Opinion

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

June 27, 2012 Session

E. RON PICKARD and LINDA PICKARD, as TRUSTEES OF THE

SHARON CHARITABLE TRUST and as INDIVIDUALS v.

TENNESSEE DEPARTMENT of ENVIRONMENT AND CONSERVATION,

TENNESSEE WATER QUALITY CONTROL BOARD and TENNESSEE

MATERIALS CORPORATION

Direct Appeal from the Chancery Court for Davidson County

No. 09-2297-III Ellen H. Lyle, Chancellor

No. M2011-01172-COA-R3-CV - Filed August 14, 2012

The Tennessee Department of Environment and Conservation issued a permit allowing a

proposed rock quarry to discharge storm water and wastewater into a nearby creek. Owners

of property allegedly affected by the discharge filed an appeal challenging the issuance of

the permit with the Water Quality Control Board, as well as a petition seeking a declaratory

order construing the rules regarding the protection of existing uses of waters. The Water

Quality Control Board refused to issue a declaratory order and the property owners appealed

to the Davidson County Chancery Court. Because we conclude that the trial court lacked

jurisdiction to grant the relief requested, we vacate the judgment of the trial court and remand

for dismissal of this cause. Vacated and remanded.

Tenn. R. App. P. 3. Appeal as of Right; Judgment of the Chancery Court Vacated

and Remanded

J. S TEVEN S TAFFORD, J., delivered the opinion of the Court, in which D AVID R. F ARMER, J.,

and R ICHARD H. D INKINS, J., joined.

Robert E. Cooper, Jr., Attorney General and Reporter; Bill Young, Solicitor General; Joseph

F. Whalen, Associate Solicitor General; Elizabeth Parker McCarter, Senior Counsel; and R.

Stephen Jobe, Senior Counsel, for appellants, Tennessee Department of Environment and

Conservation and Tennessee Water Quality Control Board.

Elizabeth L. Murphy, W. David Bridgers, and Robert Anthony Peal, Nashville, Tennessee,

for the appellees, E. Ron Pickard and Linda Pickard as Trustees for the Sharon Charitable

Trust and as Individuals.

OPINION

I. Background

Plaintiffs/Appellees Ron and Linda Pickard are the Trustees of the Sharon Charitable

Trust (“the Trust,” and together with Mr. Pickard and Mrs. Pickard, “Appellees”). The Trust

is a non-profit corporation managing the Horse Creek Wildlife Sanctuary and Animal Refuge

(“the Sanctuary”) in Hardin County, Tennessee. The Sanctuary is a recreation area open to

the public for fishing, camping, and other outdoor activities. Horse Creek runs through the

property.

This lawsuit involves the planned construction of a rock quarry in an undeveloped

parcel adjacent to the Sanctuary (“the Quarry”). The Quarry will be owned and operated by

Tennessee Materials Corporation. In order to begin construction, the Quarry applied for a

Nationwide Pollution Discharge Elimination System discharge permit (“the permit”) from

the Tennessee Department of Environment and Conservation (“TDEC”). The Quarry applied

for a permit in order to discharge wastewater and storm water from the Quarry into an

unnamed tributary of Horse Creek, which runs onto the Sanctuary’s property, near

recreational areas.

Pursuant to the request for a permit, Amy Fritz, a biologist for TDEC’s Jackson field

office, conducted a standard stream health survey of a segment of Horse Creek in accordance

with TDEC’s Quality System Standard Operating Procedures for Macroinvertebrate Stream

Surveys (“Standard Operating Procedures”). The purpose of the stream survey was to

evaluate the “biological integrity” parameter of the water quality standards for waters

classified for fish and aquatic life in accordance with the Standard Operating Procedures. Ms.

Fritz’s survey of the segment of Horse Creek that would be directly affected by discharge

from the Quarry yielded a Biological Index Score of 30. According to the Standard

Operating Procedures, this Biological Index Score meant that Horse Creek was slightly

impaired, or not fully supporting its classified uses for aquatic life. The survey also revealed

that the stream bed was suffering the effects of bank instability and that the bed scored below

the habitat assessment guideline for maintaining habitat protective of aquatic life. The survey

yielded a habitat score of 127, meaning that Horse Creek is moderately impaired with regard

to habitat.

Notwithstanding Ms. Fritz’s findings, TDEC issued a draft permit to the Quarry in

August 2008. A draft permit is merely a tentative determination and serves to notify the

public of a planned discharge. Only after the draft permit is made public and citizens are

given the opportunity to comment on the draft, will a final permit be issued. The draft permit

proposed to allow the Quarry to discharge wastewater and storm water into an unnamed

-2-

tributary of Horse Creek. The draft permit limited the frequency of discharges, however, and

also placed limitations on the characteristics of the discharged wastewater. For example,

Total Suspended Solids, or sediment, were limited to 40.0 milligrams per liter for any one

day, and pH was similarly limited to 6.0 to 9.0 standard units. Other limitations regarding

visible scum, oil, or other potentially hazardous discharges were further outlined. The draft

permit, however, stated that Horse Creek did not qualify as “Exceptional Tennessee Waters” 1

1

Tennessee Compiled Rules and Regulations Rule 1200.04.03.06(4)(a) provides that waters will be

classified as “Exceptional Tennessee Waters” if any of the following criteria are met:

