Ronald Ogle v. Sevier Cnty. Reg'l Planning Comm'n ( 2020 )

NOT RECOMMENDED FOR PUBLICATION
File Name: 20a0688n.06
No. 19-6327
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
RONALD W. OGLE, BETTY OGLE, ) FILED
) Dec 09, 2020
JERRY KERLEY, MARK T. WHITE, and
) DEBORAH S. HUNT, Clerk
JOHN C. SCHUBERT, dba HIGH
)
BRIDGE DEVELOPMENT
)
PARTNERSHIP,
)
) ON APPEAL FROM THE UNITED
Plaintiffs-Appellants, STATES DISTRICT COURT FOR
)
) THE EASTERN DISTRICT OF
v. TENNESSEE
)
)
SEVIER COUNTY REGIONAL OPINION
)
PLANNING COMMISSION and SEVIER
)
COUNTY, TENNESSEE,
)
)
Defendants-Appellees.
BEFORE: ROGERS, SUTTON, and STRANCH, Circuit Judges.
JANE B. STRANCH, Circuit Judge. The High Bridge Development Partnership wanted
to build a large subdivision in Sevier County, Tennessee. It submitted a concept plan to the
Regional Planning Commission that included a 40-foot right-of-way, though the subdivision
regulations required a 50-foot right-of-way. The Commission denied the plan, citing the right-of-
way problem. The Partnership presented information putatively solving the problem and the High
Bridge subdivision plan was initially approved. Then, following further investigation, the plan
was denied. The Partnership ultimately sued, alleging violations of its due process and equal
protection rights. After a bench trial, the district court found in favor of the Defendants. We
AFFIRM.
No. 19-6327, Ogle v. Sevier Cnty. Reg’l Plan. Comm’n
I. BACKGROUND
The Partnership develops property in Sevier County, which extends into Great Smoky
Mountains National Park. In 2005, it purchased the 942.3-acre piece of property at issue (the
Property), planning to build at least 400 houses. The Property borders Miller’s Creek, a much
smaller subdivision development, to the north, and the Park lies to the south. The only road to
both Miller’s Creek and the Property is Scottish Highland Way, which passes through the Foothills
Parkway area. Sevier County requires all new subdivisions to comply with its regulations,
including those governing right-of-way widths. The regulations categorize Highland Way as a
“Minor Collector Street,” so it must have a 50-foot right-of-way. It has a 50-foot right-of-way
along most of its length, but the parties disagree about the right-of-way’s width in the Foothills
Parkway stretch: the Partnership maintains that it remains 50 feet, but the Commission contends
that it narrows to 40 feet. That discrepancy gave rise to this case.
A. Sevier County’s Plat Approval Process
During this case, a developer that wanted to build a subdivision in Sevier County had to
follow a tripartite procedure and appear twice before the Commission. First, it had to prepare a
concept plan and request that the Commission preliminarily approve it. For a developer to submit
a plan, it had to “meet[] all the required standards of design” or request specific variances, and for
the Commission to approve a concept plan, it had to find that the plan complied with all of those
standards, including right-of-way widths. If it disapproved the plan or requested modifications, it
was required to give reasons in writing. Two members of the Commission and Jeff Ownby, Sevier
County’s Planner, testified that they could not recall an instance when the Commission
intentionally denied a concept plan that satisfied the regulations, and typically, the Commission
did not revoke a concept plan approval after the fact. Once the developer obtained the
Commission’s approval, it could begin preparing subsequent documents, making street
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improvements, and installing utilities. Beforehand, though, it was encouraged to “consult early
and informally” with the Commission “for advice and assistance.” Second, the developer had to
create a design plan to inform the Commission’s technical staff about how it planned to construct
the subdivision. Any construction work carried out before the design plan was approved would
be “at the subdivider’s own risk.” Third, it had to submit the final plat to the Commission for
approval, after which the plat could be recorded.
The regulations did not mandate the Commission to approve a plan that complied with the
regulations at any of these three stages. At the preliminary approval stage, the regulations directed
the Commission merely to consider the plan:
Within sixty (60) days after submission of a concept plan, the planning commission
will review it and indicate its approval, disapproval, or approval subject to
modifications. If a concept plan is disapproved, reasons for such disapproval will
be stated in writing. If approved subject to modifications, the nature of the required
modifications will be indicated.
