Appeals court revives Nashville developer’s takings claim, overrules lower court dismissal

Nashville, Tennessee; August 14, 2026: Today, an appeals court handed a victory to a Nashville developer that was forced to wait four years for permission to build on its own property after the Metro Government of Nashville put an indefinite hold on its permit application. In the decision, the U.S. Court of Appeals for the Sixth Circuit reversed a lower court dismissal and sent the case back for further proceedings, reviving SW Nashville’s lawsuit. 

“The city was not allowed to say no to this project, so it refused to say anything,” said Jon Houghton, an attorney at Pacific Legal Foundation. “For four years, Metro froze a project that met every legal requirement, while insisting it hadn’t made up its mind. The Constitution doesn’t let the government indefinitely freeze someone’s property rights.” 

In 2022, SW Nashville bought a vacant lot and applied for a standard permit for a mixed-use development. The Metro Government’s planning commission imposed an indefinite hold on the permit while it considered taking part of the property through eminent domain for a future roadway. For four years, the hold rendered the property undevelopable and unsellable, leading to substantial financial loss. 

The company sued in December 2025, arguing that the delay was a de facto taking that violated the Fifth Amendment. A district court dismissed the case, ruling that SW Nashville would not have standing to sue until the government issued a final decision on the permit. SW Nashville appealed. 

Today, the Sixth Circuit reversed the lower court’s ruling and found that the hold was a “definitive decision” by the government that caused measurable harm. The Sixth Circuit then remanded the case to lower courts to continue litigation. 

Pacific Legal Foundation represents SW Nashville free of charge. The case is SW Nashville EB Owner, LLC v. Metropolitan Government of Nashville & Davidson County.