If a Tennessee city's annexation ordinance was finalized by court settlement before Tennessee passed a 2013 annexation moratorium, can the new moratorium retroactively undo that annexation?
Subject
Opinion No. 13-71, Retroactivity of Annexation Moratorium, September 4, 2013
Plain-English summary
Rep. Gerald McCormick asked whether Chapter 441 of the 2013 Tennessee Public Acts, which imposed a one-year moratorium on annexation by ordinance of residential or agricultural territory (running April 15, 2013 through May 15, 2014), could undo annexation ordinances that had been the subject of completed quo warranto litigation. The specific facts: a Hamilton County municipality had passed annexation ordinances in 2009. A quo warranto challenge was filed by affected property owners. The lawsuit was resolved by an Agreed Order filed April 30, 2012. The Agreed Order said the ordinances "shall remain operative on their original dates of passage in 2009, but the effective dates shall be changed to December 31, 2013."
The AG concluded the moratorium could not reach this annexation. Three steps in the reasoning:
- The ordinances were "initiated" in 2009, well before Chapter 441's April 15, 2013 window. So the initiation prong of the moratorium did not apply.
- The ordinances became "operative" on April 30, 2012 when the quo warranto settlement was filed under Tenn. R. Civ. P. 58. The Tennessee Court of Appeals had established in Town of Huntsville v. Scott County that an annexation's effective-or-operative date is held "in abeyance" by a quo warranto action and that the ordinance becomes effective or operative when the quo warranto action is resolved. The Agreed Order's reference to a December 31, 2013 "effective date" did not change this. That date was for administrative wind-up, not for legal operability.
- The constitutional prohibition on retrospective laws kept Chapter 441 from impairing the vested settlement rights. Article I, § 20 of the Tennessee Constitution bars any "retrospective law, or law impairing the obligations of contracts." Although not every retrospective law is unconstitutional, those that "take away or impair vested rights acquired under existing laws" are. Because the parties' rights had vested when the quo warranto settlement was finalized in 2012, Chapter 441 could not undo them.
The AG was careful to note Chapter 441 still operated prospectively under the Municipal Boundaries Clause (Article XI, § 9) and could stay future or pending annexations that had not yet become operative.
Currency note
This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Tennessee's annexation framework was significantly rewritten in 2014 (Chapter 707 of the 2014 Public Acts) and again in subsequent years, generally moving from annexation-by-ordinance toward consent-based annexation. Anyone evaluating a current annexation dispute should pull the current statute and check whether the procedural posture (litigation resolved or pending) matters under the current rules.
Background and statutory framework
Chapter 441 of 2013. Codified as Tenn. Code Ann. § 6-51-122, Chapter 441 (a) prohibited, from April 15, 2013 through May 15, 2014, any municipality from initiating annexation by ordinance of territory used primarily for residential or agricultural purposes; (b) said no such ordinance "shall become operative during such period"; and (c) created an exception, with county legislative body waiver, for ordinances formally initiated before April 15, 2013 where the municipality would suffer "substantial and demonstrable financial injury" if the ordinance did not become operative before May 15, 2014. The Tennessee Advisory Commission on Intergovernmental Relations (TACIR) was directed to study annexation policy and report by January 14, 2014. Chapter 441 became effective May 16, 2013.
Quo warranto effect on annexation timing. Town of Huntsville v. Scott County, 269 S.W.3d 57, 61-62 (Tenn. Ct. App. 2008), and the line of related cases (City of Knoxville v. Knox County and Jefferson County v. City of Morristown) held that the operative date of an annexation is held in abeyance pending quo warranto litigation. The ordinance becomes operative when the litigation is resolved.
Retrospective-law constitutional limit. Article I, § 20 prohibits retrospective laws or laws impairing the obligations of contracts. Estate of Bell v. Shelby County Healthcare Corp., 318 S.W.3d 823, 828-29 (Tenn. 2010), explained that not every retrospective law is unconstitutional, but those that "impair vested rights or contractual obligations" are. Procedural and remedial retrospective changes are generally allowed; substantive ones that take away vested rights are not.
