News

Knoxville Motel Sued for Crime that Took Place on Property

A Knoxville motel with a troubled history has been hit with a lawsuit over a gospel singer who was kidnapped, beaten and robbed while staying there, Knoxnews reports. Smyrna-based singer Dennis Humphries was staying at the West Knoxville Motel 6 on June 5 when he was attacked, chased into his room, tied him up in the bathroom and robbed. The lawsuit alleges that hotel security saw the attack and did nothing, and a clerk only called 911 at another guest’s urging but did not go to the room to investigate. The complaint seeks $1 million in damages.
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Age Bias Lawsuit With Rep. Duncan Settled Using ‘Hush Fund’

U.S. Rep. John J. Duncan Jr. was found to have settled an age bias lawsuit, first filed in 2009, using a fund that settles lawsuits on behalf of members of Congress and shields disclosure of settlements from the public, Knoxnews reports. The law that allows the fund’s existence, the Congressional Accountability Act, is under scrutiny by leaders in Washington, including U.S. Reps. Diane Black and Marsha Blackburn, given recent public outcry on behalf of sexual harassment victims.
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Johnson City Men Plead Guilty to Federal Conspiracy, Mail Fraud

Two Johnson City men have pleaded guilty to running a million dollar scam centered around the Mountain Empire Surgery Center, the Times News reports. Donald Kevin Collins and Charles Turner were charged in August with conspiracy to commit mail fraud and 15 counts of mail fraud for the scam, in which they created a fake company and tricked the surgical center into paying them nearly $1.4 million over six years. Turner is scheduled for sentencing on Feb. 7, while Collins has a change of plea hearing set for Jan. 18.
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Dedmon Decision Reached

Shortly before Thanksgiving, Tennessee’s high court issued its long-anticipated opinion in the case of Dedmon v. Steelman, No. W2015-01462, 2017 Tenn. LEXIS 720 (Tenn. Nov. 17, 2017) concerning the collateral source rule[1] and the proper measure of damages in personal injury claims.  In its unanimous decision, the Tennessee Supreme Court affirmed that its decision in the hospital lien case of West v. Shelby County Health Care Corp., 459 S.W.3d 33 (Tenn. 2014) does not apply to the measure of damages in personal injury cases, and that the collateral source rule continues to bar evidence of discounted medical charges in personal injury claims.  After thoroughly reviewing the long history of the rule in Tennessee and throughout our country, the Court found that it remains viable for several important policy reasons, and that alternatives to it have proven less than preferable. 

In its 45-page opinion, the Tennessee Supreme Court noted that the rule could be found at common law in England as early as nearly two centuries ago in 1823, and that the United States Supreme Court adopted it thirty-one years later in The Propeller Monticello v. Mollison, 58 U.S. (17 How.) 152 (1854).[2]  It further noted that Tennessee expressly adopted the rule in 1896,[3] and that all other 49 states (“except perhaps Alabama”) eventually adopted it as well. 

The court found that the rule in Tennessee is “succinctly articulated in the widely-cited Section 920A of the Restatement (Second) of Torts” as both a substantive rule of law and as evidentiary rule.  It noted that, without the rule, “the jury may well reduce the damages based on” payments from collateral sources. (Quoting Kenney v. Liston, 760 S.E.2d 434, 441 (W. Va. 2014); citing Jurgensen v. Smith, 611 N.W.2d 439, 442 (S.D. 2000)).  The court also noted that “tort deterrence has been an inherit, inseparable, aspect of the collateral source rule since its inception over 100 years ago.”  (Quoting Bozeman v. State, 879 So. 2d 692, 699 (La. 2004)).  After conceding that its “overly broad language” in West had caused some confusion, the Dedmon court found that West “was not intended to apply in personal injury cases.”

