The Tennessee Supreme Court on March 25 suspended 20 attorneys for failure to pay the annual registration fee, nine of whom also failed to file proof that client funds are held in an IOLTA-compliant account. View the fee suspension order and IOLTA suspension order. Lawyers reinstated in the last month include three who were suspended in 2025. TBA has administrative suspensions dating back to 2005. Be sure to check the Board of Professional Responsibility's website for the most up to date information on lawyers' licenses.

Campbell County lawyer J. Stephen Hurst was censured by the Tennessee Supreme Court on March 25 for violating Rules of Professional Conduct 1.2, 3.3 and 8.4(d) while representing a client in a property boundary action. During the representation, the court found that Hurst improperly negotiated and settled the pending action without his client’s knowledge or authorization and failed to inform the court that his client had not approved the settlement.

In today's immigration climate, keeping up with hot topics and policy changes is more important than ever. TBA's 2026 Immigration Law Forum, to be held in-person in Nashville on May 15, will cover everything immigration attorneys in Tennessee need to know. State Rep. Yusuf Hakeem, D-Chattanooga, will discuss state legislation again this year. Other topics will include practice management tips, an ethical discussion with the Board of Professional Responsibility about fee changes, and a session with Tennessee Immigrant & Refugee Rights Coalition leadership on using court petitions for immigration advocacy.

Make plans to attend now!

The Tennessee Supreme Court recently addressed the issue of whether shareholders of a corporation may bring claims directly on their own behalf, or whether certain claims must be brought as derivative actions on behalf of the corporation. Specifically, the court addressed the nature of shareholder standing in the context of both direct actions and derivative actions, based on the type of damages at issue in the lawsuit.

In the case of Houghton, et al. v. Malibu Boats LLC, No. E2023-00324-SC-R11-CV, the two plaintiffs were the sole shareholders of a Tennessee corporation that operated a dealership on property owned by the corporation. The plaintiffs alleged that the defendant’s tortious actions caused the dealership to go out of business, as well as the foreclosure of the real property owned by the corporation. The plaintiffs sued the defendant for intentional misrepresentation, fraudulent concealment and promissory fraud, seeking damages to corporate property and diminution in the value of their stock.

A jury awarded plaintiffs compensation for “loss of equity” in the buildings used to run the business. At a post-trial motion, the defendant, for the first time in the proceedings, orally raised an issue purporting to implicate subject matter jurisdiction. Specifically, the defendant argued that the plaintiffs lacked standing to assert a cause of action for damage to property that was owned by the corporation, not by the plaintiffs personally. The Tennessee Supreme Court analyzed whether the standing issues in the case were jurisdictional or prudential. The court concluded that shareholder standing limitations are prudential, not jurisdictional, and must be raised in a timely manner; otherwise, they are subject to forfeiture. Because the defendant did not raise the defense in a timely manner, it was waived.

On the substantive issue of whether or not the claims in the case belonged to the corporation and should have been brought derivatively on behalf of the corporation, or whether the plaintiffs had a cause of action on their own behalf, the Tennessee Supreme Court noted the general proposition that only a corporation may sue for injuries to corporate property. In the context of the fact that the corporation, not the plaintiffs, owned the real property at issue, the court examined the nature of direct shareholder injuries. The court noted that shareholders may bring individual actions for direct injuries to their legal rights as stockholders, even if the corporation also has a claim; however, they must comply with the procedural requirements of derivative actions if asserting corporate claims. However, given the axiomatic principle that a corporation and its shareholders are distinct parties, the nature of a shareholder’s claim must be analyzed to determine whether the shareholder has the requisite standing to bring a claim.

The court, noting the plaintiffs’ stock ownership in the corporation “clearly represented a cognizable private property right” which was allegedly damaged by the defendant’s tortious conduct, determined that the individual shareholders had constitutional standing. Next, in examining whether the plaintiffs had statutory standing, the Tennessee Supreme Court determined that the plaintiffs’ course of action in pursuing their own personal claims was “permitted even if the corporation also may have a cause of action growing out of the same wrong.” However, the court, as well as even the plaintiffs, seemed to give some credence to the defendant’s argument that the plaintiffs did not have shareholder standing because it was the corporation “that suffered the alleged harm and, thus, the [p]laintiffs were not directly injured by the loss of equity” in the property owned by the corporation. However, the defendant’s apparent victory on this singular point was hollow, as this distinction affects the merits, not “the authority of the court to adjudicate the dispute,” and must be timely raised.

While the doctrine of standing and its various corporate-related subdoctrines recently analyzed by the Tennessee Supreme Court may be ponderous to sort through at the outset of litigation, this case lays out a roadmap for doing so. This recent case also demonstrates the downside of not making such a determination early in the case (or at least at some point before a fact finder renders a decision) and raising the issue accordingly.

Justin Joy is a shareholder in the Memphis office of Lewis Thomason and leads the firm’s cybersecurity practice group. He provides counsel to clients in a variety of industries in the area of information privacy and cybersecurity including incident investigation and breach response management, regulatory compliance, privacy and security policy review and drafting, and cyber risk management. Joy is a Certified Information Privacy Professional/US (CIPP/US) and a Certified Information Privacy Technologist (CIPT) through the International Association of Privacy Professionals. He speaks frequently to various groups and organizations on the topic of information privacy and cybersecurity. Joy also regularly represents businesses and individuals in a variety of litigation matters including professional liability claims, insurance coverage disputes, business torts and commercial disputes. He also frequently advises business clients regarding a range of governance, operational and strategic matters. He is a 2001 graduate of Wake Forest University and holds a law and MBA degree from the University of Memphis.