Municipal Boundaries Clause. Article XI, § 9 grants the General Assembly broad authority over how municipalities may be created and how municipal boundaries may be altered. Vollmer v. City of Memphis, 792 S.W.2d 446, 448 (Tenn. 1990). This authority lets the General Assembly stay pending or future annexations even if those steps had begun.
Civil procedure. Tenn. R. Civ. P. 58 governs the entry of judgments. The Agreed Order in this case was filed and signed on April 30, 2012, and became effective on that date.
Common questions
What is a quo warranto action in this context?
A quo warranto proceeding lets the state or affected residents challenge whether a municipal entity is acting within its lawful authority. In Tennessee annexation disputes, quo warranto was the historical mechanism for residents in newly annexed areas to challenge the legality of the annexation ordinance itself. Filing the action stayed the operative date.
Could the 2013 moratorium undo annexations still in pending litigation?
The opinion suggested yes for genuinely pending annexations where rights had not vested. The Municipal Boundaries Clause allowed prospective interference. The narrow rule the AG announced was that an ordinance which had already become operative and final under Tennessee law before May 16, 2013 (the effective date of Chapter 441) was protected.
What does "vested" mean for the city in an annexation context?
Vested means rights that have become so fixed and final that they cannot be retroactively impaired without violating constitutional protections. The AG concluded that once the quo warranto settlement was filed in 2012, the city's rights to the annexed area (and the property owners' rights under the agreed compromise) had vested. Subsequent legislation could not undo what the parties had finalized.
Did the Agreed Order's "December 31, 2013 effective date" actually mean anything?
It mattered for administrative purposes: that's when notices were to be sent, ordinances formally amended, and the city would begin providing services to the annexed area. But for the constitutional analysis, what mattered was the legal moment when the parties' rights became fixed. That was the April 30, 2012 filing under Rule 58, not December 31, 2013.
Could the General Assembly have overridden this with a more explicit retroactivity clause in Chapter 441?
No. The Tennessee Supreme Court has repeatedly held that vested-rights protection under Article I, § 20 is constitutional, not statutory. The General Assembly can write whatever retroactivity language it wants into a statute, but the constitution still trumps.
Citations
Tenn. Code Ann. §§ 6-51-122, 6-51-102. Tenn. Const. art. I, § 20; art. XI, § 9. 2013 Tenn. Pub. Acts, ch. 441. Tenn. R. Civ. P. 58. Cases: Town of Huntsville v. Scott County, 269 S.W.3d 57 (Tenn. Ct. App. 2008); City of Knoxville v. Knox County, 2008 WL 465265 (Tenn. Ct. App. Feb. 20, 2008); Jefferson County v. City of Morristown, 1999 WL 817519 (Tenn. Ct. App. Oct. 13, 1999); Estate of Bell v. Shelby County Healthcare Corp., 318 S.W.3d 823 (Tenn. 2010); Vollmer v. City of Memphis, 792 S.W.2d 446 (Tenn. 1990); State ex rel. Cain v. City of Church Hill, 2008 WL 4415579 (Tenn. Ct. App. Sept. 30, 2008); Myers v. AMISUB (SFH), Inc., 382 S.W.3d 300 (Tenn. 2012); State v. Flemming, 19 S.W.3d 195 (Tenn. 2000); Ford Motor Co. v. Moulton, 511 S.W.2d 690 (Tenn. 1974); Shields v. Clifton Hill Land Co., 94 Tenn. 123, 28 S.W. 668 (1894); Dark Tobacco Growers' Coop. Ass'n v. Dunn, 150 Tenn. 614, 266 S.W. 308 (1924); Stewart v. Sewell, 215 S.W.3d 815 (Tenn. 2007); Doe v. Sundquist, 2 S.W.3d 919 (Tenn. 1999); Saylors v. Riggsbee, 544 S.W.2d 609 (Tenn. 1976); Morris v. Gross, 572 S.W.2d 902 (Tenn. 1978); Kuykendall v. Wheeler, 890 S.W.2d 785 (Tenn. 1994); Collins v. E. Tenn., Va. & Ga. R.R., 56 Tenn. (9 Heisk.) 841 (1874); Woart v. Winnick, 3 N.H. 473 (1826). Prior AG opinions: Op. 13-60 (July 26, 2013); Op. 13-45 (June 11, 2013).
