Home Builders Association Of Middle Tennessee v. Metropolitan Government Of Nashville And Davidson County ( 2019 )

01/30/2019
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
January 8, 2019 Session
HOME BUILDERS ASSOCIATION OF MIDDLE TENNESSEE v.
METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON
COUNTY
Appeal from the Chancery Court for Davidson County
No. 17-0386-II William E. Young, Chancellor
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No. M2018-00834-COA-R3-CV
___________________________________
Plaintiff challenged a zoning ordinance on the grounds that it violated the Federal and
State Constitutions, that it was preempted by a state law, and that it was ultra vires and
thus void. The trial court dismissed this challenge on the grounds of ripeness, lack of
standing, and because no private right of action was conferred by the statute that Plaintiff
contended preempted the ordinance at issue. While the appeal was pending, the
Tennessee Legislature enacted Public Chapter 685, which Defendant contended made the
case moot and accordingly moved to dismiss the appeal. After a thorough consideration
of the arguments, we grant the motion and dismiss the appeal as moot; we vacate the
judgment of the trial court and dismiss the case.
Tenn. R. App. P. 3 Appeal as of Right; Motion to Dismiss Granted; Judgment of the
Trial Court Vacated and Case Dismissed
RICHARD H. DINKINS, J., delivered the opinion of the court, in which FRANK G.
CLEMENT, JR., P.J., M.S., and ANDY D. BENNETT, J., joined.
Braden H. Boucek, Nashville, Tennessee, for the appellant, Home Builders Association
of Middle Tennessee.
Jon Cooper, Director of Law, Lora Barkenbus Fox, and Catherine J. Pham, Nashville,
Tennessee, for the appellee, Metropolitan Government of Nashville & Davidson Co.
OPINION
I. FACTUAL AND PROCEDURAL HISTORY
In September of 2016, the council of the Metropolitan Government of Nashville
and Davidson County (“Metro”) passed two ordinances that provided incentives to home
builders to build affordable housing. The first ordinance, referred to as Substitute
Ordinance BL 2016-133 (“the ordinance” herein), amended Title 17 of the Metropolitan
Code, governing zoning, by adding provisions which adopted a policy known as
Inclusionary Housing.1 A second ordinance, BL 2016-342, amended Title 2 of the Metro
Code by adding Chapter 2.213, which contained provisions allowing Metro to provide
incentive grants to developers to assist with the development of affordable rental and
owner-occupied units.
The Home Builders Association of Middle Tennessee (“HBAMT”), a “non-profit
trade group dedicated to the promotion and protection of the home building industry in
the Middle Tennessee area,” filed suit on April 24, 2017. Count one of the complaint
asserted that, on its face, the ordinance effectuated a taking that violated the Fifth and
Fourteenth Amendments to the U.S. Constitution and Article I, section 21 of the
Tennessee Constitution because it “conditions the approval of development entitlements
needed to build developments over five units on a private property owner’s surrender of
its constitutional right to seek market rate value on their rental or for sale properties.”
Count two of the complaint alleged that the ordinance is preempted by Tennessee Code
Annotated section 66-35-102(b). Count three alleged that Metro’s enactment of the
Ordinance was ultra vires and thus void. HBAMT sought a declaration that the
ordinance “imposes an unconstitutional condition, constituting a taking without just
compensation” and an injunction prohibiting enforcement of the ordinance.
Metro moved to dismiss the complaint pursuant to Rule 12.02(6) of the Tennessee
Rules of Civil Procedure on the ground that the case was not ripe for adjudication
because Plaintiff “has not sought compensation through the ordinance or state law,”
1
The stated purpose of the ordinance was:
… to promote the public health, safety and welfare by increasing the production of
Inclusionary Housing units to meet existing and anticipated housing and employment
needs; mitigating the impacts of increasing housing cost and provide housing affordable
to low and moderate income households; providing for a range of housing choices
throughout the city to avoid the concentration of poverty; and to provide a mechanism by
which residential development can contribute in a direct way to increasing the supply of
affordable and work force housing in exchange for additional development entitlements
other than those otherwise permitted as a matter of right.
Metropolitan Gov’t of Nashville & Davidson County, Tennessee, Code § 17.128.030 (2016).
