Mobile’s SWDA looks to higher court again as rulings mount against it

After racking up about $200,000 in legal fees related to a state court battle over landfill property, the Mobile Solid Waste Disposal Authority (SWDA) will appeal a second federal court ruling awarding Waste Management millions of dollars in damages related to a breach of contract. 

A three-judge panel for the 11th Circuit Court of Appeals has already ruled against SWDA in a very similar breach of contract lawsuit in which a jury awarded Waste Management (WM) Mobile Bay Environmental Center more than $6 million. 

The claims of breach of contract were based on a number of issues unpacked at a 2015 trial. One issue that remains as a sticking point in the current suit is the city’s use of a third-party contractor, Gulf Hauling, for the disposal of its yard trash and construction debris. WM has successfully argued twice in federal district court it is owed lost profits from SWDA because a 1993 contract states WM is entitled to the city’s entire waste stream, including the construction debris and yard waste. 

SWDA has previously argued it is unnecessary and too costly to send the yard waste to a lined landfill and has instead been sending it to a Dirt Inc. landfill. 

Despite the judgment and the city’s attempts to reach an agreement with WM, the garbage contractor sued again and was awarded more than $2 million for lost profits related to the city’s contract with Gulf Hauling to handle residential yard waste and construction debris. 

It is this latest judgment that has SWDA willing to continue the fight. In the most recent action on Nov. 20, U.S. District Judge Kristi DuBose ruled against SWDA in a series of post-trial motions and has ruled in favor of WM in its attempt to have the award amended. 

Court records confirm attorneys for SWDA tried but ultimately failed in asking DuBose to set aside the verdict and possibly call for a new trial, claiming the calculations WM made to come up with its lost profit numbers didn’t reach the evidence burden needed for the jury to make an award. 

“Specifically, [SWDA] argues that WM Mobile presented no witness testimony as to the amount of lost profits, instead leaving this determination to the jury’s speculation,” the order reads. “[SWDA] argues that WM Mobile’s lost profits calculation required multiplying the ‘exact volumes’ of cubic yards of diverted wastes by ‘conversion factors’ tied to different types of waste streams comprising the diverted waste and then the ‘exact volume’ in tons would be multiplied by plaintiff’s supposed ‘lost profit per ton.’”

SWDA argues WM relied on “unreliable” Gulf Hauling invoices to calculate the lost profits. SWDA also argues the jury was left to convert cubic yards to pounds to come up with the award amount, the order states. 

In court records, WM argues it only needed to provide the “best evidence available,” which included the invoices and testimony from a Gulf Hauling employee. 

“WM Mobile argues that the Gulf Hauling invoices were the best evidence in that they documented each load of waste diverted and the capacity of each truck,” the order states. “Moreover, the invoices were the only records available to document or quantify the volume of waste actually diverted during the years from 2015 to 2019. WM Mobile points out that the testimony also established the type of waste diverted.” 

WM also argued converting cubic yards to pounds “commonly occurs in the waste industry.” 

In the order, DuBose sides with Waste Management. 

“The evidence as recounted in WM Mobile’s response shows a legally sufficient evidentiary basis for the jury to find for WM Mobile on the claim for lost profits,” the order states. “Accordingly, [SWDA’s] renewed motion for judgment as a matter of law is denied.” 

In the same order, SWDA claimed the 1993 contract it entered into with a WM predecessor is illegal and therefore cannot be enforced. Specifically, SWDA argues a 1992 solid waste management plan approved by the Alabama Department of Environmental Management (ADEM) contradicts the 1993 operating agreement between SWDA and what is now WM.

“[SWDA] points out that the 1992 plan stated that yard wastes were currently disposed of at the Bates Field Landfill and would be disposed of at a relocated Bates Field Landfill in the future,” the order states. “Thus, [SWDA] argues that the paragraphs of the 1993 operating agreement, which indicate this waste should be disposed of at the Chastang Landfill, are inconsistent with the plan and thus inconsistent with state law.” 

Attorneys for WM called these arguments improper because they were not raised at trial for the jury. But they also argue the 1993 contract and the 1992 plan are consistent. 

“WM Mobile points out that the 1992 plan provides for contracts with private contractors such as WM Mobile [and] that the Alabama Legislature did not deem the entire contents of local waste management plans as binding,” the order states. “WM Mobile also points to two circumstances that require amendment of the 1992 plan and changing the disposal location between existing facilities is not among the specified circumstances.” 

Attorneys for WM also point to instances where the city did not previously amend the 1992 plan. One was when it entered into the contract with Gulf Hauling for the use of the Dirt Inc. landfill instead of the Bates Field Landfill in 1997, and the closing of a transfer station, according to the order. 

DuBose denied SWDA’s motion, writing that the 1993 contract is not inconsistent with the 1992 ADEM plan.