Explainer Episode 33 – Litigation Update: Shaw v. Metro. Gov’t

On January 26, the Tennessee State Supreme Court heard oral arguments in Shaw et. al. v. Metropolitan Government of Nashville and Davidson County, a case in which the plaintiffs are challenging a zoning provision that prevented them operating businesses out of their homes. The city argues that the provision is “rationally related to the legitimate goal of protecting the residential nature of neighborhoods,” while the plaintiffs contend the provision violates their state constitutional rights to substantive due process and equal protection.

Paul Avelar and Braden Boucek, who are representing the plaintiffs in the case, joined the podcast to break down the case from their clients’ point of view.

Transcript

Although this transcript is largely accurate, in some cases it could be incomplete or inaccurate due to inaudible passages or transcription errors.

[Music and Narration]

 

Introduction:  Welcome to the Regulatory Transparency Project’s Fourth Branch podcast series. All expressions of opinion are those of the speaker.

 

Jack Derwin:  On January 26, 2022, the Tennessee State Supreme Court heard oral arguments in Shaw et. Al. v. The Metropolitan Government of Nashville and Davidson County. Braden Boucek and Paul Avelar, who represented the plaintiffs in the case, joined us to break down the case from their clients’ point of view.

 

We hope you enjoy.

 

Welcome to the Regulatory Transparency Project’s Explainer podcast, part of RTP’s Fourth Branch podcast series. My name is Jack Derwin, and I’m Assistant Director of RTP at The Federalist Society. Today, I’m very excited to be joined by Paul Avelar and Braden Boucek to discuss the Tennessee State Supreme Court case centered around zoning restrictions for home recording studios.

 

Paul Avelar is the Managing Attorney with the Institute for Justice, Arizona office. He joined the Institute in March 2010 and litigates free speech, property rights, economic liberty, school choice, and other constitutional cases in federal and state courts, including the case we’ll be discussing today.

 

And Braden Boucek, who will serve as a moderator of sorts for our discussion today, is Director of Litigation at the Southeastern Legal Foundation. Previously, Braden was Vice President of Legal Affairs at the Beacon Center of Tennessee and an Assistant United States Attorney in Nashville and Memphis.

 

And with that, Braden, I’ll pass things over to you.

 

Braden Boucek:  Yeah. Thanks for passing it off. I’m excited to be here today. I’m especially excited to be here with my frequent partner in litigating for liberty, Paul Avelar. For those of you who don’t know, Paul is widely regarded as one of the best litigators in the movement. It’s an honor to be on air with him. Paul is, perhaps, best known, however, for pulling the whistling belly button trick at the talent competition of the Western Chapter’s Conference. 

 

How are you doing, Paul? 

 

Paul Avelar:  It’s great. Braden, I’m glad to see you are taking this with all the seriousness that you usually take things. It’s good to be here and fun to be talking about a case that we are both very well familiar with for many years now.

 

Braden Boucek:  Well, let’s get into it. This has been a case four years in the making. Am I counting that correctly, Paul? Let’s talk on business here. 

 

Paul Avelar:  So, first of all, what’s a home-based business? Well, it’s a business that’s based in the home. It’s right there in the name, pretty simple. But a lot of people don’t recognize how common these are and how important they are. So home-based businesses are incredibly common across the US, and most of the time, we don’t even know that they’re there. Research, even before COVID-19 hit, showed that lots of people were running businesses from their homes. These people tended to be much smaller size operations, mostly worked by themselves, and they ran the gamut of all sorts of different types of home-based businesses.

 

And this is not a surprise. This has been going on for many, many years, especially with the growth of the information age. And the internet made it easier for people to do these things. So we’ve done a number of studies. Other organizations like Beacon and Goldwater have looked at home-based businesses and, honestly, even as much as 20-plus years ago, law professors like Nicole Stelle Garnett at Notre Dame were looking at home-based businesses and regulatory problems and why we needed to be thinking about reforms in these areas.

 

So this case is really an outgrowth of what we’ve seen nationally, which is common, every day, every place sorts of home-based businesses running into regulatory restrictions that just don’t make any sense.

 

Braden Boucek:  Yeah. And, of course, it has newfound saliency now in the area of COVID, when so many of us were, actually, forced to work from home and found that we could do so incredibly effectively.

 

Paul Avelar:  Yeah, we did a study recently that said that––of the people that we surveyed––one in three started their home-based business after a pandemic-related job loss, and one in four did so after pandemic-related business closures. So this has become all the more important in just the last two years, and frankly, I think we’re looking at a long-term realignment in the way that Americans think about where and how they work. 

 

Braden Boucek:  Sure. And, of course, that happened as the case unfolded. So naturally, the regulators have kept pace with the developments in society, right? I mean, surely, those regulatory barriers that preexisted COVID were removed.