1. Waters within state or national parks, wildlife refuges, forests,

wilderness areas, or natural areas;

2. State Scenic Rivers or Federal Wild and Scenic Rivers;

3. Federally-designated critical habitat or other waters with documented

nonexperimental populations of state or federally-listed threatened or

endangered aquatic or semi-aquatic plants, or aquatic animals;

4. Waters within areas designated as Lands Unsuitable for Mining pursuant

to the federal Surface Mining Control and Reclamation Act where such

designation is based in whole or in part on impacts to water resource

values;

5. Waters with naturally reproducing trout;

6. Waters with exceptional biological diversity as evidenced by a score of

40 or 42 on the Tennessee Macroinvertebrate Index (or a score of 28 or 30

in subecoregion 73a) using protocols found in TDEC's 2006 Quality

System Standard Operating Procedure for Macroinvertebrate Stream

Surveys, provided that the sample is considered representative of overall

stream conditions; or

7. Other waters with outstanding ecological, or recreational value as

determined by the department. When application of this provision is a

result of a request for a permit, such preliminary determination is to be

made within 30 days of receipt of a complete permit application.

If waters are classified as “Exceptional Tennessee Waters:”

[N]o degradation will be allowed unless and until it is affirmatively

demonstrated to the Department, after full satisfaction of the following

intergovernmental and public participation provisions, that a change is

justified as a result of necessary economic or social development and will

not interfere with or become injurious to any classified uses existing in

such waters.

Tenn. Comp. R. & Reg. 1200.04.03.06(4)(c).

-3-

under the state Antidegradation regulations2 and concluded that “[t]herefore, the materials

reviewed indicate that ‘available conditions’ exist in the receiving stream.” The draft permit

made no mention of the adverse results of the stream survey, including the findings regarding

impaired aquatic life and habitat.

The draft permit was made public and concerned citizens were given the opportunity

to comment either in writing or at public hearings. The Appellees participated in the

commenting process. A summary of the comments issued by TDEC provides:

Commenter said that Horse Creek has aquatic life . . . that was

not properly evaluated or considered in this permit.

Commenter said that the antidegradation regulations have not

been followed or met with regard to this proposed permit or by

the applicant in the application process. Horse Creek was

improperly identified as not qualifying as “exceptional waters,”

as the biological and deliberative process were flawed and

inadequate, failing to consider the actual conditions and uses.

On January 14, 2009, prior to the completion of the public comment period and

issuance of a final permit, the Appellees filed a Petition for a Declaratory Order3 with the

Tennessee Department of Water Quality Control Board (“the Board,” and together with

TDEC, “Appellants”). The Appellees alleged that the permit application and draft permit

contained inadequacies that prevented a proper application by TDEC. The Appellees further

alleged that TDEC misapplied the Antidegradation rule and thereby mistakenly failed to

conclude that the impairments revealed by the stream survey meant that there were

unavailable conditions4 in Horse Creek warranting greater protections. TDEC moved to

2

According to TDEC, Antidegradation policy is to establish a greater level of protection for those

waters that are identified to be of high quality.

3

This case concerns the proper application of the Uniform Administrative Procedures Act to a

petition for declaratory relief. As such the phrases “declaratory order” and declaratory relief” will be used

throughout this decision. For clarity, we note that the phrase “declaratory order,” as it is used throughout this

opinion, refers to the type of declaratory relief that may be issued by the agency, here the Board. See Tenn.

Code Ann. § 4-5-223. In contrast, the phrase “declaratory judgment” refers to the type of declaratory relief

that may be rendered by the Chancery Court. See Tenn. Code Ann. § 4-5-225.

4

Unavailable conditions exist where water quality is at, or fails to meet, the criterion for one or more

parameters. In unavailable conditions, new or increased discharges of a substance that would cause or

contribute to impairment will not be allowed. See Tenn. Comp. R. & Reg. 1200-4-3.06(2). In contrast,

(continued...)

-4-

dismiss the petition. The Board entered an order dismissing the case on February 18, 2009,

wherein the Board stated:

The Board declines to convene a contested case at this time

based on the stipulated fact that the permit at issue has not been

issued or denied therefore there is no final administrative action

by the [TDEC].

* * *

REASONS FOR DECISION

This ORDER of the Board is entered to maintain the

delegated responsibilities of the Division and the Board; to

prevent against the Board rendering impermissible advisory

opinions based on hypothetical facts; and to protect the waters

and the citizens of the state of Tennessee.

On March 13, 2009, TDEC issued a final permit to the Quarry. The final permit was

substantially similar to the draft permit.5 The permit referenced the Tennessee

Antidegradation Policy, as well as the stream survey conducted prior to the issuance of the

draft permit; however, the permit rationale, a document attached to the final permit

concluded that:

Based on the survey results and review of all the data, neither

the unnamed tributary nor the reach of Horse Creek near the

proposed discharge qualifies as Exceptional Tennessee Waters.

The data do not indicate the presence of Federal and/or State

listed threatened or endangered species of aquatic life as

occurring within a two-mile radius of the proposed discharge

monitoring point.