Despite the length of time which the collateral source rule has been “entrenched” in Tennessee law, the court still agreed to re-consider its continuing viability.  When doing so, it specifically noted that at least two states’ high courts have held that state statutes abrogating the rule are unconstitutional because they violate the separation of powers doctrine. (CitingJohnson v. Rockwell Automation, 308 S.W.3d 135, 142 (Ark. 2009); O’Bryan v. Hedgespeth, 892 S.W.2d 571, 576 (Ky. 1995)).[4]

The Tennessee Supreme Court found that the state statutes modifying or abrogating the collateral source rule “lack any uniformity whatsoever.”  The court then grouped three approaches to the rule by courts in other jurisdictions as follows: 1. actual amount paid; 2. benefit of the bargain; and 3. reasonable value.  Writing for the court, Justice Kirby noted that the first approach (“actual amount paid”) was followed only by “few” courts (led by California), and has been subject to criticism.  Citing the Supreme Court of Virginia, she noted that reducing an insured plaintiff’s recovery “overlooks the fundamental purpose of the [collateral source] rule, … to prevent a tortfeasor from deriving any benefit from compensation or indemnity that an injured party has received from a collateral source.” (QuotingAcuar v. Letourneau, 531 S.E.2d 316, 322 (Va. 2000)).

The second approach (“benefit-of-the bargain”) allows recovery of undiscounted bills only where the plaintiff has somehow paid for the benefits, as by the payment of insurance premiums.  Our Supreme court explained that the negotiated rate differential is the “benefit” for which the plaintiff paid consideration. (Citing id.;Stayton v. Del. Health Corp., 117 A.3d 521, 531 (Del. 2015)).  This approach has been criticized as undermining the collateral source rule by using the plaintiff’s relationship with third parties to measure the defendant’s liability.  (Citing, inter alia, Wills v. Foster, 892 N.E.2d 1018, 1027 (Ill. 2008)).

Under the last approach (“reasonable value”), most courts hold the reasonable value of the expenses to be the full, undiscounted bills.  See, e.g., Montgomery Ward & Co. v. Anderson, 976 S.W.2d 382, 385 (Ark. 1998); Brethren Mut. Ins. v. Suchoza, 66 A.3d 1073, 1081-82 (Md. 2013).  Dedmon noted that Tennessee has generally adhered to this approach.

In the end, the Tennessee Supreme Court decided it would continue to follow the approach of “most state courts … that the negotiated rate differential is a collateral source benefit [allowing] injured plaintiffs to recover the full amount of reasonable medical expenses billed….” (Quoting Lori A. Roberts, Rhetoric, Reality, and the Wrongful Abrogation of the Collateral Source Rule in Person Injury Cases, 31 Rev. Litig. 99, 117 (Winter 2012)).  It noted that the “negotiated rate differential would not exist but for an insurer who ‘negotiated’ the ‘rate differential.’” (Quoting Acuar, supra, 531 S.E.2d at 322). Quoting McConnell v. Wal-mart Stores, 995 F. Supp. 2d 1164, 1170-71 (D. Nev. 2014), the court reasoned that the “actual amount paid” approach would abrogate the rule.  It found “specious” the California Supreme Court’s “fiction” that said approach did not contravene the rule.  It also quoted another Virginia Supreme Court opinion, Radvany v. Davis, 551 S.E.2d 347, 348 (Va. 2001), that negotiated amounts “do not reflect the ‘prevailing cost’ of those [medical] services….” (Emphasis added).

The court further reasoned that its holding was bolstered by Tenn. Code Ann. § 24-5-113 (2017).  Since that statute allows undiscounted bills to be presumed reasonable when properly presented, holding that undiscounted bills are unreasonable (as urged by Appellants/Defendants) would conflict with existing law.

The court also rejected the intermediate appellate court’s “hybrid” method of proving “reasonable value,” which would have permitted defendants to present discounted charges alongside the undiscounted charges. See Dedmon v. Steelman, No. W2015-01462, 2016 WL 3219070, at *11 (Tenn. App. June 2, 2016).  The court found that, like the “actual amount paid” approach, the hybrid method “has not been met with favor,” having been specifically rejected by twenty-two other courts, citing, inter alia, Covington v. George, 597 S.E.2d 142 (S.C. 2004) and Aumand v. Dartmouth Hitchcock Med. Ctr., 611 F. Supp. 2d 78 (D.N.H. 2009).

