News

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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Haslam Pushing Expansion of Internet Sales Tax

Gov. Bill Haslam wants Tennessee to join a growing group of states seeking to revisit rulings preventing collection of sales taxes from out-of-state online retailers, the Times-Free Press reports. State Department of Revenue officials will hold a rulemaking hearing in August on a proposed rule that would require out-of-state online companies with more than $500,000 in annual sales in Tennessee to collect and remit sales taxes starting July 1, 2017. At least a dozen states also are pushing a patchwork of laws or rules they hope will pressure Congress to act or, more likely, force the issue back before the U.S. Supreme Court.

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Starbucks Suit More Than Froth, Judge Rules

A class-action suit alleging Starbucks underfills its latte drinks will proceed after a California judge last week refused to dismiss the lawsuit, the Columbia Daily Herald reports. The judge found the plaintiffs had sufficiently alleged three legal theories – 1) Frothy milk atop the drink should not be factored in to total volume; 2) Fill-to lines on cups are below advertised amounts; and 3) recipe cards instruct baristas not to completely fill cups.

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E-books Settlement Payments to Begin This Week

Tennessee Attorney General Herbert H. Slatery III announced yesterday that Tennessee residents who purchased electronic books (e-books) could begin receiving account credits or checks this week. Payments are the result of the successful prosecution of a price-fixing case against Apple in 2013. Apple is obligated to pay $400 million in nationwide consumer compensation. Tennesseans will share $8.5 million. A toll-free number (866-686-9333) and website have been set up for consumers with questions. Read the AG's release.

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Prosecutors Drop FedEx Prescription Drug Case

Criminal charges alleging FedEx knowingly delivered illegal prescription drugs to dealers and addicts were dropped suddenly last week after prosecutors asked a judge to dismiss all charges. FedEx was indicted in 2014 and the trial began last Monday. In court on Friday, U.S. District Court Judge Charles Breyer said FedEx was “factually innocent” and had repeatedly attempted to identify the customer in question but the U.S. Drug Enforcement Administration was unwilling or unable to provide the information. The Times Free Press has more.

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Federal Judge Extends Volkswagen's Settlement Deadline

A federal judge in San Francisco is extending the deadline for attorneys for Volkswagen to reach a final settlement proposal, citing the “highly technical nature” of the proposed settlements. Bloomberg News reports that the new deadline, June 28, will deny Volkswagen the opportunity to present a conclusion to investors at its annual shareholders meeting on June 22. Without the settlement, the German carmaker’s efforts to navigate out of the crisis remain incomplete nine months after admitting to rigging the exhaust systems in some 11 million vehicles worldwide.

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Avenue, Pinnacle Outline Class-Action Settlement

Avenue Financial Holdings and Pinnacle Financial Partners have signed a memorandum of understanding with plaintiffs in a class-action suit that claims Avenue’s board of directors put their personal interests ahead of Avenue shareholders in Pinnacle’s proposed acquisition of the bank. The Nashville Post reports the MOU requires the two companies to disclose more information about the strategies and talks leading up to their $200 million deal announcement. 

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Learn About New Overtime Rule in 1-Hour Webcast

Nashville attorneys Stanley Graham and Andrew Naylor, both of Waller Lansden Dortch & Davis LLP, will explain the new federal overtime rule in a one-hour webcast CLE on June 28 at noon CST. The changes include increasing the minimum salary required for exempt employees from $23,660 to over $47,000 per year. The course, approved for one CLE credit, will replay on July 21. 

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Nashville Business Court Reaches One-Year Mark

What’s next for Davidson County's business court? The Nashville Business Journal revisits its headline from a year ago and takes a look at the state of the Tennessee Supreme Court's business litigation pilot project created in May of last year. According to a report from Davidson County Chancery Court, 57 cases have requested transfer to business court as of the end of March. 

