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Supreme Court Sends Case On Nashville Home Business Law Back To Trial Court

In a lawsuit by a well-known record producer challenging Nashville’s laws restricting home-based businesses, the Tennessee Supreme Court today vacated the previous court decisions. Noting that Metro Nashville had recently amended the law to make it less restrictive, the Supreme Court decided the prudent course was to send the case back to the trial court to assess whether the plaintiffs have valid claims under the new law.

Plaintiff Elijah “Lij” Shaw is a record producer who lives in the East Nashville neighborhood.  He renovated the detached garage at his home to create a recording studio he called The Toy Box Studio, which operated for a number of years.  Co-plaintiff Patricia Raynor, a licensed cosmetologist, ran a single-chair beauty salon out of her home in the Donelson area.

During this time, Metro’s laws on home businesses stated, “No clients or patrons may be served on the property.” This was called the “Client Prohibition.” After citizens complained that Mr. Shaw and Ms. Raynor were violating the Client Prohibition, Metro sent both of them cease and desist letters; both complied.

In 2017, Mr. Shaw and Ms. Raynor filed a lawsuit against Metro, arguing the Client Prohibition violated their constitutional rights. The trial court granted judgment to Metro, holding there was no violation of the plaintiffs’ constitutional rights.

Mr. Shaw and Ms. Raynor appealed to the Court of Appeals. While the appeal was pending, the Metro Council repealed the Client Prohibition and replaced it with a new law that allowed home businesses up to six customer visits per day. 

The Court of Appeals held that the repeal of the Client Prohibition made the plaintiffs’ case moot—that is, there was no longer a live controversy for a court to decide—so it dismissed the case. The Tennessee Supreme Court granted Mr. Shaw and Ms. Raynor permission to appeal.

On appeal, Mr. Shaw and Ms. Raynor argued their case was not moot because they were still harmed by the new law, only to a lesser degree. Some home businesses, such as day cares, were allowed many client visits per day, but the plaintiffs were limited to six. Metro responded that their lawsuit had only challenged the Client Prohibition, so the case should be dismissed as moot.

The Tennessee Supreme Court observed that this was not a situation where the new law completely cured the harm claimed by the plaintiffs. Instead, this case falls into a “gray area” where the new law did not completely remedy the plaintiffs’ problem, but it is more narrowly drawn.  The court record had no information on how the new law would affect the plaintiffs because the Metro Council adopted it after the trial court issued its final judgment. In this circumstance, the Court said, an appellate court could not be sure whether Mr. Shaw and Ms. Raynor will suffer ongoing harm from the new law.

The Court held it was most prudent in this situation to vacate the judgments of the previous courts and send the case back to the trial court, to let the parties amend their pleadings to include any claims Mr. Shaw and Ms. Raynor may have under the new law.              

To read the unanimous opinion in Elijah “LIJ” Shaw et al. v. Metropolitan Government of Nashville and Davidson County, authored by Justice Holly Kirby, go to the opinions section of TNCourts.gov.