Mr. Larry Clark

Office of the Attorney GeneralJune 7, 2002

2002 WL 1579650 (Miss.A.G.)
Office of the Attorney General
State of Mississippi
*1 Opinion No. 2002-0295
*1 June 7, 2002

Re: Binding Arbitration Agreements

*1 Mr. Larry Clark
*1 Watkins Ludlam Winter & Stennis, P.A.
*1 633 North State Street 39202
*1 P. O. Box 427
*1 Jackson, Mississippi 39205-0427
Dear Mr. Clark:
*1 Thank you for your letter of May 14, 2002, in which you ask our office to reconsider our official opinion to you, MS AG Op., Clark (April 26, 2002), concerning the authority of the West Rankin Metropolitan Sewer Authority to enter into binding arbitration agreements. Your opinion request has been assigned to me for research and reply. In our official opinion to you of April 26, 2002, we answered the following two questions:
*1 1. Does the West Rankin Metropolitan Sewer Authority (WRMSA) come within the definition of “person” set out in Section 1-3-39 so as to enable it to enter into an agreement for binding arbitration under Section 11-15-1?
*1 2. Does Section 11-15-1, or any other provision of Mississippi law authorize provisions in contractual agreements between parties requiring them to submit to binding arbitration disputes, not now existing but which may arise in the future, concerning the interpretation and/or performance of those contracts?
*1 As you note in your letter, Miss. Code Ann. Section 1-3-39 defines the term “person” for purposes of statutory construction, stating:
*1 The term “person,” when used in any statute, shall apply to artificial as well as natural persons; and when used to designate the party whose property may be the subject of offense, shall include the United States, the state, or any other state, territory, or county, and any county, city, town or village which may lawfully own property in this state; also all public and private corporations as well as individuals.
*1 Section 11-15-1 provides for resolution of disputes between persons by binding arbitration, stating:
*1 All person, except infants and persons of unsound mind, may, by instrument of writing, submit to the decision of one or more arbitrators any controversy which may be existing between them, which might be the subject of an action, and may, in such submission, agree that the court having jurisdiction of the subject matter shall render judgment on the award made pursuant to such submission, In such case, however, should the parties agree upon a court without jurisdiction of the subject matters of the award, the judgment shall be rendered by the court having jurisdiction in the county of the residence of the party, or some one of them, against whom the award shall be made.
*1 As we noted in our opinion to you, the Mississippi Supreme Court in City of Jackson v. State, 126 So. 2d 2, 3 (Miss. 1930), quoting Dollman v. State, 12 So. 23, 24 (Miss. 1930) held that the word “person” for purposes of statutory construction is defined in the context of each statute where it appears, stating:
*1 ... when the word “person” is used in statutes, “its signification is so controlled by the context that it may be said to rest upon it,” and “the word may or may not include the state and its subdivisions” and rested its conclusion that municipal corporations were not included within the mean of the word as used in the statute under consideration, on the ground that the subject-matter of the statute was wholly foreign to the ordinary functions of public corporations, and imposed burdens, duties, and liabilities upon them without any corresponding benefits...
*2 “Whether a state or municipality or other corporation exercising a subdivision of its sovereignty is included by the terms of a statute — not being expressly named — must be determined by a consideration of the subject-matter of the statute, its purpose and effect...”
*2 In City of Jackson v. State, 126 So. 2d at 4, the Court held that a municipality is a “person” for purposes of paying a privilege tax imposed on distributors or wholesale dealers of gasoline, and in Dollman v. State, 12 So. 23 at 24, the Court held that a board of trustees of a school and the governing authorities of a municipality are not considered to be “persons” within the meaning of a statute providing that chancery courts have jurisdiction of attachment suits against any nonresident, absent or absconding debtor and “persons” in the state who have in their hands effects of, or are indebted to the debtor.
*2 Chapter 987, Local and Private Laws of 2000, in Section 6(d) authorizes the West Rankin Metropolitan Sewer Authority, a public body corporate and politic, to enter into contracts but does not authorize it to enter into contracts with binding arbitration provisions. This office has consistently opined that the authority of state agencies and political subdivisions is specifically set forth or necessarily implied in the enabling legislation. The state and its political subdivisions, including public bodies created by local and private act, are governed by constitutional constraints, such as the prohibition against donations in MS Const. Art. 4 Section 66, the prohibition against granting extra compensation beyond the contracts made to employees or contractors in MS Const. Art. 4 Section 96, and the prohibition against diminishing or relinquishing an obligation or claim held or owned by the state set forth in MS Const. Art. 4, Section 100. The legislature has set forth by statute the specific areas in which state institutions and state agencies may submit disputes to arbitrators for resolution or may enter into contracts with binding arbitration agreements for resolution of future disputes. See, e.g., MS AG Op., Shaw (April 1, 1991)(Mississippi State Highway Arbitration Board); MS AG Op., Kopf (September 15, 2000)(Mississippi Transportation Commission); MS AG Op., Hardy (October 3, 1996)(Tort Claims Board); MS AG Op., Conerly (February 5, 1999)(University Medical Center). We opined in MS AG Op., Austin (February 16, 2001) that the DeSoto County Convention and Visitors Bureau does not have statutory authority to enter into binding arbitration agreements. We opined in MS AG Op., Perkins (October 20, 2000) that a municipality does not have authority to enter into a contract with a union with binding arbitration provisions. Whether a specific state agency or political subdivision may enter into binding arbitration agreements is a policy decision which is best left to the legislature, since this form of dispute resolution does not encompass protections of litigation, such as summary judgments, the discovery process and avenues of appeal, and may run afoul of constitutional provisions and statutes. We reaffirm our opinion, MS AG Op., Clark (April 26, 2002), and remain of the opinion that the West Rankin Metropolitan Sewer Authority does not have specific authority in its enabling legislation or general legislation to enter into binding arbitration agreements. However, the WRMSA may seek amendment of the local and private act by the legislature to include the authority to enter into binding arbitration agreements in specific circumstances. If we may be of any further assistance, please let us know.
*3 Mike Moore
*3 Attorney General
*3 By: Alice Wise
*3 Special Assistant Attorney General
2002 WL 1579650 (Miss.A.G.)
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