News

Lawsuits Piling up over Target Data Breach

Days after acknowledging a massive hacking of customer credit card data, Target is facing at least two dozen lawsuits, CNN Money reports. Customers from California, Oregon and Washington to Louisiana, Massachusetts and Rhode Island have filed would-be class actions in federal courts, alleging Target was negligent and did not protect their card information. The retailer announced Monday that the Department of Justice is investigating the security breach of about 40 million credit and debit card accounts, the Associate Press reports on WATE. Security experts say it is the second largest theft of card accounts in U.S. history.

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TBJ Covers Jobs, Money Laundering, Estate Planning for Same-Sex Couples

About 25 percent of the students in The Law Launch Project have jobs lined up after graduation -- the Tennessee Bar Journal checks in on them and how the job searches of the other three-quarters of the group are going. Also in this issue, columnists Kathryn Reed Edge covers money laundering, Eddy R. Smith discusses estate planning for same-sex couples, and Bill Haltom has discovered a new toy -- a coloring book for lawyers.

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Less Than 20 Civil Cases Pending Against Pilot

An attorney for Knoxville-based truck stop chain Flying Pilot J said today that fewer than 20 companies have filed lawsuits against the company, despite nearly 60 refusing Pilot’s settlement offer. At a hearing before Knox County Circuit Judge Harold Wimberly, Pilot attorney Al Harb distributed a list showing nine of the cases were pending in state courts, including actions in Texas and Louisiana, while seven were filed in federal courts. Harb says he expects the company will seek to consolidate the federal cases for pre-trial proceedings likely during a hearing on Jan. 30 when the federal Judicial Panel on Multidistrict Litigation is slated to meet in New Orleans. Knoxnews has more.

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Judge Clears Way for Airline Merger Completion

U.S. District Court Judge Sean Lane has ruled that this month's settlement of an antitrust lawsuit filed by the Department of Justice did not upset American Airlines’ bankruptcy reorganization plan, which is built around the merger of American Airlines and US Airways into the world’s largest airline. The judge rejected a request by a group of consumers to temporarily block the deal. WRCB Channel 3 has the story.

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Investor Lawsuit Allowed to Continue in State Court

The Tennessee Supreme Court yesterday unanimously decided that a lawsuit filed by Jeffrey R. Cooper against a movie start-up could proceed in state court. Cooper’s suit claims Phillip, Richard and David Glasser misrepresented facts to induce him to invest $500,000 in their production company, Hi Def Entertainment. After Cooper requested dismissal of a similar action filed in California and a suit filed in federal court, the defendants sought to block the case based on a federal rule that precludes proceeding on a claim after two dismissals. The high court determined that the voluntary federal dismissals did not address the merits of the case and that the claims raised by Cooper were still viable in state court. The Administrative Office of the Courts has more.

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Lawsuits Target Black Friday Phantom Discounts

Beware of Black Friday discounts this holiday season, consumer advocates warn. According to the ABA Journal, unhappy shoppers have filed lawsuits claiming they bought merchandise touting discounts that turned out to be illusory. The Wall Street Journal reports that retailers often set starting retail prices so high that the discounted price will give them the profit margins they want— a strategy that isn’t deceptive according to Federal Trade Commission guidelines. Among the retailers facing suit over alleged phantom discounts are J.C. Penney, Kohl’s and Jos A. Banks Clothiers.

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Catholic Diocese Sues Feds over Health Reform

The Catholic Diocese of Nashville and other related groups have filed suit against the federal government over health care reform, the Nashville Business Journal reports. The suit argues that the groups do not qualify under the government’s narrow definition of “religious employers” in the guidelines defining exemption from coverage requirements, such as birth-control coverage. The U.S. Supreme Court yesterday agreed to hear arguments from for-profit companies Hobby Lobby and Conestoga Wood Specialties Corp., which also are objecting to being forced to provide coverage for contraceptives on religious grounds. 

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New Pilot Suit Filed Days Before Settlement Hearing

A Knox County trucking firm has filed suit against Pilot Flying J and a former sales executive of the company who already has pleaded guilty to charges stemming from a federal rebate fraud probe, The Tennessean reports. The suit comes just days before a federal judge is scheduled to hold a hearing on a proposed $72 million settlement of rebate fraud charges against Pilot. The so-called fairness hearing on that proposal will take place Monday in Little Rock, Ark. The new suit, brought by Moore Freight Services of Mascot, outlines the company’s complaint and why it decided to opt out of the settlement.

