The Tennessee Court of Appeals has upheld dismissal of a 2018 lawsuit against the City of Memphis, Shelby County government and the Memphis Grizzlies by Elvis Presley Enterprises over Graceland’s plans to build a 6,200-seat arena on its Whitehaven campus.

The Thursday, Dec. 26, ruling upholds a 2018 decision by Chancellor Jim Kyle.

“We are not surprised by the Tennessee Court of Appeal ruling dismissing the lawsuit filed by Elvis Presley Enterprises,” city chief legal officer Bruce McMullen said in a written statement. “The City remains hopeful that EPE and the Grizzlies can work out an agreement acceptable to all involved.”

Graceland filed its first lawsuit against all the defendants in November 2017, claiming Memphis Basketball LLC, the part of the Grizzlies organization that operates FedExForum, and the city had intentionally interfered with business relations.

The issue in the lawsuit was a noncompete clause between the city, county and Memphis Basketball for the operation of FedExForum. The clause forbids the city and/or county from financing the construction and operation of a competing arena – an indoor arena or entertainment center with between 5,000 and 50,000 seats.

Attorneys for Graceland claimed the Grizzlies pressured the city and county and the EDGE board, the Economic Development Growth Engine that grants financial incentives.

Mayor Jim Strickland claimed the noncompete was clear and that the city would not back the plan for a Whitehaven arena. He also said there was nothing preventing Graceland from financing such a facility on its own.

Graceland sought incentives for an amended master plan that included the arena, arguing it already had tax incentives for other parts of the plan and its foot in the door in terms of getting more.

This past March, the city and Graceland reached an agreement on a development master plan that does not include the arena. The plan does, however, allow use of exhibit spaces Graceland has built on its campus in the interim, including sound stages used for concerts that the Grizzlies organization and the city had questioned.

Graceland’s $75 million expansion moves forward

“EPE has a legislative and governmental issue but seeks a judicial solution,” Kyle wrote in his ruling.

He said EDGE had not acted on the request and neither the city council nor county commission had rejected Graceland’s plan.

The commission and EDGE board later gave conditional approval. The condition was that a court ruling would decide whether the 6,200-seat arena violated the noncompete.

Graceland filed a second lawsuit in June 2018 instead of appealing Kyle’s ruling in the first lawsuit. The second lawsuit dropped the claim of interference.

In the Appeals Court opinion, written by Judge Kenny Armstrong, the court ruled that Graceland could have filed a motion to amend its first lawsuit which was still pending.

“Having failed to avail itself of the opportunity to raise these new facts in the first lawsuit, we conclude that EPE’s second complaint is barred as res judicata,” he wrote.

Res judicata is the legal principle that a matter has been decided by the proper court and cannot be pursued further.

Justice J. Steven Stafford submitted a dissenting opinion in which he argued an essential element in the doctrine of res judicata had not been established.