Historic Landmark for the Strand Book Store in NYC?

In an interesting New York Times article today, the owner of the Strand bookstore in NYC vigorously opposed having the city historic commission landmark the the building in which the bookstore operates. Arguing that land marking the building would increase her overall costs in what is a cutthroat business within margins, she asked the city commission to just leave her alone. She pointed out that New York City just granted $3 billion worth of subsidies to her arch rival, Amazon, and that instead of getting help from the city financially, they threaten now to make her operations even more difficult by land marking the building. It's quite a fun little article, and well worth reading. Whether her evaluation of the impact of the landmark status is accurate, the juxtaposition of the subsidies being paid by the city to Amazon vs. keeping one of the few independent bookstores still operational in the city is quite entertaining.

Cunningham v Bedford County -- Procedural Due Process

We have been reviewing the Cunningham v Bedford County case (copy found here) over the last several installments of this little zoning blog. We will continue today with a look at procedural due process.

The plaintiff also alleged a violation of procedural due process under both the US and Tennessee constitutions. The difficulty with this type of a claim is that there must be some constitutionally protected property interest that requires some degree of notice and opportunity to be heard. That property interest must be more than a unilateral expectation or an abstract need or desire, it must be a legitimate claim of entitlement created and defined by existing rules or understandings that come from some independent source such as Tennessee state law. The Court of Appeals concluded that here the plaintiff simply failed to demonstrate that he was entitled to have a zoning change and it was not therefore deprived of any procedural due process. He had no legitimate claim of entitlement to what is a discretionary decision by the local legislative body.

Once again, to a perhaps lesser extent in this instance, the decision turns on whether or not there was a rational basis for the failure to rezone the property. Having concluded that there was a rational basis for declining to change the zoning, there could not possibly be any claim of entitlement and as a result the procedural due process argument was doomed to failure.

I would go further and say that the procedural due process argument is somewhat difficult in the context of a zoning change. Perhaps if the zoning had been commercial and the County changed it to residential to the detriment of the owner, a procedural to process argument might have been more tenable. Under these circumstances though, it may be just too far a stretch. However, adding procedural and substantive due process claims to any case such as this is always worth considering and usually worth trying. Remember, that the local legislative body had cut off the plaintiff’s presentation of one of the hearings, and there were some allegations that at least the trial court found persuasive because of conflicts of interest by some members of the County commission.

Our next installment of this review of the Cunningham case will take a quick look at the alleged violations of substantive due process.

Cunningham v Bedford County -- Takings Law

The Cunningham case (copy found here) also involved allegations of a regulatory taking by overbroad zoning. The property was zoned residential; the plaintiff argued that it should be zoned commercial and that the residential zoning worked a taking of the land. The lower court concluded that there was no taking based on the Tennessee Supreme Court reasoning in Phillips v Montgomery County, 442 S.W. 3d 233 (Tenn. 2014). The Court of Appeals affirmed.

The plaintiff evidently relied upon the fact that the plaintiff had been led to believe that the property would easily be rezoned to commercial and thus had legitimate investment backed expectations for commercial use of the land. Furthermore, because at some points in the rezoning process, the applicant was not permitted to make a presentation and because there might have been some conflicts of interest among the County commissioners, the argument was that the character of the governmental action was inherently suspect and taking should've been found.

The difficulty here is that was forced to rely on the multifactor analysis found in 10 Central Transportation v New York, 438 US 104 (1978). There are some cases involving overbroad regulatory actions, that somewhat easily fit into the proper analysis. For example, a required dedication for subdivision that does not ameliorate some significant impact of the development is simply a take. See Nolan v California Coastal Commission, 483 US 825 (1987). Or, if there is a regulation which completely eliminates the potential economic use of the land, that may be a taking per se. See Lucas v South Carolina Coastal Council, 505 US 1003 (1992). And certainly, if there is a physical invasion, no matter how slight, that is also a taking of a more traditional kind.

But if the governmental actions do not fit into any of those categories, Penn Central must be applied. The difficulty is that unlike in the other categories, there is no set formula for determining when the Constitution requires that economic injuries caused by public action be compensated. Penn Central suggested a few factors to include:

The economic impact on the claimant,
the extent to which the regulation has interfered with distinct investment backed expectations
and the character or extent of the governmental action.

However, as I've mentioned, balancing these factors is not nearly so simple as the more distinctive total take categories mentioned above. As a result, if the plaintiff has to rely on Penn Central, it is often difficult to prevail.

And certainly, that was true in this case. The Court of Appeals pointed out that the plaintiff purchased the property knowing it was zoned for residential use. He did not choose to make his contract contingent upon obtaining zoning change. His first application for a zoning change was made before he actually bought the property. The Court of Appeals did not believe that there was a significant economic impact. He could have drafted the contract in order to make sure that he did not have to buy the property unless the zoning change was obtained. In addition, his investment backed expectations were hopeful. There is no binding commitment that the zoning would be changed. Finally the character of the governmental action was a zoning application which was denied on a rational basis. Thus there was no element of a regulatory taking.

The difficulty I have is once again rooted in the conclusion that there was a rational basis for this decision. Both the planning official for the county, Chris White, and Lisa Keylon, an urban planner by training and education, indicated clearly that this area was prime commercial land and that the entire area ultimately would be rezoned to commercial. It may be that it was too soon to take the zoning in that direction, but it's unclear from the discussion of the facts by the Court of Appeals.

Assuming for example that there is not a rational basis for residential zoning at that location, that would lead to a conclusion of a regulatory taking and compensation paid by the local government.

But once again, this case gives the practicing bar a good idea of how strong a case you must have in order to prevail. Even with County representatives testifying that the land was prime commercial land, the Court of Appeals found a rational basis for the current zoning and ruled in favor of the county.

Cunningham v Bedford County -- Justification for Zoning Changes

Returning to this recent and very interesting case concerning zoning changes (a copy of which can be found here), keep in mind that challenging any legislative enactment is a difficult task. The Court of Appeals in Cunningham, cited many of the leading cases in the state, including Fallin v Knox County Board of Commissioners, 656 S.W. 2d 338 (Tenn. 1983), for the proposition that local legislative bodies are given broad discretion in enacting or amending zoning ordinances.

When the act of a local governmental body is legislative, judicial review is limited to whether any rational basis exists for the legislative action and, if the issue is fairly debatable, it must be permitted to stand as valid legislation.

McCallen v City of Memphis, 786 SW 2d 633, 640 (Tenn. 1990).

The applicant argued that the opposition of nearby residents did not provide a basis on which the commission could lawfully refuse to rezone his property. Frankly, I agree with this point. It is not for the nearby residents to show a basis for a decision. From my perspective it takes the testimony of an expert witness, usually a land planner, to discuss whether a particular zoning classification on a particular property is rationally related to a legitimate governmental objective. Certainly, the residence may, at a public hearing, expressed their opinions. But those opinions are not well-informed and although they may have a political impact, have little or no impact on a judge making a final decision about the sustainability of the decision of the local legislative body.

Unfortunately, the cases relied upon by the applicant here were not legislative cases but rather administrative cases with a different standard of proof. The court easily blew through those, basically finding that neither of those cases was apposite to the facts presented here.

Interestingly, from my perspective, the Court of Appeals, sites an old favorite case of mine, Day v City of Decherd, 1998 WL 684533 (Tenn. App. 1990). In that case, Judge Cantrell, speaking for the Court of Appeals, noted that “legislative classifications in a zoning law are valid of any possible reason can be conceived to justify them.” And in an interesting comment on our political system:

Legislators, however, do what legislators two: they listen to their constituents; they test the wind; they try to please as many people as possible, consistent with the Constitution and a good conscience. And they are not to be condemned for doing so. That is their job.

Indeed, the Day case is somewhat similar. The owner there asked for a zoning change from residential to commercial as well, and ultimately did not have the votes to have it pass. There is one distinctive difference however, in the Day case, an urban planner, advise the planning commission that he had reservations about zoning this particular property commercial given other plans for that area of the city. As a result, there was an expert witness, so to speak, who provided some slim but necessary insight into the land use planning process and a reason to deny the zoning request.

In the Cunningham case on the other hand, the opposite appears to be true. Lisa Keylon, an urban planner by training and education, testified that this land was prime for commercial use. She testified that she thought the property should be rezoned to commercial. Now of course, in the absence of testimony by the plaintiff, a court must assume that most zoning enactments are valid. However, I feel certain that the plaintiff in this case adduced some proof, from an urban planner or otherwise, about the invalidity of the ordinance. At that point it seems to me that the burden should shift to the local legislative body to produce its own proof. Further, it appears that the County planners themselves testified the other way, that is, that the zoning change should be granted. Again, the Court of Appeals decision does not comment about this important testimony. The court focused solely on the adjacent neighbor and his opposition. But from my perspective, the neighbors' testimony, standing alone, in the face of expert proof from the plaintiff (if there was any) would insufficient to win the case for the local government. And since the planners from the local government itself seem to agree with the plaintiff’s position, that makes the plaintiff’s case even stronger.

