Danis Clarkco Landfill Co. v. Clark Cty. Solid Waste Mgt. Dist.

• Decision Date: 06 September 1995
• Docket Number: No. 94-1047,94-1047
• Citation: 73 Ohio St.3d 590,653 N.E.2d 646
• Parties: DANIS CLARKCO LANDFILL COMPANY, Appellee and Cross-Appellant, v. CLARK COUNTY SOLID WASTE MANAGEMENT DISTRICT, Cross-Appellee; Ogden Martin Systems, Inc., Appellant and Cross-Appellee.
• Court: Ohio Supreme Court

Page 590

73 Ohio St.3d 590

653 N.E.2d 646

DANIS CLARKCO LANDFILL COMPANY, Appellee and Cross-Appellant, v. CLARK COUNTY SOLID WASTE MANAGEMENT DISTRICT, Cross-Appellee; Ogden Martin Systems, Inc., Appellant and Cross-Appellee.

No. 94-1047.

Supreme Court of Ohio.

Submitted May 23, 1995.

Decided Sept. 6, 1995.

SYLLABUS BY THE COURT

1. The selection of designated providers of solid waste disposal services by a county solid waste management district established pursuant to R.C. Chapters 343 and 3734 does not involve the expenditure of public funds falling within the minimum monetary limits of the county competitive bid statute R.C. 307.86, and such a selection is not subject to the competitive bid requirements of that statute.

2. In selecting designated providers of solid waste disposal services, a county solid waste management district established pursuant to R.C. Chapters 343 and 3734 may adopt a procedure by which it first issues a request for proposals to be followed by subsequent negotiation with successful respondents.

3. The issue whether to grant or deny an injunction is a matter solely within the discretion of the trial court and a reviewing court will not disturb the judgment of the trial court in the absence of a clear abuse of discretion. (Garono v. State [1988], 37 Ohio St.3d 171, 173, 524 N.E.2d 496, 498, followed.)

The Clark County Solid Waste Management District ("District") is a single county solid waste management district established pursuant to R.C. Chapters 343 and 3734, and is responsible pursuant to R.C. 3734.52 et seq., for preparing, obtaining Ohio Environmental Protection Agency approval for, and implementing a ten-year solid waste management plan ("SWM plan" or "plan") for disposal of solid wastes generated within the District's boundaries. In February 1992, the District received approval from the Director of the Ohio Environmental Protection Agency ("OEPA") for its SWM plan. The plan contemplated continued use of an existing landfill (the Tremont City Landfill) for disposal of wastes generated in Clark County until that landfill reached its capacity, expected to occur in late 1992 to early 1993. Thereafter the plan contemplated both interim and long-term disposal systems. The plan called for interim waste disposal needs to be met by transfer of solid waste to an unspecified transfer station and landfill which the District intended to identify through a request for proposals ("RFP") process. Pursuant to that process, the District intended to solicit proposals from private solid waste operators, to select the proposal it deemed most satisfactory and beneficial to the residents of the District, and to thereafter enter into negotiations with the successful operator leading to execution of a contract. In terms of long-term (fifteen-twenty years) solid waste planning, the approved plan again contemplated use of an RFP-negotiation process to obtain future disposal or landfill services for the use of both residential and industrial waste generators in the district.

The District's OEPA-approved plan defined "secondary processing facilities" as including composting systems, waste-to-energy facilities, refuse-derived fuel facilities and other secondary recycling and composting methods. Although the plan did not schedule development of a waste-to-energy incinerator or other secondary processing facility, or anticipate implementation of such a facility for eight to ten years, the plan indicated the District's intent to use the RFP process to "accept secondary processing facility alternatives to determine improved cost competitiveness due to local private sector involvement."

