Court Opinion

ID: 47304
Source: CourtListenerOpinion
Date Created: 2010-04-25 23:20:17+00
Date Added: 2024-06-11T17:17:52.271426
License: Public Domain

[DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                     ________________________
                                                               FILED
                            No. 05-15802              U.S. COURT OF APPEALS
                                                        ELEVENTH CIRCUIT
                        Non-Argument Calendar               March 29, 2006
                      ________________________           THOMAS K. KAHN
                                                              CLERK
                 D. C. Docket No. 00-00198-CV-WLS-1

HIGHLAND PROPERTIES,
a Georgia Joint Venture,
HOME BUILDERS ASSOCIATION OF ALBANY &
SOUTHWEST GA., INC.,

                                                    Plaintiffs-Appellants,

                                 versus

LEE COUNTY UTILITIES AUTHORITY,

                                                    Defendants-Appellee.

                      ________________________

               Appeal from the United States District Court
                   for the Middle District of Georgia
                    _________________________

                            (March 29, 2006)

Before ANDERSON, BIRCH and BLACK, Circuit Judges.

PER CURIAM:
      Highland Properties and Homebuilders Association of Albany and

Southwest Georgia (Highland Properties) appeal the district court’s judgment in

favor of Lee County Utilities Authority (the Authority) after a bench trial.

Highland Properties asserts the district court erred in holding: (1) Highland

Properties is not similarly situated to the Water Plentiful subdivisions, and

(2) Highland Properties failed to prove the Authority had no rational basis for

treating Highland Properties differently than the Water Plentiful subdivisions. We

conclude the district court did not err, and affirm.

                                 I. BACKGROUND

A. Water Plentiful Subdivisions

      Water Plentiful contracted with the owners and developers of four separate

subdivisions to provide water and sewer services between 1992 and 1995. Each

subdivision had a separate provision for the amount charged for water tap and

water meter fees. On June 4, 1997, the Authority purchased the water and sewer

systems of Water Plentiful, Inc., that serviced the four subdivisions. The

Authority agreed to comply and carry out the existing provisions of the

subdivision contracts. On October 16, 1997, the Authority promulgated “A

Resolution Establishing Rates and For Other Purposes” expressly adopting the

water tap fees, water meter fees, and rates as provided under the subdivision

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contracts as the rate structure for the respective subdivisions. In August of 1999,

the Authority promulgated a resolution revising the water and sewer tap fees for

all other subdivisions in Lee County and expressly incorporated the rate structure

under the Authority/Water Plentiful contract for the subdivisions. For all four

subdivisions, the water tap and water meter fees remained the same as they were

before acquisition by the Authority. The Authority has consistently abided by the

Authority/Water Plentiful contract.

B. Highland Properties/Agunac

      In November 1997, Highland Properties, acting in a joint venture with

Jowers Construction Company, began development of approximately 160

residential units located off of U.S. 19 in Lee County, Georgia, known as North

Highland Crossing subdivision. Highland Properties entered into a contract with

Agunac, Inc., a private water and sewer provider, whereby Agunac agreed to

provide a water and sewer system to North Highland Crossing. The contract

provided, in part that “[i]n the event water and sewer are obtained for North

Highland Crossing Subdivision from Agunac or its successor, then there shall be

no tap fees charged for North Highland Crossing[’]s subdivision lots to hook up to

the Agunac water and sewer system.” Additionally, the contract provided Agunac

an option to terminate the agreement at any time. There was no provision in the

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agreement that required written or verbal notice of termination to Highland

Properties.

      On March 25, 1998, the Authority condemned the Agunac private water and

sewage system servicing North Highland Crossing subject to the contract. On

June 5, 1998, an “Award of Special Master” was entered in the condemnation

action awarding $6,994,798 to the condemnees, $6,950,000 of which was awarded

to Agunac. There was no appeal filed in the condemnation action.

