IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
February 10, 2010 Session
GRAY’S DISPOSAL COMPANY, INC. ET AL. v. METROPOLITAN
GOVERNMENT OF NASHVILLE, DAVIDSON COUNTY ET AL.
Appeal by Permission from the Court of Appeals, Middle Section
Chancery Court for Davidson County
Nos. 98-3317-III, 03-3890-I(III), 98-3400-II(III)
Ellen Hobbs Lyle, Chancellor
No. M2007-00528-SC-R11-CV - Filed August 31, 2010
This appeal involves the application of a decision by the United States Supreme Court to
legal issues in a matter pending before a state trial court after being remanded by a state
appellate court. In 1998, a group of commercial waste haulers filed suit in the Chancery
Court for Davidson County challenging the validity of a flow control ordinance enacted by
the Metropolitan Government of Nashville and Davidson County. The trial court granted the
Metropolitan Government’s motion for summary judgment. However, in 2002, the Court of
Appeals, relying on a decision of the United States Court of Appeals for the Sixth Circuit,
reversed the trial court with regard to part of the application of the ordinance and remanded
the case to the trial court for further proceedings. Gray’s Disposal Co. v. Metro. Gov’t of
Nashville, Davidson Cnty., 122 S.W.3d 148 (Tenn. Ct. App. 2002). While the case was
pending in the trial court, the United States Supreme Court handed down a decision contrary
to the Sixth Circuit’s decision relied upon by the Tennessee Court of Appeals. The trial court
declined to follow the United States Supreme Court’s intervening decision. The Court of
Appeals, relying on the law of the case doctrine and equitable principles, affirmed. Gray’s
Disposal Co. v. Metro. Gov’t of Nashville, Davidson Cnty., No. M2007-00528-COA-R3-CV,
2009 WL 454183 (Tenn. Ct. App. Feb. 23, 2009). We granted the Metropolitan
Government’s Tenn. R. App. P. 11 application for permission to appeal. We have
determined that Tennessee’s courts are not free to disregard applicable intervening changes
in federal constitutional law announced by the United States Supreme Court while a case is
pending on remand. Accordingly, we reverse the judgment of the Court of Appeals.
Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Appeals
Reversed
W ILLIAM C. K OCH, J R., J., delivered the opinion of the Court, in which J ANICE M. H OLDER,
C.J., C ORNELIA A. C LARK, G ARY R. W ADE, and S HARON G. L EE, JJ., joined.
Sue B. Cain, Director of Law, J. Brooks Fox, Christopher M. Lackey, Melissa S. Roberge,
and Elizabeth A. Sanders, Assistant Metropolitan Attorneys, Nashville, Tennessee, for the
appellants, Metropolitan Government of Nashville, Davidson County, Tennessee and
Metropolitan Thermal Transfer Corporation.
Thurman T. McLean, Jr., Nashville, Tennessee, for the appellees, Gray’s Disposal Company,
Inc. and Ray Webster d/b/a Hermitage Hills Sanitary Company.
OPINION
I.
In 1963, the separate governments of the City of Nashville and Davidson County were
consolidated into the Metropolitan Government of Nashville and Davidson County
(“Metropolitan Government”).1 As a result of this consolidation, the portion of the county
located within the boundaries of the old city became the Urban Services District and the
remainder of the county became the General Services District.2 The benefit of living in the
Urban Services District is increased city services;3 the burden, however, is the obligation to
pay increased taxes.
Waste collection is an example of the increased services available to residents of the
Urban Services District. While the Metropolitan Government must dispose of all the waste
generated by county residents, it only collects the waste from the residents of the Urban
Services District. The Metropolitan Government uses its own employees and private haulers
to collect this waste. In contrast, residents of the General Services District must hire private
haulers to collect their waste.
Since 1974, most of the solid waste generated by the residents of Davidson County
has been hauled to the Nashville Thermal Transfer Corporation (“Nashville Thermal”), a
power plant that used solid waste as fuel to provide heating and cooling to the buildings in
downtown Nashville. This facility was owned by the Metropolitan Government and operated
by a not-for-profit corporation. In 1981, the Tennessee General Assembly amended Tenn.
1
Carole Bucy, Short History of Metropolitan Government for Nashville-Davidson County, Nashville
Public Library, http://www.library.nashville.org/research/res_nash_history_metrohistory.asp (last visited
Aug. 9, 2010) (“Bucy, Short History”).
