Tag Archives: Daniel Horwitz

Tennessee Supreme Court Reinstates Panel Decision Extending Attorney’s Disbarment

Rules of Professional Conduct,

Lawyer convicted for possessing child pornography in 2007 denied petition to have his law license reinstated.

By Daniel A. Horwitz

In 2007, Drayton Smith—an accomplished wills and estate planning attorney—pleaded guilty to charges of receipt and possession of child pornography.  He was sentenced to five years in federal prison, another ten years of supervised probation, and required to register as a sex offender for life.  In a separate proceeding, he also consented to his immediate disbarment from the practice of law.

Yesterday, the Tennessee Supreme Court affirmed a panel decision forbidding Mr. Smith from having his law license reinstated.  Under the deferential standard of review that applies to appeals of agency determinations, the decision was plainly correct.  Nonetheless, the case gives rise to much broader concerns about Due Process and character and fitness requirements themselves.

In 2014, after his release from prison but during his probation, Mr. Smith petitioned a panel of Tennessee’s Board of Professional Responsibility (BPR)—the judicial agency that handles lawyer discipline—for reinstatement of his law license.  Mr. Smith’s physicians, the deputy director of the Tennessee Lawyers Assistance Program, several character witnesses, and a separate medical expert testified at Mr. Smith’s hearing, as did Mr. Smith himself.

The testimony presented at Mr. Smith’s hearing covered several topics.  Mr. Smith’s doctors testified about his treatment and opined that he was unlikely to reoffend.  Mr. Smith’s character witnesses—who included multiple current attorneys, former clients, and two retired judges—testified that he was a capable, intelligent attorney, and that he enjoyed a reputation as a skilled lawyer who represented his clients competently and with honesty and integrity.  As to the crime that he had committed, Mr. Smith testified that he had been convicted of possessing approximately 40 photographs of prepubescent girls, which he had downloaded while “suffering from chronic clinical depression.”  (He has since been diagnosed with pedophilia as well.)  Mr. Smith further testified that he thought of his crime as victimless at the time, but that “[s]ince his arrest, he had come to understand through counseling the harm that his actions caused to the persons in the images.”  Finally, Mr. Smith detailed the personal and professional consequences that he had experienced as a result of his crime, which can fairly be summarized as having lost everything.

Perhaps unsurprisingly, the Board of Professional Responsibility vigorously opposed Mr. Smith’s reinstatement.  In so doing, it emphasized a component of one of Mr. Smith’s medical reports, which indicated that during his treatment, he had scanned comic strips from a newspaper and then colored their clothing to make them appear nude—behavior that one doctor noted was “an indirect measure of interest in children.”  According to the BPR’s prosecutor, that behavior, which had stopped, was not disclosed to Mr. Smith’s probation officer, and it could be construed as possession of pornography (no) or use of a computer with internet access in violation of his probation (the Court noted that there was no evidence introduced on the matter).  The BPR’s prosecutor also cross-examined a church official who had come to support Mr. Smith and asked her whether Mr. Smith had sought “forgiveness from you or the church for his actions.”

Upon review, Mr. Smith’s hearing panel ruled that he had “failed to prove by clear and convincing evidence that he possesses the moral qualifications required to practice law in Tennessee.”  The panel’s unusually long decision was multi-pronged.  First, it found that Mr. Smith’s character witnesses were insufficiently knowledgeable about the precise details of his crime, treatment, and post-release conduct to have a credible opinion as to whether he should be reinstated.  Second, it expressed concern that Mr. Smith had not disclosed the comic strip incident to his probation officer, which it took as an indicator of dishonesty and potential probation violations.  Third, and most importantly, the hearing panel noted that:

“[T]here is a negative public stigma attached to individuals convicted of paraphilia and pedophilia offenses. Several of [Mr. Smith’s] friends . . . testified [that he] has lost friends, had his reputation damaged and will suffer public scorn from his criminal history and conviction. Moreover, both Dr. Battle and Dr. Abel testified as to the negative social stigma attached to sex offenders and pedophilia/paraphilia patients. Dr. Abel testified the general public believes paraphilia patients cannot be successfully treated. Even [Mr. Smith] acknowledged during his testimony, people are going to hate him just because they know he is a sex offender and that is not something that will go away.”

In other words: the panel “expressed concern with [Mr. Smith]’s status as a sex offender and, if [he] were reinstated, the impact of that status on the integrity of the bar.”

The hearing panel’s ruling was ultimately affirmed by the Tennessee Supreme Court, which reviews agency determinations under a highly deferential standard of review that ensures that they are virtually never disturbed except in the most outrageous cases.  Under that standard of review, the Court defers to all credibility determinations made by an agency, and it also gives the agency complete authority to determine the relative weight of the evidence presented to it.  After doing so, as long as there is more than a scintilla of “substantial and material” evidence in the record to support the agency’s decision, the decision must be affirmed.

Given this deferential standard of review, there is little doubt that the Tennessee Supreme Court correctly affirmed the hearing panel’s decision to deny Mr. Smith reinstatement.  Of special note, though, it did so only after an intermediate court held that the panel’s ruling had been “based solely on the nature of the crime committed and . . . [was] arbitrary and capricious and not supported by substantial and material evidence.”  The case also saw the BPR’s attorney chastised by the Tennessee Supreme Court for (badly) missing a filing deadline and then “attempt[ing] to use its own missed deadline as both weapon and shield.”  But the greatest import of the case is not its ultimate outcome for Mr. Smith.  Instead, it was the BPR’s troubling conduct along the way.

There is no doubt whatsoever that child pornography is widely viewed and treated as one of society’s most heinous crimes.  Those who believe that people convicted of possessing child pornography cannot suffer too much have a great deal of company.  Regardless, however, the BPR’s conduct in Mr. Smith’s case should concern everyone, because there is little reason to believe that it is or will be isolated.

Whether they are entitled to do so or not, government agency prosecutors should not be compelling clergy to divulge whether a person—any person—has asked forgiveness from their faith community or from God.  Whether they are entitled to do so or not, government agency prosecutors should not be positing that a person—any person—may have committed an uncharged, unproven criminal violation.  And whether they are entitled to do so or not, the Board of Professional Responsibility should not premise its determination about whether a person has the “moral qualifications required to practice law” upon vague and undefined notions of “public stigma”—a dangerously overbroad criterion that has frightening potential to be extended to anything that a handful of elite government agency appointees collectively deem “unpopular.”

