Tuesday, July 25, 2017

Livingston Christian Schools v Genoa Charter Township

The Sixth Circuit Court of Appeals decided an interesting new RLUIPA case early last month. The local government denied an application for a special use permit for the use of a school and suit was brought under the federal statute. The school was attempting to relocate from an outer lying area to a new property, which was already improved with an existing church, albeit one unconnected to the school itself. Although the Planning Commission recommended approval, the Township board disapprove based on neighborhood concerns about traffic and previous compliance issues by the church.

The school entered into a short-term lease thereafter and also leased their property for income purposes to another charter school.

The interesting aspect of this case is the meaning of the phrase "substantial burden" under the terms of the federal statute. Remember, that the Tennessee statute provides an explicit definition which is a fairly low burden to meet: under Tennessee law, substantial burden means anything that inhibits or curtails. Given the definition here from the Sixth Circuit, even though the relevant phrase, "substantial burden" is the same under both statutes, the interpretation of that phrase by the two sets of courts could not be more dramatically different.

The federal statute does not define the term. There have only been a few cases from the six circuit, the most prominent of which is the Living Water Church case decided in 2007. After reviewing its president, this panel of the Sixth Circuit relied on factors from other circuit courts to make this decision. One of those factors was the availability of a alternative feasible location, and another is whether the religious land use would suffer substantial delay uncertainty and expense. The court also was concerned as to whether the plaintiffs own actions caused some of the burden.

Ultimately the court simply found unavailing the schools insistence that the outer lying property wasn't in adequate location for its purposes. The court found that the school put forth only conclusory evidence that the outer lying property was in adequate and did not allege that any of its core religious functions could not be carried out at that property despite its remote location.

The school did demonstrate a drop in enrollment, but there was no evidence as to why the drop took place. The court suggested that testimony concerning the drop as a result of denial of the special use permit, would have been at least somewhat persuasive. But no such proof was admitted.

By way of conclusion, the court indicated that traveling the roughly 12 miles to the outer lying property is not unduly burdensome to the schools students. There was simply no substantial hardship.

Under the circumstances, would a Tennessee court applying the Tennessee statute agree? Certainly, the Tennessee statutory provision would make it a lot harder to rule similarly; on the other hand, perhaps 12 miles is just too short distance to characterize as a substantial burden.

Friday, April 7, 2017

Tennessee Billboard Act declared unconstitutional

In an extremely interesting billboard case recently decided by the US District Court for the Western District of Tennessee, the Tennessee Billboard Regulation and Control Act of 1972, Tenn. Code Ann. §54-21-101 et seq., was held unconstitutional. Actually, the Billboard Act certainly seemed to be a fit candidate for constitutional scrutiny, particularly after the recent US Supreme Court decision in Reed v Town of Gilbert, 135 S Ct 2218 (2015). I had occasion several years ago to get involved in a billboard case and was frankly stunned to learn that the Sixth Circuit had upheld the on/off premises distinction in the context of noncommercial speech. So for example, if the Billboard owner wanted to announce his or her support for American veterans, for example, unless the property on which the billboard was established operated some veterans relief organization, it was not an on premise sign and prohibited. Thus, noncommercial speech faced a significantly greater burden than commercial speech. Thomas v Schroer, 2017 WL 1208672.

While this state of affairs was difficult to understand before the Reed decision in 2015, once that decision was handed down, it became clear that any regulation which required categorization of a sign by reading the sign was subject to strict scrutiny under the First Amendment, and as a result, was likely to be determined to be unconstitutional. Nevertheless, the state regulations concerning billboards here in Tennessee were never changed.

In this case, Thomas displayed an image of the American flag, and at different times content referencing the holiday season along with the American flag. Because he never obtained a permit for the sign, the state sought to have the sign removed: it did not in fact comply with the state regulations anyway. The court applied strict scrutiny because the regulations had an impact on the plaintiffs noncommercial speech. In effect, if the sign is deemed to be on premise, then it need not comply with the locational requirements otherwise established. But since its difficult to establish noncommercial speech as on premise, the rule actually discriminates against noncommercial speech, which should be given more favorable treatment, not less.

Having concluded that the Billboard Act was subject to survive strict scrutiny, the court then looked at the reasons advanced by the state as compelling in order to justify the regulations. These reasons included safety, recreational value of public travel, tourism, economic development, scenic beauty and the investment in public highways. Perhaps understandably, the District Court found none of these as being a compelling state interest. Furthermore, the Billboard Act was not narrowly tailored to advance the state’s compelling interest, even if it had any.

