission LLC received federal approval to construct the Maryland Piedmont Reliability Project, or MPRP, a transmission line intended to address the region’s emerging electricity shortage. Before construction can begin, PSEG is required to obtain a Certificate of Public Convenience and Necessity, or CPCN, from Maryland’s Public Service Commission, or PSC.

PSEG submitted a CPCN application to the PSC, which referred its review to Maryland’s Power Plant Research Program, or PPRP. The PPRP submitted a report to the PSC deeming the CPCN application incomplete until PSEG completes certain field-based studies. To conduct the surveys necessary for these studies, PSEG must access the properties over which the MPRP would run.

PSEG filed suit against the property owners for injunctive relief and moved for a preliminary injunction which would permit PSEG to access the properties under Maryland Code, Real Property Article § 12-111(a). The district court granted PSEG’s motion.

LAW: Regarding likelihood of success, the property owners contend that PSEG cannot possess the power of eminent domain until it has been issued a CPCN. This court agrees with the district court that requiring PSEG to obtain a CPCN before accessing property under § 12-111(a) would render the statutory scheme unworkable, “illogical, unreasonable, [and] inconsistent with common sense.” The General Assembly could not have intended for a federal public utility to obtain a CPCN before it could access properties to conduct the field surveys required for the CPCN application.

Thus, the district court did not abuse its discretion in finding that PSEG likely gained the power of eminent domain for purposes of access under § 12-111(a) before the issuance of a CPCN. This court also agrees with the district court’s conclusion that PSEG likely gained this power for purposes of § 12-111(a) when PPRP directed it to complete the necessary field studies. The property owners raise three arguments regarding why the district court was wrong. None are compelling.

Next, the district court did not clearly err in concluding that PSEG demonstrated it is likely to suffer irreparable harm, absent the preliminary injunction, in the form of lost revenues. Specifically, the district court found that without access to conduct the field surveys—a necessary step to securing a CPCN—construction of the MPRP was likely to be perpetually delayed, causing PSEG to lose revenue that it could not later recover.

In so finding, the district court relied heavily on two Fourth Circuit cases that both involved the construction of natural gas pipelines. Both decisions stand for the principles that an obstruction at one stage of large-scale energy infrastructure construction can hinder and derail the entire project, and that potential lost revenues from delayed construction constitutes irreparable harm.

The property owners contend that the harm to PSEG is monetary, speculative and impermissibly conditioned on possible future events. This court disagrees. And while the property owners fault PSEG for not offering sufficiently detailed projections of the revenue it stands to lose, the district court acted well within its discretion to infer from other facts that PSEG might plausibly lose revenue if the MPRP is never constructed.

When balancing equities, the district court reasoned this access would be “temporary, limited, [and] non-invasive,” and the property owners could recover any damage to their land or personal property through the cause of action provided under § 12-111(c). Conversely, PSEG would suffer the irreparable harm of “prospective financial losses” absent injunctive relief. This court discerns no abuse of discretion in the district court’s conclusion.

Finally, the district court concluded that the injunction is in the public interest because advancing projects that satisfy energy demands, like the MPRP, generally benefits the public, and because the PPRP, in furtherance of its statutory duties, directed PSEG to conduct the studies in the report finding its CPCN application administratively incomplete. It did not abuse its discretion in so holding.

Affirmed.

CONCUR: I agree that the district court did not abuse its discretion in granting the preliminary injunction, and I concur in the court’s judgment. But I take a different path to get there. Applying Maryland’s purposive method of statutory interpretation, I would reach the same result on the statutes’ own terms.

Patent and trademark; foreign-branded prescription drugs

BOTTOM LINE: Where a drug manufacturer was likely to prevail on its direct and contributory trademark infringement claims, the defendants were enjoined from advertising, selling or facilitating the sale of the manufacturer’s imported branded medications in the United States.

CASE: Gilead Sciences, Inc. v. Meritain Health, Inc., Case Nos. 25-1828, 25-1829, 25-1849, 25-1850 (filed Aug. 13, 2026) (Judges AGEE, Harris, Keenan).

