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Posted by: Azya Thornton on Jan 22, 2025

Charles Youree, Jr. filed a lawsuit against two business entities seeking to hold them liable, under the theory of piercing the corporate veil, for a judgment he previously had obtained against another business entity. When the two entities did not answer, he was awarded a default judgment. The entities moved to vacate the default judgment before it became final. They argued that the trial court should not have entered judgment in the first place because the complaint did not plead the elements required for piercing the corporate veil. They also argued that their failure to respond was due to excusable neglect, but they later withdrew that argument. The trial court denied the motion to vacate. In determining that the complaint stated a claim for piercing the corporate veil, the trial court evaluated the factual allegations under the so-called Allen factors. See Fed. Deposit Ins. Corp. v. Allen, 584 F. Supp. 386 (E.D. Tenn. 1984). On appeal as of right, the Court of Appeals reversed. The court looked not to the Allen factors, but rather to a three-element standard set forth in Continental Bankers Life Insurance Co. of the South v. Bank of Alamo, 578 S.W.2d 625 (Tenn. 1979). We granted permission to appeal. Based on our review of the applicable law, we hold that it was proper in this case to address whether the complaint pleaded the elements for piercing the corporate veil even absent a claim of excusable neglect. We further hold that the Continental Bankers elements provide the correct framework for piercing the corporate veil and that the complaint failed to plead the elements sufficiently. Accordingly, we affirm the judgment of the Court of Appeals that the trial court erred in denying the motion to vacate the default judgment. We remand this case to the trial court for further proceedings consistent with this opinion.

Posted by: Azya Thornton on Jan 22, 2025

In this health care liability action, Clayton D. Richards asks us to consider whether the trial court erred in dismissing his complaint. Previously, Mr. Richards sued Vanderbilt University Medical Center alleging negligence. That lawsuit ended in a voluntary nonsuit. Mr. Richards refiled his complaint, which became the current action, over a year later. The trial court dismissed his complaint, holding that he had not complied with the terms of the saving statute, Tennessee Code Annotated section 28-1-105. On appeal, Mr. Richards argues that Tennessee Code Annotated section 29-26-121(c) offers him a 120-day extension of the one-year saving statute, making his lawsuit timely. We disagree and conclude that section 29-26-121(c) does not extend the saving statute. Thus, we affirm the trial court’s order granting Vanderbilt University Medical Center’s motion to dismiss.

Posted by: Azya Thornton on Jan 22, 2025

The Tennessee Supreme Court clarified in an opinion today that holding shareholders responsible for a corporation's actions, known as "piercing the corporate veil," requires three elements: control, wrongdoing and causation. According to a press release, the court also ruled that trial courts must ensure a complaint sufficiently articulates a claim for the relief sought before entering a default judgment. Charles Youree Jr. filed a lawsuit seeking to hold two companies responsible for a monetary judgment he had obtained against another company. When the two companies failed to respond, the trial court awarded him a default judgment. The companies later moved to set aside the judgment, arguing Youree’s complaint lacked sufficient factual allegations for piercing the corporate veil. The trial court denied the motion, but the Court of Appeals reversed the decision. The Supreme Court unanimously affirmed the Court of Appeals, holding that while a defendant’s failure to answer does admit the factual allegations in a complaint, it does not mandate a default judgment. Instead, courts must ensure that the admitted facts are sufficient to establish a valid claim. When applying the three-prong test to this case, the court found that Youree’s complaint did not contain sufficient factual allegations.

Posted by: Azya Thornton on Jan 22, 2025

The Tennessee Supreme Court ruled today that a plaintiff who did not refile a negligence lawsuit against Vanderbilt University Medical Center within the required one-year time frame could not assert an extension based on the Health Care Liability Act. According to a press release from the Administrative Office of the Courts, the case began when Clayton D. Richards, a former patient at the medical center, filed a negligence lawsuit in 2014 after giving pre-suit notice as required by law. The lawsuit was voluntarily dismissed without prejudice, allowing Richards the opportunity to refile the complaint within a year. However, instead of refiling within that time, Richards argued that the act provided a 120-day extension under the Saving Statute, making his lawsuit timely. The trial court disagreed and dismissed the complaint. The Court of Appeals upheld the trial court’s decision, and in a unanimous opinion, the Supreme Court agreed, concluding that the claims were untimely.