It is also fair to worry that if the same searching inquiry and zeal were deployed against every other lawyer in Tennessee, there would not be anyone left to practice law in this state.  Indeed, if the BPR were interested in applying disciplinary rules evenhandedly, then its own agency prosecutor would find himself sanctioned for missing a filing deadline in Mr. Smith’s case—a prosecution that it has very recently brought against others.  That will not happen, of course, and it shouldn’t.  Even so, the knowledge that disciplinary rules are broad enough to enable the BPR to bring its hammer down selectively on anyone it pleases should concern everyone.

In theory, bar “character and fitness” requirements are intended to protect the public from unqualified and unethical lawyers.  As explained in a previous post, however, in the not-too-distant-past, such requirements were “wielded to keep disfavored minorities—like Jews and women—from becoming lawyers instead.”  With this disturbing historical context in mind, the same people who will be understandably pleased with the outcome of Mr. Smith’s case should also be concerned that the next person who is denied the opportunity to practice law due to the “public stigma” surrounding his or her past may be significantly less concerning.

Mr. Smith’s case also forces the rest of society to grapple with a number of difficult questions that the BPR has left unanswered.  When people who are convicted of possessing child pornography get out of prison, do we want them to be unemployed forever?  If not, what jobs should they be permitted to hold?  Whatever those jobs are, why is being a lawyer different?  If Mr. Smith’s honesty and integrity were as indisputable as all of his character witnesses claimed, would that change your view?

Separately, it is worth asking who—specifically—benefits from denying Mr. Smith the opportunity to practice his lifelong profession.  If Mr. Smith were able to return to his job, for instance, it stands to reason that he could begin paying restitution to the victims whose photos he downloaded.  By getting his law license back, Mr. Smith would also become a tax-paying, productive member of society again, rather than an unemployed one.  Further, by allowing Mr. Smith to practice law, people in need of legal assistance regarding wills and estate matters would have another capable option available to them in the marketplace for those legal services—meaning that the public would enjoy the greater choice, improved service, and lower prices that always result from enhanced competition.

Perhaps more than any other, the legal profession is obsessed with its reputation among the public.  Despite this obsession, however, it consistently enjoys one of the worst reputations of any major profession—just barely outpacing lobbyists and members of Congress, who are disproportionately made up of lawyers as well.

Although the bar seems unaware of it, the public is unimpressed with lawyers for any number of legitimate reasons, chief among them being that the legal system is profoundly abusive—particularly to those who have to navigate it alone; that the vast majority of people cannot afford legal services; and that justice is only really available to those who can afford it.  Despite the serious structural problems with the profession, however, bar regulators have done little and less to address any of them.  Instead, they have focused their efforts to “protect the integrity of the profession” on causes like enforcing speech codes that prohibit lawyers from criticizing judges; advocated for new speech codes that would enable bar regulators to punish all manner of disfavored speech; demanded unquestioned and borderline dogmatic respect for participants in the legal system; and agitated for robust “civility” enforcement.

Taken together, one could be forgiven for concluding that the legal profession’s primary response to widespread criticism has not been to address its root causes, but to make such criticism illegal.  Whether the bar regulators who are in a position to address the structural problems in the profession are interested in doing so, however, remains an open question.

Read the Tennessee Supreme Court’s unanimous opinion in Drayton Beecher Smith, II v. Board of Professional Responsibility of the Tennessee Supreme Court, authored by Chief Justice Jeffrey Bivins, here.

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Tennessee’s Medical Malpractice Statute Traps Another Plaintiff

Civil Procedure,

Tennessee Supreme Court holds that the Health Care Liability Act’s statute of limitations is not extended if a plaintiff sends pre-suit notice to the wrong defendant.

By Daniel A. Horwitz

Tiffinne Runions, a Madison County mother who lost her child five days after childbirth, has also lost her day in court based on a misaddressed pre-suit notice.  As a result, Ms. Runions’ lawsuit did not fail based on a judge or jury rejecting the merits of her claim that “the defendants’ negligent conduct . . . caused the baby’s death.”  Instead, her lawsuit never even made it past the courthouse doors due to her attorney’s mistake about who owned the hospital that delivered her baby.

Over the past decade, one medical malpractice claim after another in Tennessee has been derailed following plaintiffs’ unsuccessful attempts to comply with certain pre-suit notice requirements mandated by Tennessee’s Health Care Liability Act (HCLA).  As a result, the Tennessee Supreme Court’s unanimous decision to dismiss Ms. Runions’ lawsuit even before its merits could be considered represents only the latest casualty in a long line of medical malpractice cases—known as “healthcare liability” claims in Tennessee—that have been doomed from their inception due to attorneys’ procedural mistakes.

As this author previously explained in a 2015 Nashville Bar Journal article:

In 2009, interest groups representing both healthcare providers and injured patients worked together “to draft and pass” several amendments to Tennessee’s medical malpractice statute that aimed to improve medical malpractice litigation for all involved.  According to the Tennessee Supreme Court, the goals of the 2009 amendments were “to give defendants written notice that a potential healthcare liability claim may be forthcoming,” to “facilitate early resolution of healthcare liability claims,” and to “equip[] defendants with the actual means to evaluate the substantive merits of a plaintiff’s claim by enabling early discovery of potential co-defendants and early access to a plaintiff’s medical records.”  To accomplish these goals, the legislature required medical malpractice plaintiffs to satisfy six pre-suit “notice requirements,” and it further required plaintiffs to file a “certificate of good faith” with their complaints in cases in which expert testimony would eventually be required.