Source
- Landing page: https://www.tn.gov/attorneygeneral/opinions.html
- Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2013/op13-071.pdf
Original opinion text
September 4, 2013
Opinion No. 13-71
Retroactivity of Annexation Moratorium
QUESTION
Does Chapter 441 of the 2013 Tennessee Public Acts preclude the implementation of annexation ordinances that were the subject of litigation contesting the validity of the ordinances, when the litigation was resolved prior to the date on which Chapter 441 became effective?
OPINION
No.
ANALYSIS
This opinion request concerns a municipality's annexation ordinances enacted in 2009 (hereinafter the "Annexation Ordinances"). See Agreed Order of Compromise and Dismissal, Tennessee v. City of Chattanooga, Case Nos. 09-c-1502 & 11-c-1376 (Apr. 30, 2012) (hereinafter "Agreed Order"). The validity of the ordinances was subsequently challenged in a quo warranto lawsuit commenced by residents in the annexed territory. Id. The litigation was resolved by settlement by an Agreed Order between the parties, entered on April 30, 2012. Id. (This Office has been advised by the Hamilton County Circuit Court Clerk's Office that this Agreed Order was filed for entry on April 30, 2012. Thus, given the Order was filed on that date with the signatures of the judge and all parties or counsel, the Order became effective on that date. See Tenn. R. Civ. P. 58.) A copy of this Agreed Order was submitted to this Office with the opinion request. The Agreed Order states that the municipality will amend the 2009 Annexation Ordinances to, among other things, make these ordinances effective December 31, 2013. Id., ¶ 1. The Order also states that the "Annexation Ordinances shall remain operative on their original dates of passage in 2009, but the effective dates shall be changed to December 31, 2013." Id., ¶ 2.
Chapter 441 of the 2013 Tennessee Public Acts adds the following Section 6-51-122 to Tennessee Code Annotated, Title 6, Chapter 51, Part 1:
(a)(1) Notwithstanding the provisions of this part or any other law to the contrary, from April 15, 2013, through May 15, 2014, no municipality shall extend its corporate limits by means of annexation by ordinance upon the municipality's own initiative, pursuant to § 6-51-102, in order to annex territory being used primarily for residential or agricultural purposes; and, except as otherwise permitted pursuant to subdivision (a)(2), no such ordinance to annex such territory shall become operative during such period. As used in this subsection, "municipality" does not include any county having a metropolitan form of government.
(2) If, prior to April 15, 2013, a municipality formally initiated an annexation ordinance delayed by subdivision (a)(1); and if the municipality would suffer substantial and demonstrable financial injury if such ordinance does not become operative prior to May 15, 2014; then, upon petition by the municipality, the county legislative body may, by a majority vote of its membership, waive the restrictions imposed on such ordinance by subdivision (a)(1).
(b) On or before January 14, 2014, the Tennessee advisory commission on intergovernmental relations (TACIR) shall complete a comprehensive review and evaluation of the efficacy of state policies set forth within title 6, chapters 51 and 58, and shall submit a written report of findings and recommendations, including any proposed legislation, to the speaker of the senate and the speaker of the house of representatives.
2013 Tenn. Pub. Acts, Ch. 441, § 1 (hereinafter "Chapter 441") (emphasis added). Chapter 441 became effective on May 16, 2013. Id., § 2. From April 15, 2013 through May 15, 2014, Chapter 441 prohibits a municipality from initiating an annexation by ordinance to extend the municipality's corporate limits to annex territory being used primarily for residential or agricultural purposes and also stays any such annexation ordinance from becoming "operative" during this time frame, subject to the exception described in Section (a)(2) of Tenn. Code Ann. § 6-51-122. Id. (A review of the Agreed Order and supporting documents submitted to this Office with this opinion request confirms that the Annexation Ordinances constitute an annexation of "territory being used primarily for residential or agricultural purposes.")
