WM Mobile Bay Environmental Center, Inc. v. The City of Mobile Solid Waste Disposal Authority ( 2022 )

USCA11 Case: 20-14749 Date Filed: 07/15/2022 Page: 1 of 18
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 20-14749
Non-Argument Calendar
____________________
WM MOBILE BAY ENVIRONMENTAL CENTER, INC.,
Plaintiff-Appellee-Cross-Appellant,
versus
THE CITY OF MOBILE,
Defendant,
THE CITY OF MOBILE SOLID WASTE DISPOSAL
AUTHORITY,
Defendant-Appellant-Cross-Appellee.
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2 Opinion of the Court 20-14749
____________________
Appeals from the United States District Court
for the Southern District of Alabama
D.C. Docket No. 1:18-cv-00429-KD-MU
____________________
Before WILSON, ROSENBAUM, and ANDERSON, Circuit Judges.
PER CURIAM:
This appeal is about a 1993 waste management contract
(Operating Agreement) between Appellant the City of Mobile
Solid Waste Disposal Authority (the Authority) and Appellee-
Cross-Appellant WM Mobile Bay Environmental Center, Inc.
(WM Mobile). 1 WM Mobile initiated this suit after the Authority
breached the Operating Agreement. WM Mobile’s cross-appeal in-
volves a 1994 contract (the 1994 Agreement) between the Author-
ity and Cross-Appellee the City of Mobile (the City) concerning the
disposal of the City’s waste. The jury awarded damages to WM
Mobile for two of its claims related to the Authority’s breach of the
Operating Agreement. The district court entered summary judg-
ment for the City as to WM Mobile’s claim related to the City’s
alleged breach of the 1994 Agreement because it found that WM
1 The Operating Agreement was between the Authority and WM Mobile’s
predecessor in interest, Transamerican Waste Industries, Inc. But for simplic-
ity, we refer to the Operating Agreement as being between the Authority and
WM Mobile.
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20-14749 Opinion of the Court 3
Mobile was not an intended third-party beneficiary of the 1994
Agreement.
On appeal, the Authority raises these issues: (1) whether the
district court erred in determining that the parties had diversity of
citizenship when the lawsuit was filed; (2) whether the district
court erred in determining that the exclusivity provisions in the
Operating Agreement are enforceable; (3) whether the evidence
presented for lost profits was sufficient to permit the jury to award
damages; and (4) whether the district court erred in determining
that the reimbursement provisions in the Operating Agreement are
enforceable. WM Mobile’s issue on cross-appeal is whether the dis-
trict court erred in determining that WM Mobile is not a third-
party beneficiary of the 1994 Agreement between the Authority
and the City. After careful review of the record and the briefs, we
affirm on all issues.
I. Introduction
Because of the extensive litigation in the case, the parties are
fully familiar with the factual and procedural background of this
case. Accordingly, we only discuss those facts and relevant parts of
the procedural history that are necessary when resolving the vari-
ous issues on appeal. We address the Authority’s issues on appeal
first and then turn to WM Mobile’s cross-appeal.
II. The Authority’s Appeal
A. WM Mobile’s Principal Place of Business is in Mississippi
and the Parties Have Complete Diversity of Citizenship
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4 Opinion of the Court 20-14749
We review a district court’s determination of subject matter
jurisdiction de novo. Sweet Pea Marine, Ltd. v. APJ Marine, Inc.,
411 F.3d 1242, 1247 (11th Cir. 2005). “A district court’s finding as
to a corporation’s principal place of business . . . for purposes of
establishing diversity jurisdiction, however, is a question of fact and
cannot be overturned unless it was clearly erroneous.” Id.Subject matter jurisdiction exists for diversity purposes
when the amount in controversy exceeds $75,000 and the parties
are citizens of different States. 28 U.S.C. § 1332 (a)(1). The statute
has been held to require complete diversity of citizenship, meaning
that “diversity jurisdiction does not exist unless each defendant is a
citizen of a different State from each plaintiff.” Owen Equip. &
Erection Co. v. Kroger, 437 U.S. 365, 373 (1978) (emphasis in orig-
inal). “[D]iversity jurisdiction is determined at the time of filing the
complaint.” PTA-FLA, Inc. v. ZTE USA, Inc., 844 F.3d 1299, 1306
(11th Cir. 2016).
