297 S.W.3d 695 | Tenn. | 2009
Lead Opinion
OPINION
delivered the opinion of the court,
The Plaintiffs filed an action for declaratory judgment seeking to set aside a consent judgment entered in a lawsuit between property owners in an area of a proposed annexation and the City of Memphis. The earlier lawsuit, which the Plaintiffs failed to timely join, was a quo war-ranto challenge to an ordinance purporting to annex certain territory contiguous to the boundaries of the City. The consent judgment provided for the annexation of the territory described within the ordinance in two stages, with a portion of the area having an effective annexation date in 2006 and the remainder having an effective date in 2013. The trial court dismissed the complaint and the Court of Appeals affirmed. We granted permission to appeal in order to determine the propriety of the challenge to the consent decree approving of the two-step annexation. We hold that (1) the Plaintiffs are not authorized to file a declaratory judgment action challenging the consent judgment as violative of the terms of the annexation ordinance; and (2) the consent judgment did not create an unconstitutional taxing structure. The judgment of dismissal is, therefore, affirmed.
This appeal arises out of a declaratory judgment action filed by Highwoods Properties, Inc., Highwoods Realty Limited
Factual and Procedural Background
The facts underlying this dispute are largely uncontested. On November 4, 1997, the Memphis City Council enacted Ordinance No. 4513 (the “Ordinance”), adopting a proposal to annex Area 42, a property adjacent to its city limits. The Ordinance provided as follows:
[T]he City of Memphis on its own initiative is authorized to annex territory if it appears that the prosperity of the City of Memphis and of the territory will be materially retarded, and the safety and welfare of the inhabitants and property thereof endangered if said property is not annexed to the city of Memphis....
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[I]t was determined by the Council of the City of Memphis that the proposed annexation reflects the planned and orderly growth and development of the City of Memphis taking into consideration the characteristics of the City of Memphis and those of the area proposed for annexation and is reasonable for the overall well being of the City of Memphis and the proposed area to be annexed; that it appears that the prosperity of the City of Memphis and the affected territory will be materially retarded and safety and welfare of the inhabitants and property thereof endangered if such area is not annexed to the City of Memphis; that, therefore, it is in the best interest, safety and welfare of the inhabitants and property of said territory as well as the municipality as a whole to annex [Area 42] to the boundaries of the City of Memphis.
The Ordinance incorporated a detailed “Plan of Services” setting forth the expected dates by which enumerated city services would be extended to the annexed area.
On December 3, 1997, a number of the property owners within Area 42 filed three separate quo wa/n’anto proceedings challenging the propriety of the annexation. See Tenn.Code Ann. § 6-51-103 (2005). All were timely filed within thirty days of the passage of the Ordinance. See State ex rel. Bastnagel v. City of Memphis, 224 Tenn. 514, 457 S.W.2d 532, 535 (1970). Pursuant to statute, the three quo warran-to actions were consolidated in the Chancery Court for Shelby County. See Tenn. Code Ann. § 6 — 51—103(d) (“If more than one (1) [quo warranto ] suit is filed, all of them shall be consolidated and tried as one (1) in the first court of appropriate jurisdiction in which suit is filed.”). Although the record does not include the details of the litigation, the pleadings do establish that the suit concluded in a settlement in 2006. None of the Plaintiffs in the present case, however, were among the property owners involved in the 1997 litigation.
On December 29, 2005, while the consolidated 1997 challenges were still pending, Highwoods Properties, Inc. (“Highwoods Properties”), one of the Plaintiffs in this litigation, filed a separate quo warranto challenge to the annexation, seeking to have its suit consolidated with those filed in 1997. A month later, Highwoods Properties filed an amended complaint, adding Highwoods Realty Limited Partnership, Highwoods/Tennessee Holdings LP, and Southeast Portfolio Partners, LP, as Plaintiffs. The Amended Complaint contained
On May 10, 2006, during the course of the appeal by the Plaintiffs, the trial court approved and entered a “Consent Final Judgment” in settlement of the 1997 challenge to the annexation. On June 8, 2006, an “Amended Consent Final Judgment” superceding the initial judgment was approved for entry. The amended judgment divided Area 42 into five sections, which appear below:
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The terms of the final settlement provided for each of the five sections of Area 42 to become a part of the City; however, the annexation of areas Al, A2, and A3 (collectively “Area A”) was to become effective on December 31, 2006, while the annexation of areas B1 and B2 (collectively “Area B”) would be delayed until December 31, 2013.
In its motion to dismiss, the City argued that (1) the claims are barred by res judi-cata and collateral estoppel; (2) the Plaintiffs do not have standing to file a declaratory judgment action challenging the terms of a judgment to which they were not a party; (3) the complaint was untimely; and (4) the Plaintiffs failed to join indispensable parties, specifically the property owners involved in the 1997 consolidated litigation. On January 22, 2007, the trial court granted the motion to dismiss “on all grounds set forth therein.”
