A primer: Key players and legal ramifications of the Nashville anti-tax referendum
James Blumstein. (Photo: Vanderbilt University Law School)
The Davidson County Election Commission will meet on Monday to consider a proposal that would completely overhaul how Metro operates, drastically curb the government’s ability to raise property taxes and make elected officials susceptible to be easily recalled from office.
The election commission will hear a report from its handpicked attorneys about the legality of a proposal from 4 Good Government, the opaquely funded anti-tax group that failed to force a charter amendment referendum last year.
The sense from stakeholders who have followed the election commission’s handling of the referendum proposal is that its attorneys, Vanderbilt professor James Blumstein and the Bradley law firm attorney Austin McMullen, will give the green light for the referendum to move forward and set a date for a special election.
In that scenario, the election commission will be putting the charter amendment on the ballot despite serious legal questions from Bob Cooper, Metro’s top attorney. This is the fifth time the election commission will meet to ponder the petitions and the possible referendum.
With that in mind, here is a primer on what is being proposed, how it would affect Metro, the looming legal battle and the key players.
How we got here
The effort to change the Metro charter to limit the city’s ability to raise taxes sprung up on the heels of Metro Council and Mayor John Cooper approving a record 34 percent tax increase a year ago.
Led by Jim Roberts, the group 4 Good Government, mailed petitions to Davidson County voters last year seeking to undo the tax increase and limit future increases. But, the proposal was immediately criticized by opponents for failing to comply with state and Metro laws. Eventually, Davidson County Chancellor Ellen Hobbs Lyle rejected the proposal as illegal, sending 4 Good Government back to the drawing board. Last year’s failed effort was financially supported by the local affiliate of Americans For Prosperity, part of the national group funded by the conservative Koch family.
When the first proposed charter amendment was thrown out, Roberts and 4 Good Government went back to the drawing board, mailing out two more rounds of petition cards. It’s unclear if the Koch family is paying for the latest effort.
Roberts initially told the Tennessee Star, a conservative website, that he believed he needed more than 31,000 signatures in order to force the referendum. The number of signatures needed is based on 10 percent of the previous countywide Metro election. He later changed his tune, and said he needed about 9,000 because, he argued in a legal filing, the previous election determining the number of signatures needed was the August Trustee’s election.
After the election commission verified 4 Good Government earned over 12,100 signatures, Robers withdrew his preemptive lawsuit and the issue now rests in the hands of the election commission.
What the proposal would do
4 Good Government’s charter amendments would completely overhaul how the city functions. The proposal would reset the property tax rate back to its levels prior to last year’s increase. Since a property reappraisal has taken place since then, the rate would roughly be the same as it will be for most property owners after the rate is readjusted in accordance with state law. However, the 4 Good Government proposal would also amend the charter to say that a special referendum must be held to allow voters to approve any future increase of more than 3 percent.
The proposal would also amend the charter by:
*Make it easier to remove Metro officials by reducing the number of signatures needed to force a recall election. Also, the elected official who is the subject of the recall would be barred from running in the recall election except as a write-in candidate.
*Abolish health insurance benefits for Metro Council members and other elected officials.
*Preserve voter-approved charter amendments by changing the charter itself to say those amendments could only be repealed by way of future voter referendums.
*Make it harder to give away Metro property by requiring 31 Metro Council votes to approve land conveyances instead of the current requirement of 21 votes.
*Revert pro sports stadiums and the surrounding developments back to taxpayers in the event a team leaves town or fails to play in its venue for 24 straight months.
A legal battle royale
Bob Cooper, the director of the Metro Department of Law, mapped out the legal flaws with the 4 Good Government proposal in a memo provided to the Metro Council last month.
Cooper argued that the proposal is too vaguely worded to be clearly implemented were the referendum to pass, that limiting the city’s taxing powers is illegal and that the petitions themselves are legally flawed.
The ultimate takeaway is that if identifying multiple election dates on a referendum is impermissible, then 4 Good Government has submitted zero valid signatures, because every petition that it filed was fatally defective.
