Showing posts from May, 2010

SC Supreme Court: Courts Cannot "Blue Pencil" Non-Compete Restriction

In Poynter Investments v. Century Builders , the South Carolina Supreme Court continued a line of cases holding that the "restrictions in a non-compete clause cannot be rewritten by a court or limited by the parties' agreement, but must stand or fall on their own terms." In addition, the Court clarified that there is no separate "balancing the equities" requirement for the issuance of a preliminary injunction (modifying five South Carolina Court of Appeals opinions including such a "requirement"). Appellant Rector sold his business to Poynter in 2007, and the parties entered into an "Employment and Non-Competition Agreement" containing a four year non-competition clause, and preventing Appellants from competing in a defined geographic area ("Restricted Territory") during that time period. Poynter sued Appellants in 2008 alleging violations of the non-competition agreement. The trial judge granted Poynter a preliminary injuncti

Bank's Loan Closing Without Attorney Supervision Bars Any Relief Against Borrower

On May 6, 2010, the South Carolina Court of Appeals issued a ruling affirming a harsh result against Wachovia for its failure to have loan closing documents reviewed, and the closing supervised by, an independent attorney. In Wachovia v. Coffey , borrower Dr. Coffey took out a $125,000 home equity line of credit with Wachovia. Wachovia closed the loan directly without the involvement of counsel. Dr. Coffey’s wife was unaware of the closing. Dr. Coffey signed a mortgage document purporting to secure the line of credit with their home, despite the fact that Mrs. Coffey was the sole owner on the title. Wachovia wired the loan proceeds for the purchase of a thirty-six-foot boat. Dr. Coffey paid monthly payments for the boat for the rest of his life, and Mrs. Coffey continued those payments temporarily after his death. Mrs. Coffey believed the loan was secured by the boat, not the home. After Dr. Coffey passed away, Mrs. Coffey sold the boat, with the help of a boat broker. Dur

Changes to the Federal Rules To Go into Effect in December

The U.S. Supreme Court recently approved proposed changes to various federal rules of procedure (appellate, bankruptcy, civil, criminal, and evidence). These changes will be effective on December 1, 2010, unless Congress enacts legislation to the contrary. A list of the rules amended or added is found here , courtesy of Fastcase . The Administrative Office of the U.S. Courts has a summary of the proposed rules.

N.C. Bar Association Issues Proposed Ethics Opinions Addressing Use of "Software as a Service" by Attorneys

Attorneys and law firms (like the rest of the business world) are beginning to migrate to "software as a service" (SaaS) for various practice applications. (The ABA Legal Technology Resource Center has a good primer on SaaS here ) The nature of SaaS presents new challenges for attorneys with respect to the protection of client information. The North Carolina State Bar has issued two proposed Ethics Opinions (scroll down) concluding that lawyers may use SaaS as long as certain steps are taken to safeguard the confidentiality and security of client information. The second opinion also contains a number of "best practices" that an attorney should follow when contracting with a SaaS vendor. The questions that an attorney should ask an SaaS vendor include where the data is hosted, who owns the data, does the agreement address confidentiality, how does the vendor protect the security and confidentiality of data, how the data is backed up, and how the data is retr

U.S. Supreme Court Clarifies "Principal Place of Business" for Purposes of Diversity

Analysis of Hertz v. Friend from the ABA Litigation News . The "nerve center" test trumps the "business realities" test used by the 9th Circuit.

Mutual Fund Fees

Article in the Sunday New York Times about the fees investors pay for mutual funds and whether those fees are excessive. This piece contains some analysis of the U.S. Supreme Court's recent decision in Jones v. Harris . Of note for South Carolina, the article quotes John P. Freeman , professor emeritus at the University of South Carolina School of Law , and a study Professor Freeman co-authored comparing mutual fund fees with those of public pension funds.

FCC Proposal for "Light Touch" Broadband Regulation

Chairman Julius Genachowski of the Federal Communications Commission issued a statement yesterday outlining how the agency might regulate certain parts of the nation's broadband communications network. The General Counsel of the FCC also provided the legal framework for this approach in an accompanying statement . South Carolina's own Commissioner Mignon Clyburn also issued a statement . Very broad brush, the Chairman's plan seeks to protect customers and help promote fair competition for broadband services, while not stifling investment and innovation. His approach seeks to classify only the transmission component of broadband access service as a "telecommunications service" subject to FCC oversight. In plainer English, the FCC would regulate (to some extent) the pipes (broadband lines) used to deliver Internet services, but not the content being carried on them. As history has demonstrated, the FCC's proposals rarely foster consensus among inter

A Brief Overview of the South Carolina Business Court Program

For various reasons, many corporate entities are created in Delaware. As a result, Delaware courts handle a large amount of complex business cases. Delaware’s Chancery Court is already well-known for its sophistication in handling commercial litigation, and its opinions are viewed favorably by other courts around the country. For those faced with litigation in Delaware, its Superior Court has created a new business court to handle complex commercial litigation, effective May 1, 2010. The Complex Commercial Litigation Division promises to be a new source of leading authority on business litigation matters. A copy of the directive creating the business court can be found here . South Carolina launched a similar Business Court Pilot Program in September of 2007. The Business Court is designed to handle complex business, corporate, and commercial matters. The program is currently available in Charleston, Richland, and Greenville Counties. Judges Young, Childs, and Miller s

Cash-Strapped States go Online, Hoping to Tax Sales

Washington Post article from Sunday's paper describing the ongoing effort by states to tax online purchases.