Tennessee Court Strikes Down Non-Compete Agreement

In a recent decision, Julian Hinson d/b/a Trivia Time v. Thom O’Rourke, the Tennessee Court of Appeals upheld a trial court’s determination that a post-employment non-compete agreement was unenforceable.noncompete trivia

Defendant Thom O’Rourke was an independent contractor for plaintiff Trivia Time, an entertainment business providing live trivia games at bars and restaurants in Nashville. Defendant worked for plaintiff for approximately two years. As part of his employment, defendant signed a noncompetition agreement, independent contractor agreement and confidentiality agreement. The noncompete agreement prohibited defendant from “directly or indirectly conducting activity that is competitive with any of the activities [defendant] conducted for Trivia Time” for a period of three years from the date of termination. Upon terminating his association with plaintiff, defendant opened a competing business and provided services to prior clients of plaintiff.

Plaintiff sent a cease and desist letter to defendant; however, defendant refused to stop competing with plaintiff. Plaintiff then filed suit for breach of contract and violation of the Tennessee Trade Secrets Act. The Chancery Court for Davidson County dismissed all claims finding that the non-compete agreement was unenforceable and the information received by defendant did not qualify as a “trade secret” under the Trade Secrets Act. The trial court found the non-compete provision enforceable because defendant was not privy to confidential information, received no specialized training, and therefore, plaintiff did not have a protectable business interest that warranted enforcement of the non-compete agreement.

On appeal, plaintiff argued that his company could demonstrate a legitimate business interest that warrants restraint on competition because he provided specialized training and trade secrets to defendant. The Court of Appeals, however, determined that plaintiff did not have a protectable business interest. The Court recognized that to establish a protectable business interest, the employer must show “special facts present over and above ordinary competition” so that the employee would have an “unfair advantage” over the employer.  In determining whether an employee would have such an unfair advantage, Tennessee courts consider:

(1) whether the employer provided the employee with specialized training;

(2) whether the employee is given access to trade or business secrets or other confidential information; and

(3) whether the employee had such repeated contact with the employer’s customers that the customers would tend to see the employee as the “face” of the company.

“Specialized training cannot include general skills and knowledge of the trade . . . and trade secrets cannot be easily ascertainable in the trade.” The Court of Appeals agreed with the trial court’s conclusion that defendant did not receive specialized training or gain access to trade secrets, and therefore, the noncompetition agreement was unenforceable. The Court recognized that most of the information defendant learned about plaintiff’s business could be ascertained by any audience of the trivia game.

The Trivia Time decision is a reminder that Tennessee courts will not enforce any and every non-compete agreement. An employer must have a protectable business interest in order to enforce post-employment restrictive covenants, and the interest must be sufficiently special to make competition unfair. Here, plaintiff could have better protected its position in the marketplace by having a narrowly tailored non-solicitation agreement with defendant to prevent defendant from poaching trivia game clients.

If you have questions regarding the enforcement, drafting or negotiation of a non-compete or non-solicitation agreement, please check out my series of articles on Tennessee Non-Compete Law or contact me.

Enforceability of Physician Non-Compete Agreements

Physician Non-Compete Agreement

Physician Non-Compete Agreement

I have previously written about the enforceability of non-compete agreements with respect to health care professionals. Non-compete agreements for these professionals implicate certain public policy concerns absent in other industries. Non-compete agreements for physicians and other health care providers pose the unique issue of balancing the interests of patients against a physician’s ability to practice medicine.

In a recent case, Amsurg New Port Richey FL, Inc. v. Vangara, No. 2D14-2117, 2015 WL 894322 (Fla. Dist. Ct. App., Mar. 4, 2015), a Florida appellate court examined Tennessee law with respect to the enforceability of a physician non-compete agreement. In this case, Dr. Vangara entered into a joint venture agreement with AmSurg to own and operate a ambulatory surgery center. As part of the agreement, Dr. Vangara agreed to not have any ownership or financial interest in any other ambulatory surgery center or competing business. The agreement was governed by Tennessee law. AmSurg later learned that Dr. Vangara began operating his own competing ambulatory surgery business. Dr. Vangara refused to cease operating the business, and AmSurg sued in Florida state court to enforce the noncompete agreement.