The Court of Appeals relied on the neighbor’s testimony at the public hearing as providing a rational basis. It’s not clear to me that that is entirely appropriate. I think that if the plaintiff presented an expert who concluded that the zoning change was appropriate and had a rational basis, and furthermore that the existing zoning which was residential, had no rational basis, then the local legislative body should have been required to change the zoning.

Bear in mind, it’s very possible to have two or more zoning classifications which meet the rational basis test. For example, in this case, perhaps this property, from an urban zoning standpoint, could reasonably be used for residential or commercial purpose. If that’s the case then the local legislative body has the choice of either one. But without knowing more, it is difficult to reach a final conclusion concerning this issue as it regards this particular set of facts. However, the rational basis with regard to a zoning change cannot simply be provided by a neighbor. Either, the plaintiff fails to present expert proof, in which case the presumption of validity controls and the local government wins. Or, alternatively, if the plaintiff presents expert proof tending to show that there is no rational basis for the current zoning and that commercial zoning would have a rational basis, then either the local government must present its own expert and the court makes a decision between the two experts, or if the local government presents no expert proof, then the plaintiff should prevail.

However, our courts here in Tennessee have been very reluctant to even go that far and this decision in Cunningham is certainly consistent with other decisions where expert proof has been presented by the plaintiff, none from the local government, and yet somehow the local government nonetheless prevails. See for example, Family Golf v Metro Nashville, 964 S.W. 2d 264 (Tenn. App. 1997) (perm. app. denied April 6, 1998).

The point here is to recognize the difficulty of challenging a zoning change. Very few of those challenges are successful.

One final note: The Court of Appeals analyzed the denial of the zoning request as one section of its analysis, and then in another section analyzed the claims associated with substantive due process. From my perspective, those two sections could easily be combined. The basic challenge to a zoning change is really pursuant to substantive due process. The “fairly debatable rational basis test” arises out of substantive due process. In fact, the “fairly debatable” rule was applied in the first US Supreme Court case, Euclid v Ambler Realty, 272 US 365 (1926) (“If the validity of the legislative classification for zoning purposes be fairly debatable, the legislative judgment must be allowed to control.”). Over the years, the analysis has perhaps become more sophisticated with differing standards for fundamental rights and suspect classifications, but the basic test was laid down in Euclid almost 100 years ago.

Cunningham v Bedford County -- Intro

This case, decided at the end of October, is an illustration of the difficulties involved in defeating the local government regarding any kind of a zoning change. Whether the local government has granted the zoning change and the neighbors challenge the change, or deny the change and the applicant challenges the decision, it is very difficult for the losing party to successfully challenge the decision of the local government. It is once again one of those instances where fighting city hall is difficult to do.

Over the next couple of days, I will discuss this case. Today I will simply look at the factual background and procedural history as recited by the Tennessee Court of Appeals. You can find a copy of the case here.

The property involved in this case was zoned residential and the owner tried unsuccessfully several times to have the property rezoned for commercial use. This case arises out of his efforts to obtain a zoning change to commercial use filed in May 2013.

The court indicates that the Planning Commission recommended the zoning change from residential to commercial. However, at the next meeting of the local legislative body, while there was a motion and second to approve the rezoning, it failed to pass.

Nevertheless, the application was placed on the agenda for a subsequent meeting of the local legislative body and a public hearing was held as part of that meeting. The applicant and his attorney spoke in favor of the application and a resident of a local subdivision, located adjacent to the property, spoke against it. For one reason or another, there was a motion made to defer consideration of the zoning change and remand to the Planning Commission.

It’s unclear whether the case ever went back to the Planning Commission. The opinion does not indicate any further action by the Planning Commission. However, at the next meeting of the local legislative body, the application was again considered, and a motion was made to approve and seconded, but the motion failed. Neither Mr. Cunningham nor his attorney was given the opportunity to speak prior to the vote.

The failure to approve the requested zoning change was challenged by filing a declaratory judgment action in Chancery Court. Notice that in challenging a zoning change, the appropriate manner of doing so is by way of a declaratory judgment. In many other instances, on an appeal from the planning commission, on appeal from the board of zoning appeals, and on appeal from certain kinds of special zoning techniques from the local legislative body, the proper method is to file a petition for writ of certiorari. But where the local legislative body considers a straight zoning change, say from residential to commercial as in this case, the appropriate manner of challenging the decision is by way of declaratory judgment.

The plaintiff alleged that the denial of the zoning change was arbitrary, capricious and illegal and that there was no rational or justifiable basis for the decision of the local legislative body. The complaint also alleged violations of the applicant’s due process and equal protection rights and that the failure to grant a zoning change rendered the county liable for inverse condemnation/regulatory taking of the property.

There were four days of hearings before the trial court although the Court of Appeals does not indicate much by way of what testimony was adduced. The trial court ultimately found that:

– the decision of the local legislative body was arbitrary and capricious,
– the plaintiffs due process rights were violated,
– there was no regulatory taking,
– no violation of the sunshine law and
– the members of the local legislative body were acting within the scope of their authority in                   carrying out their duties.

The court ordered that the property be rezoned from residential to commercial, and awarded damages in the amount of $75,600 plus interest and attorneys fees in the amount of $10,000.

The plaintiff appealed seeking lost profits other damages and also asking that the trial court decision finding no regulatory taking be reversed. The defendants for their part, raised an additional issue as to whether or not the decision to deny the zoning change was arbitrary and capricious and violation of the plaintiff’s due process rights.

This case gives us an excellent opportunity to discuss not only the perils and pitfalls of challenging a local governmental decision concerning zoning changes, but also the various theories which might be used by a plaintiff to challenge such a decision. Since the Court of Appeals ultimately concludes that the trial court was incorrect in finding any violation of the law whatsoever, it also demonstrates how difficult it is to prevail under the circumstances.

We will take a look at the basic issues concerning zoning changes next time, discuss regulatory takings at a future date and then finally look at the procedural and substantive due process issues after that.

Administrative Search Warrants

In a case which I think is the first of its kind, the Tennessee Court of Appeals recently addressed the validity of administrative search warrants issued pursuant to the Tennessee State Building Code Act, Tenn. Code Ann. §68-120-117, and upholds the validity of the warrants against attack.

Let's quickly mention that this all began in the '60s, when there was a debate at the highest level regarding the constitutionality of administrative search warrants. Towards the end of the '50s and the early '60s, the US Supreme Court had concluded that administrative search warrants, those necessary to enforce the housing and building codes, did not have to comply with the constitutional imperative of search warrants.

That changed with the decision in Camara v Municipal Court, 387 US 523, 18 L. Ed. 2d 930, 87 S Ct 1727 (1967).  The issue in that case was an attempted warrantless entry and search of an apartment by two housing code inspectors. The owner of the apartment steadfastly refused to allow entry, and he was ultimately cited under a San Francisco ordinance which made it illegal to deny entry. He was prosecuted under that ordinance, found guilty, and the case was ultimately heard by the US Supreme Court.

The issue before the court was whether or not a warrant was necessary to conduct the inspection over the objection of the property owner. The conclusion by the Supreme Court was that indeed a search warrant was necessary, reversing the earlier decisions. Of course, from the standpoint of enforcing the building and housing codes, this is a nonstarter: ordinarily, the codes inspector can't see inside the house, has no authority to enter the house (without a warrant), and thus if you need to know what's in the house before you can get the warrant, and can't be in the house without a warrant, then it becomes extremely difficult to enforce the provisions of the building and housing codes.

The Supreme Court however wasn't finished: it held that probable cause for a search warrant in codes cases is not the same as that which is necessary in a criminal case. Rather than demonstrating a reasonable belief that a crime has been committed, the codes inspector needs only show reasonable legislative or administrative standards for conducting an area inspection and some indication that those are satisfied with regard to a particular building, such as (1) the passage of time since the last inspection; (2) the nature of the use of the building; or (3) the conditions of the general area in which the property is located. This is obviously a much less imposing standard for probable cause than in a criminal case.

On the same day, the court decided See v City of Seattle, 387 US 541 (1967) which involved a fire code inspection of a locked commercial warehouse. Once again, the court upheld the requirement of a search warrant, but with the more limited nature of probable cause now applicable in a codes case.

