March 31, 2016
The United States District Court for the Southern District of Indiana has granted the National Waste and Recycling Association’s (NWRA) motion for a preliminary injunction against the Warrick County (Ind.) Solid Waste Management District, which tried to institute an exclusive waste and recycling program in late 2015.
In an effort to increase recycling, Warrick County awarded a construction contract to Aigner Construction to build Renewable Resources LLC, a recycling processing center, with the intention of it being the county’s sole contractor for waste and recycling. This effort was made to ensure that the county had an adequate supply of waste to be recycled so that it could pay for the curbside program, Kevin Kraushaar, NWRA vice president of government affairs and chapter operations and general counsel, told Waste360 in an interview. In the process of awarding a contract to a sole contractor, the county cut out a lot of local private-sector players, many of which are NWRA members.
The county’s actions raised a red flag to the NWRA and in October 2015, NWRA’s Indiana Chapter voted on a possible lawsuit, which ended up moving forward and being filed a month later. The law suit included allegations of insider knowledge, opening the bidding process early and sharing the bids with everyone who responded, allowing residents to revise their bids based on shared information and several other irregularities that occurred during the bidding process for the exclusive contract.
“We felt that the bidding process had been arranged in such a way to unfairly exclude out-of-state bidders from that process,” says Kraushaar.
In December 2015, the NWRA and Warrick County came to a temporary agreement that allowed residents to use any hauler in the county’s curbside waste and recycling program until January 21, 2016. During this time period, Renewable attempted to take business away from NWRA member companies, states Kraushaar.
Although the district made it clear that the program with Renewable was mandatory, residents did have the option to opt out of the program and bring their own waste and recyclables to the county’s transfer facilities instead. The opt-out option made residents responsible for their own pickup, collection and transfer of waste and recyclables.
“In response to the resolution enacted by the district, some residents have switched from our member companies to Renewable so that business has been lost,” says Kraushaar. “Our members can obviously go about trying to get that business back, but the status quo has been preserved as a competitive marketplace that existed prior to the lawsuit and the district’s resolutions being enacted. That’s what we were after in the first place.”
On count three of the suit, the court found that Warrick County didn’t conform to the statutory requirements in making the award for a sole waste and recycling contractor. The requirements state that in order to award any contract the district must show that there was not a reasonable or economically feasible alternative to making the award. And in this case, there was.
“One of our member companies said that it could do what the contract would have required for $3 a month less than the county requirement,” says Kraushaar.
In granting the NWRA’s motion for a preliminary injunction, the court noted that the NWRA would have a very high probability of success on the merits of the case, states Kraushaar. The court also stated that “NWRA’s members would suffer irreparable harm absent the preliminary injunction relief.”
The court also cited in its opinion that part of NWRA’s mission is advocacy and part of that advocacy mission is to help ensure that NWRA member companies can compete fairly and openly in the marketplace, which benefits consumers and helps keep costs low.
“That fair and open competition is beneficial to consumers and that is what our members are all about.” says Kraushaar. “They are happy to compete with each other in an open and fair marketplace. It’s an exclusivity contract that was awarded by the district and the irregularities in how they got awarded that contract were the problem.”
The next step for the NWRA would be to file a motion for a permanent injunction, which would include a full trial. The NWRA does not feel it is necessary to take action at this time, but will continue to back all of its members.
“The important thing to take away from all this is that the judge recognized the NWRA as being an advocate for our companies, whether in the legislature or in the court of law,” states Kraushaar. “In this case, we prevailed and we will continue to do this on behalf of our members.”