Due to the myriad technical dismissals that resulted from these reforms, however, the 2009 amendments unexpectedly turned out to be red tape with fangs for medical malpractice plaintiffs. . . .  Thus, what began as a laudable effort to improve medical malpractice litigation in Tennessee has instead created new procedural barriers that cause many cases to be dismissed on grounds that are completely unrelated to the merits of a plaintiff’s claim.[1]

Critically, the HCLA provides that a plaintiff who complies with the statute’s mandatory pre-suit notice requirements automatically receives a 120-day extension to the one-year statute of limitations for filing suit.  In theory, this extension benefits both parties by affording them a longer period of time to negotiate a potential settlement before contentious litigation begins.  In practice, however, the extension functions as a “fatal booby trap for unwary plaintiffs,” because “if a plaintiff’s attorney has erred in complying with one or more of the HCLA’s pre-suit notice requirements, then he almost invariably will not discover his error until the initial one-year statute of limitations has expired.”[2]

The Court’s opinion in Runions v. Jackson-Madison County General Hospital District makes clear that this “fatal booby trap” has just claimed another victim.  In Runions, the aggrieved mother (or, more accurately, her attorney) attempted to comply with all of the HCLA’s pre-suit notice requirements before filing her lawsuit.  Critically, however, her attorney made one significant misstep: he misidentified the hospital’s owner and operator.  As the Court explains:

“Ms. Runions knew that she and her baby received medical treatment at Jackson-Madison County General Hospital, but she did not correctly identify the District as the owner and operator of Jackson-Madison County General Hospital.  Instead, she identified and gave pre-suit notice to Bolivar General Hospital, Inc.; West Tennessee Healthcare, Inc.; and West Tennessee Healthcare Network through their registered agent, Ms. Higgs, who also served as general counsel for the District.”

Upon discovering the error, “Ms. Runions moved to amend her complaint to substitute the District for Bolivar General Hospital, Inc. d/b/a Jackson-Madison County General Hospital.”  Normally, permitting such an amendment is standard practice; Tennessee Rule of Civil Procedure 15.01 makes clear that permission to amend pleadings should be “freely given” early on in a case, and the error at issue in Ms. Runions’ case was identified almost immediately.  Additionally, when a plaintiff has sued the wrong party, Tennessee Rule of Civil Procedure 15.03 provides further that “[a]n amendment changing the party or the naming of the party by or against whom a claim is asserted” should be treated as if it occurred on the date when the plaintiff’s original complaint was filed.

The entire purpose of Tennessee Rule of Civil Procedure 15.03 is to prevent a claim from becoming time-barred by the statute of limitations due to a mere “mistake concerning the identity of the proper party.”  In Runions, however, by the time the mistake was discovered, the harm was incurable.

After providing pre-suit notice to the hospital, Ms. Runions’ attorney believed that the statute of limitations had been extended by 120 days based on the HCLA’s automatic extension provision.  Because her pre-suit notice had identified the wrong hospital owner, however, the extension was never triggered—something that she did not discover until it was too late.  Accordingly, by the time that Ms. Runions learned that her pre-suit notice was defective, the one-year, unextended statute of limitations had already elapsed, and Ms. Runions’ lawsuit was forever time-barred.

As this author has previously noted, this framework conflicts with both Tennessee law generally and the stated purposes of the HCLA specifically.  From a broad perspective, “Tennessee law reflects a longstanding, consistent public policy that favors resolving litigation on its merits, rather than promoting dismissals based on purely procedural grounds.”[3]  Further, based on an information asymmetry concerning whether the applicable statute of limitations has been extended, mandating strict compliance with the HCLA’s notice provisions in order to trigger the 120-day extension “function[s] to undermine dialogue between litigants by creating perverse litigation incentives that facilitate only mock settlement negotiations and delusive discovery.”[4]  As a result, significant reform is in order.

Notably, although Ms. Runions will not be able to pursue a medical malpractice claim against the hospital that delivered her child, she may well be able to pursue a legal malpractice claim against the attorney who represented her.  According to practitioners in the space, such claims are rapidly increasing in frequency.  Indeed, given how easily attorneys can find themselves on the receiving end of such claims due to the HCLA’s significant procedural complexities, most plaintiff’s lawyers no longer take medical malpractice cases at all.

Read the Tennessee Supreme Court’s unanimous opinion in Tiffinne Wendalyn Gail Runions v. Jackson-Madison County General Hospital District, authored by Justice Sharon G. Lee, here.

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[1] Daniel A. Horwitz, The Law of Unintended Consequences:  Avoiding the Health Care Liability Act Booby Trap, Nashville Bar Journal (June 2015), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2577156 (citations omitted).

[2] Id. at 3.

[3] Id. at n. 28 (citing  Brown v. Samples, No. E2013-00799-COA-R9-CV, 2014 WL 1713773, at *8 (Tenn. Ct. App. Apr. 29, 2014) (collecting cases and holding that “Tennessee courts have long recognized that the interests of justice are promoted by providing injured persons an opportunity to have their lawsuits heard and evaluated on the merits”); Givens v. Vanderbilt Univ., No. M2013-00266-COA-R3-CV, 2013 WL 5773431, at *4 (Tenn. Ct. App. Oct. 24, 2013) (“We conclude that section 121 does not require a court to dismiss a complaint with prejudice for noncompliance with the notice requirement of that section. This conclusion is in keeping with the general principle that ‘Tennessee law strongly favors the resolution of all disputes on their merits.’” (quoting Henley v. Cobb, 916 S.W.2d 915, 916 (Tenn.1996))); Bowers v. Gutterguard of Tennessee, Inc., M2002-02877-COA-R3-CV, 2003 WL 22994302, at *5, (Tenn. Ct. App. Dec. 17, 2003) (“[I]t is the general rule that courts are reluctant to give effect to rules of procedure . . . which prevent a litigant from having a claim adjudicated upon its merits.” (quoting Childress v. Bennett, 816 S.W.2d 314, 316 (Tenn. 1991))). See also Chambers, 2014 WL 1266101 at *5.).

[4] Id. at p. 7.

Supreme Court Solicits Comments on Proposed Rule Changes

Constitutional Law, Contract Law, Criminal Law, Tennessee Court Rules, , ,

By Daniel A. Horwitz

Following the demise of proposed Rule 8.4(g) last month—a well-intentioned but dangerous and constitutionally infirm speech code—two additional rule changes have been proposed to the Tennessee Supreme Court for consideration.  The court is currently soliciting comments on both proposals.