Finally, let's take a look at a more current decision. In Jacob v West Bloomfield, (6th Cir. 2008) the plaintiff alleged that the codes official entered his property without a warrant to inspect for codes violation. He sued under the federal civil rights statute for a violation of the fourth amendment. The zoning official had received a complaint about the plaintiff's property and upon investigation discovered inoperable vehicles and scrap material in the yard. Misdemeanor charges were filed against Mr. Jacob and he ultimately pled guilty. The Township agreed as part of the plea arrangement that the defendant would have 14 days to clean up the property and if not cleaned up Mr. Jacob would be sentenced to 30 days in jail.

In order to carry out the agreement, the zoning official entered the property on October 15 and 18th without a warrant but at the request of the prosecuting attorney. The inspector found that the violation had not been remedied and Mr. Jacob wound up in jail.

The inspections done to establish the original violation were not an issue because the defendant had pled guilty. By doing so, the defendant waived any question about those inspections. But the Sixth Circuit held that the remaining inspections had not been agreed to and that they were unlawful under the terms of the Fourth amendment to the federal constitution. While the zoning official argued that the inspections were much less intrusive than a criminal search, done by an unarmed officer, during the day, and were not subject to the Fourth amendment, the court simply did not accept that line of argument based on Camara and See. The Sixth Circuit upheld the decision of the lower court that the zoning official was not entitled to immunity and ultimately the court awarded money damages against the zoning official.

After the decision in Camara, the Tennessee General Assembly despite numerous requests, did not take up the issue of administrative search warrants for several decades. In fact, legislation was not passed until 2003. It is now codified at Tenn. Code Ann. §68-120-117. Subsection (b) provides:

In the event that a building official is denied permission to make an inspection and a warrant is required by the Constitution of the United States or the state of Tennessee to perform such inspection, a building official may obtain an administrative inspection warrant in accordance with the procedures outlined in this section.

The term "building official" is defined to mean any local government building official certified under state law, acting in their capacity as an official of any municipality or county in an attempt to enforce the ordinances or codes of the local government. Tenn. Code Ann. §68-120-117 (a) (2).

The warrant may issue upon affidavit filed by the building code official demonstrating that his or her agency has the statutory authority to conduct the inspection and demonstrating probable cause. However, the statute particularly notes that probable cause under the terms of this section of the code is not the same standard as used in obtaining criminal search warrants. The statute specifically states that probable cause can be based upon a showing that:

1. Previous inspection section violations of the law in the present inspection is necessary to determine whether those violations have been abated (remember the Jacob case from the Sixth Circuit);
2. Complaints have been received from persons who have personal knowledge of violations of the law;
3. The inspection is to be made pursuant to an administrative plan containing neutral criteria supporting the need for an inspection (routine periodic inspections under the housing code)
4. Any other showing consistent with constitutional standards for probable cause in administrative inspections

The affidavit also must demonstrate that the inspection is reasonable and not intended to arbitrarily harass the persons or businesses involved. Of course, the areas and items to be inspected must be accurately described and that must be within the statutory inspection authority of the building code official. Finally, the purpose of the inspection is not criminal in nature and the agency is not seeking sanctions against the person for refusing entry.

All warrants issued pursuant to §117 must include:

1. The name of the agency and building code official requesting a warrant
2. The statutory or regulatory authority for the inspection
3. The names of the building code official or officials authorized to conduct the administrative inspection
4. A reasonable description of the property and items to be inspected
5. A brief description of the purposes for the inspection
6. And any other requirement or particularity required by the constitutions of the United States and the state of Tennessee regarding in ministry of inspections

All warrants must be executed within 10 days and anyone who willfully refuses to permit an inspection, or obstructs the inspection or aids in the obstruction of the inspection commits a Class C misdemeanor.

At the same time, anyone who believes the inspection was unlawful may move to suppress any evidence before the agency and if the inspection was unlawful the evidence must be suppressed and not considered in the proceeding.

In the Levitt case, the plaintiff first argued that this was a general warrant which is not recognized under Tennessee law. The court quickly pointed out that while such an objection in criminal procedure would be well taken, the statutory process set out here was much different, and the information necessary to obtain the warrant was much less. Essentially, if the inspection is part of a routine periodic inspection, or based on complaints showing a potential violation, or any other constitutionally appropriate inspection, which would include, under the Camara and See cases general deterioration in the area in which the building is located.

Levitt objected to the affidavits upon which the search warrant was based for several reasons, including a failure to identify the agency, and the specific description of the property to be searched. The court found no merit in these arguments.

So far as I know, this is the first case in Tennessee to really address the issue of administrative search warrants at the appellate court level. This case should be highlighted by local government attorneys and local government codes officials. For the first time since the adoption of the statute, we now have case law specifically concluding that the statutory requirements are reasonable and in fulfilling those requirements, codes officials no longer have to rely on consent for entry onto property.

I'll close here with the admonition that I put in my Legal Handbook for Tennessee Codes Officials at page 64. No inspections without a warrant or permission! Every codes official should understand that prior to doing any inspection, he or she should ask the owner or occupant for permission to do the inspection, and if permission is not granted, then obtain an administrative search warrant. If permission is given, make sure to note in the inspection report, who gave the permission, the date and time of the permission as well as the inspection, and the relationship of the person who gave permission to the property.

STRP Bill -- to Conference?

The Tennessee House of Representatives evidently did not agree with the Senate version of the Short Term Rental Properties legislation, and presumably, the House and Senate will need to meet to resolve the issues. It's not clear what particularly concerned members of the House. Most likely, that there was not enough protection for short term rental property owners, but that's not entirely clear. Presumably, over the next several weeks, we will get a final bill and be able to understand more completely how it will impact local zoning and land use regulations.

California Prohibits Public Land Sale without First Refusal

Yesterday, the US Attorney General filed suit on behalf of the United States against the state of California arguing that the adoption by California of a statutory provision which required the federal government to give notice to and obtain from the state documentation that the state did not want to buy for itself or arrange a sale to a third party before selling federal public lands. A number of news outlets, including the New York Times have reported on the filing of the lawsuit and a copy can be found here.

I have not actually read the California statutory provision but it purports to be summarized in the complaint filed by the US. Obviously, California feel strongly about the sale of federal public lands and the conversion of open land in its natural state to developed land. On the other hand, that desire to protect federal land runs not only into the Supremacy and Public Property Clauses of the federal Constitution, but also into various federal statutory provisions relating to the use and sale of federal public lands.

Ideologically, the state desire to protect federal public land against the conversion of at least a portion of the land by the Trump administration represents a basic conflict between two points of view regarding the use of federal public land. Unfortunately, this may be more of a political decision-making process than a legal one: federal constitutional and statutory law would at least seem to have the upper hand here.

It is interesting to read the 1940 case involving the city of San Francisco: US v City and County of San Francisco, authored by one of my favorite Supreme Court Justices, Hugo Black, who noted, after quoting the Public Property Clause:

The power over the public land thus entrusted to Congress is without limitations. And it is not for the courts to say how that trust shall be administered. That is for Congress to determine. Thus, Congress may constitutionally limit the disposition of the public domain to a manner consistent with its views of public policy.

In any event, it should be interesting following the arguments of both parties.

Challenging the Historic Zoning Commission

In an opinion issued just yesterday by the Tennessee Court of Appeals, a decision of the Metro Historic Zoning Commission is reviewed and illustrates several important points when challenging decisions of the historic zoning commission. The case involves a property located on Lower Broadway here in Nashville. MJM v Metro Historic Zoning Commission, Tenn. App. 2018.

Both the procedural and substantive aspects of this case are worth noting. First, the case was appealed pursuant to the statutory writ of certiorari, specifically authorized in the historic enabling legislation. Tenn. Code Ann. § 13-7-409 states that "anyone who may be aggrieved by any final order or judgment of the historic zoning commission… may have such order or judgment reviewed by the courts by the procedure of statutory certiorari." As the MJM court noted, review pursuant to the statutory writ means that the trial court may hold a new hearing based upon the administrative record and any additional or supplemental evidence which either party wishes to produce at trial. Furthermore, although the appellate court did not expressly say this, the statutory writ allows the trial court to substitute its judgment for that of the administrative body and make whatever decision the court feels is appropriate based on all of the evidence. Tenn. Code Ann. § 27-9-111(d).

Almost every other species of administrative appeal in land use planning and zoning cases here in Tennessee are pursuant to the common law writ of certiorari, which is much different. In a case brought pursuant to the common law writ, no new evidence may be submitted to the trial court (absent exceptional circumstances), and the trial court may only disturb the ruling of the administrative body upon a finding of illegal, fraudulent, or arbitrary and capricious action. This makes it difficult to reverse any administrative decision which must be appealed pursuant to the common law writ, which is in fact most zoning decisions.

