Cedar Greene, LLC v. City of Charlotte

• Decision Date: 07 August 2012
• Docket Number: No. COA12–212.,COA12–212.
• Citation: 731 S.E.2d 193
• Court: North Carolina Court of Appeals
• Parties: CEDAR GREENE, LLC and O'Leary Group Waste Systems, LLC, Plaintiffs, v. CITY OF CHARLOTTE, Defendant.

731 S.E.2d 193

CEDAR GREENE, LLC and O'Leary Group Waste Systems, LLC, Plaintiffs,

v.CITY OF CHARLOTTE, Defendant.

No. COA12–212.

Court of Appeals of North Carolina.

Aug. 7, 2012.

Appeal by defendant from judgment entered 14 December 2011 by Judge H. William Constangy in Mecklenburg County Superior Court. Heard in the Court of Appeals 7 June 2012.

Robinson, Bradshaw & Hinson, P.A., Charlotte, by Richard A. Vinroot, A. Ward McKeithen, and Matthew F. Tilley, for plaintiff appellees.

Office of the City Attorney, by Senior Assistant City Attorney S. Mujeeb Shah–Khan and Assistant City Attorney Thomas E. Powers, III, for defendant appellant.

K & L Gates LLP, Charlotte, by Roy H. Michaux, Jr., for Greater Charlotte Apartment Association amicus curiae.

McCULLOUGH, Judge.

Defendant City of Charlotte (“the City”) appeals from the trial court's summary and declaratory judgment finding and concluding that the City's reimbursement policy for the disposal of supplemental solid waste collected from multi-family complexes constitutes unlawful, unreasonable, and arbitrary discrimination in the provision of a public enterprise service in violation of N.C. Gen.Stat. § 160A–314 (2011). On appeal, the City argues the trial court erred in (1) denying its motion to dismiss with respect to both plaintiffs under Rule 12(b)(1) of our Rules of Civil Procedure; (2) granting plaintiffs' motion for summary judgment and denying its motion for summary judgment after finding the City's reimbursement policy is discriminatory in violation of N.C. Gen.Stat. § 160A–314; and (3) imposing a specific injunctive remedy against the City to correct the discriminatory practice. After careful review, we reverse and remand for further proceedings.

I. Background

By local ordinance, and pursuant to statutory authority to engage in “public enterprises”under Chapter 160A of our General Statutes, the City furnishes solid waste services to multi-family complexes, including apartment complexes, condominiums, and trailer parks, that maintain dumpsters or compactors for the storage and collection of solid waste within its corporate limits. The City provides to each multi-family complex a fixed number of solid waste collections per week in accordance with a formula based on the ratio of residential units to dumpsters at the complex. This primary collection is provided by the City through a private contractor, Republic Services, Inc. (“Republic”). If a multi-family complex desires to receive any additional weekday collections, the complex must privately contract for such supplemental collection service.

In addition to its primary collection service, the City provides for the disposal of solid waste collected from multi-family complexes through the reimbursement of disposal fees charged by the City's designated landfill for the disposal of residential solid waste. Pursuant to the City's ordinances, the City levies on each separate multi-family complex an annual disposal fee for the disposal of all solid waste collected from the complex. This annual disposal fee, in the amount of $27 per residential unit, corresponds to the fees charged by the City's designated landfill to dispose of the total amount of solid waste that a unit within a multi-family complex produces during one year. Accordingly, the annual disposal fee is calculated to account for the cost of the disposal of all solid waste collected from each multi-family complex through both the primary collection and any supplemental collections.

Pursuant to its contractual agreement with Republic, the City provides reimbursement to Republic for all disposal fees paid on account of both the primary collection and any supplemental collections for which Republic is hired. However, the City does not provide any reimbursement of disposal fees to supplemental collection service providers other than Republic. Republic was awarded the contract with the City after submitting a bid for the services, as did five other companies. In order to obtain the lowest possible rate for its primary collection service, the City included its reimbursement policy for disposal fees as a provision in the guidelines for consideration by the companies choosing to submit a bid for the services.

Plaintiff Cedar Greene, LLC (“Cedar Greene”) owns and operates a residential apartment complex comprised of 224 units, known as Cedar Greene Apartments, within the corporate limits of the City. Accordingly, Cedar Greene Apartments is entitled to receive such solid waste services from the City. Based on the City's formula, Cedar Greene Apartments receives primary collection once per week by the City through Republic.