4

(...continued)

available conditions occur where water quality is better than the applicable criterion for a specified

parameter. In available conditions, new or additional degradation for that parameter will only be allowed if

the applicant has demonstrated to the department that reasonable alternatives to degradation are not feasible.

See Tenn. Comp. R. & Reg. 1200-4-3.06(3).

5

Specifically, the final permit increased the limitation on Total Suspended Solids to 200 milligrams

per liter and included, for the first time, a limitation on oil and grease of a maximum of 15 milligrams per

liter. The draft permit limitation on pH remained unaltered.

-5-

In addition to the final permit and the rationale, TDEC issued a summary of the comments

received during the public commenting period, including the comments set forth above

regarding the Antidegradation rule. In response to those comments, TDEC stated:

There was significant public interest in classifying Horse Creek

as Exceptional Tennessee Waters. Many comments were

received from the public that specifically requested that status

due to the public’s enjoyment of the facilities at the Horse Creek

Wildlife Sanctuary. However, antidegradation rules and field

sampling protocols were followed, and the receiving streams

(Horse Creek and its unnamed tributary) were not found to be

Exceptional Tennessee Waters, pursuant to the Rules of the

Tennessee Department of Environment and Conservation,

Chapter 1200-4-3-.06(4)(a). Biological sampling followed semi-

quantitative protocols specified in the [Standard Operating

Procedures]. The sample reach was at a location of sufficient

watershed size and stream order for comparison to ecoregion

biocriteria.

On April 6, 2009, the Appellees filed a “Permit Appeal and Declaratory Order

Petition” with the Board, challenging the decision to issue the final permit and requesting a

contested case. The April 6, 2009 appeal recited essentially the same grounds as the former

declaratory judgment action previously dismissed by the Board. The petition specifically

requested that the Board find that TDEC improperly concluded that Horse Creek had

available conditions. According to the Appellees, a proper application of the Antidegradation

rule required a finding of unavailable conditions due to the impaired ratings in aquatic life

and habitat. With a finding of unavailable conditions, the Appellees argue that the existing

uses of the creek should be given higher protections.

On May 14, 2009, the Quarry petitioned the Board to intervene as a defendant.6 The

Board granted the petition to intervene on June 11, 2009; however, there is no indication that

6

On June 22, 2012, the Appellees filed notice to this Court that the Quarry had filed a Chapter 11

Petition for Reorganization in the United States Bankruptcy Court for the Western District of Tennessee on

May 11, 2012. The Appellees noted that while the Quarry was present during some of the proceedings, it

never formally intervened in this case. Nevertheless, the Appellees filed a motion in Bankruptcy Court to

modify the automatic stay regarding litigation to allow this case to proceed. The Quarry did not oppose the

motion. Consequently, the Bankruptcy Court entered an order on June 7, 2012 allowing this case to proceed.

-6-

the Quarry ever exercised its right to participate in this case.7 On May 15, 2009, TDEC filed

a motion to dismiss the declaratory judgment claim, arguing that the Appellees could seek

review of the permit decision only through a permit appeal, and not through a declaratory

order action. On May 29, 2009, the Appellees filed an amended Permit Appeal and

Declaratory Order Petition, which specifically stated:

13. [Appellees] seek a declaratory order as to the validity and or

applicability of the Water Board’s Revised Anti-Degradation

Rule, found at [Tennessee Compiled Rules and Regulations]

1200-4-3-.03, and the Water Quality Control Act, specifically

[Tennessee Code Annotated] 69-3-108(e). [Appellees] contend[]

that these rules and statutes require more than a mere guess or

supposition in finding that the discharge will be “de minimis”

and in concluding that degradation will not occur [Appellees]

contend[] that the interpretation and application of the Anti-

Degradation rules as to mining activities do not comply with

[Tennessee Code Annotated] 69-3-108(e) when a receiving

stream is determined to be impaired and will also receive

industrial wastewater within the meaning of the Anti-

Degradation [r]ules and the discharges to the stream have not

been assessed.

12. [Appellees] seek a declaratory order regarding whether [t]he

Anti-Degradation [r]ule requires TDEC to assess the applicable

parameters of water quality, as set forth in [Tennessee Compiled

Rules and Regulations] 1200-4-3-.03, to determine whether

those parameters created “available conditions” or “unavailable

conditions,” such as those terms are clearly defined in the Anti-

Degradation [r]ule. TDEC assessed “biological integrity” and

“habitat” parameters for Horse Creek following protocols set

forth in TDEC’s [Standard Operating Procedures], as the water

criteria rules require, and those assessments demonstrated that

Horse Creek’s biological condition was “slightly impaired” and

its was “moderately impaired” with respect to habitat assessment

guidelines. According to the Anti-Degradation [r]ule,

“unavailable conditions exist where water quality is at, or fails

to meet, the criterion for one or more parameters.” [Tennessee

Compiled Rules and Regulations] 1200-4-3-.06(2) (emphasis

supplied). [Appellees] contend[] that the rule is not valid

7

The Quarry did not file a brief with this Court and is not a party to this appeal.

-7-

because it lacks specificity and cannot be properly applied

without a scientific basis or analysis for determining the type of

condition existing or whether additional discharges would be

“de minimis.” [Appellees] contend[] that pursuant to [Tennessee

Code Annotated Section] 4-5-223, an aggrieved party with a

recognized interest in the area of the discharges has the right,

under the state Water Quality Control Act, to a scientific

application of the Anti-Degradation rules to reasonably ensure

compliance with [Tennessee Code Annotated Section] 69-3-

108(e).

