The Battle of The Branches Tennessee’s New “Special Chancery Courts”

THE BATTLE OF THE BRANCHES:

TENNESSEE’S NEW “SPECIAL CHANCERY COURTS”

What happens when the legislature doesn’t like the judiciary’s interpretation of a statute? Sometimes, nothing. But sometimes, the legislature passes a law that legislatively overrules the offending judicial ruling. The Lilly Ledbetter Fair Pay Act of 2009 is one example.1 Even when the judicial branch declares a statute unconstitutional, the legislature usually tweaks the offending statute in an effort to address the constitutional deficiencies. For example, when the U.S. Supreme Court declared the death penalty unconstitutional in 1972 and then reinstated it four years later, state legislatures rapidly rewrote their statutes to comply with the Court’s requirements.

In Tennessee, however, the General Assembly has found a novel way to express its disagreement with recent judicial rulings: create a special judicial body to consider constitutional challenges to statutes involving state defendants. On May 26, 2021, Governor Bill Lee signed into law Public Chapter No. 566, which set forth a process for establishing “Special Chancery Courts” that became effective July 1.2 Because of their unorthodox nature and the fact that the legislation establishing them went through several iterations prior to passage, Tennessee lawyers are asking, quite reasonably, how the new courts are structured and what exactly they will do.

Impetus for the Legislation

The genesis of the Special Chancery Courts can be found in a couple of recent decisions by courts in Davidson County. In 2019, the General Assembly passed legislation creating an education savings account, or “school voucher” program. Under the program, individual students could choose to receive their pro rata share of the tax dollars that would otherwise be paid to their public school and use these funds to pay tuition at private schools.3 Notably, the school voucher program applied only to students in Davidson and Shelby Counties. The statute was immediately challenged by those two counties as violating the “home rule” provision of the Tennessee Constitution, which provides: any act of the General Assembly private or local in form or effect applicable to a particular county or municipality either in its governmental or proprietary capacity shall be void and of no effect unless the act by its terms either requires the approval by a two-thirds vote of the local legislative body of the municipality or county, or requires approval in an election by a majority of those voting in said election in the municipality or county affected.4 After an expedited hearing, on May 14, 2020, Davidson County Chancellor Anne C. Martin held the school voucher program unconstitutional and granted an interlocutory appeal to the Tennessee Court of Appeals.5 On September 29, 2020, the Court of Appeals affirmed.6

In another judicial outcome that displeased some members of the General Assembly’s majority party, on June 4, 2020, Davidson County Chancellor Ellen Hobbs Lyle ruled that Tennessee must allow all eligible voters to vote by absentee ballot due to the COVID-19 pandemic. This ruling expanded the statutory scope of absentee voting, which required that the voter meet one of 14 requirements. Chancellor Lyle held that enforcing these requirements during the pandemic constituted “an unreasonable burden on the fundamental right to vote guaranteed by the Tennessee Constitution.”7 The Tennessee Supreme Court would later vacate the temporary injunction that had been issued by Chancellor Lyle.8 Stung by these decisions, the General Assembly initiated three separate legislative initiatives during its 2021 session that were designed to insulate its statutes from judicial meddling. First was a bill allowing the state an interlocutory appeal as of right from a trial court’s decision holding a statute unconstitutional that “[g]rants, continues, or modifies an injunction . . . or [d]enies a motion to dissolve or modify an injunction.”9 At the same time, House Resolution 23 was filed, which took the more direct approach of urging the General Assembly to remove Chancellor Lyle from office.10 After vocal opposition by state and local bar associations, 11 this expression of legislative pique died in committee.

The Three-Judge Panels

The third bill eventually became Public Chapter No. 566. It provides that a civil action that (a) challenges the constitutionality of a statute, executive order, or administrative regulation, (b) seeks declaratory or injunctive relief, and (c) is brought against “the state, a state department or agency, or a state official acting in their official capacity” shall be heard by a “three judge panel” rather than a single trial judge.

The Act provides that, when such an action is filed, the plaintiff shall notify the presiding judge of the district, who shall notify the Tennessee Supreme Court, which then shall appoint two judges – one from each of the other two Grand Divisions – to sit with the original trial judge.12 The Supreme Court shall designate one of the judges to serve as the chief judge, and rulings shall be by majority vote. Appeals from decisions of the three-judge panel shall lie in the Court of Appeals.

Venue for such actions is the county where the plaintiff resides or, in multiple plaintiff cases, where any plaintiff resides. If the plaintiff is from out of state, venue lies in Sumner County.13 Therefore, the Davidson

COVER STORY By: Judy M. Cornett

U.T. College of Law

Matthew R. Lyon

LMU Duncan School of Law

County Chancery Court will be proper venue for such cases only when the plaintiff resides there. This would seem to legislatively overrule a 1993 Court of Appeals decision, which observed that Tennessee Code Annotated section 4-4-104, “as interpreted for many years, established venue for suits against state officials in Davidson County.”14

The three-judge panel shall sit in the supreme court building for the Grand Division of the county where the action is venued. Thus, if a case is filed in Johnson County (in the far northeastern corner of Tennessee), the plaintiff must travel to the supreme court building in Knoxville (nearly 150 miles) for any trial-level proceedings.

Anticipating challenges to any redistricting plan enacted by the super-majority Republican General Assembly, the Act also requires any court (including the three-judge panel and the supreme court) to give the legislature at least 15 days in which to remedy any defects found in the redistricting plan.

