Anti-tax hike referendum legal battle over: Tennessee Supreme Court declines appeal

The legal battle over a 2020 anti-tax hike referendum effort is over.

The Tennessee Supreme Court on Thursday declined to hear the Davidson County Election Commission's appeal challenging Metro's handling of a petition-driven referendum effort to strike down the city's 34% property tax increase.

Petition group 4 Good Government first attempted to trigger a referendum election in 2020, aiming to curb Metro government's power to increase property taxes and change how Nashville handles public official recalls, sports team deals and more. A trial court judge struck down that effort.

The group launched another referendum push in 2021, which was also struck down by a trial court judge later that year.

The Davidson County Election Commission took the case to the Tennessee Court of Appeals, which ruled in March that the commission acted illegally when it decided to hold the anti-tax hike referendum in 2021.

The commission voted 3-2 in April to take the case to the state Supreme Court in hopes of answering the following:

  • Whether the court has the power to "undo an election" and then reschedule it.

  • Whether Metro's pre-election legal challenge of the "form" of the referendum petition and its initiatives was valid.

  • What the Metro Charter's language means regarding the requirement for a petition to set an election date.

The last question is now moot – voters approved an amendment to Nashville's charter in May that lays out a new, more detailed process for altering the charter via referendum by petition.

In its refusal to consider the appeal, the state supreme court designated the Court of Appeals opinion in the case "not for citation," meaning it has "no precedential value" according to Supreme Court rules.

Commission Chairman Jim DeLanis said Thursday that "Metro government and anti-voter groups" sued the commission six times to "challenge" voter rights, which the commission is tasked to defend.

"The Tennessee Supreme Court did not approve the decisions below but decided not to intervene. They rejected the analysis of Metro and the anti-voter groups and ruled that the lower court's decisions have no precedential value and may not be relied on in the future," DeLanis told The Tennessean. "As chairman, I respect the Supreme Court's decision, but I am disappointed that, unfortunately, the voters will not have the opportunity to vote on these important issues."

Metro Law Director Wallace Dietz said the city's legal department advised the commission that 4 Good Government's second attempt to place the referendum on the ballot was "legally defective."

The commission moved forward anyway, but "despite nearly a million taxpayer dollars spent on outside counsel, the Election Commission failed to convince a single judge that this petition belonged on the ballot," Dietz said in a statement Thursday.

"We are pleased to see this lengthy and costly litigation put to rest," Dietz said.

Attorney Daniel Horwitz served as counsel for the Nashville Area Chamber of Commerce and Save Nashville Now in their amicus curiae brief on the case, which was heavily cited in the Court of Appeals' opinion.

"Compliance with straightforward and longstanding legal requirements is not voluntary, and ignoring provisions of the Metro Charter while depriving opponents of fair notice because a bare majority of the Election Commission supports a particular measure is impermissible," Horwitz wrote in a statement Thursday. "This is the end of the road for this ill-conceived litigation and egregious waste of taxpayer money."

As of Thursday, the lengthy legal battle related to both referendum attempts cost Davidson County taxpayers upwards of $1.1 million.

Most of the money spent – $891,586.88 – went to outside counsel retained by the Election Commission for the most recent case. Metro mostly relied on its salaried, in-house attorneys for work related to both cases — an option the Election Commission didn't have, DeLanis said.

The election commission hired Vanderbilt University Professor James Blumstein and Bradley Law Firm attorney Austin McMullen in April 2021 for the most recent referendum case. McMullen charged a "discounted" hourly rate of $460 and said he would take an additional 20% off his fees if costs exceeded $60,000, according to engagement letters between the men and DeLanis. Blumstein told the commission in June 2021 his rate was $800 an hour.

As of April, Metro spent $14,219.50 on the most recent case, including $5,440 for outside counsel from former Metro Director of Law Bob Cooper, $4,800 for outside counsel from William Koch, and $3,899.50 for court reporters and court clerk fees.

The legal costs for the first referendum court battle cost the Election Commission $214,927, the Tennessee Lookout reported. Metro's costs associated with outside counsel, court reporters and clerk fees for that litigation totaled about $19,360.

"The rights of the voters to have a voice in their government is an important right," DeLanis said in response to criticism of the roughly $1,106,500 spent on outside counsel for the commission over the course of both referendum-related cases. "Those rights were put under attack and … as chairman, I believe that the commission had to defend the rights of the voters."

This article originally appeared on Nashville Tennessean: TN Supreme Court declines to hear anti-tax hike referendum appeal