City of Canton, Mississippi et al v. Nissan North America, Inc.

Filing 42

ORDER OF DISMISSAL granting defendant's 25 Motion for Judgment on the Pleadings; granting intervenor's 27 Motion for Summary Judgment. A final judgment will be entered on this day to dismiss all claims with prejudice. Signed by District Judge Carlton W. Reeves on 05/01/2012 (WB)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
JACKSON DIVISION
CITY OF CANTON, MAYOR WILLIAM
TRULY, JR., ALDERWOMAN ALICE
SCOTT, AND ALDERMEN RODRIGUEZ
BROWN, BILLY MYERS, CHARLES
WEEMS, LOUIS SMITH, REUBEN
MYERS, AND ERIC GILKEY

PLAINTIFFS

V.

CAUSE NO. 3:11-CV-00318-CWR-LRA

NISSAN NORTH AMERICA, INC.

DEFENDANT

AND
JIM HOOD, ATTORNEY GENERAL FOR
THE STATE OF MISSISSIPPI, EX REL.
THE STATE OF MISSISSIPPI

INTERVENOR

ORDER OF DISMISSAL
The above-styled cause is before the Court on the motions to dismiss of defendant Nissan
North America, Inc., and intervenor Attorney General Jim Hood. The Court has considered those
motions, along with the parties’ arguments in favor of and in opposition to the requests, as well
as governing authority relevant to the dispute. After due deliberation, the Court has concluded
that the motions must be granted and that the case must be dismissed with prejudice.
FACTS
On November 6, 2000, James C. Burns of the Mississippi Development Authority
notified Canton Mayor Alice M. Scott by letter that “a major industrial client” was considering
building a manufacturing plant at a site near her city. Burns explained:
The client has invoked one of the most strict [sic] confidentiality rules for the project
that we have seen and largely directed who could or could not be contacted regarding
1

the project.
I am aware that you were frustrated regarding your personal level of knowledge
regarding this project. I am sorry for that, but I hope you will understand that our
main mission was to secure the project for Mississippi. Obviously, because of the
location, Madison County and the City of Canton will derive a great deal of direct
benefit should this project locate in the metro area.
Over the last few months we have been in negotiation with the company regarding
a broad array of incentives. Most of the incentives involve state and county.
However, there are some incentives that will involve the city and I would like to
discuss these areas with you.1
The letter asked Mayor Scott to facilitate the agreement in seven specific ways, one of
which was to
ask the City of Canton to agree to the provisions outlined in the attached House Bill
1 adopted on November 6, 2000 and signed by Governor Musgrove. Specifically, the
provisions of this bill give the City of Canton the authority to agree and to bind
further city mayors and alderman [sic] to a thirty year moratorium on any annexation
of the primary project site for that project known as Project Delta. Further, under this
authorization the Project Delta primary site could not be annexed at any time during
this thirty year period of time unless the project officials request the City of Canton
in writing to annex the primary site.2
As Burns’ letter indicated, on that same day, the Mississippi Legislature passed House
Bill 1 of its third extraordinary session. Section 18 of that legislation amended Section 21-1-59 of
the Mississippi Code to provide that
[t]he governing authorities of a municipality may enter into an agreement with an
enterprise operating a project as defined in Section 57-75-5(f)(iv)13 providing that

1

Exhibit B to Complaint (hereinafter “Burns Letter”) at 1 [Docket No. 4 at 12].

2

Burns Letter at 2.

