Bye Bye Hannan?

What a difference two little words, at trial, can make in the formulation of Tennessee’s summary judgment standard.

The Headline: A New Summary Judgment Standard   

There is a new summary judgment standard for all civil actions filed in Tennessee state courts on or after July 1, 2011. Unlike previous summary judgment standards that have been developed through judicial interpretation of Rule 56 of the Tennessee Rules of Civil Procedure, the new summary judgment standard has been established by the Tennessee General Assembly.[1] If you move for summary judgment in a case filed on after July 1, you shall prevail on [your] motion for summary judgment if [you]: (1) Submit[] affirmative evidence that negates an essential element of the nonmoving party’s claim; or (2) Demonstrate[] to the court that the nonmoving party’s evidence is insufficient to establish an essential element of the nonmoving party’s claim.

That’s it; that is the entire operative text of the new statute. It “shall apply to actions filed on or after” July 1, 2011.[2]

The Back Story: The Previous Summary Judgment Standard(s)

To help figure out what impact this legislation may have — pragmatically — on summary judgment practice, a brief look at the back story is useful. It reveals that the recent history of Tennessee’s summary judgment standard pivots around two little words that can make a big difference: “at trial.”

Just about three years ago, in Hannan v. Alltel Publishing Co., the Tennessee Supreme Court clarified for the bench and bar that, to win a motion for summary judgment in state court in Tennessee, the moving party “must either (1) affirmatively negate an essential element of the nonmovant’s claim, or (2) show that the nonmoving party cannot prove an essential element of its claim at trial.”[3] Those two words — at trial — were added to signify that the Tennessee Supreme Court had not adopted the “put-up-or-shut-up” summary judgment standard applicable in federal court.

The federal standard allows the party moving for summary judgment to challenge the sufficiency of the nonmovant’s evidence at the summary judgment stage by pointing to the nonmovant’s failure to have come forward with evidence to support an essential element of his claim or defense on which he will have the burden of proof at trial. For example, the defendant in a tort case might move for summary judgment by pointing to the plaintiff’s lack of proof of proximate cause, an essential element in every tort claim. The nonmovant must then “put up” evidence supporting his claim, evidence from which the trier of fact could find in his favor. Put another way, the burden of production then shifts to the nonmovant to fill the evidentiary gap. If, in the tort case example, the plaintiff/nonmovant does not come forward with evidence that his injury was proximately caused by the negligence of the defendant, summary judgment will be granted, and the plaintiff will have to “shut up.”[4] If the plaintiff does come forward with evidence of causation, either by pointing to facts already in the record or by submitting appropriate affidavits, summary judgment will be denied.

After Hannan, it was no longer sufficient — if it ever had been under Tennessee jurisprudence — for the movant just to point to an absence of evidence on the other side. Hannan clarified that movant had to show not only that there was a gap in the nonmovant’s evidence at the time of the summary judgment motion, but also had to show that the nonmovant could not possibly fill that gap at trial. In other words, the movant could not force the nonmovant to “put up or shut up” at the summary judgment stage. That could happen only “at trial.”

Before Hannan there was Byrd. Since 1993, Byrd v. Hall had been Tennessee’s Rule 56 bible, offered, as it was, “to establish a clearer and more coherent summary judgment jurisprudence” by setting out “the basic principles to be applied in deciding a summary judgment motion.”[5] Byrd instructed, among other things, that to win a motion for summary judgment the moving party must either (1) affirmatively negate an essential element of the nonmovant’s claim, or (2) establish “an affirmative defense.” Byrd then anomalously defined “affirmative defense” to mean that the movant would be entitled to summary judgment if she “demonstrated that the nonmoving party cannot establish an essential element of his case.”[6] This definition is obviously at odds with the usual meaning of “affirmative defense.”

