The James Wiseman saga mixes my two favorite things: Memphis basketball and Chancery Court procedure

The James Wiseman news ruined my Friday evening. It doesn’t get more ominous than this:

First, I’m a Memphis fan. This includes the University of Memphis, the basketball team, the football team, the people of Memphis, and the city itself.

(Side Note: As a Memphian For Life, how awesome was it to see my Memphis people representing on twitter last night? Don’t mess with Memphis.)

Second, I’m a commercial litigator, and, here I was, thinking through issues of complex legal procedure, exactly 45 minutes before I was planning to watch James Wiseman play basketball.

But, then, some exciting news:

So, the Shelby County Chancery Court granted a Verified Complaint filed by James Wiseman, represented by Lesline Ballin, that requested a Temporary Restraining Order.

Story over, right? Not at all.

Legal analysis to follow:

Tennessee Rule of Civil Procedure 65 controls here. Tennessee Rule of Civil Procedure 65.03 provides, in part, that a court “may issue a temporary restraining order without written or oral notice to the adverse party or its attorney” when “an affidavit or verified complaint clearly show that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party can be heard in opposition [.]”

Here, this TRO was entered without notice to the NCAA. The NCAA didn’t have an opportunity to respond with factual or legal analysis…or even a one page “We Object!” filing.

The Shelby County Chancery Court simply reviewed the filed pleadings to make sure that the Verified Complaint, if assumed to be true, connected all the dots to satisfy the elements for getting a TRO issued. In a way, it’s just a matter of being good at paperwork at this stage.

And it helps if you probably have the Judge’s cell phone number.

Don’t get me wrong; it’s still savvy lawyering. Courts refer to any relief under Rule 65 as “extraordinary relief.” It’s a big deal, and a strong move by Memphis and Ballin.

But there is a long road ahead, with the first test coming up soon.

TROs only last 15 days. Under Rule 65.03(3), TROs have a limited life; they only last 15 days, unless they are extended by the Court. That’s the reason for the low proof threshold; TROs are designed to be temporary remedies.

The real fight will be over the Temporary Injunction. Under Rule 65.04, the court will replace the TRO with a Temporary Injunction, which is designed to provide longer injunctive relief to the plaintiff while the litigation proceeds.

Under Rule 65.04, a “temporary injunction may be granted during the pendency of an action if it is clearly shown by verified complaint, affidavit or other evidence that the movant’s rights are being or will be violated by an adverse party and the movant will suffer immediate and irreparable injury, loss or damage pending a final judgment in the action, or that the acts or omissions of the adverse party will tend to render such final judgment ineffectual. “

In deciding whether to grant the temporary injunction, the court will apply a “four-factor test: (1) the threat of irreparable harm to plaintiff if the injunction is not granted; (2) the balance between this harm and the injury that granting the injunction would inflict on the defendant; (3) the probability that plaintiff will succeed on the merits; and (4) the public interest.”

Here, James Wiseman’s case will rise and fall on item # 3, and the NCAA will want a mini-trial on the violation. Wiseman should have a fairly good argument on items 1 and 2, since he’ll lose valuable chunks of his college career if he has to sit out.

If I had to bet, I’d think a judge would let him play, while the matter is being litigated.

But, what Court will decide? There’s no way this matter stays in Shelby County Chancery Court.

Despite what Bluff City Law says (i.e. where every case they handle is in the Shelby County Courthouse), this case will be removed to federal court.

Pursuant to 28 U.S.C. § 1441, a case “may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” Here, the District Court for the Western District Courts of Tennessee will likely get this case, unless the NCAA both removes the matter to district court and then asks for a change of venue (to a different district court in the US) at the same time.

Given the time challenges here, I’d bet the matter would stay in Memphis’ district courts.

There are a number of reasons a defendant would remove this. For one, a state court judge is popularly elected, and, while judges are generally not biased, an elected judge would face great public pressure from a rabid fan base. District Court judges are lifetime appointees by the President, and they are perceived to be free from bias.

How to Get Rich in Distressed Assets in Nashville? (You probably won’t like my answer)

In a strong economy like Nashville-2019, I get lots of calls from people looking for “good deals” on real estate.