      After the condemnation, Jowers began constructing residential units in

North Highland Crossing. Jowers met with Kenneth Christopher Boswell, General

Manager of the Authority, to discuss the Highland Properties/Agunac agreement

that stated Highland Properties was not supposed to pay any water tap fees or

sewer tap fees for North Highland Crossing. Boswell told Jowers the Authority

now owned the water and sewer system and that Jowers would have to pay the

water and sewer tap fees for North Highland Crossing until the Authority told him

otherwise.

      On December 22, 2000, the Authority voted to terminate the Highland

Properties/Agunac agreement. That same day, an attorney for the Authority wrote

a letter to the attorney for Highland Properties stating it was the Authority’s

position the Highland Properties/Agunac agreement was unenforceable under

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Georgia law. In the event the agreement was enforceable, the Authority was

exercising its option to terminate the agreement at will.

      Highland Properties filed a complaint in the district court asserting the

Authority was violating: (1) the Equal Protection Clause of the Fourteenth

Amendment because there was no rational basis for treating Highland Properties

differently than the Water Plentiful subdivisions, (2) the Contracts Clause of the

United States Constitution, (3) the Takings Clause of the United States

Constitution, and (4) Georgia statutory condemnation procedures. The parties

mutually agreed to drop all claims except the Equal Protection claim. The district

court held a bench trial and entered an order in favor of the Authority. The district

court concluded Highland Properties did not show they were similarly situated to

the Water Plentiful subdivisions or that the Authority had no rational basis for

treating them differently than the Water Plentiful subdivisions.

                                 II. DISCUSSION

      “On appeal of a district court order from a bench trial, we review the court’s

conclusions of law de novo and its findings of fact for clear error.” HGI Assocs.,

Inc. v. Wetmore Printing Co., 427 F.3d 867, 873 (11th Cir. 2005). “The Equal

Protection Clause of the Fourteenth Amendment, § 1, commands that no State

shall deny to any person within its jurisdiction the equal protection of the laws.”

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Nordlinger v. Hahn, 112 S. Ct. 2326, 2331 (1992) (quotations omitted). The

Clause prevents the government “from treating differently persons who are in all

relevant respects alike.” Id. When state economic activity is challenged and there

is no claim of discrimination based on some suspect class, then the state activity is

presumed valid unless it is not rationally related to a legitimate state interest. Foto

USA, Inc. v. Bd. of Regents of the Univ. Sys., 141 F.3d 1032, 1037-38 (11th Cir.

1998).

A. Similarly Situated

        The district court did not err in finding Highland Properties is not similarly

situated to Water Plentiful. The Highland Properties contract provided for a

termination of the contract at will, while the Water Plentiful contracts did not.

Highland Properties’ contract with Agunac contained a provision permitting

Agunac to terminate the contract without notice to Highland Properties, while the

Water Plentiful contracts required its pre-existing contracts be honored by the

Authority. As Agunac’s legal successor, the Authority was permitted to terminate

the contract at will. Thus, Highland Properties and Water Plentiful are not in all

relevant aspects alike, and are not similarly situated. See Nordlinger, 112 S. Ct. at

2331.

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B. Rational Basis

      The district court also did not err in finding the Authority had a rational

basis for treating Highland Properties and the Water Plentiful subdivisions

differently. The Authority had a legitimate interest in not breaching the Water

Plentiful subdivisions contracts, and thus had to adhere to the pre-existing Water

Plentiful fees and rates. Conversely, the Authority was not bound by the Highland

Properties/Agunac agreement, and had a legitimate economic interest in raising

the rates to match those of the rest of the county. Thus, the Authority had a

rational basis for its actions. See Foto USA, 141 F.3d at 1037-38.

                                 III. CONCLUSION

      The district court did not err in finding Highland Properties and Water

Plentiful were not similarly situated. Additionally, the district court did not err in

finding the Authority had a rational basis for the disparate treatment of the

properties.

      AFFIRMED.

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