The first thing to notice here is that most people either do not realize or do not understand that review pursuant to the statutory writ of certiorari is available. Ordinarily, from my perspective, this gives an advantage to the applicant because a wide array of proof which might have been too expensive to adduce at the administrative hearing may be more easily available for a trial court hearing. However, that is not to say that an attorney handling such a case should not be aware of a choice between the common law and statutory writs in such cases. If the attorney seeking the appeal believes that the record below is much better for the appellant as a result of some failure of the Historic Zoning Commission to have sufficient proof which ruling in front of it, it may be worthwhile to file a request for review under the common law writ of certiorari. Without objection, the court will ordinarily here the case as a common law writ, preventing the presentation of additional proof by the historic zoning commission. Bear in mind, that is the historic zoning commission is aware of the law in Tennessee, and frankly, that is often not the case, the commission can argue to the court that the case should be opened up, an additional proof permitted. In my experience, that is not happen very often. For example, in Byron Avenue v Metro Historic Zoning Commission, a case in which I was tangentially involved, review was pursuant to the common law writ of certiorari because that was the type of review requested by the petitioner. No objection was made and although the standard of review was higher (the arbitrary and capricious standard), because the proof was so one-sided in favor of the petitioner, the Court of Appeals ultimately reverse the decision of the historic zoning commission and remanded for further proceedings, where the petitioner ultimately prevail.

Obviously, this is a judgment call that must be made by the attorney based on his or her evaluation of the proof as it was adduced before the administrative agency. In most instances, I believe that the statutory writ of certiorari, with the lower burden of proof and the ability to introduce additional evidence is far superior; but there are certainly cases where the attorney representing the party seeking review might decide that at least asking for the common law writ without bothering about the statutory writ, might be a better strategy.

Finally, there is one other aspect of the statutory vs. common law writ of certiorari which should be noted here. To the extent that the statutory writ of certiorari is made available to review actions of a legislative or executive nature, it is not constitutional. The leading case, decided back in the 50s, is Hoover v Public Utilities Commission, 195 Tenn. 592, 261 S.W. 2d 233, 238 (1953). Why is the historic zoning commission in applying its rules and regulations to a particular piece of property any different from the board of zoning appeals in administering the zoning ordinance as applied to a particular piece of property? In fact, there would appear to be no difference yet the board of zoning appeals decisions are appealed pursuant to the common law writ of certiorari, and the historic zoning commission is subject to the statutory writ of certiorari. So far as I know, no one has ever brought this up and as a result, it has not been addressed by any Appellate Ct. in Tennessee. But if, for example, the attorney for the petitioner, was seeking a common law writ and the attorney for the historic zoning commission argued that the statutory writ was available pursuant to the specific statutory authority, the constitutionality of that statute would be worth challenging. It is certainly an interesting question of administrative law.

Substantively, this case is interesting as well. Essentially, the petitioner/property owner wanted to make various changes to the exterior of the building. The historic zoning commission approved many of the proposed changes, but rejected proposed changes to the front windows, and required a parapet wall on the roof as opposed to a railing.

The petitioner argued that because substantial changes had previously been made to the property, much of the historic value had been lost. The trial court perhaps said it best:

There is an implicit grandfather provision in the [Historic Preservation] Guidelines and in the statutes which indicate that the property or preexisting condition of property in 2007 [when the historic district was created] may be preserved by the owner, but when alterations and additions and other changes, replacements, take place, then those alterations, replacements, and buildings must be in keeping with the 1935, that is the historic building….And the Court finds here that since [Petitioner] wants to alter its year 2000 windows that it used to replace the historic windows…it must now alter them in compliance with the historic guidelines. And [Petitioner] has not carried its burden to show that it is entitled to a Preservation Permit allowing those roll-up windows, because they are not historic.

The petitioner argued that the historic zoning commission based its denial of the proposed replacement windows upon their function, but the testimony at the hearing by one of the commission staff members clearly indicated that the windows proposed when open would appear vacant and inconsistent with the historical construction elsewhere on Lower Broadway.

With regard to the required parapet wall on the roof, the same staff member testified that a railing would allow our view of the additional stories which were being added to the building but that a parapet wall would prefer that view and the more consistent with the adopted guidelines for the area.

Is there any lesson which can be gleaned from these conclusions? First, it is very difficult to launch a direct attack on guidelines for any historic area. A review of any historic zoning ordinance and guidelines for any particular area will quickly demonstrate that the language is very ambiguous and difficult to apply in an objective manner. Most courts are going to lean heavily on the historic zoning commission and its staff regarding the proper application of the guidelines and regulations.

Second, that means to me that the argument to be constructed should usually be to demonstrate that the proposed alterations are consistent with the historic guidelines. While that is often difficult to do at the level of the administrative decision maker, hiring an outside expert, beyond someone who simply has an engineering or architectural degree, is frequently the best way to go. Hiring an expert with the historical background to support your position will at least give the court an additional view on the way the guidelines should be interpreted and applied. To my way of thinking, that is the preferable approach but of course it assumes that you can find a preservationist who supports the proposed alterations suggested by the property owner.

This is an interesting case, but I fear very typical in the area of historic zoning. Because the statutes, ordinances, and regulations (frequently called guidelines, but if you read those guidelines carefully, you will see that the staff always really thinks of them as regulations) are often ambiguous, the court relies on the staff to understand their meaning. Typically, in the context of other zoning decisions subject to review, there are objective criteria which must be met and if they are met, the permit should issue. For example, in the case of a special exception/conditional use permit, if the applicant demonstrates compliance with the required conditions, the permit should issue. To the extent that a number of neighbors may appear and oppose, causing the zoning board for example to deny the application, there is a significant chance of reversal on appeal. Look at it from another perspective, from the point of view of the neighbors: in a variance case, if the developer does not demonstrate compliance with the requirements of the statute for variances, then if the variance is granted it is also subject to reversal on appeal. In both of those instances there are usually objective criteria by which to make the decision. Because the historic zoning regulations generally are much less objective, it increases the difficulty of successfully appealing a decision of the historic zoning commission, whether you are the applicant/landowner or a neighboring property owner.

Takings cases created by non-enforcement of regulations

Assume for a moment that your neighbor is illegally using his property for some type of commercial activity. Let’s assume it’s a barbershop. Can you sue the local government for the diminution in the value of your property as a result of its failure to enforce the local zoning regulations? We looked at a case that is very similar to this a short while back. In Beech v City of Franklin, the Sixth Circuit Court of Appeals dismissed the claim against the city, although in that case, the plaintiff only alleged failure to enforce the zoning regulations and asked for mandamus to force the city to enforce the code provisions. The Sixth Circuit emphasized that there was no takings claim made against the city in the original lawsuit which was filed in Chancery Court in Williamson County. As a result, under both state and federal takings law, the case was not ripe for review.

But let’s suppose that such a claim had been made in the Chancery Court. Would the plaintiffs have prevailed? It would certainly seem very difficult from my perspective.

However, there is a very interesting recent article about “Non-Enforcement Takings,” which makes the point that although these types of cases are difficult, to be consistent, non-enforcement takings cases should be reviewed carefully and under the right circumstances may form a justifiable basis for relief. The neighbor complaining about the barbershop is a good example: certainly, having a barbershop next door to your residential property may cause a significant decrease in the value of the land, may increase noise, traffic, and cause other harm to the property owner. It is difficult however usually to get the courts to seriously review such claims.

The article is by Tim Mulvaney, Non-Enforcement Takings (February 20, 2018). Boston College Law Review, Vol. 59, No. 145, 2018, and is available at SSRN.

Of course, the property owner can sue the neighboring property owner for nuisance, including a request for damages and injunctive relief. Perhaps in the case of a failure to enforce the zoning regulations by the local government, there is the possibility of an additional takings claim? Obviously, one of the counter arguments is the extent to which such failure to enforce takings cases might subject the local government to an onslaught of damage claims.

The article is quite interesting and certainly the argument is worth considering seriously.

Short Term Rentals: Amendment 2 to Senate Bill

Last week I mentioned that the Senate here in Tennessee had considered an amendment to the short terminal bill but at the time I did not have access to the amendment because it had not yet been posted online. The amendment is now posted and is worth a look. It is less broad than the original legislation.  Take a look at it here.

In general, the amendment looks to keep existing short-term rental properties but allow local governments to control and regulate short-term rentals in the future. Originally, the legislation appeared to take virtually all control of short-term rentals from local governments, but it would appear, given the language of the second amendment to the bill, that there weren't enough votes for that broad-based regulation, and so instead, the bill is amended simply protects existing short-term rental properties.