3

Section 57-75-5(f) is contained within the Mississippi Major Economic Impact Act and
contains several definitions of the term “project.” One such definition is memorialized at
Subsection (f)(iv)1 so that the term includes “[a]ny major capital project with an initial capital
investment from private sources of not less than Seven Hundred Fifty Million Dollars
2

the municipality shall not change its boundaries so as to include within the limits of
such municipality the project site of such a project unless consent thereto shall be
obtained in writing from the enterprise operating the project. Such agreement may
be for a period not to exceed thirty (30) years. Such agreement shall be binding on
future governing authorities of such municipality.4
The City of Canton responded quickly – within twenty-four hours. On November 7, 2000,
the Board of Aldermen met to take up a measure addressing the Mississippi Development
Authority’s requests and, in particular, the specific issue of the City of Canton agreeing that it
would not change its boundaries for a period of 30 years to include the project site. The measure
is styled a “resolution” and recognizes that, under House Bill 1 adopted by the Mississippi
Legislature a day earlier,
a municipality is authorized to agree that said municipality will not change its
boundaries for a period of up to thirty (30) years so as to include within the limits of
such municipality the site of a project, as defined in Sections 57-75-5(f)(iv)1 and 5775-5(g) of the Mississippi Code . . . unless consent thereto shall be obtained in
writing from the enterprise operating the Project[.]5
After delineating a series of specific findings, including the City’s “anticipat[ion]” that
Nissan North America, Inc. (hereinafter “Nissan”), the new industrial client, “will operate a
Project in Madison County presently located outside the corporate boundaries of the City of
Canton, Mississippi,”6 and “will agree to pay to the Municipality a fee in lieu of ad valorem

($750,000,000.00) which will create at least three thousand (3,000) jobs meeting criteria
established by the Mississippi Development Authority.” The City does not contend that the
Nissan project failed to meet these requirements.
4

2000 Miss. Laws 3rd Ex. Sess. Ch. 1 (H.B. 1) (hereinafter “House Bill 1”).

5

Exhibit A to Complaint at 1 [Docket No. 4 at 9] (hereinafter “November 2000
Resolution”).
6

November 2000 Resolution at 1.
3

taxes, which payment shall be for Canton Municipal School District purposes,”7 the measure
reads:
NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY, AS
FOLLOWS:
SECTION 1. The Governing Body of the Municipality hereby agrees that the
Municipality will not change its boundaries for a period of at least thirty (30) years
from the date hereof so as to include within the corporate limits of the Municipality
the site of the Project which is anticipated to be operated by [Nissan], its successors
and assigns, unless consent thereto shall be obtained in writing from the Company,
its successors and assigns.
SECTION 2. This resolution shall constitute an “agreement” as that term is
used in Section 18(2) of [House Bill 1].
SECTION 3. This resolution may not be revoked without the consent of the
operator of the Project.
SECTION 4. All prior orders, resolutions or proceedings of the Governing
Body in conflict with the provisions of this resolution are hereby repealed, rescinded
and set aside, but only to the extent of such conflict. For cause, this resolution shall
become effective immediately upon the adoption thereof.8
The measure was adopted by a unanimous vote. In time, Nissan constructed the plant in
Madison County, where it continues to operate today.
Many years later, the City of Canton’s Board of Aldermen and Mayor assembled at a
special call meeting on February 11, 2011. According to the minutes of that meeting, “[t]here
came on for consideration before the Mayor and Board the matter of seeking a declaratory
judgment to clarify whether successors are bound by agreement predecessors’ [sic] made

7

November 2000 Resolution at 1.

8

November 2000 Resolution at 2.
4

between the City of Canton and Nissan’s exemption from annexation for a period of 30 years.”9
By a vote of 3-1, with three aldermen absent, the Board agreed to seek such a determination.
On May 3, 2011, the City of Canton (hereinafter “Canton” or “the City”), by and through
its mayor and seven aldermen, filed suit against Nissan in Madison County Circuit Court seeking
a declaratory judgment as to 12 separate questions:
a.

b.

c.
d.

e.
f.
g.
h.

I.

