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Advanced Technology Building Solutions, LLC v. City of Jackson

United States District Court, S.D. Mississippi, Northern Division

July 31, 2014

ADVANCED TECHNOLOGY BUILDING SOLUTIONS, LLC, et al., Plaintiffs,
v.
CITY OF JACKSON, MISSISSIPPI, et al., Defendants.

MEMORANDUM OPINION AND ORDER CONCERNING THE DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT AND MOTIONS TO STRIKE

LOUIS GUIROLA, Jr., Chief District Judge.

BEFORE THE COURT are the Motion for Summary Judgment [125] filed by Jason Brookins, Ronnie Crudup, Brian Fenelon, Jackson Redevelopment Authority, and Beau Whittington, Jr. (hereinafter collectively referred to as "the JRA defendants"), the Motion for Summary Judgment [127, 128] filed by the City of Jackson, Mississippi, and Harvey Johnson, Jr. ("the City defendants"), [1] the Motion to Strike Selected Exhibits [146] filed by the JRA defendants, the Motion to Strike Portions of Don Hewitt's Affidavit [148] filed by the JRA defendants, and the Motion to Strike Portions of Herbert J. Irvin's Affidavit [150] filed by the JRA defendants. After reviewing the submissions of the parties and the applicable law, the Court finds that the defendants' Motions for Summary Judgment should be granted as to the plaintiffs' substantive due process, equal protection, conspiracy, gross negligence, and tortious breach of contract claims, but denied as to the plaintiffs' First Amendment retaliation claim. The Motions to Strike are moot.

FACTS

Advanced Technology Building Solutions, LLC ("ATBS"), is a Mississippi real estate development company operated by Don Hewitt, an African-American male. (Defs.' Mot., Ex. A at 21-22, ECF No. 125-1). Beginning in 2009, ATBS sought to develop three different parcels of real estate located in Jackson, Mississippi: Block C, the Deposit Guaranty building, and the Convention Center Hotel. ATBS sought approval of these projects from the Jackson Redevelopment Authority ("JRA"), Jackson's governing board for all urban renewal projects. ATBS applied for funding pursuant to Miss. Code. Ann. § 43-35-21, which permits municipalities to issue bonds financing urban renewal projects. After the JRA rejected ATBS's applications, ATBS and Hewitt filed this lawsuit against the JRA, several members of the JRA board, the City of Jackson, and former Jackson Mayor Harvey Johnson, Jr., claiming violation of the constitutional rights of ATBS and Hewitt.

The claims included in ATBS and Hewitt's Amended Complaint originally included: a Fourteenth Amendment substantive due process claim, a Fourteenth Amendment equal protection claim based on political affiliation, a Fourteenth Amendment equal protection claim based on race, a First Amendment retaliation claim, and a conspiracy claim pursuant to 42 U.S.C. §1985 and §1986. ATBS also asserted state law tort claims for gross negligence and tortious breach of contract against the JRA, and a tortious interference with contract claim against the City defendants.

On May 22, 2013, Judge Daniel P. Jordan, III, entered an Order [65] dismissing the conspiracy claim as to the following defendants: JRA Chairman Ronnie Crudup, former JRA executive director Jason Brookins, the JRA, and the City. Judge Jordan also dismissed the substantive due process claim as to the Convention Center Hotel and Deposit Guaranty projects, but he did not reach the issue of whether a substantive due process claim was pled regarding the Block C project or the issue of whether such a claim should be dismissed. Furthermore, Judge Jordan dismissed the state law tortious interference with contract claim in its entirety. Subsequently, the parties agreed to the dismissal of all claims filed against the Mayor in his individual capacity. The case was transferred to the undersigned on October 24, 2013.

DISCUSSION

A motion for summary judgment may be filed by any party asserting that there is no genuine issue of material fact and that the movant is entitled to prevail as a matter of law on any claim. Fed.R.Civ.P. 56. The movant bears the initial burden of identifying those portions of the pleadings and discovery on file, together with any affidavits, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the movant carries its burden, the burden shifts to the non-movant to show that summary judgment should not be granted. Celotex Corp., 477 U.S. at 324-25. The nonmovant may not rest upon mere allegations or denials in its pleadings but must set forth specific facts showing the existence of a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57 (1986).

I. SUBSTANTIVE DUE PROCESS

The Court finds that the plaintiffs pled a substantive due process claim as to the Block C project. While Block C was not specifically mentioned in the portion of the Amended Complaint included under the heading "Substantive Due Process, " that portion of the Amended Complaint incorporated all prior allegations, including the plaintiffs' allegation that the JRA initially awarded the Block C project to ATBS but canceled the award at the urging of the Mayor. (Am. Compl. at 8 (¶¶16-19), ECF No. 48). The Amended Complaint also included the following allegations:

JRA and Mayor Johnson violated the equal protection and due process rights of ATBS. Further, ATBS lost its "property interest" and "liberty interest" to develop a project and perform work it was qualified to and selected to develop after having adhered to a statutorily-mandated public procurement process.

( Id. at 9 (¶22)). Since the Amended Complaint includes a substantive due process claim regarding the Block C project that remains pending, the Court will consider whether the defendants are entitled to summary judgment as to that claim.

To demonstrate a substantive due process claim, a plaintiff must show that he suffered a deprivation of a liberty or property interest that was arbitrary or not rationally related to a legitimate governmental interest. Simi Inv. Co., Inc. v. Harris Cnty., Tex., 236 F.3d 240, 249 (5th Cir. 2000). A property interest "rises to the level of a constitutionally protected interest" if the plaintiff has "a legitimate claim of entitlement." Nelson v. City of Horn Lake ex rel. Bd. of Aldermen, 968 So.2d 938, 944 (¶21) (Miss. 2007). As Judge Jordan correctly held in his Order [65], "in Mississippi, where the government authority has discretion in awarding a contract, the law does not recognize a protected property interest in such contract until it is actually awarded." Advanced Tech. Bldg. Solutions, LLC v. City of Jackson, Miss., No. 3:12cv389-DPJ-FKB, 2013 WL 2252104 at *4 (S.D.Miss. May 22, 2013) (quoting Miss. Forum on Children & Families v. Miss. Dep't of Human Servs., 850 F.Supp.2d 644, 648 (S.D.Miss. 2012)).

The plaintiffs rely on the following testimony[2] of their transactional attorney, Herbert J. Irvin, to support their substantive due process claim regarding the Block C development:

In August 2009, ATBS responded to a [Request for Redevelopment Proposal (RFP)] published by the [JRA] requesting proposals to develop a parcel owned by JRA known as Block "C." ATBS was the only entity to submit a bid to develop Block "C." In its response, ATBS proposed to develop the site as a mixed-use community consisting of market-rate housing, retail, and parking. At a board meeting, JRA gave ATBS its approval of the mixed-use concept and declared that JRA had accepted the ATBS mixed-use proposal.... After the design work for [Block "C"] was finished, ATBS and M Architects made a presentation to a joint meeting of JRA's Projects Committee and its Finance Committee. At its March 2010 meeting, JRA's board authorized the transfer of Block "C" to ATBS as specified in the RFP response. The board then directed its attorneys to meet with me to draft a property acquisition [memorandum of understanding] that would detail the terms of the transfer of the property to ATBS.... At the request of JRA's then-Executive Director Jason Brookins, ATBS arranged an August 1, 2010 meeting with Mayor Harvey Johnson, Jr., to discuss its development plan for Block "C." At this meeting, Mayor Johnson told Brookins, ATBS and several of the mayor's department heads, that "for the next two years and nine months or as long as I am mayor, this project is not going to ...

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