The Byrd analysis looked to the opinions in what has been dubbed the “summary judgment trilogy,” the three 1986 cases in which the U.S. Supreme Court first articulated the “put-up-or-shut-up” summary judgment standard and reinforced the use of summary judgment as an efficacious, efficient and fair way of dealing with meritless claims or defenses at a relatively early stage in the litigation.[7] The seminal case in that trilogy, Celotex, talked in terms of allowing the movant to carry its burden by alleging that “there is an absence of evidence to support the nonmoving party’s case.”[8] Byrd especially cited to portions of Celotex explaining that “the moving party may demonstrate … that the nonmoving party’s evidence is insufficient to establish an essential element of the nonmoving party’s claim.”[9]

Because Byrd seemed to equate “affirmative defense” with this language from Celotex, the Byrd standard was almost invariably quoted by leaving out the term “affirmative defense” and substituting the definitional equivalent that the court had provided. The second prong of the Byrd standard became: showing that the nonmoving party cannot establish an essential element of his case.

Byrd was therefore widely — but by no means universally — read to have articulated a “put-up-or-shut-up” standard just like the Celotex standard.

The Hannan majority undertook to dispel the confusion caused by Byrd, particularly by Byrd’s odd definition of “affirmative defense.” When all was said and done, Hannan simply added the two little words — “at trial” — to the second prong of the Byrd standard, holding that the movant will prevail on its Rule 56 motion (1) if it affirmatively negates an essential element of the nonmovant’s claim, or (2) if it shows “that the nonmoving party cannot prove an essential element of its claim at trial.”

How Hannan applied this clarified standard shows just how significant those two words can be. The Hannans had sued Alltel for breach of contract. But the Hannans had admitted in discovery that neither they nor anyone else could quantify their damages — an essential element of their contract claim. Alltel moved for summary judgment. The motion was denied because, although the Hannans could not come forward with the requisite evidentiary basis for quantifying damages at the summary judgment stage, the Supreme Court reasoned that they might be able to do so at trial.[10]

The result would have been different under the federal summary judgment standard. There Alltel (the defendant/movant) would have won the motion for summary judgment because in the put-up-or-shut-up world it could have relied on the Hannans’ lack of evidence at the summary judgment stage. Alltel could have forced the plaintiffs to “put up” their evidence then and there.

Hannan, a 4-1 decision, generated much commentary, many CLE programs, and not a little consternation and confusion of its own. It made winning a motion for summary judgment more challenging. It is always difficult (some would say, impossible) to prove a negative, which is essentially what the first prong of both Byrd and Hannan requires — affirmatively negating an essential element of the nonmovant’s claim. Therefore, before Hannan, motions for summary judgment were more often than not premised on Byrd’s second prong, namely a showing by the movant that the nonmovant lacked sufficient evidence to support an essential element of its claim.

After Hannan, the movant could no longer prevail by demonstrating — at the summary judgment stage — that his opponent was unable to establish an essential element of his case. He needed to show that his opponent would be unable to muster the required proof at trial. And as applied, Hannan made it very difficult for the movant to rule out the possibility that the nonmovant would be able to come up with something at trial.

The Hannan majority insisted that its opinion did not represent any change at all in summary judgment jurisprudence, but Justice Koch, in his dissent, viewed the majority’s clarification of Byrd as a dramatic change in the law, destined to “undermine, rather than enhance, the utility of summary judgment proceedings as opportunities to weed out frivolous lawsuits and to avoid the time and expense of unnecessary trials.”[11]

Apparently the Tennessee legislature agreed with Justice Koch when it passed the new summary judgment legislation, which is intended to restore the utility of summary judgment.[12]

Here, in overview, is where we’ve been and where we are after this new legislation:

The first prong is clearly identical under Byrd, Hannan, and §20-16-101. The second prong is virtually identical in all three with these differences: (a) where Hannan added those two key words, at trial, §20-16-101 removes them, and (b) the second prong of §20-16-101 is couched in terms of the nonmovant’s evidence being insufficient, rather than in terms of what the nonmovant can or cannot prove. You will perhaps have noticed that the second prong of §20-16-101 is, word for word, the Celotex formulation that ushered in the put-up-or-shut-up standard.[13]

Byrd (1993)

Hannan (2008)

Tenn. Code Ann.
§20-16-101 (2011)

To prevail on a motion for summary judgment, the moving party must either:
(1) affirmatively negate an essential element of the nonmovant’s claim;

or
(2) demonstrate that the nonmoving party cannot establish an essential element of his case.
To prevail on a motion for summary judgment, the moving party must either:
(1) affirmatively negate an essential element of the nonmovant’s claim;

or
(2) show that the nonmoving party cannot prove an essential element of its claim at trial.
To prevail on a motion for summary judgment, the moving party must either:
(1) submit affirmative evidence that negates an essential element of the nonmovant’s claim;
or
(2) demonstrate that the nonmoving party’s evidence is insufficient to establish an essential element of the nonmoving party’s claim.