Whether the governing authorities of Canton, Mississippi can bind their
successors in office beyond their terms of office by resolution and/or contract
prohibiting the municipality of Canton from annexing the site of a project as
defined by Sections 57-75-5(f) and 57-75-5(g) of the Mississippi Code of
1972, as amended, also known as the “Nissan Project,” thereby taking away
from them rights and responsibilities conferred by law.
Whether House Bill Number 1, Section 18(2) is violative of the Fourteenth
Amendment’s Equal [P]rotection Clause and the Mississippi Constitution’s
equivalent found in Article 3, Section 14, which provides that “no person
shall be deprived of life, liberty, or property except by due process of law.”
Miss. Const. Art. 3, Section 14.
Whether the agreement between the City of Canton and Nissan North
America is ultra vires and unenforceable.
Whether House Bill Number 1 of the third extraordinary session, 2000,
singles out the City of Canton, MS with language that appears on its face to
be general legislation, but in its application subjects only the City of Canton,
MS to separate and disparate treatment in violation of the Equal Protection
Clause of the 14th Amendment, and the Due Process Clause of the 5th
Amendment to the U.S. Constitution.
Whether House Bill Number 1 of the third extraordinary session, 2000
violates the Constitution of the State of Mississippi § 87.
Whether House Bill Number 1 of the third extraordinary session, 2000
violates the Constitution of the State of Mississippi § 90(h).
Whether House Bill Number 1 of the third extraordinary session, 2000
violates due process and equal protection clauses of the U.S. Constitution.
Whether the authority vested in the municipality in Section 21-1-7 cannot by
contract or agreement, be prohibited beyond the term of office of the elected
municipal officers.
Whether, enforcement of House Bill Number 1 of the third extraordinary
session, 2000 will allow a former governing body to perpetuate its policies

9

Exhibit C to Complaint at 2 [Docket No. 4 at 14] (hereinafter “February 2011
Minutes”).
5

j.

k.
l.

beyond its terms and thereby limit a successor governing body’s ability to
respond to the public’s changing needs, which is contrary to law and public
policy.
Whether the agreement between the City of Canton and Nissan North
America which restricts the City of Canton’s free exercise of a discretion
vested by law is contrary to public policy and law, and utterly null and void.
Whether the agreement between the [C]ity of Canton and Nissan North
America is contrary to public policy, and utterly null and void.
Whether the agreement between the [C]ity of Canton and Nissan lacks
adequate consideration and is thereby in violation of the Constitution of the
State of Mississippi §96, and/or is unconscionable and thereby
unenforceable.10

On June 1, 2011, Nissan removed the case11 to federal court, and the City did not oppose
that effort. On June 20, 2011, Mississippi Attorney General Jim Hood moved to intervene,12 and
the magistrate judge granted the motion that same day.13
Discovery ensued, and on February 20, 2012, Nissan14 and Attorney General Hood15 both

10

Exhibit C to Notice of Removal at 1 [Docket No. 1-3] (First Amended Complaint at 4-

6).
11

Notice of Removal [Docket No. 1]. Specifically, Nissan invoked diversity jurisdiction
pursuant to Title 28, Section 1332 of the United States Code, and federal-question jurisdiction
pursuant to Title 28, Section 1331 of the United States Code. The existence of a federal question
is clear; of the 12 questions addressed by the City’s Amended Complaint, three explicitly invoke
the United States Constitution. First Amended Complaint at 4-6.
12

Attorney General’s Unopposed Motion to Intervene [Docket No. 5]. Rule 24(b)(2)(a) of
the Federal Rules of Civil Procedure establishes that a court “may permit a federal or state
governmental officer or agency to intervene if a party’s claim or defense is based on a statute or
executive order administered by the officer or agency[.]” See also Miss. Code Ann. § 7-5-1 (the
Attorney General, the chief legal officer for the state, who is responsible for managing all
litigation on behalf of the state, shall intervene and argue the constitutionality of any statute).
13

Order [Docket No. 6].

