Opinion ID: 1057663
Heading Depth: 2
Heading Rank: 2

Heading: The Plaintiffs’ Cause of Action

Text: The Plaintiffs do not dispute that they failed to file a timely quo warranto challenge. This issue was resolved by the Court of Appeals in Highwoods Properties I, 2006 WL 3628102, at . Instead, the Plaintiffs argue that they now have a cause of action under the Declaratory Judgment Act to challenge what they have characterized as the “amendment” of the annexation ordinance by the 2006 consent judgment.7 We disagree. Under the principles of our constitution, the General Assembly “could have delegated to the municipalities the authority to annex with no right of judicial review absent constitutional restraint.” Bastnagel, 457 S.W.2d at 534. The right to challenge an annexation is thus a “statutory right” that “in its very origin is limited.” Brent v. Town of Greeneville, 309 S.W.2d 121, 123 (Tenn. 1957). We have stated that “[w]ithin the four corners of [the quo warranto] statute lies the entire jurisdiction and authority of the Courts to review the actions of municipalities in enacting annexation ordinances.” City of Oak Ridge v. Roane County, 563 S.W.2d 895, 897 (Tenn. 1978). Thus, “the courts have no power to vacate an annexation ordinance for purely procedural defects,” because no such authority has been granted by statute. City of Watauga v. City of Johnson City, 589 S.W.2d 901, 906 (Tenn. 1979). Rather, the general rule is that defects in an annexation ordinance must be presented in the context of a challenge to its reasonableness or necessity by way of a timely quo warranto challenge. City of Oak Ridge, 563 S.W.2d at 898; see also City of Knoxville v. State ex rel. Graves, 341 S.W.2d 718, 721 (Tenn. 1960) (holding that allegation that ordinance was passed without a public hearing “should be considered in connection with the question of the reasonableness of the ordinance”). In State ex rel. Earhart v. City of Bristol, however, we recognized an exception (other than a constitutional challenge) to the rule and held that, in certain situations where no quo warranto action is statutorily available, it is permissible to challenge an ordinance’s validity with a declaratory judgment action. 970 S.W.2d at 953. In Earhart the validity of an ordinance enacted several years 7 A declaratory judgment action is a relative novelty in the law. Snow v. Pearman, 436 S.W .2d 861, 863 (Tenn. 1968) (observing that “the declaratory judgment procedure does not come to the jurisprudence of Tennessee from antiquity”). The common law did not allow a suit in either law or equity absent an actual and present injury. Clein v. Kaplan, 40 S.E.2d 133, 137 (Ga. 1946). In recent years, however, declaratory judgment actions have gained popularity as a proactive means of preventing injury to the legal interests and rights of a litigant. See Colonial Pipeline, 263 S.W .3d at 836-37 (discussing history of declaratory judgments). In its present form, the Tennessee Declaratory Judgment Act grants courts of record the power to declare rights, status, and other legal relations. Tenn. Code Ann. § 29-14-102(a) (2000). The Act also conveys the power to construe or determine the validity of any written instrument, statute, ordinance, contract, or franchise, provided that the case is within the court’s jurisdiction. Tenn. Code Ann. § 29-14-103 (2000). “[W ]hether to entertain a declaratory judgment action is, in certain situations, largely discretionary with the trial judge.” State ex rel. Earhart v. City of Bristol, 970 S.W .2d 948, 954 (Tenn. 1998). -12- earlier was challenged because the annexed area contained no “people, private property, or commercial activity.” Id. at 954; see State ex rel. Collier v. City of Pigeon Forge, 599 S.W.2d 545, 547 (Tenn. 1980) (“[L]ong and lean . . . annexations, so long as they take in people, private property, or commercial activities and rest on some reasonable and rational basis, are not per se to be condemned.” (emphasis added)). Annexations containing no people, private property, or commercial activities, by necessity, cannot be challenged in a quo warranto action, because only an “aggrieved owner of property that borders or lies within territory that is the subject of an annexation ordinance prior to the operative date thereof” may file such a challenge. Tenn. Code Ann. § 6-51-103(a)(1)(A) (emphasis added). We held, therefore, that the action for declaratory judgment was permissible, but limited our holding in two key ways. First, we permitted only challenges to ultra vires acts, that is, tests of “[t]he validity of an annexation ordinance alleged to exceed the authority delegated by the legislature.” Earhart, 970 S.W.2d at 954. Second, we stated that it is only “where the quo warranto proceeding is not available, [that] alternative equitable remedies are not barred.” Id. at 952 (citing 65 Am. Jur. 2d Quo Warranto § 7 (1972) (“[W]here the remedy by quo warranto is available, it is usually held that there is no concurrent remedy in equity, unless by virtue of statutory provision.”)) (emphasis added). While citing Earhart as authoritative support for their contentions, the Plaintiffs have failed to overcome either of the barriers identified in that case. As an initial matter, they have neither raised a colorable claim that the Ordinance is void, nor, despite their protestations to the contrary, challenged any specific augmentation of the Ordinance. Reduced to its essence, the challenge by