The Future: Summary Judgment Practice after July 1, 2011

How, then, will motions for summary judgment be handled in cases filed on or after July 1? Will §20-16-101 make a significant difference? It should.   

The obvious intent of the new statute is to overrule Hannan and to substitute the federal Celotex “put-up-or-shut-up standard” for the Hannan standard.[14] If the courts apply the new statute according to its terms (and the legislative intent), then in cases brought after July 1, summary judgment now becomes the put-up-or-shut-up moment in Tennessee litigation. Just as in federal court, you should be able to force your opponent, at the summary judgment stage and, of course, after adequate time for discovery, to show what evidence it has to support its case. If your opponent does not “put up” sufficient evidence to support any essential element of its claim (or defense), your Rule 56 motion should be granted.

Generally speaking, it should work as follows. The party asking for summary judgment always has the initial burden of production. When you move for summary judgment, Rule 56 requires you to show the court (i.e., to bear the initial burden of production) that there is no genuine issue of material fact and that you are entitled to judgment as a matter of law. How you may satisfy that burden of production is controlled by the applicable summary judgment “standard.”

The new standard in Tenn. Code Ann. §20-16-101 allows you to meet your burden of production in one of two ways. First, you may affirmatively negate an essential element of the other side’s claim. To do this, you must point to undisputed evidence that disproves an essential factual claim made by the nonmovant. Or, alternatively, you may demonstrate that the other side does not have sufficient evidence to establish an essential element of its claim. This alternative allows you, as the moving party, to discharge your burden of production by showing — that is, pointing out to the trial court — that there is an absence of evidence to support the other side’s claim or defense.[15]

If you don’t meet your initial burden of production, your summary judgment motion will be denied. If, on the other hand, you properly shoulder your own burden of production, then the burden of production shifts to your opponent.

Once the burden of production has been shifted to the other side, then to survive your Rule 56 motion, the nonmoving party must go beyond the pleadings and, by affidavit, depositions, or other discovery in the record designate specific facts showing that there is a genuine issue for trial. If you are defending against a motion for summary judgment and the burden has been shifted to you, you will have to show that there is sufficient evidence from which the trier of fact could find in your favor. If you cannot come forward with — “put up” — sufficient evidence to support your claim or defense, summary judgment should be granted for the movant.

In short, the new statutory summary judgment standard requires the entry of summary judgment — after adequate time for discovery — against a party who cannot make a showing at the summary judgment stage sufficient to establish the existence of an element essential to that party’s case and on which that party will bear the burden of proof at trial. There should be no judicial kicking the can down the road to trial. The logic is this: if there is insufficient evidence on any one essential element of a party’s claim, all the other facts become immaterial. No matter how many good facts there are on other elements, they just don’t matter if proof on even just one element is lacking. Ipso facto, there can be “no genuine issue as to any material fact.” If there is no genuine issue as to any material fact — and of course assuming that the moving party is entitled to a judgment as a matter of law — Rule 56 requires the entry of summary judgment.[16]

That is how it should work for summary judgment motions in cases filed after July 1, 2011.

But it may not yet be safe to archive all the post-Hannan CLE materials you have been collecting or to banish from memory all the post-Hannan case law you have been following. For one thing, the new legislative standard applies to “actions” (i.e., not simply to motions for summary judgment) filed on or after July 1, 2011. Thus, courts are presumably still required to follow Hannan in cases that were filed before July 1, even if the motion for summary judgment is not made until after July 1. Clearly the Hannan standard can still be operative in many cases for several years to come.

If you think that your motion for summary judgment stands a much better chance under the new legislative standard, you may want to think about non-suiting and re-filing after July 1, 2011. But if you do, you should also be prepared for an argument that what should govern is the standard that was in place when the case was initially filed, not when it was re-filed.