14

Defendant Nissan North America, Inc.’s Motion for Judgment on the Pleadings
[Docket No. 25].
15

The State of Mississippi’s Motion for Summary Judgment [Docket No. 27].
6

moved for judgment as a matter of law. Although the motions are not identical, both argue that
each of the City’s claims is invalid as a matter of law and that the case should be dismissed with
prejudice.
The City responded in opposition on March 16, 2012,16 and in its briefs, it addressed just
four issues: whether House Bill 1 violates the Fourteenth Amendment to the United States
Constitution,17 whether House Bill 1 violates Section 87 of the Mississippi Constitution,18
whether the City of Canton’s November 2000 resolution was an unconscionable agreement,19 and
whether House Bill 1 is legally unenforceable due to a failure to obtain preclearance under
Section 5 of the Voting Rights Act of 1965.20
STANDARD OF REVIEW
A motion for judgment on the pleadings, as established by Rule 12(c) of the Federal
Rules of Civil Procedure, and a motion for summary judgment under Rule 56 of the Federal
Rules of Civil Procedure are distinct but related creatures. A court reviewing a Rule 12(c) motion
applies the same test as it would when reviewing a motion under Rule 12(b)(6) – that is, the court
reviews the pleadings to determine whether they “contain sufficient factual matter, accepted as

16

Plaintiffs’ Memorandum of Authorities in Support of Their Opposition to the State of
Mississippi’s Motion for Summary Judgment [Docket No. 35] (hereinafter “Canton’s First
Brief”); Plaintiffs’ Memorandum of Authorities in Support of Their Opposition to Defendant
Nissan North America, Inc.’s Motion for Judgment on the Pleadings [Docket No. 37] (hereinafter
“Canton’s Second Brief”).
17

Canton’s First Brief at 5; Canton’s Second Brief at 4.

18

Canton’s First Brief at 6.

19

Canton’s First Brief at 7; Canton’s Second Brief at 5.

20

Canton’s First Brief at 9; Canton’s Second Brief at 8.
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true, to state a claim to relief that is plausible on its face.”21 The plaintiff’s factual allegations
must be “enough to raise a right to relief above the speculative level.”22
A motion for summary judgment, on the other hand, reviews not only the pleadings but
also all evidence offered in support thereof. Rule 56 establishes that, after reviewing that
evidence in the light most favorable to the non-moving party, “[t]he court shall grant summary
judgment if the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”23
Both judgment on the pleadings and summary judgment are useful tools, but either one
“must be employed cautiously because it is a final adjudication on the merits.”24 However,
“where the relevant facts are not in dispute, and the disagreement at hand regards only questions
of law, summary disposition is appropriate.”25
ANALYSIS
As an initial matter, the Court holds that all claims pled by the City in the Amended
Complaint but not addressed in its responses to the dispositive motions have been waived.

21

Oceanic Exploration Co. v. Phillips Petroleum Co. ZOC, 352 Fed Appx. 945, 950 (5th
Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
22

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

23

Fed. R. Civ. P. 56(a).

24

Jackson v. Cain, 864 F.2d 1235, 1241 (5th Cir. 1989).

25

Canal Ins. Co. v. Owens, 2011 WL 4833045, *2 (S.D. Miss. Oct. 12, 2011) (citing
Nabers v. Morgan, 2011 WL 359069, *3 (S.D. Miss. Feb. 2, 2011)).
8

“Failure to address a claim results in the abandonment thereof.”26
Additionally, the Court declines to address the issue of Section 5 preclearance. The
Amended Complaint makes no mention of the Voting Rights Act or its requirement that the
Department of Justice preclear changes to any standard, practice, or procedure with respect to
voting.27 “A claim which is not raised in the complaint, but, rather, is raised only in response to a
motion for summary judgment is not properly before the court.”28
Therefore, the Court addresses only (1.) whether House Bill 1 violates the Fourteenth
Amendment, (2.) whether House Bill 1 violates Section 87 of the Mississippi Constitution, and
(3.) whether the November 2000 Resolution was an unconscionable agreement.
Whether House Bill 1 Violates the Fourteenth Amendment. Section 1 of the
Fourteenth Amendment provides, in relevant part, that “[n]o State shall . . . deprive any person of
life, liberty, or property, without due process of law[,] nor deny to any person within its
jurisdiction the equal protection of the laws.” Although the Amendment contains two noteworthy
provisions – the Due Process Clause and the Equal Protection Clause – only the latter draws the
City’s attention. Specifically, the City29 argues that House Bill 1 violates the Equal Protection

26

Sanders v. Sailormen, Inc., 2012 WL 663021 (S.D. Miss. Feb. 28, 2012) (citing In re
Entringer Bakeries, Inc., 584 F.3d 344, 347 n.1 (5th Cir. 2008)).
27

See Lopez v. City of Houston, 617 F.3d 336, 340 (5th Cir. 2010).