 

Paul Avelar:  They were kind of removed in some places, in some ways, temporarily, which we’ll get into, I think, later as we talk about the specifics of this case. I think there’s been a greater recognition that something needs to change, but that hasn’t always made its way into the law. And so, that’s part of the problem we’re dealing with now. 

 

Braden Boucek:  Well, let’s start talking about the case a little bit because you’ve got two great clients in this case—Lij Shaw and Pat Raynor. So tell us a little bit about them. And what can’t they do that they wanted to do?

 

Paul Avelar: I’ll start with Pat because Pat’s been dealing with this even longer than Lij has—for almost a decade now. Pat is a widow. She’s older, and she’s a state-licensed cosmetologist. And in order to continue to make the payments on her house and continue to support herself, she decided to build a home-based, single-chair salon where she could, essentially, spend her golden years continuing to work and continuing to support herself. And she was up and running for just a couple of months when someone––and we don’t know who, and neither does the City of Nashville––called in a complaint, and Pat was shut down, not because she was doing anything bad but just because she had clients at her home. 

 

And Lij has a home recording studio. And in fact, just before he got shut down by the City of Nashville, a record that was recorded and mixed in his home studio won a Grammy award. So this is a real set-up here. Lij started his home-based recording studio so that he––he’s a single father––so he could take care of his daughter and continue to earn a living.

 

Once again, someone, totally anonymously, complained about Lij, and based on the fact that he had a website alone, he got shut down. This happened to both Pat and Lij many, many years ago. Ever since then, they’ve been scrambling to make ends meet. And, really, that’s what this lawsuit is about—the fact that both of these good people who were doing things that were perfectly innocuous and perfectly innocent were no longer allowed to use their property to earn an honest living.

 

Braden Boucek:  Yeah. And let me follow up on that. I mean, it isn’t just that they’re innocuous. I mean, we’re talking about home studios. They have to be professionally soundproofed, right? It’s baked into the nature of the business that it cannot disrupt neighbors. And the other thing I want to say is I’m a native Nashvillian. I’ve lived here pretty much my whole life, and living in and amongst the music community is not a problem in Nashville. It’s actually kind of one of the coolest things about Nashville. And home studios are utterly common. I could tell you that home studios are everywhere. Some of the famous and most biggest names in Nashville have home professional recording studios. And, in fact, true story, I actually did — my prom breakfast was at a very well-known singer songwriter’s house, and he had a home studio we all thought was pretty cool when we were dopey high schoolers.

 

Paul Avelar:  Well, I mean, it’s not called Music City for nothing. The irony of these regulations is that they make it much more difficult to make music in Music City. 

 

Braden Boucek:  Yeah, it’s, in fact, illegal to make music in Music City. That’s the tagline, right? 

 

Paul Avelar:  Well, I mean, you could make music. You just can’t record it. And if you do record it, you can record it for your friends but not for clients. And what the difference between that is, frankly, Nashville doesn’t exactly know either. You get this horrible system—again, we’ll be talking about this––where Nashville’s own code enforcement officials basically recognize that because this is all done via anonymous complaint — they don’t know why anyone’s complaining. They don’t know if there’s a real problem. They fully recognize that this is a weaponized system where neighbors who have bad blood can sic the city on their neighbors for no good reason. It’s just a really, I’ll say, counterproductive system. I think some of the other words I would have used probably would have been bleeped out. 

 

Braden Boucek:  So it’s not unfair to say then that it makes you an outlaw to make music in Music City. 

 

Paul Avelar:  I think that’s right.

 

Braden Boucek:  And we all know what outlaw country is, but this kind of brings new meaning to the term. 

 

Paul Avelar:  I thought outlaw country wasn’t done in Nashville anymore. I thought you had to go to Texas for that.

 

Braden Boucek:  Outlaw was always frowned upon in this establishment, but it happened here, nevertheless. In fact, a lot of people don’t know, but outlaw country was, more or less, invented in a studio known as Hillbilly Central, which was the brainchild of Tompall Glaser. But Waylon Jennings actually lived, practically, in the upstairs part of the studio. So this is nothing new—to live where you make music.

 

Paul Avelar:  Absolutely. So let’s talk about that a little bit more, this — what specifically was at issue here. So strictly speaking, it wasn’t illegal to have a home-based business in Nashville. There was a whole lot of hoops you had to jump through to do that, though, and there were a whole lot of restrictions that came with that. And one of those restrictions was what we’re talking about here—the client prohibition. It made it illegal for Pat and Lij to have clients to their home-based business. Now, not all home-based businesses were similarly restricted. Owner-occupied, short-term rentals––of which there are somewhere between 3,000 and 5,000 of them in Nashville––it seems, those are perfectly legal. And other sorts of businesses, it was legal to have clients as well, but only those preferred, privileged home-based businesses were allowed, and everyone else was forbidden.

