Vista disposal detroit

It is hard to imagine how improper motives could be alleged any more clearly than they have been in this case. The next factor on which Justice Stevens found it appropriate to focus in Contractors is "the nature of the plaintiff's alleged injury. The injury claimed by the plaintiff counties in the instant case is a classic example of precisely the sort of injury with which the antitrust laws were intended to deal; the prices the counties had to pay, according to the complaints, were higher than they would have been had the defendants not broken the law.

The fact that the counties' injury, like the injury alleged by the plaintiff in Blue Shield v. Brunswick Corp. Pueblo Bowl-O-Mat, Inc. As direct purchasers, the counties obviously assert a direct injury.

The state of the law at the time the antitrust statutes were initially adopted makes the direct injury a particularly significant factor.

The substance of Sec. The doctrine of privity of contract--specifically mentioned in Contractors at U. Justice Holmes were both members would have been unsympathetic to the view that the City of Detroit could be sued for damages, in a situation such as that presented here, by any entity with which the city did not have a direct contractual relationship. The damages claim of the plaintiff in Contractors was found to be "highly speculative," a factor that cut against recognition of the plaintiff's action.

The claims of the counties in the case at bar, on the other hand, are obviously less speculative than the claims of remote consumers who, unlike the counties, may have had their individual charges computed on the basis of estimates and arbitrary formulae. The next factor identified in Contrators--"the strong interest A straightforward action by Oakland and Macomb counties alone would obviously be more manageable than a class action brought on behalf of thousands of remote consumers whose individual claims would present extraordinary complexities.

If "the risk of duplicate recoveries" is minimal in this case, "the danger of complex apportionment of damages" U. The task of making a proper allocation and distribution of any recovery to thousands of end users would be a formidable one, particularly in view of the frequency with which modern Americans change their places of residence. Although we have focused primarily on the antitrust laws in the foregoing discussion, most of what we have said is applicable also to the treble damage provision of RICO, 18 U.

If the counties are the proper parties to sue for damages allegedly arising out of violations of the antitrust laws, it seems clear that the counties are also the proper parties to sue for damages allegedly arising out of RICO violations. Terre Du Lac, Inc. Under both statutes, on the facts that we are required to assume here, the counties are indeed the proper parties to bring suit.

The complaints should not have been dismissed. The various discovery issues raised by the parties are entirely unrelated to the standing issue, and both the protective order from which Oakland County appeals and the order denying in part a motion to quash various subpoenas, from which certain defendants cross-appeal, are interlocutory orders that would not ordinarily be immediately appealable. Indeed, we have previously dismissed attempts to take immediate appeals from these very orders.

We think it would be premature to undertake appellate review of the discovery orders before the case is even at issue.

The court having received the defendants' various petitions for rehearing en banc, and the petitions having been circulated not only to the original panel members but also to all other active judges of this court, and no judge of this court having requested a vote on any of the three suggestions for rehearing en banc, the petitions for rehearing have been referred to the original hearing panel. After receipt of the petitions for rehearing, we requested that petitioner City of Detroit furnish a record citation for a purported contract that was quoted and relied on heavily in the city's petition for rehearing.

The city conceded that the contract was not part of the record, but the city moved to enlarge the record by adding both the contract quoted in the petition for rehearing and a later contract. The plaintiffs have responded in opposition to the motion. The city had ample opportunity to present this evidence in a timely manner in the district court.

It did not do so. Neither did the city move to correct or modify the record pursuant to Fed. The attempt to change the record after an adverse decision had been rendered by the court of appeals simply came too late. See generally 16 C. Wright, A. Miller, E. Gressman, Federal Practice and Procedure Sec. If we had been prepared to accept the tendered contracts, it would not have led us to grant rehearing in this case.

In our original opinion we assumed, for purposes of the opinion, "that any and all overcharges were passed on to the counties' own customers, the municipalities. The contracts simply confirm what we had already assumed.

The contracts in question do not affect the constitutional standing issue. The initial purchaser in a chain of distribution does not lack standing in a constitutional sense if charges are passed down the line.

As we noted in our original opinion,. The question of whether a plaintiff has standing to sue under the antitrust laws depends largely on prudential considerations, including the importance of construing the antitrust laws in a way that preserves the effectiveness of the private antitrust action and furthers the orderly administration of justice. If the counties are not appropriate plaintiffs because they passed their costs on to municipalities, surely the municipalities, which in turn passed their costs on to individual residential and commercial customers, are not appropriate plaintiffs either.

We continue to believe that " [e]fforts to apportion the recovery among everyone who could have absorbed part of the overcharge' would add whole new dimensions of complexity to treble-damages suits and seriously undermine their effectiveness. Furthermore, the Illinois Brick Court's observation that a cost-plus contract exception "might be permitted" was limited to contracts for a fixed quantity.

Although at least one court has been prepared to read the cost-plus exception more broadly in cases involving offensive use of a pass-on theory, see State of Illinois ex rel.

Hartigan v. Panhandle Eastern Pipe Line Co. We have also reviewed the petitions for rehearing filed by the other defendants, and we conclude that all of the questions addressed in those petitions were fully considered upon the original submission and decision of this case.

In the last nine years there have been no fewer than 14 published federal court opinions on matters arising out of the operation of Detroit's sewer system. The reader interested in the background is referred toUnited States v. Bowers, F. State of Michigan, F. Macomb County has not provided details similar to those furnished by Oakland County. We are told only that Macomb allocates Detroit's charges proportionately, based on meter readings, and adds a fixed markup. Macomb operates no facilities of its own.