2
because Plaintiff did not have standing, and because “there is no private right of action
for Plaintiff to enforce state law.” The motion was heard on August 17, and on October
31 the court entered an order holding that the case was not ripe because HBAMT had not
sought compensation through the ordinance or applicable Tennessee law; that HBAMT
lacked standing; and that no private right of action existed in section 66-35-102(b) to
enable HBAMT to enforce that law. HBAMT’s motion to alter or amend the judgment
was denied. HBAMT appeals, raising the following issues for our review:
1. Whether a facial taking claim based on the unconstitutional conditions
doctrine is ripe for judicial review immediately upon enactment of the
challenged law or must a plaintiff first seek compensation through
inverse condemnation.
2. Whether HBAMT has organizational standing to raise a facial challenge
to an effective law certain to affect the property rights of HBAMT’s
members and inflicting immediate compliance costs before the law has
been applied to any of HBAMT’s members.
On October 4, 2018, Metro filed a motion requesting this Court to consider post-
judgment facts and dismiss this case as moot due to the Legislature’s enactment of Public
Chapter 685 on April 9, 2018, which amended Tennessee Code Annotated section 66-35-
102.2 Metro contended that the statute “expressly prohibits local governments from
enforcing ordinances that condition a zoning change on the allocation of affordable
housing” and that, according to its terms, “any ordinances in conflict with this act are
void and unenforceable.” On October 25, HBAMT filed a motion to consider post-
judgment facts and asserted that “this Court should consider the fact that . . . Metro . . .
has not repealed its Inclusionary Zoning Ordinance (Metro Code. § 17.40.780) even after
the passage of the state law that Metro argues mooted this case” and that “the continued
existence of the law demonstrates that the case is anything but moot.”
This Court granted both motions to consider post-judgment facts and reserved
judgment on Metro’s motion to dismiss the appeal.
II. ANALYSIS
In order for a court to rule on a matter, the case must remain justiciable throughout
the entire course of litigation, including appeal. Alliance for Native American Indian
Rights in Tennessee, Inc. v. Nicely et al., 182 S.W.3d 333, 338 (Tenn. Ct. App. 2005);
State v. Ely, 48 S.W.3d 710, 716, n.3 (Tenn. 2001). A case is not justiciable if it does not
involve a genuine, continuing controversy requiring the adjudication of presently existing
rights. State v. Brown & Williamson Tobacco Corp., 18 S.W.3d 186, 193 (Tenn. 2000);
Ford Consumer Fin. Co., Inc. v. Clay, 984 S.W.2d 615, 616 (Tenn. Ct. App. 1998). A
2
Public Chapter 685 is reproduced in its entirety as an appendix to this opinion.
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moot case is one that has lost its justiciability because it no longer involves a present,
ongoing controversy. McCanless v. Klein, 188 S.W.2d 745, 747 (Tenn. 1945); County of
Shelby v. McWherter, 936 S.W.2d 923, 931 (Tenn. Ct. App. 1996). A case will be
considered moot if it no longer serves as a means to provide some sort of judicial relief to
the prevailing party. Knott v. Stewart County, 207 S.W.2d 337, 338-39 (Tenn. 1948);
Ford Consumer Fin. Co., 984 S.W.2d at 616.
The nature and purpose of the doctrine of mootness has been explained by the
Tennessee Supreme Court:
Tennessee’s courts believed that “the province of a court is to
decide, not advise, and to settle rights, not to give abstract opinions.”
Accordingly, they limited their role to deciding “legal controversies.” A
proceeding qualifies as a “legal controversy” when the disputed issue is real
and existing, and not theoretical or abstract, and when the dispute is
between parties with real and adverse interests.
***
Tennessee courts do not apply the mootness doctrine mechanically. Rather,
when the question of mootness is raised, they consider many factors,
including the reason that the case is alleged to be moot, the stage of the
proceeding, the importance of the issue to the public, and the probability
that the issue will recur. Over time, the courts have recognized several
circumstances that provide a basis for not invoking the mootness doctrine.
These circumstances include: (1) when the issue is of great public
importance or affects the administration of justice, (2) when the challenged
conduct is capable of repetition and of such short duration that it will evade
judicial review, (3) when the primary subject of the dispute has become
moot but collateral consequences to one of the parties remain, and (4) when
the defendant voluntarily stops engaging in the challenged conduct. . . .
