Green Solutions Recycling, LLC v. Reno Disposal Co., Case No. 3:16-cv-00334-MMD-CBC
| Citation | 359 F.Supp.3d 960 |
| Decision Date | 07 January 2019 |
| Docket Number | Case No. 3:16-cv-00334-MMD-CBC |
| Parties | GREEN SOLUTIONS RECYCLING, LLC, Plaintiff, v. RENO DISPOSAL COMPANY, INC., et al., Defendants. |
| Court | U.S. District Court — District of Nevada |
Whitney D. Bocchi, Jones Vargas, Whitney Derrah, Jeffrey Chase Whittemore, Argentum Law, Reno, NV, for Plaintiff.
Mark G. Simons, Simons Law, PC, Therese Shanks, Robison Belaustegui Sharp & Low, Jonathan David Shipman, City of Reno, William J. McKean, Matthew Jensen, Reno City Attorneys Office, Reno, NV, for Defendants.
This case is about the City of Reno's authority to grant a monopoly for the collection and disposal of certain recyclable materials. Plaintiff Green Solutions Recycling, LLC ("GSR") contends that the City has no such authority and unlawfully has restrained trade in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 ("Act"). Before the Court are three motions for summary judgment: (1) Defendants Reno Disposal Company, Inc. ("Reno Disposal") and Waste Management of Nevada, Inc.'s ("WMON") motion for summary judgment regarding lack of subject matter jurisdiction/standing ("Defendants' Jurisdictional Motion") (ECF No. 105); Defendants Reno Disposal and WMON's motion for summary judgment regarding enforceability of franchise agreement ("Defendants' Merits Motion") (ECF No. 106); and Plaintiff's motion for partial summary judgment ("Plaintiff's Motion") (ECF No. 113).1 The Court has reviewed the relevant briefing (ECF Nos. 120, 121, 122, 123, 124, 126) and held a hearing on these motions on December 18, 2018 (ECF No. 134). For the following reasons, the Court denies Defendants' Jurisdictional Motion, grants Defendants' Merits Motion, and denies Plaintiff's Motion.
Nevada law allows the City to "[g]rant an exclusive franchise to any person" for the "[c]ollection and disposal of garbage and other waste." NRS §§ 268.081, 268.083. Accordingly, the City entered into an exclusive franchise agreement with Reno Disposal on November 7, 2012. (ECF No. 113 at 2; ECF No. 106 at 6.) The City entered into a second exclusive franchise agreement with another entity, but Reno Disposal eventually acquired the franchise rights under that agreement as well. (ECF No. 106 at 6.) The Court refers to both franchise agreements as the "Franchise Agreement." The Franchise Agreement basically grants Reno Disposal the exclusive right to pick up and remove solid waste and certain recyclable materials from commercial entities, although the Franchise Agreement uses a number of terms of art that are defined in the Franchise Agreement itself. (Id. at 10; see also ECF No. 113-1 at 15.)
Plaintiff contracted with various commercial entities in the City to pick up and remove certain recyclable materials from their premises. (ECF No. 113 at 4.) Plaintiff operates by providing its customers with recycling containers in exchange for payment offset by a rebate. (ECF No. 106 at 12, 17.) For example, Plaintiff charged one customer $ 440 per bin each month and provided that customer with a rebate of $ 2.52 per bin each month. (Id. at 17.)
The City eventually took the position that Plaintiff was violating the Franchise Agreement based on its view that Plaintiff's customers were essentially paying for Plaintiff to remove waste when Reno Disposal had the exclusive rights to remove waste. (See ECF No. 113 at 4.) The City informed Plaintiff's counsel that Plaintiff could pick up and remove certain recyclable materials without violating the Franchise Agreement only if Plaintiff's customers actually sold the recyclable materials instead of paying for them to be removed. (Id. ) In other words, Plaintiff's customers were essentially required to realize a net profit from the arrangement, and thus the rebate would have to exceed the container rental charges. (See id. ) The City informed some of Plaintiff's customers that the customers were violating the Franchise Agreement. (Id. at 5.) In addition, counsel for Reno Disposal and WMON sent demand letters to some of Plaintiff's customers asserting that the customers were violating the Franchise Agreement. (ECF No. 113 at 7.)
