Category Archives: Civil Procedure

Op Ed: Veto bill aimed at quelling sexual harassment claims

From today’s Tennessean, my op ed on proposed civil fee-shifting for claims against government officials:

___________________________________________________________________________

By Daniel Horwitz:

Imagine being a young legislative aide who is on the receiving end of unwanted sexual advances by her employer, a prominent state representative.  He frequently comments on your appearance and suggests that you start dressing in more revealing clothing.  He calls you late at night and asks you to meet him at local bars while his wife thinks he’s working.  One day, he summons you to his office, shuts the door, and gropes you.  When you resist, he warns you not to tell anyone.  The next day, after you decline his request to come in for another “private meeting,” he fires you.

What do you do?  If you can prove what happened in court, of course, then you can hold him accountable.  But if you sue, you also fear repercussions.  What will happen to your career?  Do you want a long, high-profile legal battle, and can you even afford one against someone who has the government’s vast resources at his disposal?  What if a jury doesn’t believe you?

One way that society attempts to correct this power imbalance is by requiring government wrongdoers to pay a victim’s legal fees if the victim’s lawsuit is successful.  Federal and state laws commonly include such “fee-shifting” provisions in order to incentivize people to file suit when their constitutional or civil rights have been violated.  Notably, such provisions also play an important role in promoting public policy, since society has a strong interest in rooting out misconduct like sexual harassment even when a victim’s monetary damages are insubstantial.

Following the legislature’s recent approval of SB2377/HB1679, however, Tennessee is on the verge of taking the opposite approach: requiring alleged victims to pay the government’s legal fees if a lawsuit against a government official is unsuccessful.  Significantly, this penalty also is not restricted to claims that are deemed frivolous or unfounded; instead, it would apply no matter why the allegations failed.  For example, even if a victim withdraws a lawsuit voluntarily because she runs out of money to keep fighting it, she would still be required to pay the government a crippling monetary penalty.

Like many lawsuits, sexual harassment claims frequently cost hundreds of thousand dollars to litigate.  It is also safe to assume that most people don’t have that kind of money lying around, so individuals who fail to win a lawsuit against state employees will often be forced to declare bankruptcy.  Tellingly, the legislature’s own fiscal impact report acknowledges this reality, stating that “there will not be a significant number of attorneys’ fee awards collected as a result of the bill.”  Consequently, SB2377/HB1679 cannot honestly be described as an effort to reimburse taxpayers for successfully defending against frivolous lawsuits, as its Senate sponsor Mike Bell claimed.  Instead, it’s a deliberate attempt to deter victims from bringing government officials’ wrongdoing to light in the first place.

The immediate effect of such a change will be to discourage victims of official misconduct from pursuing their claims in court at all.  Remarkably, this naked attempt to intimidate victims was also the top legislative priority of Tennessee Attorney General Herbert Slatery, who is supposed to be the one individual above all in Tennessee who is tasked with protecting the public interest.

Even more disturbingly, General Slatery promoted this “reform” while his office was supposed to be conducting an investigation into alleged misconduct by State Representative Jeremy Durham, who recently resigned his leadership post after being accused of sexually harassing three women who work at the statehouse.  Astoundingly, General Slatery has also stated unequivocally and without embarrassment that the purpose of SB2377/HB1679 is to ensure that such victims “have something at risk” if they decide to file suit.

It is difficult to overstate just how troubling it is that the Attorney General’s primary response to sexual harassment at the state Capitol has been to try to sweep it under the rug.  Simply put, General Slatery’s effort to intimidate victims in this manner is shameful, and it is beneath the dignity of his office.

The proper response to wrongdoing by government officials is to root it out, to punish it, and to prevent it from occurring in the first place—not to use the threat of bankruptcy to deter victims from coming forward.  Regrettably, SB2377/HB1679 would do, and is intended to do, just that.  It should be vetoed by Governor Haslam accordingly.

Daniel A. Horwitz is an attorney in Nashville.  Reach him at daniel.a.horwitz@gmail.com and @Scot_Blog.

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A win for substance over form: Tennessee Supreme Court holds that Tennessee’s one-year savings statute applies to tolling agreements.