13. [Appellees] further contend as part of the Declaratory Order

claim that TDEC’s action in issuing the permit without

application of a scientific analysis and a reasoned finding of

impacts measured against the existing stream conditions violated

the [Appellees’] rights and the State’s obligations under the

Water Quality Control Act and promulgated water quality rules.

14. [Appellees] seek[] review of the validity and application of

the Anti-Degradation [r]ule and with [Tennessee Code

Annotated Section] 69-3-108(e) as it related to allowing

discharges that have not been assessed.

15. [Appellees] also request a review of the commissioner’s

action in issuing the March 13, 2009 NPDES permit to [the

Quarry]. [Appellees] allege that the issuance of the permit

violates [Tennessee Code Annotated Section] 69-3-108

including subsection (e) in that restriction of the permit are not

consistent with the Anti-Degradation [r]ules, the Anti-

Degradation [r]ules were not followed in issuing the permit, and

the permit would cause a condition of pollution either by itself

of in combination with other conditions and the parameters in

the permit are not in compliance with the most restrictive state

federal water quality limits.

The Administrative Law Judge (“ALJ”) heard oral arguments on TDEC’s motion to

dismiss on July 9, 2009. Finding that the applicable law clearly and unambiguously provides

that permit appeal is the exclusive means of review of the issuance of a permit, the ALJ

dismissed the Appellees’ claim for declaratory relief on October 6, 2009. Nothing in the

record suggests that a contested case was ever convened on the issue of the declaratory order.

-8-

The permit appeal remained a viable cause of action.8

II. Procedural History

On December 4, 2009, Appellees filed a petition in the Davidson County Chancery

Court for judicial review of the Board’s refusal to consider the declaratory order petition filed

concurrently with Appellees’ permit appeal. The petition for judicial review specifically

stated:

[T]he decision of the Board is in violation of [Tennessee Code

Annotated Section] 4-5-223 and should be reversed pursuant to

[Tennessee Code Annotated Section] 4-5-322(h)(1).

WHEREFORE. [Appellees] seek judicial review of the ruling to

dismiss the “Petition for Declaratory Order” pursuant to

Tennessee Code Annotated Section] 4-5-322(a) as a matter of

law . . . .

Accordingly, the judicial review petition did not request that the Chancery Court issue a

declaratory judgment, only that it reverse the Board’s refusal to do so. On December 4, 2009,

Appellees also filed a separate petition for Declaratory Judgment in the Chancery Court of

Davidson County, pursuant to Tennessee Code Annotated Section 4-5-225. This petition

requested that the trial court issue a declaratory judgment regarding the application of the

Antidegradation rule. Both cases were assigned to Chancellor Ellen Hobbs Lyle. The

December 2009 petition for a declaratory judgment is the subject of a separate appeal to this

Court, Pickard v. Tennessee Water Quality Control Board, M2011-2600-COA-R3-CV; we

refer to the proceedings in the companion case only for the sake of clarity.

The parties subsequently filed trial briefs regarding the jurisdiction of the Board to

consider the declaratory order petition filed in conjunction with the permit appeal. By order

of April 11, 2011, the trial court ruled that:

In sum, then the Court’s construction of the interplay between

[Tennessee Code Annotated Section] 69-3-105(i) [regarding a

permit appeal] and [Tennessee Code Annotated Sections] 4-5-

223 through 225 is that a petition for declaratory relief pursuant

to section 4-5-223 related to the issuance of a permit may be

requested by an aggrieved party in a permit appeal under section

8

From our review of the record, the permit appeal has not yet been heard by the Board.

-9-

69-3-105(i). This construction is based on: (1) the flexible and

expansive text of section 69-3-105(i) that “any of the issues”

raised during the permitting process “may” be presented in the

appeal; (2) the need to assure that the right of an aggrieved party

to obtain a ruling as a matter of law regarding the validity or

application of a water quality statute or regulation is maintained

for these reasons . . . , that declaratory relief has become such a

hallmark in the law; and [(3)] the same standard of review and

contested case procedure are used in the permit appeal and

petition for declaratory order.

Accordingly, the trial court ruled that the Board erred in refusing to issue the requested

declaratory order.

The trial court went on to note the “unusual procedural posture” in the case regarding

the simultaneous filing of a petition for judicial review of the Board’s refusal to issue a

declaratory order and the separate petition for a declaratory judgment from the Chancery

Court. Because the trial court perceived the issues to be identical in both the petition for

judicial review and the petition for a declaratory judgment, the trial court ruled that its

decision reversing the Board’s refusal to issue a declaratory order in conjunction with the

permit appeal rendered the separate petition for a declaratory judgment from the Chancery

Court moot. Accordingly, the trial court dismissed the separate petition for declaratory

judgment and ordered that the parties return to court for a hearing on whether the petition for

a declaratory order filed in conjunction with the permit appeal would be remanded back to

the Board for consideration.

