It’s true that a lot has changed since Oct. 6, 1993. But one thing that hasn’t changed, according to attorney Jaime Betbeze, is the tipping fee his client, Waste Management Mobile Bay Environmental Center is allowed to charge the city of Mobile’s Solid Waste Authority at the Chastang Landfill.
While the price of Harvard tuition has nearly doubled and the price of a gallon of gas has increased significantly before falling again as of late, the $20 per ton tipping fee Waste Management is allowed to charge the city has remained stagnant, Betbeze told a jury during opening arguments of an ongoing civil case in U.S. District Court Monday.
Although Waste Management entered into a long-term agreement with the authority in 1993, Betbeze argued the contract included an escalation clause, allowing his client to increase its tipping fee at the landfill it operates to an agreed upon amount.
“It’s not unusual for contracts to be for the entire life of a landfill, which can be 70 years or more,” he told jurors. “The current contract could be in effect for 50 years or more.”
Due to the city’s refusal to raise the fee, Betbeze told jurors that Waste Management has lost about $1 million in revenue. In addition, he told jurors the authority is only paying a $9.88 per ton fee at a transfer station it uses in Theodore.
The station is managed by Waste Away, Inc., a subsidiary of Waste Management. Betbeze said a reasonable rate for the transfer station would be $12.45 per ton. He said Waste Management has lost $200,000 because of the transfer fee. Additionally, Betbeze said the authority has begun to use another landfill for some of its garbage, constituting a breach of contract. He told the court Waste Management would be asking for $8.5 million in damages.
“It’s time to bring the authority into the 21st century whether they like it or not,” Betbeze said.
Mobile Solid Waste Authority attorney Larry Wettermark opened by saying the Chastang Landfill makes the majority of its money from private sources and only about 25 percent of its business comes from city garbage. He added that the missing garbage “stream” to which Betbeze was referring is actually yard debris, which the city picks up every two weeks, and is different than household garbage.
The authority’s biggest contention is that Waste Management has asked for an increase in the fee without showing the proper documents to support the move, Wettermark said. He said the contract stipulated an increase, as part of the escalation clause, must be justified through documentation provided by the contractor. Without proper documentation, Wettermark said Waste Management asked the authority to reimburse them for unforeseen expenses to the tune of $2.9 million.
The complaint was originally filed in August 2013 and the parties were incapable of reaching a settlement agreement even through a mediation period. By the time the court broke for lunch at noon on Monday, the plaintiff’s first witness, retired Waste Management Vice President David McConnell, was still on the stand. The trial is expected to continue through the week.
The second day of the trial ended with one attorney asking U.S. District Judge Kristi DuBose to declare a mistrial.
Dubose denied the motion from Solid Waste Authority attorney Jim Rossler for a mistrial on Tuesday evening. She also denied a motion to have testimony stricken from the record, during cross examination of Michael Bass, a financial analyst for Waste Management.
Bass was called by Waste Management attorneys in order to testify about a profit and loss spreadsheet he had prepared earlier this month for court. The spreadsheet showed that Waste Management suffered about an $8.7 million loss at the Chastang Landfill, when the Solid Waste Authority entered into a contract with a landfill operated by Dirt, Inc. for disposal of the city’s yard waste. Chastang Landfill handles all of the city’s household waste.
The court had previously ruled that the authority was in breach of one provision of the contract, due to that move and Bass was called to testify to the amount of damages Waste Management could be awarded.
When he made the motions, Rossler complained that his office only got the spreadsheet in question six days before the trial, meaning the other side violated the disclosure requirement. He told DuBose that it was prejudicial because it didn’t allow him enough time to prepare for the cross examination of Bass. He told her that with time, he would’ve found an independent accountant to review the numbers in the spreadsheet.
During redirect, Bass told Waste Management attorney Trice Stabler that he calculated the amount of revenue lost with an equation that took into account the cost to Waste Management to process the extra tonnage that, by contract, Waste Management said it was owed. During cross, Bass told Rossler that the equation didn’t factor in fixed operating costs at the landfill, like fuel, equipment and labor because those costs wouldn’t have changed, due to an increased amount of waste.
Although she denied both of Rossler’s motions, DuBose did say it seemed “squirrelly” to leave out the fixed costs in the calculations. Waste Management attorney Jaime Betbeze said it wasn’t squirrelly at all and that the fixed costs wouldn’t change, despite the increased wastestream.
The trial is set to continue today and was scheduled for seven days.