United States District Court, W.D. Tennessee, Western Division
ELVIS PRESLEY ENTERPRISES, INC. EPPF, LLC, and GUESTHOUSE AT GRACELAND, LLC, Plaintiffs,
CITY OF MEMPHIS, TENNESSEE, Defendant.
H. MAYS, JR. UNITED STATES DISTRICT JUDGE
the Court is Defendant City of Memphis's (the
“City's”) November 6, 2018 motion to dismiss.
(ECF No. 8.) Plaintiffs Elvis Presley Enterprises, Inc.,
EPPF, LLC, and Guesthouse at Graceland, LLC (collectively
“EPE”) responded on December 4, 2018. (ECF No.
21.) The City replied on December 18, 2018. (ECF No. 23.)
Plaintiffs filed supplemental briefing on May 30, 2019. (ECF
No. 42.) The City filed supplemental briefing on June 4,
2019. (ECF No. 45.)
brings claims against the City for retaliation under 42
U.S.C. § 1983, intentional interference with contractual
relationships under Tennessee law, and intentional
interference with business relationships under Tennessee law.
City filed its motion to dismiss under Federal Rule of Civil
following reasons, the City's motion to dismiss is
GRANTED IN PART and DENIED IN PART.
owns and operates Graceland, the former home of Elvis Presley
and a current tourist attraction in Memphis,
Tennessee.(ECF No. 1 at 2.)
2014, EPE developed the Graceland Project, a planned
redevelopment of Graceland that included a new hotel and
improvements to existing facilities. (Id. at 2-3.)
To help fund the Graceland Project, EPE submitted EPE's
Economic Impact Plan for Graceland Economic Development Area
(the “Plan”) to the City, Shelby County,
Tennessee (the “County”), and the Economic
Development Growth Engine Industrial Development Board of the
City of Memphis and County of Shelby (“EDGE”).
(Id. at 3.) The Plan included a request for tax
increment financing, which would earmark a certain amount of
property taxes to support the Graceland Project.
(Id.) EDGE, the City, and the County approved the
Plan in late 2014. (Id.) The new hotel was built.
(Id. at 4.) The facility improvements were
2017, EPE sought to expand the Graceland Project.
(Id. at 5.) EPE submitted to EDGE the Supplement to
Economic Impact Plan for Graceland Economic Growth Area (the
“Supplemental Plan”). (Id.) The
Supplemental Plan requested approval, among other things, of
an arena capable of seating 6, 200 people (the
EDGE considered the Supplemental Plan, Memphis Basketball,
LLC (“Memphis Basketball”) contacted the City.
(Id. at 6.) Memphis Basketball owns and operates the
National Basketball Association franchise the Memphis
Grizzlies. (Id.) The Memphis Grizzlies play their
home games at FedExForum, a multipurpose arena located in
downtown Memphis, Tennessee.Memphis Basketball contended that
the City's approval of the Arena would violate a contract
between Memphis Basketball and the City, prohibiting the City
from providing public financing for competing entertainment
facilities. (Id. at 9.) Memphis Basketball
threatened to sue EDGE if EDGE approved the Supplemental
Plan. (Id. at 8.)
told EPE it would not move forward with the approval process
for the Supplemental Plan until Memphis Basketball dropped
its litigation threat. (Id. at 7.) About the same
time, the City told EPE that the City would not consent to
the Supplemental Plan, particularly the Arena, until Memphis
Basketball gave the City written confirmation that approval
of the Arena would not breach the City's contract with
Memphis Basketball. (Id. at 8.) The approval process
for the Supplemental Plan came to a halt. (Id.)
responded by filing a declaratory judgment action in
Tennessee Chancery Court. (Id. at 9.) EPE asked the
court to interpret the contract between Memphis Basketball
and the City. (Id.) EPE contended that the contract
did not prohibit the City from approving the Arena.
(Id.) The Chancery Court dismissed the case,
concluding that EPE had to demand that EDGE consider and vote
on the Supplemental Plan before EPE could seek a declaratory
judgment. (Id. at 10.)
February 2018, after the Chancery Court's decision, EPE
asked EDGE to vote on the Supplemental Plan at its next
meeting. (Id. at 11.) EDGE did not do so.
(Id.) In March 2018, EPE filed a new action in
Tennessee Chancery Court, seeking to force EDGE to vote.
(Id. at 12.) EDGE approved the Supplemental Plan
about a month later. (Id.) EDGE conditioned its
approval on a court order declaring that approval of the
Arena would not breach the contract between the City and
Memphis Basketball. (Id.)
securing EDGE's approval, EPE sought the County's.
