The Real Lesson of ‘Groundhog Day’

John W. Casella

Editor’s note: In September, Barry Shanoff, author of our Legal Lode column and general counsel of the Solid Waste Association of North America (SWANA), wrote a column entitled “Déjà Vu Ado” about a settlement reached between Casella Waste Systems and the New York State Attorney General. Here, Casella Waste Systems Chairman and CEO John W. Casella responds to some of the claims made in that column.

In a sloppily researched and written column (“Déjà Vu Ado”), Barry Shanoff, general counsel to SWANA, mistakenly negatively characterized an agreement that our company, Casella Waste Systems, reached with the New York State Attorney General regarding our service contracts, and reveals several shortcomings in his understanding of service contracts in our industry.

Worst of all, he completely missed the real story, and a wonderful opportunity to educate his industry readers. Instead, invoking the classic film “Groundhog Day,” he engaged in a lazy, too-clever-by-half assault, painting a highly inaccurate picture of our company, our values as people, and our approach to doing business.

To Shanoff’s apparent horror, we have grown our company and built strong market positions by “acquiring smaller competitors,” which he reports without apparent irony, although growth by acquisition has been a standard in our industry for over four decades, led by the firms Waste Management and Republic Services.

Shanoff refers to our service contracts in New York State and other markets as “restrictive,” and says that we “shackle” our customers to service agreements of up to five years. These are practices, he writes, that are “questionable,” although the terms of the contracts that the New York State Attorney General found objectionable are standard in our industry, used by large and small competitors in various markets, including New York State.

Despite being no different than what was—and remains—standard in the industry, we reached a settlement with the New York State Attorney General to modify the terms of existing and future contracts with commercial customers in certain rural counties in upstate New York. We had reached a similar agreement with the Vermont Attorney General in 2002.

There is nothing wrong, illegal, questionable, dubious or shackling about our contracts, but the New York State Attorney General was not comfortable with their duration or the conditions for termination. We didn’t agree, but we volunteered to change the terms of our contracts to meet their comfort level in a very limited number of rural markets. Our contracts are unchanged in other areas of New York State.

In Shanoff’s view, there is something dastardly going on, and he blithely accuses us of either willful or ignorant wrongdoing.

We are offended, and puzzled. We believe the value of our story is that everyone in our industry needs to be informed and prepared to understand how standard service contracts and contract terms could make nearly everyone a target dependent on the views of regulators.

Regardless of your market, your size or your competitive position, your industry-standard service contracts are vulnerable for reasons that may have little to do with the law. Failing to understand this is a mistake that no one in our industry should ever repeat, and it was Shanoff’s mistake not to take the opportunity to lend his expertise to that issue. After all, with a little thought and consideration, he could have discovered the real lesson in our “Groundhog Day” experiences.

Like Shanoff, we love the movie “Groundhog Day.” It’s a great film about a grumpy man who’s enamored by his own cleverness and, over time, learns from his mistakes.

John W. Casella is the chairman and chief executive officer of Casella Waste Systems Inc., a Rutland, Vt.–based solid waste, recycling and resource management services company.