WM Mobile Bay Environmental Center, Inc. v. The City of Mobile Solid Waste Authority

Case: 15-15466 Date Filed: 12/02/2016 Page: 1 of 7

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT
________________________

No. 15-15466
________________________

D.C. Docket No. 1:13-cv-00434-KD-N

WM MOBILE BAY ENVIRONMENTAL CENTER, INC.,

Plaintiff -
Counter Defendant -
Appellee,

versus

THE CITY OF MOBILE SOLID WASTE AUTHORITY,

Defendant -
Counter Claimant -
Appellant.

________________________

Appeal from the United States District Court
for the Southern District of Alabama
________________________

(December 2, 2016)
 Case: 15-15466 Date Filed: 12/02/2016 Page: 2 of 7

Before TJOFLAT and HULL, Circuit Judges, and MENDOZA, * District Judge.

PER CURIAM:

After a jury trial, several post-trial motions for judgment as a matter of law

and for new trial, renewed motions, and a remittitur, the district court entered

judgment in favor of the Plaintiff-Appellee WM Mobile Bay Environmental

Center, Inc. (“WM Mobile”) on the following claims against the Defendant-

Appellant The City of Mobile Solid Waste Authority (the “Authority”): (1) breach

of contract in Count I for damages in the amount of $1,369,771 related to price

adjustments for waste disposal at the landfill; (2) breach of contract in Count III for

damages in the amount of $1,082,753 related to reimbursements for capital

expenditures; (3) breach of contract in Count IV for damages in the amount of

$558,457 related to reimbursements for increased operating costs due to changes in

applicable laws and regulations; (4) breach of contract in Count VII in the amount

of $23,064.50 related to breach of the indemnification obligation; (5) breach of

contract in Count X for damages in the amount of $3,000,000 related to WM

Mobile’s lost profits from the diversion of solid waste from the landfill from the

period September 2007 through April 2011; and (6) declaratory judgment in Count

XI setting the future rate of payment for solid waste disposal at $25.43 per ton.

*
Honorable Carlos Eduardo Mendoza, United States District Judge, for the Middle District of
Florida, sitting by designation.

2
 Case: 15-15466 Date Filed: 12/02/2016 Page: 3 of 7

The Appellant Authority appeals the verdict and all of the district court’s

multiple rulings and entries of final judgment on Counts I, III, IV, X, and XI.

Because of the extensive litigation in the case, the parties are fully familiar with the

factual and procedural background of this case, and thus we need not recount it.

On appeal, the Authority raises these issues: (1) whether the Authority is an arm of

the State of Alabama and thus not a citizen for purposes of diversity jurisdiction;

(2) whether the record supports the fact that WM Mobile has its principal place of

business in Alabama; (3) whether the contract requirements for rate changes and

reimbursements were satisfied; (4) whether the Authority acted in bad faith;

(5) whether the district court was authorized to set a new rate of payment for

disposal of waste at the landfill; and (6) whether the district court erred in not

excluding certain evidence at trial related to WM Mobile’s lost profits.

After thorough review and oral argument, we conclude all of those

arguments and issues lack merit and only two warrant discussion.

As to diversity jurisdiction, the Second Amended Complaint alleged that the

Appellee WM Mobile was incorporated in Delaware and that its principal place of

business was Madison, Mississippi. In its answer to that complaint, the Appellant

Authority “Admitted” these factual allegations. After the jury trial and extensive

post-trial proceedings, the Authority for the first time on appeal asserts that the

evidence in the record “implies” that WM Mobile’s principal place of business is

3
 Case: 15-15466 Date Filed: 12/02/2016 Page: 4 of 7

in Alabama. If true, WM Mobile would be an Alabama citizen for purposes of 28

U.S.C. § 1332 and complete diversity would not exist. 1

The fatal flaw in the Appellant Authority’s entire argument is that it

admitted sufficient facts to establish diversity jurisdiction on which the district

court properly relied. The Authority has offered no reason, much less a compelling

reason, why the Authority should not be held to that factual admission, especially

after a full jury trial and entry of final judgment in the district court. “Consent of

parties cannot give the courts of the United States jurisdiction, but the parties may

admit the existence of facts which show jurisdiction, and the courts may act

judicially upon such an admission.” Ry. Co. v. Ramsey, 89 U.S. (22 Wall.) 322,

327 (1874); see also Cooper v. Meridian Yachts, Ltd., 575 F.3d 1151, 1177-78

(11th Cir. 2009) (examining contacts with the United States for a choice of law

analysis and finding that parties are generally bound by their admissions and that

the parties’ denial of having a principal place of business in Florida was binding);