The first proposal is a petition to amend Rule 25, governing the Tennessee Lawyers’ Fund for Client Protection.  The proposed changes are detailed here.  I have a problem with one of the proposals, which caps attorney compensation at the randomly low amount of $500.00.  Such a rule would significantly interfere with what is typically a strongly-enforced right to contract.  It would also have no result other than ensuring that clients can’t get legal representation to handle qualifying fraud claims.  Simply stated: lectures on lawyers’ duties aside, no lawyer will work a complex case with a potential value of up to $250,000.00 for just $500 plus expenses, and there are other matters that are significantly more worthy of pro bono assistance.  My concerns about this portion of the proposed change are detailed in this Twitter thread, and the text of the change at issue is as follows:

18.01. No lawyer shall charge or accept compensation for prosecuting a claim on behalf of a claimant unless approved by the Board (a) on a contingency basis or (b) in excess of a flat fee of $500.00 plus reimbursement of expenses. Lawyers owe a duty to the public to assist individuals wronged by members of the profession and may count hours spent assisting a claimant in the prosecution of a claim as pro bono hours if conducted without receiving a fee.

https://twitter.com/Scot_Blog/status/994589523223941121

The second proposed change is to amend Rule 13 to adjust the hourly rates and per-case caps for appointed indigent criminal defense work.  $9.7 million in additional and much-needed funding was recently appropriated for indigent defense in Tennessee, which is currently in a state of crisis.  The proposed changes are available here, and the TBA is soliciting input here.  The changes, if adopted, would modestly increase case caps and compensate both in-court and out-of-court work at $50/hour.

Compensating in-court and out-of-court work at the same rate is a marked and arguably legally mandated improvement.  However, as a whole, the changes are not nearly significant enough to address the catastrophic problems and perverse incentives involved in Tennessee’s indigent defense system.  In particular, retaining case caps ensures a serious and rapid conflict of interest in appointed cases, because after attorneys spend between 10-60 hours on a defendant’s representation (depending on the type of case), the attorney stops getting paid.  For instance, under even the improved case caps, a lawyer defending a client charged with First Degree murder will only be paid for the first 60 hours of work.  Further, even if the case at issue is deemed especially “complex or extended”—a characterization that should apply to every serious felony case—a lawyer will only be compensated for a maximum of 120 hours of work no matter how long the case lasts.  For cases that can often take years to resolve, the economic pressure to push a client to plead guilty after the cap has been hit is enormous.

For anyone interested in providing commentary on the proposed rules, written comments may be emailed to [email protected] or mailed to:

James Hivner, Clerk
Tennessee Appellate Courts
100 Supreme Court Building
401 7th Avenue North
Nashville, TN 37219-1407

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Nashville School of Law Graduate JT Conway Wins Defamation Lawsuit Against Convicted Felon, Ex-Beauty Queen Kumari Fulbright

Defamation, First Amendment, ,

FOR IMMEDIATE RELEASE

Nashville, TN—Following a more than ten-year saga involving multiple criminal convictions and intense national media attention, Joshua “JT” Conway has closed the final chapter of his kidnapping, violent torture, and near-murder at the hands of former Arizona beauty queen and convicted felon Kumari Fulbright, Conway’s ex-girlfriend.  The final order granting Conway a declaratory judgment against Fulbright—which includes an agreement that “she will never use [Conway’s] name again in a public setting”—is available here.

A decade ago, Fulbright had Conway kidnapped and tortured at gunpoint for more than eight hours with the help of three armed men.  Conway eventually escaped by ripping the skin off his zip-tied hands and wrestling a gun away from Fulbright that was fired in the struggle.  Conway has since authored a tell-all book and movie script about his life and near-death experience.

For her crimes against Conway, Fulbright previously pleaded guilty to conspiracy to commit kidnapping and aggravated assault, and she served two years in an Arizona prison following her convictions.  Fulbright was also ordered to pay Conway restitution and sentenced to an additional six years of probation.

During the criminal trial of Robert Ergonis—Fulbright’s ex-fiancé and co-conspirator in Conway’s kidnapping—Fulbright claimed that she had committed her crimes against Conway because he stole jewelry from her.  Conway fiercely disputed the allegation, however, as did Aaron Ellertson, a witness to a phone call between Conway and Fulbright that took place during the jewelry’s sale.  To this day, Fulbright’s motives for fabricating her allegations against Conway remain unknown.  “We’re never going to know why Kumari did that, but what you’re going to know at the end of the trial is that she lied about it,” Arizona prosecutor Kim Ortiz told the Arizona jury that convicted Ergonis.

After the end of her criminal sentence, Fulbright went on national television and falsely claimed—again—that her crimes against Conway were “justified” because Conway had stolen jewelry from her.  Fulbright also added new allegations that Conway had drugged her and stolen money from her as well.  In response, Conway—a recent law school graduate with a family and a reputation—sued Fulbright for defamation.

During the parties’ lawsuit, overwhelming evidence indicated that Fulbright had indeed fabricated her claims against Conway as Arizona prosecutors had argued.  The parties’ phone records proved that Conway had called Fulbright and spoken to her at length while negotiating her jewelry’s sale, and a witness to their conversation supported Conway’s longstanding claim that the jewelry had been sold with Fulbright’s knowledge and approval at her request.  A police report filed by Fulbright well after the alleged “theft” took place also indicated that another piece of jewelry that Fulbright claimed Conway stole from her had really gone missing in a Detroit hotel room—a city that Conway had never even visited.  During her deposition, Fulbright also repudiated her new claims that Conway stole money from her or drugged her, claiming instead that “I never said he stole it and [that] I know it” and that “[t]here’s a lot of other explanations” for what she claimed had happened.

Earlier this year, Fulbright formally admitted that her claims that Conway stole from her and drugged her were not supported by any proof whatsoever.  As a result, a Circuit Court Judge in Davidson County, Tennessee, issued a declaratory judgment that the allegations were baseless.  Fulbright also agreed to the entry of an order “that she will never use Plaintiff Joshua ‘JT’ Conway’s name again in a public setting.”  Further, as the losing party in the case, Fulbright was assessed the costs of the lawsuit, which she paid earlier this morning.

“As a First Amendment and speech defense lawyer, I am deeply skeptical of defamation lawsuits, and this is the first and only defamation case that I have ever considered legitimate,” said attorney Daniel Horwitz, who represented Conway.  “I rarely support defamation lawsuits, but when I do, it’s because a convicted felon tries to justify domestic violence and profit from her crimes by fabricating allegations that she had someone kidnapped, tortured, and very nearly killed because the person stole from her and drugged her—allegations that she knew full well were baseless at the time she made them.”

Please contact JT Conway at [email protected] for media inquiries.