Norma Faye Pyles Lynch Family Purpose LLC v. Putnam Cty., 301 S.W.3d 196, 203,
(Tenn. 2009) (citations omitted). In specifically addressing the public interest exception,
which HBAMT contends applies in this case, the Court stated:
. . . [A]s a general rule, Tennessee’s appellate courts should dismiss appeals
that have become moot regardless of how appealing it may be to do
otherwise. However, under “exceptional circumstances where the public
interest clearly appears,” the appellate courts may exercise their judgment
and discretion to address issues of great importance to the public and the
administration of justice. To guide their discretion, the courts should first
address the following threshold considerations: (1) the public interest
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exception should not be invoked in cases affecting only private rights and
claims personal to the parties; (2) the public interest exception should be
invoked only with regard to “issues of great importance to the public and
the administration of justice”; (3) the public interest exception should not
be invoked if the issue is unlikely to arise in the future; and (4) the public
interest exception should not be invoked if the record is inadequate or if the
issue has not been effectively addressed in the earlier proceedings.
If the threshold considerations do not exclude the invocation of the
public interest exception to the mootness doctrine, the courts should then
balance the interests of the parties, the public, and the courts to determine
whether the issues in the case are exceptional enough to address. In making
this determination, the courts may consider, among other factors, the
following: (1) the assistance that a decision on the merits will provide to
public officials in the exercise of their duties, (2) the likelihood that the
issue will recur under similar conditions regardless of whether the same
parties are involved, (3) the degree of urgency in resolving the issue, (4) the
costs and difficulties in litigating the issue again, and (5) whether the issue
is one of law, a mixed question of law and fact, or heavily fact-dependent.
Id. at 210–11 (citations and footnotes omitted).
As we resolve this issue, we have taken into account the four threshold
considerations. HBAMT contends that the appeal is not moot because its facial challenge
is an issue of great public importance; in our analysis, the first and third considerations
must also be taken into account. The purpose of the ordinance is to address “the public
health, safety and welfare by increasing the production of Inclusionary Housing units”;
the interest presented by HBAMT, however, is one which falls more as affecting the
asserted rights of its individual members. We are persuaded that the consideration of
whether the issue is unlikely to arise in the future is paramount.
In Kentucky Right to Life, Inc. v. Terry, the Sixth Circuit Court of Appeals
addressed the question of whether a Legislature’s amendment or repeal of the law at issue
in a pending case rendered the case moot; the court observed:
The mootness doctrine, a subset of the Article III justiciability
requirements, demands a live case-or-controversy when a federal court
decides a case. Legislative repeal or amendment of a challenged statute
while a case is pending on appeal usually eliminates this requisite case-or-
controversy because a statute must be analyzed by the appellate court in its
present form.
5
108 F.3d 637, 644 (6th Cir.1997) (citations omitted); see also Green Party of Tenn. v.
Hargett, 700 F.3d 816, 822 (6th Cir. 2012); Banas v. Dempsey, 742 F.2d 277, 281 (6th
Cir. 1984) (holding that a change in federal law while an action was pending rendered
moot the plaintiffs’ request for injunctive relief to prevent the defendant from enforcing
allegedly unconstitutional state practices).
Public Chapter 685 expressly precludes Metro from enforcing the ordinance, i.e.,
taking the action that HBAMT sought to have declared unconstitutional; as such,
HBAMT’s members face no threat of further injury. See Banas v. Dempsey, 742 F.2d
277, 282–83 (6th Cir. 1984), aff’d sub nom. Green v. Mansour, 474 U.S. 64 (1985)
(holding that the plaintiffs had “received the benefits to which they claimed to be entitled
after filing their lawsuit” and were “under no threat of further injury as a result of
defendant’s conduct” such that they “lacked a ‘personal stake in the outcome’ required to
assure the concrete adverseness necessary for the resolution of constitutional questions”)
(quoting O’Shea v. Littleton, 414 U.S. 488, 94 S. Ct. 669, 38 L. Ed. 2d 674 (1974); Baker
v. Carr, 369 U.S. 186, 204, 82 S. Ct. 691, 703, 7 L. Ed. 2d 663 (1962)). In light of the
nullification of the Metro ordinance by Public Chapter 685, the issue presented is
unlikely to arise in the future.3
III. CONCLUSION
We conclude that the public interest exception to the mootness doctrine is not
applicable to the facts of this case, as the issue presented is unlikely to arise in the future.