The Business Law Section will host its annual forum on May 5 with a theme of artificial intelligence (AI) and business law. This program offers Tennessee business lawyers a timely and practical exploration of how AI is transforming the practice of business law. Designed for attorneys at all levels of familiarity with AI platforms and use, the program provides both foundational knowledge and more in-depth discussions of issues and implications.

The program begins with AI 101 for Business Lawyers, providing a clear, accessible overview of key concepts, terminology and real-world applications relevant to legal practice. From there, sessions dive into the evolving role of AI in business contract drafting and critical issues at the intersection of cybersecurity and AI. A dedicated session on AI platform selection and implementation offers practical guidance for law firms and legal organizations, followed by a session on substantive legal issues with AI use. The program concludes with a forward-looking ethical discussion on developing internal law firm policies for AI use, along with best practices for negotiating and structuring agreements with vendors.

By the end of the program, attendees will have a well-rounded understanding of both the opportunities and challenges AI presents in business law, along with actionable strategies to enhance their practice while maintaining professional and ethical standards. Make plans to attend now!

MURPHY, Circuit Judge. Bourbon has been the cause of many Kentucky controversies. “The idea of ‘the first distiller,’” for example, “has bemused Kentucky historians and writers for well over a century.” Henry G. Crowgey, Kentucky Bourbon: The Early Years of Whiskeymaking 24 (1971). Was the first distiller Evan Williams? Elijah Craig? Some long-forgotten settler? See id. at 24–25. And where was this drink first distilled—in Georgetown in 1789 or Fort Harrod in 1774? See Maker’s Mark Distillery, Inc. v. Diageo N. Am., Inc., 679 F.3d 410, 415 (6th Cir. 2012). This case involves a similar controversy: Which African American-owned company first distilled bourbon? Victory Global (which does business as Brough Brothers) claims to have become the “first” when it opened its physical distillery in 2020. But Fresh Bourbon counters that it was the “first” because its owners physically distilled their brand at another company’s distillery two years earlier. Disagreeing with Fresh Bourbon’s claim, Brough Brothers sued it for false advertising under the Lanham Act, 15 U.S.C. § 1125(a). Brough Brothers, though, fails to identify any unambiguously false statements that Fresh Bourbon made, so it had the burden to introduce evidence that Fresh Bourbon’s statements had deceived consumers. It made no effort to do so. The district court thus properly granted summary judgment to Fresh Bourbon. We affirm.

MATHIS, Circuit Judge. Linda Elam resided at a nursing home in Lexington, Kentucky, in the weeks leading up to her death. Shortly before she died, Elam was diagnosed with several serious illnesses. Bonnie Townsend, Elam’s sister and estate executor, sued BLC Lexington SNF, LLC, Brookdale Senior Living Communities, Inc., Brookdale Senior Living Inc., and American Retirement Corporation (collectively, “BLC Lexington”) in Kentucky state court, bringing claims related to Elam’s care and death. BLC Lexington then filed a complaint in federal court, asking the district court to enjoin the state-court proceedings and compel Townsend to arbitrate her claims. The district court found the parties’ arbitration agreement enforceable and compelled arbitration for nearly all of Townsend’s claims. After a week-long arbitration, the arbitrator ruled in BLC Lexington’s favor on all claims. The district court confirmed the arbitration award. Because we agree with the district court’s decisions compelling arbitration and confirming the arbitration award, we affirm.

MURPHY, Circuit Judge. High-level prison officials cannot operate prisons by themselves. They must assign many duties to others. This case requires us to consider when these officials might violate the Eighth Amendment if the contractors tasked with providing medical care and preventing the spread of infectious diseases perform incompetently. For several years, women detained in a Michigan prison suffered from painful rashes. Their medical providers mistakenly ruled out a contagious condition: scabies. Much later, though, an outside dermatologist found that these providers had misdiagnosed the women and that scabies had spread through the prison. Four inmates incarcerated during this time seek damages not just from the medical providers but also from various prison officials who did not treat them. The district court held that the complaint plausibly pleaded that all defendants committed “clearly established” violations of the Eighth Amendment. It thus denied the defendants’ request for qualified immunity. The non-treating prison officials have appealed. And we agree with them that our precedent would not have clearly conveyed that their reliance on the front-line medical providers was so unreasonable as to violate the Eighth Amendment. On the other hand, the inmates adequately pleaded that these officials were the proximate cause of their injuries under Michigan law. We thus reverse the district court’s denial of qualified immunity and affirm its denial of state-law immunity.

Gov. Bill Lee has appointed Judge Stacy Street to the Tennessee Court of Criminal Appeals, Eastern Section. Street currently is serving as a criminal court judge in the 1st Judicial District. He earned his bachelor’s degree from East Tennessee State University and law degree from the University of Tennessee Winston College of Law. Street’s appointment fills a vacancy created by Judge Kyle Hixson’s elevation to the Tennessee Supreme Court. The appointment is effective July 7 and is subject to legislative confirmation. Read more in a press release from the Administrative Office of the Courts.