WM Mobile Bay Envtl. Ctr., Inc. v. City of Mobile Solid Waste Auth.

• Decision Date: 26 August 2020
• Docket Number: No. 19-10239,19-10239
• Citation: 972 F.3d 1240
• Parties: WM MOBILE BAY ENVIRONMENTAL CENTER, INC., Plaintiff - Counter Defendant - Appellant, v. The CITY OF MOBILE SOLID WASTE AUTHORITY, Defendant - Counter Claimant - Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

972 F.3d 1240

WM MOBILE BAY ENVIRONMENTAL CENTER, INC., Plaintiff - Counter Defendant - Appellant,

v.The CITY OF MOBILE SOLID WASTE AUTHORITY, Defendant - Counter Claimant - Appellee.

No. 19-10239

United States Court of Appeals, Eleventh Circuit.

August 26, 2020

Jaime W. Betbeze, Daniel Trice Stabler, Maynard Cooper & Gale, PC, Mobile, AL, John Cowles Neiman, Jr., Mary Mangan, Maynard Cooper & Gale, PC, Birmingham, AL, for Plaintiff-Appellant.

Charles Leo Miller, Jr., Charles L Miller Jr., PC, Patrick Hanlon Sims, Sims Law Firm, LLC, Mobile, AL, Albert L. Jordan, Susan Elaine McPherson, Wallace Jordan Ratliff & Brandt, LLC, Birmingham, AL, for Defendant-Appellee.

Before WILSON, JILL PRYOR, and LAGOA, Circuit Judges.

LAGOA, Circuit Judge:

This diversity case requires us to determine whether Alabama law permits a judgment creditor to execute on certain real property owned by an Alabama solid waste disposal authority. Appellant WM Mobile Bay Environmental Center, Inc. ("WM Mobile"), seeks to partially satisfy its multi-million-dollar judgment against Appellee the City of Mobile Solid Waste Authority (the "Authority") by executing on real property owned by the Authority that WM Mobile claims has never been used for waste disposal purposes. The parties dispute whether such property is exempt from execution under section 6-10-10 of the Alabama Code or, alternatively, Alabama common law. However, Alabama law is not clear on how we should treat property owned by a solid waste disposal authority, with case law supporting each party's arguments.

The issues in this appeal are based solely on Alabama statutory and common law. Principles of comity and federalism instruct us that "[b]ecause the only authoritative voice on Alabama law is the Alabama Supreme Court, it is axiomatic that that court is the best one to decide issues of Alabama law." Blue Cross & Blue Shield of Ala., Inc. v. Nielsen , 116 F.3d 1406, 1413 (11th Cir. 1997). We therefore respectfully certify the issues of Alabama law discussed below to the highest court of that state, and if the Alabama Supreme Court accepts our request, its determination will be dispositive.

I. FACTUAL AND PROCEDURAL BACKGROUND

WM Mobile brought this action in federal court against the Authority, alleging that the Authority breached various provisions of a contract between WM Mobile and the Authority for the operation of a landfill (the "Landfill") owned by the Authority. After a jury trial, WM Mobile obtained a judgment against the Authority totaling $6,034,045.50. This Court affirmed that judgment in WM Mobile Bay Environmental Center, Inc. v. City of Mobile Solid Waste Authority , 672 F. App'x 931 (11th Cir. 2016).

To partially satisfy its judgment,¹ WM Mobile applied to the district court for a writ of execution against a 104-acre parcel of land (the "West Tract") owned by the Authority that sits adjacent to the Landfill. The Authority purchased the West Tract in 1994 and it "has been held by the [Authority] for expansion of the Chastang Landfill if needed. The expansion has been discussed but has not been needed to date."

The Authority moved to quash WM Mobile's request for a writ of execution, asserting, among other things, that Alabama law prohibits execution on the West Tract because that land is owned by the Authority for public use. The Authority emphasized its role as a public corporation, its purpose and limited rights under the statutes authorizing its creation, and its relationship with the City of Mobile (the "City"). The Authority argued that its property is held for public use and should be considered, for debt collection purposes, that of the City. Thus, the Authority argued, the West Tract was exempt from execution under Alabama common law and section 6-10-10 of the Alabama Code, which prohibits execution on property "belonging to the several counties or municipal corporations in this state and used for county or municipal purposes."

The district court agreed with the Authority and granted its motion to quash. After first rejecting the Authority's other arguments, the district court found that the West Tract "belongs" to the City and is used for municipal purposes, as required by section 6-10-10. The district court relied on the "longstanding principle [in Alabama] that public property is exempt" and discussed cases describing the role of, and certain protections afforded to, certain public corporations. The district court found that these principles are codified in section 6-10-10 and held that the West Tract is protected from execution under that provision. This appeal ensued.