 

Braden Boucek:  So the hook here, what makes it illegal, is not the business itself. It’s the fact that you’ve got clients. Although, some types of businesses are allowed to have clients on top of it. But pulling the lens back a little bit, I mean, let’s just think about some of the very, utterly commonplace businesses that take place in homes, that see clients—I mean, swimming lessons, for instance, right? Would swimming lessons — when you have people come swim in your back door pool, that would be illegal, right, Paul? What about home Yoga studios? I mean, these are things that we’re all very familiar with. These things all would have been unlawful under Metro’s law, right?

 

Paul Avelar:  All illegal, as Metro’s own spokesman said in a deposition. There was a little old lady who taught piano lessons from her home who lived in his same neighborhood, and he fully recognized that what she did was illegal, and he hoped that no one would complain about her to turn her in. But that’s the kind of ridiculousness that we saw. I mean, any law that says something as commonplace and ordinary as piano lessons is illegal — I mean, that’s just a law that’s — you can’t even say it’s going to be honored in the breach. It’s not going to be honored at all, and Nashville itself recognized this.  

 

They knew that there were hundreds, if not thousands, of totally illegal home-based businesses that ran for years and years and years because no one ever complained about them because no one ever knew that they were there. So why was Nashville banning something that you couldn’t even know was happening if you stood outside and looked at it. That’s part of the silliness of this. And I think that sort of gets back to the silliness of how this law came in to place in the first place, which is no one knows.

 

The client prohibition first appears in Metro’s code in 1998, and no one knows how it got there. And there’s no history of legislative discussion about it. There’s nothing. It just seems to have popped up, fully formed, out of Zeus’s head in 1998, and there we go. We’re off and running, and that’s the regime in which Pat an Lij found themselves trying to earn an honest living against this law that literally came from nothing.

 

Braden Boucek:  Yeah. And, I mean, I hope we get a chance to talk a little bit about the deposition witnesses, including the one that you referenced earlier who mentioned the piano instructor. To just jump ahead a little bit, this was a witness that the city offered up that turned out to have been my across-the-street neighbor when I was growing up, right? And that was one of the just surprising and fortuitous things that happened. And the actual little old lady he was talking about who gave the piano instructions gave me piano instruction. And so, you really couldn’t invent a better set of facts to underscore the outright silliness of the law, to use your word.

 

But was the city really — the city wasn’t then sending out police to investigate this, right? It was just when people were complaining. Does that make it better or worse?

 

Paul Avelar:  In a lot of ways, that makes it worse. The way the city enforced this was — the city fully recognized they could never actually enforce the law, so they relied entirely on tips, basically—complaints. And the city system is entirely anonymous. They don’t know who complains. They don’t know why they’re really complaining. All they do is they get an anonymous tip, and then someone from the code inspector’s office will go out and look. 

 

And again, we’re skipping ahead a little bit, but the code inspector involved in this case actually investigated both Pat and Lij. And for Pat, she showed up and she watched Pat’s house for a while and, eventually, she saw a couple little old ladies coming out with, in her words, freshly coiffed hair. That was the evidence that Pat was doing something wrong. 

 

And in Lij’s case, she looked at Lij’s website and it said, “Well, we’re a recording studio.” And so, both Pat and LIJ got shut down that way. Again, this is the sort of thing where they’re unenforceable. And so, you get this really, at base, arbitrary enforcement anyway. It’s only if someone gets a complaint, and the complaints aren’t even evidence that they’ve done anything wrong. 

 

Braden Boucek:  Yeah, that’s alarming. But tell me why this is a constitutional law case. I mean, what right did Metro violate?

 

Paul Avelar:  Well, strictly speaking, Metro violated two of our clients’ rights. The first is the right to earn an honest living, which the Tennessee Supreme Court has said is a fundamental right. The second right that they violated is the right to use and enjoy property, also, by the way, previously recognized by the Tennessee Supreme Court as a fundamental right. And they all occur, basically, against this baseline of — laws have to actually serve a purpose and do so rationally, reasonably. And that’s really the problem here is that whatever Metro thinks it’s doing — and, again, this is a restriction that actually was created, apparently, without any thought. Metro didn’t actually think about what it was doing or say what it was doing. Whatever they were trying to do, they’re not doing it here. Pat and Lij aren’t causing any harms. You can’t just stop people from doing something because you feel like it. There has to be a real––if we’re using the language of the police power––public health, safety, welfare, morals sort of reason. And what Pat and Lij do, don’t tick any of those boxes. So that’s really the problem here.

