News

AG: Ban on Beer Signs Likely Unconstitutional

A little-known Tennessee law banning bars and stores from including beer brands or sales on outside signs could be unconstitutional, state Attorney General Herbert Slatery said in a recent legal opinion. Slatery found that the ban likely would not survive a legal challenge on free speech grounds because it bans “truthful and non-misleading commercial messages about lawful products.” Republican Rep. Ryan Haynes of Knoxville had requested the opinion on behalf of a constituent, the Associated Press reports. News Channel 5 has the story.

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Bass Berry Launches International Trade Group

Bass, Berry & Sims is establishing an International Trade Practice Group in its Washington, D.C., office. Thad McBride, previously with the San Diego-based Sheppard Mullin, will chair the new group, which will focus on trade, economic sanctions and anti-bribery issues. It also will handle matters before the Committee on Foreign Investment in the United States. The Memphis Business Journal has the story.

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CCA Denounces Shareholder Resolution on Re-entry Programs

Nashville-based Corrections Corporation of America is falling short in its commitment to help reduce recidivism rates, former prisoner and Human Rights Defense Center Associate Director Alex Friedmann says. He proposes the company dedicate an additional 5 percent of its net income to related programs and services, the Tennessean reports. As a shareholder of the for-profit prison owner and operating company, Friedmann has written a resolution requesting a spending increase, a proposal that CCA opposes. On Jan. 9, CCA filed a formal objection with the Securities and Exchange Commission seeking to keep the resolution out of the proxy materials it sends to shareholders. Read more from the Tennessean

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Apple, Google, Others Pay $415M in Wage Case

Apple, Google and two other Silicon Valley companies have agreed to pay $415 million in a second attempt to resolve a class-action lawsuit alleging they formed an illegal cartel to prevent their workers from leaving for better-paying jobs. The settlement filed yesterday in a San Jose federal court revises a $324.5 million agreement that U.S. District Judge Lucy Koh rejected as inadequate five months ago. Koh indicated that she believed the roughly 64,000 workers in the case should be paid at least $380 million, including attorney fees. The lawsuit, filed in 2011, sought $3 billion in damages that could have been tripled under U.S. antitrust law. Attorneys for the workers decided to settle after concluding it would have been difficult to prove the alleged conspiracy to a jury. WRCB has more from the Associated Press.

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Judge Seeks Details in Fraud Claims Against Pilot

U.S. District Judge Amul Thapar asked attorneys to provide more details about what Pilot Flying J promised several trucking companies that claimed they were cheated by the retail giant. The trucking companies claim they were cheated out of fuel rebates and discounts promised by Pilot Flying J, the nation’s largest diesel retailer with annual revenues of about $30 billion. Most of the lawsuits against Pilot were resolved by a class-action settlement, in which Pilot agreed to pay out nearly $85 million to 5,500 customers. The trucking companies involved in this hearing opted out of the settlement to pursue their own suits. The Tennessean has more.

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DOJ: Verso Can Acquire NewPage

The U.S. Justice Department and Memphis-based Verso Paper Corp. have reached a settlement that will allow Verso to move ahead with its $1.4 billion acquisition of NewPage Holdings Inc. The settlement terms became formal Wednesday. They require NewPage to sell its paper mills in Biron, Wis., and Rumford, Maine, to a subsidiary of Catalyst Paper Corp. The Memphis Daily News has more.

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Circuits Split on Definition of ‘Applicant’

In her Journal column this month, Kathryn Reed Edge makes a prediction: "As the financial crisis wanes and fewer banks are plagued by their borrowers’ credit problems, we in the business are seeing the federal banking agencies gear up for an energetic assault on consumer compliance violations." And adding to the confusion that many bank compliance officers have in interpreting the Equal Credit Opportunity Act, she writes that two judicial circuits, the 6th and the 8th, "have split on a seemingly simple issue of the definition of 'applicant' under the ECOA." She explains the important differences and advises readers of her column "Bank On It" to watch the U.S. Supreme Court for an answer.

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Appeals Court Deals Blow to U.S. in Insider Cases

The Second U.S. Circuit Court of Appeals yesterday dealt a blow to the government's success in insider trading prosecutions by reversing two convictions with a decision that also jeopardizes a third — and attempts to further define how far prosecutors can push the law in their quest to clean up Wall Street. The three-judge panel criticized the government for a blitz of Manhattan insider trading prosecutions that resulted in over 80 convictions since 2008, citing the "novelty of its recent insider trading prosecutions, which are increasingly targeted at remote tippees many levels removed from corporate insiders."  WRCB reports from the Associated Press.