II. ANALYSIS

On appeal, WM Mobile argues that the district court erred by finding that the West Tract was exempt from execution because Alabama's statutory and common law exemptions apply only to property owned by counties or municipalities, not public corporations. The Authority counters that, because of the close connection between the Authority and the City and the statutory purpose of the Authority, the West Tract should be deemed to be owned by the City for purposes of § 6-10-10. The Authority further argues that, regardless of whether the West Tract is owned by the City, the common law exemption protects the West Tract from execution because it is used for a public purpose.

The parties also dispute whether the West Tract is used for public purposes. WM Mobile argues that neither section 6-10-10 nor the common law exemption to execution applies because the Authority, which has owned the West Tract since 1994, is simply holding the West Tract for possible expansion of the Landfill. The Authority, in turn, argues that it is statutorily restricted to holding the West Tract for future public purposes and that temporary non-use is insufficient to negate the statutory and common law exemptions.

1. The statutory relationship between the Authority and the City

Both parties rely on the role of the Authority and its relationship to the City, which we summarize below, to support their respective arguments. The Authority is a public corporation created by the City and authorized by Chapter 89A of the Alabama Code. The Alabama Legislature, through Chapter 89A, declared the "need for planning, research, development, and innovation in the design, management, and operation of facilities for solid waste management" and concluded with the need for the creation of "authorities which will have the power to issue and sell bonds and notes ... to acquire and construct such facilities." Ala. Code § 11-89A-1. These authorities are organized as public corporations. Id. §§ 11-89A-3, 11-89A-4(d).

To incorporate a solid waste disposal authority, at least three qualified electors of a county or municipality must file an application with the governing body of their county or municipality. Id. § 11-89A-3. The governing body of the county or municipality must then review the electors’ application and adopt a resolution either denying the application or declaring the need for the requested authority and authorizing the electors to file incorporation documents for the authority. Id. Once incorporated, the authority can acquire facilities for waste disposal and enter into contracts to accomplish its statutory purpose. See id. § 11-89A-8(a)(5), (12). It can also "borrow money," "assume obligations secured by a lien" on its facilities, and "sue and be sued in its own name." See id. § 11-89A-8(a)(2), (6), (11).

The Authority's ability to borrow money and issue bonds is significant. The Alabama constitution prohibits the legislature from authorizing "any county, city, town, or other subdivision of this state to lend its credit, or to grant public money or thing of value in aid of, or to any individual, association, or corporation whatsoever, ... by issuing bonds or otherwise." Ala. Const. art. IV, § 94 (a). Statutorily authorized public corporations, however, are not subject to this constitutional restriction because they are "[s]eparate, independent public corporations[,] ... not subdivisions of the State within the meaning of Section 94 of the [Alabama] Constitution." Knight v. W. Ala. Envtl. Improvement Auth. , 287 Ala. 15, 246 So. 2d 903, 907 (1971). As recognized by the Alabama Supreme Court:

Public corporations were initially authorized by the Legislature as a means for municipalities to finance improvements to their utilities infrastructure without running afoul of constitutional and statutory debt limitations, as well as to shield municipalities from the large financial obligations that often accompany such utilities projects.

Water Works & Sewer Bd. of Talladega v. Consol. Publ'g, Inc. , 892 So. 2d 859, 861 (Ala. 2004).

Nonetheless, a public corporation is not completely separate from the county or municipality that authorizes it, and, in some ways, the role played by the local government is analogous to a shareholder of a public corporation. For example, the City is the Authority's "determining municipality" because it authorized the creation of the Authority. See Ala. Code §§ 11-89A-2(9), 11-89A-3. The Authority's board of directors is elected by the City's governing body, and the City must approve any amendments to the Authority's articles of incorporation. See id. §§ 11-89A-5, 11-89A-6. In the event the Authority is dissolved, title to its property will vest in the City. See id. § 11-89A-21. Moreover, any net earnings generated by the Authority, if any, are paid over to the City because the Authority must operate as a nonprofit corporation. See id. § 11-89A-19. Additionally, by statute, the Authority shares certain characteristics with the City. For example, the Authority has the power of eminent domain, see id. § 11-89A-14, its directors can be removed only via the same impeachment process used to remove municipal officials, see id. § 11-89A-6(d), and the Authority is required to include "City of Mobile" in its corporate name, see id. § 11-89A-4(b)(4).

2. Statutory exemption from execution

In light of the statutory...