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Doctor, Drug Testing Lab Settle False Claims Act Case

The Nashville Post reports Jonathan Oppenheimer, who ran drug testing laboratories OURLab and OPKO Lab, will pay more than $9.3 million to settle False Claims Act allegations. The U.S. Attorney’s Office for the Middle District of Tennessee yesterday said that the Nashville company violated anti-kickback statutes by placing certain conditions on the financial support they were giving physician practices investing in electronic health records systems.

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Vonore Business Man Faces Federal Fraud Charges

The Knoxville News Sentinel reports Phillip Michael Huddleston, co-owner of Protech Metal Finishing in Vonore, faces federal charges for allegedly defrauding the U.S. Department of Defense of $1.2 million, forcing employees to cover up environmental violations and threatening to fire whistle-blowers. Huddleston's attorney, David Eldridge, said his client maintains his innocence.

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ABA Committee to Survey on LLCs, Partnerships and Unincorporated Entities

The American Bar Association's committee on LLCs, Partnerships and Unincorporated Entities needs your help with a short survey on the ability to merge, enter into interest exchanges, convert and domesticate for each of the five major entities (general partnerships, limited partnerships, LLCs, corporations and nonprofit corporations).

The committee is currently reviewing these acts and the general state of the law regarding these types of transactions so that attorneys know how to address certain issues being raised with respect to these transactions in various states.

Visit this site to take part in the survey.

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Out-of-state In-house Counsel Must Register by July 1

In-house counsel working in Tennessee without a Tennessee law license have until July 1 to register with the Board of Law Examiners or face discipline and a bar examination in order to continue practicing in the state. Changes to Supreme Court Rule 7 adopted by the court in December set up the amnesty provision and the July 1 deadline. 

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Legal Pitfalls in Tennessee's Alcohol Industry; 6 Hours of CLE

Earn six CLE credits while learning about the business and legal impacts of the developing alcohol industry in Tennessee. The Legal Pitfalls of Operating a Vineyard, Distillery and Brewery in the 21st Century will be held June 2, 8:30 a.m. – 4:45 p.m., at the Tennessee Bar Center in Nashville. Lunch will be provided. 

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Trump Could Take Witness Stand as President-Elect

A trial involving Donald Trump and the now-defunct Trump University is scheduled for Nov. 28, meaning the possible president-elect could be called to take the witness stand. Trump is named in a class-action lawsuit that alleges his real estate seminars were a scam. The Associated Press reports two other lawsuits have been filed against the school. 

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Roundup of Bills That Alter or Reverse Earlier Actions

The Tennessean outlines five examples of bills the legislature approved this year that will alter or reverse their earlier actions. Legislative topics include wine in supermarkets, spiritual treatment and horse racing in Tennessee. 

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Beacon Files Suit Over State's Shampoo Licensing Rules

Beacon Center Legal Foundation filed its first statewide legal challenge on behalf of a Memphis resident who wants to change the state’s occupational license requirement for shampooing. According the the foundation, hair washers must complete educational training and receive a license before they are allowed to wash hair in Tennessee. However, Beacon says, there are no schools currently operating in the state that offer the course that is a mandated component of the hair washing license. “These laws are designed by people already in the business who are attempting to unfairly shield themselves from competition at the expense of hard working Tennesseans,” said Braden Boucek, Beacon Director of Litigation. 

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Starbucks Sued Over Amount of Ice in Cold Drinks

A Chicago woman filed a federal lawsuit last week that accuses Starbucks of misleading customers about the ice-to-product ratio in its cold beverages, The Wall Street Journal Law Blog reports. The suit, which seeks class-action status, claims “a Starbucks customer who orders a Venti Cold Drink receives only 14 fluid ounces of that drink – just over half the advertised amount.” 