2
Charter of Metro. Gov’t of Nashville & Davidson County, Tenn. art. I; § 1.03 (2010) (“Metro.
Charter”).
3
See generally Metro. Charter § 1.05.
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Code Ann. § 7-54-103 to allow the Metropolitan Government to charge fees for the
collection of solid waste.4
The Metropolitan Government began charging “tipping fees” 5 for deliveries of solid
waste to Nashville Thermal. These fees were used to fund the operation of the Nashville
Thermal plant. To assure that Nashville Thermal had a sufficient and steady supply of solid
waste, the Metropolitan Government enacted a series of “flow control” ordinances requiring
that all residential solid waste generated in Davidson County be disposed of at the Nashville
Thermal plant. The Metropolitan Government did not collect the tipping fee from the
Department of Public Works or from the private haulers with whom it contracted to collect
solid waste in the Urban Services District.6 Consequently, only the private haulers collecting
waste in the General Services District and disposing of it at the Nashville Thermal plant were
required to pay the tipping fees.
Gray’s Disposal Company, Inc. (“Gray’s Disposal”) is a family-owned refuse hauler
that began operating in 1948. Ray Webster began operating Hermitage Hills Sanitary
Company (“Hermitage Hills”) in 1960. Both of these haulers served private customers in the
General Services District. Ostensibly as a result of the Metropolitan Government’s tipping
fees, Gray’s Disposal filed for bankruptcy on November 30, 1995, and Mr. Webster sold his
business in 1997.
In November 1998, Gray’s Disposal and Mr. Webster filed suit in the Chancery Court
for Davidson County seeking a declaration that the tipping fees and flow control ordinances
violated the Metropolitan Charter and the Commerce Clause of the United States
Constitution.7 Specifically, Gray’s Disposal and Mr. Webster alleged that the Metropolitan
Government was permitting other haulers to co-mingle waste from the Urban Services
District with waste from the General Services District to avoid paying the tipping fee. The
4
Act of April 8, 1981, ch. 204, § 5, 1981 Tenn. Pub. Acts 264, 266-67 (codified as amended at Tenn.
Code Ann. § 7-54-103(e) (2005)).
5
The term “tipping fee” originates from the manner in which refuse trucks unload their waste – the
bed of the truck rises and “tips” the refuse out. United Haulers Ass’n v. Oneida-Herkimer Solid Waste Mgmt.
Auth., 550 U.S. 330, 336 n.1 (2007).
6
Tipping fees were computed for deliveries by private haulers on Urban Services District routes, but
these fees were either rebated or credited against the fees charged to these private haulers on their General
Services District routes.
7
U.S. Const. art. I, § 8, cl. 3.
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Metropolitan Government filed a separate suit against Mr. Webster seeking unpaid tipping
fees for dates prior to December 1997. These cases were consolidated by agreement.8
On March 12, 2001, the trial court granted a summary judgment dismissing the claims
of Gray’s Disposal and Mr. Webster. Nine months later, on December 12, 2001, the trial
court granted the Metropolitan Government’s claims for unpaid tipping fees. The order
directed Gray’s Disposal to remit $66,789.80 and Mr. Webster to remit $55,275.00 in unpaid
fees. Gray’s Disposal and Mr. Webster appealed both summary judgments to the Court of
Appeals.
The Court of Appeals filed its first opinion in this case on December 31, 2002. While
the court generally upheld the validity of the Metropolitan Government’s tipping fees and
flow control ordinances, it relied on Waste Management of Tennessee, Inc v. Metropolitan
Government of Nashville & Davidson County, 130 F.3d 731 (6th Cir. 1997) (“Waste
Mgmt.”), to hold that a portion of the fees sought by the Metropolitan Government had been
imposed as part of an illegal flow control regulation that violated Gray’s Disposal’s and Mr.
Webster’s Commerce Clause rights. Gray’s Disposal Co. v. Metro. Gov’t of Nashville,
Davidson Cnty., 122 S.W.3d 148, 168-69 (Tenn. Ct. App. 2002) (“Gray’s Disposal I”).
Accordingly, the Court of Appeals held that Gray’s Disposal and Mr. Webster “remain liable
for the payment of any unpaid tipping fees accumulated by the respective appellants after
November 5, 1997.” Gray’s Disposal Co. v. Metro. Gov’t of Nashville, Davidson Cnty., 122
S.W.3d at 169. Accordingly, the court “remand[ed] this cause to the trial court for
determination of the respective totals owing by each respective appellant for unpaid tipping
fees accumulated after November 5, 1997.” Gray’s Disposal Co. v. Metro. Gov’t of
Nashville, Davidson Cnty., 122 S.W.3d at 169.