A corporation is a citizen of the state where it is incorporated
and the state where its principal place of business is located. 28
U.S.C. § 1332(c)(1). The Supreme Court found that a corporation’s
principal place of business refers “to the place where a corpora-
tion’s officers direct, control, and coordinate the corporation’s ac-
tivities.” Hertz Corp. v. Friend, 559 U.S. 77, 92–93 (2010). It is nor-
mally “the place where the corporation maintains its headquar-
ters—provided that the headquarters is the actual center of direc-
tion, control, and coordination, i.e., the ‘nerve center,’ and not
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20-14749 Opinion of the Court 5
simply an office where the corporation holds its board meetings.”
Id. at 93.
The Authority and the City are both citizens of Alabama and
WM Mobile is a citizen of Delaware because it is incorporated in
that state. The parties dispute whether WM Mobile’s principal
place of business is in Alabama or in Mississippi. If it is the former,
then the parties are not citizens of different states. If it is the latter,
then the parties have complete diversity. On appeal, the Authority
maintains that WM Mobile’s principal place of business is at the
Chastang Landfill, which is in Alabama. We sent this appeal back
to the district court on limited remand to make a finding on WM
Mobile’s principal place of business. The district court found that
WM Mobile’s principal place of business in 2018 was in Mississippi,
so the parties were diverse when WM Mobile filed its complaint.
We affirm the district court’s finding that WM Mobile’s prin-
cipal place of business is in Mississippi. The district court based its
decision on the testimony of two of WM Mobile’s officers that all
major decisions of the company in 2018 were directed, controlled,
and coordinated from an office in Madison, Mississippi. We find
that district court did not clearly err in crediting that testimony.
The Authority’s arguments to the contrary on appeal are un-
availing. The Authority contends that WM Mobile’s principal
place of business is in Alabama because that is where most of the
day-to-day activities of the company were taking place. But this
fact is not dispositive because a corporation’s principal place of
business is “where a corporation’s officers direct, control, and
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coordinate the corporation’s activities.” Hertz, 559 U.S. at 92–93.
While the day-to-day activities may have occurred in Alabama, the
evidence shows that WM Mobile was directed and controlled by
its officers in Mississippi. Further, the Authority’s argument that
WM Mobile could not have its principal place of business in Missis-
sippi because it did not have a license to do business in that state is
misplaced. WM Mobile did not transact business in Mississippi. In-
stead, it made decisions in Mississippi about its business transac-
tions in Alabama. The Authority’s remaining arguments in rebut-
tal also lack merit and we need not address them here. We there-
fore hold that the district court did not clearly err in finding WM
Mobile’s principal place of business to be in Mississippi and the par-
ties have complete diversity of citizenship.
B. The Exclusivity Provisions of the Operating Agreement Are
Enforceable
Next, we turn to whether the district court erred in deter-
mining that the exclusivity provisions of the Operating Agreement
do not conflict with state law and are thus enforceable. The district
court made this determination in the context of a motion for judg-
ment as a matter of law. We review a motion for judgment as a
matter of law de novo, applying the same standards as the district
court. Nebula Glass Int’l, Inc. v. Reichhold, Inc., 454 F.3d 1203,
1210 (11th Cir. 2006).
The exclusivity provisions of the Operating Agreement, Sec-
tions 1.32 and 5.2, require that the Authority dispose of all munici-
pal solid waste at the Chastang Landfill, which is operated by WM
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Mobile. WM Mobile alleged that the Authority breached these
provisions by diverting waste to a different landfill. Under the Op-
erating Agreement, the Authority pays WM Mobile $20 per ton of
waste delivered to Chastang Landfill. Accordingly, WM Mobile
claimed lost profits for the waste that should have been delivered
to Chastang Landfill but was instead diverted to a different landfill.