Posted by: Stacey Shrader Joslin on Jan 22, 2025

On the last day of his presidency, Joe Biden granted blanket pardons to five family members; members of Congress who investigated the Jan. 6, 2021, attack on the U.S. Capitol; former National Institutes of Health leader Anthony Fauci; and retired Gen. Mark Milley, former chair of the Joint Chiefs of Staff. A few days earlier, Biden commuted the sentences of almost 2,500 people convicted of nonviolent drug offenses. The Associated Press reports on those actions. According to Reuters, Biden also granted clemency to Native American activist Leonard Peltier, who had been sentenced to life for killing two FBI agents. Since taking office Monday, President Donald Trump also has issued a slew of pardons, including pardons for all of those charged in the Jan. 6 attack on the capitol — including some 30 who have connections to Tennessee — as well as Ross Ulbricht, who operated a dark web marketplace. Read more about those actions from The Tennessean and Reuters.

Posted by: Azya Thornton on Jan 22, 2025

After a blackout that lasted about 14 hours, TikTok returned to the U.S. on Sunday. The video app was taken offline Saturday night in compliance with a law that effectively banned the service nationwide unless it separates from ByteDance, its China-based owner. Last week, the U.S. Supreme Court upheld the law. On Saturday, Google and Apple removed the app from their stores, a requirement of the ban, which also prohibits web-hosting companies from providing back-end support to the app, National Public Radio reports. On Sunday morning, President Donald Trump issued a statement vowing to pause the law and protect tech companies while the app's future is worked out. On Monday, the president signed an executive order giving U.S. leaders 75 days to find a buyer, according to the Associated Press. Despite that action, Apple and Google reportedly are not allowing new users to download the app or allowing current users to install updates or make in-app purchases.

Posted by: Azya Thornton on Jan 22, 2025

U.S. Rep. Tim Burchett, Republican of Knoxville, announced Tuesday morning on social media that he will serve on the U.S. House of Representative's Department of Government Efficiency (DOGE) Committee. According to ABC 24, President Donald Trump signed an executive order Monday establishing DOGE to modernize "federal technology and software to maximize governmental efficiency and productivity." The DOGE Act, introduced in the U.S. Senate in December by Sen. Marsha Blackburn, also of Tennessee, aims to freeze federal hiring, relocate government agencies outside of Washington, D.C., and establish a merit-based salary system for federal workers.

Posted by: Azya Thornton on Jan 22, 2025

Acting U.S. Attorney Robert E. McGuire announced Tuesday that the U.S. Attorney’s Office for the Middle District of Tennessee recovered more than $137 million for American taxpayers and crime victims in fiscal year 2024. According to the press release, the office collected a total of $135.7 million in civil cases, primarily through the False Claims Act, which allows the government to recover up to three times the amount of fraudulently obtained funds, and $59 million from civil penalties under the Controlled Substances Act. In criminal cases, the office obtained approximately $4.1 million in money judgments and recovered $939,718 through forfeited criminal and civil assets. “The dedicated public servants in our office responsible for protecting the public from fraud and disgorging criminal proceeds have once again done a fantastic job on behalf of taxpayers and crime victims in Middle Tennessee,” McGuire said.

Posted by: Azya Thornton on Jan 22, 2025

The Tennessee Attorney General announced a settlement this week with Family Dollar Stores, a subsidiary of Dollar Tree Inc. The settlement follows an investigation that found Family Dollar stores in Tennessee were selling consumer goods that had been knowingly stored in a rodent-infested distribution center in Arkansas. In 2022, Family Dollar announced a voluntary recall of FDA-regulated products stored at its West Memphis Distribution Center. In 2024, the company pleaded guilty to causing FDA-regulated products to become adulterated while being held under insanitary conditions. As part of the settlement, Family Dollar has agreed to pay the state $1.125 million. “No matter the family budget, whether at a discount shop or not, every Tennessean deserves confidence in the food they buy. This settlement holds Family Dollar accountable and protects Tennessee families from being sold harmful or mislabeled food,” Attorney General Jonathan Skrmetti said in a press release.

Posted by: Stacey Shrader Joslin on Jan 22, 2025

President Donald Trump has named a number of acting leaders at the U.S. Department of Justice (DOJ) while his nominees await confirmation. According to Bloomberg Law, James McHenry, a longtime DOJ immigration official, will serve as acting attorney general; Emil Bove, Trump’s personal lawyer, will serve as acting deputy attorney general; and veteran federal prosecutor Antoinette “Toni” Bacon will serve as acting leader of the criminal division. Attorney general nominee Pam Bondi appeared before the U.S. Senate Judiciary Committee last week. Bloomberg reports on the hearing, which can be watched in full on the committee’s website (watch Day 1 or Day 2). The committee is set to vote on the nomination on Jan. 29 according to Politico.


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