###

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Photos from left to right:  Joshua “JT” Conway (submitted); Kumari Fulbright (Kevin Hayes, CBS News, Kumari Fulbright (PICTURES): Beauty Queen Known for Mug Shot Headed to Prison (Dec. 10, 2010, 12:04PM), CBS News, http://www.cbsnews.com/news/kumari-fulbright-pictures-beauty-queen-known-for-mug-shot-headed-to-prison); Robert Ergonis (Brian Mori, Last man in kidnapping guilty; Sues judge, prosecutors, and sheriff, Tucson Courts Examiner (Nov. 9, 2010, 7:49PM), https://meridiancity.files.wordpress.com/2011/07/guilty-ergonis-sues.pdf).

 

Restaurateur Wins Defamation Suit (Again)

Constitutional Law, First Amendment, ,

In a resounding win, celebrated Nashville restaurateur Randy Rayburn has again beaten back a multi-million dollar defamation and false light lawsuit filed against him by Thomas Nathan Loftis, Sr., the former director of Nashville State’s culinary program.  In a unanimous ruling, the Tennessee Court of Appeals affirmed the outright dismissal of Mr. Loftis’s claims on the basis that Loftis had advanced a “far-fetched and not a reasonable interpretation” of the statements that he had sued over, and that “the statements in the newspaper article are not defamatory as a matter of law.”  The Court of Appeals also ordered Mr. Loftis to pay for the costs of the lawsuit, and it further ordered the Trial Court to determine whether Loftis must pay Mr. Rayburn’s legal fees.

Given the serious threat that the case posed to the viability of newsgathering in Tennessee, the lawsuit attracted national attention from First Amendment organizations like The First Amendment Center’s Newseum Institute and TechDirt.  Following a disturbing trend in local media of inflating the legitimacy of almost uniformly baseless defamation lawsuits when they are filed but failing to cover them after they fail, however, the Court of Appeals’ decision has gone unreported in Nashville.

Mr. Loftis’s lawsuit was novel in that it was filed over statements that had been authored by a Tennessean newspaper journalist in an article in which Mr. Rayburn—the supposed source of the statements at issue—was not even quoted.  As a result, the lawsuit attempted to run an end-around Tennessee’s source-protection statutes, and it also served as a warning that anyone who is even referenced in a news article containing critical coverage can be threatened with multi-year, multi-million dollar litigation.  Had the lawsuit been permitted to go forward, it stands to reason that news sources would have been far less likely to speak to journalists on the record or to interact with the media at all.

Significantly, the case also involved a stunning, outright acknowledgement from Mr. Loftis’s counsel that Mr. Rayburn had been sued in part because the newspaper that had actually published the statements at issue was more likely to be able to defend itself.  Specifically, during oral argument before the Court of Appeals, Mr. Loftis’s counsel had the following exchange with the Court:

Judge Neal McBrayer: “Why isn’t the Tennessean the proper party here?”

Gary Blackburn (Attorney for Tom Loftis):  “Your Honor, there were practical reasons for that . . . .  It is easier to bring a lawsuit against the person who uttered the words than against a publication that buys ink by the barrel, as they say, and has lots of resources.“

Unfortunately, this strategy—which is rarely acknowledged so openly—is all-too-common in the defamation world.  Given the enormous costs of civil litigation, powerful people seeking to stifle criticism often file flagrantly baseless claims against those perceived to have limited resources in the hopes of being able to censor them.  As a result, as the author has explained previously, being able to sue for defamation “provide[s] enormous space for the powerful and well-resourced to threaten, censor, abuse, and intimidate those who lack the means, knowledge, or fortitude to defend themselves.”

All considered, the Court of Appeals’ decision constitutes a total victory and complete vindication for Mr. Rayburn, who has maintained that the lawsuit was frivolous from the beginning.  “We’re thrilled about this resounding win, which fully vindicates Mr. Rayburn and the First Amendment yet again,” said Daniel Horwitz, Mr. Rayburn’s attorney.  “Filing a lawsuit this frivolous was a very poor decision, and unfortunately for Mr. Loftis, it is about to become an expensive one as well.”

The Court of Appeals’ unanimous decision, authored by Judge Andy Bennett, is available here.  Selected case documents and media coverage are available below.

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Selected Case Documents:

–Plaintiff’s First Amended Complaint

–Defendant’s Motion to Dismiss First Amended Complaint

–Plaintiff’s Response to Motion to Dismiss (1)/Plaintiff’s Response to Motion to Dismiss (2)

–Defendant’s Reply to Plaintiff’s Response

–Transcript of Hearing on Defendant’s Motion to Dismiss

–*Order Dismissing Plaintiff’s Complaint With Prejudice

–Brief of Plaintiff-Appellant Thomas Nathan Loftis, Sr.

–Brief of Defendant-Appellee and Cross-Appellant Randy Rayburn

–*Appellate Court Order Denying Plaintiff’s Appeal and Remanding for Consideration of Attorney’s Fees Award

Selected Media Coverage:

-The Tennessean: Defamation lawsuit against restaurateur Randy Rayburn dismissed — again

-TechDirt: Judge Dumps Stupid Libel Suit Featuring A Man Suing A Third Party For Things A Journalist Said

-Nashville Business Journal: Nashville restaurateur Randy Rayburn faces $1.5 million lawsuit

-TechDirt: Former University Official Files Libel Lawsuit Against His Replacement For Things A Journalist Said

-Nashville Business Journal: Judge dismisses $1.5M suit against well-known restaurateur

-First Amendment Center’s Newseum Institute: Unusual Defamation Suit Targets Source of Story

 

Tennessee Passes Bill to Allow In-Home Beauty Services

Constitutional Law, Property Law, ,

FOR IMMEDIATE RELEASE:

Nashville, Tenn., April  25, 2018—Late yesterday afternoon, the Tennessee General Assembly completed the final step in passing a bill to allow in-home beauty services across Tennessee.  State Senator Steve Dickerson, R-Nashville, State Representative Sam Whitson, R-Franklin, and State Representative Jason Powell, D-Nashville, were the primary sponsors of the bill.  Once signed by Governor Haslam, the reform will allow Tennesseans to purchase beauty services in the privacy of their own homes and businesses.