Moreover, the new statute will undoubtedly undergo “development” through judicial construction. It is impossible to predict what course that construction might take. But it is safe to say that the development of the law is likely to be influenced by the ongoing, interesting and robust scholarly[17] and political debates as to which summary judgment standard is the best from a policy perspective. For example, to the extent that the new statute has the effect of reinstating summary judgment as a meaningful and useful tool to weed out non-meritorious claims at a relatively early stage of the litigation, it may be viewed as part of the tort reform package that has also just become law in Tennessee.[18]

Finally, the constitutionality of the statute may be challenged. If the statute were to be struck down, it is reasonable to surmise that we will be dealing with the Hannan standard once again in a few years.

Exploring the contours of a constitutional challenge is well beyond the scope of this article, except to say that the challenge would presumably be premised on the separation of powers notion that only the courts, and not the legislature, can make rules that govern court proceedings. A full discussion of the likelihood of success of such a challenge is, likewise, a topic for another day, but there is precedent and there are policies to suggest it would not be an easy case to make. The Tennessee Supreme Court has long held that the Rules of Civil Procedure are “laws” of Tennessee and it has held that those laws are “in full force and effect, until such time as they are superseded by legislative enactment or inconsistent rules promulgated by this Court and adopted by the General Assembly. Any other construction would thwart, frustrate and emasculate these modern and progressive rules … . The Legislature rejected the argument that rules governing trial and appellate procedure could not be adopted pursuant to the statutorily prescribed procedure and so do we.”[19]

A Coda: The New Statute for Summary Judgment in Employment Discrimination and Retaliatory Discharge Cases

There is companion legislation that is specifically aimed at summary judgment in employment discrimination and retaliatory discharge cases in Tennessee.[20] It took effect on June 10 of this year.  Its purpose (as expressed in an amendment that was deleted before final passage) is to “expressly reject and legislatively overrule the decision” of the Tennessee Supreme Court in Gossett v. Tractor Supply[21] and to establish the McDonnell Douglas framework as the required framework for considering evidence in these cases at all stages, including specifically the summary judgment stage.

In McDonnell Douglas Corp. v. Green[22] the U.S. Supreme Court set out the basic allocation of burdens of production and persuasion in federal Title VII cases alleging discriminatory treatment by employers. When an employee makes out a prima facie case of discrimination (or retaliation), there arises a rebuttable presumption that the employer unlawfully discriminated against her. The burden of production then shifts to the employer to articulate a legitimate and nondiscriminatory reason for its actions. If the employer does so, the presumption of discrimination is removed. It is then for the finder of fact to decide whether the adverse employment action was discriminatory.

In Gossett an employee brought an action for common law retaliatory discharge against his employer. Tennessee courts have in the past applied the McDonnell Douglas framework to such claims. Relying on the McDonnell Douglas framework by presenting evidence of a legitimate reason for the discharge, the employer moved for summary judgment. However, the Tennessee Supreme Court held that the McDonnell Douglas framework was inapplicable at the summary judgment stage because it was incompatible with the Tennessee summary judgment jurisprudence of Hannan and its progeny. Evidence that satisfies an employer’s burden of production under McDonnell Douglas — evidence of a legitimate reason for discharge — does not, the court noted, necessarily demonstrate that there is no genuine issue of material fact.

Gosset, like Hannan, was a split decision; two justices dissented. The dissenting justices voiced concern about, among other things, the uncertainties in employment litigation that would flow from a schism between Tennessee’s summary judgment jurisprudence on the one hand and summary judgment practice in federal court (and in the vast, vast majority of other state courts) on the other hand.

With the new legislation, the General Assembly has attempted to avoid such a schism by establishing the McDonnell Douglas framework as controlling at the summary judgment stage — and throughout the litigation process. Now in cases involving (1) claims of discrimination or retaliation under Tennessee anti-discriminations statues or common law, (2) wrongful discharge in violation of public policy, or (3) retaliatory discharge under the workers’ compensation law, the Tennessee courts will have to apply, as they did before Gossett, the federal burden-shifting standard of McDonnell Douglas, not the Hannan standard, at all stages of the case, including summary judgment.

