STORY

Executive Summary

After Beacon’s successful litigation against Nashville’s sidewalks law, the city enacted a stormwater ordinance that is just as unconstitutional. The stormwater ordinance charges individuals seeking a development permit a fee to fund capital improvements to Nashville’s stormwater system. Based on how Nashville calculates the fee, property owners making modest improvements to their property must pay a disproportionate stormwater fee under the new ordinance. 

Our client Peyton Pratt is a homeowner seeking to renovate his property. Born and raised in Nashville, Peyton spent a few years away, moved back to Nashville in 2016, and purchased his current property in 2019. As his children grew older, Peyton wanted more room for his family and discovered that the most cost-effective solution was to rebuild a larger house on his current property. Peyton thought that Nashville would require less than $2,000 in stormwater fees based on the additions to his property, but Nashville ultimately charged him more than three times that amount. Peyton paid the full amount under protest.   

The Problem

In 2023, Nashville established a stormwater capacity fee in addition to the stormwater user fee that it has charged Nashville residents for years. The capacity fee applies to any development project that results in a post-completion impervious surface area of over 800 square feet. “Impervious area” means a portion of a parcel of property that is covered by any material— including roofs, streets, sidewalks and parking lots paved with asphalt, concrete, compacted sand, compacted gravel or clay—that substantially reduces or prevents the infiltration of stormwater. The fee is $0.71 per square foot of post-development impervious area and must be paid before Nashville issues a development permit for any parcel. 

There are several problems with the stormwater capacity fee. First, it’s charged only to Nashville residents seeking a development permit. If Nashville needed to charge a fee to fund capital improvements in its stormwater system, it should charge all who stand to benefit from those improvements. It makes no sense for Nashville to charge only Nashville residents who are building on their property. Second, Nashville charges the fee based on the total (rather than net) post-development impervious surface area. That means individuals making modest improvements on their property are nonetheless charged for the entire impervious surface area on the property. For instance, a homeowner who is adding a garage that increases the impervious area from 500 to 700 square feet must pay the stormwater fee for the entire 700 square feet of property instead of the 200 square feet that he or she added. Tennesseans who participated in Beacon’s listening tour remarked that the high cost of housing makes them feel trapped in their own homes. The stormwater capacity ordinance exacerbates that problem.  

Legal Issues

As in the sidewalks litigation, Beacon argues that the stormwater ordinance violates the Fifth Amendment’s prohibition against unlawful exactions. Just as the Fifth Amendment bars government from taking property, it also forbids government from withholding development permits unless property owners accede to unreasonable government demands to relinquish property. As Justice Antonin Scalia famously explained in an opinion for the Supreme Court, an excessive permit condition resembles “an out-and-out plan of extortion.” 

The stormwater capacity fee is an unlawful exaction. If Nashville wants to improve its stormwater system for all Nashville residents, it may not single out and force residents who are seeking development permits to shoulder all the costs. The stormwater capacity fee is also an excessive permit condition because it charges Nashvillians not for the purported impact of any additions they make to their homes but for the entire post-development impervious area of their property. That formula imposes a disproportionate burden on Nashvillians, like Peyton, who are seeking to make only modest additions on their property. 

Case Logistics

Beacon represents Peyton Pratt in a class action lawsuit in the United States District Court for the Middle District of Tennessee. Beacon asks the Court to certify a class consisting of Nashville residents who have paid the fee required by Nashville’s new stormwater ordinance. 

The Legal Team

Wen Fa is the Vice President of Legal Affairs at the Beacon Center. 

Ben Stormes is an attorney at the Beacon Center. 

Case Documents

Complaint