News

SCOTUS Justices Appear Ready to Void Tennessee Residency Requirement for Alcohol Sales

The U.S. Supreme Court appeared ready today to strike down a Tennessee provision that requires people to live in the state for two years before obtaining a license to sell alcohol, The Associated Press reports. Several justices said the restriction unconstitutionally discriminates against out-of-state economic interests. A ruling invalidating the residency requirement would be a victory for The Ketchum family, who bought a Memphis liquor store and moved to Tennessee from Utah in search of a healthier climate for their disabled adult daughter. Thirty-five states and the District of Columbia are urging the court to uphold the two-year residency requirement.

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Metro Council Approves Infrastructure Funding for Nashville Yards Development

The Metro Nashville Council on Tuesday voted to grant preliminary approval for $15.2 million earmarked towards road, sewer and other infrastructure needs around the Nashville Yards project which will be home to Amazon’s HQ2, The Tennessean reports. The move also approves participation, easement and license agreements between Metro and Uptown Property Holdings, the building group in charge of development. Council member Kathleen Murphy — one of only three detractors — denounced the city’s interest in the infrastructure plan, saying that it was just "another incentive" for Amazon and that the money would be better spent on other projects throughout the city. The council will make its final decision regarding the infrastructure reimbursement on Feb. 5.

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Real Estate Investments Safer than Other Sectors in Flailing Market

Real estate fund investments remain relatively stable despite a mercurial stock market, The New York Times reports. As the S&P 500 plunged 13.52 percent in the fourth quarter, FTSE Nareit All Equity R.E.I.T.s Index — the leading index of publicly traded real estate investment trusts — lost only 6.1 percent, marking a 4 percent loss for the entirety of 2018, compared to an S&P 500 loss of 4.4 percent, including dividends, for the same period. The sector has achieved comparative stability through tangible assets, banking on office buildings, malls and warehouses.

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FedEx Agrees to Payout, Ceasing Tobacco Shipments in Settlement with New York

FedEx has reached a $35.4 million settlement with the city and state of New York for three lawsuits alleging illegal shipments of cigarettes in the state over a 10-year period, The Commercial Appeal reports. In announcing the case against FedEx in 2014, the New York Attorney General’s office said FedEx made close to 33,000 illegal cigarette shipments amounting to more than 400,000 untaxed cigarette cartons to consumers in the state. This meant New York lost out on more than $10 million in tax dollars. In its settlement, FedEx, beyond the payment, agreed to reforms like ceasing domestic tobacco shipments (with limited exceptions) and having an independent consultant monitor the company’s compliance going forward.
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Republicans File Medical Marijuana Bill

Two Republican lawmakers are sponsoring legislation to regulate medical marijuana in Tennessee, The Times Free Press reports. State Sen. Janice Bowling, R-Tullahoma, and Rep. Ron Travis, R-Dayton, said their bill would apply to qualified patients with certain specific diagnoses. They could obtain medical cards and buy products from companies licensed by Tennessee and owned by Tennesseans to cultivate, process and dispense cannabis. The Tennessee Medical Cannabis Trade Association has endorsed the Bowling-Travis bill, which the sponsors tout as a tool to fight opioid addiction as well as provide therapy to individuals suffering from serious illnesses.
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Supreme Court to Take Up Case of Liquor-store Owner Residency Requirements

The U.S. Supreme Court is soon due to hear the case of Doug and Mary Ketchum, who according to Tennessee law, cannot get a license to operate a liquor store because they have not lived in the state for more than a year, The Commercial Appeal reports. The state Alcoholic Beverage Commission recommended that the couple be allowed a license, but the Tennessee Wine & Spirits Retailers Association threatened to sue if they did. Instead, the commission filed its own suit, asking that the law be declared unconstitutional. The case is due to be heard on Jan. 16.
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Appeals Court Delays Pilot Flying J Executive’s Prison Sentence

The 6th Circuit Court of Appeals says former Pilot Flying J Vice President Scott “Scooter” Wombold doesn’t have to go to prison just yet, due to Senior U.S. District Judge Curtis L. Collier Jr.'s decision during Wombold's trial to allow jurors to hear secret recordings of former company president Mark Hazelwood's drunken, racist rants during a corporate meeting. Knoxnews reports that this is the second such decision made by the 6th Circuit, as it also delayed Hazelwood's trip to prison back in November. Wombold claims the jury was unfairly prejudiced against him due to the recordings.