Apparently the remanded case was not enough litigation for the parties. For the next
four years or so, they let that proceeding lay fallow while they pursued new claims against
each other. In December 2003, Gray’s Disposal and Mr. Webster filed a new suit against the
Metropolitan Government seeking to recover tipping fees paid prior to November 5, 1997.9
The Metropolitan Government responded with a new lawsuit of its own in May 2006,
8
The Metropolitan Government did not pursue claims for unpaid tipping fees against Gray’s Disposal
because it was in bankruptcy. After Gray’s Disposal emerged from bankruptcy, the Metropolitan
Government amended its complaint to include claims for unpaid fees against Gray’s Disposal, extending
beyond December, 1997.
9
Eventually, Gray’s Disposal sought to recover $575,875.50, and Mr. Webster sought to recover
$534, 835.00.
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seeking to recover $63,994.90 in unpaid tipping fees from August 2001 to August 2002,
prejudgment interest, and court costs from Gray’s Disposal and Mr. Webster.10
On November 14, 2006, Gray’s Disposal and Mr. Webster moved for a summary
judgment in the case that had been remanded by the Court of Appeals almost four years
earlier. On January 30, 2007, the trial court entered an order limiting the issues to be decided
to those that had been remanded by the Court of Appeals in 2002. Later, on March 26, 2007,
the trial court entered an order setting the date for the hearing on these issues for June 19,
2007.
On April 30, 2007, the United States Supreme Court handed down its decision in
United Haulers Association v. Oneida-Herkimer Solid Waste Management Authority, 550
U.S. 330 (2007). This decision undermined the continuing legal validity of the Sixth
Circuit’s 1997 Waste Management decision. On June 1, 2007, the Metropolitan Government
filed a “notice of intervening change in controlling authority” to bring the United Haulers
decision to the trial court’s attention. Thereafter, Gray’s Disposal and Mr. Webster filed their
notice of affirmative defenses, including defenses based on laches, the statute of limitations,
and res judicata. Their chief complaint was the “lengthy delay” between the filing of the
Court of Appeals’ opinion on December 21, 2002, and the June 19, 2007 trial date.
During the hearing on June 19, 2007, the Metropolitan Government argued that it was
no longer limited to collecting tipping fees accruing prior to November 5, 1997, because of
the United Haulers decision. The trial court declined to consider the effect of the United
Haulers decision on the case, stating “I’m going to stick with what the Court of Appeals told
me to do on remand.”
Based on the trial court’s ruling, the Metropolitan Government stipulated that Mr.
Webster did not owe any tipping fees and presented evidence that Gray’s Disposal owed
$62,036.80. Thereafter, on July 9, 2007, the trial court entered a judgment against Gray’s
Disposal for $62,036.80. The Metropolitan Government moved to alter or amend seeking
permission to collect fees accruing prior to November 5, 1997. The trial court denied the
motion based on “the untimeliness, stealth and informality with which Metro raised the issue
resulting in unfair prejudice to the [plaintiffs].”
The Metropolitan Government appealed, and the Court of Appeals filed its second
opinion in this case on February 23, 2009. Gray’s Disposal Co. v. Metro. Gov’t of Nashville
& Davidson Cnty., No. M2007-00528-COA-R3-CV, 2009 WL 454183 (Tenn. Ct. App. Feb.
23, 2009) (“Gray’s Disposal II”). The court held that Gray’s Disposal and Mr. Webster were
10
The trial court dismissed this complaint, and the Court of Appeals affirmed the trial court. Metro.
Gov’t of Nashville & Davidson Cnty. v. Gray’s Disposal Co., No. M2007-00073-COA-R3-CV, 2008 WL
624851 (Tenn. Ct. App. Mar. 6, 2008), perm app. denied (Tenn. Oct. 27, 2008).
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barred from pursuing their second claim for a refund. Gray’s Disposal II, 2009 WL 454183,
at *7. While acknowledging that the United Haulers opinion produced an intervening
change in the law, the court declined to depart from its understanding of the law of the case
doctrine because it viewed this case as “one of those ‘unique cases where on grounds of
fairness, procedure trumps substance.’” Gray’s Disposal II, 2009 WL 454183, at *4.