The Appellees filed a timely motion to alter or amend the trial court’s ruling that the

separate petition for a declaratory judgment was rendered moot by the trial court’s decision

in the judicial review case. The Appellees argued that the two petitions sought different relief

and, therefore, the petition for a declaratory judgment was not rendered moot by the decision

reversing the Board’s refusal to issue a declaratory order. On May 10, 2011, the trial court

entered an order modifying its previous order rendering the separate petition for declaratory

judgment moot, and ruled that the separate petition could proceed. In addition, the trial court

ordered that, based on the Board’s refusal in the separate petition for declaratory judgment

to consider the Appellees’ request for declaratory relief, the matter would not be remanded

back to the Board for consideration. The trial court further stated that its order was final and

the Appellants timely appealed.

III. Analysis

-10-

The Appellants raise one issue, which we restate:

Except as expressly provided therein, does Tennessee Code

Annotated Section 69-3-105(i) preclude filing for a declaratory

order under Tennessee Code Annotated Section 4-5-223 once a

water quality permit application has been submitted to the

Tennessee Department of Environment and Conservation.

We do not reach this issue, however, based upon our conclusion that this Court lacks

subject matter jurisdiction in this case. Subject matter jurisdiction concerns the authority of

the court to hear a matter and cannot be waived. Meighan v. U.S. Sprint Commc'ns Co.,

924 S.W.2d 632, 639 (Tenn. 1996). The court may consider subject matter jurisdiction sua

sponte. Tenn. R. App. P. 13(b); Ruff v. State, 978 S.W.2d 95, 98 (Tenn. 1998). Judgments

or orders entered by courts without subject matter jurisdiction are void. See Brown v. Brown,

281 S.W.2d 492, 497 (Tenn. 1955); Riden v. Snider, 832 S.W.2d 341, 343 (Tenn. Ct. App.

1991); Scales v. Winston, 760 S.W.2d 952, 953 (Tenn. Ct. App. 1988). The lack of subject

matter jurisdiction is so fundamental that it requires dismissal whenever it is demonstrated.

See Tenn. R. Civ. P. 12.08. Thus, when an appellate court determines that a trial court lacked

subject matter jurisdiction, it must vacate the judgment and dismiss the case without reaching

the merits of the appeal. See J.W. Kelly & Co. v. Conner, 122 Tenn. 339, 397, 123 S.W. 622,

637 (1909); see also First Am. Trust Co. v. Franklin–Murray Dev. Co., 59 S.W.3d 135, 141

(Tenn. Ct. App. 2001).

In this case, our review of the record leads us to conclude that the trial court lacked

jurisdiction to consider Appellees’ petition for judicial review of the Board’s refusal to issue

a declaratory order in this case. This determination is based on the framework contained in

the Uniform Administrative Procedures Act (“UAPA”) regarding declaratory orders and

judicial review of agency decisions.

Petitions for declaratory orders before administrative agencies such as the Board in

this case are governed by Tennessee Code Annotated Section 4-5-223:

(a) Any affected person may petition an agency for a declaratory

order as to the validity or applicability of a statute, rule or order

within the primary jurisdiction of the agency. The agency shall:

(1) Convene a contested case hearing pursuant to this chapter

and issue a declaratory order, which shall be subject to review

in the chancery court of Davidson County, unless otherwise

specifically provided by statute, in the manner provided for the

review of decisions in contested cases; or

-11-

(2) Refuse to issue a declaratory order, in which event the

person petitioning the agency for a declaratory order may apply

for a declaratory judgment as provided in § 4-5-225.

* * *

(c) If an agency has not set a petition for a declaratory order for

a contested case hearing within sixty (60) days after receipt of

the petition, the agency shall be deemed to have denied the

petition and to have refused to issue a declaratory order.

Accordingly, “the decision of whether to issue a declaratory order is within an agency's

discretion.” Consumer Advocate Div. ex rel. Tennessee Consumers v. Tennessee, No.

M1999-01170-COA-R12-CV, 2001 WL 575570, *5 (Tenn. Ct. App. May 30, 2001). The

term “discretion,” as it is used in administrative proceedings, is discussed in Administrative

Law and Practice:

The term discretion pervades administrative law even

more than other legal disciplines. Yet it is one of the most

unsatisfactory phrases in law. Discretion has many meanings,

especially in application. In judicial review, for example, the

existence of “discretion” may mean that the decision is

unreviewable, § 12:12, or reviewable only for abuse, § 9:27. An

official may be said to have discretion to make adjustments at

the margin, to individualize the application of general rules, or

to set generally applicable policy. In short, discretion has many

meanings and each conveys a different type of decisionmaking.

The core meaning of the term discretion is some degree

of decisionmaking freedom and independence. The degree of

such decisionmaking freedom and independence in the

particular context emerges as a crucial question. Courts have

held that “discretion” means that an official exercises their

authority according to their understanding and conscience. In

short, it is impossible to talk about a specific use of the term

without first looking behind that use for the intended meaning

of the term in that context.