Plaintiff asserts five claims for relief in its First Amended Complaint ("FAC"): (1) violation of Section 1 of the Act; (2) violation of the Commerce Clause under 42 U.S.C. § 1983 ; (3) violation of the Nevada Unfair Trade Practices Act, NRS § 598A.060 ; (4) tortious interference with contractual relationship; and (5) trespass to chattels. (ECF No. 48 at 7-11.) The Court has already dismissed Plaintiff's second claim for relief. (ECF No. 86 at 236.)
"The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court." Nw. Motorcycle Ass'n v. U.S. Dep't of Agric. , 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings, the discovery and disclosure materials on file, and any affidavits "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."
Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). An issue is "genuine" if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is "material" if it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Where reasonable minds could differ on the material facts at issue, however, summary judgment is not appropriate. See id. at 250-51, 106 S.Ct. 2505. "The amount of evidence necessary to raise a genuine issue of material fact is enough ‘to require a jury or judge to resolve the parties' differing versions of the truth at trial.’ " Aydin Corp. v. Loral Corp. , 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat'l Bank v. Cities Serv. Co. , 391 U.S. 253, 288-89, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968) ). In evaluating a summary judgment motion, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fischbach & Moore, Inc. , 793 F.2d 1100, 1103 (9th Cir. 1986).
The moving party bears the burden of showing that there are no genuine issues of material fact. Zoslaw v. MCA Distrib. Corp. , 693 F.2d 870, 883 (9th Cir. 1982). Once the moving party satisfies Rule 56's requirements, the burden shifts to the party resisting the motion to "set forth specific facts showing that there is a genuine issue for trial." Anderson , 477 U.S. at 256, 106 S.Ct. 2505. The nonmoving party "may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists," Bhan v. NME Hosps., Inc. , 929 F.2d 1404, 1409 (9th Cir. 1991), and "must do more than simply show that there is some metaphysical doubt as to the material facts." Orr v. Bank of Am., NT & SA , 285 F.3d 764, 783 (9th Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient." Anderson , 477 U.S. at 252, 106 S.Ct. 2505.
Defendants move for summary judgment on two jurisdictional grounds: that the Court lacks subject matter jurisdiction and that Plaintiff lacks standing. The Court finds both grounds unpersuasive for the following reasons and denies Defendants' Jurisdictional Motion.
"In determining jurisdiction under the Sherman Act, the focus of the inquiry is the defendant's business activities." Musick v. Burke , 913 F.2d 1390, 1395 (9th Cir. 1990) (citing Western Waste Serv. Sys. v. Universal Waste Control , 616 F.2d 1094, 1097 n.2 (9th Cir. 1980) ). The plaintiff "must make a showing of a substantial effect on interstate commerce generated either by [the defendant's] general business activities or by the alleged antitrust violations themselves." Id. (citations omitted). "To make this showing [the plaintiff] must first identify the relevant aspect of interstate commerce; it is not sufficient to presume an interrelationship of the local activity to some unspecified aspect of interstate commerce." Id. (citing McLain v. Real Estate Bd. of New Orleans, Inc. , 444 U.S. 232, 242, 100 S.Ct. 502, 62 L.Ed.2d 441 (1980) ). Then the plaintiff must demonstrate that the defendant's local activity affects some other appreciable activity demonstrably in interstate commerce. Id. (citing McLain , 444 U.S. at 242, 100 S.Ct. 502 ). "This effect must be, ‘as a matter of practical economics ... not insubstantial.’ " Id. (alteration in original) (quoting McLain , 444 U.S. at 246, 100 S.Ct. 502 ). "Whether the defendant's ‘activities sufficiently affect interstate commerce to create Sherman Act jurisdiction is a highly fact-based question calling for common sense judgment.’ " Id. (citing Mitchell v. Frank R. Howard Mem'l Hosp. , 853 F.2d 762, 765 (9th Cir. 1988) ).
Plaintiff argues that Defendants' business substantially affects interstate commerce because Defendants ship all the recyclables they collect in Nevada to a materials recycling facility in California. (ECF No. 120 at 4-5.) As evidence, Plaintiff cites to the testimony of Greg Martinelli—Defendants' employee—at the preliminary injunction hearing. (Id. at 5 (citing ECF No. 113-18 at 184-85).) Defendants do not dispute this evidence and instead make a number of arguments that the Court finds unpersuasive for the reasons discussed below. Accordingly, the Court finds that it has subject matter jurisdiction over Plaintiff's claim under the Act.
Defendants first make several arguments that the Court lacks subject matter jurisdiction because Plaintiff is not implicated in interstate commerce. (See ECF No. 105 at 14-27...
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