On appeal, the Authority argues that these exclusivity pro-
visions stating that waste be delivered only to Chastang Landfill are
unenforceable because it conflicts with the City’s 1992 Solid Waste
Management Plan (the 1992 Plan). The 1992 Plan was adopted pur-
suant to Alabama’s statute titled the Solid Waste and Recyclable
Materials Management Act, Ala. Code. § 22-27-1 et seq. (the Solid
Waste Act). The Solid Waste Act requires that local governments
in Alabama submit “a plan for the management of solid waste gen-
erated within its boundaries.” Ala. Stat. § 22-27-47. The 1992 Plan
stated that certain types of waste—yard waste, construction debris,
and municipal street wastes—were currently being disposed of at a
different landfill, the Bates Field Landfill. Thus, according to the
Authority, because the 1992 Plan called for these types of waste to
be deposited at the Bates Field Landfill, and not the Chastang Land-
fill, the exclusivity provisions of the Operating Agreement that all
waste be deposited at the Chastang Landfill conflict with the 1992
Plan.
In support, the Authority cites the Court of Civil Appeals of
Alabama’s decision in Alabama Disposal Solutions-Landfill, LLC v.
Town of Lowndesboro, 837 So. 2d 292 (Ala. Civ. App. 2002). In
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8 Opinion of the Court 20-14749
Lowndesboro, a town adopted an ordinance that prohibited land-
fills within city limits and its police jurisdiction. 837 So. 2d at 294.
The town did not have its own waste management plan, so it fell
within the surrounding county’s plan. Id. at 294–95. The county’s
plan called for the placement of a landfill outside the city limits of
the town, but within its police jurisdiction. Id. at 294. In determin-
ing that the town’s ordinance was invalid, the court applied the rule
that “[a]n ordinance may be ‘inconsistent’ with State law if it pro-
hibits conduct permitted under State law.” Id. at 301. Because the
Solid Waste Act requires local governments to “follow a local solid-
waste-management plan in deciding where to locate a landfill” and
the county’s plan permitted a landfill near the town, the town’s or-
dinance prohibiting a landfill conflicted with state law. Id. at 302.
Here, the facts are much different. First, the Operating
Agreement is not an “ordinance” but a contract between the Au-
thority and WM Mobile. The 1992 Plan specifically provides that
the City and the Authority “may choose to contract with private
contractors to perform solid waste collection and/or disposal activ-
ities.” Second, the Operating Agreement does not “prohibit” any-
thing that the 1992 Plan “permits.” Lowndesboro, 837 So. 2d at
302. While the 1992 Plan states that some waste was currently be-
ing deposited at the Bates Field Landfill, it does not suggest that the
waste was to be deposited there forever. In fact, the 1992 Plan spec-
ified that because of construction near the Bates Field Landfill, “it
is anticipated that the Bates Field Landfill will probably be relo-
cated.” Thus, the 1992 Plan contemplated that while certain waste
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20-14749 Opinion of the Court 9
was currently being deposited at the Bates Field Landfill, it was
likely that the Bates Field Landfill would fall out of use.
In sum, the exclusivity provisions of the Operating Agree-
ment are not inconsistent with the 1992 Plan. The 1992 Plan ex-
pressly authorized the Authority to enter into private contracts for
waste management and there is no requirement in the 1992 Plan
that the City had to dispose of waste at the Bates Field Landfill.
Accordingly, we affirm the district court’s ruling on this issue.
C. The Evidence Was Sufficient to Permit the Jury to Award
Damages for Lost Profits
Now that we have determined that the exclusivity provi-
sions are valid and enforceable, we turn to whether the evidence at
trial was sufficient to permit the jury to award damages for the Au-
thority’s breach of those provisions. The jury returned a verdict of
$2,000,000 in lost profit damages for WM Mobile. Following the
district court’s entering of the judgment, the Authority filed a re-
newed motion for judgment as a matter of law. The district court
denied the motion, finding that the jury’s verdict as to lost profits
was supported by sufficient evidence.
We review the sufficiency of the evidence de novo, but with
deference to the jury’s verdict. Crawford v. ITW Food Equip.
