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

Filing 172

Order re: Plaintiff WM Mobile Bay Environmental Center, Inc.s oral motion to sever Count XI for declaratory judgment and The City of Mobile Solid Waste Authoritys oral motion for judgment as a matter of law as to Count XI. The oral motion to sever the current disposal rate portion of Count XI for determination by the Court is GRANTED, as set out. The oral motion for judgment as a matter of law is granted and denied as set out in order. Signed by Judge Kristi K. DuBose on 2/6/2015. (cmj)

UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
WM MOBILE BAY ENVIRONMENTAL
CENTER, INC.,
Plaintiff,
V.
THE CITY OF MOBILE SOLID WASTE
AUTHORITY,
Defendant.

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CASE NO. 13-0434-KD-N

ORDER
This action is before the Court on the Plaintiff WM Mobile Bay Environmental Center,
Inc.’s oral motion to sever Count XI for declaratory judgment, The City of Mobile Solid Waste
Authority’s oral motion for judgment as a matter of law as to Count XI, and the parties additional
briefing (docs. 157, 164, 165).
In Count XI, in relevant part, WM Mobile Bay “demands a declaratory judgment that [it]
is entitled to an increased disposal . . . rate in an amount to be determined by this Court and that
Defendant is obligated to negotiate in good faith in response to WM Mobile Bay’s requests for
rate adjustments and reimbursements.” (Doc. 29, p. 20-21) WM Mobile Bay demanded a jury
trial. (Id., p. 21) The Authority demanded a jury trial in its answer and counterclaim (Doc. 6).
A. WM Mobile Bay’s motion to sever Count XI.
An issue arose at trial as to whether the Court or the jury was the proper entity to declare
that WM Mobile Bay is entitled to an increased disposal rate and to determine what that rate
should be. The Court indicated that it would make that declaration under its equitable powers but
would include a question for the jury as to the current appropriate rate in the verdict form. The

Court indicated that the jury’s answer would be advisory. WM Mobile Bay did not object. The
Authority objected and argued that a declaration as to the increased disposal rate is based on
what is reasonable and that any aspect of Count XI that calls for a determination of
reasonableness is a question of fact for the jury to determine. The Authority pointed out that
both parties had made jury demands. After discussion, WM Mobile Bay moved to sever Count
XI for decision by the Court. The Court took the motion under advisement and received
additional briefing. (Docs. 157, 164)
WM Mobile Bay brings Count XI pursuant to 28 U.S.C. § 2201, the Federal Declaratory
Judgment Act1 and Ala. Code § 6-6-223, the Alabama Declaratory Judgment Act.2 Under both
Acts, the Court may declare the rights, obligations, and legal relations of the parties to the
Operating Agreement. Declaring that WM Mobile is entitled to an increased disposal rate and
the current appropriate rate to be paid in the future falls within the scope of the Acts.
The issue now before the Court is whether the declaration of an increased disposal rate is
a legal issue for the jury or an equitable determination for the Court. WM Mobile argues that the
declaratory relief it seeks is equitable in nature, that the parties are not entitled to a jury trial on
this issue, and that the Court should determine the proper interpretation of Section 6.6 (doc. 157).
The Authority argues that declaratory judgment actions are not inherently legal or