– Daniel Horwitz
Critically, the supporters signed two different petitions with two different dates prescribing when the referendum election should take place. The charter requires that a referendum petition prescribe a date for a special election. The 4 Good Government petition offered that the referendum take place on “May 28, 2021 or June 14, 2021, whichever is earlier as permitted by Metro charter.”
Nashville attorney Daniel Horwitz, who frequently practices in the area of Metro law, said no other referendum proposal in the city’s history failed to prescribe a specific date. The election commission staff has also said there isn’t enough time to pull off the referendum even by the second date offered by 4 Good Government. Meaning, no matter how the election commission votes, it won’t meet the petitions’ directive to hold the referendum on May 28 or June 14.
“Several other arguments support the same conclusion, but the ultimate takeaway is that if identifying multiple election dates on a referendum petition is impermissible, then 4 Good Government has submitted zero valid signatures, because every petition that it filed was fatally defective,” Horwitz told the Tennessee Lookout.
Since the issue is heading for Chancery Court either way, it’s not premature to take note of the legal battle that will ensue. On one side will be Roberts, a frequent thorn in the side of Metro government whose career has survived its own legal troubles. Roberts will be joined by McMullen, the former Republican politician who previously served as the mayor of Oak Hill and frequent rumored candidate for higher office, and Blumstein, the Vanderbilt professor whose controversial legal memos helped lay the foundation for Republicans to strike down key components of President Barack Obama’s Affordable Care Act.
On the other side of the lawsuit will be Bob Cooper, who heads the city’s legal department and previously served as state attorney general under Gov. Phil Bredesen’s administration, and Jamie Hollin, the former Metro Councilman who has won a slate of landmark cases related to Metro laws. Hollin is representing the Nashville Business Coalition, a group of prominent local businesses which opposes the referendum.
The Sue Cain/Karl Dean memo
While all the provisions would significantly alter the way the city functions, none would have the far-reaching impact of the proposal to limit future tax increases to 3 percent without voter approval.
In 2006, voters approved a charter amendment, pushed by anti-tax activist Ben Cunningham, which said the city could not raise taxes over the rate at the time of $4.69 per $100 of assessed value.
Although that amendment passed, then-Metro attorney Sue Cain wrote a memo spelling out why the proposal was contradicted by the Tennessee constitution.
“… it is the opinion of the Department of Law that a court is likely to find this provision of the Metropolitan Charter is invalid because the Tennessee Constitution has vested the General Assembly; with the power to authorize counties to impose an ad valorem tax on property, the General Assembly has authorized the county legislative body to levy the tax and required the county legislative body to determine the amount of the tax. The General Assembly has not authorized the charter of a consolidated government to limit or restrict this authority of the local legislative body,” Cain, who went on to serve as Mayor Karl Dean’s top legal adviser, said in her 2006 opinion.
Blumstein’s history with Metro
The reason observers believe Blumstein and McMullen will say the proposal passes legal muster is the manner in which the two lawyers were hired by the election commission. For last year’s referendum proposal, the commission hired attorney Bill Koch, the dean of the Nashville School of Law and former associate justice of the Tennessee Supreme Court.
The commission decided Koch was conflicted to represent it in this matter because of a memo shared between Bob Cooper and him in advance of the commission’s first meeting on the matter. So, it hired McMullen and Blumstein on a no-bid contract. McMullen’s hire was noteworthy since he works for the same law firm, Bradley, as the lawyers who aided Koch in last year’s lawsuit.
Blumstein is highly regarded in Nashville legal circles. He is a tenured professor at the prestigious Vanderbilt law school and has worked on an array of notable cases, including the Affordable Care Act lawsuit.
But, Blumstein has his own colorful history with Metro government.
Blumstein represented a class of plaintiffs in a lawsuit with the city over how arrest records were used in background checks on prospective employees. That lawsuit resulted in a one page consent decree in 1973 that guided how the city could use records of arrest that did not result in conviction.