FACTS: Gilead Sciences, Inc. sued appellants, claiming that Rx Valet, LLC, Advanced Pharmacy, LLC, Affordable Rx and Gregory Santulli directly infringed its trademarks by importing and distributing foreign-market Gilead-branded drugs and that Meritain Health, Inc. and ProAct, Inc. contributed to the Quartet’s infringement by facilitating the scheme.

The district court granted Gilead’s motion for a preliminary injunction, enjoining appellants from advertising, selling or facilitating the sale of imported Gilead-branded medications in the United States.

LAW: Santulli contends that the district court erred by concluding that Gilead was likely to succeed on the merits against him without first finding “that there is a reasonable probability that it has personal jurisdiction over [him].” Santulli contends the district court needed to, but did not, find that Gilead met the higher “reasonable probability of ultimate success” standard before granting preliminary relief. The court declines to consider this argument because Santulli never made it below.

Santulli placed his 12(b)(2) motion and Gilead’s preliminary-injunction motion on separate tracks. On the first, he argued that Gilead had not made a prima facie showing of personal jurisdiction. On the second, he never argued that the court had to find a “reasonable probability” of personal jurisdiction before enjoining him.

To the extent Santulli maintains that the district court had an independent obligation to apply that standard whether he requested it or not, the court disagrees. Because Santulli never argued that the district court had to find a “reasonable probability” of personal jurisdiction before enjoining him, he cannot now fault the court for failing to do so.

Appellants nevertheless maintain that the Federal Food, Drug, and Cosmetic Act, or FDCA’s exclusive enforcement provision bars Gilead’s Lanham Act infringement claims. The court disagrees. Under the facts of this case, comparing two products to determine whether they materially differ for Lanham Act purposes doesn’t require interpreting FDA regulations.

To prevail on the merits of its direct trademark infringement claims against the Quartet, Gilead must establish, among other things, that the Quartet’s use of its marks “is likely to confuse consumers.” This appeal turns on whether the Quartet’s importation of authentic Gilead-branded medications intended only for sale and distribution abroad is likely to do just that.

There are two ways in which goods bearing an authentic mark are still not genuine: they (1) materially differ from the goods the trademark owner has authorized for sale or (2) are manufactured or distributed outside the trademark owner’s legitimate quality-control system. The district court here concluded that the internationally sourced Gilead-branded medications that the Quartet imported materially differ from the domestic versions and aren’t subject to the same quality control measures. This court agrees with the district court.

Turning to Gilead’s contributory trademark infringement claims against Meritain and ProAct, to make out such a claim, a plaintiff must prove (1) “underlying direct infringement” by a third party; and (2) that the defendant either (a) “intentionally induce[d] another to infringe a trademark” or (b) continued to supply the product or service to someone that the defendant “knows or has reason to know is engaging in trademark infringement.”

The first element is satisfied given the discussion about the Quartet above. As for the second element, the relevant inquiry is whether Meritain and ProAct continued providing their services to the Quartet while knowing or having reason to know that the Quartet was importing and distributing Gilead-branded medications that weren’t genuine. On this record, the court discerns no error in the district court’s conclusion that they had that knowledge.

Appellants argue that the 10-month period between Gilead’s first becoming aware of John Doe’s complaint in February 2024 and filing suit in December 2024 rebuts any presumption of irreparable harm. But delay does not undermine irreparable harm when it results from “the plaintiff’s [] good faith efforts to investigate the alleged infringement.” That’s what the district court found occurred here, and appellants haven’t come close to showing that its finding was an abuse of discretion.

Appellants argue that a preliminary injunction undermines the public interest because American consumers benefit from the lower costs of imported prescription medications. And because there’s no risk of harm from the importation of those authentic drugs, appellants maintain that the balance of the equities doesn’t support an injunction. But that argument assumes the imported medications are genuine merely because Gilead manufactured them and their chemical formulation is the same. As explained above, they are not.

Affirmed.