28

Cutrera v. Bd. of Supervisors of Louisiana State Univ., 429 F.3d 108, 113 (5th Cir.

2005).
29

This lawsuit was initiated by the City and its Mayor and alderpersons in their official
capacities only; therefore, resolution of this claim turns on the status and rights of the City. See
Kentucky v. Graham, 473 U.S. 159, 166 (1985).
9

Clause by treating the City differently than other municipalities.30
However, the City has no standing to raise such a claim. “Being but creatures of the State,
municipal corporations have no standing to invoke . . . the provisions of the Fourteenth
Amendment of the Constitution in opposition to the will of their creator.”31
Therefore, the Court finds that the City of Canton has no standing to challenge House Bill
1 on the basis of the Fourteenth Amendment.
Whether House Bill 1 Violates Section 87 of the Mississippi Constitution. Section 87
of the Mississippi Constitution establishes that, as a matter of state law,
[n]o special or local law shall be enacted for the benefit of individuals or
corporations, in cases which are or can be provided for by general law, or where the
relief sought can be given by any court of this State; nor shall the operation of any
general law be suspended by the Legislature for the benefit of any individual or
private corporation or association, and in all cases where a general law can be made
applicable, and would be advantageous, no special law shall be enacted.
In its motion for judgment on the pleadings, Nissan argues that not only is House Bill 1
not a “special or local law . . . enacted for the benefit of individuals or corporations,” but that in
fact it is not a local law at all but is, rather, a general law. The Mississippi Supreme Court has
written that “[a] law is classified as general when it operates uniformly on all members of a class
of persons, places or things requiring legislation peculiar to that class.”32 To put it another way,

30

Canton’s First Brief at 5.

31

Coleman v. Miller, 307 U.S. 433, 441 (1939) (cited by Town of Ball v. Rapides Parish
Police Jury, 746 F.2d 1049, 1051 n.1 (5th Cir. 1984). See also Appling Cnty. v. Mun. Elec. Auth.
of Georgia, 621 F.2d 1301, 1308 (5th Cir. 1980) (“[A] city or county cannot challenge a state
statute on federal Constitutional grounds.”); State v. Hinds Cnty. Bd. of Supervisors, 635 So. 2d
829, 843 (Miss. 1994) (“political subdivision of a state have no . . . Fourteenth Amendment
protections against the state”) (citations omitted).
32

Sec’y of State v. Wiesenberg, 633 So. 2d 983, 995 (Miss. 1994).
10

“[w]here a law is broad enough to reach every portion of the state and to embrace within its
provision every person or thing distinguished by characteristics sufficiently marked and
important to make them clearly a class by themselves, it is not a special or local, but a general,
law, even though there may be but one member of the class or one place in which it operates.”33
In apparent concession that House Bill 1 fits this description, the City argues that
although the statute “appears to be general legislation,”34 evidence demonstrates that Section 211-59(2) is, in truth, a special law. Specifically, the City contends that the statute is a special law
because the legislation was drawn up and passed to address Nissan’s impending move to
Madison County and for no other reason.35 But even if that is true, it does not prove the City’s
point. The Mississippi Supreme Court has held that a law may be a general law “even though
there may be but one member of the class or one place in which [the statute] operates.”36 So long
as the statute is drawn in such a way that it operates uniformly in every corner of the state, it is a
general law.
A review of Section 21-1-59(2) provides no indication that it would not apply with equal
force anywhere else in the state, so long as its prerequisites are satisfied.37 Therefore, the Court

33

Vardaman v. McBee, 198 Miss. 251, 258 (1945).

