Failure to Exhaust

Last week, we discussed the new Ready Mix v Jefferson County case, 2012 WL 3757025, decided by the Tennessee Supreme Court. One of the most interesting aspects of the case to me is the issue of exhaustion of administrative remedies. When must an applicant appeal to the zoning board before going to Court? This question is a bit more difficult to answer than it should be. Back in 1992, the Tennessee Court of Appeals ruled in a somewhat similar case:

. . .  we find that the landowners have a right to obtain the board of zoning appeals' interpretation of their rights under the state laws and zoning ordinances pertaining to the erection and maintenance of a billboard on their property. We also find that review by the board of zoning appeals would be efficient and effective. Accordingly, we concur with the trial court's dismissal of the landowners' complaint because they have not exhausted their remedies before the board of zoning appeals.

Robison v. Metro. Gov't of Nashville & Davidson County, 90-3031-I, 1992 WL 205268 (Tenn. Ct. App. Aug. 26, 1992)

Ready Mix itself cites State ex rel Moore & Associates v West, 246 S.W. 3d 569, 577 (Tenn. App. 2005). In that case, the owner of a newly constructed hotel in Nashville filed suit concerning the interpretation of the zoning ordinance by Sonny West who concluded that a landscape buffer was required. The trial court ruled in favor of the owner, but on appeal, the Court of Appeals dismissed the lawsuit, holding that the owner first had to file an appeal to the zoning board, explaining that the "challenge was to the zoning administrator's denial of the certificate… [rather than] the validity of the ordinance requiring the buffer or the applicability of that ordinance to its hotel."

Notice however, that in the Moore case, the interpretation involved the zoning ordinance, not the applicability of a state statute.

In  Ready Mix, the Supreme Court ruled that the "primary issue for consideration was the applicability of the grandfather statute," and that no administrative appeal was required.

In this instance, the Company has, in our view, presented a challenge to the applicability of the zoning ordinance rather than to the discretion of the zoning official who issued the stop work order. The complaint required an assessment of whether the Company, by its actions prior to the passage of the zoning ordinance, invoked the protections of Tennessee Code Annotated section 13-7-208 and qualified as a direct challenge to “the applicability of th[e] ordinance” to the property. An administrative appeal to the board of zoning appeals “would have afforded no review over the key issue[].”

I certainly believe that the Supreme Court reached the right conclusion. I approach it from a similar standpoint but carry it to a further extreme.

In my opinion, the board of zoning appeals has no business construing a matter of state statutory law. Tenn. Code Ann. §13-7-109 (and as to municipalities, §207) grants the board of zoning appeals the power to "hear and decide appeals where it is alleged… that there is error in any order, requirement, decision or refusal made by the County building Commissioner or any other administrative official in the carrying out or enforcement of any ordinance enacted pursuant to this part."

The key words, from my perspective, are "enforcement of any ordinance enacted pursuant to this part." There was no error in the interpretation of the ordinance enacted pursuant to that section of the Tennessee Code. In these non-conforming property cases, the question is the interpretation of the state statute, §13-7-208. The zoning board only has the authority to interpret and conduct hearings concerning ordinances enacted pursuant to the enabling legislation. TCA §13-7-208 is not an ordinance; it is a state statute that has direct impact and should only be interpreted by members of the state judiciary. A zoning board, a planning commission, the local legislative body, all have no business interpreting the provisions contained within §13-7-208. Those provisions apply directly to the local governments; they are not adopted by local regulation or at least, need not be. It seems to me therefore that when the principal issue in the case is the applicability of §13-7-208, there is no jurisdiction before any administrative body, and the case must be litigated in the state courts.

Let's approach it from another angle just briefly. There are 95 counties in the state of Tennessee most of which now have zoning; there are many more municipalities. We could wind up with a different interpretation of the state statute in each of the countys and each of the municipalities if zoning boards are allowed to interpret these state provisions. It makes much more sense to have state judges  rule on the applicability and interpretation of state statutory requirements, rather than allowing a zoning board or planning commission or local legislative body, the majority of whose members have no training in the law anyway.

Certainly, if the applicant is relying on a local zoning regulation to demonstrate that the property is legally non-conforming, such as where the issues involve residential properties not protected by the state statute, the zoning board certainly has jurisdiction to hear and decide those cases. But where the owner relies on the protection of the state statute, there is no reason to go to the zoning board. The case should be considered by the state judiciary without the interference of local administrative decision-making.

As a result, the decision in Ready Mix certainly seems to be correct; I would even extend it further based on my analysis above. In any event, it is a very interesting case, and it strongly suggests that the Supreme Court believes that in cases involving non-conforming properties, that direct action in the state courts is generally appropriate when the primary issue for consideration is the applicability of the grandfather statute.