South Carolina Business Law Blog

The infamous Willie Sutton reportedly was once asked why he robbed banks.  His simple answer:  "That's where the money is."  Likewise, in an information age, the information that forms the basis for legal disputes is increasingly stored on computers. The South Carolina Court of Appeals recently considered a claim under the federal Stored Communications Act (SCA), found at Title II of the Electronic Communications Privacy Act (ECPA).  And the 4th Circuit Court of Appeals reviewed a decision of the United States District Court for the District of South Carolina considering the reach of the Computer Fraud and Abuse Act (CFAA). It is not surprising that litigants seek to take advantage of the civil liability provisions of these computer crime statutes when their adversaries obtain,  transmit, and share electronically stored information. The challenge for courts construing these laws is that both of them were enacted in 1986, before the Internet and email (as ...

By Drew Walker Note:  This article was originally published in the Summer 2012 Issue of Palmetto Banker , published by the South Carolina Bankers Association . Don’t Give It Away:   Avoiding New Unauthorized Practice of Law Consequences Banks lend money – they don’t give it away.   However, recent rulings from South Carolina appellate courts may close the courtroom door to a bank seeking mortgage foreclosure and a money judgment. Without relief from the courts for bad loans, the bank has essentially given their money away. South Carolina law requires an attorney to perform or supervise certain steps in a real estate closing.   Lenders and lawyers have known this for 25 years.   The 1987 Buyers Service case and its progeny ( State v. Buyers Service Co., Inc. , 292 S.C. 426, 357 S.E.2d 15 (1987); Doe v.McMaster ; and Doe Law Firm v.Richardson ) served notice on lenders that an attorney must supervise the following aspects of a real estate closin...

The Fourth Circuit Court of Appeals and the Supreme Court of South Carolina recently have had occasion to consider the interplay of the South Carolina Uniform Arbitration Act (“SCUAA”) with the Federal Arbitration Act (“FAA”) and the requirements of an international treaty. The Convention Act Trumps The McCarran-Ferguson Act and the SCUAA In ESAB Group Inc. v. Zurich Insurance, PLC , a group of insurers refused to defend and indemnify ESAB Group in a number of product liability actions.  ESAB Group is a foreign-owned company, but also a South Carolina-based manufacturer of welding materials and equipment.   ESAB Group sued these insurers in state court in Florence seeking coverage under several insurance policies, and the insurers removed the case to federal court.  Magistrate Judge Rogers referred all claims related to the insurance policies to arbitration in Sweden based upon the arbitration agreements contained therein, and ESAB Group appealed that decisio...

On March 1, 2012, the South Carolina Supreme Court issued an Order amending Rule 1.15, "Safekeeping Property," of the South Carolina Rules of Professional Conduct . Minimum File Retention Requirement and Adoption of a File Retention Policy Rule 1.15(i) establishes for the first time in South Carolina the requirement for an attorney or law firm to maintain client files after they are closed for a minimum of 6 years (unless the file is delivered to the client or the client has authorized destruction of the file and no pending or threatened legal proceedings are known to the lawyer).  If the client does not request the file within 6 years following the end of the representation, the lawyer may destroy the file unless pending or threatened legal proceedings are known to the lawyer. The last sentence of Comment 13 to Rule 1.15(i) will be of particular interest to the Bar:  "Attorneys and firms should create file retention policies and clearly communicate these ...

By Shaun Blake As last month’s decision by the Central District of California in the Toyota Hybrid Brake Class Action case demonstrates, simply raising a contractual right to arbitrate as an affirmative defense may not be enough to protect a party's right to compel arbitration.   In its Answer, Toyota raised as an affirmative defense an arbitration clause contained in certain dealer agreements excuted by the Class Plaintiffs (purchasers of hybrid vehicles with allegedly defective anti-lock braking systems).  Thereafter, in support of its subsequent Motion to Compel Arbitration, Toyota contended that it had preserved the right to compel arbitration as it awaited the United States Supreme Court’s decision in AT&T Mobility LLC v. Concepcion , 131 S. Ct. 1740 (2011). Toyota argued that, prior to Concepcion , any motion to compel arbitration would have been futile because class action waivers were generally unenforceable under California law. The Court disregarded Toyota’s...

As described by Greenberg Traurig , the Federal Courts Jurisdiction and Clarification Act of 2011 goes into effect on January 6, 2012, making several significant changes to federal law related to removal and venue. One important addition to 28 U.S.C. Section 1446 is a provision explaining how removal is accomplished when an action has multiple defendants.  The change resolves some inter-circuit variation on that point in favor of a rule allowing each defendant 30 days from its date of service to file a notice of removal, and then further allowing earlier-served defendants to join in or consent to any previous removal.  (For a 4th Circuit discussion of this topic, see Barbour v. International Union ).  Similarly, the law codifies the the "rule of unanimity" requiring all defendants to consent to removal. The law also makes significant changes to the "amount in controversy" provisions applicable to removal, and revises the general federal venue statute .

The ABA's Litigation News recently described an opinion from the U.S. District Court for the Eastern District of Pennsylvania refusing to apply the community-of-interest privilege, and provided an overview of the history of the privilege and its application by various federal circuits and courts. The community-of-interest privilege (in the 3rd Circuit) allows attorneys "representing different clients with similar legal interests to share information without having to disclose it to others."  In re Teleglobe Communc'ns Corp. ,  493 F.3d 345, 364 (3d Cir. 2007).  "Alleged members of the community of interest must at least share a 'substantially similar legal interest,' that is not solely commercial.  Id. at 365.  In King Drug Co. of Florence, Inc. v. Cephalon, Inc. , Plaintiffs in a putative class action alleging violations of the Sherman Antitrust Act sought to compel discovery of certain communications between Defendant Barr Laboratories, Inc. (...