The court also concluded that the act was both overinclusive and underinclusive. It is overinclusive because the Billboard Act is content based inasmuch as the application of the exemptions hinges on the content of the sign. While the state wants to limit highly distracting signs which might have an impact on traffic safety, the net effect of the state act leaves an off premise sign of enormous size regulated in the same manner as a small on premise sign.

The court also concluded that the act was underinclusive in that there is no rationale as to why signs displaying non-premise related content would mar the aesthetics in such a way as to merit arbitrary restrictions such as permits and tags. In essence, the act would permit large ostentatious on premise signs closely placed together while restricting small, muted off premise signs. As the court indicated, “aesthetics are not measured by how relevant the signs content is to the on premise activity.”

This is an extremely interesting case which almost certainly will go on up to the Sixth Circuit. It will be interesting to see what happens on appeal.

Wednesday, March 29, 2017

Clear Water Partners v Benson 2017 WL 376391 (Tenn. App. 2017)

Clear Water is a very interesting case from the standpoint of developers' remedies against neighborhood groups who overreach. Clear Water applied for a zoning change and “use on review” (special exception) to allow the use of its property for a moderately dense residential development and marina. The neighbors vigorously oppose the submissions. Clearwater sued the neighbors for intentional interference with developer's business relationships and tortious interference with its contracts based on residents' alleged misconduct aimed at preventing the development. It did not sue for defamation.

The neighbors filed a motion to dismiss which was granted by the trial court, but on appeal, the Tennessee Court of Appeals reversed. First, I would’ve thought that the doctrine of judicial privilege would have required dismissal of the case, but Judge Andy Bennett, writing for the court, indicated that the parties had agreed that the doctrine only applied to a claim of defamation. Since no such claim was made, judicial privilege is not apply. See Evans v. Nashville Banner Publ'g Co., 1988 WL 105718, for an interesting example of its application.

The allegations by the developer were numerous: the creation of a multiplicity of falls email accounts in order to give the governmental decision makers an inflated idea of the number of people in opposition; flyers containing false and misleading information; and the submission of false and misleading material to the Board of Zoning Appeals, among other things.

The motion to dismiss was based on a number of arguments, including judicial immunity, but also the Anti-Slap Act, Tenn. Code Ann. §4-21-1003. As mentioned above, the judicial immunity doctrine only applies to defamation; the Anti-Slap Act provides immunity, but not if the communications were intentionally false or recklessly false. As a result, although the trial court granted the motion, the Court of Appeals reversed. Thus it appears, that if neighbors using social media tools, deliberately mislead or provide false information to governmental officials, there may be liability to a developer for interference with business relationships or contracts. By the way, the contractual allegations in this case were dismissed for failure to attach a copy of the contracts themselves, but that technical failure would not prevent some future developer from filing a similar case.

Also interesting is the fact that the case was appealed ultimately to the Tennessee Court of Appeals to review the zoning decisions made by the County and its board of zoning appeals. Although the Court of Appeals does not give the citation to that case, I believe it is Benson v Knox County, 2016 WL 2866534. Ultimately, the main part of the development was upheld while the marina was disapproved.

The outcome of the zoning litigation is interesting to me here. If the neighbors engaged in false and misleading communications, should that not have been revealed in the zoning litigation? And if so, was it not taken into consideration by the local government decision-makers in reaching a final conclusion? In effect, is the tort lawsuit not simply retrying the zoning litigation? For example, one of the allegations has to do with delay caused by misrepresentations by the neighbors. Assuming that's the truth, could the delay not also have been occasioned simply by the request of neighboring property owners without the misrepresentation? Those kinds of delays in rezoning applications and hearings before zoning boards are frequent in my experience. It doesn't require anybody to mislead; local government officials often have a leaning in favor of neighbors who vote in elections. That's just part and parcel of making an application for a zoning change or other development. I recognize that the developer could not counterclaim in a common law writ of certiorari appeal for damages, and that there is no technical res judicata; but as a practical matter, it seems to me that the decision of the courts on the zoning issues takes much of the wind out of the sails of the tortious interference case.

One final interesting note about the case is that the neighboring property owners who were sued, faced additional claims resulting from the conduct of their attorney. The allegations were that the Defendants were commanding, directing, and/or knowingly authorizing their attorney, and attorney “explicitly represented to the BZA” that a mock-up created by the Defendants and/or their attorney was “an intentional or reckless factual misrepresentation of the appearance of the development plan approved by the MPC” and that the attorney knew or should have known that the mock-up was false and misrepresented the location, nature, and appearance of the planned development. The court concluded that this was sufficient so that the neighboring property owners could be responsible for the actions of the attorney vicariously as part of a civil conspiracy.