 

Braden Boucek:  Paul, this sounds alarmingly like a rational basis case, which I have on very good authority that you cannot win those because the government always wins rational basis cases. And you have legions of admiring fans because we all like to see a man of advancing years throwing caution to the wind, but this just sounds reckless to me. Was it foolhardy for you to bring a rational basis case in state court, no less?

 

Paul Avelar:  Well, strictly speaking, we didn’t, but let’s get back to that. Right? So all of us in this movement have made the same joke at some point that, in practice, the rational basis test seems to neither require a rationale nor a basis. And we can all point to decisions that really support that. But the rational basis test, even in the federal courts, isn’t a rubber stamp. Courts do — at least, properly, should be actually looking at the facts of a case and figuring out whether this is really a case involving a legitimate use of government power or not. I think the rational basis test gets a well-deserved bad reputation from all of the instances in which courts just don’t do that and rubber-stamp government action even though the US Supreme Court has said the rational basis test isn’t a rubber stamp. 

 

But let’s put all the bad-mouthing of the rational basis test to the side for a second because, as you said, this was a case in state court. And it was a case not under the federal Constitution but the Tennessee constitution. And the Tennessee constitution is different than the federal Constitution. The test under the Tennessee constitution is not rational basis; it’s reasonable basis. And for purposes of Tennessee’s equal protection guarantees––which are actually an equal privileges or immunities guarantee––it’s real and substantial. And there’s these different tests, these tests from state law and common law that predate the invention of the federal rational basis test and the test that state courts used to use all the time when looking at supposed exercises of the police power. 

 

Ever since the federal courts invented the rational basis test, a lot of states have, sort of, slipped into following that by lockstep. But they’ve never really said why or how that is or why that should be or why — especially in Tennessee on which you are a bigger expert than I am. Why is it that Tennessee’s constitutional provisions, which predate the relevant federal constitutional provisions by decades, ought to mean exactly the same thing as different language and a different constitution adopted at a different time in different circumstances? And that’s something I’ve never understood as someone who’s litigated under a lot of state constitutions. That’s the great question that a lot of people have been asking, and state courts don’t have a great answer for that. And part of their defense — lawyers are really bad at litigating a lot of these things, but when they are litigated well––and I’d like to think that this a case where it’s been litigated well––I think it’s incumbent on state courts to really grapple with these issues.

 

Braden Boucek:  Paul, it’s been litigated exceptionally well. I need to go back to the earlier part of your statement, where you recognized my superior expertise. I mean, we need to underscore that before we get into the next part of the discussion. But, as an expert––one who has been officially recognized on FedSoc podcasts––an important point that isn’t often appreciated enough is there’s not just one Constitution, there’s 51. Each state has their own constitution. And the federal Constitution is, in many senses, the floor. And there’s not any limitation on a state’s ability to build in additional constitutional protections that the federal Constitution did not incorporate.  

 

And to the right in question here, the equal privilege and immunities clause — I have had the privilege––some might say punishment––of perusing the constitutional history from the 1834 Tennessee constitutional convention where that right was added. And it was added. And you can go and look and see exactly what it was that the Tennessee constitutional convention was concerned about. And, I mean, the concern was really pragmatic, number one, that they were spending all of this time enacting preferential treatment laws. 

 

But the more interesting thing, for purposes of your argument, is what were the types of those preferential laws. And this is 1834, so keep that in mind. But it was, like, liquor licenses and fish traps and dams. In other words, these were all things that went straight to the right to earn a living. And under the federal constitutional rubric, under equal protection with the tripartite standards of scrutiny––with strict scrutiny for important rights and rational basis for less important rights––even if there was a basis for drawing those distinctions, I don’t see how one could draw it in the Tennessee constitutional context when it was economic concerns that themselves animated the people who wrote the right. I mean, where’s the originalism in state con law?

 

Paul Avelar:  You’re exactly right. So Tennessee is, actually, probably the first state with an equal privileges or immunities clause. And again, it was adopted three decades prior to the federal equal protection clause. And a number of states since then––my home state of Arizona included––have adopted provisions that look a lot more like Tennessee’s than the federal Constitution equal protection provision. And I could tell you here in Arizona the same things motivated the concern. Arizona, as a territory, had just been in the pocket of eastern banks, big railroads, mines, and there was a real push to ensure that the government wasn’t putting a thumb on the scale of certain interests versus others.

 

Braden Boucek:  I was going to piggyback on that, and, of course, Arizona’s got its own unique constitutional history. But at base, the concern was the same, which is, essentially, preferential treatment under the law that were being delivered to big, deep-pocketed, private corporate interests in the name of promoting the public welfare but really weren’t promoting the public welfare. And in your instance, that was railroads. In my instance, that was liquor licenses, so draw whatever lessons you need to draw there.