34

Canton’s First Brief at 6.

35

“[I]t is evident that this Bill was designed for the specific purpose of furthering the
negotiations that had occurred in an effort to bring the Defendant to the State of Mississippi and
in doing so enabling [sic] the City of Canton’s ability to annex for some 30 years.” Canton’s First
Brief at 7.
36

Vardaman, 198 Miss. at 258.

37

See Miss. Code Ann. 57-75-5(f) (definition of “project”).
11

holds that House Bill 1 is not a special law but is, rather, a general law that does not violate
Section 87 of the Mississippi Constitution.
Whether the November 2000 Resolution Amounts to an Unconscionable Agreement.
Finally, the City argues that its November 2000 Resolution consummated a contract that is
unenforceable because it is unconscionable, lacks consideration, and is a contract of adhesion.38
The Court rejects each of these claims.
First, the agreement is not unconscionable. Unconscionability is “an absence of
meaningful choice on the part of one of the parties, together with contract terms which are
unreasonably favorable to the other party.”39 In Mississippi, “[u]nconscionability can be
procedural or substantive.”40 The burden of proving a contract’s unconscionability rests with the
party seeking to nullify the agreement.41 An inquiry into whether a contract is unconscionable is a
question of law.42
“Procedural unconscionability may be proved by showing a lack of knowledge, lack of
voluntariness, inconspicuous print, the use of complex legalistic language, disparity in
sophistication or bargaining power of the parties and/or a lack of opportunity to study the

38

Canton’s Second Brief at 5-8.

39

East Ford, Inc. v. Taylor, 826 So. 2d 709, 715 (Miss. 2002).

40

Covenant Health & Rehab. of Picayune, LP v. Estate of Moulds, 14 So. 3d 695, 699
(Miss. 2009).
41

See Entergy Mississippi, Inc. v. Burdette Gin Co., 726 So. 2d 1202, 1207 (Miss. 1998).

42

Norwest Fin. Servs. Inc. v. McDonald, 905 So. 2d 1187, 1192 (Miss. 2005).
12

contract and inquire about the contract terms.”43 But where a contract was signed “willingly,
knowingly, and voluntarily,”44 it is not unconscionable.
The City’s arguments regarding unconscionability do not make clear whether it attacks
the agreement’s procedure or its substance, but the City makes apparent its dissatisfaction with
the timeline of the events of November 2000.45 Following what the City describes as “months . . .
to research, investigate and negotiate terms which were most beneficial to promoting its
objectives,”46 Nissan received the benefit of the November 2000 Resolution’s passage within a
day of the enactment of House Bill 1. In the City’s view, this disparity demonstrates an
unconscionability.
But a quick decision does not in and of itself evince an unconscionable agreement; rather,
the haste of assent must demonstrate that the contract was not entered into willingly, knowingly,
and voluntarily.47 The circumstances of this case simply do not paint such a picture. After the
passage of House Bill 1, the City was permitted but was not required to act under its authority.
The Mississippi Development Authority’s November 6, 2000, letter to then-Mayor Scott48 clearly

43

Citigroup Global Markets, Inc. v. Braswell, 57 So. 3d 638, 645 (Miss. Ct. App. 2011).

44

Community Care Center of Vicksburg, LLC v. Mason, 966 So. 2d 220, 230 (Miss. Ct.
App. 2007).
45

This great dissatisfaction became obvious at the special call meeting, presumably since
the City authorized the filing of the instant action. The record belies any dissatisfaction prior to
the deal being closed.
46

Canton’s First Brief at 9.

47

Mason, 966 So. 2d at 230.