On direct appeal, the Court of Appeals affirmed, concluding that there was “no authority to vacate the annexation ordinance based upon the ... procedural defects” alleged by the Plaintiffs. Highwoods Props., Inc. v. City of Memphis, No. W2007-00454-COA-R3-CV, 2007 WL 4170821, at *10 (Tenn.Ct.App. Nov. 27, 2007) (“Highwoods Properties IP’). The court further concluded that the Plaintiffs’ constitutional claims were without merit. Id. at *14.
Standard of Review
A Rule 12.02(6) motion under the Tennessee Rules of Civil Procedure seeks to determine whether the pleadings state a claim upon which relief may be granted. Edwards v. Allen, 216 S.W.3d 278, 284 (Tenn.2007). Such a motion tests only the legal sufficiency of the complaint, not the strength of the proof. The resolution of the motion is determined by an examination of the pleadings alone. Cook ex rel. Uithoven v. Spinnaker’s of Rivergate, Inc., 878 S.W.2d 934, 938 (Tenn.1994) (citing Wolcotts Fin. Servs., Inc. v. McReynolds, 807 S.W.2d 708, 710 (Tenn.Ct.App.1990)). For purposes of analysis, the motion con templates that all relevant and material allegations in the complaint, even if true and correct, do not constitute a cause of action. In considering a motion to dismiss, courts must construe the assertions in the complaint liberally; the motion cannot be sustained unless it appears that there are no facts warranting relief. Cook, 878 S.W.2d at 938 (citing Fuerst v. Methodist Hosp. S., 566 S.W.2d 847, 848-49 (Tenn.1978)). On appeal, all allegations of fact by the Plaintiffs must be taken as true. Stein v. Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn.1997). Our scope of review is de novo with no presumption of correctness. Colonial Pipeline Co. v. Morgan, 263 S.W.3d 827, 836 (Tenn.2008); Owens v. Truckstops of Am., 915 S.W.2d 420, 424 (Tenn.1996).
Analysis
The Plaintiffs have presented two arguments in support of their claim for declaratory relief. As Count I, they argue that the consent judgment entered in the earlier settlement of the quo wanunto suits amounts to an impermissible, non-legislative amendment of the ordinance. As Count II, the Plaintiffs allege that the consent judgment, if otherwise valid, imposes a system of taxation that violates article II, section 28 of the Tennessee Constitution. The City has disputed both the substance of these arguments and the Plaintiffs’ authority to initiate the declaratory judgment suit under these circumstances.
Count I
The Plaintiffs argue that the Declaratory Judgment Act permits a challenge to the terms of the 2006 consent judgment, which, they claim, revises the Ordinance. In response, the City maintains that permitting an action for declaratory judgment by the Plaintiffs on this count, despite their failure to file a timely quo warranto challenge eleven years ago, would circumvent the intent of the General Assembly and the longstanding policy of this state limiting the power of courts to intercede in the annexation process. Our resolution of this question requires a close analysis of the historical role of courts in reviewing annexations, as well as the relevant statutes and constitutional provisions.
I. Background
In Hunter v. City of Pittsburgh, 207 U.S. 161, 28 S.Ct. 40, 52 L.Ed. 151 (1907), the United States Supreme Court considered the efforts of citizens and taxpayers of Allegheny, Pennsylvania — as well as the City of Allegheny itself — to block the consolidation of Allegheny with the larger City of Pittsburgh. Allegheny and its citizenry raised a number of objections to the consolidation, including claims that it violated the United States Constitution, both as an unlawful impairment of the obligations of contracts under Article I, Section 10, and as a deprivation of property without due process of law under the Fourteenth Amendment. Id. at 176-77, 28 S.Ct. 40. After the Supreme Court of Pennsylvania addressed the relevant state law claims, see In re City of Pittsburg, 217 Pa. 227, 66 A. 348 (1907), the United States
Municipal corporations are political subdivisions of the state, created as convenient agencies for exercising such of the governmental powers of the state as may be intrusted to them.... The number, nature, and duration of the powers conferred upon these corporations and the territory over which they shall be exercised rests in the absolute discretion of the state.... The state, therefore, at its pleasure, may modify or withdraw all such powers, may take without compensation such property, hold it itself, or vest it in other agencies, expand or contract the territorial area, unite the whole or a part of it with another municipality, repeal the charter and destroy the corporation. All this may be done, conditionally or unconditionally, with or without the consent of the citizens, or even against their protest. In all these respects the state is supreme, and its legislative body, conforming its action to the state Constitution, may do as it will, unrestrained by any provision of the Constitution of the United States.
Hunter, 207 U.S. at 178-79, 28 S.Ct. 40 (emphasis added).