The Florida trial court, relying on the Tennessee Supreme Court opinion in Murfreesboro Medical Clinic, P.A. v. Udom, 166 S.W.3d 674 (Tenn. 2005), found that the joint venture noncompete provision was unenforceable. In Udom, the Tennessee Supreme Court invalidated restrictive covenants that prevent a physician from practicing medicine. The Udom Court reasoned that non-competition agreements were contrary to public policy because they may operate to interfere with the patient-physician relationship. The Florida appellate court found that the trial court erred in applying Udom and reversed the trial court. The appellate court concluded that the noncompete provision did not prevent Dr. Vangara from practicing medicine. Rather, it only prevented him from “having a financial interest in, managing, leasing, or developing a competing business”, all of which a company may lawfully restrict, even against a physician, under Tennessee law.

This case draws an important distinction between a noncompete that prohibits a physician from practicing medicine and a noncompete that prohibits a physician from owning a directly competitive business.

Do you have questions or concerns regarding a health care employment or non-compete agreement? Please contact the Thompson Burton team, who is regularly called upon to prepare, review, negotiate, and litigate non-compete agreements on behalf of businesses, health care providers and physicians.

Tennessee Creates Business Court in Nashville

Tennessee joins a growing number of states that have developed specialized courts exclusively for business related disputes.  Tennessee  has created a new Business Court in Nashville for complex business litigation. The new Business Court was created by the Tennessee Supreme Court as pilot program “to meet the litigation needs of existing and future businesses” in Tennessee. A copy of the Order establishing the Business Court can be found here.

Cases eligible for the Business Court must involve at least $50,000 in controversy, or seek injunctive or declaratory relief, and:

  1. relate to the internal affairs of businesses (i.e., corporations, limited liability companies, general partnerships, limited liability partnerships, sole proprietorships, professional associations, real estate investment trusts, and joint ventures), including the rights or obligations between or among shareholders, partners, and members, or the liability or indemnity of officers, directors, managers, trustees or partners;
  2. involve claims of breach of contract, fraud, misrepresentation, breach of fiduciary duty or statutory violations between businesses arising out of business transactions or relationships;
  3. constitute a shareholder derivative or commercial class action;
  4. involve commercial real property disputes other than residential landlord-tenant disputes and foreclosures;
  5. involve business claims between or among two or more business entities or individuals as to their business or investment activities relating to contracts, transactions, or relationships between or among them;
  6. arise from technology licensing agreements, including software and biotechnology licensing agreements, or any agreement involving the licensing of any intellectual property right, including patent rights;
  7. constitute an action alleging violations of a noncompete, non­ solicitation, or confidentiality agreement, or an antitrust, trade secret, or securities-related action; or,
  8. commercial construction contract disputes and/or commercial construction defect claims.

The existing Davidson County Chancery Court, Part III (Chancellor Ellen Hobbs Lyle) is designated to serve as the Business Court.

I believe that the new Business Court will be effective in creating a sound body of law for business disputes in Tennessee. More importantly, having an exclusive Business Court will likely lead to more consistent results and provide an increased level of predictability for business clients engaged in business and commercial disputes.

For the latest updates on the Litigation & Dispute Resolution Blog, be sure to follow me on Twitter and on LinkedIn.

Tennessee Business Law Conference

I am honored to speak at the Tennessee Business Law Conference presented by the Tennessee Attorneys Memo and M. Lee Smith Publishers. I will be presenting a CLE on piercing the corporate veil in Tennessee. I have previously written about piercing the corporate veil in Tennessee, and I am excited to share my insight on this important subject. This is an all day conference focused on business law, which will include presentations on officer/director liability, business divorce, nonprofit corporations, business entity selection, LLC operating agreements, professional entities and ethics. The conference will take place on Friday, May 15, 2015, at the Nashville School of Law.