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Jimmy Haslam's Deposition Required, Judge Says

An Alabama circuit court judge today denied a request by Jimmy Haslam, Pilot Flying J CEO, to throw out a deposition request. Attorneys for Halsam argue he should not be deposed, calling the deposition a “thinly-disguised effort to obtain discovery from him to be used in the litigation against him, wherever it ends up.” The deposition, scheduled for May 11 in Knoxville, is part of lawsuit claiming the company was involved in a fuel rebate scheme. Read more from The Tennessean

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New Issue of Transactions Available Online

The Spring 2016 issue of Transactions, The Tennessee Journal of Business Law is available online. The journal is published by the University of Tennessee College of Law. Articles include “Braving the Waters: A Guide for Tennessee’s Aspiring Entrepreneurs (5th Edition),” and “Student Note: The Changing Chapter 13 Procedural Landscape After Espinosa and Consequences.” 

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Davidson Business Court March Report Available

The Davidson County Pilot Business Court’s March 31 report is now available online. The report, authored by Chancellor Ellen Hobbs Lyle and attorney Justin Seamon, details the project’s case load, special practices for business litigation and includes answers to frequently asked questions about the court. Additional information and forms regarding the project may be found here

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Court Holds Water Customers May Pursue Suit Without Administrative Proceedings First

The Tennessee Supreme Court today held that customers of the Hamilton County Water and Wastewater Treatment Authority may file a lawsuit to challenge their rates without first going through administrative proceedings. The authority notified customers they would be assessed an $8 per month charge for 20 years for a program to inspect and repair sewer pipes for all 26,000 of its customers. The plaintiff, American Heritage Apartments Inc., said the fee was unlawful and filed a lawsuit. The trial court dismissed the suit and held that the company must first go through administrative proceedings. The Court of Appeals reversed the dismissal, and the Supreme Court agreed that a water and wastewater treatment authority is not considered to be a “utility district” for the purpose of a rate challenge. The unanimous opinion in American Heritage Apartments, Inc. v. The Hamilton County Water and Wastewater Treatment Authority was authored by Justice Holly Kirby.

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Tennessee Banks Take Recruitment Battle to Court

“They all had a gentleman’s agreement — you don’t go after my guys, I won’t go after your guy.” That's how it used to be in Nashville's banking community, but that's not how it is anymore, the Tennessean reports in its coverage of the ongoing legal battle between the two largest Tennessee-based banks, Pinnacle Financial Partners and First Tennessee Bank. The battle is over Pinnacle’s recruitment of eight First Tennessee employees in 2015. Pinnacle denies allegations that a former First Tennessee employee recruited coworkers to work for Pinnacle before moving there himself. 

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Register Today for the 135th Annual TBA Convention

Join us on June 15-18 in Nashville for the 135th Annual Convention! Registration for the 2016 TBA Convention includes:

  • free access to all TBA CLE programming;
  • the Opening Reception;
  • the Bench Bar Programming and Luncheon;
  • Law School and general breakfasts;
  • the Lawyers Luncheon;
  • the Thursday evening Joint (TBA/TLAW/TABL) Reception;
  • the Thursday night dinner and entertainment at the George Jones Museum;
  • and the Friday night Dance Party.

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Court Upholds Tax Variance on Verizon Parent Company

The Tennessee Supreme Court today upheld a decision by the Tennessee Department of Revenue to impose a tax variance on the parent company of Verizon Wireless and ruled the Commissioner of Revenue was within his authority to impose the variance. The lawsuit, filed in 2007 by Vodafone Americas Holdings Inc. and its subsidiaries, asked Tennessee to refund nearly all state franchise and excise taxes it had paid from 2002-2006. The company claimed the apportionment formula in Tennessee’s franchise and excise tax has been incorrectly applied. The Commissioner of Revenue then decided to impose on Vodafone a tax variance that required the company to pay franchise and excise taxes by a formula that varied from the standard apportionment formula in Tennessee’s tax statutes. The trial court and the Court of Appeals both upheld the Commissioner’s decision to issue the tax variance. Read the majority opinion in Vodafone Americas Holdings, Inc. v. Reagan Farr, authored by Justice Holly Kirby, and the dissent by Justice Jeffrey S. Bivins.

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