KNOXVILLE, Tenn. (Legal Newsline) - The City of Memphis lost one round of a fight with Elvis Presley Enterprises over a proposed 6,200-seat arena at the Graceland theme park that the owner of the Memphis Grizzlies basketball team said would illegally compete with its own stadium.
Elvis Presley Enterprises sued Memphis, Shelby County and the Grizzlies after local officials balked at approving a property tax scheme to finance improvements to Graceland, citing a 2001 contract with the entities that built FedEx Forum. That contract established a tax incremental financing district for the basketball stadium with a clause prohibiting similar treatment for any competing venues with more than 5,000 seats.
A trial court dismissed EPE’s lawsuit, saying the organization hadn’t exhausted its administrative remedies. The city and county later said no administrative remedies were available, but voted to provisionally allow EPE’s tax financing scheme if it either obtained a court order stating that wouldn’t violate the FedEx agreement or negotiated its own settlement with the Grizzlies.
Elvis Presley Enterprises sued again, seeking a declaratory judgment that the TIF wouldn’t violate the city’s agreement over FedEx Forum. The city and county again sought dismissal, saying EPE didn’t have standing to sue.
An appeals court dismissed for another reason, however, saying the second suit was precluded by res judicata, or the doctrine that matters between the same parties that have been previously litigated to final judgment can’t be brought to court again.
The Tennessee Supreme Court reversed, ruling that res judicata doesn’t apply in cases where the court dismisses because the plaintiff failed to exhaust administrative remedies. That isn’t a final judgment on the merits, the state high court ruled.
It sent the case back to be heard on the parallel question of standing, ordering fees and costs paid to EPE.