First, I tell them to buy a time machine that will take them back to 2010.

Then, I commiserate with them about all the awesome deals that I watched other people pounce on over the last 7 years (with, of course, a quick reminder about all the awful deals that brought people to financial ruin in the 7 years before that).

After all that, I get serious and talk to them about buying distressed real estate, and all the forms and forums where that can happen. Bankruptcy Sales. Foreclosures. Sheriff’s Sales. Tax Sales.

It’s, literally, a path full of misery and heartbreak, but it’s probably the only realm in present-day Nashville where you can truly get a good deal.

And part of the reason that there’s so much upside is that there’s so much risk in these types of sales. There’s no way to avoid that risk, and, at best, your goal is to simply mitigate that risk.

TL;DR: You have to know what you’re doing. Otherwise, you’re buying your dream house for pennies on the dollar, only to learn that you’re not getting what you thought you were.

I recently taught a CLE for OutkickCLE on distressed buying, and I’ll post that video link here when it goes live. In the meantime, I’ll be posting snippets from my CLE materials here. Stay tuned.

You’ll be hearing a lot about “predatory installment loans” in 2020

There’s a new lending device that’s gaining popularity across the country, and it’s coming to Tennessee soon.

As in, “to be considered by the 2020 Tennessee Legislature” soon.

It’s called an “online installment loan,” and it’s a new form of pay-day lending, but with a few extra bells and whistles that make it look more like a regular bank loan.

And while many people know the downsides of going to a title-lending place for a loan, this new device is being marketed to a broader group of American consumers, says Bloomberg News in an article published today, titled “America’s Middle Class is Addicted to a New Kind of Credit.” Per Bloomberg, these are:

…a form of debt with much longer maturities but often the same sort of crippling, triple-digit interest rates. If the payday loan’s target audience is the nation’s poor, then the installment loan is geared to all those working-class Americans who have seen their wages stagnate and unpaid bills pile up in the years since the Great Recession.

In just a span of five years, online installment loans have gone from being a relatively niche offering to a red-hot industry … and have done so without attracting the kind of public and regulatory backlash that hounded the payday loan.

[The] average online subprime installment loan customer has an annual income of about $52,000. About 80% have been to college and 30% own a home…[m]ore than 10% of the company’s core customer base makes over $100,000 a year.

These instruments generally have a longer repayment period, like 90 days to a year, but they have the same insanely high interest rates (ranging from 20% to 35% to, in some cases, 155%) as other title loans.

Not in Tennessee, right?

These lenders are targeting Tenn. Code Ann. § 47-14-104, and, specifically, that statute’s 10% cap on interest rates. The lenders hope to eliminate that cap entirely.

October is Pro Bono Month in Tennessee, and what have you done?

October is Pro Bono Month in Tennessee. The Tennessee Bar Association’s Celebrate Pro Bono Month 2019 page has a list of opportunities to choose from.

It is not difficult. A lot of lawyers never provide pro bono services.

Frequently, they’ll say “I practice in [insert corporate/high end practice area], and there’s nothing I can do to help [them].”

If you really think that, call or e-mail me, and I can help find you an opportunity that will be perfect for you. Two months ago, I got a call from an in-house lawyer at a Fortune 50 company who didn’t know what his legal team could do. Not only did I find them some options to serve, but I volunteered with them. Seriously, call me if you want to volunteer, but don’t know where to start.

The vast majority of matters at walk-in clinics are just common-sense/paperwork based issues. Occasionally, you’ll get some really specific landlord-tenant or divorce question, but there is always someone else at these clinics with that expertise.

If you, commercial real estate attorney, take 15 minutes to help somebody deal with an issue about their neighbor’s barking dog, that frees up 15 minutes of that divorce expert’s time.

In my experience, most people just want somebody to just listen to their legal issues, and give them common sense advice. To be clear, these are all important questions that people have. They’ve taken the time out of their day to drive downtown, so whatever their question is, it’s a big deal to them.

And, sometimes, all it takes is a smart person to talk it through with them and make their life a little easier.