Municipalities
A municipal corporation is a political, or governmental, agency of the state, which has been constituted for the local government of the territorial division described[,] and which exercises, by delegation, a portion of the sovereign power for the public good. In its organization, and in the assignment of its powers and duties, the Legislature acts supremely.
174 Tenn. 483, 126 S.W.2d 339, 340 (1939) (quoting MacMullen v. Middletown, 187 N.Y. 37, 79 N.E. 863, 864 (1907)). We have therefore held that “[i]t is elementary that the Legislature ... may give and take away as it chooses [a municipality’s] powers and privileges.” First Suburban Water Util. Dist. v. McCanless, 177 Tenn. 128, 146 S.W.2d 948, 950 (1941).
Traditionally, the power to alter the boundaries of a municipality has been viewed as a natural result of the legislature’s broader power to establish and abolish municipal corporations: “To hold that the legislature could not enlarge the corporate limits by an act passed for that purpose would be to deny that it could create or abolish; for the greater includes the lesser in law, as in mathematics.” Williams v. City of Nashville, 89 Tenn. 487, 15 S.W. 364, 365 (1891). Thus, “[t]he
Until 1955, the primary method in Tennessee for annexation of new territory to the borders of a municipality was by private act of the General Assembly. Wallace Mendelson, Suggestions for the Improvement of Municipal Annexation Law, 8 Vand. L.Rev. 1, 3 (1954); Joe M. Looney, Note, Municipalities — Judicial Review of Annexation, 36 Tenn. L.Rev. 825, 825 (1969); see also Hamilton County v. City of Chattanooga, 203 Tenn. 85, 310 S.W.2d 153, 154-55 (1958). In 1953, however, a limited constitutional convention proposed — and voters adopted — article XI, section 9 of the Tennessee Constitution, including the provision that has come to be known as the “municipal boundaries clause.” Frederic S. Le Clercq, Tennessee Annexation Law: History, Analysis, and Proposed Amendments, 55 Tenn. L.Rev. 577, 580-82 (1988). The clause appears alongside identical restrictions on the creation, merger, consolidation, and dissolution of municipalities: “The General Assembly shall by general law provide the exclusive methods by which municipalities may be created, merged, consolidated and dissolved and by which municipal boundaries may be altered.” Tenn. Const. art. XI, § 9 (emphasis added).
Cecil Sims, a delegate to the 1953 convention, characterized this portion of article XI, section 9 as the product of a “fight for the removal of ... [a] cancer from the body politic” — the cancer being the misuse of private acts against municipal governments. Journal and Proceedings of the 1953 Limited Constitutional Convention 910. As an example of the exploitation of the legislative prerogative, Sims recounted the dissolution of the City of Memphis by private act in 1879:
And consider ... our great sister City of Memphis, with all of its fine people and all of its horses and wagons, and all of its fire engines, and all of its public property was abolished as a municipality and the property it owned, and its people were transferred to the State of Tennessee ... and the great City of Memphis having been robbed of its property paid for by the sweat and toil of its taxpayers, was humiliated by having its property sequestered to the State....
Id. (discussing Act of Jan. 29, 1879, 1879 Tenn. Acts 13); see also id. at 911 (“On three successive occasions, the Charter of the City of Nashville was completely repealed and replaced by another Charter, resulting from a factional fight in city politics, and enacted by the means of local legislation over the protests of the people.... ”). Under the municipal boundaries clause, Sims explained, municipalities
The legislature employed the authority granted under article XI, section 9 to enact chapter 113 of the public acts of 1955 (the “1955 Act”), establishing a general law governing the annexation of land to the borders of existing municipalities. The 1955 Act provided for three mechanisms of annexation: (1) a single referendum by the voters in the area to be annexed, Act of Mar. 1, 1955, § 3, 1955 Tenn. Pub. Acts 382, 384-85 (codified as amended at Tenn. Code Ann. §§ 6-51-104, -105 (2005)); (2) two concurrent referenda by, on the one hand, voters in the area to be annexed and, on the other, voters within the annexing municipality, both of which must be successful to establish annexation, id.; and (3) an ordinance of the annexing municipality, id. § 2 (codified as amended at Tenn.Code Ann. § 6-51-102 (Supp.2008)).
The third of these methods — annexation by ordinance of the annexing municipality — has been described as “[t]he most innovative aspect of the 1955 Act,” Le Clercq, 55 Tenn. L.Rev. at 583, and a “radical change” from prior law, Hamilton County, 310 S.W.2d at 154. This Court later explained the rationale for allowing a municipality to annex new territory on its own initiative:
The whole theory of annexation is that it is a device by which a municipal corporation may plan for its orderly growth and development. Heavily involved in this is control of fringe area developments and zoning measures to the end that areas of unsafe, unsanitary and substandard housing may not “ring” the City to the detriment of the City as a whole. In a word, annexation gives a city some control over its own destiny. The preservation of property values, the prevention of the development of incipient slum areas, adequate police protection within a metropolitan area, and the extension of city services to [t]hose who are already a part of the city as a practical proposition, are the legitimate concern of any progressive city.
