News

CCA Announces Nashville Layoffs

Nashville-based Corrections Corporation of America (CCA) plans to cut between 50 and 55 jobs at its headquarters as part of a restructuring and cost-reduction plan, the company announced today. The decision follows a rough stretch for CCA, whose stock price plummeted last month after the Justice Department announced it would stop using private prisons like the ones the company owns and operates. The Nashville Business Journal has more on the company’s restructuring plans.

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Suit Challenges New Overtime Rules

More than 50 business groups and 21 states have filed suit in the Eastern District of Texas to stop new overtime rules imposed by the Department of Labor. The suit alleges that the department unconstitutionally overstepped its authority when it established a federal minimum salary level for white collar workers. The rule, set to go into effect Dec. 1, doubles the salary threshold under which workers qualify for overtime pay, from $455 per week to $913 per week. The Labor Department estimates the rule will impact an additional 4.2 million workers. KIII-TV 3 of South Texas has the story.

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State AG Joins Multi-State Opioid Treatment Suit

Tennessee Attorney General Herbert H. Slatery III joined with attorneys general from 35 other states last week to file suit against the makers of Suboxone, a prescription drug used to treat opioid addiction. The suit alleges that the companies engaged in an anti-competitive scheme to block generic competitors and cause consumers to pay artificially high prices. “Opioid abuse is a serious problem and we need to make sure those addicted to opioids have treatment available,” Slatery said. “Putting a stop to anticompetitive and deceptive practices is one way to accomplish that.” Read more in this release from the attorney general's office.

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Blue Cross Pulls out of Insurance Exchange in 3 Cities

BlueCross BlueShield of Tennessee will not sell insurance plans on the federal exchange in the state’s three largest metro areas next year, the Tennessean reported today. The healthcare giant is grappling with hefty losses and ongoing uncertainty in the marketplace, despite winning state approval to increase its rates. The decision means that consumers in Nashville, Memphis and Knoxville will have to look to another insurer for coverage in 2017. The paper estimates the decision will impact nearly 115,000 people.

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Gas Shortage Leads to Hundreds of Complaints

An ongoing gas shortage has prompted hundreds of price gouging complaints statewide, the Tennessean reports. The Tennessee Department of Commerce and Insurance reports nearly 600 consumer complaints came in over the weekend related to gas issues and prices. Most of the complaints came from Nashville drivers and involved gas prices that were under $3 a gallon, but some consumers said retailers were charging $9.99 a gallon. In response, Gov. Bill Haslam issued an executive order that would allow longer hours for fuel truck drivers so they can bring oil from refineries further away. 

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Regions Bank to Pay $52M in Mortgage Loan Case

Alabama-based Regions Bank has agreed to pay more than $52 million to resolve allegations that it improperly handled mortgage loans, federal officials announced this week. The bank was accused of approving mortgage loans, insured by the Federal Housing Administration, that failed to meet requirements designed to protect homeowners. As part of the settlement, Regions acknowledged it failed to follow several federal guidelines. Authorities said that as a result, the government insured hundreds of loans approved by Regions that were not eligible for mortgage insurance. WRCB-TV has the AP story.

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Airbnb Drawing Attention of State Lawmakers

In town for the special session this week, senators also are discussing another emerging controversy: how to regulate Airbnbs and other short-term rentals. The possibility of a new state law has localities watching closely, since many already have enacted regulations about tax collection, official permits and penalties for disruptive tenants. Sen. Jack Johnson, R-Franklin, says he is concerned there is a “hodgepodge” of laws across the state, Nashville Public Radio reports. The Senate will hold a hearing Thursday at 9 a.m. on the issue. According to NPR, only Arizona has taken statewide action. The legislation there stripped regulatory powers away from localities and imposed a single tax collection system.

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VW Challenges NLRB Union Ruling

Volkswagen last week challenged a National Labor Relations Board (NLRB) ruling allowing a small group of skilled-trades workers who maintain and repair machinery to be represented by the United Auto Workers union. The board had ruled that Volkswagen was engaging in unfair labor practices by refusing to bargain with the union. The car maker has argued that labor decisions should be made by the plant’s entire workforce of 1,400 hourly employees. That group narrowly rejected UAW representation in 2014. Knoxnews has the AP story.