By Daniel Horwitz:

In an increasingly rare win for substantive law and justice over blind adherence to procedural technicalities, the Tennessee Supreme Court held in a 3-1 decision on Monday that Tennessee’s one-year savings statute applies to tolling agreements.

The case arose out of a legal malpractice dispute between a construction company and its law firm.  After the construction company found itself on the losing end of a $1.66 million judgment, the company notified its law firm that it was considering filing a malpractice claim against it.  Thereafter, the parties entered into an agreement that voluntarily extended the deadline for filing legal malpractice claims.  Pursuant to that agreement – known in legalese as a “tolling agreement” – the statute of limitations was extended by four months following the outcome of the company’s appeal.[1]  Notably, the tolling agreement also made no mention of Tennessee’s “savings statute,” the importance of which is discussed further below.

The company ultimately filed a legal malpractice lawsuit against its law firm on September 21, 2011.  Because the company’s appeal concerning its $1.66 million judgment had not yet been decided, there was also no doubt that based on the parties’ tolling agreement, the lawsuit was not time-barred.

Approximately seven months later, on April 16, 2012, the company voluntarily dismissed its lawsuit.  Like many other states, Tennessee has a “savings statute” that “allows a case that has been dismissed, for reasons other than a dismissal on the merits, to be refiled within a set period [of time]—even after the statute of limitations has run on the action.”[2]  Specifically, under Tennessee’s savings statute, a plaintiff that dismisses a lawsuit voluntarily is permitted to re-file the lawsuit “within one (1) year after” the dismissal.[3]

The Tennessee Supreme Court has explained on several occasions that the primary purpose of the savings statute is “to aid the Courts in administering the law fairly between litigants without binding them to minor and technical mistakes made by their counsel in interpreting the complexities of [Tennessee’s] laws of procedure.”[4]  In practice, though, the savings statute also provides several other benefits, such as giving parties an additional year to settle their claims, allowing a plaintiff to switch attorneys, or allowing an attorney to withdraw from a case after filing a lawsuit without unduly harming the plaintiff’s legal interests.  Thus, “the savings statute confers upon a plaintiff who files a second action within one year of a voluntary non-suit of a first action the same procedural and substantive benefits that were available to the plaintiff in the first action.”[5]

The company’s appeal was ultimately handed down on October 1, 2012.  Consequently, under the parties’ tolling agreement, the company’s (first) lawsuit had to be filed no more than four months later by January 29, 2013.  Because the company had already filed its first lawsuit and then taken a voluntary dismissal on April 16, 2012, however, the company relied on Tennessee’s savings statute for the proposition that it had an additional year after April 16, 2012 – meaning until April 16, 2013 – to re-file its claim.  Accordingly, the company re-filed its malpractice lawsuit on April 8, 2013.

The law firm ultimately filed a motion to dismiss the company’s second lawsuit on the basis that it had been filed too late.  According to the law firm, Tennessee’s savings statute did not apply to tolling agreements, and the company’s initial lawsuit had not been filed within the applicable statute of limitations.  Thus, the law firm argued, the merits of the company’s re-filed lawsuit could not be considered.

The hyper-technical justification offered to support the law firm’s position in this regard was that Tennessee’s savings statute applies only if an action “is commenced within the time limited by a rule or statute of limitation[.]”  Because, according to the law firm, the company’s lawsuit had only been commenced within the time permitted by the parties’ tolling agreement – rather than having been commenced within the time permitted by “a rule or statute of limitation” – Tennessee’s savings statute didn’t apply.

Upon review, a majority of the Tennessee Supreme Court summarily rejected this conclusion for several reasons.

First, the court explained, based on longstanding precedent, “the rights and obligations of contracting parties are governed by the law in effect when they entered into their contract, and existing law becomes as much a part of the contract as if specifically incorporated therein.”  Thus, the court reasoned, “in the absence of evidence of contrary intention, the parties must be held to have contemplated the application of [the savings statute] to the terms of their agreement.”

Second, the court held that even assuming that a tolling agreement itself doesn’t qualify as “a rule or statute of limitation,” the company’s first lawsuit had nonetheless been filed “within the time limited by [the] statute of limitation” because the parties’ tolling agreement had expressly “paused and extended the applicable statute of limitations.”  Accordingly, Tennessee’s savings statute had to be given effect.