 

Paul Avelar:  You can tell from the early cases in Tennessee where they talk about — we want to make sure that this is really an exercise of the police power and that it really has something to do with the public health, safety, welfare morals, that distinction’s drawn in the law are real and substantial and that different classes are really different and that the distinctions they’re drawing are really based on germane purposes to the purpose of the law. And there’s all this great background understanding of government favoritism and the way it plays out in the real world, which are, frankly, things that the rational basis test—as in the federal courts is commonly done—just, sort of, look at and don’t see. 

 

Braden Boucek:  Yeah. So crony capitalism is nothing new, and we act like there’s nothing we can do about it from a constitutional standpoint, forgetting that we had this argument 150 years ago or more, in Tennessee’s case, and the Tennessee electorate got together and said, “We want to put a stop to this because, obviously, if somebody can have a liquor license then it isn’t to the detriment of the public welfare.” You need to have that benefit for all. Or in Arizona, if you’re going to be shoveling a bunch of money and giving away free state land to railroads, then it doesn’t — that’s something that everybody should have the benefit of or no one should. But there’s no basis in giving a railroad preferential treatment from Paul Avelar’s grizzly mining ancestors that I like to imagine you had.

 

Paul Avelar:  The first part of that is absolutely right. I’m not sure that my ancestors were grizzly mining ancestors.

 

Braden Boucek:  So you’re going to have us believe that the Avelar’s didn’t become grizzly until 2022. 

 

Paul Avelar:  It’s entirely my fault. It’s COVID. I just stopped shaving.

 

Braden Boucek:  Fair, fair. Okay, so let’s get back to the case here. Why does Metro think that we need to keep innocuous businesses like Lij and Pat out of their homes? What were their justifications and arguments that they made? 

 

Paul Avelar:  Well, to be clear, Metro offered up a lot of, in its own words, speculation––it said it was rational speculation––about reasons why this might be a good thing. What’s interesting about that — and as you might not surprise, they were things that sounded an awful lot like public health and safety, like, “We’re concerned about traffic or parking, or we’re concerned about the potential for inappropriate businesses in residential areas. We’re concerned about noise, garbage, things like that.” But these were all post hoc justifications that, when you actually looked at the facts of the case, didn’t make any sense, especially as applied to Pat and Lij. 

 

So, for example, Metro says, “Oh, we were really concerned about traffic.” And then they ignored the fact that Metro’s own traffic investigator people had previously said that neither Pat nor Lij would cause traffic problems in their neighborhoods. And they said, “Well, we’re concerned about parking.” And they didn’t look at the fact that both Pat and Lij have parking on their own driveways for their own clients. No one parks on the streets, and Metro itself admits that it doesn’t regulate parking on private driveways. 

 

They said, “Well, we were concerned about the potential for someone to open a tattoo parlor in the middle of a residential area and that kids might show up.” Well, that’s easy; neither Pat nor Lij does tattoos, easy peasy. So they had all of these different potential justifications, but none of those justifications really matched up with, again, what Pat or Lij were doing. At the end of the day, you could stand on the street in front of Pat and Lij’s homes, and you would have no idea that they had business there. There’s nothing — there’s no outward effects of their businesses that affect anyone else. And so, that’s really the problem with Metro’s regulation in this case — is that it just doesn’t make any sense, at least as applied to Pat and Lij. 

 

From Metro’s perspective, they didn’t care. From their perspective, the law meant that so long as they could come up with a justification, no matter how detached from reality it was, that was good enough for government work. And that was how they would win the case at the end of the day. At the end of the day, they said, repeatedly, that the individual facts of this case are immaterial. All that matters is that we’ve come up with this speculation, and we think it’s rational, therefore we win. 

 

Braden Boucek:  So, yeah, to your earlier point, though, about how Lij and Pat’s particular businesses, you could observe them from the street and have no idea they were there — Lij and Pat originally even tried, at one point in time, to just get the city to give them a special zoning category that many other Nashvillians had that would allow their business to operate. And many—in fact, I think all—of their neighbors came out in force and specifically said, “Yeah. We’re in favor of these guys having this benefit.” And it was really the city’s fear that the sky would fall that that was denied, as if there’s something analogous between having a sweet lady like Pat who wants to freshly coiffe hair––to use the actual phrase––a couple of times a week and having like a heliport in your backyard with a petting zoo where you could serve alcohol by the drink. And the city just was able to just lump all of those justifications onto every home business, irrespective of the actual facts at hand. 

 

And so, that’s really the game with the game––right, Paul––to take a look at the actual facts in this case, not the broad, general concern that overriding the client prohibition on itself would wreak havoc in neighborhoods around Nashville.