Cedar Greene sought to engage plaintiff O'Leary Group Waste Systems, LLC (“O'Leary,” collectively with Cedar Greene, “plaintiffs”) to provide supplemental collection services at a rate lower than that charged by Republic, on condition that the City provide reimbursement of the supplemental collection disposal fees. Specifically, O'Leary offered to provide supplemental collection service at a rate of $12.50 per pickup from dumpsters and $125.00 for pickup from compactors, versus Republic's rates of $16.95 per pickup from dumpsters and $168.98 per pickup from compactors.

O'Leary represented to the City that it was prepared and willing to meet all uniformly applicable requirements the City may impose on providers of supplemental collection, including those requirements imposed on Republic under the City's contractual agreement, in order to receive reimbursement from the City of the supplemental collection disposal fees. Such requirements include (1) using designated vehicles for supplemental collection of solid waste from multi-family complexes, (2) not commingling solid waste from multi-family complexes with waste from other sources, (3) disposal of such solid waste at the designated landfill, (4) submitting to monetary penalties if it disposes of waste not from multi-family complexes, and (5) allowing the City to monitor collection to ensure compliance with these requirements. Nonetheless, the City informed O'Leary that it would continue to reimburse disposal fees for supplemental waste collected from multi-family complexes only to Republic and that it would not reimburse such disposal fees to O'Leary or any other supplemental collection provider. O'Leary did not previously submit a bid for the City's waste disposal business.

On 23 May 2011, plaintiffs commenced the present action by filing a verified complaint for declaratory judgment in Mecklenburg County Superior Court, alleging that the City's program of reimbursing supplemental collection disposal fees, for which Cedar Greene had already paid the City by way of the annual disposal fee levied on all multi-family complexes, to only those multi-family complexes who hire Republic for supplemental collection services, violated N.C. Gen.Stat. § 160A–314 and the equal protection clauses of the North Carolina and United States Constitutions. After the City removed the case to federal court based on the federal constitutional claim, plaintiffs filed an amended complaint on 27 June 2011 removing the federal claim, and the case was then remanded pursuant to the parties' joint motion to remand. On 26 July 2011, the City filed its answer to plaintiffs' amended complaint and a motion to dismiss plaintiffs' action pursuant to Rules 12(b)(1) and 12(b)(6) of North Carolina's Rules of Civil Procedure, alleging that neither plaintiff had standing to bring the claims set forth in their amended complaint.

On 22 September 2011, plaintiffs filed a motion for summary judgment, and on 4 November 2011, the City also filed a motion for summary judgment. The trial court conducted a hearing on the parties' respective motions on 15 November 2011, and on 14 December 2011, the trial court entered a summary and declaratory judgment denying the City's motion to dismiss and motion for summary judgment and granting plaintiffs' motion for summary judgment. The trial court's order concluded the City's policy of supplemental collection disposal fee reimbursement was in violation of N.C. Gen.Stat. § 160A–314. In light of that conclusion, the trial court made no ruling on plaintiffs' constitutional equal protection argument. The trial court ordered the City to

commence within 30 days of entry of this judgment the provision of disposal services for supplemental waste through the reimbursement of Disposal Fees for the benefit of all Multi–Family Complexes equally, without regard to the provider the Multi–Family Complex may choose to hire to provide Supplemental Collection, so long as that collection provider agrees to and complies with those uniformly-applicable requirements the City may prescribe for such service.

On 22 December 2011, the City filed a motion for reconsideration, or in the alternative, to amend or alter the judgment, or in the alternative, for relief from the judgment, pursuant to Rules 59(e), 60(b), and 62(b) of our Rules of Civil Procedure. The City also filed a contemporaneous motion for stay of execution of the judgment. By order dated 3 January 2012, the trial court modified the judgment only to extend the time within which the City must comply with the judgment, giving the City a new compliance deadline of 2 February 2012. On 5 January 2012, the City entered timely written notice of appeal to this Court from the trial court's 14 December 2011 judgment. The City also filed a contemporaneous motion for stay with the trial court, seeking a stay of the 14 December 2011 judgment pending appeal. On 18 January 2012, the trial court denied the City's motion for stay.

On 25 January 2012, the City filed a petition for writ of supersedeas and motion for temporary stay with this Court. On 26 January 2012, this Court granted the City's motion for temporary stay, and on 9 February 2012, this Court allowed the City's petition for writ of supersedeas. We now reach the merits of the City's appeal from ...