American Eagle Waste Industries, LLC, vs St. Louis County: Challenge to County Ordinance

St. Louis County enacted an ordinance on December 12, 2006, to implement a waste collection program effective October 1, 2008. American Eagle Waste Industries and the other respondents each submitted bids to participate in the program, but none was the lowest bid.

The companies were aware of the program the day it was enacted and received letters regarding the program 25 days after the ordinance was enacted. A new law effective January 1, 2008, was passed repealing several statutes along with section 260.247, RSMo. Section 260.247 was amended to require private waste collection entities to be notified by certified mail when a municipality extended its services into an area the private entity currently serviced. Notice was directed to be sent at least two years before the new services commenced.

American Eagle brought an action to have the court determine the rights of the parties. The county’s motion to dismiss for failure to state a claim was granted, and judgment was entered for the county. American Eagle filed this action claiming breach of implied contract, antitrust violation, taking of private property and violation of due process. The county moved to dismiss for mootness (no longer an issue) and failure to state a claim. The trial court agreed the determination of rights was no longer an issue but did not dismiss it, dismissed the antitrust claim and refused to dismiss the breach of implied contract claim.

The trial court granted American Eagle’s motion for partial summary judgment on the breach of implied contract. Damages were determined to be the amount American Eagle and the other companies would have received for the two years prior to commencement of the program. At trial for determination of damages, a certified public accountant testified for American Eagle that damages should be $23 million for the companies including loss of revenue in the redistricting.

The court reduced the proposed amount to 5% and entered judgment for $1,159,903.90. St. Louis County appeals and American Eagle cross-appeals.

St. Louis County’s appeal

St. Louis County argues the trial court erred in finding for American Eagle. It contends American Eagle failed to state a claim because section 260.247 does not apply to the county and its power over municipal waste collection. The county asserts section 260.247 violates the Missouri Constitution when applied to business protection instead of environmental regulation because the title to the bill contains the amendment.

It argues section 260.247 became effective on January 1, 2008, the county waste program was adopted in 2006 and the statute was not designed to apply to matters prior to its effective date. The county contends American Eagle failed to provide sufficient evidence that the county received a benefit from them that the county accepted and retained. It asserts American Eagle’s evidence should have been excluded under section 490.065, RSMo, because it was based on inadmissible out of court statements and was unreliable.

The county argues that American Eagle voluntarily participated in the waste program and benefited from it, thereby waiving its right to challenge the validity of the program. It contends the trial court awarded incorrect damages because the two-year period for damages under section 260.247 ran from December 12, 2006, to December 12, 2008.

American Eagle argues the trial court correctly found for them. It contends section 260.247 applies to the waste program and the county’s first three points regarding the statute should not be reviewed by this Court. American Eagle asserts that section 260.247 is a statewide market regulation, not an infringement on the county’s power over municipal waste collection. It argues the county failed to challenge the constitutionality of section 260.247 before its enactment and any complaints now are barred by time limits.

American Eagle contends section 260.247 is not being improperly applied to a prior matter. It asserts that the claim for payment under section 260.247 is proper and its qualified expert provided sufficient evidence of damages. American Eagle argues it did not waive its right to challenge the program because it is challenging its implementation, not the validity of the actual program. Finally, American Eagle contends the county failed to send certified notice to them required by section 260.247 before beginning waste collection.

American Eagle’s cross-appeal

American Eagle argues the trial court erred limiting its award to five percent because it was not permitted to submit evidence of its profit margin. It contends the trial court should not have determined damages based on profits because section 260.247 entitles it to two years worth of anticipated payment. American Eagle asserts damages should have been for $23,198,078.00 and not $1,159,903.90 because the evidence supports the larger amount.

It argues the trial court should not have dismissed the antitrust claim because it was a valid claim that the county created a monopoly of trash districts in unincorporated St. Louis County. Finally, American Eagle contends it was entitled to interest on its damages under section 408.020, RSMo.

St. Louis County argues the trial court correctly limited the damages. It contends the amount American Eagle sought in damages would have meant a windfall judgment unrelated to the alleged damages. The county asserts the trial court correctly dismissed the antitrust claim because American Eagle failed to state a claim. It argues the trial court was correct in not adding prejudgment interest onto the amount of damages.

The Missouri Municipal League, Missouri Municipal Attorneys Association and St. Louis County Municipal League argue as friends of the court that the implied in law contract was not the proper action for American Eagle to pursue. They contend the county did not receive and retain a benefit from American Eagle or the other companies to satisfy an implied in law contract claim.

The organizations assert the trial court incorrectly ruled there was a breach of an implied in law contract. They argue the trial court’s ruling is contrary to the public policy of Missouri and interferes with principles set down to protect the public interest.