Canton v. Nissan: The Most Unpopular Lawsuit in the State of Mississippi
The City of Canton is suing Nissan seeking a declaratory judgment that Canton's 2000 agreement to not annex the Nissan plant located outside Canton for at least 30 years is not binding on the City. Apparently, Canton wants to annex the Nissan plant so that it can collect taxes from Nissan.
Here is the City of Canton's Complaint, which it filed in state court. Nissan removed the case to federal court.
One of the claims in the Complaint is for a declaration that Canton's 2000 agreement is not binding on subsequent city administrations. Huh? That argument sounds so bad that it makes me think I'm missing something.
A contract is not binding on a successor administration? So the agreement was actually only for the life of the 2000 administration? Even though the contract said 30 years? Really? Really? What am I missing here?
But it gets worse.
Here are the exhibits to the Complaint. Page 8 is part of a letter to the then Mayor of Canton that stated that a statute passed regarding the project specifically authorized Canton's administration to bind future administrations.
Barbara Blackmon of Blackmon and Blackmon in Canton represents the City of Canton. Mitchell Cowan with Watkins Ludlam in Jackson represents Nissan. U.S. District Judge Carlton Reeves presides in the case.
My Take:
Nissan appears to be a big favorite in this one. Why? Because a deal's a deal. I think that's Latin.
I don't see how Canton can get out of its 2000 agreement.
So why did Canton make that deal in 2000? Probably because Canton stood to benefit from the Nissan plant due to its proximity to the plant. I'm sure that has been the case.
Also, it seems that Canton can annex every hotel, restaurant and gas station within miles of the Nissan plant. This would allow Canton to tax surrounding properties that benefit from the proximity to the plant.
Several people have mentioned this lawsuit to me. Their comments are uniformly critical of the City of Canton. The public does not sympathize with Canton because the City receives economic benefit from the Nissan plant due to its proximity to the plant. It seems that most people in the state are rooting for Nissan in this one.
This reminds me of a bumper sticker I saw several years ago that said: "The next time you complain about farmers, don't talk with your mouth full!"
I cynically observed over at the JJ blog that this lawsuit appeared to be, in its essentials, a device for redirecting Canton taxpayers' money to the Blackmon Law Firm.
I have seen nothing since to change that estimate.
Generally under Mississippi law, a city's administration cannon bind their "successors in office." However, there are clearly issues where that rule either does not apply or a work around is found. For instance, many Mississippi municipal bonds are issued for terms of 20 years. That's 20 years, not four, and terms of muncipal governing authorities are four years, not twenty. Here, there appears to clearly be specific legislative authorization. No large manufacturer is going to make large capital investments in any area where every four years they have to re-negotiate every deal they've made with local authorities. If that was the case, good-bye Chevron, Nissan, Toyota, Ingalls Shipbuilding, etc. Talk about biting the hand that feeds you...