We granted the Metropolitan Government’s Tenn. R. App. P. 11 application for
permission to appeal. The Metropolitan Government has raised the following three issues:
(1) whether United Haulers would allow Metro to collect unpaid tipping fees for the time
period before November 5, 1997; (2) whether Metro’s failure to file a motion to amend the
Chancery Court’s Pre-Trial Order acts as a procedural bar to the application of United
Haulers to the facts of this case; and (3) whether Tennessee courts are bound by decisions
of the United States Supreme Court after a case has been remanded to the trial court from an
appellate court with instructions predicated on a contrary understanding of federal law.
II.
T HE A PPLICATION OF THE L AW OF THE C ASE D OCTRINE
The Metropolitan Government argues on this appeal that the law of the case doctrine
should not have prevented either the trial court or the Court of Appeals from giving effect
to the United Haulers decision in this case. It insists that the United Haulers decision
amounts to a change in the controlling law that occurred after the Court of Appeals remanded
the case for further proceedings. We agree.
A.
An appellate court’s final decision in a case establishes the “law of the case” when a
case is remanded for further proceedings. This “law of the case” is binding on the trial court
during the remanded proceedings and is also binding on the appellate courts should a second
appeal be taken after the trial court enters a judgment in response to the remand order.
Memphis Publ’g Co. v. Tenn. Petroleum Underground Storage Tank Bd., 975 S.W.2d 303,
306 (Tenn. 1998). While the doctrine applies only to issues that were actually decided by the
court, explicitly or implicitly, it does not apply to dicta. Memphis Publ’g Co. v. Tenn.
Petroleum Underground Storage Tank Bd., 975 S.W.2d at 306; Ladd ex rel. Ladd v. Honda
Motor Co., 939 S.W.2d 83, 90 (Tenn. Ct. App. 1996).
The “law of the case” doctrine is neither a constitutional mandate nor an inflexible
limit on the adjudicatory power of the courts. Instead, it is “a longstanding discretionary rule
of judicial practice,” Memphis Publ’g Co. v. Tenn. Petroleum Underground Storage Tank
Bd., 975 S.W.2d at 306; Orlando Residence, Ltd. v. Nashville Lodging Co., 213 S.W.3d 855,
861 (Tenn. Ct. App. 2006), reflecting the commonsense recognition that issues previously
litigated and decided by a court of competent jurisdiction need not be revisited. In re Estate
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of Boote, 265 S.W.3d 402, 413 (Tenn. Ct. App. 2007); Ladd ex rel. Ladd v. Honda Motor
Co., 939 S.W.2d at 90. Adhering to the “law of the case” doctrine promotes finality and
efficiency in litigation, ensures consistent results in the same proceeding, and assures that
lower courts follow the decision of higher courts. State v. Jefferson, 31 S.W.3d 558, 561
(Tenn. 2000); Harrison v. Laursen, 128 S.W.3d 204, 208 (Tenn. Ct. App. 2003).
As salutary as the “law of the case” doctrine may be, it does not erect an absolute bar
to the renewed consideration of earlier-decided issues. The doctrine does not necessarily
apply: (1) when the evidence offered at a trial or hearing following the remand is
substantially different from the evidence in the earlier proceeding; (2) when the prior
decision was clearly erroneous and would result in manifest injustice if allowed to stand; or
(3) when the prior decision is contrary to a change in the controlling law which has occurred
between the first and second appeal. Memphis Publ’g Co. v. Tenn. Petroleum Underground
Storage Tank Bd., 975 S.W.2d at 306; In re Estate of Boote, 265 S.W.3d at 413.
B.
In response to the accelerating generation of solid waste in the United States,11 many
local governments stepped up their recycling efforts and either upgraded solid waste disposal
facilities or constructed new, more efficient ones. These efforts are capital-intensive and thus
present funding challenges. While raising taxes is one way to provide this funding, local
governments have frequently used tipping fees and flow control measures to produce the
needed revenue.12
The viability of these programs depends on their adoption and use by the residents in
the area being served. To assure economic viability, flow control measures assure a steady
source of revenue by requiring waste haulers to deliver their waste to designated facilities.13
In circumstances where a local government has contracted for waste disposal services with
a private, for-profit corporation, the contractors have considered a flow control ordinance as
an essential part of their agreement.