the Plaintiffs is to a single aspect of the court’s approved settlement of the earlier lawsuit attacking the reasonableness of the Ordinance; that is, the City’s consent to delay the planned annexation of Area B until 2013. A delay in the effective date of the annexation fits more neatly within the classification of procedural defects, as defined by City of Oak Ridge and City of Watauga – issues that we held must be presented in a quo warranto proceeding and considered in the context of the reasonableness of the annexation. We completely agree with the assessment of the Court of Appeals that our limited holding in Earhart did not overrule the longstanding principle, articulated in those cases, that Tennessee courts have no authority to vacate an annexation based on procedural defects, except insofar as those defects bear on the questions presented in a timely quo warranto action. Moreover, the Plaintiffs cannot avail themselves of Earhart because they, unlike the claimants in Earhart, could have filed a timely quo warranto challenge.8 “Subject to some exceptions, a declaratory judgment action should not be considered where special statutory proceedings provide an adequate remedy.” Colonial Pipeline, 263 S.W.3d at 838 (citing Katzenbach v. McClung, 379 U.S. 294, 296 (1964)). If the Plaintiffs had filed a timely quo warranto challenge, their cause of action would have been consolidated with the other timely-filed challenges pursuant to Tennessee Code Annotated section 6-51-103(d). The Plaintiffs, as parties in a single, consolidated quo 8 It appears from the record that the Plaintiffs owned property in the annexation area at the time the Ordinance was enacted. Even if they had acquired the property later, however, it is of no consequence. An individual who acquires title to land within an annexation area after the time period for a challenge has expired is not entitled to a new cause of action. -13- warranto case, would have had a seat at the table throughout the litigation and could have rejected any offer of settlement by the City. Indeed, the allegations in the Highwoods Properties I complaint effectively confirm that, if they had filed a timely quo warranto challenge, they would have been able to prevent the adoption of any “especially detrimental” terms within the consent judgment. The Plaintiffs – having allowed their special statutory cause of action to expire – are not entitled to a second bite of the apple under the Declaratory Judgment Act. The quo warranto procedures established by the General Assembly are the product of over half a century of experience and reflect a careful balance between the interests of municipalities and the concerns of individuals who object to the annexation of their property. This legislative remedy “avoid[s] the specter of numerous successive suits by private parties attacking the validity of annexations,” “because the judgment settles the validity of the annexation on behalf of all property holders in the affected area.” Earhart, 970 S.W.2d at 952 (quoting Alexander Oil Co. v. City of Seguin, 825 S.W.2d 434, 437 (Tex. 1991)). To sustain the propriety of this litigation would permit the piecemeal litigation that the quo warranto procedures are designed to prevent. We do not believe that the General Assembly intended to permit such a result. Thus, the Court of Appeals’ holding on Count I must be affirmed. Count II As a preliminary matter, we agree with the Court of Appeals that Count II, unlike Count I, is a proper question for the courts. “The importance of correctly resolving constitutional issues suggests that constitutional issues should rarely be foreclosed by procedural technicalities.” Colonial Pipeline, 263 S.W.3d at 844-45 (quoting In re Adoption of Female Child, 42 S.W.3d 26, 32 (Tenn. 2001)). The stringent restrictions on any challenge to an annexation apply only when constitutional issues are not at stake. See City of Oak Ridge, 563 S.W.2d at 897 (“[A]bsent constitutional infirmities, the rights that now exist are limited to those granted in Section 2(b) of that act, codified in T.C.A. § 6-310, grammatical paragraphs one, three, and four.” (emphasis added)). Moreover, the Plaintiffs’ allegations in Count II challenge the taxation scheme incident to the annexation and not the propriety of the annexation itself. The Plaintiffs argue that the consent judgment approving the annexation, even if otherwise valid, establishes a system of taxation that contravenes the equality and uniformity requirements of article II, section 28 of the Tennessee Constitution, because it permits the City to levy a municipal tax on the inhabitants of Area A while, at the same time, levying no corresponding tax on the inhabitants of Area B. The Court of Appeals rejected the argument: [Plaintiffs’] complaint that they are forced to pay City of Memphis taxes for a longer period than other property owners, whose land is not yet part of the City, does not implicate the “equal and uniform clause” of Article II, Section 28. . . . There is nothing in the record to suggest that the City of Memphis or any other taxing authority is implementing different tax rates within its own borders. Area B will not be annexed into the city limits of Memphis until 2013, so it is not necessary that Area A and Area B property be taxed at the same rate at this time. They are currently in -14- different jurisdictions for purposes of this analysis. Highwoods Properties II, 2007 WL 4170821, at .