In re CP Ships Ltd. Sec. Litig., 578 F.3d 1306, 1311 (11th Cir. 2009) (finding a

factual challenge to jurisdiction raised for the first time on appeal was waived

when the parties admitted facts demonstrating jurisdiction in the court below),

abrogated in part by Morrison v. Nat’l Austl. Bank Ltd., 561 U.S. 247, 130 S. Ct.

2869 (2010).

1
A corporation is a citizen of every state or foreign state within which it has been incorporated or
has its principal place of business. 28 U.S.C. § 1332(c)(1).
4
 Case: 15-15466 Date Filed: 12/02/2016 Page: 5 of 7

As to the arm of the state issue, we conclude that the Authority’s arguments

have no basis in the law or the facts relevant to this case. Our governing precedent

in Coastal Petroleum Co. v. U.S.S. Agri-Chemicals, a Division of United States

Steel Corp., 695 F.2d 1314 (11th Cir. 1983), sets forth the following analytical

framework for this arm of the state issue:

These factors have been approved by this circuit and are as follows:
(1) whether the agency can be sued in its own name; (2) whether the
agency can implead and be impleaded in any competent court;
(3) whether the agency can contract in its own name; (4) whether the
agency can acquire, hold title to, and dispose of property in its own
name; and (5) whether the agency can be considered a “body
corporate” having the rights, powers and immunities incident to
corporations.

695 F.2d at 1318.

Each of the Coastal Petroleum factors shows that the Authority is an

independent public corporation and is not an arm of the state. The Authority can

sue and be sued in its own name. Ala. Code § 11-89A-8(a)(2). The Authority can

enter into contracts, agreements, leases, and other instruments as necessary to

accomplish its goals. § 11-89A-8(a)(12). The Authority can also acquire and hold

title to property. § 11-89A-8(a)(5).

Moreover, the Authority is considered a corporate body. The Authority is

defined as a nonprofit “public corporation.” §§ 11-89A-2(2), 11-89A-19. The

Authority was created by the filing of a certificate of incorporation. § 11-89A-

5
 Case: 15-15466 Date Filed: 12/02/2016 Page: 6 of 7

4(a). A board of directors governs the Authority, exercises the powers of the

Authority, and appoints its own officers. §§ 11-89A-6(a), 11-89A-7.

In addition to the Coastal Petroleum factors, the Authority has the power to

issue bonds. § 11-89A-9(a). The Authority is also largely free “from supervision

and control of” the state in executing its functions:

Except as expressly provided in this chapter, no proceeding, notice, or
approval shall be required for the incorporation of any authority or the
amendment of its certificate of incorporation, the purchase of any note
or other instrument secured by a mortgage, deed of trust, note, or
other security interest, the issuance of any bonds, the execution of any
mortgage and deed of trust or trust indenture, or the exercise of any
other of its powers by an authority.

§ 11-89A-13(a). The Authority is also exempt from: taxation by a subdivision of

the state, usury and interest laws, and competitive bid laws. §§ 11-89A-16, 11-

89A-17, 11-89A-18.

Given the Authority’s broad powers and the lack of control over the

Authority by the State of Alabama, we conclude that the Authority is not an arm of

the State of Alabama as a matter of law. 2 The Authority is thus a citizen for

purposes of diversity, and the district court had jurisdiction to decide this case.

2
The Authority does not appear to argue they are an arm of the state for purposes of the Eleventh
Amendment or sovereign immunity. Rather, their arm of the state contention relates to the claim
that they are the state and not a citizen of Alabama and, therefore, not a citizen for purposes of
§ 1332.
6
 Case: 15-15466 Date Filed: 12/02/2016 Page: 7 of 7

Accordingly, we affirm the district court’s rulings and entry of final

judgments in this case.

AFFIRMED.

7