11
In 2008, Americans generated 250,000,000 tons of solid waste each day which is an average of 4.5
pounds of waste per person per day. Office of Resource Conservation and Recovery, U.S. Environmental
Protection Agency, Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Facts
and Figures for 2008 (2009), available at http://www.epa.gov/osw/nonhaz/municipal/pubs/msw2008rpt.pdf.
12
See generally Maryellen Suhrhoff, Note, Solid Waste Flow Control and the Commerce Clause:
Circumventing Carbone, 7 Alb. L.J. Sci. & Tech. 186 (1996) (discussing municipalities’ approaches to
financing solid waste management in response to increased expenses and constitutional limitations).
13
United Haulers Ass’n v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. at 334, 343, 346.
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Despite the popularity of flow control measures among local governments, they often
came under legal attack by the private waste disposal companies who lost business when a
local government adopted a flow control ordinance. Companies that were not designated as
an approved recipient of solid waste could no longer accept waste from areas covered by the
flow control ordinance. Accordingly, their customers were required to contract with others
to dispose of their solid waste.
In 1994, the United States Supreme Court invalidated a flow control ordinance that
required residents of a local government to dispose of their solid waste with a private for-
profit company that had contracted with the local government to construct and operate a new
solid waste transfer station for non-recyclables. C & A Carbone, Inc. v. Town of Clarkstown,
511 U.S. 383 (1994). The Court held that the town’s flow control ordinance, which favored
one local business over other competing businesses, violated the Commere Clause and could
be upheld only if the town could demonstrate, under rigorous scrutiny, that it had no other
means to advance a legitimate local interest. C & A Carbone, Inc. v. Town of Clarkstown,
511 U.S. at 392. Because the town conceded that the flow control ordinance was chiefly a
financing measure, the Court concluded that the town had not carried its burden and held that
“[s]tate and local governments may not use their regulatory power to favor local enterprise
by prohibiting patronage of out-of-state competitors or their facilities.” C & A Carbone, Inc.
v. Town of Clarkstown, 511 U.S. at 394.
In the wake of the C & A Carbone decision, Waste Management, Inc., a private waste
collector that operated a waste disposal facility in Nashville, challenged the Metropolitan
Government’s tipping fees and flow control ordinance in the United States District Court for
the Middle District of Tennessee on the grounds that it violated the Commerce Clause and
the Due Process Clause. The District Court enjoined the enforcement of the tipping fee
provisions but did not enjoin the flow control ordinance. On appeal, the United States Court
of Appeals concluded that the Metropolitan Government’s ordinances were similar to those
struck down by the United States Supreme Court in C & A Carbone, Inc. v. Town of
Clarkstown and enjoined both the tipping fee and the flow control ordinance. Waste Mgmt.,
Inc. v. Metro. Gov’t of Nashville and Davidson Cnty., 130 F.3d at 736-37.
When the case currently before us was first appealed to the Court of Appeals, the
Court relied heavily on the Sixth Circuit’s Waste Management decision in its opinion. It held
that the fees accrued prior to November 5, 1997 – the date of the Waste Management
decision – were “an unconstitutional violation of appellants’ rights under the [C]ommerce
[C]lause. Appellants can not be held liable for the payment of fees, where such fees were
imposed involuntarily upon appellants as a mandatory requirement of an illegal municipal
regulation.” Gray’s Disposal I, 122 S.W.3d at 169.
After the Court of Appeals vacated the summary judgment for the Metropolitan
Government and remanded the case to the trial court but before the long-delayed hearing in
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the trial court, the United States Supreme Court limited the application of its C & A Carbone
decision to circumstances where the flow control ordinance benefitted a private contractor.
Noting that waste disposal is typically and traditionally a local government function, the
Court held that “it does not make sense to regard laws favoring local government and laws
favoring private industry with equal skepticism.” United Haulers Ass’n, Inc. v. Oneida-
Herkimer Solid Waste Mgmt. Auth., 550 U.S. at 343. Accordingly, the Court held that “flow
control ordinances, which treat in-state private business interests exactly the same as out-of-
state ones, do not ‘discriminate against interstate commerce’ for purposes of the dormant
Commerce Clause.” United Haulers Ass’n, Inc. v. Oneida-Herkimer Solid Waste Mgmt.
Auth., 550 U.S. at 345.