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Planned Parenthood and Others Face Accusations of Mistreating Pregnant Employees

Planned Parenthood and four other organizations that serve or cater to women have been accused of engaging in discriminatory practices against potential and current pregnant employees, The New York Times reports. Employees from four states claim that Planned Parenthood managers in certain locations declined to hire pregnant job applicants and declined break requests from pregnant employees. Additionally, some employees were forced out of their position following child birth. Natera, a company that sells genetic tests for pregnant women, has been accused of demoting employees while on maternity leave. CNN adds to the story that beauty company Avon, hailed as “the company for women,” has been sued by two cosmetics-testing lab employees with claims that they were forced to handle toxic chemicals while pregnant. The law firm Mehri & Skalet faces accusations that Cyrus Mehri, a founding partner, mistreated three female lawyer employees. One claims she was pressured to return to work from her maternity leave earlier than planned, while another alleges that she was fired following her request to delay her performance review while she was on leave.  

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Blog Reviews Most Important Legal Tech Developments in 2018

LawSitesBlog.com has published a roundup of the 20 most important legal tech developments in the past year, eschewing the traditional Top 10 list due to the overwhelming number of significant changes. Included on the list were analytics becoming an essential part of the legal practice, investments in legal tech topping $1 billion, the end of Avvo and the new American Bar Association rule emphasizing the duty of lawyers to be up-to-date on legal technology.
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Lawsuit Claims Baker Donelson, Butler Snow Share Responsibility in Ponzi Scheme

The court-appointed receiver for the estates of confessed Ponzi schemer Arthur Lamar Adams and his disgraced company, Madison Timber Properties, has sued Baker, Donelson, Bearman, Caldwell & Berkowitz and Butler Snow for allegedly abetting or turning a blind eye to Adams’ $100 million scheme, Law.com reports. Receiver Alysson Mills argues responsibility for the scheme extends far beyond one individual, claiming that individuals at the firms ignored red flags and even abetted the scam. Both law firms issued statements adamantly denying the allegations against them and promising to vigorously defend themselves in the suit.
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Forum Selection Provision in Corporate Charter or Bylaws Deemed Unenforceable Under Delaware Law for Securities Claims

While Delaware statutes permit corporations to include bylaws provisions specifying a forum for “internal affairs claims,” such provisions in corporate documents do not apply to external relationships. In a Dec. 19 opinion, the Delaware Chancery Court ruled in the case of Sciabacucchi v. Salzberg that a provision in an incorporation certificate stating that any claim under the Securities Act of 1933 must be brought in federal court was unenforceable. The court noted the fundamental principle that corporate charters are not ordinary contracts binding the rights and obligations of private individuals, but rather are instruments creating a corporate entity, whose existence is recognized and regulated by a state. Delaware’s authority over the internal affairs of corporations “does not extend to (a corporation’s) external relationships.”

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Delaware Supreme Court Upholds Merger Termination Under Material Adverse Effect Provision

For apparently the first time, a Delaware court has found that a material adverse effect occurred in a merger transaction and affirmed the unilateral termination of the agreement. In 2008, the Delaware Chancery Court in Hexion Specialty Chemicals, Inc. v. Huntsman Corp., recognizing material adverse effect clauses as a “backstop” against the occurrence of unknown events substantially threatening the long-term profitability of the target, stated “(m)any commentators have noted that Delaware courts have never found a material adverse effect to have occurred in the context of a merger agreement.” 965 A.2d 715, 738 (Del. Ch. 2008). On Dec. 7, the Supreme Court of Delaware, in the expedited appeal of Akorn, Inc. v. Fresenius Kabi AG, upheld the chancery court’s opinion finding, among other things, the acquisition target “had suffered a material adverse effect” under the merger agreement “that excused any obligation on (the acquirer’s) part to close.” Notably, the case was submitted to the chancery court on Sept. 25, with a 246-page opinion issued on Oct. 1.