This case is well worth considering. It is extremely interesting, and may be a cautionary tale for neighbors opposing development opportunities. Certainly, misrepresenting the details of any application for development is never a good thing; given the outcome here, it seems that there may be a cottage industry for lawsuits back against neighbors who get a little too creative.

At the same time, I have never been very comfortable with these kinds of cases against neighbors. Ordinarily I think they are mainly intended to scare the neighbors into not opposing the development, and secondly, that they may wind up diverting attention from the main objective, obtaining approval from the local government. But with the advent of this case in January of this year, I’m sure we will see more of these kinds of cases get filed.

Tuesday, March 28, 2017

Save Rural Franklin v Williamson County

One of the most interesting cases recently decided his a case from Williamson County released by the Tennessee Court Of Appeals last August. In Save Rural Franklin v Williamson County, 2016 WL 4523418, the Tennessee Court of Appeals does an interesting overview of the subdivision process as mandated by the Tennessee subdivision statutes, Tenn. Code Ann. §13-4-301 et seq. Although it is interesting generally for the overview that it provides concerning the subdivision process, it is even more interesting because it finally resolves a very significant question concerning appeals from decisions of Planning Commissions relating to subdivisions.

In a very rough way, the work of a Planning Commission with regard to subdivisions can be summarized as being tripartite: generally speaking, most local subdivision regulations require that a concept plan be submitted, that a preliminary subdivision plat be submitted which must be approved, and a final subdivision plat which will be recorded and based on which the lots may be sold. The heart of the process is the preliminary subdivision plat: that’s when the majority of decisions with regard to the layout and design of the subdivision are made. Furthermore, since the preliminary subdivision plat, once approved, forms the basis for the construction of the required infrastructure for the subdivision, and has always seemed to me that an appeal concerning the subdivision must be taken from the decision with regard to the preliminary subdivision plat. If for example, a group of neighbors weights until after the preliminary plat has been approved and substantial work completed with regard to the infrastructure, water and sewer, sidewalks, roadways, and so forth, an appeal from the decision with regard to the final subdivision plat, even if they might be right, the developer has spent a very significant amount of money based on the approval of the preliminary subdivision plat. As a general rule therefore the appeal should be taken from the action taken by the planning commission on the preliminary plat.

Unfortunately, we have never had any case law that directly looked at this issue. The Williamson County case finally does address it, and concludes that the approval of the preliminary plat is final for purposes of appeal. In the Williamson County case, a group of neighbors waited until the final plat had been approved to challenge the decision of the Planning Commission. The developer had already spent significant sums in order to provide the infrastructure required for the development. The court concluded that approval of the preliminary plat was final for purposes of appeal.

That’s not to say that an appeal from a final plat would not be appropriate under some circumstances. For example, if the final plat differed significantly from the preliminary plat, then a challenge to the approval of the final plat might be in order based on the lack of consistency. But in general, most of the time, on appeal from a Planning Commission decision concerning a subdivision, the appeal should be taken within 60 days of the decision concerning the preliminary plat.

This case is very interesting, and well worth study by attorneys working in the area of land use planning.

Friday, October 21, 2016

Metro Short Term Rental Property Ordinance Unconstitutional

Earlier today, Judge Kevin Jones of the Davidson County Circuit Court ruled in favor of the plaintiffs in a challenge to Metro's Short Term Rental Property Ordinance, finding it unconstitutionally vague. The court ruled on a Motion for Summary Judgment, my guess is orally from the bench, and so an order will be entered sometime in the next week or two. At this present time, I am assuming that no written version of the court's ruling is available. I did check with the Davidson County Circuit Court Clerk's office, and there is no order as of yet (which would be expected if the ruling was from the bench on the motion).

In essence, the plaintiffs argued that the definition of short-term rental properties was unconstitutionally vague and overlapped with a number of other land-use definitions contained in the Metro Zoning Ordinance, including hotels, boardinghouse, and bed-and-breakfasts. From some of the published reports, it appears that the court did not hold the 3% rule unconstitutional, but since the definitions are unconstitutionally vague, the 3% cap was invalidated as well.

It is certainly an interesting decision, and it will be more interesting to read the order. Finally, whether Metro will appeal is another interesting question. It may be simpler to simply pass another ordinance. The difficulty from the standpoint of property owners is that with the increased concern which is developed over the last few years since the adoption of the ordinance, there may be rather draconian solutions, including simply restricting short-term rentals to commercial areas of the city.