For more information about the seminar or to register, click here.

Statutes of Limitation: How Long Do You Have to File Suit?

statute of limitationThe Basics

There are definite deadlines for filing a lawsuit. Statutes of limitation are laws that set forth time limits for filing a lawsuit. These laws differ state to state and depend on the type of claim asserted in the lawsuit. Courts have said the purpose of statutes of limitations are to 1) promote stability in personal and business relationships, 2) give notice to defendants of potential lawsuits, 3) prevent undue delay in filing lawsuits, 4) avoid the uncertainties and burdens inherent in pursuing and defending stale claims, and 5) ensure that evidence is preserved and facts are not obscured by the lapse of time or the defective memory or death of a witness. See, Redwing v. Catholic Bishop for Diocese of Memphis, 363 S.W.3d 436, 456 (Tenn. 2012).

Knowing the time limit for filing suit is important whether you intend to pursue a claim or are faced with defending a lawsuit. In Tennessee, the statutes of limitation are as short as 90 days for some claims as long as 15 years for others. The following are some of the more common statutes of limitation in Tennessee:

  • Slander (spoken defamation) – 6 months
  • Libel (written defamation) – 1 year
  • Personal injury and wrongful death – 1 year
  • Professional (medical, legal, etc.) malpractice – 1 year
  • Breach of fiduciary duty – 1 year
  • Tennessee Consumer Protection Act – 1 year
  • Injury to personal or real property – 3 years
  • Fraud/misrepresentation – 3 years
  • Tennessee Uniform Trade Secret Act – 3 years
  • Conversion – 3 years
  • Actions on contracts for the sale of goods – 4 years
  • Breach of contract – 6 years
  • Actions to set aside fraudulent conveyances – 7 years
  • Actions on judgments (including foreign judgments) – 10 years

As you can see, many claims in Tennessee are subject to a 1-year statute of limitation; however, there is a good deal of variation depending on the type of claim. This list is not comprehensive and there are number of important nuances among the statutes and the appellate cases interpreting them, so you should consult an attorney if you have questions about a particular claim.

Which Statute of Limitation is Applicable?

While the statute of limitation for some claims, such as personal injury, is very clear, the statute for other claims, such as business torts and actions involving real property, is more difficult to determine. What is the statute of limitation when a plaintiff makes multiple claims for relief? It is not uncommon for a plaintiff to assert claims for breach of contract (6 years), fraud (3 years) along with breach of fiduciary duty (1 year). What statute applies when the lawsuit involves a breach of contract (6 years), but the damages concern real property (3 years)?

The Tennessee Supreme Court answered this question in recent case, Benz-Elliott v. Barrett Enterprises, LP, et al., No. M2013-00270-SC-R11-CV (Tenn. Sup. Ct., January 23, 2015), and clarified the analysis used to determine the applicable statute of limitation. The Barrett case involved damages to real property stemming from a contract for the sale of the real property. The plaintiff’s claims included breach of contract, intentional misrepresentation and negligent misrepresentation. Because the plaintiff filed suit approximately 4 years after the alleged damages occurred, the defendants raised the statute of limitation as defense arguing that the plaintiff’s claims were for injuries to real property barred by the 3-year statute of limitation. The trial court rejected the defendants’ argument that the breach of contract claim was barred by the statute of limitation and awarded the plaintiff a judgment of $650,000. On appeal, the Tennessee Court of Appeals reversed and found that the plaintiff’s claims were for injuries to her real property barred by the 3-year statute of limitation. The Tennessee Supreme Court then took the case on appeal, and reversed the Court of Appeals, finding that the intermediate appellate court incorrectly determined the “gravamen” of the action.