If you work in this area, it's certainly worth a look.

Variances: Basis and res judicata

The Tennessee Court of Appeals and that an interesting variance case last last December, Cobble v Greene County, 2017 WL 6502878 (Tenn. App. 2017), dealing with both the basis for variances and the potential application of the doctrine of res judicata.

Mr. Moore wanted to add a carport onto his residence and to that end began erecting a prefabricated aluminum carport on the front right side of his property. Unfortunately, this was a violation of the current Zoning Resolution which required that portion of the property to be open space. The Moores filed an appeal to the board of zoning appeals and the zoning board voted down the application.

About a month later, a second application for a variance was filed seeking the same relief except that there was one significant difference, in that the request was 7 feet less on the setback. The neighboring property owner, cobble, attended the hearing and opposed granting the variance. More justify the variance indicating that he was out of town four days a week and that he was trying to make it so that his wife could go out in inclement weather, and stay out of the rain or snow. Moore also acknowledged that he had six cars and already had a garage. He didn't think that had a bearing on the application.

The staff report indicated that there was a significant slope on the left side of the property and borders and undeveloped Street. In addition, the staff report noted that there worse exceptional topographic conditions on the rear part of the property. The combination of slope, topography and increased left side yard setbacks because the property was a corner lot, made it difficult to locate the carport. As a result, the staff recommended approval of a variance.

The board, following the staff recommendation, granted the variance.

The Cobbles filed a petition for writ of certiorari and the trial court affirmed the decision of the zoning board.

The Court of Appeals discussed two issues: whether res judicata would bar the second application for a variance, and whether or not the decision was supported by material evidence.

With regard to res judicata, the court cited the recent Finley v Marshall County, 2016 WL 3637879 (Tenn. App. 2016), for the proposition that the doctrine of res judicata would apply in a context such as this administrative decision relating to a variance. The court found that there was no violation of res judicata, because the second request was materially different from the first in that there was a 7 foot reduction in the requested variance. The court acknowledged that if the Moore's had, for instance, come back seeking one foot less of a setback each time, probably would fall within the doctrine of res judicata. But here, there was a material reduction between the first and second applications sufficient to make the second application significantly different from the first.

The next question was whether or not there was enough evidence to grant a variance. The Court of Appeals concluded that there was no evidence in the record justifying the variance even given the fact that judicial review of such a decision by the Board of Zoning Appeals, was extremely narrow. First, the court noted that the desire to build this carport was based on the fact that Mr. Moore owned six vehicles and could not fit them all into his existing garage. "It is not at all clear how the Moore's' beneficial use of the property is impaired by any unique hardship from the train. On the contrary, it appears that any hardship incurred by the Moore's is self-imposed."

In addition, the court noted that the staff report indicated that all of the properties in the same general vicinity were challenged with similar slopes and topographic conditions. The court made the point that if all of the properties had these exceptional conditions, then the conditions were exceptional and all of the lots suffered from the same difficulties. The subject property simply was not distinctive and as a result the more property was not eligible for a variance on that basis.

The court went further to indicate that if the local legislative body considered that the current zoning requirements were unduly harsh or oppressive, then legislation revising the regulations could always be adopted. In any event, the decision of the zoning board was reversed.

This is quite an interesting decision, and makes significant points about each of the issues. The applicant changes the requested relief in a significant manner. Thus, zoning officials need to be careful about screening such cases: if there is a significant change in the requested relief, such as the 7 foot reduction in the requested variance in this case, then the matter should go to the board of zoning appeals for consideration. In fact, I would suggest that every case go to the board and the board should be permitted to consider how closely connected any success of application was to the original allow the board to make that decision.

Perhaps more importantly, a quick review of the Tennessee Public Zoning Enabling Statutes,Tenn. Code Ann. §13-7-201 et seq. (municipal), and in particular, §207 (3), will demonstrate that the emphasis is on finding some exceptional physical or topographical feature of the property which justifies relaxing the zoning restrictions on a particular property. The difficulty is that you have all of the property suffer from the same physical or topographical feature, then the property which is the subject of the appeal cannot be said to be exceptional. In order to be exceptional, it must stand out from its neighbors. If all the neighbors suffer from the same physical difficulties, then the only change that should be countenanced is a legislative change so that everyone benefits and not a single property owner

We don't have many cases here in Tennessee which make this point. It is however a valuable one. If you are the attorney representing applicant for a variance, you want to distinguish your client's property from the other properties in the surrounding vicinity. If you are representing a neighborhood, you want to emphasize the similarities of the property to the other properties in the surrounding vicinity.

This is a very interesting case, and certainly worthy of additional study.

Short Term Rental Properties – AG's Opinion

Back on February 20, we discussed briefly a bill pending before the Tennessee General Assembly which would limit the regulatory power of local governments in dealing with short-term rental properties. Senate Bill 1086 is still pending before the Tennessee General Assembly, but recently, the Tennessee Attorney General has weighed in on the legislation confirming that for the most part the proposed legislation is constitutional. A copy of the opinion can be found here.

The first question had to do with exempting local governments with legislation regarding STRPs before January 1, 2014. The question was whether or not distinguishing between local governments which had legislation before that date vs. those which did not pass legislation until after that date was impermissible constitutionally. The AG's opinion is that it would not render the proposal impermissible.

The second question was whether or not the fact that the proposed legislation would allow local governments which prohibited STRPs on or before August 1 of 2017 to continue the prohibition, while it would not permit other local governments which did not enact legislation prior to that date to so prohibit STRPs. This time, the AG felt that there is no rational relationship between the date and distinction between those two classes of regulations. The opinion states:

Proposed $ 13-7-603(b) states that its purpose is "to prevent recent and future
overregulation of short-term rental units by a local governing body." On its face, this purpose appears legitimate. If the General Assembly determines that a prohibition or effective prohibition on short-term rental units is "overregulation," it can act to address that problem. But if a prohibition or effective prohibition enacted on August 2,2017, is an "overregulation" that warrants legislative action, then it is unclear why the same prohibition or effective prohibition passed on July 3 7,2017 , would not warrant the same action. 

As a practical matter, the date appears to have been chosen to nullify the Metropolitan
Government of Nashville and Davidson County's act in November 2017 to ban short-term rentals. The proposed legislation would apply more broadly, of course, to prevent any local government from taking similar action in the future. The prohibition does not, however, distinguish among local jurisdictions based on facts that are conceivably relevant to the regulation of short-term rental units, such as population size, tourism, or urban density.  

The proposed legislation instead distinguishes among local jurisdiction based solely on the date on which the jurisdiction enacted a prohibition on short-term rental units. Because that date does not appear to be reasonably related to any conceivable state interest in the regulation of shortterm rentals, this provision would likely violate the Tennessee Constitution. In contrast to the date in the continued-use provision-which corresponds roughly to the point at which the use of residential property for short-term rentals became widespread and relates to the legislature's concern about preserving property owners' reasonable expectations for the use of their property the date chosen after which no local government may prohibit short-term rental units is arbitrary
and unrelated to the interests underlying the legislation.

The third question involve the extent to which the proposed legislation might have an impact on taxation and run afoul of the Tennessee Constitution on that issue. The AG distinguished between the use of property for tax purposes and the use of property for zoning and land use purposes; just because the property is classified as commercial for one use, is not require that it is considered as commercial for another.

Finally, the fourth question had to do with whether or not the proposed legislation would be unconstitutional given that it effectively only applies to Davidson County (at the present time) and, whether or not the use of terms such as reasonable compliance and effectively prohibit were too vague to survive constitutional scrutiny. In both instances the AG responded in the negative. With regard to the first question, since other jurisdictions could theoretically be subject to the law in the future, it was not class based legislation prohibited by the Tennessee Constitution. Furthermore, the terminology of the proposed legislation is capable of reasonable understanding by ordinary citizens. In addition, since the legislation as proposed would limit the powers of local governments, and because local governments have no due process protections against the legislation, there likely would not be any due process violation either.

Of course, it is useful to bear in mind that the AG only offers an opinion, and while those opinions are certainly useful and offer guidance, they do not have the force or effect of law. Only a judicial decision would carry that weight. It will be interesting to see what the General Assembly does with the legislation. Furthermore, there may be litigation arising out of the legislation if it passes.