City of Kingsport v. State ex rel. Crown Enters., Inc., 562 S.W.2d 808, 814 (Tenn.1978) (emphasis added). This decision of the General Assembly to vest annexation power in municipalities themselves reflects the “perfectly obvious” conclusion “that the city fathers would know far more about the needs and necessity of annexation than would the Legislature.” State ex rel. Senff v. City of Columbia, 208 Tenn. 59, 343 S.W.2d 888, 889 (1961).
The context of the passage of the 1955 Act reveals a corresponding intent by the General Assembly to increase the power of municipalities to deal with developments on their peripheries. The first decade following the Second World War had been marked by a major rise in public interest in the abilities of cities to cope with growth immediately outside their borders.
The 1955 Act granted “[a]ny aggrieved owner of property lying within territory which is the subject of an annexation ordinance” a right to challenge the ordinance via a timely filed quo warranto action alleging that the annexation “reasonably may not be deemed necessary for the welfare of the residents and property owners of the affected territory and the municipality as a whole and so constitute^] an exercise of power not conferred by law.”
[I]f it is a fairly debatable question as to whether or not the ordinance is reasonable or unreasonable^] the courts certainly are not going to take any hand in it one way or the other.... [If the question is, as a matter or law, fairly debatable,] the court should take the matter away from the jury and conclude in favor of the ordinance.
206 Tenn. 411, 333 S.W.2d 924, 930-31 (1960). In the ensuing years, the Court repeatedly cited Morton for the proposition that, if the reasonableness of an annexation is fairly debatable, then any quo warranto action in opposition must fail and the annexation be permitted to move forward. State ex rel. Spoone v. Mayor of the Town of Morristown, 222 Tenn. 21, 431 S.W.2d 827, 829 (1968); State ex rel Robbins v. City of Jackson, 218 Tenn. 322, 403 S.W.2d 304, 306 (1966); State ex rel. Hardison v. City of Columbia, 210 Tenn. 514, 360 S.W.2d 39, 41-42 (1962); State ex rel. Cathey v. City of Knoxville, 211 Tenn. 304, 364 S.W.2d 912, 913 (1962); State ex rel. Campbell v. Mayor of the Town of Morristown, 207 Tenn. 593, 341 S.W.2d 733, 734-35 (1960).
In 1974, the General Assembly enacted a series of amendments to the 1955 Act (the “1974 Amendments”), including a new provision establishing that, in a quo warranto challenge to an annexation ordinance, “[t]he municipality shall have the burden of proving that an annexation ordinance is reasonable for the overall well-being of the communities involved.” Act of Mar. 28, 1974, § 4, 1974 Tenn. Pub. Acts 1111, 1113 (codified at Tenn.Code Ann. § 6-51-103(c) (2005)). This section of the 1974 Amendments “destroyed all presumptions of validity and demolished the ‘fairly debatable’ rule” established by Morton. Crown Enters., Inc., 562 S.W.2d at 812; see also Pirtle v. City of Jackson, 560 S.W.2d 400, 401 (Tenn.1977). Moreover, in State ex rel. Moretz v. City of Johnson City, 581 S.W.2d 628, 631-32 (Tenn.1979), this Court concluded that a challenge to the reasonableness of an annexation in quo warranto included the entitlement to a trial by jury, a development that, as a practical matter, had a significant adverse effect upon the expansion of municipal territories.
In 1998 (shortly after the City of Memphis enacted Ordinance No. 4513 in regard to the annexation of Area 42) the General Assembly adopted additional amendments further refining the procedures for annexation and quo warranto challenges. Act of May 1, 1998, 1998 Tenn. Pub. Acts 1157 (the “1998 Amendments”); see also State ex rel. Tipton v. City of Knoxville, 205 5.W.3d 456, 465-68 (Tenn.Ct.App.2006) (upholding constitutionality of 1998 Amendments), perm. app. denied (Tenn. 2006).
II. The Plaintiffs’ Cause of Action
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 *7. 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.
Under the principles of our constitution, the General Assembly “could have delegated to the municipalities the
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 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 oumer 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)(l)(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 color-able 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
Moreover, the Plaintiffs cannot avail themselves of Earhart because they, unlike the claimants in Earhart, could have filed a timely quo warranto challenge.
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
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 different jurisdictions for purposes of this analysis.
Highwoods Properties II, 2007 WL 4170821, at *12.