48

Supra at n.1.
13

asked the City to invoke its new authority, but MDA did not (and could not) require the City to
do so. Indeed, it could have declined the offer or bargained for more consideration. Instead, one
day later, the City drafted the terms of and adopted the November 2000 Resolution. These facts
fall far short of proving that the City acted out of a lack of meaningful choice.
In contrast to procedural unconscionability, which relates to the circumstances under
which one enters into a contract, substantive unconscionability relates to the terms of the
agreement. “Substantive unconscionability is present when there is a one-sided agreement
whereby one party is deprived of all the benefits of the agreement . . . .”49 “Substantive
unconscionability may be proven by showing the terms of the [agreement] to be oppressive.”50
Again, the facts do not support the City’s argument. The City admitted in its Amended
Complaint that, in lieu of ad valorem taxes, Nissan would remit a fee to the City.51 Therefore, the
agreement is not altogether one-sided with the City deprived of all benefits.52 It may be that the
City of Canton, as it is constituted in 2012, wishes that its predecessors had made a better deal,
but that is not the question at hand. The question is whether the agreement is so one-sided as to
be illegally oppressive, and that question can be answered only in the negative. Therefore, the

49

Vicksburg Partners, L.P. v. Stephens, 911 So. 2d 507, 521 (Miss. 2005) (overruled on
other grounds by Estate of Moulds, 14 So. 3d at 706).
50

East Ford, 826 So. 2d at 714.

51

Supra at n.7; Exhibit B to Nissan’s Motion for Judgment on the Pleadings [Docket No.
25-2] (hereinafter “Agreement to Make Payments in Lieu of Ad Valorem Taxes”).
52

To be clear, the City received other incentives as well. Among other things, the City
was to rceive a fee for the use of a portion of its multipurpose building for a six-month period,
and it would receive $1 million for the purpose of building and equipping a new fire station. See
supra at n.1. Consequently, there was adequate, substantial consideration.
14

Court finds that the agreement is not substantive unconscionable.
This same remittal demonstrates that the agreement does not lack mutual consideration.
Therefore, the Court holds that the agreement is not unenforceable for lack of mutual
consideration.
Finally, the Court declines to dissolve the agreement based on the City’s argument that
the agreement is a contract of adhesion. Under Mississippi law, “[c]ontracts of adhesion are those
that are drafted unilaterally by the dominant party and then presented on a ‘take-it-or-leave-it’
basis to the weaker party who has no real opportunity to bargain about its terms.”53 By definition,
a party that takes part in the drafting of the agreement’s terms does not face a contract of
adhesion. The fact that the City drafted its own assent to the agreement – namely, the November
2000 Resolution – counsels strongly against a finding that the agreement amounts to a contract of
adhesion.
But even if the City could prove that the agreement were one of adhesion, that fact alone
would not establish that the agreement is unenforceable, because “a contract of adhesion is not
unconscionable per se.”54 Even if a party demonstrates the existence of a contract of adhesion,
“[i]t is essential that the evidence show a lack of knowledge or voluntariness by the weaker
party.”55 As heretofore discussed, the City simply has not made such a showing.
Therefore, the Court holds that the City has not shown that its agreement not to annex is

53

Estate of Moulds, 14 So. 3d at 701 (quotations omitted).

54

Forest Hill Nursing Ctr., Inc. v. McFarlan, 995 So. 2d 775, 784 (Miss. Ct. App. 2008)
(citing Stephens, 911 So. 2d at 520).
55

Id.
15

an unenforceable contract of adhesion.
CONCLUSION
None of the pled, non-waived arguments offered by the City persuades against granting
the two dispositive motions. The City has no standing to argue that House Bill 1 violates the
Fourteenth Amendment, and the City has failed to show that House Bill 1 violates Section 87 of
the Mississippi Constitution. Likewise, the City has not shown that its agreement with Nissan is
unenforceable under Mississippi contract law.
Therefore, the Court grants Nissan’s motion for summary judgment and Attorney General
Jim Hood’s motion for judgment on the pleadings. A final judgment will be entered on this day
to dismiss all of the City’s claims with prejudice.
SO ORDERED this First day of May 2012.

/s/ Carlton W. Reeves
Hon. Carlton W. Reeves
United States District Court Judge

16