South Carolina Business Law Blog

In AU Optronics Corporation and LG Display Co. v. State of South Carolina , the 4th Circuit Court of Appeals considered for the first time the issue of whether a state's lawsuit pursuing claims that may benefit some of its citizens is a "mass action" under the Class Action Fairness Act of 2005  ("CAFA"). BACKGROUND The State of South Carolina brought separate actions against Defendants AU Optronics and LG Display (citizens of states other than South Carolina) in state court (Richland County) under the S.C. Antitrust Act and the SC Unfair Trade Practices Act (SCUTPA) and alleging a price-fixing conspiracy involving LCD panels.   The suits sought civil forfeitures, statutory penalties, and restitution for those South Carolina individuals who had purchased products utilizing these panels.    Defendants removed the actions to the District of South Carolina, alleging that the cases satisfied the "minimal diversity" standards of  CAFA as “class ...

It has scarcely been a month since this post describing Jennings v. Jennings , and the the S.C. Court of Appeals' construction of the Stored Communications Act . The South Carolina Supreme Court granted Certiorari to review the opinion, and on October 10th reversed the decision of the Court of Appeals .  Three of the five Justices on the Court issued opinions in the case, underscoring the difficulties in construing this law enacted before the advent of browsers and webmail.    Click here for the facts. The Majority Opinion: This is not Backup Justice Hearn rejected the rationale of the Court of Appeals that Mr. Jennings' single copies of previously opened Yahoo emails were stored "for purposes of backup protection" pursuant to Section 2510(17)(B) of the Wiretap Act:  "We decline to hold that retaining an opened e-mail constitutes storing it for backup protection under the Act."  Employing the ordinary meaning of "backup" as "one tha...

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...