I. Background
The relevant language of article II, section 28 of the Tennessee Constitution provides that “[e]ach respective taxing authority shall apply the same tax rate to all property within its jurisdiction.” This language was adopted by a 1971 constitutional convention and approved by general election on August 3, 1972. See generally Sherwood Co. v. Clary, 734 S.W.2d 318, 320 (Tenn.1987) (“Article 2, § 28, of the Tennessee Constitution was extensively revised by an amendment adopted in 1972.”); Snow v. City of Memphis, 527 S.W.2d 55, 58 (Tenn.1975) (discussing history of the 1972 amendment of section 28); So. Ry. Co. v. Fowler, 497 S.W.2d 891, 893 (Tenn. 1973) (same). Prior to 1972, however, the Constitution of 1870 imposed a similar restriction. Article II, section 28 required that “[a]ll property shall be taxed according to its value, that value to be ascertained in such manner as the legislature shall direct, so that taxes shall be equal and uniform throughout the state.” See Albert v. Williamson County, 798 S.W.2d 758, 759 n. 1 (Tenn.1990). Article II, section 29 of the 1870 Constitution applied this restriction to taxation by municipalities:
The General Assembly shall have power to authorize the several counties and incorporated towns in this state, to impose taxes for county and corporation purposes respectively, in such manner as shall be prescribed by law; and all property shall be taxed according to its value, upon the principles established in regard to state taxation.
Albert, 798 S.W.2d at 760 (emphasis added). These provisions, read together, “require that there shall be uniformity of valuation and assessment of property for purposes of taxation, and that the tax levy for any given purpose shall be uniform throughout the territory to which it is applied.” King v. Sullivan County, 128 Tenn. 393, 160 S.W. 847, 848 (1913); see
Over one hundred years ago, the Court concluded that a private act annexing new territory to the City of Memphis, but exempting the newly-annexed area from certain city taxes for a ten-year period, violated sections 28 and 29 of article II of the 1870 Constitution:
This court is of opinion that sections 3 and 4 of chapter 6 are clearly unconstitutional and void, inasmuch as they exempt the annexed territory from taxes for fire, light, and police protection for 10 years, and for the same time expressly prohibit the district from having the advantages of this protection. The court is of opinion that taxation must always be uniform and equal throughout the extent of the same jurisdiction; that state taxes must be equal and uniform throughout the state; that county taxes must be equal and uniform throughout the county; and that a city tax must be equal and uniform throughout the city, so far as revenues for current expenses or future wants are concerned....
Jones v. City of Memphis, 101 Tenn. 188, 47 S.W. 138, 139 (1898). In many contexts, “the [amended] language of the equal and uniform clause has the same meaning as the 1870 version.” Albert, 798 S.W.2d at 761; but see Sherwood Co., 734 S.W.2d at 320 (discussing effect of amendment on application of equal and uniform clause to different classifications of property).
II. Equality and Uniformity of Taxation in Area 42
The Plaintiffs insist that the terms of the consent judgment permit the City to impose a scheme of taxation in direct violation of Jones. They base their claim on the following language in section 6-51-103(d):
Should the court find the ordinance to be unreasonable, or to have been done by exercise of powers not conferred by law, an order shall be issued vacating the ordinance and the municipality shall be prohibited from annexing, pursuant to the authority of § 6-51-102, any part of the territory proposed for annexation by such vacated ordinance for a period of at least twenty-four (24) months following the date of such order. In the absence of such finding, an order shall be issued sustaining the validity of such ordinance, which shall then become operative thirty-one (SI) days after judgment is entered unless an abrogating appeal has been taken therefrom.
Tenn.Code Ann. § 6-51-103(d) (emphasis added). While acknowledging that the language in the consent judgment provides otherwise, the Plaintiffs contend that both Areas A and B became part of the City thirty-one days after the entry of that judgment, because, by the terms of this statute, the entire ordinance had become “operative.” Because both areas have been annexed by the terms of the legislation, but only Area A is subject to city taxes, the Plaintiffs argue that an unequal taxing scheme is the result.
This argument rests on a faulty assumption that there is no difference between the effective date of the ordinance and the effective date of the annexation. In our view, although the entire ordinance became operative thirty-one days after the entry of the consent judgment, the very terms of that judgment also properly delay the annexation of Area B until a later date. See Bastnagel, 457 S.W.2d at 534-35 (holding that the date on which an annexation ordinance becomes operative is not necessarily “the actual date of annexation”). The actual date of annexation for Area B has been merely postponed by a term contained within the judgment approved by
Moreover, our ruling on this issue does not create the risks identified by the Court in Jones:
The logical result of the contrary holding as to taxation would be that, in every city, taxes might be different in different wards, and on different streets; in every county, taxes might be different in every civil district; in the state, taxes might be different in every county, and in each division, — all clearly in violation of the constitution and our whole theory of equal and uniform taxation. So, also, it cannot be maintained that a section of territory may be brought within the city limits, and made part of the city, and yet be excluded by express enactment from the benefits extended to other portions of the city.