No reasons for disapproval were specified, and the regulations did not speak in terms of “must” or
“shall” approve, but warned that “[a]ny construction work carried out by the subdivider prior to
design plan approval . . . shall be at the subdivider’s own risk.” Similarly, at the final plat stage,
they said that the Commission “shall approve or disapprove” the final plat and give reasons if it
disapproves. The regulations did not explicitly provide for a revocation of approval after an
approval was granted at any stage.
B. Subdivision Developments
About three years before the Partnership purchased the Property, the Commission approved
four plats for Miller’s Creek, each of which labeled the Foothills Parkway stretch of Highland Way
as a 40-foot right-of-way or did not depict the right of way at all. The subdivision contained 12 to
14 tracts. Though it is unclear from the record whether the Miller’s Creek subdividers petitioned
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for variances or were granted variances to permit the 40-foot right-of-way, trial testimony
established that the plats were ultimately approved without variances. Jerry McCarter, an attorney
working for Sevier County, opined that there was a variance, and the Commission argues that it
relied on that opinion. The Commission’s Chairman subsequently acknowledged that the Miller’s
Creek approvals were mistakes because they did not include the required 40-foot rights-of-way.
The Partnership purchased the Property in February 2005 to develop the High Bridge
subdivision. About two years later, the Southern Design Group (“SDG”), a firm the Partnership
retained, contacted Ownby for initial consultation about the Property per the regulations’
suggestion. SDG staff met with Ownby multiple times concerning the Commission’s review
processes. From the time it purchased the Property, the Partnership was aware that Highland
Way’s right-of-way was 40 feet, as noted on the deed, and that “this was going to be an issue with
the Planning Commission.” In February or March 2007, the Partnership submitted its concept plan
to the Commission, indicating Highland Way’s 40-foot right-of-way. The concept plan provided
for 400 to 450 tracts. The Commission denied the concept plan because it did not comply with the
rights-of-way requirement. SDG and the Partnership returned to the Commission on April 10,
2007, with a plat recorded in 1971 that depicted Highland Way with a 50-foot right-of-way.
Ownby agreed with them, and the Commission approved the concept plan based on this evidence.
Some members of the Commission questioned whether that 50-foot right-of-way continued
to exist 36 years after it had been recorded. The Chairman testified that the Commission wanted
to “get it right” and did not necessarily intend to overturn the earlier approval, so it asked Ownby
to continue researching the right-of-way. Both McCarter and a title abstractor told Ownby that the
50-foot right-of-way no longer existed. John Schubert, the Partnership’s managing partner, then
met with Ownby and a Park Service representative to find an alternate right-of-way.
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On May 8, 2007, the Commission held another meeting. Four members of the public spoke
in favor of rescinding the High Bridge approval. Commissioner Ogle moved to add High Bridge
to the meeting’s agenda; after some discussion, the commissioners voted to do so and then voted,
7–6, to rescind the Partnership’s concept plan approval.
The Partnership asserts that it did not receive notice that the Commission would discuss
High Bridge at the May 8 meeting. None of the Partnership’s members or anyone representing it
attended the meeting. Prior to the meeting, the Partnership was generally aware of the
Commission’s concerns about High Bridge, Schubert having met with Ownby and the Park
Service. In the following months, the Partnership’s representatives met with Ownby multiple
times to discuss applying for a variance for the right-of-way. The Partnership resubmitted the
High Bridge concept plan to the Commission at a subsequent meeting without applying for a
variance, but Ron Ogle, a partner, moved to remove it from the meeting’s agenda.
The Commission took up High Bridge again at its December 9, 2008, meeting. The
Partnership had submitted an identical concept plan, again without applying for a variance. Three
speakers argued that the right-of-way was 40 feet wide. The Commission then voted to deny the
concept plan because it did not “provide for access directly to a county road or access via a 50’
private permanent easement to a county road.” At the same meeting, the Commission denied
another development’s concept plan for the same reason.
After the Partnership filed suit, the district court held a bench trial, finding in the
Commission’s favor. The Partnership then filed a motion to alter or amend the findings of fact
and conclusions of law and the judgment, which the district court denied. The Partnership timely
appealed.