1 Admin. L. & Prac. § 1:20 (3d ed.) (footnotes omitted). In the context of the Appellees’

petition for a declaratory order, Tennessee Code Annotated Section 4-5-223 specifies what

action the Board, in its discretion, may take. Here, the Board had three options: 1) convene

-12-

a contested case in order to decide the merits of the petition for declaratory order; 2) refuse

to issue a declaratory order, in which case the complaining party may file a petition for a

declaratory judgment pursuant to Tennessee Code Annotated Section 4-5-225; or 3) take no

action, in which case, the petition for declaratory judgment is deemed denied and the

complainant may file a petition for a declaratory judgment pursuant to Tennessee Code

Annotated Section 4-5-225. See Tenn. Code Ann. §4-5-223; see also Hughley v. State, 208

S.W.3d 388 (Tenn. 2006) (holding that when petitioned for a declaratory order, the agency

“may respond in one of two ways: (1) convene a contested case hearing and issue a

declaratory order or (2) refuse to issue a declaratory order” either by a formal denial or by

taking no action). Although the order denying the Appellees’ petition for a declaratory order

is styled as an order granting a motion to dismiss, of the only three options available to the

Board pursuant to Tennessee Code Annotated Section 4-5-223, the Board clearly refused to

issue the requested declaratory order. See Gordon v. Greenview Hosp. Inc., 300 S.W.3d 635,

643 (Tenn. 2009) (citing Tenn. Farmers Mut. Ins. Co., v. Farmer, 970 S.W.2d 453, 455

(Tenn. 1998) (noting that with regard to legal filings, the law favors substance over style)).

In response to the Board’s refusal to issue the declaratory order, the Appellees filed

a petition for judicial review of the Board’s decision pursuant to Tennessee Code Annotated

Section 4-5-322, seeking to have the Board’s decision to refuse the declaratory order

reversed. Tennessee Code Annotated Section 4-5-322 provides, in pertinent part:

(a)(1) A person who is aggrieved by a final decision in a

contested case is entitled to judicial review under this chapter,

which shall be the only available method of judicial review. A

preliminary, procedural or intermediate agency action or ruling

is immediately reviewable if review of the final agency decision

would not provide an adequate remedy.9

* * *

(b)(1)(A) Proceedings for review are instituted by filing a

9

Although not specifically briefed, we note that the decision of the Board to dismiss the Appellees’

petition for a declaratory order is not a final decision in this case as the Appellees’ permit appeal remains

pending before the Board. See In re Estate of Schorn, 359 S.W.3d 192, 195 (Tenn. Ct. App. 2011) (noting

that an “order that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the

parties is not final”). We presume that the Appellees filed their appeal to the Chancery Court pursuant to

Tennessee Code Annotated Section 4-5-322's provision that any “preliminary, procedural or intermediate

agency action or ruling” may be immediately appealed when “review of the final agency decision would not

provide an adequate remedy.” Because we hold that the trial court lacked jurisdiction to consider this case

on other grounds, we will not consider this issue.

-13-

petition for review in the chancery court of Davidson County,

unless another court is specified by statute. Such petition shall

be filed within sixty (60) days after the entry of the agency's

final order thereon.

Nothing in the petition at issue in this case asks that the Chancery Court consider the merits

of this issue or issue a declaratory judgment in favor of the Appellees.10 However, Tennessee

Code Annotated Section 4-5-223 clearly provides that the appropriate procedure to follow

when the Board refuses to issue a declaratory order is to seek a declaratory judgment

pursuant to Tennessee Code Annotated Section 4-5-225. This statute provides:

(a) The legal validity or applicability of a statute, rule or order

of an agency to specified circumstances may be determined in

a suit for a declaratory judgment in the chancery court of

Davidson County, unless otherwise specifically provided by

statute, if the court finds that the statute, rule or order, or its

threatened application, interferes with or impairs, or threatens to

interfere with or impair, the legal rights or privileges of the

complainant. The agency shall be made a party to the suit.

(b) A declaratory judgment shall not be rendered concerning the

validity or applicability of a statute, rule or order unless the

complainant has petitioned the agency for a declaratory order

and the agency has refused to issue a declaratory order.

Tenn. Code Ann. § 4-5-225. It is well settled that, “where the mind of the legislature has

been turned to the details of a subject and they have acted upon it, a statute treating the

subject in a general manner should not be considered as intended to affect the more

particular provision.” Arnwine v. Union County Bd. of Educ., 120 S.W.3d 804, 809 (Tenn.

2003) (quoting Woodroof v. City of Nashville, 192 S.W.2d 1013, 1015 (Tenn. 1946)). Thus,

the provisions of a specific statute will control over conflicting provisions in a general

statute. Id. Consequently, when an agency refuses to issue a declaratory order, proper

procedure dictates that the complaining party follow the specific procedures of Tennessee

Code Annotated Sections 4-5-223 and -225 and file a petition for a declaratory judgment in

Chancery Court rather than the more general Tennessee Code Annotated Section 4-5-322

procedures regarding a petition for judicial review.

This Court has stated that one of the chief purposes of the Uniform Administrative

10

The Appellees do seek this relief in the companion case, Pickard v. Tenn. Water Quality Control

Board, M2011-2600-COA-R3-CV.

-14-

Procedures Act (“UAPA”) is “to provide a single method for obtaining judicial review of the

decisions of state agencies.” McEwen v. Tennessee Dept. of Safety, 173 S.W.3d 815 (Tenn.