Accordingly, we grant Metro’s motion to dismiss this appeal, vacate the judgment of the
trial court, and dismiss this case as moot.
RICHARD H. DINKINS, JUDGE
3
HBAMT maintains that the case is not moot because “it takes a repeal or a court order to void a
preempted law” and Metro has not repealed the ordinance; this argument is without merit. Repeal of the
ordinance is not necessary for purposes of determining whether the case is moot. Moreover, our
resolution of this case is based on our holding that Public Chapter 685 renders the ordinance
unenforceable, a position advanced by Metro in the motion and affirmed by its counsel at argument.
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APPENDIX
State of Tennessee
Public Chapter No. 685
House Bill No. 1143
By Representatives Casada, Cameron Sexton, Daniel
Substituted for: Senate Bill No. 363
By Senator Haile
AN ACT to amend Tennessee Code Annotated, Title 7; Title 13 and Title 66,
relative to housing sold or rented at below market value.
WHEREAS, the 109th General Assembly enacted Public Chapter 822 that
prohibited a local governmental unit from enacting, maintaining, or enforcing “any
zoning regulation, requirement, or condition of development imposed by land use or
zoning ordinances, resolutions, or regulations or pursuant to any special permit, special
exception, or subdivision plan that requires the direct or indirect allocation of a
percentage of existing or newly constructed private residential or commercial rental units
for long-term retention as affordable or workforce housing”; and
WHEREAS, the Metropolitan Government of Nashville and Davidson County
enacted an ordinance to incentivize inclusionary housing with any residential
development that seeks additional development entitlements beyond that permitted by the
current zoning district, which is in direct conflict with Public Chapter 822; and
WHEREAS, it is the intent of the General Assembly to clarify that neither
Nashville nor any local government has the authority to enact such an ordinance that
would place requirements regarding inclusionary, affordable, or below market value
housing when entitlements, variances, or any other form of permit or authorization is
sought from the local government; now, therefore,
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF
TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 66–35–102, is amended by
deleting subsections (b) and (c) and substituting instead the following:
(b)
(1) Notwithstanding any provision of law to the contrary, a local
government unit, or any subdivision or instrumentality thereof, shall not enact,
maintain, or enforce any ordinance, resolution, regulation, rule, or other
requirement of any type that:
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(A) Requires the direct or indirect allocation of existing or newly
constructed private residential or commercial rental units to be sold or
rented at below market rates;
(B) Conditions any zoning change, variance, building permit,
development entitlements through amendment to the zoning map, or any
change in land use restrictions or requirements, on the allocation of existing
or newly constructed private residential or commercial rental units to be
sold or rented at below market rates; or
(C) Requires a person to waive the person's constitutionally
protected rights related to real property in order that the local government
unit can increase the number of existing or newly constructed private
residential or commercial rental units that would be available for purchase
or lease at below market rates within the jurisdiction of the local
government unit.
(2) This subsection (b) does not prohibit a local government unit from
creating or implementing a purely voluntary incentive-based program designed to
increase the construction or rehabilitation of workforce or affordable private
residential or commercial rental units, which may include providing local tax
incentives, subsidization, real property or infrastructure assistance, or any other
incentive that makes construction of affordable housing more economical, so long
as no power or authority granted to the local government unit to regulate zoning or
land use planning is used to incentivize or leverage a person to develop, build, sell,
or rent housing at below market value.
(3) Any person who suffers an ascertainable loss of money or property,
real, personal, or mixed, or any other article, commodity, or thing of value
wherever situated, as a result of the practices prohibited by this section, may bring
an action individually to recover actual damages.
SECTION 2. All ordinances, resolutions, regulations, rules, or requirements of any
type of a local government unit that are in conflict with this act are void and
unenforceable.
SECTION 3. This act shall take effect upon becoming a law, the public welfare
requiring it.
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