Lipscomb v. Columbus Municipal Separate School Dist., 00-60245

Citation269 F.3d 494
Decision Date03 October 2001
Docket NumberNo. 00-60245,00-60245
Parties(5th Cir. 2001) J. RANDOLPH LIPSCOMB, on behalf of himself and all others similarly situated; MAYOR, CITY OF COLUMBUS; CITY COUNCIL OF THE CITY OF COLUMBUS, MISSISSIPPI, as the statutorily designated successors in office to the Trustees of Franklin Academy, Plaintiffs-Appellees, v. THE COLUMBUS MUNICIPAL SEPARATE SCHOOL DISTRICT, etc.; ET AL., Defendants, v. STATE OF MISSISSIPPI; ERIC CLARK, In his capacity as Secretary of State, Defendants-Appellants
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

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269 F.3d 494 (5th Cir. 2001)
J. RANDOLPH LIPSCOMB, on behalf of himself and all others similarly situated; MAYOR, CITY OF COLUMBUS; CITY COUNCIL OF THE CITY OF COLUMBUS, MISSISSIPPI, as the statutorily designated successors in office to the Trustees of Franklin Academy, Plaintiffs-Appellees,
STATE OF MISSISSIPPI; ERIC CLARK, In his capacity as Secretary of State, Defendants-Appellants.
No. 00-60245
October 3, 2001
Revised October 5, 2001

Appeal from the United States District Court For the Northern District of Mississippi

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This case requires us to examine a collision between the Contract Clause of the United States Constitution and Mississippi's effort to escape rent and renewal terms of leases of sixteenth section land in Columbus, Mississippi dating back to the early nineteenth century. The Secretary of State of Mississippi and the State maintain that the rental and renewal terms are invalid because their perpetuation of rents that are now nominal violate a provision of the 1890 Mississippi Constitution forbidding the donation of public property to private parties. Lipscomb sues for a declaration that the efforts of the Secretary of State to invalidate these leases violates the Contract Clause. The district court held that invalidating the leases would violate the Contract Clause. We affirm.


Before Mississippi became a state, the United States Congress set aside the sixteenth section of every township in the Mississippi Territory to be used for the benefit of schools.1 Congress then authorized the leasing of the sixteenth section land to raise funds to finance public schools in the Mississippi Territory.2 Upon granting statehood to Mississippi in 1817, Congress gave the sixteenth section land to the new state for the benefit of its schools.3 Thereafter, the Mississippi legislature authorized the leasing of the school lands, the proceeds of which would finance public schools.4

During the nineteenth century, various persons leased sixteenth section land from

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the school board of Columbus, Mississippi. These leases were to last 99 years from February 10, 1821, or thereabouts (regardless of when actually made), and contained "renewable forever" provisions authorized by an 1830 Mississippi statute.5 Many of the leases--often after being assigned or subdivided--were renewed in 1920 under their renewable forever provisions. The rental rates paid on the Columbus leases have remained unchanged for 180 years. Leaseholders of lots of property in downtown Columbus pay pennies in rent per year, a small fraction of their fair market rent.

In 1890, Mississippi ratified its current constitution. Section 95 of the 1890 constitution prohibits the donation of state lands to private parties.6 Mississippi courts subsequently interpreted section 95 to prohibit leases or sales of land for grossly inadequate consideration.7 A lease that violates section 95 is voidable.8 Following these rulings, the State and individual school boards began asserting that sixteenth section leases for nominal consideration were void and renegotiating the leases. The leases in Columbus, Mississippi, however, occupy a unique position: because the "renewable forever" leases in Columbus were signed before the ratification of the 1890 Mississippi Constitution, voiding the leases implicates the Contract Clause of the United States Constitution.9

J. Randolph Lipscomb brought a declaratory judgment action in federal court seeking certification of a class of leaseholders and a declaration that the State's threatened action to void the leases and renegotiate would violate the Contract Clause. He originally named the Secretary of State of Mississippi, the State of Mississippi, the Columbus School Board, and the U.S. Department of Housing and Urban Development10 as defendants.11

The district court certified the class, but then abstained under the Pullman and Burfordadoctrines. This Court reversed the ruling on abstention and remanded.12 The district court redefined the class and ultimately granted summary judgment in favor of Lipscomb, declaring, in relevant part, that (1) "renewable forever" in the Columbus sixteenth section leases means all rental covenants, including the lease rate, are renewable forever, (2) the Contract Clause of the United States Constitution applies to the leases in this case, and (3) voiding the leases under section 95 of the Mississippi Constitution would violate the Contract Clause. The Secretary of State and the State of Mississippi appeal that ruling.