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Regular Memphis Pro Bono Clinic Has Served 12K Since Inception

Since its beginnings over a decade ago, a Memphis-area pro bono legal clinic has gone on to serve roughly 12,000 individuals in need, The Daily Memphian reports. The Saturday Legal Clinic, sponsored by Memphis Area Legal Services (MALS) and the Memphis Bar Association, has been held at the Benjamin L. Hooks Library once a month since November 2006. Firms and associations work to promote the event to ensure that 30 to 40 attorneys attend each month.
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Webcasts: Transactional Practice Series (Parts 1 and 2)

New for 2018! Every lawyer experiences transactional law at some point in the year, and this all-in-one online video series features up to six dynamic hours of valuable content providing lawyers in various areas of the law with the information, tools, and tips needed to successfully handle transactional, traditional business, and probate matters. Perfect for General, Solo, Small Firms, Real Estate Law, Entertainment Law, Health Law, Business Law, Bankruptcy Law or Young Lawyers Division attorneys. Earn up to five general (online) CLE hours and one dual (online) hour. Part 1: Earn up to 3 general (online) CLE hoursPart 2: Earn up to 2 general and 1 dual (online) CLE hours.

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CBS Has to Pay Moonves’ Legal Fees Against CBS

Former CBS Corporation Chairman and CEO Les Moonves may utilize a confidential arbitration to challenge the decision recently reached by CBS’s board to deny him any severance payment, The New York Times reports. In his termination agreement, CBS is liable for paying his attorney fees. Arbitration at this level could run up anywhere between $20 million to $50 million. CBS is facing high costs due to having to pay for legal representation for itself, its board and Moonves; a cheaper option may be a settlement. However, the article notes that a settlement would likely anger many people given the publicity of the sexual assault and misconduct allegations against Moonves.

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Johnson & Johnson Loses Bid to Reverse $4.7 Billion Verdict in Baby Powder Case

Johnson & Johnson lost its motion on Wednesday to reverse a jury verdict that awarded $4.69 billion to women who blamed their ovarian cancer on asbestos in the company’s baby powder and other talc products, The New York Times reports. Missouri Circuit Court Judge Rex Burlison upheld the verdict, which represented one of the largest personal injury awards on record. Johnson & Johnson has known for decades about the risk of asbestos contamination in its talc, but fought to keep negative information behind closed doors. The company said the verdict could still be reversed in appeals court.
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3 More Former Pilot Flying J Executives Sentenced

Three more former Pilot Flying J sales executives appeared in court yesterday to be sentenced for their roles in the fraud scheme that also took down the company’s former president and several other leaders, Knoxnews reports. Arnold Ralenkotter, Jay Stinnett and John Spiewak all worked approving contracts they knew Pilot didn't plan to honor with smaller trucking companies that sales execs hoped wouldn't be sophisticated enough to spot the deceit. Ralenkotter and Spiewak will serve 21 months apiece, and Stinnett will serve 30 months. 
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Court Solicits Comments on Rule Change for Professional Privilege Tax Payments

The Tennessee Supreme Court is soliciting comments on a proposed rule change that would make delinquent professional privilege tax fees payable via an online portal and remove the requirement of a Privilege Tax Delinquency Notice to be sent via mail, requiring only an email notice. The deadline for submitting written comments is Feb. 4. Written comments may be emailed to appellatecourtclerk@tncourts.gov or mailed to James M. Hivner, Clerk, Re: Tenn. Sup. Ct. R. 9, section 26 Tennessee Appellate Courts, 100 Supreme Court Building, 401 7th Avenue North, Nashville, Tennessee 37219-1407.
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Boy Scouts of America Considers Chapter 11 Filing

The Boy Scouts of America (BSA) is struggling financially as costs mount for defending against allegations of  sexual abuse of boys, NBC News reports. The nonprofit organization is exploring all options to continue its programming without interruption, including filing for Chapter 11 protection. Following some controversial policy changes — including the removal of a ban on openly gay members, accepting openly gay adult scout leaders, accepting girls into the program and changing the program name to a gender-neutral alternative — the Mormon Church decided to end its 105-year partnership with the BSA. The strategy of filing for Chapter 11 protection is not uncommon; many religious groups and dioceses have filed for Chapter 11 protections during settlement negotiations with victims. USA Gymnastics also filed for bankruptcy while the organization deals with a mountain of lawsuits related to the Larry Nassar scandal.   