Traditionally, the “gravamen” of the complaint determines the applicable statute of limitation. The gravamen is often defined as the “real purpose” of an action or the “substantial point” of the lawsuit. Identifying the gravamen of a claim requires a court to consider both the legal basis of the claim and the injury for which damages are sought. However, in practice, trial and appellate courts have inconsistently applied this principle with varying results. Some courts would consider exclusively the type of damages while others solely would look to the legal basis for the claim. In Barrett, the Tennessee Supreme Court said that trial courts must do both. The Court held that when determining the gravamen, “a court must first consider the legal basis of the claim and then consider the type of injuries for which damages are sought. This analysis is necessarily fact-intensive and requires a careful examination of the allegations of the complaint as to each claim for the types of injuries asserted and damages sought.” Barrett, at p. 15. While this two-step approach may not prove perfect in practice, it is the framework that the Tennessee Supreme Court instructs trial courts to utilize.

The Barrett case is also important because it clarifies that when a complaint contains multiple causes of action, a court must determine the gravamen of each claim, not simply the gravamen of the complaint in its entirety. This is consistent with Tennessee Rules of Civil Procedure, which allow a plaintiff to plead multiple, alternative, and even inconsistent, causes of action.

Special Exceptions

There are certain laws that toll the statute of limitation under certain circumstances. For example, a statute of limitation is generally tolled 1) for minors, 2) for adults who lack the capacity to sue and 3) during times of disaster. The statute also will be tolled for fraudulent concealment — when the defendant has taken steps to prevent the plaintiff from discovering she was injured. However, it is important to note that the mere ignorance about the time period for filing suit will not toll the statute of limitation.

The Litigation & Dispute Resolution attorneys at Thompson Burton PLLC are regularly retained to represent business and individuals in a variety of lawsuits. Should you have questions regarding any business litigation matter or a statute of limitation for a particular case, please contact the Thompson Burton PLLC business litigation and dispute resolution team. For the latest updates on the Litigation & Dispute Resolution Blog, be sure to follow me on Twitter and on LinkedIn.

 

Collecting Out of State Judgments in Tennessee: The Narrow Defenses to Enrollment

enforcing out of state judgments

Enforcing Out of State Judgments

I recently concluded two matters involving the enrollment of an out of state judgment in Tennessee and thought I would re-visit the process and rules for enrolling an out of state judgments in Tennessee. I have previously written about the general process for enrolling judgments across state lines and the process for enrolling international judgments.

While the procedure in Tennessee for enrolling an out of state judgment is relatively simple, this process is sometimes complicated when a judgment debtor challenges the enrollment or otherwise attempts to prevent a Tennessee court from recognizing the judgment. Unfortunately, there are not that many Tennessee appellate cases involving the enrollment of foreign judgments or interpreting the Uniform Enforcement of Foreign Judgments Act, Tenn. Code Ann. § 26-6-101, et seq. (“UEFJA”). In fact, during 2014, the Tennessee Court of Appeals issued only one opinion involving the enrollment of a foreign judgment. The case, Guseinov v. Synergy Ventures, Inc., No. M2014-00213-COA-R3-CV (Tenn. Ct. App., Oct. 21, 2014), is important because it underscores the notion that a party who attempts to prevent the enrollment of a foreign judgment carries what Tennessee courts have described as a “stern and heavy” burden.

Courts in Tennessee hold that “the burden is placed on the party seeking to attack the validity of a foreign judgment to prove that it should not be given full faith and credit in this State as required by . . . the United States Constitution.” Four Seasons Gardening & Landscaping, Inc. v. Crouch, 688 S.W.2d 439, 442 (Tenn. Ct. App. 1984). Moreover, the factual issues underlying the foreign judgment may not be the basis for challenging the enrollment of a foreign judgment. Tennessee recognizes only three primary exceptions to the enrollment of a foreign judgment:

  1. when the judgment is void due to lack of personal or subject matter jurisdiction;
  2. where the judgment is based upon fraud; or
  3. when the enrollment would violate public policy.