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The statute sets forth in relevant part as follows: “In a case of actual controversy within its
jurisdiction, . . . any court of the United States, upon the filing of an appropriate pleading, may
declare the rights and other legal relations of any interested party seeking such declaration,
whether or not further relief is or could be sought. Any such declaration shall have the force and
effect of a final judgment or decree and shall be reviewable as such.” 28 U.S.C. § 2201(a).
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The statute sets forth in relevant part as follows: “Any person interested under a . . . written
contract, or other writings constituting a contract or whose rights, status, or other legal relations
are affected by a . . . contract, . . . may have determined any question of construction or validity
arising under the . . . contract, . . . and obtain a declaration of rights, status, or other legal
relations thereunder.” Ala. Code § 6-6-223.
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equitable in nature but depend upon how the issues would have arisen if the Declaratory
Judgment Act had not been enacted. The Authority argues that absent the Act, WM Mobile
Bay’s claims would have arisen as a breach of contract action, which is a legal action triable to
the jury. Thus, the jury should determine whether WM Mobile Bay is entitled to an increase and
the amount of that increase instead of the Court exercising equitable jurisdiction.
Alternatively, the Authority argues that if the Court determines that the demand for
declaratory judgment is an equitable action, the Court’s determination must be resolved based on
the jury’s findings. The Authority argues that the facts applicable to Count XI are the same facts
applicable to WM Mobile Bay’s breach of contract claim and that whether WM Mobile Bay is
entitled to an increased rate will be determined by the jury when it considers the breach of
contract claim.
In “determining whether a declaratory judgment action is legal or equitable,” the Court
has “examined the basic nature of the issues involved to determine how they would have arisen
had Congress not enacted the Declaratory Judgment Act.” Gulf Life Ins. Co. v. Arnold, 809 F.2d
1520, 1523 (11th Cir.1987) (footnote omitted). The “basic nature of the issue[] involved” in
Count XI is a determination as to whether WM Mobile Bay is entitled to an increased disposal
rate and the amount of that rate.
This issue does not arise in the breach of contract claim. In Count I, WM Mobile Bay
alleged that the Authority breached the contract by failing to negotiate in response to WM
Mobile Bay’s request for price adjustments and as a result WM Mobile Bay was damaged “in
that it incurred increased costs in the management and operation of the subject landfill without
receiving a corresponding price adjustment pursuant to the terms of the” Operating Agreement.
(Doc. 29, p. 10) WM Mobile Bay sought damages for “the increased costs of managing the

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subject landfill in an amount to be determined by the trier of fact”. (Id) The jury has resolved all
issues of fact relevant to the breach of contract claim in Count I. However, in resolving that
claim, the jury was not required to determine a current appropriate disposal rate.
Upon consideration of the parties’ oral argument during trial and their respective
additional briefing (docs. 157, 164), and for the reasons set forth herein, the Court finds that the
declaratory relief that WM Mobile seeks is equitable in nature and therefore, not an issue for the
jury. The Court further finds that a declaration of an appropriate current disposal rate is not a
question of fact or legal issue for the jury to determine but instead is within the Court’s equitable
jurisdiction to declare, but the jury’s determination of a current appropriate disposal rate, $27.39,
will be considered as an advisory opinion. Therefore, the motion to sever this portion of Count
XI for determination by the Court is GRANTED.
The Court determines that $25.433 is an appropriate current disposal rate. The Court
started its determination with the parties’ last negotiated rate in 2010. The Court finds this to be
an equitable starting point because the parties abided by Section 1.31 in the Operating
Agreement and negotiated “consistent with standards of good faith and fair dealings” (doc. 29-1,
p. 16) and came to a mutual agreement as to the disposal rate. The Court finds the Consumer
Price Index to be an appropriate gauge for the increase each year from 2010. Starting with the
negotiated rate in 2010, $23.50, and applying the annual maximum multiplier based on the C.P.I.
(see Section 6.6 of the Operating Agreement), the rates increase to $25.43.

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2010
2011
2012
2013
2014

$23.50 x 1.1 = $.26;
$23.76 x 3.8 = $.90;
$24.66 x 1.6 = $.39;
$25.05 x 1.5 = $.36;
$25.43

$23.50 + $.26 = $23.76
$23.76 + $.90 = $24.66
$24.66 + $.39 = $25.05
$25.05 + $.38 = $25.43

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B. The Authority’s motion for judgment as a matter of law as to Count XI.
At the close of all evidence, the Authority renewed and clarified its motion for judgment
as a matter of law as to Count XI. The Authority argued that the count should be dismissed on
basis that WM Mobile has no right to equitable declaratory relief because it has an adequate
remedy at law, a breach of contract action. (Doc. 165) The Authority argues that if WM Mobile
makes future requests for increases, and feels that it is treated wrongly, it may sue for breach of
contract at that time.
The Authority’s motion is directed in part toward the portion of Count XI wherein WM
Mobile demands declaratory judgment that the Authority “is obligated to negotiate in good faith
in response to WM Mobile Bay’s request for rate adjustment and reimbursements” (Doc. 165).
As to that demand, the motion for judgment as a matter of law is due to be granted. The
Authority is correct that should the Authority fail to negotiate future rate increases in good faith,
a breach of contract action is an adequate remedy at law. However, to the extent that the
Authority’s motion is directed toward WM Mobile Bay’s demand for declaratory judgment that
it is presently entitled to an increased disposal rate in an amount to be determined by the Court,
the motion is denied on basis that that issue has been resolved herein.
DONE and ORDERED this the 6th day of February 2015.
s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE

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