Short Term Rentals: Senate Bill 1086 Moves thru Committee

The Short Term Rental Properties Bill, Senate Bill 1086, was recommended for passage yesterday by the Senate Commerce and Labor Committee, 8 to 1. There is an interesting video of the sponsor of the bill here. As you might suspect, the emphasis is on the property rights of the unit owners during the sponsor's presentation. Interestingly, Sen. Stevens discusses the bill in terms of grandfathered uses. The bill actually looks more like a regulatory scheme rather than a non-conforming use bill. Further, with regard to non-conforming uses, it would probably be better to link it to the Tennessee Non-Conforming Property Act,Tenn. Code Ann. §13-7-208, if that's the intent. I looked back quickly through the bill and didn't see any reference to the TNCPA.

In addition, the bill which is on the website does not appear to be the latest version, at least not the latest one that I’ve seen.

It is also worth noting that there is a provision in the bill for judicial remedies which allows the unit owner to appeal to the board of zoning appeals if the permit is revoked or if there is a refusal by the local government to issue or renew a permit. The interesting part is that an appeal from the board of zoning appeals to Circuit Court or Chancery Court is de novo instead of on the record from the board of zoning appeals. There is certainly a constitutional issue there. Generally speaking, courts of law may not review administrative decisions as though the court was making a decision in the first instance, because it’s a violation of the separation of powers doctrine. The Tennessee courts have long recognized that distinction and therefore whether judicial review pursuant to this statutory provision is constitutionally permissible is certainly open to question.

In any event, it will be interesting moving forward to see how the bill progresses.

Business licenses and non-conforming uses

In order to establish a non-conforming use, must the property owner demonstrate compliance with the business licensing laws? In Oregon, the answer is evidently no. In Morgan v Jackson County, 290 OR App. 111 (February 7, 2018) the court reversed a zoning board decision finding that an “auto yard business” located in a zoning district for agricultural use was not legally non-conforming because it did not comply with the dealer-licensing statutes of Oregon.

The court, relying on statutory authority, construed the statute and its use of the phrase “lawful use” to include only land use laws. Therefore, the fact that the owner of the property did not have a business license to engage in the operation of the business at the time that the operation began was not relevant to the land use issue. As a result, the zoning board decision finding no non-conforming use was reversed.

The Tennessee statute, Tenn. Code Ann. §13-7-208, augurs in precisely the opposite direction. For example, §208 (b), (c) & (d) allow “industrial, commercial, or other business establishments in operation and permitted to operate under zoning regulations or exceptions thereto immediately preceding a change in zoning…” to continue and expand. §208(d)(1). In Toles v City of Dyersburg, 39 S.W. 3d 138 (Tenn. App. 2000) the court concluded that because a tavern operator had lost his beer license immediately before the change in zoning took place and therefore could not legally be “in operation” that the property was no longer legally non-conforming. The court found nothing involuntary about the cessation of operations of the tavern and found the property was not legally non-conforming as a result.

I suspect that we will see other cases arguing this point here in Tennessee. However, the “in operation” provision of our statute, as applies to commercial and industrial uses, makes the argument much more difficult than in other states, such as for example Oregon.

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.

Howell v Farris, Tenn App 2018

This very interesting case involves an appeal from a decision of the local legislative body in Bolivar denying building permits to the property owner. The denial of the building permits was based on the failure of the owner to get a contractors license as required by Tennessee law. The suit requested the issuance of a statutory or common law writ of certiorari,  and liquidated damages based allegedly on the delay caused by the city by refusing to issue to permits. At a later time, the complaint was amended to include a request for inverse condemnation by regulatory taking.

The Court of Appeals initially considered whether the appropriate mechanism for appeal was the common law or statutory writ of certiorari. Based on innumerable cases here in Tennessee, the court easily concluded that since the local legislative body was acting as a board of zoning appeals at the time that it upheld the denial of the building permits, that the proper means of challenging that decision was pursuant to the common law writ of certiorari. Remember that the statutory writ of certiorari allows the trial court to conduct an entirely new hearing, including the admission of new evidence is the parties so desire whereas the common law writ only allows the trial court to review the record of the proceedings below to determine if the administrative body acted arbitrarily or capriciously.

The Court of Appeals, citing Judge Ben Cantrell's well-known and definitive article (Review of Administrative Decisions by Writ of Certiorari in Tennessee, 4 Memphis State University Law Review 19, 28 (1973)), held that the statutory writ was only available when (1) the order of the administrative body has no specific provision for judicial review; (2) the function performed by the lower tribunal is essentially judicial in nature; and (3) the order for which review is sought finally determines the rights of the petitioner.

The difficulty with this framework is the use of the term "judicial." Who's to say that a board of zoning appeals acts any less "judicially" then the historic zoning commission?

Judge Cantrell offers some insight into that question. "Apparently the court will sanction the granting of review by the statutory writ with its trial de novo only where the administrative tribunal is acting as to the petitioner much like a court would; namely, the individual petitioner has something like a private property right (e.g., a license, a permit, an office) which by its order, the administrative body may take away." Once again, think of it in the context of a zoning board: most of the time, the zoning board is determining whether or not to grant some specific type of relief to an applicant, a variance, or a special right to use property such as by a special exception or conditional use permit. If the board denies the application for the variance or conditional use permit, the applicant has not lost any species of right – the applicant never had the right to use his/her property for that purpose in the first place. Thus, arguably, nothing has been lost.

In this case, the question was whether or not the applicant had satisfied the requirements for the building permit and the legislative body/board of zoning appeals determined that he had not because of his failure to comply with the Contractors Licensing Act.

The second issue was whether or not the case became moot when during the pendency of the litigation, the property owner finally was able to obtain the building permits. At stake worthy numerous other claims that the plaintiff had attempted to put before the court arising out of the denial of the permits. The Court of Appeals affirmed the decision of the trial court finding the whole matter moot by issuance of the permits. But it went further: "it has been consistently held that the common law writ of certiorari, which is appellate in nature, is incompatible with an original action, and the two cannot be brought together." In other words, all of the other claims, request for injunction, removal action, the takings case, were all inappropriately joined with the common law writ of certiorari and should have been dismissed by way of a motion to dismiss early on in the litigation. I will come back to this point just a second.

Finally, the court addressed specifically the regulatory taking claim. While the trial court concluded that the taking claim had to be dismissed, it was based on the fact that the Tennessee Criminal Court of Appeals had ruled that withholding the building permits because of a lack of compliance with the Contractors Licensing Act was appropriate, the Court of Appeals concluded that it should have been dismissed because it was not proper to join the regulatory taking case with a petition for the common law writ of certiorari.

Citing among others, Goodwin v Metro Board of Health, 656 S.W. 2d 383, 387 (Tenn. App. 1983), the Tennessee Court of Appeals held that since the plaintiff had requested the issuance of a common law writ of certiorari, a form of appellate review, his claims invoking the original jurisdiction of the Chancery Court, including his regulatory taking claim, could not be joined in the same proceeding. Therefore, the regulatory taking claim had to be dismissed.

Let me make two quick observations concerning the ability to join original action with a common law writ of certiorari. The Goodwin case and its progeny have been around as long as I practice law. It has never made any sense to me. What is there about joining an original cause of action such as a regulatory takings case with a common law writ of certiorari which disqualifies the Chancery Court from hearing them both? Are we saying that the Chancellor's are not equipped to handle a multiplicity of actions? That doesn't make much sense. Certainly both our chancery court and circuit court judges are entirely capable of handling a case which is in Foreman appellant action, and a case which is informed and original action, in the same matter. Is there some difficulty, hearing can be held separately to make disposition easier. But that doesn't seem to be any reason why the Chancellor or Circuit Court judge or these issues all at once in the same proceeding.

However, since the Goodwin doctrine has been around for at least 35 years now, a far safer alternative for counsel is to simply file two cases. First, file the administrative review via the common law writ of certiorari, and then file a second case seeking whatever other types of original relief the client might be entitled to. Take this case for example. If the common law writ of certiorari had been filed first, and then immediately after that, another suit for regulatory taking, injunctive relief damages, on whatever other theories might be available, the Goodwin doctrine would be avoided and the client would be entitled to pursue whatever relief might be available.

The attorney for the petitioner (plaintiff) must remember that the petition for certiorari must be filed within 60 days after the entry of the decision by the Board of Zoning Appeals. That's why it is important to go ahead and file the petition for certiorari first, because ordinarily the statute is for the other types of tortious misconduct is longer.

Finally, it is worth noting apps, if the court dismisses claims properly certiorari case he may be some relief pursuant to the saving statute here in Tennessee. I don't know of any case law on that issue, but if there's nothing else available, that would probably be worth arguing to see what our appellate courts would conclude as to that issue.