Finally, the court rejected the potential overcompensation of plaintiffs as a reason to abandon the rule.  It noted that the “law contains no rigid rule against overcompensation.  Several doctrines, such as the collateral [source] rule, recognize that making tortfeasors pay for the damage they cause can be more important than preventing overcompensation.”  (Quoting McDermott, Inc. v. AmClyde, 511 U.S. 202, 219) (1994) (unanimous opinion). 

Having dispatched with all of Appellants’ arguments,[5] as well as the court of appeals’ hybrid solution, the Tennessee Supreme Court held that West does not apply in injury cases outside the interpretation of the hospital lien statute, and that the collateral source rule remains unaltered in Tennessee personal injury cases, as it still is in “the majority of courts.”


[1] The court noted that the rule’s name is derived from Harding v. Town of Townshend, 43 Vt. 536 (1871).

[2] Dedmon further noted that the Court had found the rule to be “well-settled” by 1876 in The Atlas, 93 U.S. 302, 310 (1876).

[3] Anderson v. Miller, 33 S.W. 615, 617 (Tenn. 1896).

[4] It also noted that another state’s supreme court found such statutes unconstitutional under the equal protection clauses of state and federal constitutions in Wentling v. Med. Anesthesia Servs., 701 P.2d 939, 951 (Kan. 1985).

[5] In addition to briefing by the parties and amici curiae on both sides, the court heard oral argument on April 5, 2017.

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Nashville Cleared to Move Forward with Opioid Lawsuit

Nashville Mayor Megan Barry’s administration has been cleared to utilize an outside law firm to explore a potential lawsuit against opioid manufacturers and distributors, The Tennessean reports. The Nashville Metro Council voted yesterday to defeat a motion to reconsider contracting with Lieff Cabraser Heimann & Bernstein LLP for the effort. The road block in the process came from Councilwoman Erica Gilmore, who was concerned that minority-led law firms were not considered for the contract. Lieff Cabraser has now partnered with Manson, Johnson and Conner, a firm whose five partners are all African-American.
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Prosecutors Unveil Evidence in Woodmore Bus Crash

The driver of a school bus charged with killing six children was on the phone at the time of the crash, the Times Free Press reports. Hamilton County District Attorney General Neal Pinkston said that driver Johnthony Walker received a call at 3:17 p.m., and the first calls about the Woodmore Elementary bus crash came in at 3:20 p.m. The prosecution also alleges that Walker was speeding. A draft of National Transportation Safety Board report on the wreck is now in the review process and could be released in late spring. Judge Don Poole also announced during today's hearing that jurors for the trial will be brought in from Montgomery County to hear the case.
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TSC Upholds Standards for Statute of Limitations in Legal Malpractice Cases

In John Howard Story, et al. v. Nicholas D. Bunstine, et al., the Tennessee Supreme Court reaffirmed its commitment to following the “discovery” rule for determining when the statute of limitations begins to run in legal malpractice cases. At the urging of the plaintiffs, the Court analyzed other possible methods for determining when a legal malpractice action accrues, including the continuous-representation rule, appeal-tolling doctrine and final judgment rule, but concluded none was preferable to Tennessee’s current “discovery” standard. Justice Roger A. Page wrote the court’s opinion.
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Scottie Nell Hughes Speaks Out on Rape, Harassment Claims from Tenure at Fox News

Tennessee conservative political pundit Scottie Nell Hughes gave an in-depth interview to the Nashville Scene this week, detailing her lawsuit against Fox News and its anchor, Charles Payne, whom Hughes accuses of harassment and rape. Fox claims it found no evidence of wrongdoing on Payne’s part. Fox and other defendants have yet to file a response to the lawsuit, but are required to do so by next week. A pre-trial conference is scheduled for Dec. 18.