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DOJ: Bankers Need to Do More to Clean Up Profession

The U.S. Department of Justice’s second in command, Deputy Attorney General James Cole, told a group of bankers and lawyers gathered at a money laundering conference that too many financial institutions have failed in their duty to ensure that businesses are run cleanly. "Despite years of admonitions by government officials that compliance must be an important part of a corporation's culture, we continue to see significant violations of law at banks, inadequate compliance programs, and missed opportunities to prevent and detect crimes," he said. The comments come amid an international probe into possible manipulation of foreign exchange rates. "You will be hearing more about these investigations," Cole said. Read more in the Memphis Daily News.

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Court Considers Whistle-Blower Protections

The U.S Supreme Court heard arguments yesterday involving the collapse of energy giant Enron to determine who is protected from retaliation after blowing the whistle on the company’s misdeeds. In an appeal brought by two former employees of the companies that run the Fidelity family of mutual funds, the workers claimed they faced retaliations after they reported allegations of fraud affecting Fidelity funds. They argued that a provision of the Sarbanes-Oxley Act protects their whistle-blower activity, WRCB News 3 reports.

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American, US Air Reach Deal with DOJ and States

American Airlines and US Airways Group have reached a settlement with the U.S. Justice Department (DOJ) in an antitrust lawsuit that sought to block the companies’ proposed $17 billion merger, the Dallas Business Journal reports. Under the deal, the airlines will be able to merge but will sell 104 takeoff and landing slots at Reagan National Airport near Washington D.C., 34 slots at LaGuardia Airport in New York and slots at gates at Boston, Chicago, Dallas-Love Field and Los Angeles International. Key slots will be auctioned off to low-cost carriers, the DOJ reported. The airlines also settled a suit brought by Tennessee and five other states, Tennessee Attorney General Bob Cooper reports. Under those terms, the new airline will commit to serve the state’s major airports in Nashville, Memphis, Knoxville, Chattanooga and the Tri-Cities for five years.

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Bank of America Found Guilty of Fraud

A jury in federal court found Bank of America and a former Countrywide Financial executive guilty of fraud, the Nashville Business Journal reports. Jurors concluded Bank of America, through its Countrywide Financial acquisition, had fraudulently sold mortgages to Fannie Mae and Freddie Mac as part of an internal program called "The Hustle."

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Judge Allows Separate Pilot Suit to Proceed

A federal judge in Alabama has allowed a lawsuit against Pilot Flying J to be brought by Wright Transportation, despite Pilot’s claim the case should be dismissed given a pending class action settlement and an ongoing federal investigation. The judge rejected that argument noting that Wright, like 90 other companies, had opted out of the class action designed to settle claims that Pilot withheld millions of dollars in promised rebates. The proposed $40 million class-action settlement will be heard Nov. 25 in Little Rock, The Tennessean reports.

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Tower Wins Domain Dispute with MDHA

After a bitterly contentious four-year legal dispute about the fair value of land Metro Nashville took to build the new convention center, the Tennessee Supreme Court denied the Metro Development and Housing Agency’s (MDHA) request to appeal, giving a decisive victory to development firm Tower Investments. According to the Tennessean, Metro used eminent domain to take land south of Broadway it needed to build Music City Center, and then paid owners what it contended was fair market value for the property. A Nashville jury decided in 2011 that Tower’s 5.66-acre tract was worth $30.4 million, more than double the $14.8 million the city paid during the condemnation proceedings.

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Chattanooga Lawyer Elected Chair of Transportation Group

Steve Powers, a shareholder in Baker Donelson's Chattanooga office, has been elected chairman of the American College of Transportation Attorneys, a non-profit corporation comprised of a select group of transportation defense attorneys who serve as a confidential and reliable legal resource for the trucking industry. He will serve for two years. Powers previously served a two-year term as vice chairman. At his firm, Powers handles transportation litigation and regulatory matters. He graduated from the University of Tennessee College of Law in 1979. Chattanoogan.com has more on his experience.

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Airlines Dealt Setback in Merger Lawsuit

A court-appointed official recommended yesterday that the judge hearing a lawsuit to block the American Airlines and US Airways merger reject the airlines’ request to gain access to the names of people the government interviewed as well as what they said. The official said that the airlines were trying to learn what facts mattered to the government, which he said could give them insight into the thinking and legal strategy of Justice Department lawyers. He said that kind of information is protected as the work product of lawyers preparing for a lawsuit or trial. The Memphis Daily News has the story.

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Court Accepts 8 Cases; Likely Will Work During Shutdown

The U.S. Supreme Court today granted review of eight new cases, including one from Tennessee seeking to clarify when an individual commits a crime for having a gun after being convicted of domestic violence. Other cases involve questions about the award of attorneys' fees in patent cases; whether it is unconstitutional for a state to require home-care providers to pay a union to represent them before state agencies; whether the federal government has a right to reclaim lands abandoned by a railroad; whether shuttered businesses must pay Social Security and Medicare tax on severance checks; and whether police, after receiving an anonymous tip, must observe drunken or reckless driving before stopping a vehicle. The final case seeks to resolve a long-running copyright dispute in Hollywood over the screenplay for the 1980 movie Raging Bull. Although much of the government is closed because of the budget impasse, the Supreme Court is going ahead with its work, SCOTUSblog reports.