47 S.W. at 139. In this instance, we are not dealing with territory “brought within the city limits, and made part of the city.” To uphold the system of taxation within the City in no way approves of the establishment of different levels of taxation “in different wards, and on different streets” of a municipality.
Conclusion
In summary, the relevant and material allegations in the Plaintiffs’ complaint, even if true and correct, do not constitute a cause of action upon which relief may be granted.
The judgment of the Court of Appeals is affirmed. Costs are assessed to the Plaintiffs, for which execution may issue if necessary.
WILLIAM C. KOCH, JR., J. filed a separate dissenting opinion.
. This opinion refers to “Area A” and "Area B” for the purposes of clarity; however, as the map shows, neither the subsections bearing “A" designations nor the subsections bearing “B" designations are contiguous. Thus, Area A is, in fact, three areas, all of which border Memphis, but none of which share borders with each other. Similarly, Area B consists of two areas, both of which
. This Court has remarked that "we are not convinced that there is an ordinary meaning" for the term "municipality.” Chapman v. Sullivan County, 608 S.W.2d 580, 582 (Tenn.1980). For the purposes of this opinion, '"municipality” refers to a municipal corporation and its boundaries.
. The 1955 Act was not the only high-profile step taken by the General Assembly during
. "The propriety of quo warranto as a remedy for attacking the legality of municipal annexation proceedings has often been affirmed by the courts.” 18 A.L.R.2d 1255, Proper remedy or procedure for attacking legality of proceed
. One legal scholar described Moretz and the 1974 Amendments as, respectively, "the most devastating judicial and legislative blows to municipal annexation in the ... history of the 1955 Act,” with Moretz being "probably the more ruinous of the two” because it “makes municipal annexation hostage to the caprice of even a single hold-out juror.” Le Clercq, 55 Tenn. L.Rev. at 639.
. The 1998 Amendments were drafted to create a statutory scheme that:
(1) Eliminates annexation or incorporation out of fear;
(2) Establishes incentives to annex or incorporate where appropriate;*707 (3) More closely matches the timing of development and the provision of public services;
(4) Stabilizes each county’s education funding base and establishes an incentive for each county legislative body to be more interested in education matters; and
(5) Minimizes urban sprawl.
Act of May 1, 1998, § 3 (codified as amended at Tenn.Code Ann. § 6-58-102 (2005)).
. A declaratory judgment action is a relative novelty in the law. Snow v. Pearman, 222 Tenn. 458, 436 S.W.2d 861, 863 (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, 201 Ga. 396, 40 S.E.2d 133, 137 (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.2d 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).
. 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.
. The Plaintiffs make a significant point of arguing that "operative” and "effective” are synonymous. The issue in this case, however, is not whether there is a difference between an ordinance being operative and the ordinance being effective. The issue is whether there is a difference between an ordinance being operative and a portion of the annexation described in the ordinance being effective.
. Because we affirm the trial court's decision on the above-stated grounds, we are not required to address the additional questions raised by the City: whether dismissal was warranted by the Plaintiffs’ failure to join indispensable parties in their suit; whether the Plaintiffs had standing under the Declaratory Judgment Act; and whether the Plaintiffs' complaint was barred by the doctrines of res judicata and collateral estoppel.
Dissenting Opinion
dissenting.
At the heart of this case is the operation of the checks and balances that influence
I.
On November 4,1997, the Memphis City Council enacted an ordinance to annex several tracts of real property referred to as “Area 42.” The effective date of this ordinance was January 1, 1998. On December 3, 1997, several owners of the property located in Area 42 filed three quo warranto proceedings in the Circuit Court for Shelby County challenging the reasonableness of the annexation. These cases were consolidated but then languished in the courts for years.
On December 29, 2005, Highwoods Properties, Inc. (“Highwoods”), also an owner of property in Area 42, filed a quo warranto action in the Circuit Court for Shelby County. In an amended complaint filed one month later, Highwoods and other parties alleged that a “potential [consent [jjudgment” between the City of Memphis and the 1997 plaintiffs was not only detrimental to the Highwoods parties but also inconsistent with the terms of the 1997 annexation ordinance.
As it turned out, the 1997 plaintiffs and the City of Memphis had settled their almost ten-year-old dispute. Their agreement effectively amended the 1997 annexation ordinance. Instead of simultaneously annexing all of Area 42, the compromise called for annexing part of Area 42 on December 81, 2006, and the remainder of Area 42 on December 31, 2013. Neither the city attorney nor the 1997 plaintiffs obtained the Memphis City Council’s approval or ratification of their compromise.