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Court Clarifies Law on Proof of Medical Expenses in Personal Injury Cases

In Jean Dedmon v. Debbie Steelman et al., the Tennessee Supreme Court declined to change a state law that outlines what evidence can be used to prove medical expenses in cases involving personal injury. The court held that Tennessee law continues to allow plaintiffs to use full, undiscounted medical bills to prove their medical expenses instead of the discounted amounts paid by insurance companies. Justice Holly Kirby authored the unanimous opinion in the case that was originally filed in Crockett County.
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Woodmore Employees File Suit Over Emotional Trauma Suffered After Bus Crash

Two lawsuits were filed today by Woodmore Elementary School employees who claim they suffered “acute emotional trauma” following last year’s deadly bus crash, which took the lives of many students, the Times Free Press reports. The employees named the private bus company, Durham School Services, as well as driver Johnthony Walker in their lawsuits. Faculty and staff say they were not prepared to go to school following the tragedy and deal with the trauma that followed.
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Tennessee to Join Settlement Against Veterans Charity

Tennessee will join 24 other states in a settlement that will shut down a veterans charity that scammed $15 million from donors, The Tennessean reports. VietNow National Headquarters Inc., also known as Veterans Now, will be forced to close down after reportedly only spending 20 percent of its collected donations on charitable organizations. As a condition of the settlement, remaining funds from the organization will be donated to Fisher House and Operation Homefront.
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Chattanooga Agrees to Redact Personal Information in Crash Reports

In an effort to curb unethical solicitation of crash victims, the city of Chattanooga has agreed to redact personal information of crash victims in reports, the Times Free Press reports. Additionally, those requesting records must promise not to use the information to wrongfully solicit a victim, lest they face a Class A misdemeanor. The change is in response to a federal lawsuit filed in Chattanooga’s U.S. District Court, in which a personal injury attorney claimed a medical company called a crash victim on behalf of an out-of-town lawyer. U.S. District Court Judge Thomas Varlan ordered the city to make the changes.
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Lawsuits Filed Over Las Vegas Shooting Face Legal Obstacles

Lawsuits filed in the wake of the Las Vegas mass shooting face many obstacles, the least of which includes a 2005 law that protects gun makers from civil claims brought by gunshot victims, the ABA Journal reports. At least two lawsuits have been brought against the manufacturers of “bump stock” devices, which allow accelerated gunfire from a semi automatic weapon and were used by the killer in the Vegas incident. It is unclear whether a bump stock is a gun component covered by the law’s liability shield.
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Las Vegas Shooting Witnesses File Lawsuit Against Makers of ‘Bump Stocks’

Three people who witnessed the mass shooting at a concert in Las Vegas this month have filed a would-be class action lawsuit against the makers of “bump stocks,” the device used by the gunman to accelerate gunfire from his semi-automatic weapon, the ABA Journal reports. The suit was filed in a Nevada court on behalf of individuals who suffered emotional distress during the shooting. The defendant is Slide Fire Solutions, which claims the product was intended for use by people with limited hand mobility. The lawsuit claims that the company did not limit its marketing to those consumers alone.
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Shelby County Man Wins $140 Million Lawsuit Against Testosterone Drug Maker

Jeffrey Konrad of Collierville has been awarded more than $140 million in a lawsuit against the makers of AndroGel, a testosterone drug he claims gave him a heart attack, The Commercial Appeal reports. Konrad’s attorneys argued in federal court that drug maker AbbVie Inc., misrepresented the risks associated with the drug. Konrad had been prescribed AndroGel by his doctor for conditions attributed to low testosterone levels.
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Sessions Says Title VII Does Not Protect Trans Individuals from Discrimination