Jurisdictional challenges to the enrollment of a foreign judgment look to whether personal and subject matter jurisdiction was established in the forum state. Courts will look to the rules of the forum state to determine whether jurisdiction was proper. For the fraud exception to apply, it must be extrinsic fraud in the underlying foreign action. Courts have explained this type of fraud as “keeping the unsuccessful party away from the court by a false promise of a compromise, or purposely keeping him in ignorance of the suit; or where an attorney fraudulently pretends to represent a party, and connives at his defeat; or, being regularly employed, corruptly sells out his client’s interests.” Schorr v. Schorr, 1996 WL 148613, at *3 (Tenn. Ct. App. Mar. 29, 1996) (quoting Noll v. Chattanooga Co., 38 S.W. 287, 291 (Tenn. Ct. App. 1896)). Under the public policy exception, some courts have found that Tennessee courts are not obligated to give full faith and credit to any judgment of a state that would violate of Tennessee’s public policy; however, this is a rare exception and Tennessee appellate courts have been very cautious with applying this defense. In sum, courts in Tennessee will decline to enroll and out of state judgment only when one of these three defenses is established.

Enrollment of a foreign judgment is not a determination that the judgment is enforceable. It is important to remember that collecting out of state judgment is a two-step process: enrollment of the judgment in Tennessee and then actual enforcement the judgment. Once a judgment is enrolled in Tennessee, it is subject to the same defenses and challenges as a judgment that originated in a Tennessee court. Of course, tactics and procedures for judgment enforcement and the potential defenses to judgment enforcement are topics for another day.

We are regularly retained to assist in the enrollment and enforcement of foreign judgments in Tennessee. We have been engaged to enroll and collect judgments from states as far away as Texas and Utah. Should you have questions regarding a foreign judgment or are seeking local counsel, please contact the Thompson Burton PLLC business litigation and dispute resolution team.

Are Attorney’s Fees Recoverable in Construction Dispute Arbitration?

As with most questions in law, it depends. Typically, attorney’s fees are recoverable only if the contract contains an attorney’s fees provision or if the claims involve a statute, such as the Tennessee Consumer Protection Act, allowing a party to recover attorney’s fees. Recently, in Lasco, Inc. v. Inman Construction Corp., No. W2014-00802-COA-R3-CV (Tenn. Ct. App. Jan. 9, 2015), the Tennessee Court of Appeals considered a unique twist on the recoverability of attorney’s fees in a construction contract dispute.

In Lasko, a dispute arose between a general contractor and a subcontractor related to a commercial construction project. A few details of the parties’ contract are important here: 1) the contract had an arbitration clause, 2) the contract did not include an attorney’s fees clause, and 3) the contract incorporated the AAA’s Construction Industry Arbitration Rules.

The subcontractor filed suit against the general contractor in state court to collect amounts the subcontractor claimed were due under the contract. The case was then sent to arbitration. Following the arbitration hearing, the arbitrator denied all of the subcontractor’s claims and awarded the general contractor nearly $175,000 in attorney’s fees and costs. The subcontractor then filed a motion in state court to vacate the arbitrator’s award of attorney’s fees. Likewise, the general contractor filed a motion to confirm the arbitration award in its entirety. The trial court vacated the award of attorney’s fees on the basis that attorney’s fees were not authorized by the parties’ agreement to arbitrate.

On appeal, the Tennessee Court of Appeals was tasked with determining whether the arbitrator’s award of attorney’s fess was appropriate. The subcontractor argued that the arbitrator exceeded his powers because the arbitration award went beyond the scope of authority grated by the arbitration agreement. In other words, because the parties’ arbitration agreement did not include an attorney’s fees provision, any award of attorney’s fees was not within the scope of the arbitrator’s power. On the other hand, the general contractor argued that because the contract incorporated the AAA’s Construction Industry Arbitration Rules, the award of attorney’s fees was within the authority of the arbitrator. These construction dispute specific AAA rules provide for an award of attorney’s fees under certain circumstances, including when all parties, as part of their arbitration demands or claims, request an award of attorney’s fees. The Court of Appeals agreed with the general contractor, finding that the parties’ agreement incorporated the AAA rules, which provided for an award of fees under the circumstances of this case.