Grp., LLC, 977 F.3d 1331, 1342 (11th Cir. 2020). This deference
means that “all evidence and inferences must be in the light most
favorable to the prevailing party, and the Court must ask whether
there was any legally sufficient basis for the verdict, remembering
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10 Opinion of the Court 20-14749
that credibility determinations, evidentiary weighing and inference
drawing are jury functions.” Id. With this standard of review in
mind, we address whether the evidence was sufficient to support
the jury’s verdict for lost profits.
The parties dispute the standard of proof for lost profits.
The Authority argues that the plaintiff must prove lost profits with
“reasonable certainty.” WM Mobile maintains that it need only
prove lost profits by “the best evidence available.” 2 In denying the
Authority’s renewed motion for judgment as a matter of law, the
district court agreed with WM Mobile. We agree with the district
court and WM Mobile that the best evidence available standard of
proof applies. What standard of proof applies turns on whether the
lost profits are general damages or consequential damages.
The Alabama Supreme Court’s decision in Mannington
Wood Floors, Inc. v. Port Epres Transport, Inc., 669 So. 2d 817(Ala. 1995), is instructive. There, the court distinguished between
general damages and consequential damages, both of which could
refer to lost profits. 669 So. 2d at 822–23. For general damages, the
court noted that “damages awarded for breach of contract should
return the injured party to the position he would have been had
the contract fully been performed.” Id. at 822. There, the plaintiff
claimed that the defendant breached a shipping contract because it
2 It is not clear from the record what standard of proof the jury was asked to
apply, but since neither party challenges the jury instructions on appeal, we
need not address that issue.
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diverted its product to another location, thus depriving the plaintiff
of the profits it would have made had the plaintiff shipped that
product. Id. at 820. The contract price was also determined by the
weight of the product, like this one. Id. at 819. The court found
that the plaintiff’s lost profits were for general damages, not conse-
quential ones, because it “was merely seeking to recover the
amount it should have received for shipping wood by-products un-
der the terms of the contract.” Id. at 823. Similarly, here, the Op-
erating Agreement provides that the Authority is to send all its
waste to the Chastang Landfill and WM Mobile receives a fee of
$20 per ton of waste delivered. Thus, since WM Mobile is simply
claiming damages for the profits it would have received had the
Authority performed its obligations under the Operating Agree-
ment and sent all its waste to Chastang Landfill, we conclude that
these are claims for general damages.
As the court in Mannington noted, a plaintiff can recover for
general damages if “he has produced the best evidence available
and it is sufficient to afford a reasonable basis for estimating his
loss.” Id. at 822. The heightened “reasonable certainty” standard
applies to consequential damages, not general damages. Id. at 823.
Accordingly, we consider whether WM Mobile proved lost profits
with the best evidence available.
The Authority’s main contention on appeal is that the Oper-
ating Agreement called for price to be determined based on weight.
But the other landfill where the waste was diverted to did not
weigh the amount of waste it received. Instead, it charged based
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on the size of the truck bed carrying the waste. Thus, the waste
sent to the other landfill was measured in volume, not weight.
And, the Authority argues, the conversion factor used by WM Mo-
bile in converting the volume of diverted waste to weight was un-
reliable.
We conclude that the evidence here was sufficient to permit
the jury to award damages for lost profits. WM Mobile introduced
the invoices charged to the City for the waste that should have
been delivered to the Chastang Landfill. Testimony at trial showed
that these invoices were the only records documenting the volume
of waste diverted to the other landfill. Although these invoices
used cubic yards, rather than tons, WM Mobile produced conver-
sion factors from the Environmental Protection Agency (EPA) that
could be used to convert the volume measurement to weight.
While the Authority argues that these conversion factors are unre-
liable, it offers no evidence of better conversion factors that could
have been used. Further, when questioned on whether he used the
EPA conversion factors in his own work, the Authority’s own ex-
pert responded that he “more than likely” did and that he “proba-
bly” did so on multiple occasions. Thus, the defendant’s own ex-
pert recognized the utility of these conversion factors.
