The Promenade D'Iberville, LLC v. Jacksonville Electric Authority

Mississippi Supreme Court·Decided June 12, 2025·No. 2023-CA-01273-SCT·Published

Opinion

IN THE SUPREME COURT OF MISSISSIPPI NO. 2023-CA-01273-SCT

THE PROMENADE D’IBERVILLE, LLC v. JACKSONVILLE ELECTRIC AUTHORITY

DATE OF JUDGMENT: 10/11/2023 TRIAL JUDGE: HON. CHRISTOPHER LOUIS SCHMIDT COURT FROM WHICH APPEALED: HARRISON COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANT: JAMES GRADY WYLY, III JOSEPH JEFFREY LANDEN

JOHN PATRICK McMACKIN

KYLE STUART MORAN

ATTORNEYS FOR APPELLEE: HUGH RUSTON COMLEY JOE SAM OWEN

PAUL STEPHENSON

JAMES JOSEPH CRONGEYER, JR.

NATURE OF THE CASE: CIVIL - OTHER DISPOSITION: REVERSED AND REMANDED - 06/12/2025 MOTION FOR REHEARING FILED:

CONSOLIDATED WITH

NO. 2017-IA-00167-SCT

BEFORE RANDOLPH, C.J., MAXWELL AND SULLIVAN, JJ.

SULLIVAN, JUSTICE, FOR THE COURT:

¶1. The Harrison County Circuit Court granted Jacksonville Electric Authority’s (JEA’s) motion to dismiss for lack of subject-matter jurisdiction based on sovereign immunity pursuant to California Franchise Tax Board v. Hyatt (Hyatt III), 587 U.S. 230, 139 S. Ct. 1485, 203 L. Ed. 2d 768 (2019). Alternatively, the trial court held that the Full Faith and Credit Clause and comity principles mandated dismissal due to the presuit notice and venue

requirements under Florida Statute Section 768.28. Promenade D’Iberville, LLC, appeals.

¶2. Because we find that Hyatt III does not apply in this case and that neither the Full Faith and Credit Clause nor comity mandate dismissal, we reverse the trial court’s judgment of dismissal. The case is remanded to the Harrison County Circuit Court for proceedings consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

¶3. Promenade is the owner and developer of a large retail shopping center in D’Iberville, Mississippi. The facility covers seventy-three acres and accommodates more than fifty commercial tenants. Construction began on the facility in 2008 and was completed in the fall of 2009. In the spring of 2009, Promenade discovered heaving and swelling problems with the soil underneath the facility while construction was ongoing.

¶4. In 2010, Promenade filed suit in the Harrison County Circuit Court against the project’s general contractor, EMJ Corporation; the sitework contractor, M. Hanna Construction Company, Inc.; geotechnical engineer Gallet & Associates, Inc.; a Louisiana materials supplier, LA Ash; and JEA, a Florida public utility. The complaint alleged damages caused from the use of OPF42 as a soil stabilizer in the construction of the shopping center. The complaint asserted claims of defective product, failure to warn, breach of duty, breach of implied warranty of merchantability, breach of implied warranty of fitness for a particular purpose, breach of express warranty, and physical invasion to land.

¶5. The OPF42 was purchased from LA Ash and used at the project by M. Hanna. The complaint alleged that the OPF42 reacted chemically when exposed to water, forming

ettringite crystals and causing rapid soil expansion. This expansion caused extensive property damage, including buckled and cracked floors, cracks and separation in walls, and damage to pavement and sidewalks.1

¶6. The main component of the OPF42 used at the site was bed ash material from JEA’s power plant in Florida, a byproduct from the plant’s electric generation process. Promenade alleged that JEA had supplied the bed ash to LA Ash, which had marketed and sold the OPF42 used in the project. According to Promenade, JEA had intended that its byproduct be used in construction projects such as the D’Iberville shopping center.

¶7. JEA answered Promenade’s complaint and filed a motion to dismiss for lack of subject-matter jurisdiction. JEA asserted, inter alia, that as a sovereign entity of the State of Florida, it could not be sued in the courts of a sister state, Mississippi. JEA contended that Promenade had conceded that JEA had sovereign status by using Florida’s Public Records Act to obtain “volumes” of data from JEA. Alternatively, JEA argued that it was immune from suit to the extent provided by either Florida’s immunity provisions or the Mississippi Tort Claims Act (MTCA).

¶8. At that time, JEA acknowledged that under Franchise Tax Board of California v. Hyatt (Hyatt I), 538 U.S. 488, 123 S. Ct. 1683, 155 L. Ed. 2d 702 (2003), a sovereign body of one state is not constitutionally immune from suit in the courts of a sister state. JEA instead argued that Mississippi should decline to exercise jurisdiction over Promenade’s claims against it as a matter of comity, “an accommodation policy, under which the courts

1 This type of expansion is referred to throughout the record as “heaving.”

of one state voluntarily give effect to the laws and judicial decisions of another state out of deference and respect, to promote harmonious interstate relations[.]” Id. at 493 (internal quotation marks omitted).

¶9. A special master was appointed in the case. The special master rejected JEA’s comity argument and recommended that JEA’s motion to dismiss be denied. The special master reviewed Church v. Massey, 697 So. 2d 407, 409 (Miss. 1997), which involved a Mississippi resident injured in a traffic accident by an employee of Brewer State Junior College, an Alabama entity. Brewer State argued that Alabama law applied and that because it was immune from suit in Alabama, it should be immune from suit in Mississippi. Id. The trial court dismissed the Mississippi resident’s lawsuit against Brewer State as a matter of comity. Id. The Church Court found that the matter did “not present a question dealing with the principle of comity[;]” instead, the case presented “a classic choice of law problem.” Id. at 410. Church reiterated that “Mississippi has [subscribed] to the most significant relationship test embodied in the Restatement (Second) of Conflicts of Law.” Id. (quoting McDaniel v. Ritter, 556 So. 2d 303, 310 (Miss. 1989)). Church resolved the test in favor of applying Mississippi law. Id. Church held that “[a] foreign governmental entity enjoys no greater status under our tort law than any other similarly situated tort defendant.” Id. Church found “no compelling public policy considerations which would dictate that Brewer State Junior College should enjoy immunities above and beyond those provided to our citizens.” Id. Thus, the MTCA afforded no immunity to the Alabama governmental entity. Id.

¶10. The special master found that under Hyatt I and an earlier case, Nevada v. Hall, 440

U.S. 410, 99 S. Ct. 1182, 59 L. Ed. 2d 416 (1979), later overruled by Hyatt III, 587 U.S. at 233,2 no constitutional impediment existed to prevent the court’s exercise of subject matter jurisdiction over JEA, a Florida municipal entity. The special master found that under the most significant relationship test and the center of gravity test, Mississippi law applied. Applying Church, the special master found that JEA’s status as a “municipal utility and body politic of the State of Florida” did not afford it any immunity from suit under the MTCA. The special master found that “JEA is not an employee or political subdivision nor enjoys any other status that would provide the protection afforded under the Mississippi Tort Claims Act.” The trial court adopted the special master’s report and recommendation and denied JEA’s motion to dismiss for lack of subject matter jurisdiction.

¶11. After its motion to dismiss was denied, JEA moved for summary judgment. It argued that its only role had been supplying bed ash in rail carloads to LA Ash, which then had manufactured and sold a soil stabilization and fill product for the Promenade project. JEA denied any role in manufacturing the fill material, contending it merely had supplied a raw material that had been altered by LA Ash after it left JEA’s control. JEA averred that it had

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