 

Paul Avelar:  Exactly. And this was especially true because, again, as we talked about earlier, not all home-based businesses were — I mean, even Pat and Lij’s home-based businesses weren’t illegal, just them having clients was illegal. But thousands of other home-based businesses were allowed to have clients, and, in fact, they were allowed to have way, way, way more clients than Pat and Lij could ever have in a single day. All that was perfectly legal. And again, the facts showed that every potential justification that Nashville could come up for restricting Pat and Lij, applied just as much, if not way more, to these favored home-based businesses. As Metro codes own head of code enforcement said, “Oh, yeah. We get daily complaints about short-term rentals, about traffic, and parking and noise and general lewdness.”––one of my favorite quotes from this case––and yet perfectly legal for them to have clients every day. And Pat and Lij were prohibited because the city theorized, “Well, they might cause traffic and noise and parking problems.” They never got to general lewdness, but it was pretty clear that that’s not the case either. 

 

Braden Boucek:  General lewdness and freshly coiffed hair. This case will be without a peer for some of the memorable quotes that took place in the depositions, I think. And I want to talk about what the trial court did, but what was your favorite part of the deposition?

Paul Avelar:  I think my favorite part of the deposition was, again, Nashville’s spokesman––the equivalent of a 30(b)(6) deponent––said — admitted on the record, “You guys have the perfect plaintiffs for challenging this law. Even he recognized that our clients aren’t doing anything wrong. They’re not impacting any interest––any legitimate interest––that Nashville has. They’re just trying to make a living and, nevertheless, being stopped. 

Maybe my other favorite moment was when Nashville claimed that it had an interest in prohibiting home-based businesses so that commercial landlords could make more money. That was another fun one. And then they claimed that that’s not what they said, even though it’s right there on black and white. So there’s been all of these little moments where Nashville’s really gotten itself into trouble by just speculating on stuff and then having the actual facts shown, “No, that’s not the case at all.”  

 

Braden Boucek:  Yeah. I think it wasn’t just the deposition witness. I think it was a Metro attorney who also said in court that we had the perfect plaintiffs or the perfect clients. So you’re always doing things well when everybody has to compliment your clients. And you’re probably doing things bad when it doesn’t matter anyway. But before we get into what the trial court did, I got to ask you this question about depositions. Paul, what is a head shop, and why is Nashville worried about one coming to a home near you?

 

Paul Avelar:  Well, a head shop is, apparently, a place where lots of bad things happen, and they seem to be just like children magnets. Children can’t but help go to head shops, and so, nothing but bad things will happen. I mean, we pointed out that neither Pat nor Lij was a head shop, ran a head shop, probably don’t even know what a head shop is. Nevertheless, that was one of the justifications for shutting them down.

 

Braden Boucek:  Yeah, that came up in the depositions. The phrase, head shop was said at a deposition, correct?

 

Paul Avelar:  That is correct.

 

Braden Boucek:  Yes. I think I only knew about that because I’ve seen Dazed and Confused 30 times. Okay, so, anyway, the trial court didn’t buy any of this, right? Tell me what the trial court did.

 

Paul Avelar:  Well, unfortunately, the trial court went with Metro’s interpretation of the law which is, “Facts don’t matter.” You can read the — the decision starts off well enough. It says, “Look, the Metro’s position is that facts don’t matter, and by comparison, the plaintiffs have just put forward voluminous evidence, voluminous record about the particular facts of their case, and then the Chancery Court proceeded to not cite a single one of those.” Understand, this is a — for you litigation nerds out there, this is a summary judgment decision where uncontested material facts are the key to getting the ruling. The Chancery Court said we had a whole bunch of uncontested material facts. And, in fact, Metro said of our 50 pages of uncontested material facts––295 separate statements, of which they only contested 2––“We don’t contest any of these, we just don’t think they’re material. We don’t think they’re relevant.” And that’s, essentially, what the Chancery Court did. You can read in the Chancery Court’s decision all about Metro’s speculation, but you won’t read a single fact. And, ultimately, that’s —

 

Braden Boucek:  So, even though you had the perfect plaintiffs, by admission of the other side, and amassed a voluminous factual record to show that the clients’ businesses were utterly harmless and restricting them from engaging in those businesses failed to advance a single justification, ultimately, the court just said none of that matters anyway.

 

Paul Avelar:  That’s correct.

 

Braden Boucek:  This sounds like the soundtrack to us all losing our minds as litigators.

 

Paul Avelar:  Yeah, it’s the very worst version of what the rational basis test can be. Again, doesn’t require rationale or a basis. The government’s telling me they win, and so they win. And, really, that’s what the decision was.

 

Braden Boucek:  And what happened to the law after you lost? Because things get a little bit even more madcap if you can believe it. 