Third, the court reiterated once again that “[b]ecause the savings statute is remedial, courts must give it a broad and liberal construction.”  Accordingly, the court concluded, when applying Tennessee’s savings statute, hyper-technical procedural claims should not prohibit a party’s lawsuit from going forward.

With these concerns in mind, the court held that “[i]f parties to a tolling agreement wish to foreclose application of the savings statute, they must include clear, explicit language in the tolling agreement to that effect.  Otherwise, without such explicit indication that the parties intend to circumvent the savings statute, it will normally apply.”  Accordingly, if parties that enter into tolling agreements wish to foreclose the application of Tennessee’s savings statute going forward, then the parties must specifically state in their tolling agreements that Tennessee’s savings statute is not intended to apply.

Commendably, the court’s majority decision in Circle C. Construction breaks a recent trend in decisions that have eschewed Tennessee’s longstanding tradition of “decid[ing cases] on the merits whenever possible,”[6] and have instead permitted “technical procedural hurdles to prevent otherwise valid claims from being adjudicated on their merits.”[7]  Specifically, following the recent retirements of Tennessee Supreme Court Justices Wade and Holder, civil plaintiffs have increasingly found themselves trapped by procedural obstacles that have prevented them from getting their claims past the courtroom door.  In particular, Justice Kirby has provided an especially reliable pro-civil defendant vote, having consistently voted to dismiss plaintiffs’ claims before a trial in employment cases, governmental tort cases, and in traditional tort cases like the one discussed above—in which Justice Kirby served as the court’s lone dissenter.

In fairness, however, Justice Kirby’s jurisprudential bent in favor of civil defendants can also be described as foreseeable in light of her tenure as a Court of Appeals judge.  For example, careful court-watchers will recall that one of the first cases decided by the Tennessee Supreme Court following Justice Kirby’s confirmation was a 4-0 decision by her future colleagues to reinstate a jury’s $3 million verdict in a retaliatory discharge action that then-Judge Kirby had dismissed while presiding as a member of the Court of Appeals.[8]  Where Justice Page – just confirmed by the General Assembly as the Tennessee Supreme Court’s fifth member – will come down on this increasingly prevalent dispute, however, only time will tell.

Read the Tennessee Supreme Court’s majority opinion in Circle C. Construction, LLC v. D. Sean Nilsen et al. here, and Justice Kirby’s dissenting opinion here.

Questions about this article?  Email Daniel Horwitz at daniel.a.horwitz@gmail.com.

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[1] Traditionally, legal malpractice claims must be filed within one year.  In this case, if it had not been extended, then the company’s lawsuit would have had to be filed by March 15, 2011.

[2] Decision at 6 (citing Clark v. Hoops, LP, 709 F. Supp. 2d 657, 669 (W.D. Tenn. 2010)).

[3] Tenn. Code Ann. § 28-1-105.  See also Rajvongs v. Wright, 432 S.W.3d 808, 811 (Tenn. 2013) (“The saving statute provides that if a timely filed action is dismissed without prejudice, a plaintiff may ‘commence a new action within one (1) year after’ the dismissal.”); Tenn. R. Civ. P. 41.01 (“Subject to the provisions of Rule 23.05, Rule 23.06, or Rule 66 or of any statute, and except when a motion for summary judgment made by an adverse party is pending, the plaintiff shall have the right to take a voluntary nonsuit to dismiss an action without prejudice by filing a written notice of dismissal at any time before the trial of a cause . . . .”).

[4] Gen. Acc. Fire & Life Assur. Corp. v. Kirkland, 356 S.W.2d 283, 285 (1962).

[5] Cronin v. Howe, 906 S.W.2d 910, 913 (Tenn. 1995)

[6] Moreno v. City of Clarksville, No. M201301465SCR11CV, 2015 WL 5526858, at *16 (Tenn. Sept. 18, 2015) (Wade, J., dissenting).

[7] Daniel A. Horwitz, The Law of Unintended Consequences: Avoiding the Health Care Liability Act Booby Trap, Vol. 15, No. 5 Nashville Bar Journal 14 (June 2015) (feature article), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2577156.

