Attorney General Skrmetti’s office has filed a motion to compel the social media company TikTok to comply with an earlier court order requiring it to produce relevant evidence in response to Tennessee's investigation of the company’s possible violation of state consumer protection laws. The bipartisan investigation is part of a nationwide inquiry into whether TikTok has engaged in deceptive, unfair, and unconscionable conduct that harmed the mental health of users, particularly children and teens. Read the full press release as well as briefs and motions here.

The Belmont Law Review will host its annual fall symposium on Sept. 29 from 8 a.m. – 3:30 p.m. CDT at the Belmont Law School, Randall & Sadie Baskin Center, 1901 15th Ave. S., Nashville 37212. This year's event will focus on "Learning Together: Modern Developments in Education Law." For more information, visit the website or email Natalie.Anders@bruins.belmont.edu.

The Petitioner, Joseph Marquis Jeffries, appeals the Williamson County Circuit Court’s denial of his petition for post-conviction relief from his convictions for two counts each of aggravated assault and reckless endangerment, and one count each of domestic assault, interference with emergency communications, trafficking for a commercial sex act, promotion of prostitution, and evading arrest, for which he received an effective sentence of twenty-five years. On appeal, the Petitioner contends that the post-conviction court erred by denying relief on his claims alleging that he received the ineffective assistance of counsel. Specifically, the Petitioner argues that trial counsel was ineffective by: (1) failing to adequately explore racial bias during voir dire and (2) failing to seek additional time for the Petitioner to consider the State’s plea agreement. After review, we affirm the judgment of the post-conviction court.

A reception honoring current, new and retiring members of the Tennessee Supreme Court will be held in Nashville on Oct. 4 from 5:30 - 7 p.m. CDT at Holland & Knight, Nashville City Center, 511 Union St., 27th Floor, 37219. The event is sponsored by the Tennessee Supreme Court Historical Society. RSVP by emailing lknightlaw@outlook.com.

A Lincoln County jury convicted the Appellant, Jason Lee Schutt, of alternative counts of possession of hydrocodone with intent to sell or deliver, a Class C felony. See Tenn. Code Ann. §§ 39-17-408(b)(1)(F), -417(a), -417(c)(2)(A). The trial court properly merged the above counts, and following a sentencing hearing, the Appellant was ordered to serve nine years and six months in confinement in the Tennessee Department of Correction. In this appeal, the Appellant contends that the evidence was insufficient to support his convictions because the alleged controlled substance was not verified by chemical analysis as hydrocodone, and that the trial court erred in denying alternative sentencing. Upon our review, we affirm the judgment of the trial court.

The Appellant, Eleanor Grace Hoffman, filed a motion to suppress challenging the search of her purse during a traffic stop. The trial court denied the motion, and the Appellant was convicted as charged by a Warren County jury of simple possession of methamphetamine and possession of drug paraphernalia. The Appellant’s application for judicial diversion was granted, and she was sentenced to two concurrent terms of eleven months and twentynine days suspended to supervised probation after service of ten days’ imprisonment. A probation violation order was entered, and the Appellant conceded to violating the terms of probation before the trial court. The trial court revoked her probationary judicial diversion sentence, entered judgments of conviction for simple possession of methamphetamine and possession of drug paraphernalia, and ordered the Appellant to serve eleven months and twenty-nine days’ imprisonment, with the possibility of furlough to an inpatient drug treatment facility after service of ninety days’ imprisonment. On appeal, the Appellant challenges the trial court’s denial of her motion to suppress. Alternatively, the Appellant argues that the trial court erred in revoking her diversionary probation and ordering service of her original sentence. After review, we affirm the trial court’s denial of the motion to suppress and revocation of the Appellant’s probation but remand for the trial court to make findings concerning the consequence imposed for the revocation.

This is an appeal of the termination of a father’s parental rights. The Tennessee Department of Children’s Services (“DCS”) filed a petition in the Juvenile Court for Davidson County (“Juvenile Court”) seeking the termination of the parental rights of Horace L. (“Father”) to his minor daughter Amayzha L. (“the Child”). The Juvenile Court found that DCS had established by clear and convincing evidence the following statutory grounds: (1) abandonment by failure to provide a suitable home, (2) persistence of conditions, and (3) failure to manifest an ability and willingness to assume legal and physical custody of or financial responsibility for the Child. Determining that DCS presented insufficient evidence to establish that the Child was removed from Father’s home or physical or legal custody, we reverse the grounds of abandonment by failure to provide a suitable home and persistence of conditions. We affirm the Juvenile Court’s judgment in all other respects, including the termination of Father’s parental rights.

In this interlocutory appeal, the employee appeals two orders: one excluding her expert witness and one denying her request to amend a scheduling order. The employee suffered an injury to her right shoulder and arm while moving a client’s lift chair. She later contracted an infection, which she alleged to be related to her work duties. The employer accepted the right shoulder and arm injury but denied that the infection was primarily related to the employee’s work. After the issuance of a dispute certification notice, the trial court issued a scheduling order setting certain deadlines, including a deadline for the parties to provide expert witnesses’ reports. Following a motion by the employee, the trial court modified its order and provided new deadlines. The employee did not provide her expert report by the specified date and instead filed a motion requesting a new scheduling order. The employer filed a motion to exclude the employee’s expert witness. Following a hearing, the trial court issued two orders: one granting the employer’s motion to exclude the expert witness and one denying the employee’s motion for an amended scheduled order. The employee has appealed both orders. Having carefully reviewed the record, we affirm the trial court’s decision and remand the case.