(Id. at 13.) The County approved the request in the
Supplemental Plan for increased tax increment financing to
support the expanded Graceland Project. (Id.)
Addressing the Arena, the County told EPE to get a court
declaration on the proper interpretation of the contract
between the City and Memphis Basketball. (Id.)
followed EDGE and the County's instructions.
(Id. at 14.) In late June 2018, EPE filed a
declaratory judgment action in Tennessee Chancery Court
against the City, Memphis Basketball, and the County to
determine whether approval of the Arena would violate the
contract between the City and Memphis Basketball.
that case was pending, EPE sought to move forward with parts
of the expanded Graceland Project unrelated to the Arena.
(Id.) EPE submitted its Application for Planned
Development Approval (the “Development
Application”) to the Memphis and Shelby County Office
of Planning and Development (the “OPD”) in August
2018. (Id. at 15.) Approval of the Development
Application would have allowed EPE, among other things, to
build a new airplane hangar for planes formerly owned by
Elvis Presley, build new cabins, and update a recreational
vehicle park. (Id. at 16.) EPE was confident the OPD
would approve the Development Application. (Id. at
neither approved nor denied the Development Application.
(Id.) Instead, it decided to table consideration of
the Application indefinitely, until the Chancery Court
litigation over the Arena was complete. (Id. at 16.)
That decision followed instructions from the Memphis City
Attorney. (Id. at 19.) In an email, the OPD planning
director told EPE that:
Earlier this week, the City Attorney requested that [the
Development Application] be deferred until the pending
litigation in Chancery Court is concluded. I have conferred
with my in-house Division attorney and he agrees. Therefore,
[the Development Application] will not be considered . . .
until such time as the pending legislation [sic] is
(Id. at 16.) The Development Application did not
seek approval of the Arena at issue in the Chancery Court
case. (Id. at 14-17.)
of the OPD's deferral, EPE is prohibited from moving
forward with the Development Application projects.
(Id. at 16.) EPE has lost numerous business
opportunities -- such as hosting various shows, events, and
exhibitions -- causing EPE to suffer substantial monetary
loss. (Id. at 20.)
filed its complaint in this case on October 16, 2018. EPE
alleges that the City, through the city attorney, blocked the
OPD from considering the Development Application.
(Id. at 18.) EPE alleges that the City did so for
two reasons. (Id. at 18-19.) The first is punitive.
The City wanted to punish EPE for disagreeing with the City
about the contract with Memphis Basketball, obtaining EDGE
and the County's conditional approvals of the
Supplemental Plan, suing the City twice in Chancery Court,
and commenting publicly about these matters. (Id. at
18.) The second reason is coercive. The City wanted to deter
EPE from maintaining its latest suit against the City and
from pursuing similar conduct designed to protect EPE's
rights and interests. (Id. at 19.)
Court has federal question jurisdiction. Under 28 U.S.C.
§ 1331, district courts have original jurisdiction
“of all civil actions arising under the Constitution,
laws, or treaties of the United States.” EPE asserts a
right to relief against the City under § 1983. That
claim arises under the laws of the United States.
Court has supplemental jurisdiction over EPE's
Tennessee-law claims. See 28 U.S.C. § 1367(a).
Those claims derive from a “common nucleus of operative
fact” with EPE's federal claim against the City.
United Mine Workers of Am. v. Gibbs, 383 U.S. 715,
725 (1966); Soehnlen v. Fleet Owners Ins. Fund, 844
F.3d 576, 588 (6th Cir. 2016).
Standard of Review
Federal Rule of Civil Procedure 12(b)(6) allows dismissal of
a complaint that “fail[s] to state a claim upon which
relief can be granted.” A Rule 12(b)(6) motion permits
the defendant “to test whether, as a matter of law, the
plaintiff is entitled to legal relief even if everything
alleged in the complaint is true.” Campbell v.
Nationstar Mortg., 611 Fed.Appx. 288, 291 (6th Cir.
2015) (quotation omitted). A motion to dismiss tests only
whether the plaintiff has pled a cognizable claim and allows
the court to dismiss meritless cases that would waste
judicial resources and result in unnecessary discovery.
See Kolley v. Adult Protective Servs., 725 F.3d 581,
587 (6th Cir. 2013).
evaluating a motion to dismiss for failure to state a claim,
the Court must determine whether the complaint alleges
“sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A claim is plausible on its face if
“the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. If a