U.S. Senator Mark Kelly sued U.S. Defense Secretary Pete Hegseth on Jan. 12, saying Pentagon proceedings to demote the Arizona Democrat from his retired Navy captain rank violated Kelly's free speech rights because he urged troops to reject unlawful orders. Kelly, a retired Navy captain and former astronaut, said in his lawsuit in federal court in Washington that the Defense Department’s actions were retaliatory and violated the U.S. Constitution’s First Amendment protection of free speech. The lawsuit asked the court to block Hegseth's review and declare his actions unlawful. U.S. District Judge Richard Leon set a hearing for Jan. 15 on Kelly's request for a temporary restraining order. A Pentagon representative in a statement said it was aware of Kelly's lawsuit but does not comment on pending litigation. In November, Hegseth blasted Kelly for appearing in a video that reminded service members of their duty to reject unlawful orders. In the clip, Kelly stated: “Our laws are clear: you can refuse illegal orders.” Kelly’s remarks came as more Democrats were criticizing Republican President Donald Trump’s decisions to deploy the National Guard in U.S. cities and authorize lethal strikes on boats suspected of smuggling drugs from Latin America. Hegseth issued a censure letter on Jan. 5 accusing Kelly of “conduct unbecoming an officer.” The letter cited Kelly’s public criticism of military leadership and the November video. In a statement on Jan. 12, Kelly said Hegseth's "unconstitutional crusade against me sends a chilling message to every retired member of the military: if you speak out and say something that the President or Secretary of Defense doesn’t like, you will be censured, threatened with demotion, or even prosecuted.” Hegseth’s censure of Kelly followed a sweeping shakeup at the Pentagon during Trump’s second term. Several top military leaders were removed, including the chairman of the Joint Chiefs of Staff, the Navy’s top officer, and the director of the National Security Agency.

The U.S. Supreme Court declined on Jan. 12 to hear Citigroup's bid to avoid a lawsuit accusing the bank of causing more than $1 billion of losses by orchestrating a vast fraud at the bankrupt Mexican oil and gas services company Oceanografia. The justices turned away Citigroup's appeal of a lower court's May 2025 decision to revive the decade-old lawsuit by more than 30 plaintiffs including Oceanografia bondholders, shipping companies and Netherlands-based Rabobank. By doing so, the Supreme Court let the lower court's decision stand. Oceanografia provided drilling services to the state-owned oil company Petroleos Mexicanos prior to being seized by Mexico's government in 2014. It was declared bankrupt two years later. The plaintiffs accused New York-based Citigroup's Banamex unit of advancing $3.3 billion to Oceanografia between 2008 and 2014, despite knowing that the company had too much debt and had forged Pemex signatures on authorization forms. Citigroup later uncovered $430 million of fraudulent cash advances. The U.S. Securities and Exchange Commission fined Citigroup $4.75 million in 2018 over Banamex's internal controls. A three-judge panel of the 11th U.S. Circuit Court of Appeals found sufficient allegations that Citigroup withheld key information about Oceanografia from the plaintiffs, while benefiting from interest payments it collected on the advances. The panel also said that assuming the allegations were true, it "strains credulity" that a sophisticated bank such as Citigroup would not have known what Oceanografia was doing. Only the claims by bondholders were at issue in Citigroup's appeal to the Supreme Court. Citigroup said the bondholders should not have been allowed to pursue their "garden-variety" securities fraud civil claims under the Racketeer Influenced and Corrupt Organizations Act, or RICO, a federal anti-racketeering law that allows for triple damages. The bank also said the 11th Circuit decision conflicted with rulings from three other federal appeals courts. In response, bondholders said Congress did not intend to preclude their RICO claims simply because someone else, such as the SEC, might have pursued securities fraud claims. The bondholders also said it was possible no private plaintiff could bring securities fraud claims because there was no allegation that anyone traded in reliance on fraudulent statements.

Four years after lawsuits were first filed by Tybee Alliance, residents, property owners and city leadership gathered in Courtroom 4B of the Eugene H. Gadsden Courthouse to hear verbal arguments on the constitutionality of Tybee Island’s short-term vacation rental ordinance. Tybee Alliance, a group of property management companies and STVR owners, filed a motion for summary judgment in August 2025, seeking a decision on the claim that Tybee’s STVR ordinance is unenforceable because it violates state codes limiting municipal powers on the regulation of residential rental properties. The motion also asked for a permanent injunction barring the enforcement of the ordinance, preventing any further enforcement of STVRs in their entirety. The City of Tybee Island also filed a motion for summary judgment in November 2025, stating that the defendants are asking for the court to curtail access to information the city is entitled to. This case, attorney Patrick Connell said in his argument on Jan. 7, is about power. The City of Tybee first introduced STVR regulations in May 2016 with the approval of its first ordinance, which established mandatory registration and an occupational tax certificate for STVRs. In the intervening decade, the ordinance has been amended 17 times, including most recently in June 2024, which further limited STVRs in residential areas by dissolving those permits upon sale or transfer of the properties. The lawsuits were prompted by an amendment passed by the city in October 2022 that banned new rentals in Tybee’s residential neighborhoods, which make up 80% of the island's 3.2 square miles. Tybee’s regulations on STVRs include requiring registration of STVRs in areas that are not in the R-1, R-1-B or R-2 zones, renewing registrations annually, submitting an occupational tax certificate to obtain a permit, and allowing the city to revoke STVR permits if properties aren’t rented for at least 60 days at "full market value" during the previous year. Tybee Alliance argues the city is violating two Georgia codes, O.C.G.A. § 36-74-30(b) and O.C.G.A. § 44-7-19, One code prohibits local governments from requiring registration or conducting inspections of residential rental property unless there is probable cause to believe there has been violations of applicable codes. The other code prohibits local governments from regulating rent amounts for privately owned residential properties. Both sides also spent time contending with Dillon’s Rule, which is a legal principle that asserts local governments in the U.S. can only exercise powers explicitly granted to them by the government. Representatives for Tybee Alliance suggested that because there is no specific rule granting the registration of short-term rental properties, that it was not something that they could do. The basis of Tybee’s verbal argument centered on two of those provisions: hotel-motel excise taxes and zoning. Zoning is defined as a means for local governments to provide a set of regulations that govern how property can or cannot be used in specific geographic locations. Excise taxes are taxes imposed by the government on the sale of specific goods and services, in this case hotel and motels or lodging such as short-term vacation rentals. City of Tybee Island Attorney Bubba Hughes argued that the state grants cities the power to collect these taxes, and the storing of information is necessary or central to collecting these taxes. Tybee’s representatives also argued that short-term rentals were more in line with commercial properties, hotels and motels with innkeepers and guests, than with residential rental properties, which they clarified as a landlord-and-tenant relationship. Thompson said the plaintiffs wanted the court to determine that residential rental properties meant something different. They also said the city did not impose rent regulations as plaintiffs suggested. Superior Court Judge Christopher K. Middleton heard the arguments and will make a ruling in the coming weeks.