This case is important because it emphasizes the importance of understanding all terms of a construction contract. Even if the contract does not contain a separate and specific attorney’s fees provision, there may be a basis to recover attorney’s fees through arbitration, such as the incorporation of a AAA Rule or other arbitration rule providing for an award of fees.

Further, this case underlies the limited power of a trial court to modify or vacate an arbitration award. Tennessee has adopted the Uniform Arbitration Act, Tenn. Code Ann. §§ 29-5-301, et seq., which governs the scope of judicial review of arbitration awards. In Tennessee, courts accord deference to arbitrators’ awards and overturn arbitration awards in only in very unusual circumstances. Courts do have the power to vacate arbitrators’ awards in narrow circumstances, such as if “the arbitrators exceeded their powers.” Tenn. Code Ann. § 29-5-313(a)(3). Trial courts in Tennessee, however, are not permitted to supplement their judgment for that of the arbitrators. The Tennessee Supreme Court has held that “[a]s long as the arbitrator is, arguably, construing or applying the contract and acting within the scope of his authority, the fact that a court is convinced he committed serious error does not suffice to overturn his decision.” Arnold v. Morgan Keegan & Co., 914 S.W.2d 445, 449 (Tenn. 1996).

If you or your business enters into a contract that contains an enforceable arbitration provision, it is vitally important to understand the consequences and finality of arbitration. Many construction contracts mandate some form of arbitration, and it is important to seek competent legal counsel that can advise you on the arbitration process. If you have questions regarding a business dispute and are considering or facing arbitration, contact the Business Litigation and Dispute Resolution Attorneys at Thompson Burton PLLC.

Piercing the Corporate Veil in Tennessee: What Your Business Clients MUST Know

I have been invited by M. Lee Smith Publishers to present a CLE webinar on piercing the corporate veil in Tennessee. I have previously written about piercing the corporate veil in Tennessee, and I am excited to talk about this important subject.

The CLE agenda will include:

  • General principles for piercing the corporate veil under Tennessee law
  • The 11 Allen factors Tennessee courts consider in determining whether to pierce the corporate veil
  • The elements for piercing the corporate veil between a parent corporation and its subsidiary as well as piercing the veil under alter ego theory
  • Litigation strategy for filing and defending a piercing the corporate veil claim
  • Recent case law developments
  • Court trends in piercing the corporate veil cases

The webinar will take place on Thursday, August 14, 2014, 2:00 p.m. to 3:00 p.m. CDT. For more information about the webinar or to register, click here.

Enforcing International Judgments in Tennessee

In a previous article, I explained the procedures in Tennessee for enforcing a judgment of a court in another state. Since posting that article, I have received several inquiries regarding enforcing a foreign country judgment in Tennessee.

In Tennessee, foreign state judgments are generally enforced pursuant to the Uniform Enforcement of Foreign Judgments Act, which requires a Tennessee court to give the foreign judgment the same effect that it would have in the jurisdiction in which it was rendered. The underlying principle is the full faith and credit requirements of the United States Constitution. However, in the international context, the same constitutional considerations are not applicable, and therefore, enforcing a foreign country judgment in Tennessee is often a more complex process.

Consider the situation in which a business in another country obtains a sizable money judgment from a court in that country. The judgment debtor owns significant assets in Tennessee, including real estate. The judgment creditor now wishes to enroll and enforce its judgment in Tennessee. For an international judgment to be recognized and binding in the United States, it must carry the force of some international agreement, such as a bilateral treaty or multilateral convention.  Unfortunately, the United States is not a party to any international agreements that govern the enforcement of foreign judgments.

In a majority (32) of states, a foreign judgment usually can be enforced pursuant to the Uniform Foreign-Country Money Judgments Recognition Act. Under this act, a state must recognize a foreign judgment so long as the judgment is final, conclusive, and enforceable in the country it was decided. Obviously, this makes sense in a globalized economy.