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The State challenges federal jurisdiction on several grounds, and we turn first to that question.

A. Subject Matter Jurisdiction

The State argues that the district court lacked subject matter jurisdiction because there is no federal question and the federal defendant, HUD, has no case or controversy with the plaintiffs.13 Specifically, the State claims that the Supreme Court's decision inPublic Service Commission v. Wycoff14 precludes federal jurisdiction under 28 U.S.C. § 1331 and the well-pleaded complaint rule.15 We disagree.

In Wycoff, the plaintiffs sought a declaratory judgment that their activities constituted interstate commerce so as to insulate them from state regulation. The Court held that, when "the complaint in an action for declaratory judgment seeks in essence to assert a defense to an impending or threatened state court action, it is the character of the threatened action, and not of the defense, which will determine whether there is federal-question jurisdiction in the District Court."16 The State contends that Lipscomb has similarly attempted to evade the well-pleaded complaint rule, by anticipating the Secretary of State's judicial action. Since the state legislative action giving rise to Lipscomb's claim is the Mississippi Constitution of 1890, Lipscomb's complaint does not anticipate a state judicial action, it seeks redress for an existing harm.17 To the point, the threatened action is legislative impairment of contract.

B. Eleventh Amendment Immunity

The State for the first time seeks a dismissal on grounds of sovereign immunity. Lipscomb counters that the State has waived its Eleventh Amendment immunity and, in the alternative, that Ex parte Young18asaves the claim for declaratory relief against the Secretary of State, even if the State of Mississippi must be dismissed. We address these contentions in reverse order.

Ex parte Young of course offers an exception to the State's Eleventh Amendment immunity. That is, state immunity is no bar to enjoining a proper state official from unconstitutional acts. Lipscomb seeks not damages but a declaration that voiding the leases would violate the Contract Clause. In function, this requested

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relief is indistinguishable from a suit to enjoin the Secretary from declining to abide the challenged lease terms. While such a declaration will not support coercive, retrospective relief or money damages when confronted with the Eleventh Amendment, it will support injunctive relief.

The Secretary of State argues, however, that the suit implicates the State's ownership of land in a manner that takes it outside the Ex parte Young exception, as in Idaho v. Coeur d'Alene Tribe of Idaho.19 In Coeur d'Alene, the Supreme Court held that a claim to the ownership of submerged waters brought against the State is barred by the Eleventh Amendment, even though no damages were sought. The Court emphasized that the requested declaration would strip the State of its jurisdiction and regulatory control over the lands.20 The Court also noted that state control over submerged lands was a special incident of sovereignty with deep historical roots.21

We are not persuaded that Coeur d'Alene controls here. The Supreme Court relied on two interrelated factors: First, the Court noted that the Eleventh Amendment bars a quiet title action in federal court absent the State's consent.22 The Tribe claimed ownership and exclusive occupancy of the lands and was seeking invalidation of all state laws regulating the land. It conceded that its suit was the functional equivalent of a quiet title action. Second, the Court emphasized that the relief sought would have been an affront to the State's sovereignty. Because the Tribe was a distinct sovereign, not only would quieting title in the Tribe divest the State of ownership over the land, it would strip the State of all of its jurisdiction and power over the land.23

We find our case distinguishable. Lipscomb did originally seek to quiet title, but he abandoned that claim. His amended complaint seeks only a declaration that the invalidation of the price terms of the leases is prohibited by the Contract Clause of the Constitution. The contention that the requested relief would be an affront to state sovereignty is not convincing. Mississippi would retain jurisdiction over the leased lands; indeed, title to the lands would remain in Mississippi. The State's basic police and taxing power would not be affected.

The Tenth Circuit found similar distinctions from Coeur d'Aleneain a case resembling this one. In Elephant Butte Irrigation District of New Mexico v. Department of Interior,24 it denied an Eleventh Amendment challenge to a suit over the distribution of profits from land leases to various governmental bodies. The court acknowledged that the suit involved property interests of the State, but noted that it was not a suit to quiet title, and the "special sovereignty interests" present in Coeur d'Alene did not exist.25 Instead, the Tenth Circuit noted, the only

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