Martin Luther King, Jr., arrived in Memphis, Tenn., in March 1968, to lead a march in support of striking sanitation workers.  Speaking to a 25,000-person crowd, King hailed the value of the workers’ labor, saying, “Whenever you are engaged in work that serves humanity and is for the building of humanity, it has dignity, and it has worth.”  Less than a week later, one day after delivering his “I’ve been to the mountaintop” address at a rally, he was fatally shot.   

Fifty-five years later, the solid waste controversy there was not about fair pay or safe working conditions.  For some residents, the city had not made good on a promise.  As they saw it, poor trash collection service in their community breached a “contract” between them and the city. 

Robert Whitworth and four other Memphis residents filed a complaint in the Chancery Court for Shelby County related to residential garbage services in a section of the city known as Area E. According to the complaint, which contained class-action allegations, after the city annexed Area E, it engaged the private sector for trash pick-up there.  This approach differed from how collection is provided in other parts of the city.

Despite the fact that Area E residents were paying a monthly fee for these services mandated by city ordinance, the complaint alleged that the third-party vendors "have failed and refused to provide weekly garbage, recycling and bi-weekly bulk and yard waste pick up, leaving trash literally piling up in Area E."  As a result, Area E residents have "not receive[d] the services for which they contracted and for which they have paid."

Based on these facts, the plaintiffs asserted several claims against the city, including breach of contract, breach of implied contract, unjust enrichment and promissory estoppel. (An implied contract is a legally binding obligation not based on a written agreement but on actions, conduct or circumstances.  Unjust enrichment occurs when A provides something of value to B who accepts and benefits from it without compensating A.  Promissory estoppel is a legal doctrine that says parties may be liable for broken promises that result in financial harm.)

The city filed a motion to dismiss the complaint in its entirety, arguing that all of the claims were defective. With regard to the breach of contract claim, the city asserted that no contract existed between the city and the plaintiffs.  As for the other charges, the City contended it was exempt under state law from liability and these allegations had no legal merit regardless.

The plaintiffs opposed the city’s motion with a response that included sworn statements by three of the five named plaintiffs and another Area E property owner, detailing the manner in which fees are charged, how services were advertised and guaranteed, and what services were rendered to Area E residents.

After conducting a hearing, the trial court granted the city’s motion, finding that no contract existed between the plaintiffs and the city for trash collection services because the city was performing "an ordinary government function” and that the city was immune from suit on the other claims.  The plaintiffs appealed.   

The question before the three-judge appellate panel:  Do residents have a contractual and/or other claim against a municipality that provides trash collection services for a fee and, after receiving payment, fails to adequately provide the promised services?  The answer: No.

Under Tennessee law and in virtually all other jurisdictions, a case for breach of contract requires a plaintiff to prove (a) the existence of an enforceable contract, (b) a failure to perform by the defendant amounting to a breach of the contract, and (c) damages caused by the breach.  

The plaintiffs argued that the collection of special fees for trash services beyond simple tax collection, together with informational materials supplied by the city about trash collection dates, created a contractual relationship.  Without an actual written agreement, the plaintiffs pointed to “a series of statutes, ordinances, and public statements that combine to create what they contend is an enforceable contract for garbage collection services,” noted the appeals court.

In response, the city asserted that the trial court correctly determined that the trash services at issue stemmed from a government service, rather than a contract. For one thing, state law authorizes municipalities to impose and collect fees for trash services within their borders and the city did so. For another, solid waste collection services are widely viewed as a government function. 

“[The plaintiffs’] attempt to frame this action as a breach of contract cannot alter the fundamental truth that their claim relates the performance of a government function by the City,” the panel continued.  “Simply put, the City collected fees as authorized by statute and ordinance to perform a government function. That the City did not perform this function up to par does not transform a government function into a contractual one, nor does it rebut the presumption that the relevant statutes and ordinances do not create a contractual relationship for which a breach of contract action may lie. Thus, we conclude that [plaintiffs] can prove no set of facts demonstrating the existence of an enforceable contract between themselves and the City.”

The plaintiffs also attempted to persuade the appeals court that the trial judge was wrong in dismissing their claims for unjust enrichment, implied contract, and promissory estoppel. The city responded by saying that these claims are barred by the doctrine of sovereign immunity.

The concept of sovereign immunity is an age-old principle derived from British common law based on the concept that His (or Her) Majesty can do no wrong. In the United States, sovereign immunity typically applies to the federal government and state governments. These authorities, however, may waive their sovereign immunity.

In Tennessee, sovereign immunity is enshrined in the state’s constitution which says that lawsuits against the state are banned unless the legislature has allowed it.  The courts have defined “state” to include not only the state itself, but also “its departments, commissions, boards, institutions and municipalities.”  Suits against a municipality are permissible only if local legislation “in plain, clear, and unmistakable terms” permits such litigation. 

“[The plaintiffs] have made no effort . . . to point to a single statute or ordinance that they assert explicitly evinces the City's consent to be sued for unjust enrichment, implied contract, and/or promissory estoppel,” the appeals court said.  “The trial court therefore did not err in dismissing these claims.”

Whitworth v. City of Memphis, No. W2021-01304-COA-R3-CV, Tenn. Ct. App., Apr. 3, 2023.