Unfortunately, Tennessee has not adopted the Uniform Foreign-Country Money Judgments Recognition Act. Accordingly, when an injured foreign party wishes to enforce a judgment in Tennessee, typically the foreign party must file a new lawsuit on the judgment. Tennessee courts will consider principles of comity to determine whether to recognize the foreign judgment.

Comity “is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protection of its laws.” Hilton v. Guyot, 159 U.S. 113, 164 (1895).

The Tennessee Court of Appeals, in adopting portions of the Restatement of Conflict of Laws, explains Tennessee’s law of international comity, as follows:

[A] valid judgment rendered in a foreign nation after a fair trial in a contested proceeding will be recognized in the United States so far as the immediate parties and the underlying claim are concerned. While the subject matter and in personam jurisdiction of a foreign decree is generally presumed to exist, said decree is only entitled to such presumption upon an affirmative showing, by the party seeking enforcement, that said decree was so issued by a court of general jurisdiction. As our sister states have phrased the requirement best: “In order to be entitled to comity, the record must show the foreign judgment partook of the elements which would support it if it had been obtained in this state.” In short, common sense requires that for any court to recognize a foreign decree, the substance of that decree must be proven, or at least be open to such a plain and obvious interpretation as to be susceptible to judicial notice pursuant to the Rules of Evidence.

 Maberry v. Maberry, 1999 WL 1072568 (Tenn. Ct. App. Nov. 30, 1999) (internal citations omitted).

Ultimately, there are no requirements on a Tennessee court to validate a judgment outside the boundaries of the United States – our courts do not promise comity to the world. However, case law in Tennessee supports the notion that international judgments will be recognized when they meet certain basic requirements.

Should you have questions regarding enforcing a foreign judgment – whether from another state or another country – please contact the Thompson Burton PLLC business litigation and dispute resolution team.

Pro Hac Vice Admission In Tennessee

Tennessee SealThe rules governing pro hac vice admission vary state-by-state and often court-by-court. I am currently admitted pro hac vice in several courts across the country. In addition, from time to time, I serve as local counsel in Tennessee for out-of-state attorneys. The following is a general overview of the rules governing pro hac vice admissions in Tennessee courts.

 

Middle District of Tennessee

In the Middle District of Tennessee, Local Rule 83.01 requires that non-resident attorneys either become admitted to the bar of the Court, or seek admission pro hac vice and associate themselves with local counsel who are admitted to practice in the Middle District of Tennessee. The Rule requires local counsel to be admitted in the Middle District, and be a resident of Tennessee or have a principal law office in Tennessee. The Middle District provides instructions for pro hac vice admission and a proposed form Pro Hac Vice Motion.

Tennessee State Courts

Rule 19 of the Tennessee Supreme Court governs pro hac vice admissions in Tennessee state courts. The Rule provides that a court, in its discretion, may deny a pro hac vice motion only for 1) the out-of-state lawyer’s conduct raises reasonable doubt that the lawyer will comply with the Rules of Professional Conduct or 2) the out-of-state lawyer “has engaged in such frequent appearances as to constitute regular practice in this state.” Rule 19 also sets forth the requirements for local counsel, which includes, among other things, that local counsel be licensed in Tennessee, maintain an office in Tennessee, sign all pleadings, and appear in all proceedings. Importantly, a copy of a motion for admission pro hac vice must filed with the Tennessee Board of Professional Responsibility, and the applicant must register with the Board and pay the required fees. The Board provides information on pro hac vice admissions here.

Tennessee Administrative Proceedings

The rule governing out-of-state lawyers appearing before Tennessee administrative law judges was recently revised by the Tennessee Supreme Court. Rule 19 of the Tennessee Supreme Court, described above, requires non-resident attorneys to be admitted pro hac vice in order to appear as counsel of record before an administrative law judge, hearing officer or other state entity having authority to resolve controversies.

Should you require counsel for a local matter or need to commence or defend litigation in Tennessee, please contact us to learn more about our firm.