The Agricultural Exemption: Jefferson County v Wilmoth (Tenn. App. 2021)

Jefferson County v Wilmoth Family Properties, Tennessee Court of Appeals, February 1, 2021

One of the most difficult questions arising in Tennessee land use cases is the enforceability of zoning regulations against agricultural activities within county government jurisdiction (the statutory exemptions for the most part do not apply to municipal governments). The Wilmoth case offers some clarification although the waters remain murky.

Let’s start by mentioning the statutory provisions which cause the difficulty in the first place. When the Tennessee Zoning Enabling Statutes were passed in 1935, the County legislation included a very significant agricultural exemption:

This part shall not be construed as authorizing the requirement of building permits nor providing for any regulation of the erection, construction, or reconstruction of any building or other structure on lands now devoted to agricultural uses or which may hereafter be used for agricultural purposes, except on agricultural lands adjacent or in proximity to state federal-aid highways, public airports or public parks; provided, that such building or structure is incidental to the agricultural enterprise. Nor shall this chapter be construed as limiting or affecting in any way or controlling the agricultural uses of land.

Tenn. Code. Ann. § 13-7-114 (a). In addition, years later, the General Assembly added another provision, which only serves to increase the confusion:

Nothing in this part shall be construed as granting counties the power to prohibit or regulate normal agricultural activities.

Tenn. Code. Ann. § 5-1-118(b). It is anybody’s guess why the second provision only relates to “normal agricultural activities” when the first essentially prohibits any control over presumably all “agricultural uses of land.” The distinction between the two statutes is not the subject of our story, but just an interesting sidelight. It should be mentioned here that the original statute was not mentioned in the Wilmoth opinion; presumably the attorneys may not have cited it to the court.

The Tennessee Supreme Court took a look at this area not too long ago in Shore v Maple Lane Farms, 411 S.W. 3d 405 (Tenn. 2013). While I would characterize the opinion as fairly liberal concerning the interpretation of the agricultural exemption, the court drew a line at entertainment activities and decided that such things as concerts and other entertainment simply were not part of agriculture.

Tennessee being the farming state that it is the General Assembly immediately went to work and defined the term agriculture in a way so as to include entertainment activities. Tenn. Code. Ann. § §1-3-105 and 43-1-113. Both of these sections are definitional and include the same language relating to agricultural activities.

The question in Wilmoth was whether this farm of approximately 30 acres in size where cattle has been sold for profit but at the time of the case, only nine cows and a bull or on the farm; farm also had 18 to 22 chickens which produced 400 to 600 eggs per month. But the main income producing aspect was an event venue, where various types of parties and wedding receptions were held. As you might guess, income from the farm related to what might be referred to as normal agricultural activities was only $6250 in 2019 whereas rental income for the venue events was approximate $40,000 more. Mr. Wilmoth, the farmer, testified in-depth concerning his time operating a farm and he indicated that he spent minimal time facilitating the event venue business; that most of his time was related to working on the farm. The County of course argued that Wilmoth was attempting to circumvent the zoning regulations by maintaining a token amount of agricultural activities which had no connection to the much more lucrative commercial event venue use. The County argued that the current use the property was not agricultural and thus it was not protected by either statutory provision.

The broadened statutory definition of agriculture passed by the General Assembly after the Supreme Court decision in Shore, reads as follows:

“Agriculture” means:

(i) The land, buildings and machinery used in the commercial production of farm products and nursery stock;

(ii) The activity carried on in connection with the commercial production of farm products and nursery stock;

(iii) Recreational and educational activities on land used for the commercial production of farm products and nursery stock;  and

(iv) Entertainment activities conducted in conjunction with, but secondary to, commercial production of farm products and nursery stock, when such activities occur on land used for the commercial production of farm products and nursery stock;

Tenn. Code. Ann. § 1-3-105.

Neither the trial court nor the Court of Appeals felt that the weddings and other parties held at the event venue could be characterized as recreational or educational; however, to the extent that those activities were entertainment, conducted in conjunction with, but secondary to, the production of farm products, then the event venue would be protected by the agricultural exemptions.