A new memo from Attorney General Jeff Sessions says that Title VII of the Civil Rights Act does not protect transgender individuals from workplace discrimination, the ABA Journal reports. The memo retracts a previous interpretation from the Obama administration. American Bar Association President Hilarie Bass released a statement expressing disappointment with the decision. “For decades, the ABA has vigorously opposed such discrimination and, more recently, has urged the enactment of legislation to strengthen protections for LGBT workers to further the ABA’s belief that all Americans – regardless of sexual orientation or gender identity – should be protected from discrimination in the workplace,” Bass said.
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East Tennessee Prosecutors Sue Big Pharma Over Opioids

The top prosecutors for five judicial districts encompassing 15 East Tennessee counties are joining their counterparts in three Upper East Tennessee districts in trying to use the legal system to hold the makers of opiate-based prescription drugs financially responsible for the state’s opioid addiction problem. The News Sentinel reports that prosecutors Charme Allen, Dave Clark, Jared Effler, Russell Johnson and Stephen Crump are suing opioid drugmakers Purdue Pharma, Mallinckrodt and Endo Pharmaceuticals.

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Court Issues Proposed Rules Amendments, Asks for Comment

The Tennessee Supreme Court has published the annual package of recommendations from the Advisory Commission on Rules of Procedure and Evidence, the 2018 Proposed Rules Amendments. Several TBA sections are reviewing the recommendations for possible comment. Comments are due to the court no later than Nov. 22.

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Court Square Series Kicks Off in Chattanooga

On Sept. 21, this year’s Court Square series kicks off in Chattanooga at Chambliss, Bahner & Stophel. Kevin Christopher will address common intellectual property issues for general practitioners. Jay Elliott will cover issues attorneys may encounter when handling matters with in-house counsel and Chris Varner will provide a summary of litigation updates. The last session will be a roundtable discussion offering point and counterpoint scenarios in connection with various contract provisions. For more information or to register.   

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Lawsuit Alleges Student was Expelled for HIV Status

A lawsuit filed against a Knoxville trade school alleges that the college’s dean removed a student from its cosmetology program after she disclosed she had been diagnosed with HIV as the result of a rape, the Knoxville News Sentinel reports. Civil rights attorney Troy Bowlin filed the $25 million suit on behalf of a student against Virginia College and the school’s dean, Christine Adams. The suit further alleges that school administrators publicly humiliated the student by disclosing her status to classmates.
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Southeast Complex Litigation Forum Set for Sept. 7

 
The Southeast Complex Litigation Forum, a TBA CLE offering four general credits, will be Sept. 7 at the Tennessee Bar Center in Nashville. The seminar will cover the latest developments in mass torts, class actions and multi-district litigation (MDLs). You will learn from national litigators about the latest in cutting-edge aggregate litigation, including emerging litigation involving opioids, medical devices, pharmaceutical drugs and consumer products. The discussions will also include litigation tips and best practices on how to approach discovery in the post-proportionality world. Learn more and register here.
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Coaches Cleared of Abuse Sue Parent Who Accused Them

Two coaches cleared of abuse complaints have filed a $6 million defamation lawsuit against the parent who accused them, the Knoxville News Sentinel reports. Hardin Valley High School head coach Joe Michalski and assistant Zach Luther filed suit against Sheri Super, who they claim lied about injuries to a player and an “emotionally and physically abusive” practice drill in a letter she sent to school administrators.
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HRC Medical Must Pay $18 Million for Consumer Protection Violations

A judge has ordered that HRC Medical Centers and the company’s principles must pay consumers who purchased HRC’s bio-identical hormone replacement therapy (BHRT), according to Tennessee Attorney General Herbert Slatery’s office. Judge Don Ash granted the state’s motion for partial summary judgement in its suit against the company, which must now pay $18,141,750 for violations of the Tennessee Consumer Protection Act. Additionally, the Court issued a permanent injunction barring the Defendants from engaging in conduct the Court has found unlawful.
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Ten Tips for Better Trial Practice

Here are ten tips for better trial practice from Judge Dale Tipps.

Accident Investigation CLE

Get a working knowledge of the types and causes of accidents during this July 26 CLE webcast. Discussion includes the proper process of documenting vehicle accidents, construction accidents, environmental accidents and others. Find out more and register here.

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