Looking to Help? There are only five days left in October, so, if you haven’t volunteered yet, here are two great last chances:

  • Veterans Project Legal Help Clinic, in downtown/Gulch Nashville, on Wednesday, October 30, 2019, from 11a to 1pm. This clinic is operated by Legal Aid, and it focuses on serving the veteran community. It’s not too busy (i.e. you get about 7 customers over the course of the 2 hours), with generally straight-forward questions.
  • Judge Rachel Bell’s General Sessions Music City Community Court Expungement Clinic, on Saturday, October 26. This is an incredible program that helps people clean up their criminal record, making it easier for them to find jobs. Lawyers generally need to arrive by 9:30 and should expect to stay until around 1pm.

Upcoming Legal Aid Gala. A big fundraiser is scheduled for next Saturday, November 9, 2019, An Evening at the Frist: Celebrating 50 Years of Service. This is going to be a fun night, celebrating the work of Legal Aid.

Here’s where I go a little negative. When it comes to big-law support of Pro Bono initiatives, I’ve got some pretty strong opinions. I will keep the specifics to myself, but you are welcome to ask me at the Legal Aid event.

Warning: You will be a little weirded out at how passionate I feel about the need for lawyers to be doing more, especially in Nashville in 2019.

New Court of Appeals Opinion revisits ineffective service of process issues in Tennessee

In March, I discussed the rapidly developing litigation in Tennessee debtor-creditor law about the failure of many process servers to comply with Tenn. Code Ann. § 16-15-901(b). In order to have valid service of process, this statute says: “The process server must be identified by name and address on the return.”

Note: Here’s my post from 2015, when I warned you all that these issues were going to be a problem.

In an opinion issued yesterday, the Tennessee Court of Appeals upheld this analysis, in one of the few times the appellate courts have considered this issue.

The case is Cornerstone Financial Credit Union v. Joshua Mundy, M2018-01624-COA-R3-CV (Tenn. App. Oct. 23, 2019).

It’s a well done opinion, with a good review of personal jurisdiction, ineffective service of process, void judgments, and the method for raising these issues under Tenn. R. Civ. P. 60.02(3).

I’m biased, because–as you may note–I represented the appellee/debtor in the Mundy case. But, nevertheless, Judge Dinkins’ opinion is a good reminder that every lawsuit must start with proper service–or everything else after that may fall apart.

New Tennessee Law Allows Judgments from Foreign Countries to be Enforced in State

A few years ago, I asked the question “How ‘Foreign’ can a foreign judgment be and still be entitled to domestication?

In that post, I considered whether a a truly foreign judgment, i.e. one entered by a different country, could be domesticated and enforced in a state court, whether under state law (i.e. the Uniform Enforcement of Foreign Judgment Act) or under federal law. In the end, I thought it would, citing the Uniform Foreign Money-Judgments Recognition Act, a federal statute that can be found at 13 U.L.A. 261.

To my surprise, I just discovered that the Tennessee Legislature passed a brand new set of statutes on this issue, effective on July 1, 2019.

Found at Tenn. Code Ann § 26-6-201, et. seq., these statutes are titled the “Uniform Foreign Money-Judgments Recognition Act.” Per Tenn. Code Ann § 26-6-202 and -203, this Act expressly applies to judgment issued in a court of a foreign country that “[g]rants or denies recovery of a sum of money” and is “final, conclusive, and enforceable.” Interestingly, the Act doesn’t apply to a foreign judgment for taxes or fines/penalties.

Nothing beats actually reading the statutes, so I’ll just recap some highlights.

Be sure to read Tenn. Code Ann. § 26-6-204, which recites the various standards for recognition. Most importantly, check out subpart (b), which provides examples of matters in which a Tennessee court “may not” recognize the foreign judgment (where the court lacks “impartial tribunals or procedures”; no personal jurisdiction; no subject matter jurisdiction). Also, see subpart (c), which provides the examples for when a Tennessee “need not” recognize the foreign judgment (insufficient notice; fraud; repugnant policy; inconvenient forum; conflicting venue provisions).

Tenn. Code Ann. § 26-6-205(a) provides some examples of where a Tennessee court can pretty easily find personal jurisdiction (i.e. the defendant was actually served in that country; made a voluntary appearance in the proceeding; a car accident in that country).

