This case involved a tax-exempt charitable organization that withdrew accumulated cash values from numerous donated life insurance policies and reinvested the proceeds in higher-yielding securities, generating income that it reported and paid tax on as unrelated business income before seeking a refund. The court held that the withdrawals constituted "acquisition indebtedness" under 26 U.S.C. Section 514, making the income taxable, and denied the refund claim. The reasoning was that policy advances qualify as indebtedness based on the contractual terms treating them as loans with interest and repayment obligations, aligning with the legislative intent of Section 514 to tax debt-financed income of exempt organizations to prevent unfair competition and abuse of tax exemptions.
The case involved a dispute between Bowater North America Corp. and Murray Machinery, Inc. over the interpretation of a settlement agreement resolving prior issues from Bowater's purchase of a long log boom. The agreement provided Bowater with $286,000 in future purchase credits from Murray, to be applied at 10% off list price, but the parties disagreed on whether this meant Bowater would receive products up to that value at no cost or would instead accumulate 10% discounts on purchases until the credit total was reached. The court held that the matter must be submitted to arbitration under the agreement's terms. The core reasoning was that the contract explicitly requires arbitration for any dispute regarding the credits to be provided, and the current conflict directly concerned the method of calculating those credits rather than unrelated pricing issues.
This case involved the FDIC, acting as receiver for the failed United American Bank in Hamilton County, seeking recovery on a $404,000 promissory note executed by Valley Rental & Leasing Co., Inc. The court found that defendants including Valley Machinery Corporation, Valley Rental & Leasing, Hal Y. Roe, and Mike R. Allen participated in a scheme of fraud involving false pretenses, misrepresentations of financial condition, and sham corporate entities to obtain and extend credit from the bank. The court decided in favor of the FDIC, entering judgment against the defendants jointly and severally for the full amount of the note plus interest, with additional liability against Allen and Valley Rental for attorney's fees. The core reasoning was that the participants' fraud rendered them personally liable, the D'Oench, Duhme doctrine and federal common law barred unrecorded defenses against the FDIC, and Allen's failure to indicate representative capacity on the note made him personally liable under Tennessee law.
This was a products liability action brought under Tennessee law in which the plaintiff alleged that her husband died from exposure to asbestos-containing products made by the defendants and sought to hold them strictly liable under Restatement (Second) of Torts § 402A. The plaintiff moved for partial summary judgment, arguing that four defendants should be collaterally estopped from relitigating whether their products were defective and unreasonably dangerous because they had lost that issue in a prior federal diversity case. The court denied the motion, holding that offensive nonmutual issue preclusion was inappropriate. It reasoned that the existence of dozens of prior inconsistent verdicts for defendants in other asbestos cases made it unfair to give preclusive effect to a single favorable judgment, whether federal or state preclusion rules applied.
The City of Loudon, Tennessee, sued the Tennessee Valley Authority (TVA) and the Tennessee Valley Public Power Association, alleging that TVA's power supply contract with Loudon violated the Sherman Act by permitting TVA to sell power directly to large industrial customers like the A.E. Staley Manufacturing Company, breached the preference provisions of the TVA Act, broke a promise to help Loudon obtain industrial customers, was unconscionable, and unfairly favored some distributors over others. The court granted summary judgment to the defendants. It held that TVA, as a wholly owned federal government instrumentality, is exempt from antitrust liability under precedents such as Webster Cty. Coal v. TVA and Sea-Land Serv., Inc. v. Alaska R.R., and that the contract's Section 2(b) and related practices are consistent with the TVA Act's policies on load factors, revenue, and uniform application to distributors.
Magic Chef, Inc. sued labor unions in Tennessee state court for compensatory and punitive damages, alleging that the unions engaged in over 500 acts of violence during a strike at its manufacturing plant, violating state tort and economic interference laws. The defendants removed the case to federal district court, asserting federal question jurisdiction on the grounds that the claims were essentially federal in character under the National Labor Relations Act and RICO, which they argued preempted state authority. The plaintiff moved to remand, and the court addressed whether the action arose under federal law for purposes of 28 U.S.C. §§ 1331 and 1441(b). Relying on Supreme Court precedent such as Franchise Tax Board v. Construction Laborers Vacation Trust, the court reasoned that a plaintiff is the master of its complaint and may avoid federal jurisdiction by pleading only state-law claims that are not completely preempted, making removal improper despite the labor context and possible availability of federal remedies.
labor & employmentproceduretorts & liabilityfederal power