The city of Mobile’s Solid Waste Authority plans to appeal Waste Management’s multimillion-dollar breach of contract judgment after a judge denied the authority’s motion for a new trial last month.
Authority chairman Pete Riehm said they plan to hire new counsel for the appeal and also brought in Charles Miller as a “day-to-day attorney,” replacing Jim Rossler.
Rossler and former city attorney Larry Wettermark handled the initial case, which concluded in February when a U.S. District Court jury awarded Waste Management Mobile Bay Environmental Center more than $8 million in damages.
“We’ll probably hire a new attorney to handle the appeal,” Riehm said. “Things didn’t go as planned so the board voted to go in a different direction.”
The judgment has been reduced numerous times, most recently in a ruling last month by Judge Kristi DuBose. It currently stands at less than $5 million, Riehm said, but regardless of the amount, if the authority loses on appeal, it only has one way to pay — through 5 percent royalties it received from Waste Management for its use of the city-owned Chastang landfill. But Riehm said those payments stopped when the jury ruled in Waste Management’s favor.
“There’s no way for them to collect,” he said. “We have no assets.”
Part of the reason for the appeal is the authority’s position on the claim of breach of contract hasn’t changed, Riehm explained. Part of the original 1993 contract allowed the authority a preferential tipping fee because only a quarter of the garbage brought into the landfill came from the city.
One of the issues raised at trial by Waste Management attorneys was that the tipping fee was never raised sufficiently to offset inflation. Riehm said since the jury also set a new tipping fee, the contractual preferential tipping fee is now gone. The new tipping fee is roughly $25 per ton, Riehm said.
The authority also argues Waste Management never had an issue with not receiving a separate yard waste contract until the breach of contract suit was filed. The 1993 contract did stipulate that both yard waste and household garbage would go to the Chastang landfill, but it was never sent and Waste Management never asked for it, Riehm said. He added that the city even bid out for the yard waste service in the late 1990s, and Waste Management was a bidder.
“In over 20 years, nobody [at Waste Management] ever asked for the [yard waste] contract,” Riehm said. “They only began asking for it when they filed the lawsuit.”
In an amended judgment filed Nov. 10, DuBose reduced the amount the authority owed by about $1 million and $1.3 million each on two of the counts in the jury’s decision. Unfortunately for the defense, DuBose denied a motion for a new trial attorneys had argued was justified due to damages-disclosure issues related to the trial testimony of a Waste Management employee.
Rossler argued in trial and through a series of motions that he was not given enough time to properly rebut the testimony of Michael Bass, which was used to show how much the plaintiff was hurt by the loss of the city’s yard waste stream. If he had known about the testimony sooner, Rossler argued, he would’ve had an expert witness to dispute the claims. Rossler argued he was given an amended damages disclosure from the plaintiff only a week before the January trial.
“Defendant argues that it was precluded from adequate trial preparation and that cross-examination did not cure the harm and prejudice caused by plaintiff’s late supplemental disclosures,” the ruling reads. “Plaintiff responds that defendant was not unfairly surprised or prejudiced by the late disclosure. Plaintiff argues that defendant was aware from the early stages that plaintiff was seeking damages for breach of contract and that during discovery plaintiff was able to quantify those damages by determining the tonnage diverted, applying the applicable rate, and calculating the gross revenue.”
DuBose had initially called for the claims to be remedied in mediation, but denied the motions after those efforts failed. DuBose ruled the jury in the case “substantially rejected Bass’ testimony regarding costs” so the testimony did not “result in substantial injustice” for the defendant.