Legal Lode: Closed Space, Case Closed

During the 1860 presidential campaign, Abraham Lincoln delivered many stump speeches. Reportedly, his favorite was delivered in Macon County, Ill., where his family first settled after leaving Indiana. As a lawyer, Lincoln had argued several David-vs.-Goliath cases in the county’s courthouse, which, some 150 years later, was the scene of a clash between a small hauler and the world’s largest waste services company.

Decades ago, CC Disposal Inc. (CCD) and several other waste collection companies formed a corporation to operate a landfill where the hauler-shareholders could deposit the waste they collected. In 1998, they sold the landfill to Superior Waste. Under the terms of the buy-out, the haulers signed identical contracts requiring Superior Waste and its successors to accept all waste from the haulers at a specified tipping fee. In turn, each hauler agreed to bring all the waste it collected to the landfill. The main body of the contract did not mention the hours and days of operation, but an attachment labeled “Exhibit B” contained, among other information, the hours and days of operation, which included Saturday from “7:00 to 1:30.”

Some time later, a unit of Veolia Environmental Services (VES) became the owner of the site, which it re-named Valley View Landfill. In January 2008, the landfill ended Saturday operations. When VES ignored complaints from CCD, the hauler filed suit in the county circuit court alleging that the company had breached the agreement by failing to maintain Saturday hours and asking the court to rescind the contract.

In November 2008, a few weeks after the suit was filed, VES re-opened the landfill on Saturdays, but, even then, the trial judge refused to dismiss the case. As he saw it, a fairly debatable issue existed: whether Saturday closure was a “material breach” of the contract. The trial began in January 2010.

According to the testimony, CCD did not want its trucks to remain full until Monday morning, when the day would begin with detours to the landfill to dump the accumulated waste. This would put them behind schedule for Monday pick-ups and disposal, and perhaps for the rest of the week.

Witnesses also told about other developments. During the months when the landfill was closed on Saturday, CCD hauled its waste to Clinton Landfill, located 20 minutes farther away than Valley View, where CCD paid less than the disposal rate at Valley View. In fact, CCD discovered that Clinton would take all of CCD’s waste for $10 per ton less than the Valley View tipping fee.

In its closing argument, CCD stated that it would not have signed the disposal contract without guaranteed access to the landfill on Saturdays, thus justifying rescission based on a material breach. Veolia argued that CCD didn’t need the extreme remedy it sought and could be fairly compensated for its financial loss. Besides, wasn’t CCD motivated to circumvent the contract by a lower tipping fee elsewhere?

The trial judge ordered the contract rescinded after concluding that Veolia had materially breached the agreement by keeping the landfill closed on Saturdays for 11 months.
On appeal, the ruling was upheld.

“[N]ot being able to dump on Saturdays would disrupt and threaten [CCD’s] business,” depriving it of “a benefit it reasonably expected … ,” said the appellate court. “Although defendant did cure its failure by opening the landfill, it did not do so until after plaintiff filed this lawsuit, thus raising the question of whether its actions comported with standards of good faith and fair dealing.”

[CC Disposal, Inc. v. Veolia ES Valley View Landfill, Inc., No. 4-10-0230, Ill.App.Dist.4, Dec. 22, 2010]

Barry Shanoff is a Rockville, Md., attorney and general counsel of the Solid Waste Association of North America.

The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: [email protected].