Pursuant to Tenn. Code Ann. § 26-6-204(c), “[a] party resisting recognition of a foreign-country judgment has the burden of establishing that a ground for nonrecognition stated in subsection (b) or (c) exists.”

Some quick thoughts:

  • With all the legislative fights in Tennessee over this past summer, I’m surprised that there was no mention of this new Act;
  • This is a fairly obscure issue, and I’m honestly impressed that Tennessee has such a fair process for recognition of foreign judgments;
  • I think the statutory text of the Act has some language that will be difficult to navigate, including the “may not recognize” and “need not recognize” phrases in Tenn. Code Ann. § 26-6-204 (b) and (c).
  • If a party digs in on the “need not” criteria, including whether a cause of action is “repugnant to the public policy of this state,” we’re going to be having some really interesting arguments in Davidson County Chancery Court.

In short, I’m glad that Tennessee has adopted a version of the Act and that we have clarity as to whether a judgment from a foreign country will be enforceable and domesticated in Tennessee.

For years, I’ve handled a number of these, generally shoe-horning these judgments into the existing Tennessee Foreign Judgments Act.

Listen to the Judges

One of the benefits of practicing law for nearly two decades is that, by this time, I know the judges. I’ve either appeared in front of them dozens of times or, just as likely, I know them personally after spending years dealing with them when they were just regular lawyers.

Now, this isn’t to suggest that, even with 20 years of experience, you don’t have to give the judge respect, just because you’re so familiar with them. It means that you come to realize that judges are people too, and they’re subject to the same frustrations, flaws, and distractions that all lawyers are.

In the past two weeks, I’ve spent time with 3 different judges in social settings, and here’s some wisdom that I’ve picked up.

Stop it with the discovery disputes. They hate them, and two of the judges said “I wanted to tell them to be adults and just figure it out.” That’s easier said than done, especially when it’s the other side who is being the jerk. I guess the take-away is, unless it’s really bad, try really hard to get it resolved and, if you do have to court, make it clear how hard you tried to get it resolved.

Get to the point. Another frustration is that the parties want to push all their facts and legal citations toward the bench, and essentially ask the judge to figure it out. And, yes, that’s the judge’s job. But, if you can make it as clear and easy as possible, you should.

And, a big part of that is presenting clear, straight-forward briefs, without any extraneous legalese.

I really like this article, “How to Write So Judges Will Like You.” “Life on the other side of the gavel is busy, filled with hearings and trials and conferences and five hundred lawyers who all think their motion is an emergency that deserves immediate and undivided attention….get to the point quickly.” 

The next time you’re writing a big brief, before you start, take a moment and read that article. We practice law in a time when heretofors, comes nows, and by and through undersigned counsels just aren’t expected by modern judicial readers. It’s a waste of space and time, when a judge needs you to get to the point, say what’s really going on, and why you’re right.

Stop it with the fidgeting and listen. One judge shared a story about presiding in a small courtroom, about 7 feet away from plaintiff’s counsel before trial. And, as the judge was discussing preliminary pre-trial issues, counsel just couldn’t stop arranging everything. Pens. Post-its. Folders. Files. The judge couldn’t even focus, because it looked like counsel wasn’t listening. And that was irritating.

Now, as all trial lawyers know, that’s a nervous time. You’re rehearsing your opening statement, terrified that you’ve misplaced your exhibits, and worrying about 50 things at once.

That’s a fairly extreme example, but here’s one I see a lot: Lawyers simply can’t stay off their phones, even during their own court proceedings. Sure, sometimes there are emergency e-mails, but, generally, it’s mindless checking of twitter or texts.

I remember, as a young lawyer, some of the older lawyers would set up shop on the back row and open up the newspaper and read it while waiting for their case. Can you imagine that? That’s somebody who isn’t paying any attention–I mean, people used to do that at football games as a show of disrespect to the other team.

Staring at your phone is the modern equivalent. It makes you look unengaged and bored by what’s going on.

So, again, all of this is hearsay, gleaned from conversation here and there. But, keep this in mind the next time you’ve got something coming up in court. These may have been words from your Judge.