Ct. App. 2005). This Court further explained:

The General Assembly enacted the UAPA in 1974 in

response to the proliferation of state boards and agencies. Blank,

Scope of the Tennessee Uniform Administrative Procedures Act,

6 Mem.St.U.L.Rev. 159, 159 (1976). The growth in the number

of agencies had created an “incoherent, and indeed

incomprehensible hodgepodge” of procedures and a “very

fragmented” judicial review process. See Sanford, The

Development of the Tennessee Uniform Administrative

Procedures Act, 6 Mem.St.U.L.Rev. 151, 157 (1976); Sewell,

Judicial Review and the Uniform Administrative Procedures

Act, 6 Mem.St.U.L.Rev. 253, 253 (1976). As reflected in Tenn.

Code Ann. § 4-5-103(a), the General Assembly believed that the

UAPA would “clarify and bring uniformity to the procedure of

state administrative agencies and judicial review of their

determination[s].” [Act of Mar. 9, 1974, ch. 725, 1974 Tenn.

Pub. Acts 945. The original act, as amended is codified at

Tennessee Code Annotated Sections 4-5-101 through -324.]

* * *

Similarly, the caption of the 1974 Act states that its purpose was

"to provide a system of uniform administrative procedures for

the various agencies of the [S]tate of Tennessee; [and] to

prescribe the limits and procedures for judicial review of agency

decisions."

Mid-South Indoor Horse Racing, Inc. v. Tennessee State Racing Com'n, 798 S.W.2d 531,

536 & n.7 (Tenn. Ct. App. 1990) (footnote omitted). Thus, the General Assembly adopted

the procedures in the UAPA as a way to outline specific procedures for review of agency

decisions by the judiciary. However, judicial review of administrative decisions is limited by

statute. “It is a settled rule in this State and is the general rule in other jurisdictions that

‘where an administrative remedy is provided by statute, relief must be sought by exhausting

this remedy before the courts will act.’” Tennessee Enamel Mfg. Co. v. Hake, 183 Tenn.

615, 194 S.W.2d 468 (Tenn. 1946). Accordingly, an individual must comply with the

procedures as set forth in the UAPA to obtain relief in the courts.

-15-

Nothing in Tennessee Code Annotated Section 4-5-225 gives the Chancery Court the

authority to reverse the Board’s decision not to issue a declaratory order. Indeed, the decision

to refuse to issue a declaratory order is completely within the Board’s discretion. See Tenn.

Code Ann. § 4-5-223 (providing that not only may an agency refuse to issue an order, but the

agency may refuse to take any action whatsoever). The UAPA does not foreclose relief to a

complaining party, however. The complaining party is still entitled to seek a declaratory

judgment in the Davidson County Chancery Court pursuant to Tennessee Code Annotated

Section 4-5-225. In this case, the Appellees instead filed a petition for judicial review

pursuant to Tennessee Code Annotated Section 4-5-322. We recognize that legal pleadings

should be construed based on their substance rather than their caption. Gordon v. Greenview

Hosp. Inc., 300 S.W.3d 635, 643 (Tenn. 2009). However, the failure to follow the proper

procedure was not a mere technicality in this case. Indeed, the petition for judicial review

filed by the Appellees in the trial court seeks only reversal of the Board’s decision in refusing

to issue the declaratory order. However, nothing in Tennessee Code Annotated Section 4-5-

225 provides that the Chancery Court may grant this relief. Instead, Tennessee Code

Annotated Section 4-5-225 grants the Chancery Court authority only to render a declaratory

judgment on the validity or applicability of a statute, ordinance, or rule. Thus, the Chancery

Court in this case did not have jurisdiction to grant the requested relief. The proper

procedure, and indeed the procedure taken by the Appellees in the companion case, was to

file an original action for a declaratory judgment in the Davidson County Chancery Court,

stating that the Board had previously refused to issue a declaratory order.

Our determination that the Chancery Court lacked subject matter jurisdiction to

entertain the Appellees’ request is supported by Dishmon v. Shelby State Community

College, 15 S.W.3d 477 (Tenn. Ct. App. 1999). In Dishmon, this Court held that the

procedures outlined in Tennessee Code Annotated Section 4-5-322 regarding judicial review

are only applicable to decisions rendered in contested cases. Id. at 481 (holding that “judicial

review under Tenn. Code Ann. § 4-5-322 is not available if the proceeding to be reviewed

is not a contested case”) (citing Mid–South Indoor Horse Racing, Inc. v. Tennessee State

Racing Comm'n, 798 S.W.2d 531, 536 (Tenn. Ct. App. 1990)). This interpretation of

Tennessee Code Annotated Section 4-5-322(a) is further supported by the plain language of

the statute, which provides that only “[a] person who is aggrieved by a . . . decision in a

contested case is entitled to judicial review.” Tenn. Code Ann. § 4-5-322 (emphasis added).

When statutory language is clear and unambiguous, we simply apply its plain meaning.

Eastman Chem. Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn. 2004). The Dishmon Court

concluded that, because the appeal was not taken from a contested case, the trial court lacked

jurisdiction to consider the petition for judicial review and dismissed the case. Id. at 482.

In our research, we have found no cases which hold that an agency’s action in refusing

to convene a contested case with regard to a petition for declaratory order, resulting in denial

-16-

of the petition, is subject to judicial review pursuant to Tennessee Code Annotated Section

4-5-322. In fact, the Tennessee Supreme Court in Hughley v. State, 208 S.W.3d 388 (Tenn.