This new statute “shall apply to all causes of action accruing on or after” its effective date, June 10, 2011. On June 24 the Tennessee Supreme Court handed down its decision in Sykes v. Chattanooga Housing Authority, a retaliatory discharge case in which the trial court had granted summary judgment for the employer. While acknowledging the passage of both the new statute “overruling” Hannan and the new statute “overruling” Gossett, the Supreme Court reaffirmed its holdings in Hannan and Gossett and applied the Hannan summary judgment standard rather than the McDonnell Douglas framework to reverse in part and affirm in part the  summary judgments that the trial court had granted.[23]

Even though Sykes was decided in the wake of the new summary judgment legislation, Mr. Sykes’ cause of action had accrued years before June 10, 2011, so that the new legislation clearly did not apply. As with the new summary judgment standard in Tenn. Code Ann. §20-16-101, judicial application and development of these amendments in the employment law context lie ahead and undoubtedly will make for an engrossing — and impactful — story to follow.

Notes

  1. SB 1114 (HB 158), which will be codified at Tenn. Code Ann. §20-16-101, and which was signed into law by the governor on June 16, 2011.
  2. Id.
  3. 270 S.W. 3d 1, 9 (Tenn. 2008)(emphasis added).
  4. Steen v. Myers, 486 F.3d 1017, 1022 (7th Cir. 2007); accord Street v. J.C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir. 1989).
  5. Byrd v. Hall, 847 S.W.2d 208 (Tenn. 1993).
  6. Byrd v. Hall, 847 S.W.2d 208, 215 n.5 (Tenn. 1993).
  7. Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Anderson v. Liberty Lobby, 477 U.S. 242 (1986); Matsushita Electric Industrial Corp. v. Zenith Radio, 475 U.S. 574 (1986).
  8. Celotex, supra, 477 U.S. at 325.
  9. Celotex, supra, 477 U.S. at 331(Brennan, J., dissenting).
  10. For a more detailed discussion of the Hannan analysis and facts, See A. Blumstein, “Bye, Bye Byrd?,” TBJ vol. 46, no. 2, pp. 23-28 (February 2009).
  11. 270 S.W. 3d at 12.
  12. SB 1114; HB 158, which will be codified at Tenn. Code Ann. §20-16-101, was signed by the governor on June 16, 2011.
  13. Although this language comes from Justice Brennan’s dissent in Celotex, it reflects the majority opinion as to the appropriate summary judgment standard. The Celotex majority and the dissenters all agreed about how the burden of production could be satisfied on motions for summary judgment. Their disagreement had to do only with the application of that agreed-upon summary judgment standard to the particular facts before the court.
  14. At one point in its history, Senate Bill 114 contained a preamble explaining that, because the Hannan standard differs from the federal standard and has resulted in fewer cases being resolved by summary judgment in state court and increased costs for litigants, “the purpose of this legislation is to overrule the summary judgment standard for parties who do not bear the burden of proof at trial set forth in Hannan.” The preamble did not make it into the final version of the law, but it is still clear that the purpose of the new legislation is to undo the effects of Hannan.
  15. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
  16. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
  17. See, e.g., Judy M. Cornett, “Trick or Treat? Summary Judgment in Tennessee After Hannan v. Alltel Publishing Co.,” 77 Tenn. L. Rev. 305 (2010).
  18. Public Chapter No. 510, (HB 2008), which was signed into law on June 16, 2011, which takes effect on Oct. 1, 2011, and which amends Tenn. Code Ann. Titles 20, 27, 29 and 47.
  19. Tennessee Dep’t of Human Services v. Vaughn, 595 S.W.2d 62, 63 (Tenn. 1980) (emphases added).
  20. Public Chapter No. 461 (HB 1641), which was signed into law on June 10, 2011, and which amends Tenn. Code Ann. §4-21-311, §50-1-304, and §50-1-701.
  21. 320 S.W. 3d 777 (Tenn. 2010).
  22. 411 U.S. 792 (1973).
  23. Sykes v. Chattanooga Housing Authority, 2011 Tenn. LEXIS 604, *15-16, and n. 2, and n. 4 (June 24, 2011).

ANDREE SOPHIA BLUMSTEIN ANDRÉE SOPHIA BLUMSTEIN is a partner at Sherrard & Roe PLC, in Nashville. Her practice, which concentrates on appellate litigation, includes a special focus on state and federal antitrust counseling and litigation. She received her law degree from Vanderbilt University. She is chair of the Tennessee Bar Journal Editorial Board. She is the author of “Bye, Bye Byrd?” (TBJ, February 2009), which explores the ramifications of Hannan v. Alltel.