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Northern District of Mississippi
Case number: 2:93cv154-S-O
Type of Document: Opinion
Reference Document: [7-1] Motion for Summary Judgment
Judge: Senter
Signature Date: 09/20/94
File Date: 09/22/94
ECS Filename: 94d0032p.msn
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
DELTA DIVISION
HORN LAKE WATER ASSOCIATION, INC.,
Plaintiff,
v.
CITY OF HORN LAKE, MISSISSIPPI, et al.,
Defendants.
NO. 2:93CV154-S-O
OPINION
In this case, plaintiff, a nonprofit, private utility company, seeks
declaratory and injunctive relief regarding defendants' authority to condemn or
otherwise infringe upon its service area. Presently before the court is
plaintiff's motion for summary judgment.
FACTS
The plaintiff is a nonprofit corporate utility company which was created and
exists under the laws of the State of Mississippi. It is engaged in the
business of operating a water system in an area of DeSoto County, Mississippi,
pursuant to a permanent certificate and supplemental certificates of
convenience and necessity issued by the Mississippi Public Service Commission.
The defendants are the City of Horn Lake; its mayor, Mike Thomas; and two
members of the Board of Alderman, Barbara McCall and Lisa Fuller.
The alleged controversy in this case centers on certain actions taken by the
individual defendants at an October 6, 1993, city board meeting. At that time,
these defendants voted in favor of a resolution authorizing "the Law Firm
of Tollison, Austin and Twiford, nine (9) hours at $125.00 per hour to do some
research and draft a legal opinion for the City of Horn Lake for the purpose of
providing information to make a decision concerning the acquisition of the
Water Association." Approximately three years previously, Mayor Thomas
stated in a deposition (presumably taken in connection with a city annexation
proceeding) that it was the intent of the City of Horn Lake to take over
plaintiff's operations "by whatever legal means we can."
Less than a week after the board's actions, plaintiff filed the instant
declaratory judgment action, seeking a declaration that defendants' actions
violate, inter alia, 7 U.S.C. [[section]] 1926(b). That statute
provides:
The service provided or made available through any [rural water system
indebted to the Department of Agriculture] shall not be curtailed or limited by
inclusion of the area served by such association within the boundaries of any
municipal corporation or other public body, or by the granting of any private
franchise for similar service within such area during the term of such loan;
nor shall the happening of any such event be the basis of requiring such
association to secure any franchise, license, or permit as a condition to
continuing to serve the area served by the association at the time of the
occurrence of such event.
Plaintiff is presently indebted to the Farmers Home Administration in the
sum of approximately $440,905.08.
DISCUSSION
Plaintiff has now moved for summary dismissal of this cause, relying on the
cases of City of Madison v. Bear Creek Water Association, Inc., 816 F.2d
1057 (5th Cir. 1987) and Moore Bayou Water Association, Inc. v. Town of
Jonestown, 628 F. Supp. 1367 (N.D. Miss. 1986). These cases clearly and
undeniably hold that a city may not condemn a water association's facilities
located within its city limits during the term of the association's
indebtedness to the Farmers Home Administration. In response, defendants
acknowledge this result, see Proposed Findings of Fact and Conclusions
of Law Tendered by the Defense, but argue that because the city has taken no
affirmative steps (other than to seek a legal opinion regarding its options) to
encroach or infringe on plaintiff's service area, there is no justiciable
controversy for the court's consideration, and the case should therefore be
dismissed. The court agrees.
A fundemental prerequisite for the issuance of a declaratory judgment is
that there must be an "actual controversy" between the parties. 28
U.S.C. [[section]] 2201(a); see also U.S. Const. art. III,
[[section]] 2 (federal court may act only in cases and controversies). In
addressing this requirement, the United States Supreme Court has stated:
"[T]he question in each case is whether the facts alleged, under all the
circumstances, show that there is a substantial controversy, between parties
having adverse legal interests, of sufficient immediacy and reality to warrant
the issuance of a declaratory judgment." Maryland Casualty Company v.
Pacific Coal & Oil Company, 312 U.S. 270, 273 (1941). With this in
mind, the Fifth Circuit has fashioned the following rule for determining
whether a request for declaratory relief presents an actual controversy:
"A controversy, to be justiciable, must be such that it can presently be
litigated and decided and not hypothetical, conjectural, conditional or based
upon the possibility of a factual situation that may never develop." Brown
& Root, Inc. v. Big Rock Corp., 383 F.2d 662, 665 (5th Cir. 1967); see
also Rowan Companies, Inc. v. Griffin, 876 F.2d 26, 27-28 (5th
Cir. 1989); 10A Charles A. Wright et al., Federal Practice
& Procedure [[section]] 2757 (2d ed. 1983).
In this case, the court is of the opinion that no actual controversy exists
between the instant parties sufficient to entertain this cause. Unlike the
municipalities in Bear Creek and Moore Bayou, which had begun
condemnation proceedings against the water systems, these defendants have done
nothing more than express their interest in acquiring the plaintiff water
system and seek counsel to explore the possibility of pursuing that interest.
These actions do not rise to the level of creating an actual controversy but
rather evidence the "possibility of a factual situation that may never
develop," Brown & Root, 383 F.2d at 665, especially in light of
defendants' admission regarding the lawfulness of a condemnation action against
plaintiff. For these reasons, this cause is therefore dismissed.
An appropriate final judgment shall issue.
This day of September, 1994.
CHIEF JUDGE