Monday, December 12, 2011

Failure to Exhaust and the Tn NCFPA

Sometimes I’m sure I sound like a broken record but the Tennessee Court of Appeals recently released yet another case dealing with the failure to exhaust administrative remedies in the context of an interpretation of the Tennessee Non-Conforming Properties Act, Tenn. Code Ann. § 13-7-208. Prime Locations v Shelby County (Tenn. App. 2011). We’ve discussed this issue several times, most recently on August 5, 2011, and while there certainly cannot be any question but that the Tennessee appellate courts have given us plenty of notice that you must first exhaust administrative remedies before pursuing an action involving interpretation of the TNCPA, we still seem to file cases which are lost because of a failure to exhaust those administrative remedies.

In this most recent case, Prime Locations sued over an interpretation of the TNCPA as applied to billboards. The company applied for permits but was denied, and rather than appeal the decision to the local zoning board, the company filed a declaratory judgment action seeking a determination that the TNCPA controlled and that they were entitled to their permits. The trial court found that the TNCPA did apply. The Tennessee Court of Appeals reversed. Essentially, the court held once again, that the case had to be dismissed for failure of the company to exhaust its administrative remedies. The court cited to Thomas v. Shelby County, 2011 WL 3558171 (Tenn. Ct. App. July 21, 2011), which held similarly. Actually, it is a little interesting to note that the Thomas case involved an appeal under the state Administrative Procedures Act, whereas this case came up under the local planning jurisdiction and the common law doctrine of failure to exhaust. The court seems to confuse the two somewhat, but certainly the practical impact of the cases is the same.

And once again, as I said back on August 5, while the decision certainly is grounded amply by Tennessee precedent, I still contend that the result is incorrect. In its simplest form, the argument is that zoning boards don’t have the power or jurisdiction to construe Tennessee state law. They do have the power to construe the local zoning ordinance. But §208 is not part of the local zoning ordinance. It’s the Tennessee state statute and should be construed only by the courts of Tennessee.

There is however another way to approach this situation. Applied to the board of zoning appeals, and assuming a that the board rules against the applicant, file a petition for a statutory writ of certiorari, which allows the court to substitute its judgment for that of the zoning board. The statutory writ of certiorari is not usually available in zoning cases, but in a situation where you are arguing that the use is legally nonconforming, a strong case can be made that the administrative decision-maker cannot take away a vested right and that the court is permitted to review the decision and base its decision on what the court thinks is appropriate. Contrast this situation with a variance request: there, the applicant is asking for a special relaxation of the rules as applied to his property. He’s asking for a favor in effect. But in the case of a legally nonconforming use, the property owner is asking for no favor. He is saying that he has a right which existed prior to the effective date of the applicable zoning ordinance, and that it simply illegal to take that vested right away from him. Under those circumstances, somewhat like the revocation of a law license or a medical license, the court under the certiorari process, would be entitled to review it de novo and make its own decision.

The Tennessee courts may not accept this argument. It certainly has not been made so far as I know and there is no appellate court decision on point. But if you have a legally nonconforming use, and you are forced to go to the zoning board, if the zoning board decides against you, an appeal under the statutory writ is the ideal way of getting the court to review the case without the customary deferential standard to the conclusions of the board.

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