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II. DISCUSSION
“Following a bench trial, ‘we review a district court’s factual findings for clear error and
its legal conclusions de novo.’” Acosta v. Cathedral Buffet, Inc., 887 F.3d 761, 764 (6th Cir. 2018)
(quoting Muniz-Muniz v. U.S. Border Patrol, 869 F.3d 442, 444 (6th Cir. 2017)). We review
denials of Rule 59(e) motions to alter or amend the judgment under the abuse-of-discretion
standard, but denials of Rule 59(e) motions “based on legal error” de novo. Tchankpa v. Ascena
Retail Grp., Inc., 951 F.3d 805, 811 (6th Cir. 2020).
A. Waiver
At the outset, the Commission argues that the Partnership has waived the due process
argument that its “protected property interest vested when the [Commission] approved” the
concept plan. The Partnership responds by pointing to its trial brief that discussed the rescission
of the concept plan approval and contended that it had “a property interest in the Property proposed
and its development, and the right to approval of plans that comply with County Regulations.”
Typically, “an argument not raised before the district court is waived on appeal to this
Court,” Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 552 (6th Cir. 2008), and “the failure to
present an issue to the district court forfeits the right to have the argument addressed on appeal,”
Armstrong v. City of Melvindale, 432 F.3d 695, 700 (6th Cir. 2006); see generally Wood v.
Milyard, 566 U.S. 463, 473 (2012) (“[A]ppellate courts ordinarily abstain from entertaining issues
that have not been raised and preserved in the court of first instance.”). A party waives a claim by
“knowingly and intelligently relinquish[ing]” it, particularly when shown by record evidence, and
forfeits a claim by “merely fail[ing] to preserve” it. Cradler v. United States, 891 F.3d 659, 665
& n.1 (6th Cir. 2018) (quoting Wood, 566 U.S. at 470 n.4). But if a party makes the argument in
a different manner that can be fairly interpreted as “another way of saying” the point, it likely did
not forfeit that claim. Haywood v. Hough, 811 F. App’x 952, 959 n.1 (6th Cir. 2020).
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Here, the Partnership did not waive its argument that the Commission’s initial approval of
its concept plan created a property interest. A review of the record reveals no instance when the
Partnership waived the argument by explicitly and knowingly relinquishing it. Though whether
the Partnership forfeited the argument may be a closer call, its arguments to the district court were
other ways of saying the argument it now makes. So, we analyze the Partnership’s due process
claims through that lens.
B. Due Process
The Partnership argues that “[w]hen the Commission approved [its] concept plan on April
10, 2007, it created a protected property interest by giving the Partnership a legitimate claim of
entitlement to the initial phase of concept plan approval.” The Commission responds that no
property interest arose because there was no guarantee of High Bridge’s ultimate approval given
the subsequent stages of the planning process.
Establishing a substantive or procedural due process violation requires first showing “the
existence of a constitutionally-protected property or liberty interest” that was taken or infringed.
Silver v. Franklin Twp. Bd. of Zoning Appeals, 966 F.2d 1031, 1036 (6th Cir. 1992). The party
claiming the interest must demonstrate a “legitimate claim of entitlement” to the benefit—that is,
“more than an abstract need or desire for it” and “more than a unilateral expectation of it.” Bd. of
Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972). The party cannot claim a property
interest in the governmental procedure itself, but rather in the product of that procedure.
Richardson v. Township of Brady, 218 F.3d 508, 517–18 (6th Cir. 2000).
