Institute for Justice · August 19, 2022

NASHVILLE, Tenn.—Yesterday, the Tennessee Supreme Court vacated lower court rulings and allowed two Nashville home-based business owners to continue their lawsuit over restrictions on how many clients they can serve. The court remanded the case back to the trial court for further consideration. This ruling comes after several changes to Nashville’s home-based business regulations since the case was first filed and even since the oral argument in January of this year. 

Record producer Lij Shaw and hairstylist Pat Raynor, represented by the Institute for Justice (IJ) and the Beacon Center of Tennessee, sued the city in 2017 after it shut down their businesses without any evidence the small businesses were harming the surrounding neighborhood. Nashville completely banned Lij and Pat from having any clients at their home-based businesses, but allowed other home-based businesses, including short-term rentals, home day cares, historic homes and others, to have 12 clients daily.  

This meant that Lij could have his home-recording studio, where a Grammy-winning album was mixed, and Pat could have her state-licensed, single-chair home salon, but they could not have clients even though other people could. This violates the Tennessee Constitution. 

After the trial court ruled in the case, and COVID-19 caused Nashville to order people to work from home, Nashville temporarily amended its laws to allow home-based business owners like Lij and Pat to have up to six clients per day. While that was an improvement over the old limit of zero, it still treated Lij and Pat worse than the privileged home-based businesses, which are allowed to have twice as many clients. This still violates the Tennessee Constitution, but the court of appeals ruled the change in law “mooted” the lawsuit. 

The Tennessee Supreme Court took the case and received amicus briefing in support of Lij and Pat from numerous groups. After the argument before the Supreme Court, Nashville changed its law again, making its temporary rules permanent. This led the Supreme Court to push the lawsuit back to the trial court to determine, for the first time, whether Lij and Pat are still harmed by the new law. 

“Unless six now equals 12, Nashville has not stopped violating the Tennessee Constitution,” said IJ Senior Attorney Paul Avelar. “The Tennessee Constitution guarantees equal treatment for entrepreneurs who work from home. That is why we will continue the fight to vindicate Pat’s and Lij’s, and all Tennesseans’, constitutional rights.” 

The case will now return to the Chancery Court of Davidson County for further proceedings.