Although the United States Supreme Court was addressing the constitutionality of a
flow control ordinance from another state when it decided the United Haulers case, the
determinative legal issue decided by the Court was identical to the issue addressed and
decided by the United States Court of Appeals for the Sixth Circuit in its Waste Management
opinion. The Tennessee Court of Appeals relied heavily on the reasoning of the Waste
Management opinion when it decided Gray’s Disposal I. The United States Supreme Court’s
application of the Commerce Clause in United Haulers, therefore, controls the resolution of
the issues still pending in Gray’s Disposal II.
C.
There can be little question that the United States Court of Appeals for the Sixth
Circuit would have reached a different conclusion had it analyzed the Metropolitan
Government’s tipping fees and flow control ordinance in 1997 using the principles
announced by the United States Supreme Court in United Haulers rather than those employed
by the Court in C & A Carbone, Inc. Nashville Thermal was clearly a public entity. Thus,
rather than employing the strict scrutiny required when government favors a private entity
over its competitors, the Sixth Circuit would have used the more lenient balancing test found
in Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970), to assay the validity of the
Metropolitan Government’s ordinance. See United Haulers Ass’n, Inc. v. Oneida-Herkimer
Solid Waste Mgmt. Auth., 550 U.S. at 346.
The benefits of operating Nashville Thermal through the enactment and enforcement
of tipping fees and the flow control ordinance clearly outweigh an incidental effect on
interstate commerce. The program enabled the Metropolitan Government to provide needed
solid waste disposal services to its residents and to distribute the costs of these services
reasonably without duplication or overcharging. Efficient administration of public funds and
services is unquestionably a legitimate local public interest. Cf. Pike v. Bruce Church, Inc.,
397 U.S. at 142.
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Accordingly, we agree with the Metropolitan Government that the United States
Supreme Court’s United Haulers decision is an intervening change in controlling law for the
purposes of the application of the “law of the case” doctrine. It effectively overruled the
constitutional basis of both the Sixth Circuit’s Waste Management decision and the Court of
Appeals decision in Gray’s Disposal I. Accordingly, the United Hauler’s decision provided
a prima facie basis for declining to apply the “law of the case” doctrine in this case.
III.
E QUITABLE R EASONS FOR N OT R ECOGNIZING AND A PPLYING AN I NTERVENING
C HANGE IN C ONTROLLING L AW IN A P ENDING AND U NRESOLVED C ASE
Both the trial court and the Court of Appeals side-stepped deciding whether the
United States Supreme Court’s United Haulers decision amounted to an intervening change
in substantive law that precluded the application of the “law of the case” doctrine. They did
so by pointing to “equitable reasons” for not permitting the Metropolitan Government to take
advantage of the United Haulers decision. We have concluded that both courts’ justifications
for ignoring the United Haulers decision are insufficient.
A.
The trial court filed a detailed written memorandum explaining its reasons for
declining to consider the United Haulers case. The court stated:
What is in issue here is fairness to the garbage haulers
and the ability of this Court to effectively and meaningfully
decide cases. Metro did not use a formal, procedural
mechanism, such as a motion to alter or amend the March 26,
2007 order specifying the issues for trial when Metro learned of
the April 30, 2007 United States Supreme Court case. Such a
formal procedural mechanism would have provided notice to
opposing counsel and the Court of the asserted change in the
law and an opportunity for both to study the case and determine
its application to this matter, including whether additional
discovery was needed and/or a continuance of the trial. The
slight of hand/bootstrap procedure Metro employed of filing a
Notice of Intervening Authority 18 days before the trial and
mention of the United States Supreme Court case in its trial brief
are unfair to opposing counsel and the Court. Metro should not
reap the benefits of such conduct. The unfairness is particularly
pronounced where the original owners of the hauling business
are deceased and memories have dimmed with respect to events
in excess of 10 years ago which Metro, on the eve of trial,
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sought to tack on to the trial in this case. There are unique cases
where on grounds of fairness, procedure trumps substance. This
is such a case, the Court concludes.
The Court of Appeals ultimately reached the same conclusion as the trial court, but
it did not agree completely with all of the trial court’s reasoning. It found that the trial court
had overreached by concluding that “Metro acted in bad faith or underhandedly when it filed
the notice of what it believed was a change in controlling authority.” Gray’s Disposal II,
2009 WL 454183, at *5. To the contrary, the Court of Appeals observed that “Metro notified
the court and the parties of the case within a reasonable time, approximately one month after
the Supreme Court issued its opinion.” Gray’s Disposal II, 2009 WL 454183, at *5.