The bill follows The Tennessee Board of Cosmetology and Barber Examiners’s 2016 decision to issue a cease-and-desist letter and file a formal complaint against Belle—a popular Nashville-based technology company that provides on-demand health and beauty services—for bringing “highly disturbing” competition into Tennessee’s beauty industry.  The Board initially alleged that Belle was violating the state’s cosmetology laws, but withdrew its complaint after Belle formally contested the Board’s allegations.  The Board’s decision to withdraw its complaint was covered widely in local, state, and national media, including Forbes, Yahoo, Reason, the Nashville Business Journal, the Memphis Commercial Appeal, and the Daily Signal, among others.

“With the passing of this bill, Tennesseans will now have the right to enjoy concierge cosmetology services just like many other Americans,” said Armand Lauzon, CEO of Belle.  “Beyond that, it grants tens of thousands of cosmetologists access to the American dream by legalizing entrepreneurship in the industry. The General Assembly should be very proud of this needed reform.”

“Passage of this bill represents another step in our state to remove barriers that interfere with Tennesseans achieving the American Dream,” added Senator Dickerson.

The reform passed unanimously in the Tennessee State Senate, and it succeeded by a margin of 81-6 in the Tennessee House.  Along with the bill’s sponsors, Tennessee House Speaker Beth Harwell, R-Nashville, was instrumental in its passage.  “I was proud to support this legislation repealing a burdensome regulation.  Entrepreneurs across the state will now be able to provide convenient services to Tennesseans, and create prosperity for themselves and their families,” said Speaker Harwell.

“In 2016, the Tennessee Board of Cosmetology unlawfully attempted to shut down one of Nashville’s most exciting new tech companies for the sole purpose of protecting an outdated industry competitor from competition,” said Daniel Horwitz, Belle’s attorney and lobbyist.  “This important reform ensures that the Board of Cosmetology will be prevented from engaging in such lawless behavior ever again.”

For press inquiries, please contact Julia Bonner at ​[email protected]​ or Armand Lauzon at [email protected]​.

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Selected Case Documents:

–Board Complaint and Demand to Cease and Desist

–Respondent’s Response Letter Denying Liability and Refusing Consent Order

*Order Dismissing Complaint

Selected Media Coverage:

-Reason Tennessee Decides It’s Not Actually Dangerous for a Cosmetologist to Do House Calls

-Forbes: Tennessee Regulators Drop Complaint, Won’t Block Beauty App From Operating

-Forbes: Tennessee Wants To Shut Down This Beauty And Health App For Offering ‘Highly Disturbing’ Competition

-Nashville Business Journal: Regulators withdraw complaint against Nashville-based startups

-Reason: Tennessee Cosmetology Board Admits it Doesn’t Have Authority To Regulate Tech Companies

-Daily Signal: How This Nashville Tech Company Challenged a State Regulatory Board and Won

-The Federalist Society: Regulatory Hurdles for Entrepreneurs: The Story of Project Belle

Tennessee Supreme Court Denies Proposed Rule Change Attempting to Police Discrimination and Harassment

Constitutional Law, Rules of Professional Conduct,

By Daniel A. Horwitz

Earlier today, the Tennessee Supreme Court rejected a proposed rule change that would have subjected attorneys to professional discipline for expressing views that could be considered discriminatory or harassing.  The proposed changes were roundly criticized as an overbroad infringement upon attorneys’ constitutionally protected rights to freedom of speech and association.  The controversial rule received nearly 400 pages of commentary from members of the bar, members of the public, and interested organizations.

Model Rule of Professional Conduct 8.4(g) was initially drafted by the American Bar Association in August of 2016 as an effort to curb discrimination and harassment in the legal profession.  Thereafter, several prominent national commentators promptly criticized it, and to date, nearly every jurisdiction that has considered the proposed change has rejected it.

On November 15, 2017, the Tennessee Board of Professional Responsibility and the Tennessee Bar Association filed a joint petition asking the Tennessee Supreme Court to adopt an amended version of Rule of Professional Conduct 8.4(g).  The proposed amendments would have made certain forms of discrimination and harassment subject to professional sanction, with several exceptions.

Despite its laudable goals, the proposed amendments suffered from serious shortcomings.  As this author noted in a recent Nashville Post article on the proposal:

“Although motivated by good intentions, proposed Rule 8.4(g) is a constitutionally infirm speech code that suffers from several critical flaws. First, it is wildly overbroad; it would, for example, prohibit attorneys from restricting their pro bono practice to female victims of domestic violence or to members of their church, because doing so would constitute sex discrimination and discrimination on the basis of religion, respectively. Second, it grants the Board of Professional Responsibility immense new regulatory authority to punish attorney speech, and based on the BPR’s long history of selective enforcement and a curious exemption in 8.4(g) that makes clear that exercising ‘peremptory challenges . . . on a discriminatory basis does not alone establish a violation,’ it is fair to say that the BPR should not be trusted with such vast censorial authority. Third, more generally, it gives the Government the power to determine what kind of speech is permissible and what kind of speech is illegal—a deeply troubling and downright dangerous proposition that cannot be squared with basic principles of the First Amendment.”

In a formal opinion released in March, the Attorney General of Tennessee similarly concluded that the proposal was unconstitutional.

Upon review, the Tennessee Supreme Court issued a per curiam order denying the BPR’s and TBA’s joint petition.  “The Court has carefully considered the BPR and TBA’s proposed amendment, the comments received, including the points and issues raised therein, and this entire matter. Upon due consideration, the BPR and TBA’s petition to adopt a new Rule 8, RPC 8.4(g) is respectfully DENIED. It is so ORDERED,” today’s Order reads.  The Court’s formal denial is accessible here.

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Tennessee Court of Appeals Forces Carriage Operator Off Its High Horse In Breach of Contract Dispute

Contract Law, , ,

By Daniel A. Horwitz:

The Court of Appeals horsed around a bit today in a case involving a local carriage operator’s non-compete agreement.  The Court’s opinion in Sugar Creek Carriages v. Hat Creek Carriages, et al.—authored by Judge Frank Clement—is available here.

In 2017, Sugar Creek Carriages—a horse-drawn carriage company based in Nashville—filed a lawsuit seeking to force a former employee to “pony up” $2,500 in liquidated damages for breaching a non-compete contract.  Sugar Creek also sought several thousand bucks from Hat Creek Carriages—its former employee’s new employer—for procurement of breach of contract as well.  The employee was ultimately dismissed from the case, so the lawsuit proceeded on the procurement of breach of contract claim alone.