“Whether a person has a property interest is traditionally a question of state law,” but
“[f]ederal constitutional law . . . ‘determines whether that interest rises to the level of a legitimate
claim of entitlement protected by the Due Process Clause.’” Tollbrook, LLC v. City of Troy, 774
F. App’x 929, 934 (6th Cir. 2019) (quoting EJS Props., LLC v. City of Toledo, 698 F.3d 845, 856
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(6th Cir. 2012)). Tennessee courts have noted that “the mere approval . . . of a subdivision plat
does not give a property owner a vested right to develop his or her property in contravention of the
applicable zoning restrictions.” Metro. Gov’t of Nashville & Davidson Cnty. v. Barry Const. Co.,
240 S.W.3d 840, 853 (Tenn. Ct. App. 2007) (citing Union Trust Co. v. Williamson Cnty. Bd. of
Zoning Appeals, 500 S.W.2d 608, 617 (Tenn. 1973)). This is particularly true when substantial
construction has not yet begun or related liabilities have not been incurred. State ex rel. SCA
Chem. Waste Servs., Inc. v. Konigsberg, 636 S.W.2d 430, 437 (Tenn. 1982). And the Tennessee
legislature has expressly recognized “the prerogatives and authority of local elected officials with
respect to land-use matters.” 2014 Tenn. Pub. Acts, Ch. 686, at 1.1
In the analogous context of zoning ordinances, the Tennessee Court of Appeals has
explained that “[o]ne of the requirements for establishing vested rights in a prior ordinance or
regulation is a final governmental approval of development plans. In a majority of states, including
Tennessee, that approval generally means a building permit.” CK Dev., LLC v. Town of
Nolensville, No. M2010-00633-COA-R3CV, 2012 WL 38287, at *15 (Tenn. Ct. App. Jan. 6, 2012)
(emphasis added); see also Ready Mix, USA, LLC v. Jefferson County, 380 S.W.3d 52, 66 n.18
(Tenn. 2012). The court warned against “implicitly equat[ing]” a preliminary concept plan
approval that “was conditional, subject to modifications, and required additional approval” with a
final approval or building permit. CK Dev., 2012 WL 38287, at *15.
1
Effective in 2015, after the events of this case, the Tennessee legislature amended the Tennessee Vested Property
Rights Act, which covers subdivision regulations, to provide that
[a] vested property right shall be established with respect to any property upon the approval, by the
local government in which the property is situated, of a preliminary development plan or a final
development plan where no preliminary development plan is required by ordinance or regulation or
a building permit allowing construction of a building where there was no need for prior approval of
a preliminary development plan for the property on which that building will be constructed.
Tenn. Code Ann. § 13-3-413(b) (2020) (emphasis added).
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In Silver, we drew a similar distinction between stages of the plan approval process for
determining whether a property interest could exist. 966 F.2d at 1036. If the approval comes at a
point in the process when the government body has “the discretion to deny [the plan] even if [the
developer] complied with certain minimum, mandatory requirements, then [the developer] would
not have a ‘legitimate claim of entitlement’ . . . in the approval of his plan,” and thus “no property
right.” Id. (quoting G.M. Eng’rs & Assocs., Inc. v. West Bloomfield Township, 922 F.2d 328, 331
(6th Cir. 1990)). But if the approval comes at a point in the process when “state law circumscribes
the discretion of [the government body] to such an extent that approval of the particular use [of
the property] was mandatory once [the developer] met certain minimal requirements, then a
property interest could exist.” Id.; see generally Town of Castle Rock v. Gonzales, 545 U.S. 748,
756 (2005) (“Our cases recognize that a benefit is not a protected entitlement if government
officials may grant or deny it in their discretion.”).
In subsequent cases, we applied this distinction. In Nasierowski Bros. Inv. Co. v. City of
Sterling Heights, 949 F.2d 890 (6th Cir. 1991), the developer obtained “a favorable opinion from
the City stating that the proposed development was permitted, as of right, under the City’s relevant
zoning regulations” prior to any construction and then purchased the property. Id. at 891.
A council member who “lived in the immediate vicinity of [the] parcel” later expressed his
opposition to the development, and the city council passed an ordinance that rendered the
development effectively impossible. Id. at 891–93. The court held that the developer had a
property interest in the first zoning classification as expressed in the city’s opinion, “securely
vested by [his] engagement in substantial acts taken in reliance, to his detriment, on representations
from and affirmative actions by the City.” Id. at 897. This holding largely turned on a question
of Michigan law. See id. (quoting Roth, 408 U.S. at 577) (“Nasierowski’s property interest . . . ,
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if any, depends not on the federal Constitution, but rather on ‘existing rules or on understandings
that stem from an independent source, such as state law.’”).