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Law Schools Adding More Business Courses

A growing number of law schools are adding courses intended to give students a foundation in business in addition to the law, the National Law Journal reports. Law schools such as Georgetown, Elon and the University of Pennsylvania are offering programs and courses in finance and accounting, management, leadership and entrepreneurship in order to prepare graduates to practice law, whether the student ends up counseling corporate clients, goes solo or works in a small nonprofit.

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Are Lawyers Health Insurance Navigators?

The Tennessee Department of Commerce and Insurance has issued emergency rules requiring registration for individuals counseling or advising the uninsured on how to sign up for health care coverage or facilitate enrollment by companies under the Affordable Care Act. The rules implement legislation adopted earlier this year. The Tennessean reports that critics say the rules are overly broad, will delay their work, and will not protect the public from fraud. Due to the broad nature of the rules, the TBA is investigating how they might affect attorneys advising individual and business clients on health care insurance matters.

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Pilot Founder Opens Up about Raid

In a Question and Answer released by truck-stop chain Flying Pilot J, James A. Haslam II —- the founder of Pilot and father of current CEO Jimmy Haslam and Gov. Bill Haslam -— gives his first detailed remarks about the events surrounding the government raid of the Knoxville-based company. "It was the second worst day of my life," he said. "When Jimmy, Bill and Ann’s mother died that was obviously the worst day of my life, but this was a very difficult day for me as well." He added, "I’ve spent my life building this company with a pristine reputation of people doing the right thing, supporting our community, being a good corporate citizen, taking care of our customers and our team members, and I’m going to spend the rest of my life rebuilding that reputation." Knoxnews has more.

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Airline Merger Trial to Start Nov. 25

A federal judge ruled today that the Department of Justice’s lawsuit to block the proposed merger of American Airlines and US Airways will start Nov. 25, WKRN News 2 reports. The timetable is favored by the airlines, which said a long delay would threaten their merger. The Justice Department had wanted the trial to start in March, saying it needed more time to prepare for the complex case.

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DOJ Amends E-Book Injunction Proposal

Apple may face a reduced punishment for conspiring with publishers to raise e-book prices under a new proposal from the federal government. The U.S. Department of Justice suggested in a court filing Friday that it would cut from 10 to five years the length of a proposed injunction prohibiting Apple from entering into deals with publishers that would limit price competition. The proposal also includes a provision staggering renegotiations of contracts with publishers and would allow the government to seek a number of one-year extensions if warranted. The department said it made the modification based on concerns that its original proposal would outlive its usefulness and unnecessarily harm Apple in a fast-changing industry. WATN-TV has more from the Associated Press.

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DOJ Challenges Airline Merger, Tennessee Joins Suit

The U.S. Justice Department and attorneys general from Tennessee and five other states have sued to stop the proposed merger between US Airways and Americans Airlines, WRCB-TV reports. The suit, filed in federal court today, alleges that the merger would result in "higher airfares, higher fees and fewer choices." Washington, D.C., also joined the suit, the Nashville Business Journal reports. In announcing the move, Attorney General Robert Cooper said, "Studies show that Tennessee's four major airports … will experience fewer flights to certain destinations and travelers will pay more for remaining flights” if the merger is completed. Read more in this release from the AG's office.

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Dollar General Sued for Labor Violations

The Goodlettsville-based Dollar General Corp. is being sued for allegedly violating the Fair Labor Standards Act, the Nashville Business Journal reports. The lead plaintiffs in the suit are hourly, non-exempt Dollar General employees whose pay was subject to an automatic 30-minute meal-break deduction. The suit alleges that the plaintiffs were forced to work during their meal breaks and were not allowed to leave the premises. The class-action lawsuit comes on the heels of the Equal Employment Opportunity Commission’s suit against the retailer last month, alleging its use of criminal background checks was discriminatory.

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DOJ Reviewing Airline Merger Antitrust Lawsuit

An antitrust lawyer filed a lawsuit yesterday to block the proposed merger of American Airlines and US Airways on behalf of nearly 40 consumers, claiming the deal would hurt consumers by driving up airfares. The U.S. Department of Justice is reviewing the proposed merger, which would make American the biggest airline in the word. American Airlines and US Airways spokesmen have called the lawsuit “baseless” and lacking merit. WRCB has the story.

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