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Amazon Faces Joint Employer Lawsuits

A federal judge recently ruled against the class claims of a delivery driver in the Miller v. Amazon.com Inc. case., Bloomberg Law reports. However, the judge’s ruling did leave room for a potential joint employment finding. The case is currently being reviewed under California labor law, but this finding would set precedent for other major businesses that regularly use contracted or subcontracted labor in California and other states with similar ‘joint employer’ laws. An additional lawsuit in a different jurisdiction seeks to hold Amazon liable as a joint employer of contractor’s workers.

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Law Tech Blast: Feb. 15, 2019

Discover the newest technology for your law practice and law office at this year's Law Tech Blast on Feb. 15! This is a free program available to all practicing lawyers. The flexible open house format allows you to create your own schedule. You can attend CLE sessions, enter to win prizes, network with attendees, visit with sponsors and interact with speakers. Take as many or as few CLE hours as you need. Only those seeking to be awarded CLE Credit will be charged. The registration desk will be open all day, so you can come and go for the hours you need when it is convenient for you. Attendees can earn up to 6.5 hours of Dual CLE credit.

FREE SIGN UP: Sign up now so we know you are coming.

  • You will only pay for the hours you wish to be awarded CLE credit.
  • Programming will be available throughout the day with dual credit hours available.
  • The registration desk will also be open all day.
CLE TOPICS:
  • GDPR, Cloud and Technological Competency
  • The Bill and Phil Tech Show
  • Best Practices: Information Security for Firms
  • Judicial Panel: Technology in the Courtroom
  • Preparing for eDiscovery Before Litigation 

ATTEND TO WIN: Attendees will have a chance to win prizes, including a hot, new tech product. The tech prize drawing will be held at the 10:30 a.m. break. Must be present to win.

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Give the Gift of TBA Membership

Give yourself (or a friend) the gift that keeps giving — one-year of unlimited access to professional development opportunities and a number of programs and services designed to help you become a better practitioner. Founded in 1881, the Tennessee Bar Association is dedicated to enhancing fellowship among members of the state's legal community. Oh, and did we mention some of the benefits? Earn three pre-paid credits to use on any live or online course featured in the 12-days of CLE. Join now!

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Downtown Memphis Development Board Approves First TIF Property

The Center City Revenue Finance Corp., a state-chartered industrial development board in Memphis, recently approved its first tax increment financing initiative, the Memphis Business Journal reports. The Union Row project will develop around 800 apartments, 200 hotel rooms and 460,000 square feet of mixed-use office and retail space in a location between South City and Downtown. Construction is set to start in June 2019, with the first phase scheduled for completion by June 2021.

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Application of Blockchain Tech Reaches the Music Industry

This article from BBC discusses how blockchain technology has the potential to change several industries, including the music industry. Musician Imogen Heap held a small show in Sweden and offered the ticket holders an opportunity to join an experiment of hers - those that sign up agreed to a ‘smart contract’ to ensure they automatically receive a portion of the royalties made from the sale of the recorded show. Blockchain is primarily used to support cryptocurrencies, like BitCoin, but other industries are starting to explore the benefits of utilizing the technology. This is increasing the need for blockchain specialists in all fields. The article notes that the demand for employees with expertise in blockchain is six times higher than it was in 2015.

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CVS to Scale Back Retail Operations After Aetna Acquisition

Pharmacy chain CVS Health on Wednesday announced that it plans to reduce the amount of store space devoted to retail and shift more to health care after its acquisition of Aetna, USA Today reports. With the $70 billion-dollar deal, CVS intends to position itself to control key health care components such as pharmacy, drug distribution and insurance. The acquisition has not been without controversy, with U.S. District Judge Richard Leon admonishing a U.S. Justice Department lawyer on Thursday for keeping him “in the dark” and treating his antitrust review as a “rubber stamp operation.” The Justice Department approved the deal in October on the condition that Aetna sells its Medicare Part D prescription drug plan business.

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