McDevitt & Street Co. v. Georgia Building Authority

• Decision Date: 21 June 1972
• Docket Number: Civ. A. No. 16107.
• Citation: 343 F. Supp. 1238
• Parties: McDEVITT & STREET COMPANY v. The GEORGIA BUILDING AUTHORITY.
• Court: U.S. District Court — Northern District of Georgia

343 F. Supp. 1238

McDEVITT & STREET COMPANY v. The GEORGIA BUILDING AUTHORITY.

Civ. A. No. 16107.

United States District Court, N. D. Georgia, Atlanta Division.

June 21, 1972.

Smith, Currie & Hancock, Atlanta, Ga., for plaintiff.

J. Lee Perry, Asst. Atty. Gen., Atlanta, Ga., for defendant.

ORDER

O'KELLEY, District Judge.

McDevitt & Street Company brings this action against the Georgia Building Authority seeking to compel arbitration pursuant to the provisions of the United States Arbitration Act, Title 9 U.S.C., of an alleged dispute arising out of its contract with the Authority for the construction of "Georgia Plaza," a project located at the corner of Mitchell and Washington Streets in the City of Atlanta, Georgia. The defendant now moves the Court (1) to dismiss this action for lack of diversity jurisdiction and (2) to strike the affidavit of J. L. Padgett. The plaintiff, in turn, moves the Court for summary judgment in its favor. Since a finding of no diversity jurisdiction would be dispositive of all other pending matters, the Court will deal with that issue first.

It is well established that a State is not a "citizen" for diversity purposes. Postal Telegraph Cable Co. v. Alabama, 155 U.S. 482, 15 S.Ct. 192, 39 L.Ed. 231 (1894); State Highway Commission of Wyoming v. Utah Construction Company, 278 U.S. 194, 49 S.Ct. 104, 73 L.Ed. 262 (1928). Therefore, if the Georgia Building Authority is an arm or alter ego of the State, or if the State is determined to be the real party in interest, no basis for diversity jurisdiction exists.

In attempting to determine the status of an agency such as the Building Authority, this Court must first look to the decisions of the Supreme Court of Georgia. See Louisiana Highway Commission v. Farnsworth, 74 F.2d 910 (5th Cir. 1935). Although the Supreme Court of Georgia has not specifically determined the status of the Georgia Building Authority, it has provided an analysis of a similarly created authority in the case of International Longshoremen's Association v. Georgia Ports Authority, 217 Ga. 712, 124 S.E.2d 733 (1962). In that case, the Supreme Court held that the Ports Authority performed legitimate functions of State government ordinarily carried on by a State or a State instrumentality. It further held that the Ports Authority was a creature of the State acting for the benefit of the public.

In light of the analysis provided by the Georgia Supreme Court in the Ports Authority case, the Court now examines the sections of the Georgia Code by which the Georgia Building Authority was created.¹ In making its examination, the Court finds that the Building Authority was created for the purpose of erecting buildings and other facilities to house agents and officials of the State government. The Authority is governed by a board which consists of the Governor, the Lieutenant Governor, the State Auditor, the Commissioner of Agriculture, and the State Attorney General. It builds and owns the State office buildings and rents them to the various departments, boards, and agencies of the State. The Authority receives indirect compensation from the State in that the State includes in the budgets of...