The trial court dismissed the Highwoods parties’ quo warranto complaint on March 3, 2006. On June 8, 2006, the trial court entered a final judgment by consent disposing of the consolidated 1997 quo war-ranto complaints. This judgment approved and made the compromise two-step annexation of Area 42 part of the decree. On October 24, 2006, the Highwoods parties filed a new complaint for declaratory judgment in the Circuit Court for Shelby County challenging the validity of the compromise two-step annexation process included in the June 8, 2006 order. The Highwoods parties stated that the compromise two-step annexation unlawfully circumvented the statutory annexation procedures by effectively amending the original 1997 ordinance without action by the Memphis City Council.
The City moved to dismiss the High-woods parties’ declaratory judgment complaint on several grounds, including the ground that the complaint was not timely filed. In its January 22, 2007 order, the
II.
The power of annexation is essentially legislative in character. City of Kingsport v. State ex rel. Crown Enters., Inc., 562 S.W.2d 808, 811 (Tenn.1978); 2 Dennis Jensen & Gail O’Gradney, McQuillin Law of Municipal Corporations § 7.10 & n. 2 (3d ed. 2008). Prior to the mid-1950s, this power was wielded by the General Assembly through the enactment of private acts. Wallace Mendelson, Suggestions for the Improvement of Municipal Annexation Law, 8 Vand. L.Rev. 1, 3 (1954). The General Assembly’s power was considered to be plenary. Thus it was conceded that the General Assembly could change municipal boundaries at its “pleasure,” Daniel v. Mayor of Memphis, 30 Tenn. (11 Hum.) 582, 583-84 (1851), and that there could be no judicial review of the General Assembly’s actions, McCallie v. Mayor of Chattanooga, 40 Tenn. (3 Head) 317, 321 (1859).
In 1953, the citizens of Tennessee ratified an amendment to Article XI, Section 9 of the Tennessee Constitution that authorized the General Assembly to delegate its annexation power to the municipalities themselves. This amendment contained a “municipal boundaries clause” that provided that “[t]he General Assembly shall by general law provide the exclusive methods by which municipalities may be created, merged, consolidated and dissolved and by which municipal boundaries may be altered.”
In 1955, as a result of this amendment to Article XI, Section 9, the General Assembly enacted the statutory framework that has governed annexations ever since.
The annexation statutes themselves provided the basis for these reasonableness challenges. Tenn.Code Ann. § 6-51-103(a)(1)(A), -103(a)(2)(A) limited them to determining whether the annexation was “deemed necessary for the welfare of the residents and property owners of the affected territory and the municipality as a whole.” TenmCode Ann. § 6-51-
Eventually, the reasonableness inquiry was broadened to include procedural defects in the passage of the annexation ordinance. In 1978, this Court observed that even though
[t]he courts are not expressly or impliedly authorized to void a municipal ordinance for failure of the municipality to give notice, hold a public hearing, or submit a plan of services to the local planning commission[,] .... a city would be unable to carry the burden of proving that the annexation was reasonably necessary for the welfare of the residents and property owners of the affected territory and the municipality as a whole without a public heai'ing after the required notice.
City of Oak Ridge v. Roane County, 563 S.W.2d at 897-98. One year later, we narrowed City of Oak Ridge v. Roane County by stating that to be actionable, the procedural defects in the enactment of an annexation ordinance must result in “constitutional infirmities.” City of Watauga v. City of Johnson City, 589 S.W.2d 901, 905 (Tenn.1979).
None of these cases addressed the question of whether the statutory quo warranto proceeding authorized by TenmCode Ann. § 6-51-103(a)(l)(A) was the exclusive remedy for challenging an annexation ordinance. That question was answered in 1998 when this Court held that “[t]he validity of an annexation ordinance alleged to exceed the authority delegated by the legislature is subject to challenge under the Declaratory Judgment Act.”
The decision in State ex rel. Earhart v. City of Bristol is significant for a second reason. The declaratory judgment action in the case had been filed approximately two years after the challenged annexation ordinance had become effective. Thus, even though the Court did not directly address the question of the time within which the declaratory judgment action must be filed, the decision approving the declaratory judgment action necessarily means that declaratory judgment actions challenging annexation ordinances on grounds other than reasonableness need not be filed within thirty days after the effective date of the challenged annexation ordinance. I concur completely with this conclusion.
Because of its legitimate concern about piecemeal challenges to annexation ordi
III.
For the purposes of this case, I will concede the appropriateness of the limitations that the Court is placing on declaratory judgments that challenge annexation ordinances.
The first requirement is that a quo war-ranto action cannot be available to the parties filing the declaratory judgment action. The Court has decided that the Highwoods parties cannot satisfy this requirement because they could have filed a quo warranto in late 1997 or early 1998. True enough. To challenge the reasonableness of the 1997 annexation ordinance, the Highwoods parties would have been required to file a timely quo warranto action.