Final Bill Was a Compromise

This final version of the legislation pulled back from prior drafts that were more blatantly political. Earlier Senate and House bills created special appeals panels made up of judges who either would be appointed initially by the Governor and face retention elections after taking the bench, or, in the case of one draft bill, be elected statewide by popular vote every eight years.15 This version of the legislation closely resembled an unsuccessful legislative effort in Texas this year to establish a statewide appeals court, popularly elected, to consider constitutional challenges to state laws.16

One of the sponsors of the Senate legislation, Sen. Mike Bell (R-Riceville), was very clear regarding the reason for the legislation: to get constitutional challenges to statutes out of the Davidson County courts. “Why,” asked Sen. Rice, “should judges who are elected by the most liberal constituency in the state . . . be the ones deciding cases that affect the state in general?”17

In the end, by preserving the judicial branch’s ability to appoint the members of each three-judge panel, the new law seems to meet the legislators’ intent to provide greater representation of interests from across the state while avoiding a direct conflict between the two branches of our state government. But just as this is not the first effort in the last decade by members of the General Assembly to impact the political makeup of the judiciary, it surely will not be the last.

One of the first cases to be heard by a three-judge panel may be the six-year-old litigation over the adequacy of the state’s funding of public schools, from which Chancellor Lyle recused herself after the legislation seeking her removal was introduced in the House of Representatives.18 As lawyers, we must trust that in this case and any others heard by the new “special chancery courts,” the judges serving on these three-judge panels will interpret and apply the law fairly and impartially, regardless of the Grand Division they call home.19

1 Lilly Ledbetter Fair Pay Act of 2009, Pub. L. No. 111-2, 123 Stat. 5 (codified as amended in scattered sections of 29 U.S.C. and 42 U.S.C.) (overruling Ledbetter v.

Goodyear Tire & Rubber Co., Inc., 550 U.S. 618 (2007)). 2 2021 Tenn. Pub. Acts ch. 566 (codified at Tenn. Code Ann. secs. 20-18-101 to -105). 3 The legislation was the Tennessee Education Saving Account Pilot Program, 2019 Tenn. Pub. Acts ch. 506 (codified at Tenn. Code Ann. Secs. 49-6-2601 to -2612). 4 Tenn. Const. art. XI, § 9. 5 Mariah Timms, Duane W. Gang, & Natalie Allison, “Judge Rules Gov. Lee’s Education Savings Account Program Unconstitutional,” THE TENNESSEAN (May 4, 2020), available at https://www.tennessean.com/story/news/ education/2020/05/04/judge-rules-gov-bill-lees-education-savings-accountprogram-unconstitutional/3068998001/. 6 Metropolitan Government of Nashville and Davidson County v. Tennessee Dep’t of Education, No. M2020-00683-COA-R9-CV, 2020 WL 5807636 (Sept. 9, 2020), appeal granted, (Tenn. Feb. 4, 2021). 7 Memorandum and Order, Demster v. Hargett, No.20-435-I(III) (Davidson Co. Chancery Ct. June 4, 2020), available at https://www.aclu.org/sites/default/files/ field_document/order_-_lay_v_goins.pdf. 8 Fisher v. Hargett, 604 S.W.3d 381 (Tenn. 2020). 9 2021 Tenn. Pub. Acts 564. 10 https://wapp.capitol.tn.gov/apps/BillInfo/Default.aspx?BillNumber=HR0023. 11 Stephen Elliott, “Bar Associations Criticize Lyle Resolution,” NASHVILLE POST (Mar. 2, 2021), available at https://www.nashvillepost.com/courts/bar-associationscriticize-lyle-resolution/article_91326cfe-c014-5171-85c1-d8991bc407b9.html. 12 2021 Tenn. Pub. Acts ch. 566. Also, the Tennessee Supreme Court has promulgated Rule 54: Interim Rule for Special Three-Judge Panels, to implement the legislation. 13 When asked why Sumner County was chosen as the default venue for out-of-state plaintiffs, the sponsor of the bill, Rep. Johnny Garrett (R-Goodlettsville), stated, “An out of state plaintiff who has no residence here should have a place to be. Someone 50 years ago chose Davidson County for some reason that I don’t know. Out of state plaintiffs have to have somewhere, and we chose Sumner just like they chose Davidson.” Floor Debate on H.B. 1196, April 8, 2021, available at https:// tnga.granicus.com/MediaPlayer.php?view_id=610&clip_id=24582. Rep. Garrett represents District 65, encompassing part of Sumner County. 14 Morris v. Snodgrass, 871 S.W.2d 484, 485 (Tenn. Ct. App. 1993). 15 https://www.tennessean.com/story/news/politics/2021/05/05/tennessee-superchancery-court-state-legislature-davidson-county-judges/4925406001/. 16 https://capitol.texas.gov/BillLookup/Text.aspx?LegSess=87R&Bill=SB1529. 17 Pam Sohn, “Tennessee’s ‘Super’ Court Idea is Super GOP Partisan,” CHATTANOOGA TIMES-FREE PRESS (May 3, 2021), available at https://finance.yahoo.com/news/ opinion-tennessees-super-court-idea-010000816.html. 18 Nate Rau, “Education Funding Lawsuit Could Head to New Three-Judge Panel,” TENNESSEE LOOKOUT (July 2, 2021), available at https://tennesseelookout. com/2021/07/02/education-funding-lawsuit-could-head-to-new-3-judge-panel/. 19 The authors thank University of Tennessee College of Law student Molly Green Majewski for her excellent research assistance.