 

Paul Avelar:  Well, we lost before COVID. And so, we’re up on appeal and COVID hits, and Nashville, like a lot of other cities, tells everyone, “You know what? No going to work. Everyone must work from home from here on out.” Well, problem, it’s illegal to work from home. You can’t work from home. You can’t have a home-based business unless you’ve previously registered with the city. And to register, you have to put together drawings and a specific application and, again, you can’t have clients and all the rest of the stuff.  

 

And so, about a month and a half after they tell everyone to work from home, they adopt a new regulation, a new regulatory — some new regulations surrounding home-based businesses. Those are the regulations that are still in effect today. Two, I think, most salient points about them: One, they still continue to treat Pat and Lij and everyone else like them worse than these other privileged home-based businesses I was talking about earlier—short-term rentals, home-based daycares, these specifically spot rezoned, special rezonings, historic home events. All of these are categories of home-based businesses that can have 12 or more clients per day, every day. And Pat and Lij, and other folks like them who aren’t as privileged as these other groups, can only have six per day and only until January. At the last minute––and I do mean last minute––this provision was adopted at, like, two in the morning in a marathon city council proceeding. At, like, one clock in the morning, they tack on a sunset provision, a rather ambiguous one that says this all sunsets in January 2023, which I can’t help but note, is less than a year from now.

 

Braden Boucek:  If it was passed that early in the morning, shouldn’t it be a sunrise provision?

 

Paul Avelar:  You know, it was passed in the dark, and I think that’s a good — that just tells us a lot about the way government works sometimes. And so, at the last minute, they stick on the sunset provision, and a question comes up during the meeting. There’s video on this on YouTube––you can go watch it if you’re a glutton for punishment––where someone asks, “Okay, what does the sunset provision mean?” And Metro’s lawyer, who’s sitting in the room––a different one than their litigation counsel––sits there and says, “That’s a good question. No one’s asked that before. It could mean that the old regulations go back into place, or it could mean that all of this just goes away entirely. I’m not sure.” And with that obvious uncertainty hanging in the air, it gets adopted. 

 

And so, that’s the world in which we are currently living. Pat and Lij, as of right now, are allowed some, but not as many as other, clients to their home-based businesses and only, maybe, until January when something will happen. And Metro Council itself isn’t sure what’s going to happen, but something will happen.

 

Braden Boucek:  So to sum up, now you’ve got a rational basis case that you’ve lost that also has mootness piled on top of it. Clearly, you’re a madman for continuing to press this case. I want to ask you the question we’re all thinking, which is are you a madman? But I think that we need to keep things moving along at pace. Assuming that you aren’t a madman, why did you think that this was a case worth taking to the Tennessee Supreme Court, and what happened once you got there? 

 

Paul Avelar:  So the court of appeals said that we were moot because there was this new provision that had come into place, but the court of appeals never looked at the sunset provision. It pretended it didn’t exist and never even looked at the fact that our clients still are being treated unequally compared to the privileged home-based businesses — just said, “Well, it’s moot.” And that’s not mootness. That’s not even mootness in a federal court, much less in a state court where mootness isn’t a constitutional requirement. 

 

So we asked the Tennessee Supreme Court to take this case because, not only did the lower court decisions mess up the Tennessee constitutional standards, they also messed up mootness and made it — I think really opened the door for the potential for abuse, for governments to win or lose but take on what is, ultimately, I think, a losing hand and then change the rules of the game halfway through. And that’s not what mootness is supposed to allow anyway. So we asked the Tennessee Supreme Court to take this decision in order to correct these issues, and they did. 

 

Braden Boucek:  Yeah. And you mooted the case up here just recently. We just had the argument, whatever it was, a week or two ago. But you came to Nashville to moot your case—Nashville, Tennessee, a city not known for its ability to handle winter weather on a day when we were scheduled for winter weather, but it was also the day in which Dwight Yoakam was going to play on the Ryman auditorium, and I had tickets, and you didn’t go. Which of these decisions was more insane?

 

Paul Avelar:  Well, it seems every time I go to Nashville, you guys have winter weather. I think I’m probably going to be prohibited from coming back ever again. I’m hoping I get to see Dwight Yoakam again at some point, but the decision, I think, to take the case tells us that the Tennessee Supreme Court itself recognized that something was wrong here. And they took the case on both issues, both on mootness and on the merits. And so, that’s the way we prepared to argue it, and that’s what all the briefing was about. And there was a lot of amicus briefing, in this case, on both mootness and the merits. And we’re proud of the record that we had put together. And then we get to argument day.

 

Braden Boucek:  Yeah, and we’ve argued it, and the court has it, and we’re all waiting anxiously on the court’s ruling. But how did you think argument went?