Nevertheless, the Court of Appeals noted that Metro’s filing of the Notice eighteen days
before trial did result in “some prejudice.” Gray’s Disposal II, 2009 WL 454183, at *5.
In reaching its conclusion that this case was one “where on grounds of fairness,
procedure trumps substance,” the Court of Appeals explained:
We cannot ignore the fact that more than four years passed
before a hearing was held to address the issue remanded by this
Court. A final judgment will not be altered or amended unless
the complaining party presents “clear, convincing, cogent
evidence” that it has suffered an injustice and that it is in no way
responsible for causing the alleged injustice. Had Metro
pursued the relief afforded it by this Court in a timely fashion,
the action would have been closed long before United Haulers
was decided. We find unpersuasive Metro’s argument that the
lengthy delay was caused by Appellants’ filing of case number
03-3890-I(III). Metro offers no other explanation for its delay
in effectuating a hearing on remand. Accordingly, we find that
the trial court did not err when it declined to modify our
instructions on remand in Gray’s Disposal I.
Gray’s Disposal II, 2009 WL 454183, at *4 (citation and footnote omitted). In other words,
the Court of Appeals essentially concluded that litigation in this case, which was remanded
on December 31, 2002, should have long since been completed prior to the issuance of the
United Haulers decision and that Metro had not offered an adequate justification for the
delay in this case.
B.
The Metropolitan Government insists that federal precedent required the trial court
and the Court of Appeals to follow the United Haulers decision without considering the
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“equities” of the circumstances. It points out that the United States Supreme Court had
clearly held that when it
applies a rule of federal law to the parties before it, that rule is
the controlling interpretation of federal law and must be given
full retroactive effect in all cases still open on direct review and
as to all events, regardless of whether such events predate or
postdate our announcement of the rule.
Harper v. Virginia Dep’t of Taxation, 509 U.S. 86, 97 (1993). Gray’s Disposal and Mr.
Webster insist that this principle is limited to criminal decisions. They are mistaken.
The United States Supreme Court has pointed out that “[w]hatever freedom state
courts may enjoy to limit the retroactive operation of their own interpretations of state law
cannot extend to their interpretations of federal law.” Harper v. Virginia. Dep’t of Taxation,
509 U.S. at 100 (citation omitted). In addition, the Court has held that
when (1) the Court decides a case and applies the (new) legal
rule of that case to the parties before it, then (2) it and other
courts must treat that same (new) legal rule as ‘retroactive,’
applying it, for example, to all pending cases, whether or not
those cases involve predecision events.
Reynoldsville Casket Co. v. Hyde, 514 U.S. 749, 752 (1995). As noted by the United States
Court of Appeals for the Eleventh Circuit, the main principle of the Harper v. Virginia
Department of Taxation decision is that once the United States Supreme Court “applies a
newly announced rule [of federal law] to the parties before it, all other courts must apply that
rule to all pending cases.” Glazner v. Glazner, 347 F.3d 1212, 1217-18 (11th Cir. 2003).
Gray’s Disposal’s and Mr. Webster’s argument that Harper’s main principle applies
only to criminal cases ignores that Harper itself involved a dispute over tax refunds and that
Reynoldsville Casket Co. involved the application of a tolling statute to a personal injury
claim. It also ignores the overwhelming authority suggesting that the decision in Harper was
intended to require retroactive application of United States Supreme Court’s rulings to other
pending civil cases in circumstances where the Court applied its decision to the parties before
it. See also, e.g., 2 Sheldon Nahmod, Civil Rights & Civil Liberties Litigation: The Law of
Section 1983 § 6:62 n.1 (2009) (observing that Harper v. Virginia Dep’t of Taxation is
addressed to establishing the retroactivity guidelines for the application of decisions in civil
cases); Douglas W. Kmiec, Natural Law Originalism for the Twenty-First Century - A
Principle of Judicial Restraint, Not Invention, 40 Suffolk U. L. Rev. 383, 415 (2007) (noting
that Harper v. Virginia Dep’t of Taxation extended to civil cases a standard of retroactivity
previously applicable in criminal cases).
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C.