The jury need not achieve “mathematical precision” when
computing damages. Mannington, 669 So. 2d at 822. For lost prof-
its resulting from general or expectancy damages, the plaintiff need
only prove them through the best evidence available. Id. Here,
the invoices listing the volumes of diverted waste were the only
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20-14749 Opinion of the Court 13
evidence available for the quantity of waste that the Authority sent
to the other landfill. And the conversion factor from the EPA pro-
vided a “reasonable basis for estimating [WM Mobile’s] loss.” Id.Accordingly, we hold that the evidence was sufficient to permit the
jury to award damages for lost profits.
D. The Reimbursement Provisions of the Operating Agree-
ment Are Enforceable
The Authority’s last issue on appeal concerns the reimburse-
ment provision of the Operating Agreement, Section 6.6. This pro-
vision of the Operating Agreement relates to one of WM Mobile’s
breach of contract claims for the Authority’s failure to reimburse
WM Mobile for certain capital expenditures. In ruling on the par-
ties’ motions for summary judgment, the district court determined
that Section 6.6 is valid and enforceable. We review questions of
contract interpretation de novo. Dear v. Q Club Hotel, LLC, 933
F.3d 1286, 1293 (11th Cir. 2019).
The Authority argues that Section 6.6 is void for uncertainty
because it is an agreement to agree in the future. Under Alabama
law, “courts will not enforce a contract which is vague, indefinite,
or uncertain.” Muscle Shoals Aviation, Inc. v. Muscle Shoals Air-
port Auth., 508 So. 2d 225, 228 (Ala. 1987). “[T]o be enforceable, a
contract to enter into a future contract must be definite and certain
in all of its terms and conditions so that the court can know what
the parties have agreed upon.” Id.USCA11 Case: 20-14749 Date Filed: 07/15/2022 Page: 14 of 18
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Section 6.6 of the Operating Agreement is titled “Price Ad-
justments” and contemplates unforeseen circumstances that might
result in increased costs. The purpose of the provision is to “pro-
vide a means of arriving at adjustments in Payments or compensa-
tion hereunder to Contractor to reflect the resulting cost impacts.”
Further, the Contractor, which at the time was WM Mobile’s pre-
decessor in interest, can request adjustments to compensation “to
reflect the change in the cost of the Contractor doing business.”
Section 6.6 then lists situations that might warrant such negotia-
tions between the Contractor and the Authority. The Authority
argues that because Section 6.6 only provides that the parties may
enter into negotiations, it is an uncertain “contract to enter into a
future contract.” Id.The Authority might be correct if that were all Section 6.6
said. But the following language from Section 6.6 rebuts the Au-
thority’s argument:
Notwithstanding any provision in this Contract to the
contrary, the Authority shall reimburse Contractor
for any increases in Contractor’s costs due to laws,
rules, regulations or ordinances that become effective
or have different interpretations after the date this
Contract is entered into and that have an adverse im-
pact on Contractor hereunder.
As our emphasis of the above text shows, Section 6.6 mandates that
the Authority “shall” reimburse the Contractor, despite other pro-
visions of the Operating Agreement. Thus, even if other provisions
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20-14749 Opinion of the Court 15
of Section 6.6 merely suggest that the parties can enter into nego-
tiations to discuss increases in cost, the above language mandates
that the Authority reimburse the Contractor if the increase in cost
is due to changes in laws or regulations. We thus hold that Section
6.6 is enforceable and not void for uncertainty.
III. WM Mobile’s Cross-Appeal
Lastly, we address WM Mobile’s cross-appeal against the
City. WM Mobile brought a breach of contract claim against the
City under a third-party beneficiary theory for the 1994 Agreement
between the City and the Authority. In the 1994 Agreement, the
City conveyed its entire waste stream to the Authority. Further,
the City designated the Chastang Landfill as the “sole deposit point
of all non-hazardous and non-infectious municipal solid waste col-
lected by the City.” WM Mobile claims that the City breached the
1994 Agreement by diverting waste to a different landfill.
But WM Mobile was not a party to the 1994 Agreement. To
prevail, it must establish that it was a third-party beneficiary to the
1994 Agreement. The district court granted summary judgment
for the City for WM Mobile’s claims against it because it found that
WM Mobile was not a third-party beneficiary to the 1994 Agree-
ment. We review a district court’s grant of summary judgment de
novo. Cone Corp. v. Hillsborough Cnty, 908 F.2d 908, 913 (11th
Cir. 1990).