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Pilot CEO Seeks Dismissal of Suit

Pilot Flying J CEO Jimmy Haslam has filed a motion in federal court seeking to dismiss a lawsuit filed by two trucking companies, WBIR.com reports. The motion, filed last week, claims the companies fail to state any viable claim against Haslam. National Retail Transportation Inc. and Keystone Freight Corp. accuse Haslam of orchestrating a scheme to cheat customers out of promised rebates and discounts. In July, Pilot agreed to pay $92 million in fines and accept responsibility for the criminal conduct of its employees while the government agreed not to prosecute the company.

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Get Ready for Changes to Tennessee Nonprofit Law

Effective Jan. 1, Tennessee lawyers will see big changes to the Tennessee Nonprofit Corporations Act. Three online video CLE courses offer insights into these changes and are available for viewing now. Choose from courses on disclosure and conflict of interest rules; charter and bylaw provisions; or entity conversions, membership exchanges, charitable assets and public benefit transactions.

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Nashville Firm Closes Music Industry Deal

Round Hill Music has acquired the song catalog of Nashville-based Big Loud Shirt Industries, which consists of more than 30 number one Billboard airplay songs, Billboard Magazine reports. The transaction also included the purchase of Big Loud Bucks, a worldwide music administration company. Going forward, the companies will operate as a joint venture. The deal, handled by the Entertainment Practice Group in the Nashville office of Dickinson Wright, complements earlier moves Round Hill has made in the Nashville market, including acquisition of song catalogs from Roots 49 Music and Big Tractor Music. Read more in a release from the firm.

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EPB Loses Bid to Dismiss Whistleblower Suit

The Electric Power Board (EPB) today lost its initial bid to dismiss a $10 million whistleblower lawsuit brought by former city contractor Don Lepard, who claims the utility overbilled taxpayers for years and then tried to cover it up by bullying his company, Global Green Lighting. At a hearing this morning to rule on EPB's motion to dismiss Lepard's suit, Hamilton County Circuit Court Judge Jeff Hollingsworth said that it comes down to whether EPB is one and the same with the City of Chattanooga. If EPB and Chattanooga are found to be the same, "this case is over," said Hollingsworth, citing state laws that prevent the city from suing itself. The Chattanooga Times Free Press has the story.

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Business Attorney Launches New Firm

Veteran Nashville business attorney Bob Mendes has launched Waypoint Law, a practice that will handle transactions, litigation and insolvency cases. Mendes left Frost Brown Todd 30 months after merging his former MGLAW firm into the regional player. Mendes and Mark Donnell, who also has left Frost Brown Todd, will look for opportunities to help clients through the broader "change management challenges" that often crop up in bankruptcy or restructuring situations. The Nashville Post has more.

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Buffet Expert, Clayton Center Founder to Speak at UT Law

Best-selling author Lawrence Cunningham will visit the University of Tennessee College of Law on Monday to discuss his new book "Berkshire Beyond Buffet: The Enduring Value of Values." Joining Cunningham will be UT Law alumnus Jim Clayton, the founder and former CEO of Clayton Homes Inc., which Berkshire Hathaway acquired in 2003. Clayton established the Clayton Center for Entrepreneurial Law at UT Law. Admission is free and open to the public, but attendees are asked to RSVP to Sophia Brown before Nov. 3. Learn more about the event.

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The New Business of Law

The new wave of legal and law-related services has added to the complexity of practicing law. Explore the many angles of fee-sharing with nonlawyers, work product protection and new challenges to confidentiality during "The New Business of Law: Attorney Outsourcing, Legal Service Companies & Commercial Litigation Funding" on Nov. 12. Visit TBA CLE for more information.

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NBJ Names 'Most Admired CEO'

Two lawyers were honored by the Nashville Business Journal as "Most Admired CEO" last week. Dickinson Wright managing attorney Thomas M. Donnell Jr., is one of two winners in the “Local Office or Operation” category of the awards, which recognizes top local executives of national companies.  Robert Patterson of Bradley Arant Boult Cummings LLP was a winner in the category of "Private Companies (101-500 Employees)."  The Journal solicited nominations from the public, and nominees then voted on one another by category.

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Court Will Not Hear Phone Records Case

The U.S. Supreme Court will not hear an appeal from a civil liberties group that had wanted access to an internal Justice Department memo that allegedly gave the FBI permission to obtain records from phone companies in terrorism investigations. The justices on Tuesday let stand an appeals court ruling that said the Justice Department could refuse to release the 2010 memo under an exception to the Freedom of Information Act, according to the Associated Press. The Electronic Frontier Foundation had argued that the public has a right to see the memo, while the Court of Appeals for the District of Columbia Circuit said the document was part of the government’s internal deliberations and therefore exempt from disclosure. WRCB-TV has more.

