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Lipscomb v. Columbus Mun. Separate Sch. Dist.

United States Court of Appeals for the Fifth Circuit

October 3, 2001, Decided

No. 00-60245

Opinion

 [*498]  PATRICK E. HIGGINBOTHAM, Circuit Judge:

This case requires us to examine a collision between the Contract Clause of the United States Constitution and Mississippi's effort to escape rent and renewal terms of leases of sixteenth section land in Columbus, Mississippi dating back to the early nineteenth century. The Secretary of State of Mississippi and the State maintain that the rental and renewal terms are invalid because their perpetuation of rents that are now nominal violate a provision of the 1890 Mississippi Constitution forbidding the donation of public property to private parties. Lipscomb sues for a declaration that the efforts of the Secretary of State to invalidate these leases violates the Contract Clause. The district court held that invalidating the leases would violate the Contract Clause. We affirm.

Before Mississippi became a state, the United States Congress set aside the sixteenth section of every township [**2]  in the Mississippi Territory to be used for the benefit of schools. 1 Congress then authorized the leasing of the sixteenth section land to raise funds to finance public schools in the Mississippi Territory. 2 [**3]  ] Upon granting statehood to Mississippi in 1817, Congress gave the sixteenth section land to the new state for the benefit of its schools. 3 Thereafter, ] the Mississippi legislature authorized the leasing of the school lands, the proceeds of which would finance public schools. 4

During the nineteenth century, various persons leased sixteenth section land from  [*499]  the school board of Columbus, Mississippi. These leases were to last 99 years from February 10, 1821, or thereabouts (regardless of when actually made), and contained "renewable forever" provisions authorized by an 1830 Mississippi statute. 5 Many of the leases--often after being assigned or subdivided--were renewed in 1920 under their renewable forever provisions. The rental rates paid on the Columbus leases have remained unchanged for 180 years. Leaseholders of lots of property in downtown Columbus pay pennies in rent per year, a small fraction of their fair market rent.

 [**4]  In 1890, Mississippi ratified its current constitution. ] Section 95 of the 1890 constitution prohibits the donation of state lands to private parties. 6 Mississippi courts subsequently interpreted section 95 to prohibit leases or sales of land for grossly inadequate consideration. 7 A lease that violates section 95 is voidable. 8 [**5]  Following these rulings, the State and individual school boards began asserting that sixteenth section leases for nominal consideration were void and renegotiating the leases. The leases in Columbus, Mississippi, however, occupy a unique position: because the "renewable forever" leases in Columbus were signed before the ratification of the 1890 Mississippi Constitution, voiding the leases implicates the Contract Clause of the United States Constitution. 9

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269 F.3d 494 *; 2001 U.S. App. LEXIS 21405 **

J. RANDOLPH LIPSCOMB, on behalf of himself and all others similarly situated; MAYOR, CITY OF COLUMBUS; CITY COUNCIL OF THE CITY OF COLUMBUS, MISSISSIPPI, as the statutorily designated successors in office to the Trustees of Franklin Academy, Plaintiffs-Appellees, versus THE COLUMBUS MUNICIPAL SEPARATE SCHOOL DISTRICT, etc.; ET AL., Defendants, versus STATE OF MISSISSIPPI; ERIC CLARK, In his capacity as Secretary of State, Defendants-Appellants.

Subsequent History:  [**1]  As Revised October 5, 2001. Rehearing and Rehearing En Banc Denied November 13, 2001, Reported at: 2001 U.S. App. LEXIS 25345. Certiorari Denied April 15, 2002, Reported at: 2002 U.S. LEXIS 2388.

Prior History: Appeal from the United States District Court For the Northern District of Mississippi. 1:92-CV-20-S-A. L T Senter, Jr, US District Judge.

Disposition: AFFIRMED and REMANDED.

CORE TERMS

leases, renewable, impairment, schools, trust obligation, contracts, forever, rent, school land, regulation, terms, invalidation, leaseholders, void, police power, reinstatement, declaration, district court, Reserves, state law, obligations, sovereignty, Territory, surrender, binding, buyer's, parties, rental, trusts, impairment of contract

Governments, Federal Government, Property, State & Territorial Governments, Constitutional Law, Congressional Duties & Powers, Contracts Clause, General Overview, Contracts Law, Types of Contracts, Lease Agreements, Real Property Law, Contracts of Sale, Enforceability, Failure of Consideration, Civil Procedure, Federal & State Interrelationships, Anti-Injunction Act, Tax Anti-Injunction Act, Tax Law, Federal Tax Administration & Procedures, Tax Injunction Act, Preliminary Considerations, Contract Interpretation, State & Local Taxes, Real Property Taxes, Subject Matter Jurisdiction, Federal Questions, Jurisdiction, Federal Questions, Declaratory Judgments, Federal Declaratory Judgments, Pleading & Practice, Pleadings, Rule Application & Interpretation, State Sovereign Immunity, State Immunity, Remedies, Damages, Monetary Damages, Special Proceedings, Eminent Domain Proceedings, Legislation, Enactment, Elements, Just Compensation, Constitutional Limits & Rights, Police Powers, Criminal Law & Procedure, Standards of Review, De Novo Review, Estate, Gift & Trust Law, Trusts, Holding Trusts, Interpretation, Public Lands, Land Grants, Estates, Present Estates, Fee Simple Estates, Estate Interests, Estates in Fee Simple, Erie Doctrine, Courts, Judicial Precedent, Business & Corporate Compliance, Trust Administration, Modification & Termination, Environmental Law, Natural Resources & Public Lands, Public Trust Doctrine, Judgments, Preclusion of Judgments, Law of the Case, Estate, Gift & Trust Law, Trust Administration, Jurisdictional Sources, Relief From Judgments, Void Judgments