Ward v Metro Board of Zoning Appeals

The Davidson County Chancery Court has upheld the Metro Board of Zoning Appeals which agreed with Bill Herbert, the Metro Zoning Administrator, that the Glencliff Methodist Church should be granted an accommodation to allow 22 "tiny homes" for the homeless on the church property. Metro and the Church argued that the accommodation was required to avoid a substantial burden on the religious beliefs of the  Church and its members. The Church and its members sincerely believe that part of their religious duty is to help the homeless and other disadvantaged people.

The neighbors filed the appeal arguing that the accommodation was not essential and that the land use regulations were compelling in nature. The latter argument was undercut by the decision of the Board, which did not find that the regulations were compelling.

The Court first found that the petitioners did have standing to sue because they lived close to the church property based on the certiorari petition.

Furthermore, the Court concluded that the petitioners failed to establish by clear and convincing evidence, under the facts of this case, that enforcing the neutral residential zoning laws and subdivision regulations against the Church was essential to furthering a compelling governmental interest. The Metropolitan Government did not assert that any such compelling interest exists under the specific facts of this case.   The record contained material evidence supporting the decision of the Board of Zoning Appeals, and  therefore the court upheld its decision.

Most likely this case will be appealed to the Tennessee Court of Appeals. There is, as of yet, very little case law interpreting the Tennessee statute, and this case should offer guidance to legal counsel as to how the statutory provisions should be construed.

Discriminatory Zoning Decisions: Islamic Mosques

I saw this interesting post a few days ago discussing this issue of discriminatory zoning decisions, which comes up from time to time and over the last few years has been especially troublesome in the context of Islamic Mosques. We have certainly had a very significant case here in Tennessee, but the same concerns and issues have come up all over the country. I have commented on these issues on several posts in this blog. Unfortunately, the issues seem to veer away from the relevant land use planning and zoning principles into concerns with which have no place in administrative proceedings.

Municipal Websites as Notice of Zoning Changes

There is a new proposed bill pending before the General Assembly which would allow municipalities to give notice of zoning changes by giving notice of the required public hearing on the municipal website. While this seems like a very reasonable idea, perhaps notice should be required both on the website and in a newspaper as well. Currently it is required either in the musical journal, whatever that might be, or in a newspaper of general circulation. Adding a website requirement will certainly be helpful in most instances, particularly in the larger cities. See House Bill 2226.

Metz v Metro Nasvhille

1st Case:  2017 WL 4677248
2nd Case: http://www.tncourts.gov/sites/default/files/metz.george.opn__0.pdf

In addition take a look at this Tennessean article.

These two cases involve a challenge by neighbors to a 96 unit affordable apartment complex proposed in Antioch. Once again, these cases reinforce the very common errors that are made by counsel for petitioners in a writ of certiorari case: failing to file within 60 days of the decision of the administrative body, and/or failing to have the petition verified by the petitioner(s).

A preliminary master development plan was approved on March 24, 2016 by the Metro Planning Commission, and the minutes were signed and entered on April 14, 2016. A rehearing was requested and heard on April 28, 2016; the Planning Commission denied the request and the minutes for the meeting were entered on May 12, 2016.

On May 16, the petitioners filed a common law writ of certiorari challenging the March 24, April 14, and May 12 decisions. Neither the original petition nor several amended petitions which were filed on behalf of the petitioners were verified by oath as required by Tennessee law.

On August 5, 2016, Metro Nashville filed a motion to dismiss which the trial court granted. The petitioners filed a motion to amend the petition on August 15, which was verified an otherwise comported with the procedural requirements of the common law writ of certiorari.

In the first case reviewed by the Tennessee Court of Appeals (citation above), the trial court’s decision was upheld. Once the 60 day time frame had elapsed, without the petition having been corrected, the trial court lost jurisdiction and could no longer grant a motion to amend; therefore, the case had to be dismissed for lack of compliance with the procedural requirements of the common law writ of certiorari

An additional argument in the first case was whether or not the suit papers could be considered as a declaratory judgment rather than as a common law writ of certiorari. The difficulty with this argument is that in reviewing a master development plan within a planned unit development or a specific plan, under the Metro Zoning Ordinance, the Planning Commission makes an administrative decision by applying existing law through a given set of facts. The planning commission does not create new law. The common law writ of certiorari applies to review an administrative decision which applies existing law to a development proposal; declaratory judgment action is available to review a proposed change in the law, such as a zoning change (from, let’s say, a residential zoning district to a commercial zoning district).

The court cited McFarland v. Pemberton, 2017 WL 4279199, at *22, 28-29 (Tenn. Sept.20, 2017), for this authority; this case is an extremely interesting case applying this doctrine and explaining the difference between the common law writ in a declaratory judgment action.

However, in addition to reviewing the McFarland case, counsel for petitioners in a land use planning matter might consider suing both ways, that is, filing a petition for common law writ of certiorari, properly verified and filed within 60 days of the administrative decision, as well as filing a declaratory judgment action if there is any question that the case could be filed on my are not the other. By filing both types of cases, separately, the attorney hopefully avoids these difficulties.

But it cannot be emphasized too much, that the petition for common law writ of certiorari must be verified by the petitioner, that is the petitioner must swear that the facts alleged in the petition are true to the best of the petitioner’s knowledge information and belief. Furthermore, the petition must be filed within 60 days of the decision of the administrative body. In zoning cases, for the most part, the planning commission or the board of zoning appeals are the administrative bodies making decisions although in some instances, the local legislative body may make an administrative decision itself so that the common law writ of certiorari is applicable. There are other requirements related to the common law writ, but these are the two that are most often missed and lead to dismissals of cases which might otherwise have some merit.

A second lawsuit was filed on December 27, 2016 challenging the decision on April 28, 2016. As the Court of Appeals ruled several days ago in reviewing the trial court decision to dismiss the petition for writ of certiorari, once again because the lawsuit was not filed until well after 60 days had already expired, the lawsuit was filed too late, and the trial court lost jurisdiction. Therefore, the trial court properly dismissed the petition for writ of certiorari.

Finally, on October 13, 2016, the planning commission approved the final site plan, the minutes for which were entered on October 27. This decision was challenged by the same suit filed on December 27, 2016. Although it would appear that the filing of the common law writ was also beyond the 60 days (it looks to me like the petition was filed 61 days after the entry of the minutes on October 27), the court did not address that issue but looked at whether or not the approval of the final details of the development plan was the final judgment of the Planning Commission. It concluded that it was not; the Court of Appeals decision was that the March 24 decision concerning the preliminary master development plan was the final discretionary judgment of the Planning Commission and that the final details of the site plan, approved in October, was simply a ministerial decision from which an appeal could not be taken.

The Commission’s approval of the master development plan on March 24, 2016, created legally binding, enforceable restrictions within the Forrest View PUD, and thus, it constituted the Commission’s final judgment or order. As to the final site plan approval on October 13, the Developer was entitled to the Commission’s approval as long as the final site plan complied with the master development plan. In other words, the October 13 decision was not discretionary. Accordingly, the clock for challenging the Commission’s decision started to run on April 14, 2016, when the Commission entered the minutes for the March 24 decision. Petitioners filed their writ of certiorari on December 27, 2016, which fell outside the sixty-day deadline. As a consequence, the trial court did not have subject matter jurisdiction to review the decision. 

The court cites an interesting similar case in the area of subdivision approval, Save Rural Franklin v. Williamson Cty. Gov’t, 2016 WL 4523418, at *6 (Tenn. Ct. App. Aug. 26, 2016), which essentially holds that waiting until final approval of a subdivision plat is too late to initiate a challenge to the decision of the Planning Commission. Rather, in the subdivision context, the decision must be challenged from the preliminary plat approval.

This decision by the Court of Appeals seems eminently reasonable. If the challenge is to the basic layout and overall design of a development, it should occur at the time that the overall design is approved. Failing to appeal from that decision within 60 days bars further review. Once the final details are submitted to the planning commission in accord with the previously approved design, it should be too late to file an appeal concerning the overall design. However, I would note, that if there is a question as to whether or not the details are consistent with the overall design, there might be an avenue to appeal concerning whether the site plan is appropriate given the previous approvals. In this case however, the challenge was clearly to the overall design of the development and what was going to take place there. The minor details reflected on a final site plan were not really at issue.

In any event, the main lesson to take away from these two cases is that a common law writ of certiorari must be based upon a petition which has been verified by the petitioner, and filed within 60 days of the administrative decision which it challenges. If there’s a question, both a common law writ and a declaratory judgment action can be filed. If there’s any question about whether the lawsuit should be filed earlier or later, it is always best to file early. Certainly, if the lawsuit is filed too early and it is not appropriate at that time, the court can dismiss and a later case may be filed. Waiting too late to file the appeal has the effect of preventing any appeal at all.