In this proceeding, the Highwoods parties are squarely challenging the legality of the settlement of the 1997 litigation regarding the original annexation ordinance. They are asserting that the negotiation and acceptance of this settlement which varies from the terms of the original 1997 annexation ordinance is ultra vires. As is well stated by the Court, the Highwoods parties have requested the invalidation of the June 8, 2006 consent final judgment because
“[a] genuine dispute exists as to whether the ... Ordinance, as amended through the Consent Final Judgment and Amended Consent Final Judgment[,] is valid.” The Plaintiffs argued that the settlement constituted “an attempt to unlawfully circumvent the exclusive procedures established by the General Assembly” by effectively amending the Ordinance to incorporate the two-tiered annexation schedule, without enacting a new ordinance.
The Highwoods parties could not have asserted this claim by quo warranto or
The second requirement is that the party filing the declaratory judgment action must be claiming that the annexation ordinance was ultra vires. The Highwoods parties are asserting just such a claim. They claim that by allowing a city attorney and private parties to amend an annexation ordinance without ratification or approval from the city’s legislative body, the annexation became ultra vires and invalid because it exceeds the annexation authority delegated by the General Assembly.
Two years ago, the Court of Appeals addressed the challenge to the validity of an annexation ordinance that had been modified by consent order. Distinguishing between a reasonableness challenge and an ultra vires challenge, the court concluded that the party challenging the annexation ordinance “lost its legal right to challenge annexation of its property on the grounds of reasonableness thirty days after passage of the annexation ordinance when it did not file a quo warranto proceeding.” Blount v. City of Memphis, No. W2006-O1191-COA-R3-CV, 2007 WL 1094155, at *4 (Tenn.Ct.App. Apr. 13, 2007) (No Tenn. R.App. P. 11 application filed). Nevertheless, the court held that the bar to challenging the reasonableness of the annexation ordinance did “not preclude, impair or impede [the party’s] ability to litigate its claim that the ‘new’ or ‘modified’ ordinance is invalid in a declaratory judgment action.” Blount v. City of Memphis, 2007 WL 1094155, at *4. I agree with the reasoning of the Court of Appeals in this case.
The Highwoods parties’ declaratory judgment action is aimed precisely at the invalidity of the modified annexation ordinance. Their complaint alleges that the city attorney and private parties may not modify a duly enacted annexation ordinance. If the Highwoods parties are correct and such authority does not reside with the city attorney and private parties, then the 2006 consent decree modifying the 1997 annexation ordinance cannot be given legal effect because the compromise ordinance has not been ratified or adopted by the Memphis City Council.
IY.
I share the Court’s concern about piecemeal annexation litigation. However, I am equally concerned about the preservation of the careful balancing of interests that the General Assembly engaged in when it empowered municipal legislative bodies to annex adjoining property by ordinance. This case reveals a potentially problematic unbalancing of these compromises because in this case, an executive branch official— the city attorney — and private parties appear to be performing a legislative act with the city’s legislative body sitting on the sidelines. It is my belief that the High-woods parties are entitled to present to the courts the important issue of whether such an approach to annexation is ultra vires and to have the issue decided on the merits.
.Act of Mar. 8, 1955, ch. 113, 1955 Tenn. Pub. Acts 382 (codified as amended at Tenn. Code Ann. §§ 6-51-101 through -120 (2005 & Supp.2008)).
. Tenn.Code Ann. § 6-51-102.
. Tenn.Code Ann. §§ 6-51-104,-105.
. See Tenn.Code Ann. §§ 29-14-101 through-113 (2000).
. It is appropriate to note that the limitations that the Court imposes on declaratory judgments challenging annexation ordinances undermine two intermediate appellate court decisions that had construed State ex rel. Earhart v. City of Bristol more broadly. Accordingly, it appears that no further reliance can be placed on Town of Oakland v. Town of Somerville, No. W2002-02301-COA-R3-CV, 2003 WL 22309498, at *7 (Tenn.Ct.App. Oct. 7, 2003), perm. app. denied, (Tenn. Mar. 22, 2004) and Jefferson County v. City of Morristown, No. 03A01-9810-CH-00331, 1999 WL 817519, at *1 (Tenn.Ct.App. Oct. 13, 1999) (No Tenn. R.App. P. 11 application filed).
. In fact, the Highwoods parties did attempt to file a quo warranto action challenging the reasonableness of the 1997 annexation ordinance, but their suit was properly dismissed because it was not filed timely. Highwoods Props., Inc. v. City of Memphis, No. W2006-00732-COA-R3-CV, 2006 WL 3628102 (Tenn. Ct.App. Dec. 14, 2006) (No Tenn. R.App. P. 11 application filed).