Unfortunately for Sugar Creek Carriages, its claim proved to be a bit much.  Under Tennessee law, “[t]o establish a claim for procurement of breach of contract, a plaintiff must prove seven elements:

(1) There must be a legal contract;

(2) The wrongdoer must have knowledge of the existence of the contract;

(3) There must be an intention to induce its breach;

(4) The wrongdoer must have acted with malice;

(5) There must be a breach of the contract;

(6) The act complained of must be the proximate cause of the breach of contract; and

(7) There must have been damages resulting from the breach of the contract.”[1]

Thus, even if all other elements are met, a defendant cannot be saddled with liability for procuring a breach of contract if the contract itself is legally void.

Here, Sugar Creek Carriages’ former employee had indeed signed a non-compete clause before switching companies.  As a general matter, though, covenants not to compete are disfavored under Tennessee law both because they are in restraint of trade and because there is a strong public interest in having financially stable citizens who are not deprived of their right to earn a living.[2]  However, if there is a legitimate business interest to be protected, and if the non-compete agreement is reined in by reasonable time and territorial limits, then non-compete clauses are generally enforceable under Tennessee law.[3]  Additional factors that determine whether a non-compete clause can be enforced include:

(1) the consideration supporting the covenant;

(2) the threatened danger to the employer in the absence of the covenant;

(3) the economic hardship imposed on the employee by the covenant;

(4) whether the covenant is inimical to the public interest; and

(5) whether the time and territorial limits must be no greater than necessary to protect the business interest of the employer.[4]

In the case at hand, Sugar Creek contended that its non-compete clause was enforceable because it had “a protectable business interest in the specialized and unique training” that it had provided its former employee.  As far as protecting that interest, however, Sugar Creek put the cart before the horse by simultaneously advertising to the public at large that “anybody is welcome to pay to attend [its horse-drawn carriage] driving school”—not just its employees—and by stating further that anyone who did so would immediately be “prepared to start [their] own horse-drawn carriage business.”

Consequently, Sugar Creek’s central argument that it had provided “specialized and unique training” to its former employee turned out to be lame, and the Court of Appeals quickly put it out to pasture.  Specifically, the Court explained:

“[Sugar Creek’s] advertisement for the same training program explicitly invites members of the public to compete with it.

Assuming the specialized training [Sugar Creek] provided . . . is protectable as a matter of law, the Noncompete Agreement fails to protect that interest because it attempts to shut the barn door well after the horses have bolted. As a consequence, the Noncompete Agreement is unenforceable . . ., which is also fatal to [Sugar Creek’s] claim for procurement of breach of contract.”

Thus, after roughly a year of legal jockeying, the case has finally come to a close.  The Court of Appeals’ unanimous decision has officially forced Sugar Creek off of its high horse, and now unbridled by any fear of liability, Hat Creek Carriages can hit the hay.

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[1] Buddy Lee Attractions, Inc. v. William Morris Agency, Inc., 13 S.W.3d 343, 354-55 (Tenn. Ct. App. 1999) (citing Dynamic Motel Mgmt., Inc. v. Erwin, 528 S.W.2d 819, 822 (Tenn. Ct. App. 1975)).  See also Tenn. Code Ann. § 47-50-109.

[2] Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471, 472 (Tenn. 1984).

[3] Murfreesboro Medical Clinic, P.A. v. Udom, 166 S.W.3d 674, 678 (Tenn. 2005).

[4] Id. See also Allright Auto Parks, Inc. v. Berry, 219 Tenn. 280, 409 S .W.2d 361, 363 (1966).

Tennessee Needs to Provide More Protection to People Sued for Defamation

Constitutional Law, First Amendment, ,

By Daniel A. Horwitz:

Yesterday morning, the Nashville Post reported on yet another baseless, multimillion dollar defamation lawsuit filed here in Nashville.  The lawsuit follows a series of other recent defamation actions—including since-dismissed attempts to silence dog lovers, supposed media sources, and others—that have been aimed at stifling legitimate public criticism.

It should be emphasized that the overwhelming majority of such lawsuits have no realistic chance of success in a court of law.  Disturbingly, however, regardless of their legally meritless nature, such lawsuits often achieve their intended result—censorship of critical commentary and criticism of the powerful in particular—anyway.  Because, all things being equal, people would prefer not to be sued, voluntary self-censorship can be all-too-appealing.  Thus, to prevent such societal harm, it is long past time that Tennessee adopted a meaningful Anti-SLAPP law to deter would-be censors from threatening those who lawfully exercise their fundamental right to speak freely.

Though its protections are commonly taken for granted, the First Amendment to the United States Constitution codifies the most important protection in America’s governing charter.  Chief among the rights guaranteed by the First Amendment is the proscription against government action that “abridg[es] the freedom of speech.”  Uncontroversially, the right to speak freely plays an indispensable role in enabling the free exchange of thoughts, information, and ideas.  Indeed, without such a right, democratic government would not be possible at all.  If unaccompanied by the right to speak freely and critically, for example, “free and fair” elections would quickly become unrecognizable.

When it comes to defamation lawsuits, the First Amendment affords citizens enormous protection.  In practice, however, exercising one’s constitutional right to criticize the powerful can result in ruinous financial consequences.

The ability to sue people for defamation (libel in published form, slander by spoken word) or any number of other speech-related torts—like false light invasion of privacy—operate as theoretically narrow exceptions to the broad rule that speech is not illegal.  As a practical matter, however, most people cannot afford the tens (if not hundreds) of thousands of dollars in legal fees that are necessary to defend oneself against even the most frivolous defamation claims.  Nor are most people willing to endure the years of terror and stress that commonly accompany litigation.  As a consequence, in practice, these theoretically narrow exceptions provide enormous space for the powerful and well-resourced to threaten, censor, abuse, and intimidate those who lack the means, knowledge, or fortitude to defend themselves.  Further, when media outlets puff up defamation lawsuits and hype the liability that defendants are facing at the outset of a case regardless of legitimacy—but then fail to follow up after a lawsuit predictably collapses—all that viewers learn is that criticizing powerful people is dangerous.