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Group Granted Class Action Status in HCA Lawsuit

Plaintiffs who filed a securities fraud case against HCA Holdings Inc., the Nashville-based hospital giant, on Monday were granted class-action status in a suit stemming from the company’s $4.3 billion initial public offering in 2011, the Tennessean reports. The claim, brought by New England Teamsters & Trucking Industry Pension Fund as lead plaintiff, alleges HCA failed to disclose the company was experiencing a decline in Medicare and Medicaid revenues and had improperly accounted for previous reorganizations in a “false and misleading” initial public offering registration statement. The list of defendants includes HCA’s top executives as well as several high-profile investment banks and a private equity group.

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AG: Liquor License Residency Requirement is Unconstitutional

Outgoing Attorney General Robert Cooper has found that a two-year Tennessee residency requirement for getting a liquor license is unconstitutional despite a provision included in the wine-in-grocery-stores bill that attempted to justify it. “The residency requirements facially discriminate against nonresidents and the intent expressed in [the 2014 provision] does not establish a local purpose sufficient to justify the discriminatory licensing provisions,” the opinion finds. However, Cooper suggested that residency requirements can be valid “if they serve a legitimate local purpose that cannot be achieved by less discriminatory means.” Knoxnews has more.

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What Business Can Expect from a GOP Attorney General

New Tennessee Attorney General Herbert Slatery is expected to bring “consistency and predictability” —  two keys the business community looks for in the judiciary, Nashville attorney Gif Thornton tells the Nashville Business Journal. Marc Hill, the chief policy officer at the Nashville Area Chamber of Commerce, stressed the importance of “knowing where the new attorney general comes from,” pointing to Slatery’s role with Haslam’s administration. “Tennessee has had a reputation as a business friendly state across administrations, both Democrat and Republican,” Hill said. “Beyond the partisan label, what business folks are most focused on is that the new attorney general comes from an administration that believes in creating a prosperous business environment across the state.” Slatery will be the first Republican to fill the position in nearly 150 years.

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State Liquor Laws Are ‘Weird, Confusing, Frustrating’

An article in this week’s issue of Metro Pulse looks at the often “confusing and contradictory” state laws governing the sale of alcohol and related products, and catalogues the most confounding provisions. Nashville lawyer Rob Pinson with Bone McAllester Norton says he “would love to rewrite all of Title 57.” He also says that even if no laws get tweaked next year, the Tennessee Alcoholic Beverage Commission needs a bigger budget. “I think they’re severely underfunded. If they had more staff, there wouldn’t just be more enforcement, they could offer more education so maybe there would be less confusion over some of these laws.”

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FCC Attorney to Lead SBA Office of Advocacy

President Barack Obama has tapped Gilberto de Jesus, a senior attorney at the Federal Communications Commission, to be chief counsel at the Small Business Administration’s Office of Advocacy, the Nashville Business Journal reports. If confirmed by the Senate, de Jesus would succeed Winslow Sargeant. Unlike Sargeant, de Jesus is an attorney. He also has Capitol Hill experience, having served as a senior legislative fellow in the office of Maryland Sen. Ben Cardin. His business experience includes serving as a consultant for the Maryland Hispanic Chamber of Commerce, and as a board member of the Baltimore Development Corp. and the University of Maryland Medical Systems.

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Business Groups Support Amendment 2

Top business organizations from across the state are urging their members and supporters to Vote YES on 2 this November. Amendment 2 would continue the current system of gubernatorial appointment of appellate court judges, while adding legislative confirmation. “Our ability to attract and keep businesses in our state relies in part on having a stable, fair and impartial judiciary,” said Clay Thompson, Chairman of the Tennessee Chamber of Commerce & Industry, and President of Caterpillar Financial Insurance Services in Nashville. “Amendment 2 gives voters the chance to put an end to the legal challenges the current process has faced which threatens to destabilize our judiciary and weaken our state.”

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Why Some Business Owners Want New Justices

Among the legal community there is concern that the campaign to remove three of Tennessee's Supreme Court justices poses a threat to the independence of the judiciary and the predictability businesses expect from the high court, but some in the business community argue the opposite, suggesting that appointees from a Republican governor would create greater certainty, the Nashville Business Journal reports. “For business owners, predictability of legislation that’s been passed is critical. Tort reform is a prime example,” said Bill Lee, CEO of Franklin-based Lee Company, a provider of heating, air-conditioning and other facility services. “It’s business-friendly and Tennessee-citizen friendly legislation. The only danger to that continuity is the [state] Supreme Court overturning it, which may well happen with the existing judges in place.”

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New Vanderbilt Program Offers Joint JD and Master’s in Finance

Students can now earn a law degree concurrently with master's in finance degree through a new program offered this fall by Vanderbilt Law School and the Owen Graduate School of Management at Vanderbilt University. “For lawyers heading to Wall Street, understanding markets is critical to building a successful career in financial service,” said M. Eric Johnson, the Ralph Owen Dean of Vanderbilt University’s Owen Graduate School of Management. Prospective students should apply for admission to the J.D. and M.S.F. programs simultaneously. Spaces in this three-year joint degree program are limited.

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