[8] See Ferguson v. Middle Tennessee State Univ., 451 S.W.3d 375 (Tenn. 2014) (reversing Ferguson v. Middle Tennessee State Univ., No. M2012-00890-COA-R3CV, 2013 WL 1304490 (Tenn. Ct. App. Mar. 28, 2013)).

Metro Can Sue Its Own Zoning Board, Holds Tennessee Supreme Court

By Daniel Horwitz:

In March 2012, an advertising company applied to Metro’s Department of Codes and Building Safety for two digital display billboard permits.  The Department’s Zoning Administrator denied the company’s two permit requests, so the company appealed the denial to Metro’s Board of Zoning Appeals (“the Board”).  On a 4-2 vote, the Board overturned the Zoning Administrator’s decision, and it granted the company the two digital display permits that it sought.

Unhappy with the Board’s decision, Metro Legal filed a lawsuit against the Board and various other parties under the appeal provision set forth in Tenn. Code Ann. § 27-9-101, which governs zoning appeals.  In response, the parties that Metro Legal sued filed a motion to dismiss the lawsuit on the basis that Metro “does not have standing to bring suit [against its] own Board.”  The trial court granted the parties’ motion to dismiss, finding that Metro did not have a legal right to appeal the Board’s decision under Tenn. Code Ann. § 27-9-101.  Further, the trial court held that Metro had not suffered an injury, which is a necessary precondition to filing any kind of lawsuit.  As a result, Metro Legal appealed the trial court’s decision to dismiss its lawsuit to the Tennessee Court of Appeals, and the case ultimately reached the Tennessee Supreme Court.

1.  Metro’s Right to Appeal Under Tenn. Code Ann. § 27-9-101

The statute governing zoning appeals provides broadly that: “Anyone who may be aggrieved by any final order or judgment of any board or commission . . . may have the order or judgment reviewed by the courts, where not otherwise specifically provided, in the manner provided by this chapter.”[1]  Thus, the first question presented was whether the term “anyone” in Tenn. Code Ann. § 27-9-101 included Metro.

Reviewing the applicable statutory text, the Tennessee Supreme Court easily concluded that for purposes of Tenn. Code Ann. § 27-9-101, “anyone” did indeed include Metro.  Writing for a unanimous court, Justice Bivins explained that:  “Section 101 refers to ‘anyone,’ and we conclude that Metro, a public corporation, falls within the scope of the term ‘anyone.’”  Further, he noted, “[e]ven were we to construe ‘anyone’ as referring to ‘persons,’ the Tennessee Code defines ‘person’ as including corporations[, and] Metro is a public corporation[.]”  Accordingly, he reasoned, Metro enjoys the right to pursue zoning appeals under Tenn. Code Ann. § 27-9-101 just like anyone else.

Seeking a contrary holding, Metro’s opposing litigants highlighted the fact that the legislature had considered – but failed to enact – a separate version of the zoning appeal statute that would have expressly afforded municipalities the right to appeal.  By opting not to enact that version, they argued, the legislature must have intended to deny municipalities the right to appeal zoning decisions.  Rejecting this line of reasoning, however, the Court explained that it was “[un]aware of any [] authority limiting the definition of the term ‘anyone’ . . .  to exclude Metro as a potential petitioner.”[2]

2.  Metro’s Injury

Having established that Tenn. Code Ann. § 27-9-101 affords Metro the right to seek judicial review of zoning decisions under circumstances when it has been “aggrieved,” the next question to be decided was whether it is even possible for Metro “to be aggrieved by an erroneous decision made by one of its own boards.”  Holding in the affirmative, the Court explained that “when applied to local governments, aggrievement encompasses interference with a local government’s ability to fulfill its statutory obligations, or substantial, direct, and adverse effects on the local government in its corporate capacity.”  Since Metro alleged in its complaint that the Zoning Board’s decision would interfere with its duty to enforce municipal zoning ordinances, the Court concluded that Metro had alleged an injury sufficient to justify judicial review.  Specifically, the court explained:

“Metro has established that it is ‘aggrieved’ by its allegation that, if the [Board’s] ruling is allowed to stand, it will be unable to enforce certain of its ordinances.  That allegation is within Section 101‟s zone of interests. Accordingly, Metro has established its standing to bring this action under Section 101.”