 

Paul Avelar: So, I think, the court was––a little to my surprise, and I think also, maybe, to my disappointment––really, really focused in on mootness. We didn’t get a lot of questions about the merits, but it seems relatively clear that they recognized that the merits are still an open question. I’m not sure that anyone can say––coming out of that argument and having read all the briefing––that, “Oh no, your clients’ injuries have been totally and forever solved, that there’s nothing more for the courts to do.” There is more for the courts to do. And so, I think the real question is, is the court going to send this back down for reconsideration for more development on the meaning of the sunset provision and how this continues to affect our clients? Or what are they going to do? I think those are all real open questions coming out of the argument. But it’s certainly the case coming out of that argument that, yes, Pat and Lij’s rights are still being infringed, and there’s still more for the courts to do and, meanwhile, everyone else’s rights are still at issue as well. 

 

Braden Boucek:  How did the supreme court feel about the argument that courts aren’t supposed to consider facts?

 

Paul Avelar:  I’m not sure they were too keen on that. They weren’t spending a lot of time really diving into that. But I do think it’s telling that the entire argument, basically, was done on the assumption that 6 versus 0 versus 12 clients is a fact issue, and that must have changed something. And the only way that changed something is if facts matter in this case. And I like to think that if facts matter, we win because, well, we’ve put together a voluminous record showing why Pat and Lij were the perfect people to challenge this nonsensical regulation. 

 

Braden Boucek:  Perfect plaintiffs, Paul. Perfect plaintiffs. Well, we’re running a little long here, so let’s close on two questions. Number one, predictions for what the court will do and number two, what is the best song by The Band and why is it “The Weight?”

 

Paul Avelar: Let’s take the second one first. It is “The Weight” and, more specifically, it is the live version that they did with the Staple Singers —

 

Braden Boucek:  Oh, just hitting it out of the park right now. 

 

Paul Avelar:  Yeah.

 

Braden Boucek:  Just well done, counselor. 

 

Paul Avelar: That’s the best —

 

Braden Boucek:  Well done.

 

Paul Avelar:  — version ever.

 

Braden Boucek:  Crushing this question. The entire panel is nodding in agreement right now.

 

Paul Avelar: The second question is the court will do what courts do. They’ve taken the case under consideration and will issue a decision in due course. And that due course could mean tomorrow. That due course could mean months from now. So we sit, and we wait, and we’re prepared to continue litigating the case to make sure that Pat and Lij’s rights are protected. 

 

Meanwhile, we know that Metro Council has to do something because sunset’s coming up in January 2023. We’re going to continue to be involved there to make sure that whatever Metro Council does next is somehow not worse than what they’ve done already. And we will continue to fight until Pat and Lij can operate their perfectly innocuous, perfectly ordinary, and very important for them, home-based businesses. 

 

Braden Boucek:  Well, that’s great. I think this is a good spot to close. Paul, anything you want to say about the case, head shops, freshly coiffed hair, general lewdness, or any of the other subject matter [inaudible 47:38] —

 

Paul Avelar:  I really do think that we’ve covered all the most important aspects, and so, I’m willing to call it a day if you are. 

 

Braden Boucek:  Okay. Well, let us know if you ever decide to go pro with that whole whistling belly button thing, but I appreciate FedSoc having us on. 

 

Paul Avelar: Yeah. It’s always great to do these for FedSoc. I look forward to them every time.

 

Jack Derwin:  Well, thank you both so much for joining us for this. It was a fascinating discussion, and next time we’ll have to dedicate even more time to the music conversation as well.

 

Braden Boucek:  Yeah, please do. And for that episode, let Paul and I start drinking throughout the [crosstalk 48:12].

 

Jack Derwin:  Right.  Right.

 

Braden Boucek:  Right. 

 

Jack Derwin:  And thank you to our audience for tuning into this episode of RTP’s Explainer podcast. You can subscribe to this podcast on any major podcast platform and check out our website, regproject.org or our social media accounts at fedsocrtp to learn more. Thank you.

 

[Music]

 

Conclusion:  On behalf of The Federalist Society’s Regulatory Transparency Project, thanks for tuning in to the Fourth Branch podcast. To catch every new episode when it’s released, you can subscribe on Apple Podcasts, Google Play, and Spreaker. For the latest from RTP, please visit our website at www.regproject.org.

 

[Music]

 

This has been a FedSoc audio production.

Paul Avelar

Managing Attorney of the Arizona Office

Institute for Justice


Braden Boucek

Director of Litigation

Southeastern Legal Foundation


State & Local

The Federalist Society and Regulatory Transparency Project take no position on particular legal or public policy matters. All expressions of opinion are those of the speaker(s). To join the debate, please email us at [email protected].