581 F.Supp.3d 962
E.D. Tenn.2022Background
- The dispute concerns a 2.6-acre "Clubhouse Parcel" at 1001 Reads Lake Road (part of the former Quarry Golf Course) and the City of Chattanooga’s October 2018 ordinance conditioning its C-2 zoning to permit only office uses and uses consistent with the former C-1 zone (thereby excluding general residential uses).
- The parcel’s zoning history: R-1 (pre-1977) → R-4 (1977, for clubhouse/offices) → C-1 (1980, to permit a bar) → included in a 2002 mass rezoning that converted many C-1/C-6 parcels to C-2 (the 2002 legal notice did not list individual addresses).
- Pratt (PLD) bought the property in 2018 and sought rezoning/PUD approval to permit multifamily development; local neighbors organized opposition, Councilman Henderson pursued corrective action based on concerns about the 2002 notice, and the City enacted Ordinance #13377 conditioning the parcel’s C-2 zoning.
- PLD sued, raising claims for declaratory relief, federal and state equal protection (class-of-one), substantive and procedural due process, takings under the Tennessee Constitution, inverse condemnation (Tenn. Code § 29-16-123), and attorneys’ fees.
- The court granted summary judgment to the City on equal protection, substantive due process, and procedural due process (and dismissed related declaratory and § 1988 claims), but denied summary judgment on PLD’s takings and inverse-condemnation claims — those remain for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Equal protection (class-of-one) | City singled out the parcel to remove residential uses and prevent PLD’s multifamily development; action lacks any rational basis and is discriminatory | Ordinance rationally related to legitimate objectives: correct defective 2002 rezoning notice, preserve historical/adjacent uses, respond to neighbor opposition and preserve community character | Court: PLD cannot negate every conceivable rational basis; correcting the 2002 notice is a legitimate, conceivable basis. Equal protection claims dismissed; PLD SJ denied. |
| Substantive due process | Rezoning was arbitrary and capricious and deprived PLD of property rights in zoning | Rezoning survives rational-basis scrutiny as a local legislative decision correcting notice defects and addressing neighborhood concerns | Court: substantive due process claim collapses into rational-basis review and fails; claim dismissed. |
| Procedural due process / vested rights | PLD had a vested right in C-2 zoning (incurred substantial liabilities) and was denied a meaningful hearing (council deference to district member) | No vested right under Tennessee law absent substantial construction or liabilities directly tied to construction; PLD received actual notice and hearings | Court: PLD produced no evidence of construction-related substantial liabilities; had notice/opportunity to be heard; procedural due process and declaratory relief based on vested-right theory dismissed. |
| Takings / inverse condemnation | Ordinance removes economically viable residential development and renders parcel valueless or of nominal value; supports regulatory taking and inverse-condemnation claims | Parcel still allows historically consistent uses; City’s action corrects a defective rezoning notice; ripeness is met because Ordinance applies uniquely to this parcel | Court: genuine factual dispute exists about economic impact and investment-backed expectations; City not entitled to summary judgment on takings/inverse-condemnation claims — those survive. |
Key Cases Cited
- Loesel v. City of Frankenmuth, 692 F.3d 452 (6th Cir. 2012) (class-of-one/rational-basis review in land-use context; careful scrutiny of municipal justifications)
- Village of Willowbrook v. Olech, 528 U.S. 562 (U.S. 2000) (recognition of the class-of-one equal protection theory)
- Palazzolo v. Rhode Island, 533 U.S. 606 (U.S. 2001) (ripeness/finality considerations in land-use takings challenges)
- Lucas v. S.C. Coastal Council, 505 U.S. 1003 (U.S. 1992) (total regulatory taking doctrine where all economically beneficial use is denied)
- Murr v. Wisconsin, 137 S. Ct. 1933 (U.S. 2017) (multi-factor test for regulatory takings: economic impact, investment-backed expectations, character of government action)
- Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (U.S. 2005) (framework distinguishing takings review from due process/equal protection)
- Wedgewood Ltd. P'ship I v. Township of Liberty, 610 F.3d 340 (6th Cir. 2010) (procedural due process and vested-rights analysis under state zoning law)
- Shavers v. Almont Twp., [citation="832 F. App'x 933"] (6th Cir. 2020) (reliance on professional recommendations can supply a conceivable rational basis to defeat a class-of-one claim)