Snow v. City of Memphis
1975 Tenn. LEXIS 631, 527 S.W.2d 55 (1975)
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Rule of Law:
A limited constitutional convention is not bound by specific, affirmative proposals detailed in the legislative call that convened it, as long as its actions remain within the designated subject matter. Furthermore, classifying residential properties with two or more rental units as commercial for tax purposes is rationally related to the legitimate state interest of taxing income-producing property at a higher rate and does not violate the Equal Protection Clause.
Facts:
- The Tennessee Legislature submitted 'Question 3' to voters, which proposed a constitutional convention to amend Article II, Section 28 of the state constitution regarding property tax classification.
- The 'call' for the convention specified that the convention would classify real property into 'only' four sub-classifications: (a) public utility, (b) industrial and commercial, (c) residential, and (d) farm.
- In November 1968, Tennessee voters approved the Question 3 call.
- The subsequent Constitutional Convention of 1971 adopted Resolution 74, which proposed the new constitutional language.
- Resolution 74 included a provision stating that 'residential property containing two (2) or more rental units is hereby defined as industrial and commercial property.'
- In August 1972, voters ratified Resolution 74, making it part of the Tennessee Constitution.
- As a result, plaintiffs Snow, Kenmont Apartments, and other owners of properties with two or more rental units became subject to the higher 'industrial and commercial' assessment rate (40%) instead of the 'residential' rate (25%).
Procedural Posture:
- Plaintiffs Snow, et al., filed a declaratory judgment action in the Chancery Court of Shelby County against the City of Memphis and County of Shelby.
- The Shelby County Chancellor ruled that the constitutional amendment was unconstitutional.
- The City of Memphis, County of Shelby, and the Attorney General of Tennessee (appellants) perfected a direct appeal to the Supreme Court of Tennessee.
- Plaintiff Kenmont Apartments filed a similar action in the Chancery Court of Davidson County.
- The Davidson County Chancellor ruled that the constitutional amendment was constitutional.
- Kenmont Apartments (appellant) appealed that decision to the Supreme Court of Tennessee.
- The Supreme Court of Tennessee consolidated the two cases for review.
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Issue:
Does a Tennessee constitutional amendment that defines residential property with two or more rental units as 'industrial and commercial' property for tax purposes violate Article XI, Section 3 of the Tennessee Constitution by exceeding the limitations of the convention's call, or the Equal Protection Clause of the Fourteenth Amendment?
Opinions:
Majority - Fones, Chief Justice.
No, the amendment does not violate the Tennessee Constitution or the U.S. Constitution's Equal Protection Clause. The court held that a constitutional convention is a deliberative body of at least equal dignity to the legislature, not merely its 'puppet.' The legislature's role in a 'call' is to define the subject matter for the convention's consideration, not to dictate the specific terms of the outcome. Any affirmative proposals in the call beyond specifying the subject matter are considered 'mere surplusage' and are not binding on the convention. The court reasoned that the ultimate check on the convention's power is the people's ratification vote, which occurred here. Regarding the equal protection challenge, the court applied the rational basis test. It found that the classification scheme was rationally related to the legitimate state objective of taxing income-producing property at a higher rate than owner-occupied residences and farms. The court concluded that distinguishing between owner-occupied or single-unit rental properties and multi-unit rental properties is not a 'palpably arbitrary' or 'invidious' classification, and any resulting discrimination is minimal and constitutionally permissible.
Analysis:
This decision significantly clarifies the separation of powers between the legislature and a limited constitutional convention in Tennessee. By holding that a convention's authority is defined by subject matter rather than by the specific dictates of the legislative call, the court empowered future conventions with greater deliberative freedom. The ruling treats the convention as a sovereign body within its limited scope, preventing the legislature from using the call to effectively draft constitutional amendments itself. The decision also reinforces the broad discretion granted to states in matters of taxation under the Equal Protection Clause, upholding a classification scheme under the highly deferential rational basis review and solidifying the high bar plaintiffs face when challenging tax laws on grounds of discrimination.