The municipality initiated and passed the Annexation Ordinances in question in 2009, well before the time frame staying a municipality from initiating an annexation ordinance set by Chapter 441. Thus, the "initiation" of these ordinances was not stayed by Chapter 441. See Myers v. AMISUB (SFH), Inc., 382 S.W.3d 300, 308 (Tenn. 2012) (quoting State v. Flemming, 19 S.W.3d 195, 197 (Tenn. 2000)) (stating rule of statutory construction that courts will discern legislative intent "from the natural and ordinary meaning of the statutory language within the context of the entire statute without any forced or subtle construction that would extend . . . the statute's meaning"). The filing of the quo warranto action questioning the legality of the annexation ordinance at issue did not alter the fact that the municipality had initiated and taken all action required to pass the ordinances in 2009; the quo warranto action merely held the effective date of annexation in abeyance until the filed action was resolved. See Town of Huntsville v. Scott County, 269 S.W.3d 57, 61-62 (Tenn. Ct. App. 2008); City of Knoxville v. Knox County, No. M2006-00916-COA-R3-CV, 2008 WL 465265, at 3-4 (Tenn. Ct. App. Feb. 20, 2008); Jefferson County v. City of Morristown, No. 03A01-9810-CH-00331, 1999 WL 817519, at 7-9 (Tenn. Ct. App. Oct. 13, 1999).
The more difficult question is whether the language in Chapter 441 prohibiting certain annexation ordinances from becoming "operative" between April 13, 2013 and May 15, 2014, applies to the ordinances at issue. Chapter 441 became effective on May 16, 2013. Chapter 441, § 2. Thus, Chapter 441 by its terms would retroactively void any annexation ordinance that became operative between April 15, 2013 and May 16, 2013, the date Chapter 441 became law. The annexation in question concerns annexation ordinances enacted in 2009 that were stayed by the filing of a quo warranto action. The quo warranto action was resolved by an Agreed Order that became effective on April 30, 2012, before the effective date of Chapter 441 but during the time frame established by Chapter 441 precluding annexation ordinances from becoming operative. However, the Agreed Order by its terms states that "[t]hese Annexation Ordinances shall remain operative on their original dates of passage in 2009, but the effective dates shall be changed to December 31, 2013." Agreed Order, ¶ 2 (emphasis added). This provision appears to be added to allow the municipality time to officially approve the compromise and settlement, to amend the annexation ordinances as required by the Agreed Order, and to provide certain notices to property owners. See id., ¶¶ 2, 3.
The threshold issue for this inquiry is when did the Annexation Ordinances become effective and operative—the date they were enacted in 2009, the date the Agreed Order became effective under Tennessee Rule of Civil Procedure 58 (April 20, 2013), or the "effective date" of December 31, 2013 referenced in the Agreed Order. The law of Tennessee establishes the "effective or operative" date of an annexation ordinance is held "in abeyance" by the filing of a proper quo warranto action and that the challenged annexation ordinance does not "become effective or operative" until the date the quo warranto action is resolved. Town of Huntsville, 269 S.W.3d at 61-62. Here the quo warranto action was resolved by the Agreed Order entered with the Circuit Court Clerk on April 30, 2012. See Tenn. R. Civ. P. 58. Under Tennessee law on that date the Annexation Ordinances became "effective or operative." See Town of Huntsville, 269 S.W.3d at 61-62. The entry of the Agreed Order resolved the quo warranto action between the parties and caused the Annexation Ordinances to become effective and operative under Tennessee law, thereby vesting the parties to that action with a binding resolution of all contested issues. (This Office assumes that all conditions required by the Agreed Order have been or will be met by the parties.)
The Tennessee Constitution's prohibition on retrospective laws precludes Chapter 441 from undoing an annexation ordinance which became operative and final prior to the enactment of Chapter 441. See Tenn. Const. art. I, § 20. The Tennessee Supreme Court recently explained the parameters of this constitutional guarantee:
Article I, Section 20 of the Tennessee Constitution guarantees "[t]hat no retrospective law, or law impairing the obligations of contracts, shall be made." Despite two new renditions of the Tennessee Constitution in 1834 and 1870 and numerous amendments to these constitutions, this provision has remained unchanged since our constitution was originally ratified in 1796. The lineage of Article I, Section 20 can be traced to Article 23 of the New Hampshire Constitution of 1784. Approximately one hundred and seventy-five years ago, New Hampshire's Superior Court of Judicature, the state's highest appellate court at the time, observed that the "object of the clause is to protect both parties from any interference of the legislature whatever, in any cause, by a retrospective law." Woart v. Winnick, 3 N.H. 473, 477 (1826).
