Judge cautioned about awarding damages to trash haulers

Trash haulers’ attorney says firms lost 40,000 customers

By Evan Young

A Clayton attorney cautioned a St. Louis County Circuit Court judge last week against expanding the scope of unjust enrichment complaints by awarding actual damages to three trash haulers in their lawsuit against the county.

Attorney Kevin O’Keefe, principal at Curtis, Heinz, Garrett and O’Keefe, told Judge Barbara Wallace that if the court orders the county to pay the trash haulers compensatory damages when they haven’t lost any money to the county, it could “promote litigation” against governments across Missouri.

O’Keefe, who is the city attorney for several area municipalities, made his comments during a hearing Dec. 20 in Wallace’s courtroom.

American Eagle Waste Industries, Meridian Waste Services and Waste Management of Missouri sued the county in May 2008, contending the county failed to give two years’ notice to waste haulers before establishing trash districts in unincorporated areas and awarding contracts for trash pickup.

The haulers did not win contracts in 2008 to serve the trash districts exclusively and are prohibited from offering service to district residents. The contracts were awarded through competitive bidding to Allied Services, IESI and Veolia Environmental Services.

The haulers cite Missouri Statute 260.247, which states in part, “Any city or political subdivision which annexes an area or enters into or expands solid-waste collection services into an area where the collection of solid waste is presently being provided by one or more private entities, for commercial or residential services, shall notify the private entity or entities of its intent to provide solid-waste collection services in the area by certified mail.”

Trash-collection services cannot begin until at least two years after the date of notification, according to the statute, which was modified in 2007 to include the county. The County Council approved legislation in December 2006 calling for the future establishment of trash districts. Eight districts were implemented by Oct. 1, 2008.

After spending nearly two years moving between county, state and federal courts, the haulers’ case in March returned to circuit court, where Wallace in September ruled in their favor.

The judge ruled the county breached an implied contract with waste haulers when it neglected to notify them of its forthcoming trash district program. A trial on damages tentatively is scheduled Feb. 24.

The county plans to appeal the case once Wallace decides if the haulers are owed damages. Some estimate the judgment against the county will cost taxpayers tens of millions of dollars, though county officials have disputed that claim.

Jane Dueker, the haulers’ attorney, contended at last week’s hearing her clients are entitled to actual damages, which she said are outlined in the notification statute as “at least equal to the amount the private entity would have received for providing such services” during the two-year period.

The county, Dueker said, must pay the revenue the haulers lost when it took an estimated 40,000 of their customers.

But County Counselor Patricia Redington argued the law doesn’t spell out any damages a political subdivision must pay for not providing two years’ notification.

“There are no damages implied for going forward with the program,” Redington said. Further, because Wallace ruled the county breached an implied contract, the haulers’ case is an unjust enrichment case, which calls for restitution and not actual damages, Redington said.

Therefore, the haulers aren’t entitled to damages because they didn’t pay the county money, she said. Also, the county is not profiting from the trash districts because it does not provide waste collection itself, she said.

O’Keefe said to Wallace,”There is not a single unjust enrichment case in Missouri where the plaintiff did not convey something of value to the defendant. There is no money involved here.”

But Dueker said, “They took our customers … It doesn’t have to be monetary.”

If the court agrees with that argument, O’Keefe replied, “This will promote litigation against governments … We are evading sovereign immunity and exposing taxpayers.”

Redington said even though the haulers did not receive “procedural” notice of the forthcoming trash districts, they were fully aware of the program before its implementation because they participated in council meetings when the matter was discussed and submitted bids for trash district contracts.

“Every single plaintiff submitted a bid,” Redington told Wallace, noting the lawsuit was filed the day after bids for the trash contracts were opened. “They aren’t here because of some moral objection to this program. It’s because they were high bidders and they lost.”

Dueker disagreed, contending the county as late as 2008 expressed in court that it could decide to abandon its trash program.

“Give me the date and the time we were supposed to know,” Dueker said. “The statute requires notice by certified mail so real people and real businesses can adjust … (The county) decided to take a gamble and ignore the statute, but that didn’t work out. Unfortunately, in taking that chance, they took away 40,000 of our customers.”

She added, “To say in 2006 we knew they were going to do this in 2008 is complete garbage.”