More recently, in EJS Properties, we examined a situation in which the city had issued an
“early-start building permit” which allowed “initial renovations.” 698 F.3d at 859. Importantly,
that permit “did not entitle [the developer] to the ultimate re-zoning change or to a full permit to
reconstruct the relevant property.” Id. The applicable regulations specified that this type of permit
was limited to early stages of construction and that all work was performed at the permittee’s risk.
Id. We determined that even if the developer had a property interest in the permit, when the city
subsequently rezoned the property (rendering further construction illegal), it did not violate the
developer’s due process rights to the interest the permit conveyed. Id.
In Tollbrook, we synthesized these cases and restated their guiding principles. 774 F.
App’x at 934–35. We concluded that “a property owner may have a property interest in the
existing zoning classification of his or her property or in a discretionary benefit after it has been
conferred.” Id. at 934 (citing EJS Props., 698 F.3d at 856). And “a landowner may have a property
interest in a previously approved building permit where the city does not retain discretion to
modify its terms.” Id. But “[a] party cannot possess a property interest in the receipt of a benefit
when the state’s decision to award or withhold the benefit is wholly discretionary.” Id. at 935
(quoting EJS Props., 698 F.3d at 855). Therefore, to establish a property interest in an approval,
a party must show that the government body “lacked the ‘discretion to deny [the benefit] if [the
party] complied with certain minimum, mandatory requirements.’” Id. (quoting EJS Props.,
698 F.3d at 855).
The Sevier County regulations derived their authority from Tennessee statutes. The
statutes did not explicitly grant or deny discretion to regional planning commissions to deny
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concept plans that complied with all applicable regulations. See, e.g., Tenn. Code Ann. §§ 13-3-
104, -403 (2008) (discussing commissions’ powers and duties and listing permissible goals of
subdivision regulations). Certain provisions, however, indicated the existence of that discretion.
See, e.g., id. § 13-3-104(d) (“In general, the commission has such powers as may be necessary for
it to perform its functions and to promote regional planning.”). The fact that the Commission
heard testimony from members of the public also implicitly suggests that its decisions were
discretionary; even if a concept plan complied with all the applicable regulations, community
members’ disfavor might cause the commission to disapprove it.2 And, importantly, even after
concept plan approval, the Partnership needed to obtain two more approvals, each with its own
requirements.
Based on these cases, we conclude that the Commission’s initial approval of the
Partnership’s concept plan did not confer a property interest. The revocation of the concept plan
approval (which, it bears repeating, came before the final plan approval stage) was tantamount to
a realization that the Partnership had not “complied with certain minimum, mandatory
requirements.” Silver, 966 F.2d at 1036; see also Tollbrook, 774 F. App’x at 935. Because the
only reason for the revocation and subsequent denials was the right-of-way, at issue is not whether
the Commission could deny the Partnership’s concept plan after it complied with all of the
“minimum, mandatory requirements.” The Partnership had not done so. Nothing in the regulations
or their associated statutory provisions affirmatively suggests the circumscription of discretion to
the extent that would confer a property right here. See Tollbrook, 774 F. App’x at 935.
Aspects of this case align with Nasierowski, in that the initial concept plan approval
indicated the Commission’s opinion that the concept plan complied with the regulations, and that
2
Some community members’ comments on High Bridge in particular address both compliance with the regulations
and other factors, such as “the impact it would have on the community.”
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the Commission then effectively halted future development by rescinding the approval. 949 F.2d
at 891. But the Partnership did not carry out any “substantial acts taken in reliance, to [its]
detriment, on representations from and affirmative actions by” the Commission.3 Id. at 897.
Instead, it purchased the Property well before seeking any input from the Commission about the
development’s feasibility. For years prior to speaking with Ownby about the Commission’s
review, the Partnership was aware that Highland Way’s right-of-way was 40 feet. It was listed as
such on the deed. Schubert himself testified at trial that he knew the right-of-way would be
problematic when the development began. In Nasierowski, by contrast, the developer did not even
purchase the property until receiving confirmation from the city that the proposed use would
comply with zoning regulations. Id. at 891.