As typically happens in these cases, Mr. Wilmoth, the farmer, testified that the property was offered as an event venue and that it was successful due to the aesthetic appearance of the farm and the farming operation itself, noting that the venue provided multiple photographic opportunities of general farm life.

The Court of Appeals concluded, like the trial court, “that the present use of the property is in keeping with the legislature’s obvious intent to allow the necessary supplementation of forming income with income from related activities as long as such activities are stopped secondary to the commercial production of farm products and nursery stock.” Accordingly, the trial court’s dismissal of the complaint was affirmed.

I’m confident that there will be more cases as time goes along. This certainly can be a difficult area of land use law. Many times the properties contested are fairly small, leading many people more familiar with larger farming operations to doubt the nature of the land use. In addition, as in the Wilmoth case, often, the farmer makes more money from the event venue than from his farming activities. Frankly, this is to be expected. First of all, farming is hard work, and it does not pay particularly well unless you are farming on a very large scale. There is skepticism built into the analysis by local zoning officials.

Second, it’s not terribly clear what the General Assembly intended to protect with the latest definitional changes. It’s also not exceptionally clear how the definitions are to be applied. Wilmoth certainly is a start, but more cases will be needed to fill in the blank spaces.

Before concluding, it is interesting to take a look at the US Census of Agriculture, the latest version of which was published in 2017. There are specific versions for each state as well as the entirety of the country, and a brief look at the Tennessee census is very interesting.

First, over the last 20 years, the number of farms in Tennessee has dropped from approximately 90,000 farms to approximately 70,000 farms. That may give a good indication as to why the Tennessee General Assembly is protective of agricultural activities. Further, the size of the farms is also instructive. In 2017, with approximately 70000 operating farms, almost 6000 of those farms were under 10 acres in size. Almost ½ of all the farms in Tennessee were under 50 acres in size (30,000 farms). Another 25,000 farms were under 180 acres in size. As you can immediately see, many of the farms in our state are not very large.

The next item that jumps out is the fact that almost 31,000 farms in Tennessee make less than $2500 a year. Another 27,000 farms make less than $25,000 a year. So, of the 70,000 farms in Tennessee, approximately 58,000 of them make very little money, and probably not enough to live on. Once again, these numbers may explain quite a bit. If the state of Tennessee wants to keep some semblance of farming alive, special protections for farmers and farming activities seem undoubtedly necessary.

Religious use and concentrated animal feeding operations (CAFO)

In an interesting special exception case out of Indiana, House of Prayer v Rush County Board of Zoning Appeals, 2018 WL 414862 (Ind. Appeals January 16, 2018), a religious land use adjacent to a farm which asked for a permit to operate a concentrated animal feeding operation (CAFO) with 1400 cattle lost as a result of the fact that the agricultural use, even in its intensive form, was both expected and encouraged in the zoning district.

House of Prayer argued that its property should be protected as a result of the Indiana Religious Freedom Restoration Act and the RLUIPA, but the court concluded that there was no protection under the federal act as a result of the fact that the House of Prayer did not have an interest in the property which was regulated, a requirement under the federal act. As far as the state act goes, the court concluded that while there was some evidence of a burden on its religious exercise, because the owner of the farm promised to control the runoff and odor, the court found no substantial burden.

I have not seen too many cases yet where state religious freedom statutes are important in the outcome. It is interesting here that the Indiana court deferred to the local zoning board even in the face of an allegation implicating the Indiana statute.

Shore v Maple Lane Farms

Bill Herbert, the Metro Zoning Administrator, told me the other day that the Tennessee Supreme Court has granted permission for an appeal in the Shore v Maple Lane Farms case which we have discussed previously here. As you may recall, the Tennessee Court of Appeals took a fairly broad approach to agricultural zoning, and the Tennessee Right to Farm Act. The fact that the Tennessee Supreme Court has decided to review the case may indicate that the Supreme Court has a more conservative approach in mind.