. . . .
Despite the facial breadth of Article I, Section 20, this Court has long taken the view that "not every retrospective law . . . is objectionable in a Constitutional sense." Collins v. E. Tenn., Va. & Ga. R.R., 56 Tenn. (9 Heisk.) 841, 847 (1874). We have held that the prohibition in Article I, Section 20 "does not mean that absolutely no retrospective law shall be made, but only that no retrospective law which impairs the obligation of contracts, or divests or impairs vested rights, shall be made." Ford Motor Co. v. Moulton, 511 S.W.2d 690, 696 (Tenn.1974) (quoting Shields v. Clifton Hill Land Co., 94 Tenn. 123, 148, 28 S.W. 668, 674 (1894)); Dark Tobacco Growers' Coop. Ass'n v. Dunn, 150 Tenn. 614, 632, 266 S.W. 308, 312 (1924).
Accordingly, the Tennessee Constitution does not prohibit the retrospective application of remedial or procedural laws, unless the application of these laws impairs a vested right or contractual obligation. Stewart v. Sewell, 215 S.W.3d 815, 826 (Tenn.2007); Doe v. Sundquist, 2 S.W.3d 919, 923–24 (Tenn.1999); see also Saylors v. Riggsbee, 544 S.W.2d 609, 610 (Tenn.1976).
The constitutional guarantee against retrospective laws does, however, prohibit retrospective substantive legal changes "which take away or impair vested rights acquired under existing laws or create a new obligation, impose a new duty, or attach a new disability in respect of transactions or considerations already passed." Doe v. Sundquist, 2 S.W.3d at 923 (quoting Morris v. Gross, 572 S.W.2d 902, 907 (Tenn.1978)); cf. Kuykendall v. Wheeler, 890 S.W.2d 785, 787 (Tenn.1994) (noting that "[w]hether a statute applies retroactively depends on whether its character is 'substantive' or 'procedural.'").
Estate of Bell v. Shelby County Healthcare Corp., 318 S.W.3d 823, 828-29 (Tenn. 2010) (footnotes omitted).
Applying this analysis to the facts presented with this opinion request, upon entry of the Agreed Order on April 30, 2012, the terms of the Agreed Order became effective and operative for purposes of vesting the parties' interests in the ordinances. The fact that the ordinances were to be subsequently amended to become effective on December 31, 2013, does not change this fact. Because the parties became vested in the finality of the disposition of the quo warranto litigation prior to the effective date of Chapter 441, the Tennessee Constitution's prohibition against retroactive laws precludes Chapter 441 from impairing these vested interests. See id.
This opinion is narrowly confined to any annexation ordinance that became effective and operative from April 15, 2013 to May 16, 2013, the date Chapter 441 became law. The Municipal Boundaries Clause of the Tennessee Constitution grants the General Assembly the broad authority to "provide the exclusive methods by which municipalities may be created, merged, consolidated and dissolved and by which municipal boundaries may be altered." Vollmer v. City of Memphis, 792 S.W.2d 446, 448 (quoting Tenn. Const. art. XI, § 9). See Tenn. Att'y Gen. Op. 13-60 (July 26, 2013); Tenn. Att'y Gen. Op. 13-45, at 4 (June 11, 2013). Thus, under this provision, Chapter 411 can prospectively stay any future or pending annexations. Chapter 411 also does not violate the constitutional guarantee against retrospective laws by changing the procedural remedial process for pending annexations that have not become operative and effective. See Estate of Bell, 318 S.W.3d at 829; State ex rel. Cain v. City of Church Hill, No. E2007-00700-COA-R3-CV, 2008 WL 4415579, at *6 (Tenn. Ct. App. Sept. 30, 2008).
ROBERT E. COOPER, JR.
Attorney General and Reporter
WILLIAM E. YOUNG
Solicitor General
ANN LOUISE VIX
Senior Counsel
Requested by:
The Honorable Gerald McCormick
State Representative
18A Legislative Plaza
Nashville, Tennessee 37243