2006), recently held that a petition for declaratory judgment pursuant to Tennessee Code

Annotated Section 4-5-225 is not “the equivalent of” a petition for judicial review for

purposes of the statute of limitations. Id. at 388. In Hughley, an inmate petitioned the

Department of Correction for a declaratory order regarding the calculation of his sentence.

Id. at 390. The Department of Correction exercised its discretion pursuant to Tennessee Code

Annotated Section 4-5-223(a)(2) to deny the petition by letter, without convening a contested

case. Id. More than sixty days after receiving the denial letter, the inmate filed a petition for

declaratory judgment with the Chancery Court of Davidson County. Id. Concluding that the

applicable statute of limitations was the sixty (60) day time period for judicial review of

agency decisions, the trial court dismissed the complaint as untimely. Id. The Court of

Appeals affirmed. Id. The Supreme Court granted certiorari and reversed, stating:

Section 4-5-223 of the [UAPA] provides that an “affected

person may petition an agency for a declaratory order as to the

validity or applicability of a statute, rule or order within the

primary jurisdiction of the agency.” Tenn. Code Ann. § 4-5-

223(a) (1998). The petitioned agency may then respond in one

of two ways: (1) convene a contested case hearing and issue a

declaratory order, or (2) refuse to issue a declaratory order. Id.

at (a)(1), (a)(2). If the agency elects to convene a contested case

hearing, the resulting declaratory order is “subject to review in

the chancery court of Davidson County, unless otherwise

specifically provided by statute, in the manner provided for the

review of decisions in contested cases.” Id. at (a)(1). Judicial

review of decisions in contested cases is governed by section 4-

5-322, see id. § 4-5-322(a)(1) (Supp. 2003), and petitions for

review must be filed within sixty days after entry of the agency's

final order, id. at (b)(1).

If, however, the agency declines to issue a declaratory

order, the aggrieved petitioner may seek a judicial

determination of his concerns by filing a suit for declaratory

judgment in the chancery court of Davidson County. Id. [at] §

4-5-225(a) (1998). Section 4-5-225 does not set forth a time

period within which the complainant must file his suit for

declaratory judgment.

Hughley, 208 S.W.3d at 391 (emphasis added). The Supreme Court further opined:

-17-

[S]ection 4-5-223(a)(1) of the [UAPA] affords judicial review

under section 4-5-322 only after a contested case hearing has

been convened and a declaratory order has been issued. That did

not happen in this case.

* * *

In short, the provisions of the statute for judicial review

of contested cases, set forth at Tennessee Code Annotated

section 4-5-322, simply do not apply to the proceeding before

us. Rather, the provisions of section 4-5-225, setting forth the

procedure for seeking a judicial determination of the claims

made in a petition for declaratory order after the agency refuses

under section 4-5-223(a)(2) to issue the requested order, apply.

The provisions of each statute are not interchangeable.

Id. at 393–94 (emphasis added). Thus the Supreme Court concluded that the statute allowing

a complainant to file a petition for a declaratory judgment in Chancery Court was “wholly

distinct” from the judicial review statute. Id. at 394. Consequently, the Court held that the

sixty (60) day statute of limitations applicable to petitions for judicial review was

inapplicable to petitions for declaratory judgment. Id. at 395. Instead, the Supreme Court

held that the general ten (10) year statute of limitations, Tennessee Code Annotated Section

28-3-110, applied to petitions for declaratory judgment in Chancery Court pursuant to the

UAPA. Id.; cf. Richardson v. Tenn. Bd. of Dentistry, 913 S.W.2d 446, 456–57 (Tenn. 1995)

(holding that “a party in a contested case . . . may seek judicial review of the resolved issues

and of those issues that the agency refused or was without authority to consider,” in a case

where the agency convened a contested case and issued a declaratory order stating that it was

without authority to consider constitutional challenges to statute) (emphasis added).

In this case, the Board likewise declined to convene a contested case and issue a

declaratory order. Thus, based on the reasoning in Dishmon and Hughley, the judicial review

statute was not available to seek review of that decision. Instead, the distinct procedures of

the petition for declaratory judgment statute applied.

Based on the foregoing, we conclude that the Chancery Court lacked jurisdiction to

consider Appellees’ petition for judicial review of the Board’s refusal to issue a declaratory

order. The Board was fully within its power, under Tennessee Code Annotated Section 4-5-

223, to refuse to issue the declaratory order. The UAPA provides a specific method of

recourse: filing a petition for declaratory judgment in Chancery Court pursuant to Tennessee

-18-

Code Annotated Section 4-5-225. The Appellees failed to follow that procedure in this case.

Consequently, we must vacate the judgment of the trial court in this case and remand for

dismissal of this cause.

IV. Conclusion

The judgment of the Chancery Court of Davidson County is vacated and this cause

is remanded to the trial court for dismissal. Costs of this appeal are taxed to Appellees, Ron

and Linda Pickard, as the Trustees of the Sharon Charitable Trust, and as individuals, from

all of which execution may issue if necessary.

_________________________________

J. STEVEN STAFFORD, JUDGE

-19-