3.  Policy Considerations

In holding that Metro has the legal right to appeal decisions made by the Board of Zoning Appeals, the Court also relied heavily on a single crucial policy consideration:  the fact that a contrary result would mean that only wealthy individuals would be able to appeal adverse zoning decisions.  Specifically, the Court noted, if Metro did not have the right to appeal Board decisions on behalf of taxpayers, then only individuals or entities with sufficient resources to file a lawsuit would be able to challenge the Board in court.  Rejecting this result as unacceptable, the Court explained that it was “persuaded particularly” by the concern that:

“The enforcement of a governmental body’s zoning code should not depend upon the economic status of individuals.  Indeed, such a scenario stands to defeat the very purpose of a zoning code.”

The Court’s sensitivity to the fact that legal rights should not be a function of poverty is welcome and should be applauded by all.  One can only hope, however, that its concern for indigent citizens will extend beyond those affected by zoning decisions.  It is well documented, for example, that within the criminal justice system, outcomes that should depend exclusively on guilt or innocence are instead highly dependent on a defendant’s economic status—leading inexorably to the conclusion that “[t]here is a crisis in legal representation for the poor throughout the country.”[3]  Similarly, on behalf of several domestic and sexual violence prevention advocates who are seeking to protect rape victims from having their most sensitive personal information disclosed, the author has beseeched the Justices to recognize that “the vast majority of victims of sexual and domestic violence lack the means to retain private counsel to protect their rights in any—much less every—phase of Tennessee’s justice system.”  See Tennessean v. Metro. Gov’t of Nashville, No. M-2014-00524-SC-R11-CV, Brief of Amici Curiae Domestic and Sexual Violence Prevention Advocates 32, available at http://works.bepress.com/cgi/viewcontent.cgi?article=1023&context=daniel_horwitz.  Accordingly, these advocates have implored the Court to hold that rape survivors should benefit from a presumption in favor of non-disclosure with respect to their private, personal information, rather than being forced to hire an attorney to protect their rights in the event that someone seeks access to their private records.

Whether the Court will take citizens’ poverty and economic status into consideration outside the context of zoning disputes, however, only time will tell.

Read the Tennessee Supreme Court’s unanimous opinion in Metro. Gov’t of Nashville-Davidson Cty. v. Bd. of Zoning Appeals of Nashville here.

Questions about this article?  Email Daniel Horwitz at daniel.a.horwitz@gmail.com.

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[1] Tenn. Code Ann. § 27-9-101.

[2] In the author’s view, a much stronger argument would have been that Tenn. Code Ann. § 13-7-206 – which governs the first step of the zoning appeals process – specifically affords “municipalit[ies]” the right to appeal, while Tenn. Code Ann. § 27-9-101 – which governs the second step of the zoning appeals process – does not.  Pursuant to the doctrine of in pari materia, one could argue persuasively that this conspicuous difference indicates that the legislature intended for the two provisions to function differently.  See, e.g., Stevens ex rel. Stevens v. Hickman Cmty. Health Care Servs., Inc., 418 S.W.3d 547, 560 (Tenn. 2013) (holding that where to statutory provisions are “enacted together,” “the doctrine of in pari materia requires us to interpret the[] two sections together. . . . Although legislative silence is not generally indicative of an intent not to act, legislative silence in [] context offers a strong suggestion that the legislature intend[s provisions to] function differently.”) (internal citations omitted).

[3] Stephen B. Bright, The Right to Counsel in Death Penalty and Other Criminal Cases: Neglect of the Most Fundamental Right and What We Should Do About It, 11 J.L. SOC’Y 1, 3 (2010), available at http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=4457&context=fss_papers.

Tennessee Supreme Court gives trial courts more latitude in determining proper sanctions for spoliation of evidence.