None of this, of course, is meant to suggest that all defamation lawsuits are meritless.  In the 1966 case Rosenblatt v. Baer, U.S. Supreme Court Justice Potter Stewart persuasively observed that: “The right of a man to the protection of his own reputation from unjustified invasion and wrongful hurt reflects no more than our basic concept of the essential dignity and worth of every human being—a concept at the root of any decent system of ordered liberty.”  This worldview still carries widespread acceptance.  Accordingly, even the most ardent defenders of the First Amendment support defamation claims where, for example, someone falsely accuses an innocent child of being a murderer.  Indeed, even this author has filed a defamation suit to protect the reputation of an individual who was subjected to fabricated claims (on national television) of being a rapist and a thief by a woman who had had him kidnapped, tortured and very nearly killed—a lawsuit that ultimately resulted in an admission that the allegations were baseless.

Despite their frequency, however, legitimate defamation suits are few and far between.  Accordingly, the overwhelming majority of people who are sued for defamation are subjected to potential liability for lawfully exercising a constitutional right.  Further, because the First Amendment values not only the right to speak, but also the right to hear and the right to receive information, when individuals are censored, society as a whole suffers.

To deter such harm, many states have adopted “Anti-SLAPP” laws, which afford people who are sued for defamation special protections in response to “Strategic Lawsuits Against Public Participation.”  Although the substance of such laws varies across jurisdictions, they frequently contain provisions requiring mandatory payment of attorney’s fees in the event of a successful defense; an expedited process for reviewing the legitimacy of a plaintiff’s lawsuit; and/or an automatic right to appeal early on in the proceedings.

Tennessee, for its part, has a limited Anti-SLAPP law that provides for the payment of attorney’s fees when a person is improperly sued for exercising “such person’s right of free speech or petition under the Tennessee or United States Constitution in connection with a public or governmental issue,” and when the person sued has “communicate[d] information regarding another person or entity to any agency of the federal, state or local government regarding a matter of concern to that agency.”  Because few statements resulting in defamation lawsuits arise out of reports to government agencies, however, few defendants are able to take advantage of the law’s protection.  Given that speech in the public square is every bit as important as statements made to government agencies, however, it is long past time for these protections to be expanded.

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February 2018 Tennessee Bar Results: Maximiliano Gluzman Passes, Nashville School of Law Posts Anemic 13% Passage Rate

Business Law, Tennessee Bar Exam,

By Daniel A. Horwitz:

Earlier this morning, the Tennessee Board of Law Examiners released the results of the February 2018 Tennessee Bar Exam.  Taken by 281 prospective lawyers, the exam resulted in an unusually low total passage rate of 35%.  Although Vanderbilt Law School and the University of Memphis School of Law posted respectable passage rates of 100% and 58%, respectively, the total rate of successful takers was dragged down substantially by another dismal performance by Nashville School of Law, which posted an overall passage rate of just 13%.

One notable bright spot in the exam was the success of Maximiliano Gabriel Gluzman, the “obviously very, very qualified” Vanderbilt Law School graduate who was denied the opportunity even to take the Tennessee Bar Exam until that denial was unanimously reversed by the Tennessee Supreme Court last summer.  Thereafter, Mr. Gluzman’s case resulted in substantial amendments to Tennessee’s bar eligibility rules for foreign applicants, which will enable the Volunteer State to play an increasingly large role in conducting international business and prevent continued discrimination against foreign applicants going forward.

Mr. Gluzman’s success, while unsurprising, is also particularly sweet for his lawyer (the author), who has spent much of the past year bristling at the Board of Law Examiners’ assertion—supplied by former Tennessee Supreme Court Justice William Barker—that most people like Mr. Gluzman who take the bar exam “don’t pass.”  Like his colleagues on the Board of Law Examiners, former Justice Barker specifically voted against permitting Mr. Gluzman the opportunity even to sit for the bar exam on the basis that: “I just hate for people to come spend all the time and money and years of their lives with no possibility of passing.”  Mr. Gluzman has since passed two bar exams, each on his first attempt.

Speaking of people who spend a huge amount of “time and money and years of their lives with no possibility of passing,” however, it is long past time for the Tennessee Board of Law Examiners to take a serious look at what has been going on at Nashville School of Law.  For context, in 2014, Nashville School of Law secured new leadership and pledged to improve its state-worst passage rate of what was then 65-70%.  Since that time, the school has posted overall passage rates of 50% (February 2015), 28% (July 2015), 30% (February 2016), 28% (July 2016), 35% (February 2017), 38% (July 2017), and 13% (February 2018).  In other words: the school is on a downward trajectory, and it hasn’t had a majority of its students pass the bar exam in years.  Thus, if the Board of Law Examiners’ concern—expressed passionately with regard to foreign applicants like Mr. Gluzman—that prospective students will spend time and money training for an exam that they have little hope of passing was genuine, then presumably, Nashville School of Law’s consistently anemic passage rate will at some point come under the Board’s microscope.

It should be emphasized that Nashville School of Law has produced many wonderful, capable graduates—including the author’s co-counsel in another major Supreme Court victory earlier this week.  Thus, the issue likely has less to do with poor instruction than it does an administration that has liberalized admissions standards and accepted applicants who statistically have no reasonable chance of passing the bar exam after graduating.  As the author has previously explained:

Driven by a rapid decrease in law school applicants over the past several years (the total number of law school applicants has declined precipitously since 2010, falling from a high of 87,900 to a low of 54,130 in 2015), the academic credentials of incoming law students have measurably decreased.  Controversially, many law schools have responded to this problem (and the corresponding loss of revenue) by decreasing their admissions standards, which has predictably resulted in lower bar passage rates post-graduation.

In other words: to make up for lost revenue, many law schools have simply let in anybody who is willing to pay tuition.  The result is a major disservice to countless students who ultimately waste years of their lives and tens of thousands of dollars (or more)—not including opportunity costs—in pursuit of a profession that they likely will never be able to practice.

If Nashville School of Law were accredited by the American Bar Association, it would have been subject to discipline for both its lax admissions standards and its atrocious bar passage rate a long time ago, as Duncan School of Law was earlier this week.  However, Nashville School of Law is not an ABA-accredited law school, and it is instead regulated directly by the Tennessee Supreme Court.  Hopefully, at some point soon, the Court will step in and force the school to improve its admissions standards in the name of protecting hundreds of future applicants from wasting their time and money on a degree that they will never be able to use.

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