Accordingly, in early 1992, the District issued a formal document of over two hundred pages entitled "Request for Proposal for an Integrated Solid Waste Management System." The RFP sought "proposals from qualified bidders to design, construct and operate solid waste management facilities for the benefit of the District and its Residents," and indicated the District's willingness to accept proposals as to the following enumerated types of solid waste facilities: (1) a material processing facility to provide a drop-off station at which trash could be sorted and directed towards further disposal, (2) a yard waste composting facility, (3) a solid waste transfer station, and (4) a newly constructed landfill with minimum eleven-year disposal capacity. In addition, bidders were invited to suggest in their proposals options as to "secondary processing technologies to reduce disposal capacity requirements," and were advised that "secondary processing alternatives proposed as part of a total solid waste management solution [would] be considered." The RFP further apprised potential respondents that the District did not "currently anticipate that a secondary processing technology would be cost-effective within the District within the 11-year planning period," but that it was "possible that one of many secondary processes will be feasible during the 11-to-21-year term of the proposed contract."

The RFP indicated the basic process by which sealed bids for "Comprehensive Solid Waste Management Services" would be received and opened, and by which they could be withdrawn, and included the following statement:

"The District shall have the right to reject any or all Bids, waive any and all informalities or irregularities in any Bid or in the bidding, to accept any Bid which is deemed most favorable to the District, and to negotiate contract terms with the successful Bidder."

The RFP set forth the District's criteria to be used in evaluating bids, and reserved for the District the right to consider qualifications and experience of bidders, their key personnel and facility supervisors in managing solid waste facilities. The District informed prospective respondents that it might "schedule interviews with any or all of the Bidders," and that the results of those interviews would be "incorporated into the District's qualitative evaluation of the Bidder and its Bid." As to bids including proposals for secondary processing technologies, the District informed bidders that it reserved the right to "select any alternate Bid, or part thereof, if the District believes it is in the best interest of the District and its Residents" and advised bidders in general of its intent to reserve the right to "accept any component of any bid."

The RFP included sample contractual agreements which represented "the most likely options of the District," although potential respondents were informed that "[o]ther eventualities, unique solid waste services, and Bidder requirements may require separate negotiation between the Bidder and the District." The sample contract documents contemplated that a successful private operator would site, design, construct and operate its proposed waste disposal facilities at the operator's sole cost, all in accordance with the proposal set forth in its bid, subject to modifications resulting from negotiations due to changes in the law or regulations. Pursuant to the expected contracts, the selected private operators would accept for processing and disposal all of the solid wastes (according to enumerated types, e.g., yard waste, recyclables and mixed waste) generated by residents of the District for a specified term, and to grant the District, on behalf of its residents (including all residential households; all commercial, industrial or agricultural enterprises; and all governmental entities) an irrevocable license to use its private facility for solid waste disposal purposes. In exchange, the sample contracts called for the District to "designate the Facility as the facility where all Solid Waste and Recyclable Materials generated in the District, and over which the District has designation authority, is to be delivered and processed," and to refuse to so designate any other facility for those purposes. In further consideration of receiving such a designation, the successful bidder would contractually agree to charge depositors a pre-specified price per ton ("tip fee") set by the contract, and would pay the District a royalty fee based on the tonnage of trash received.

The District received at least ten proposals in response to the RFP, including proposals submitted by Danis Clarkco Landfill Company ("Danis") and Ogden Martin Systems, Inc. ("OM"), parties herein.

Of the bids received, only OM proposed a secondary processing technology. OM proposed a joint project with Ohio Edison in which an existing Ohio Edison facility in Clark County would be converted into a mass-burn incineration facility producing electricity from the burning of refuse. OM proposed to enter into a twenty-five-year contract by which the District would designate it to be the disposal provider of Clark County's solid waste with an expected "tip fee" of $43.60 per ton upon completion of the facility.

Danis's bid contemplated the construction of a new landfill adjacent to the existing Tremont City Landfill, which it owned and operated. Danis sought a contract by which the District would deem the new Danis facility to be the designated provider of solid waste disposal services in Clark County for a minimum of thirty years, and proposed a tip fee of $34.13 per ton for disposal into the newly constructed landfill once built.

On September 8, 1992 the District's Board of Directors adopted separate resolutions giving notice of the District's intent to award three contracts, including a contract by which OM and Ohio Edison would be designated to provide long-term solid waste disposal services by means of their proposed incineration facility. Each resolution noted that the award was subject to development and execution of a written contract within ninety days, successful completion of siting as required by the District's approved SWM plan, and issuance of all required OEPA or other governmental permits.

On October 30, 1992 Danis filed a complaint in the...