In any event, it should be pretty interesting. Our Supreme Court is very knowledgeable concerning land use planning matters, and this is another area of zoning and land use which needs some attention. Perhaps the court can give us some guidance about how to apply agricultural zoning, including the limits of what it means to be agricultural.

Right to Farm Act

Last month, the Tennessee Court of Appeals issued an interesting decision concerning the Tennessee Right to Farm Act, Tenn. Code Ann. § 43-26-101 et seq. Essentially, a number of subdivision lots were aggregated by the “farm,” and used as a pumpkin patch, corn maze, and for concerts on the property.

Some 18 years after the “farm” began operations, the plaintiff bought one of the lots in the subdivision, not far away from the farm operations. The plaintiff’s lawsuit contended that the farm operations, if such they can be called, began to expand after she moved in, including additional concert performances, helicopter rides, and ATV use, disturbing her use of her property. She furthermore contends that about 75% of income of the farm is derived from these non-farming activities.

The farm discontinued the helicopter rides, but attempted to get a zoning interpretation that would support the concerts. Ultimately the County board of zoning appeals ruled that the farm could have only one concert per year.

The trial court ruled that under Tenn. Code Ann. § 13-7-114, there were sufficient agricultural activities on the land to merit exemption from the County zoning regulations. In particular, the trial court concluded that the definition of agriculture located at Tenn. Code Ann. §§ 1-3-105 and 43-1-113 include recreational and educational activities on land used in the commercial production of farm products and nursery stock. The Court of Appeals agreed. I assume that this means that the farm could have more than one concert on a yearly basis but that is a little unclear from the opinion.

Applying the protections of the Tennessee Right to Farm Act, the Court of Appeals first noted that the General Assembly likely never conceived that the protections of the statute might be called upon under circumstances such as these. But the court made the point that the General Assembly has defined farming to include agri-tourism, Tenn. Code Ann. § 43-39-101, and that could be interpreted fairly broadly given the statutory references. One of the experts in the trial court testified about a  state publication which defined agri-tourism as

a style of activity in which hospitality is offered on farms. This may include the opportunity to assist with farming tasks during visits. Participants can pick fruits and vegetables, visit mazes cut in crop fields or “Halloween” mazes, ride horses, taste honey, learn about crops, participate in hayrides (which may include picnics, campfires, bonfires, and entertainment, music, dancing), shop in gift shops and farm stands for local and regional produce or hand-crafted gifts, purchase food and beverages, purchase photographs, and much more.

The Court felt that this was consistent with the Act, and based on the Right to Farm Act, the plaintiff failed to rebut the presumption under the act that the farming operations were not a nuisance and as a result, the Court of Appeals affirmed the decision of the trial court, dismissing the complaint.

This is probably one of the first interpretations of the Tennessee Right to Farm Act, and it is a broad interpretation not only of the act itself, but also of the zoning provisions which have always exempted agricultural activities from zoning regulation.

This is perhaps appropriate, particularly in a state like Tennessee, where farming activities have a long and hallowed history. In addition, the state remains relatively rural and agricultural; perhaps the true holding of this case is that farms are nothing other than a different type of commercial activity, and before buying property anywhere close to farming activities, the purchasers should be extremely comfortable with living in that kind of environment.

I tell many of my own clients that I grew up on a nursery. In fact, my father and brother both now run the family nursery, and far from being an idyllic place of quiet and rest, it is to the contrary, a place of boisterous commercial activity. Tractors and trailers are moving in and out constantly, there are approximately 75 to 100 workers who show up on a daily basis to plant, care for, and dig up shrubs to ship to various locations across the eastern seaboard. In addition, mulch, fertilizer, peet moss, and all manner of other materials and accessories are trucked into the nursery in support of the agricultural activities.

This is certainly not a bad thing: my family has depended for decades upon the income from this agricultural endeavor. But as cityfolk move out to the country, frequently they don’t quite understand the nature of farming activities, and the inconveniences they can create as a result.

Shore v Maple Lane Farms, Tenn Court of Appeals, April 2012