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Chief Justice Highlights Court’s Accomplishments

Tennessee Supreme Court Chief Justice Sharon Lee recently spoke to chief justices from across the country at a national conference in Jackson Hole, Wyoming. Lee focused her remarks on accomplishments achieved during her tenure as chief justice. She steps down from that role at the end of the month. Lee praised the state legislature for funding the court’s new electronic filing system and raises for staff. She also talked about efforts to ensure consistency of process and procedures in the state’s juvenile courts and highlighted the Access to Justice Initiative, civics education through the SCALES program, a new business court, a new human trafficking court and an indigent representation task force. Read her full remarks and see a photo gallery of her time as chief justice.

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Jury Imposes $30M Judgment on Memphis Nursing Home

A Shelby County jury has set a $30 million judgment against Allenbrooke Nursing and Rehabilitation Center after finding the Memphis nursing home liable for negligence, violations of the Tennessee Adult Protection Act, fraudulent records of care and medical malpractice, the Commercial Appeal reports. The verdict includes $1.9 million for negligence, $129,000 for violations of the protection act, and $28 million in punitive damages against Allenbrooke, four related companies and two owners in New York. 

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New Entrepreneurial Visa Proposed

The U.S. Citizenship and Immigration Services proposed a new rule Friday that would allow international entrepreneurs additional years of U.S. residency to start and build their businesses, the Upstart Business Journal reports. The International Entrepreneur Rule would allow startup founders to stay in the United States for up to two years, followed by a period of up to three years if they meet “additional benchmarks.” Factors to be considered include the entrepreneur’s ownership stake and leadership role, the growth potential of the startup, success in securing competitive research grants, and investment by qualified American investors.

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Hispanic Bar Creates Cuba Task Force

The Hispanic National Bar Association this week announced a new Cuba Task Force designed to provide legal analysis and policy recommendations connected to the revitalized relationship between Cuba and the United States. “We must ensure that the policy changes that are advanced not only improve business and economic opportunities between our nations, but also promote the civil and human rights of all Cubans on the island,” bar president Robert Maldonado said in announcing the entity. Among the task force members is Annie Hernandez, president of the Cuban American Bar Association. Read more from Associations Now.

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Insurance Commissioner: Health Exchange ‘Very Near Collapse’

Tennessee Insurance Commissioner Julie Mix McPeak proclaimed the state’s health exchange “very near collapse” yesterday after signing off on significant premium hikes in a bid to keep the platform viable. The rate approvals were necessary to ensure healthcare options in every part of Tennessee, McPeak said. Tennessee is seeing a steady decrease in the number of insurance companies selling plans on the federally run exchange, the Tennessean reports. In 2017, 57 of the state’s 95 counties will have only one insurance company serving their area.

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VW Likely to Face Criminal Penalties

Volkswagen is expected to face criminal and civil penalties for circumventing Clean Air Act standards, but prosecutors have not yet decided the specific criminal charges they might bring against the automaker, according to the Wall Street Journal. The paper reported today that the Justice Department is negotiating a settlement with the car maker but those familiar with the matter said there will be “significant” financial penalties. The Chattanooga Times Free Press has a summary of the article.

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State Wants to Collect Sales Tax from All Internet Sellers

Gov. Bill Haslam’s administration has proposed a rule that would require out-of-state businesses to collect and pay state sales tax if their sales exceed $500,000 in Tennessee, the Tennessean reports. Under current federal court rulings, only those sellers who have a physical presence in the state must collect state sales tax. The Tennessee Department of Revenue estimates that the state has missed out on $300 to $450 million in annual sales tax from out-of-state sellers. A number of states have proposed similar measures in hopes Congress or the U.S. Supreme Court will provide a nationwide solution.

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VW Settlement Gets Preliminary Court Approval

A federal judge gave preliminary approval today to a sweeping settlement between Volkswagen, U.S. regulators and owners of VW diesels who will receive thousands of dollars in compensation, the Tennessean reports. Judge Charles Breyer with the U.S. District Court for the Northern District of California, set the settlement in motion, allowing the automaker to begin collecting information from 475,000 consumers who bought cars that were rigged to cheat emissions standards. Final approval of the settlement could come at a hearing set for Oct. 18. .