Prior to its decision in Harper, the United States Supreme Court determined the
retroactive application of a new rule on a case-by-case basis in a manner that included
“weigh[ing] the inequity imposed by retroactive application.” Chevron Oil Co. v. Huson,
404 U.S. 97, 106-07 (1971). However, the Court expressly rejected this approach in Harper.
Harper v. Virginia Dep’t of Taxation, 509 U.S. at 95 n.9, 97. The Court also expressly
“prohibit[ed] the erection of selective temporal barriers to the application of federal law in
noncriminal cases.” Harper v. Virginia Dep’t of Taxation, 509 U.S. at 97. As opposed to
Chevron Oil Co. v. Huson’s approach, Harper v. Virginia Department of Taxation
represented a determination that varying and conflicting application of the United States
Supreme Court’s decisions to pending cases was arbitrary and lacking in fairness. See
Dempsey v. Allstate Ins. Co., 104 P.3d 483, 487 (Mont. 2004). Where the legal question at
issue is a federal one, “the United States Supreme Court has quite plainly decreed that the
federal doctrine of retroactivity cannot be circumscribed by the state courts.” Annenberg v.
Commonwealth, 757 A.2d 338, 351 (Pa. 2000).
Based on this record, we are not prepared to attribute the delay in resolving this case
solely to the actions of the Metropolitan Government. More importantly, we have concluded
that the lower courts’ concern about the lengthy delay in resolving this case after it was
remanded and the perceived unfairness of employing the substantive law in United Haulers
to finally resolve this dispute is plainly inconsistent with the main principle of the Harper v.
Virginia Department of Taxation decision. Accordingly, we find that the trial court and the
Court of Appeals erred by failing to apply the United Haulers decision to bring an end to this
dispute.
IV.
T HE M ETROPOLITAN G OVERNMENT’S F AILURE TO F ILE A M OTION TO A LTER
OR A MEND THE P RETRIAL O RDER
As a final matter, Gray’s Disposal and Mr. Webster contend that the courts need not
consider the Metropolitan Government’s arguments based on United Haulers because the
Metropolitan Government brought it to the trial court’s attention in a “notice of filing
intervening change in controlling authority” rather than in a Tenn. R. Civ. P. 59.04 motion
to alter or amend. This argument exalts form over substance.
The trial court viewed the Metropolitan Government’s filing as some sort of
subterfuge to circumvent its Tenn. R. Civ. P. 16.05 pre-trial order. We concur with the Court
of Appeals that there is simply no basis upon this record for characterizing the Metropolitan
Government’s filing of a notice of intervening authority as opposed to a motion to alter or
amend the trial court’s order in such a manner.
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In addition, it is not readily apparent that the substance of the Metropolitan
Government’s notice of intervening authority is, in fact, beyond the scope of the pre-trial
order. The trial court’s March 26, 2007 order states that “[t]he Court shall conduct a trial .
. . on the only issue remaining in this case: the amounts owed to Metro in Cause No.
98-3400-II(III).” The Metropolitan Government’s notice of intervening authority is directly
addressed to the amounts owed to the city in that proceeding. Thus, while the Metropolitan
Government could have potentially sought to clarify the trial court’s Rule 16.05 pre-trial
order, it is not apparent that any actual amendment or altering thereof was required to keep
the Metropolitan Government’s notice of intervening authority within the scope of the trial
court’s order.
V.
In summary, we conclude that the United States Supreme Court’s decision in United
Haulers Association, Inc. v. Oneida-Herkimer Solid Waste Management Authority constitutes
an intervening change in the controlling authority in this case and that the lower courts’
reliance on equitable principles to avoid applying the United Haulers decision to this case
was impermissible under Harper v. Virginia Department of Taxation. Applying the United
Haulers decision, we find that the trial court and the Court of Appeals erred by failing to
require Gray’s Disposal to enter an order, consistent with the trial court’s December 12, 2001
order, granting the Metropolitan Government a $66,789.90 judgment against Gray’s Disposal
and a $55,275.00 judgment against Mr. Webster for unpaid tipping fees.14 Accordingly, we
remand the case to the trial court with directions to enter a final order consistent with its
December 12, 2001 order. We also tax the costs of this appeal, jointly and severally, to
Gray’s Disposal Company, Inc. and Ray Webster.
_________________________________
WILLIAM C. KOCH, JR., JUSTICE
14
The Metropolitan Government has not requested interest in this case. Accordingly, the amount of
the judgments in the trial court’s December 12, 2001 order have remained unchanged, despite the lengthy
nature of the litigation between these parties.
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