After years of collective anxiety, the Syndicated Loan Market can finally exhale. The U.S. Court of Appeals for the Second Circuit rendered its decision in Kirschner v. JP Morgan Chase Bank, N.A. (2023 WL 5437811 (2d Cir., Aug. 24, 2023), ultimately holding that the promissory notes issued in connection with a $1.775B syndicated term loan B were not “securities” subject to state-law securities claims. The circuit court’s decision upholds the current standard market belief that correctly structured syndicated loans should be considered a private lending transaction out of the confines of state and federal securities regulations. 

Syndicated loans are a type of lending facility where a group of lenders — referred to as a syndicate — work together to provide funds for a single borrower. The value in this arrangement is clear: lenders can participate in larger credit facilities and distribute the risk of high-value lending, whereas borrowers get access to more credit. In Kirschner, the syndicated loan at issue was commonplace; there was nothing particularly unusual in the structure or nature of the transaction. The only exceptional facts were in connection with the business practices resulting in the borrower’s ultimate bankruptcy.

The case was originally brought before the U.S. District Court for the Southern District of New York by Marc S. Kirschner, in his capacity as trustee of the Millennium Lender Claim Trust against JPMorgan Chase Bank, N.A. and certain other lending institutions that arranged the original term loan. Kirschner alleged, among other things, a breach of certain state securities laws in the marketing and sale of the promissory notes issued through the syndicated Term Loan B by Millennium Laboratories LLC (Millennium). The District Court granted the defendants’ motion to dismiss for failure to state a claim having determined that the promissory notes issued in connection with the syndicated loan did not meet the standards required to be considered a security. Plaintiff appealed; the Second Circuit reviewed the issue de novo.

The circuit court ultimately affirmed the dismissal of Kirschner’s case after examining the promissory notes under the “family resemblance” test enunciated by the United States Supreme Court in Reves v. Ernst & Young (494 I.S. 56 (1990)). The starting presumption under Reves is that every note is a security. The test then asks the court to consider four factors to determine if, on balance, the note was issued in a consumer or commercial context (not a security) rather than as an investment (a security). Those factors are:

1. Motivation of the parties engaging in the “purchase” and “sale” of the instrument;
2. Plan of distribution of the instrument;
3. Reasonable expectations of the investing public; and
4. Existence of other risk-reducing factors that may render application of securities laws unnecessary.

After applying the foregoing factors to the promissory notes at issue in Kirschner, the circuit court reasoned that the syndicated loan in this instance bore a “strong resemblance” to a commercial-purpose loan. Commercial purpose loans are a category of debt that has been recognized as not a security.

Overall, the outcome of this case isn’t particularly surprising and is consistent with prior case law. However, this case has been closely watched by the syndicated loan market, particularly in consideration of the SEC’s decision to not provide an amicus brief after being solicited by the circuit court to do so. Many industry professionals are collectively relieved that the results in Kirschner will not require immediate changes to market practices around marketing and documenting syndicated loans.

That said, the circuit court did not affirmatively state that syndicated loans could never be considered a security. Instead, the circuit court makes express mention that it is possible a court faced with a different transaction could find the reasonable investing public perceived an instrument labelled a “syndicated term loan” to be a “security” (See, 2023 WL 5437811 at n.104). The Kirschner decision does provide some insight and guidance for similarly situated lenders and agents participating in broadly syndicated lending transactions. In order to protect similarly situated loans from being potentially classified as a security, it is prudent for market participants to undertake the following steps:

1. Have all syndicate members affirmatively represent that they are sophisticated, commercial lenders experienced in extending credit in such a capacity;
2. Utilize strict assignment provisions, such as minimum investment value, prohibition on transfers to natural persons and consent requirements, to reasonably ensure that the general investing public could not participate;
3. Confirm that all loan documents, marketing materials, commitment letters and information memoranda (a) utilize loan market terminology rather than capital market terminology (i.e. “lenders” and not “investors”) and (b) explicitly state the purpose of the loan is “commercial;” and
4. Make sure the syndicated loan has a strong security position such that the security interests reduces risks associated with the purchase of any note.

Although the circuit court’s holding in Kirschner reaffirms the distinction between investments subject to federal and state securities law and commercial lending arrangements, market participants should nonetheless take care to properly structure, market and document their loans to mitigate the risks of potential reclassification, and ultimately heightened regulation, as securities.

This summary was contributed by Marina Carrier and Katie Smalley. Marina and Katie are each associates at Bass, Berry & Sims PLC who focus their practices in representing borrowers and lenders in commercial finance transactions. 

The University of Memphis Cecil C. Humphreys School of Law is dealing with outrage over a caricature of a woman in blackface that was on display for almost two weeks in the school’s law review offices, reports the Daily Memphian. The student editor-in-chief of the law review emailed an apology last week to the law school community, and Dean Kate Schaffzin issued a statement that said, in part, “Racism in any form is inexcusable and will not be tolerated." The caricature, a face made of items found in the law review office, including a football and a long black wig, was created by the law review staff as an editing award. The law school and student organizations are planning programs in response that will cover cultural competence and implicit bias.