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Judge Rules Bitcoin Not Money, Tosses Laundering Case

A Miami judge has found that bitcoin is not the same as money and therefore tossed criminal charges against a man accused of selling $1,500 worth of the virtual currency to undercover agents. The case is believed to be the first money-laundering prosecution involving bitcoin and was “closely watched in tech, financial and legal circles,” according to the Miami Herald. Nashville lawyer Kathryn Edge wrote about bitcoin in the August 2014 issue of the Tennessee Bar Journal. She says the decision may prompt lawmakers to figure out how to regulate bitcoin and similar means of exchange. The ABA Journal has a synopsis.

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State Joins Suit to Block Anthem Acquisition of Cigna

Tennessee Attorney General Herbert H. Slatery III announced today that the state has joined a federal lawsuit to block the merger of health insurance companies Anthem and Cigna. Slatery said that the transaction, valued at $54 billion, would increase concentration and harm competition in Tennessee. The suit is being brought by the U.S. Department of Justice and 11 other states.

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Court Adopts New Standard for Shareholder Lawsuits

In a case involving claims between siblings who were shareholders in a closely held family corporation, the Tennessee Supreme Court today adopted a new standard for when a shareholder can file a direct lawsuit on claims that concern the corporation. The decision overturned a ruling by the Court of Appeals and set aside Tennessee’s prior standard. In its place, the court adopted a standard used in Delaware that “is clear and easily understood” and “should facilitate consistent and predictable outcomes in disputes involving shareholder claims.” Chattannoogan.com has the story.

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Check Out Franchise Online CLE Offerings

Did you miss the 2016 Franchise forum? You can still stream high-quality online videos on the TBA website from this year's program. CLE sessions cover the default and termination process, practical tips for representing franchisees and a general regulation overview. Check them out at the links above.

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BancorpSouth Fined for ‘Redlining’ in Memphis

The U.S. Department of Justice and the Consumer Financial Protection Bureau have fined Mississippi-based BancorpSouth $10.6 million for deliberately discriminating against minorities in its lending practices. The action alleges the bank avoided construction of branches in minority neighborhoods in Memphis and charged higher interest rates on loans made to minorities than to non-minorities. The Daily Times has more from the AP.

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Lee: Court Continually Seeking to Improve Services

Tennessee Supreme Court Chief Justice Sharon Lee spoke to the Sevierville Rotary this week to update the community on ways the court is modernizing and striving to make itself more accessible. According to the Mountain Press, she highlighted efforts such as allowing e-filing of court documents, improving access for indigent clients, exploring increased pay for indigent representation, consolidating complex business matters in one court, and streamlining the juvenile court system. Lee told local leaders that the court is committed to continually improving its services. “We need to be looking at how we do things to see if we can do them better,” she said.

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Court Rejects Visa, MasterCard Antitrust Deal

The U.S. Court of Appeals for the Second Circuit today overturned Visa and Mastercard’s $7.25 billion antitrust settlement with retailers, which sought to resolve charges that the companies improperly fixed credit-card swipe fees. A three-judge panel ruled that the settlement was tainted because lawyers representing the retailers did not do enough to protect their clients’ interests, and provisions barring merchants from opting out of the settlement and suing separately were unfair. The ruling could potentially renew years of litigation with millions of U.S. merchants. Bloomberg News has the story.

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Tennessee Eligible for $55M from VW Settlement

Volkswagen will pay $570 million to compensate American consumers and buy back or fix falsely-marketed diesel vehicles, the Tennessee Attorney General announced today. Under the deal, car owners in Tennessee will be eligible to receive $12.6 million. Volkswagen also will spend $2.7 billion on programs to reduce nitrogen oxide, $2 billion to develop zero-emission cars and $20 million to compensate states for their legal costs and pay for future investigations into emissions violations. The settlement ends a multistate action brought by 43 state attorneys general on grounds that Volkswagen sold more than 570,000 diesel vehicles in the United States with devices intended to circumvent emissions standards. Learn more about submitting a claim.

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