We have noted that in cases applying Alabama law, the “cru-
cial inquiry” for third-party beneficiary status “involves a
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determination of intent, and third parties may sue on the contract
only if it may be said to have been intended for their direct, as op-
posed to incidental, benefit.” Beverly v. Macy, 702 F.2d 931, 940
(11th Cir. 1983). We first look to the language of the contract when
determining the parties’ intent because “the intention of the parties
is to be derived from the contract itself, where the language is plain
and unambiguous.” H.R.H. Metals, Inc. v. Miller ex rel. Miller, 833
So. 2d 18, 24 (Ala. 2002). If the contract is ambiguous, then we may
also look to the circumstances to determine whether a third-party
benefit was intended. Id.WM Mobile argues that it is a third-party beneficiary under
the 1994 Agreement because the City and the Authority agreed to
send all the City’s waste to the Chastang Landfill. So, as the argu-
ment goes, both parties to the 1994 Agreement intended a direct
benefit to WM Mobile because they knew that WM Mobile had a
contract with the Authority to operate the Chastang Landfill. WM
Mobile relies on the Supreme Court of Alabama’s decision in Locke
v. Ozark City Board of Education, 910 So. 2d 1247 (Ala. 2005).
There, a baseball umpire was assaulted by an unruly parent at a
baseball game hosted by a local high school. 910 So. 2d at 1249.
The school was a member of the Alabama High School Athletic
Association (AHSAA). Id. at 1248. The AHSAA Directory stated
that schools have a duty to provide “good game administration and
supervision by providing . . . adequate police protection.” Id. at
1249. The umpire sued the school board for breach of contract be-
cause there were no police at the game when he was assaulted. Id.USCA11 Case: 20-14749 Date Filed: 07/15/2022 Page: 17 of 18
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Although he was not a party to the ASHAA’s contract, the court
found that a genuine issue of fact existed as to whether he was an
intended third-party beneficiary of that contract. Id. at 1253–54.
The court noted that the purpose of having police protection was
to “provide good game administration.” Id. at 1253. The contract
“anticipates the existence of a third party” because game admin-
istration “necessarily involves umpires.” Id.The 1994 Agreement here anticipates the existence of a third
party, but it is not WM Mobile. Instead, the intended beneficiaries
are the citizens of Mobile. This is indicated from the plain language
of the 1994 Agreement that “the City has determined that it is in
the best interest of the citizens of the City to contract with the Au-
thority to insure [sic] that the City meets its long term needs for a
landfill to dispose of its solid waste at a reasonable price.” Further,
the purpose of the 1994 Agreement was to fulfill “a matter of grave
concern to all citizens of the City of the Mobile” which was “the
disposal of solid waste.” Thus, the provision of the 1994 Agree-
ment designating Chastang Landfill as the sole deposit point for
waste was not intended to directly benefit a private operator of the
landfill, WM Mobile, but to directly benefit the City’s citizens. It
makes no difference who manages the Chastang Landfill, whether
it is the Authority, WM Mobile, or another entity. All that was
intended by the 1994 Agreement was for the City to ensure that it
could “dispose of its solid waste at a reasonable price.” Accord-
ingly, we conclude that WM Mobile was not an intended third-
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18 Opinion of the Court 20-14749
party beneficiary of the 1994 Agreement and affirm the district
court’s grant of summary judgment for the City.
IV. Conclusion
In conclusion, we hold that: (1) the district court did not
clearly err in finding WM Mobile’s principal place of business to be
in Mississippi and thus the parties had complete diversity of citizen-
ship when WM Mobile initiated this lawsuit in 2018; (2) the exclu-
sivity provisions of the Operating Agreement do not conflict with
state law and are enforceable; (3) the evidence was sufficient to per-
mit the jury to award damages for lost profits; (4) the reimburse-
ment provisions of the Operating Agreement are not uncertain and
are enforceable; and (5) WM Mobile was not an intended third-
party beneficiary to the 1994 Agreement between the Authority
and the City.
AFFIRMED.