Ultimately, we find EJS Properties to be instructive. Just like the “early-start building
permit” in that case, the concept plan approval did not give the Partnership the right to build the
entire 400-to-450-tract subdivision. EJS Props., 698 F.3d at 859. Even if the concept plan were
approved and the Partnership began utility and road construction, it still had to obtain final plat
approval prior to proceeding further. Any construction before final approval was explicitly at its
own risk, just as in EJS Properties. Id. Because the concept plan approval did not come at the
final stage in the process, and the Commission could still exercise discretion prior to design plan
approval, the April 2007 concept plan approval did not create a cognizable property interest. The
district court correctly held that the Partnership’s due process claims fail at the first step. See
Silver, 966 F.2d at 1036. Because the Commission has not demonstrated the existence of a
3
Though the existence of the property interest in Nasierowski was a question of Michigan law, as opposed to
Tennessee law like the one at issue here, both states’ laws deemed substantial acts (like construction) necessary for a
property right to vest. Nasierowski, 949 F.2d at 897; Ready Mix, 380 S.W.3d at 66 n.18.
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constitutionally protected property interest, we need not reach the next steps of the substantive and
procedural due process analyses. See id.
C. Equal Protection
Finally, the Partnership argues that the rescission of the concept plan approval violated its
equal protection rights because the Commission did not revoke other subdividers’ concept plan
approvals. It also contends that the denial of the concept plan based on the 40-foot right-of-way
was an equal protection violation because Miller’s Creek was approved with the same problem.
States may not “make distinctions which either burden a fundamental right, target a suspect
class, or intentionally treat one differently from others similarly situated without any rational basis
for the difference.” Radvansky v. City of Olmsted Falls, 395 F.3d 291, 312 (6th Cir. 2005). “The
‘rational basis’ test means that courts will not overturn government action ‘unless the varying
treatment of different groups or persons is so unrelated to the achievement of any combination of
legitimate purposes that [the court] can only conclude that the [government’s] actions were
irrational.’” Warren v. City of Athens, 411 F.3d 697, 710 (6th Cir. 2005) quoting Kimel v. Fla. Bd.
of Regents, 528 U.S. 62, 84 (2000)). The state body “has no obligation to produce evidence to
sustain the rationality of its action; its choice is presumptively valid.” TriHealth, Inc. v. Bd. of
Comm’rs, 430 F.3d 783, 790 (6th Cir. 2005). Moreover, the mere fact that “in practice [the action]
results in some inequality” is insufficient to find an equal protection violation. Id. at 790–91
(quoting F.C.C. v. Beach Commc’ns, Inc., 508 U.S. 307, 316 n.7 (1993)).
The Partnership brings a “class of one” claim, alleging that it “has been intentionally treated
differently from others similarly situated and . . . that there is no rational basis for the difference
in treatment.” Johnson v. Morales, 946 F.3d 911, 939 (6th Cir. 2020) (quoting Village of
Willowbrook v. Olech, 528 U.S. 562, 564 (2000) (per curiam)). “The first element requires that
the plaintiff and the others who were treated differently were ‘similarly situated in all relevant
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respects.’” Id. (quoting EJS Props., 698 F.3d at 865). The second obligates the plaintiff to
“demonstrate that a government action lacks a rational basis in one of two ways: either by
negativ[ing] every conceivable basis which might support the government action or by
demonstrating that the challenged government action was motivated by animus or ill-will.” Id.
(quoting Warren, 411 F.3d at 711).
When completed, High Bridge would contain more than 30 times the number of tracts in
Miller’s Creek. Highland Way, which was a private road as opposed to a county road, was the
only way to access both Miller’s Creek and High Bridge’s proposed location. So, though the
Partnership contends that Miller’s Creek was comparable to High Bridge, it was not. The
Commission was entitled to take these facts into account. Moreover, the Commission approved
Miller Creek in error, and other concept plans were denied for lack of a 50-foot right-of way.
Ultimately, the Partnership has not identified any truly similarly situated comparators who
the Commission treated differently. Even if it had, it still has not convincingly ruled out the many
rational bases for enforcing the right-of-way requirement or demonstrated animus on the
Commission’s part. The district court did not err in finding that Commission did not violate the
Partnership’s right to equal protection.
III. CONCLUSION
For the reasons discussed above, we AFFIRM the district court’s findings of fact and
conclusions of law and denial of the Partnership’s motion to amend or alter the judgment.
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