Fast-forward a few decades to 2006 when Blumstein, on behalf of the class action plaintiffs, filed a claim in federal court that Metro was in contempt of the court order because it was failing to abide by the consent decree. Without getting into the nuance of that lawsuit, Metro admitted it was not following the consent decree because the city forgot the federal order even existed.
But, Blumstein found himself in hot water with federal Judge Aleta Trauger, because it was revealed following years of litigation that he was pursuing the matter despite not having any contact with any of the plaintiffs who were considered part of the protected class. In fact, Trauger blasted Blumstein in a court order in which she described his work of moving forward with the lawsuit despite not being in contact with a member of the class as “unethical conduct.”
“Under the circumstances, counsel had an obligation to notify the court, upon filing the Motion for Further Relief, of the need to locate a substitute representative and to request leave at that time, if necessary, to conduct discovery to assist him in locating an appropriate representative,” Trauger said in her opinion, ultimately dismissing the lawsuit. “Instead, (Blumstein) purported to act on behalf of the class and engaged in lengthy negotiations for the modification of the 1973 Consent Decree, but without consulting or communicating with an actual class representative or even a class member. This conduct violates ethics rules…. “[A] lawyer shall abide by a client’s decisions concerning the objectives of representation and . . . shall consult with the client about the means by which the client’s objectives are to be accomplished.”
The Tennessee Lookout asked Blumstein to comment on that case and his involvement despite not being in contact with a client. He said that it was his belief that when a member of a class can no longer be located, an attorney can engage in discovery in order to identify an individual who would fit as a member of the class.
“The case law strongly indicated that when a class representative is no longer available, the appropriate remedy is to engage in discovery to identify a substitute,” Blumstein said. “In addition, a person who seemed to be covered as a member of the class sought to represent the class. Metro agreed to a discovery process that would, in addition, identify other class members who could serve as class representatives.
“Metro had that information from its employment application records. Judge Trauger approved that process. But, eventually, Judge Trauger concluded that the potential substitute class representative did not qualify under the federal rules to serve as the class representative. And, for reasons I still do not really understand, she changed her mind mid-stream and denied discovery that she had authorized and that I had counted on to identify an appropriate class representative so as to be able to maintain the employment component of the case.”
Before that class action lawsuit, Blumstein made his mark in Tennessee as the lawyer and lead plaintiff in a case challenging the state’s voter registration law. That lawsuit reached the U.S. Supreme Court, where Blumstein was victorious. At the time of the 1970 lawsuit, a person had to live in a state of residence for one year and in a county for 90 days in order to register. Blumstein said the estimate at the time was 6.5 percent of all voters were blocked from registering because they did not meet that requirement.
“I believe, but cannot state with confidence, that that case enfranchised more voters than any other single case,” Blumstein said. “It had nationwide effect.”
Between Blumstein’s impactful career, and Bob Cooper’s respected legacy, the referendum pits two highly regarded lawyers on opposite sides. Representing business interests, Hollin has won more lawsuits related to the Metro charter and election law than perhaps any attorney in recent years. Coincidentally, Hollin was on the other side of McMullen in another election-related lawsuit. Hollin represented supporters of the charter amendment to create the Community Oversight Board to review officer-involved shootings. Representing the Fraternal Order of Police, McMullen sought to dismiss that referendum on technical grounds, but lost out to Hollin. The COB proposal was then easily approved by voters.
Roberts is also no stranger to Metro-related lawsuits.
In addition to the fairgrounds lawsuit, Roberts backed the 2011 effort to preserve the fairgrounds. He was also the legal counsel to the 2009 English-Only referendum. That effort to make English the city’s official language and block most government communications from using any language other than English took two petition drives before garnering enough signatures to make the ballot, and then was resoundingly defeated by voters.
Roberts has been in trouble with the Tennessee Board of Professional Responsibility, which oversees the ethical conduct of lawyers. He was censured in 2020, 2018 and 2015. His license was suspended and then reinstated six months later in 2016.
In 2011, a Board of Professional Responsibility panel found Roberts engaged in “deceitful conduct” and ordered his license suspended for six months.
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