By Daniel Horwitz:

On March 3rd, 2008, Lee Ann Tatham purchased two new Bridgestone tires in Murfreesboro, Tennessee.  Unfortunately, however, less than three months later, one of the two tires failed while she was driving on the interstate, causing her to spin out.  Thereafter, Ms. Tatham’s car careened across the highway, struck a guardrail, flipped, and landed in a ditch.  Ms. Tatham survived the accident, but she suffered a broken back as a result of it.

Because her car was completely totaled in the accident, Ms. Tatham’s insurance company advised her to transfer the title of her vehicle to the wrecker service that had towed it away.  The wrecker service subsequently destroyed her vehicle – including the defective tire – as part of its routine practice.  Ms. Tatham did not seek to have the tire destroyed by the wrecker service, and she did not know that it would be.  Additionally, because she had not yet hired an attorney, Ms. Tatham was not aware that she was supposed to have the defective tire preserved as evidence.

Eventually, Ms. Tatham brought a products liability lawsuit against Bridgestone seeking compensation for her injuries.  Thereafter, Bridgestone filed a motion to dismiss Ms. Tatham’s lawsuit on the basis that the tire at issue had improperly been destroyed.  The trial court denied Bridgestone’s motion, and it permitted Ms. Tatham’s case to go forward.  This appeal followed.

Spoliation of Evidence

As a general matter, people are not allowed to destroy evidence that will be relevant to a future legal proceeding.  Failing to preserve evidence – or, in legal parlance, “spoliation of evidence” – exposes a litigant to being sanctioned once the legal proceeding begins.[1]  In Tennessee, the range of potential remedies that a trial court can use to punish a party for destroying evidence is extensive.  Possible sanctions include “dismissal of the action, rendering a judgment by default, limiting the introduction of certain claims or evidence, entering an order designating that certain facts shall be taken as established, and striking out pleadings or parts of pleadings.”[2]

Broadly speaking, trial sanctions for spoliation of evidence are intended to serve two purposes.  First, they “attempt[] to place the non-spoliator in a position similar to where it would have been prior to the destruction of evidence.”[3]  Second, Continue reading Tennessee Supreme Court gives trial courts more latitude in determining proper sanctions for spoliation of evidence.

In its most consequential ruling of the year, Tennessee Supreme Court modifies Tennessee’s summary judgment standard, adopts federal “put up or shut up” rule.

By Daniel Horwitz:

Concluding in Rye v. Women’s Care Ctr. of Memphis that the seven-year-old summary judgment standard established by the Tennessee Supreme Court in Hannan v. Alltel Publ’g Co. had proven to be “unworkable” and “functioned in practice to frustrate the purposes for which summary judgment was intended,” the Court has officially overruled Hannan effective immediately.[1]  In its place, the Court “fully embrace[d]” the summary judgment standard that has been used in federal cases since 1986.[2]

The federal summary judgment standard empowers litigants to force their opponents to “put up [evidence] or shut up” before trial.[3]  If, in response to a properly supported motion for summary judgment, the responding (“nonmoving”) party is unable to muster sufficient evidence to demonstrate that there is a genuine dispute of a material fact that requires a trial, then summary judgment must be granted in favor of the moving party.  In contrast, under the prior Hannan standard, several courts had concluded that “it is not enough to rely on the nonmoving party’s lack of proof even . . . after the deadline for discovery ha[s] passed.  Under Hannan, we are required to assume that the nonmoving party may still, by the time of trial, somehow come up with evidence to support [a] claim.”[4]  After determining that this standard was “unworkable and inconsistent with the history and text of Tennessee Rule [of Civil Procedure] 56,”[5] a majority of the Court concluded that Hannan should be overruled.

In all likelihood,[6] the immediate effect of the Court’s decision in Rye will be to increase the number of cases that are decided at the summary judgment stage.  Thus, fewer cases will end up going to trial and being decided by a jury, and litigants are less likely to settle claims.  Helpfully, the Tennessee Supreme Court’s “full[] embrace” of the federal summary judgment standard also harmonizes state and federal civil procedure, and it finally settles an area of law that had created a substantial degree of confusion among both lower courts and the Justices of the Tennessee Supreme Court themselves.[7] Continue reading In its most consequential ruling of the year, Tennessee Supreme Court modifies Tennessee’s summary judgment standard, adopts federal “put up or shut up” rule.