Short Term Rental Properties: Proposed Statutory Protection

A Senate bill pending before the Tennessee General Assembly has recently been amended to specifically prevent a local governing body from prohibiting or limiting the use of property as a short-term rental. The amendment "supersedes any ordinance, resolution, regulation, rule, or other requirement of any type enacted, maintained, or enforced by a local governing body that is not expressly authorized by this chapter." This will have the effect of rendering any local ordinance or resolution which does not comply with the state act (assuming it is passed) ineffective. Following on the heels of the controversy surrounding the adoption of the new Metro ordinance relating to short-term rental properties, this would seem to be directed precisely at that new legislation.

The proposed amendment places limits on the regulatory authority of local governments, such as for example, allowing a maximum number of bedrooms so long as that number is equal to four or greater, and the number of persons may be restricted so long as that number is not less than two persons times the number of bedrooms plus for additional people.

There has been a good deal of speculation about a state statute either preempting this area of local zoning regulation, or restricting the manner in which such regulations could be adopted and enforced. This amendment as proposed certainly presents the other side of the issue – and it is the very difficulty which many members of the Metro Council worried about when considering the recently adopted bill here in Metro Nashville. Below is a link to the proposed amendment:

http://www.capitol.tn.gov/Bills/110/Bill/SB1086.pdf

HOA views Tank with disdain

I guess I missed this when it came up in October of last year. Evidently, an attorney who owns property in a prestigious area of Houston decided to buy a renovated World War II tank. He parked it on the street in front of his home. As you might imagine, the homeowners association was not too thrilled about having a tank parked on the street in front of the subdivision, and has asked that it be moved. The attorney does not seem inclined to move it, and since it weights approximately 30 tons, it might be difficult to tow. On the other hand, homeowners associations these days have quite a few potential remedies and it's hard to believe that storing a tank on or adjacent to your property fits within the typical covenants and/or restrictions.

Take a look at the tank here:

https://taskandpurpose.com/texas-man-buys-sherman-tank-parks-front-house-upsetting-hoa/

Recode Knoxville

The City of Knoxville is in the midst of a major rewrite of its zoning regulations. It's been over 50 years since the last major rewrite of its land-use laws, and one of the major goals is to make it simpler and easier to understand and enforce. Take a look at the website:

www.recodeknoxville.com

This process should be very interesting given the number of interesting new issues which continue to pop up including the short-term rental properties issue, religious land use issues, and recent sign decisions by the US Supreme Court.

Tiny Homes and the Religious Freedom Restoration Act

Two small items of some interest came across my desk in the last week or so. First, the International Code Council has voted to amend the International Residential Code (for one and two family dwellings) by adding Appendix Q which adds special provisions for so-called tiny homes. For the purposes of the amendment, a tiny home is less than 400 square feet, excluding lofts. Of course, the amendments to the IRC must be adopted by the local governments individually, and it may take several years before the new Appendix Q is adopted across the country. However, because neither the International Building Code nor the International Residential Code (in the absence of Appendix Q) directly address the issues presented by tiny homes, it is likely that most building code officials across the country will apply Appendix Q to tiny home construction, whether actually adopted by the locality or not.

Secondly, on a related note, the zoning case involving tiny homes on a religious property was argued in Davidson County Chancery Court yesterday. The issue is whether or not the Metro Board of Zoning Appeals appropriately granted an accommodation to the church allowing 22 tiny homes on property immediately adjacent to the church building itself. The accommodation was granted based primarily on the Tennessee Religious Freedom Restoration Act, Tenn. Code Ann. §4-1-407. I was one of the attorneys retained to represent the church, but setting aside the legal arguments for a moment, it will be very interesting to get a decision applying the statute. Most Tennessee land use lawyers have debated the applicability of the statute, especially since it is much more powerful than the federal statute. But to date, I don't know of any zoning cases which have been decided based on the terms of the statute. The court's opinion will help guide future applications of the statute in zoning and land use cases.

Brown v Metro Nashville Board of Zoning Appeals, 2018 WL 522419 (Tn Apps 2018)

This case is an interesting illustration of interpretation of zoning terms, originally construed by the Metro Zoning Administrator, upheld by the Metro Board of Zoning Appeals, and affirmed on appeal to both the trial court and the Tennessee Court of Appeals.

As the Zoning Administrator and the Board construed and applied the Code to the proposed “flex loan” business, the question to be resolved was which of the existing use classifications flex loans most resembled. The meaning of a zoning ordinance and its application to a particular circumstance are, in the first instance, questions for the local officials to decide; accordingly, courts give wide latitude to local officials who are responsible for implementing zoning ordinances, Whittemore v. Brentwood Planning Comm’n., 835 S.W.2d 11, 15-16 (Tenn. Ct. App. 1992). “There is a strong presumption of validity favoring the actions of a zoning agency when applying and interpreting its own ordinances, and a reviewing court will defer to a zoning board’s interpretation and application of its ordinance, unless such interpretation or application is capricious, arbitrary or discriminatory.” Harding Acad. v. Metro. Gov’t. of Nashville & Davidson Cty., 207 S.W.3d 279, 286 (Tenn. Ct. App. 2006).

The competing definitions here were a traditional bank vs. a cash advance type of institution. The zoning administrator determined that the “flex loan” concept was more of a cash advance type financial institution, rather than a traditional bank.

Given the tremendous discretion in these kinds of interpretations, it certainly not unusual that the trial and appellate courts both found the rationale and conclusions of the zoning administrator and the board of zoning appeals to be reasonable and not arbitrary or capricious.

Perhaps the more interesting question is why a cash advance institution should be treated differently from a zoning standpoint than a traditional bank. Why is there a separation requirement in the first place? This sounds more like an anticompetitive enactment than a zoning issue. For example, in what way is a traditional bank significantly different from a cash advance institution when looked at from the standpoint of the surrounding land uses? Certainly the functions inside the buildings may be somewhat different, but the impact on surrounding land uses would seem to be pretty much the same.

Of course, a challenge to the distinction in the legislative zoning scheme would be equally as difficult, and would most likely lead to exactly the same result. Our courts are very deferential when examining legislative distinctions, particularly in zoning ordinances, and the challenge the cash advance definition as being not dissimilar from a traditional bank is most likely going to lose in any event.

This is an interesting case, but illustrates that challenging these interpretations of definitions within the zoning code are very difficult to win.

Short-term rentals: Anderson v Metro Nashville

The Tennessee Court of Appeals recently decided the short-term rental property case involving challenges to the definitions of the ordinance, the 3%, and attorneys fees. As you may recall, the trial court had found the definitions void because of vagueness, concluded that there was no monopoly in the use of a 3% cap, and awarded attorneys fees.

The Court of Appeals concluded that the constitutional vagueness issues had been mooted by the adoption by Metro Nashville of a new ordinance with updated definitions, that while the 3% might be characterized as a monopoly, it was nevertheless serving a public purpose by balancing the concerns of neighborhood residential uses against an influx of short-term rental properties. Finally, since in view of the court’s rulings the plaintiffs have not prevailed, the court reversed the award of attorney’s fees.

Perhaps the most interesting part of the decision is the discussion concerning the 3% cap. The court’s conclusion that even though it may be somewhat monopolistic, to the extent that it is offset by a concern of the legislative body for the well-being of the residential neighborhoods, It survives scrutiny.

Short-term rentals in Metro Nashville

As you are likely aware, Metro Council finally passed the amendments to its Short Term Rental Properties provisions, by way of Ordinance 2017-608. It’s a complicated bill, and I won’t try to cover all the ins and outs, but the most important change is that short-term rental properties which are not owner-occupied are not permitted in most residential areas. Compare §3 with §4 of the ordinance.

This may generate some questions about the potential non-conforming use of some of the existing non-owner occupied short-term rental properties. There are a number of issues involved in answering those questions, including whether the amendatory ordinance is a zoning ordinance subject to the Tennessee Non-Conforming Property Act ( Tenn. Code Ann. §13-7-208), whether the short-term rental properties would be classified as residential or business use for purposes of the act (if the use of the land is deemed residential, then the act does not apply), and whether the fact that the licenses were issued for only one year at a time would preclude any kind of non-conforming rights.

I’m sure that the will be some litigation about this over the next several years. It may take a while since the act expressly allows for the renewal of permits properly issued and maintained until June 28, 2020. I might add that usually those kinds of amortization provisions within zoning regulations are invalid to the extent that the Tennessee Non-Conforming Property Act is applicable, but in view of the questions about its applicability to these types of uses, that’s another question the court would have to decide.