To the extent necessary we shall assume, as did the district court, that Macomb County's operations are otherwise similar to those of Oakland County. This does not foreclose the district court from treating the claims of the two counties differently should the facts adduced hereafter warrant it. Given the nature of their crimes and the element in which these dabblers in sludge and scum worked, Shakespeare could almost have been speaking for the convicted defendants when he wrote, in Sonnet CXI,.

The counties seem to argue here, as they did in the district court, that "the Counties, the municipalities, and the end users are really one party contracting with the City of Detroit. The district court dismissed this argument as an "absurdity," and we agree.

It is somewhat reminiscent of the old common law proposition that a man and his wife are one person, the husband being that person. The district court recognized in this case that a failure of the municipalities to pay "their contractual obligations to the Counties" would injure the enterprise funds maintained by the counties.

The district court saw no reason why the end users would benefit if the counties' enterprise funds were replenished through a recovery in this litigation.

As we understand it, however, the funds are strictly non-profit, so any recovery would ultimately have to be passed through to the end users via charges lower than those that would otherwise be imposed. Receive free daily summaries of new opinions from the U. Court of Appeals for the Sixth Circuit. Ferrantino, Sr. Court of Appeals for the Sixth Circuit - F.

Message sent. Hazardous Waste Disposal in Detroit, Michigan. On the basis of the criminal convictions, the United States was granted a Forfeiture Order against Vista. These funds were deposited into the United States' treasury general fund. The United States argues that Oakland failed to present any evidence that it was damaged by the Vista conspiracy because the acts of bribery in the RICO prosecution occurred after the Vista contract was awarded. The United States was unable to provide an answer.

The indictment and the subsequent convictions clearly show that one important consequence of the RICO conspiracy was the award of contract PC to Vista. In Count II of the indictment, Darralyn Bowers, Michael Ferrantino, Joseph Valentini and Sam Cusenza were charged, inter alia, with conspiring to conduct Vista's affairs through a pattern of racketeering activity comprised of multiple acts of bribery.

It was part of the conspiracy that Bowers, Ferrantino, Cusenza and Valentini would give Beckham, a public officer, and then Director of the DWSD, gifts and money "with corrupt intent and purpose to influence the During closing argument in the criminal prosecution, the United States argued that the Vista racketeering conspiracy was inconsistent with the interests of the City, which would have been furthered by competitive bidding.

Closing Arguments of Assistant U. Attorney Christopher Andreoff, transcript of court proceedings in United States v. Beckham, et al. The court finds that to the extent that Oakland suffered an injury, that injury was caused by the RICO conspiracy. The indictment and subsequent convictions provide clear and convincing evidence that any injury suffered by Oakland was the result of the RICO conspiracy.

The measure of Oakland's injury is equal to the difference between the price Oakland paid for the Vista services and what the market price for those services would have been in the absence of the racketeering conspiracy. The difference is the overcharge per ton.

The overcharge per ton is then multiplied by the number of tons of sludge handled by Vista during PC , i. Oakland's share of that overcharge is then calculated by applying Oakland's percentage of the total flow of waste water processed by the DWWTP during each year at issue.

Oakland offers several comparisons which it argues are more indicative of the competitive price for sludge hauling services and which prove that Vista did indeed collect excess profits as a result of the conspiracy.

The court's decision is difficult in this case because the court is asked to predict what the competitive price would have been had there not been a conspiracy.

Certainly, this calculation is difficult to make with a substantial degree of accuracy. The court will address the suggested approximations of the fair market price and explain which price is the most applicable to this action. Oakland argues that the fairest calculation of Oakland's losses would be to use the results of the sludge hauling contracts signed after Vista's PC expired. In , the DWSD decided to "unbundle" the Vista contract, separating the services of providing lime for sludge stabilization, sludge hauling and land filling.

The DWSD awarded the "unbundled" contracts through competitive bids. The City of Detroit also built a larger facility to replace the Vista mixing facility. Oakland's expert analyzed the data available from DWSD and made many adjustments in order to achieve what he deemed a fair comparison to the Vista contract. He scaled down DWSD labor costs for its new and much larger facility to labor costs equivalent to the three on-site workers Vista provided under PC He scaled down DWSD maintenance expenses for its much larger facility to maintenance expenses proportionate to the much smaller facility Vista utilized.

He factored out capital costs for each facility because the DWSD paid for both. He accounted for profit, management and overhead expense by referencing each of the "unbundled" contracts which included these items. The United States has attempted to discredit Oakland's expert by indicating many reasons why Oakland County's comparison is inaccurate. The United States argues that the price the DWSD paid after the Vista contract expired was not available during the Vista conspiracy and, even if it were available, it would not have been sustainable for the three year period of the Vista contract.

For example, a year after the DWSD unbundled their service contracts, the prices for the trucking contractor increased by one hundred percent. Within three years after the Vista contract expired, the landfilling costs and the trucking charges had each increased by three times.

Furthermore, the DWSD did not include some costs in their calculation of prices for the unbundled contracts because the DWSD provided the services itself. The court concludes that the costs to the DWSD after the Vista contract expired are not comparable to the costs that would have been achieved if the Vista contract had been awarded without a RICO conspiracy.

The two contracts are themselves completely different, providing different services for the DWSD during different years. The court finds that the closest approximation of a fair market price in this action is the sum of the receiver's costs in operating Vista plus a reasonable measure of profit on these costs based upon industry averages.

Oakland proposed adding all the receiver's costs, as summarized by the United States' expert, [3] and dividing these costs by the tons of sludge Vista handled during the receivership.

This number must then be adjusted back to and dollars in order to develop a weighted average difference between the actual price per ton that Vista earned and what their costs and normal profits would have been without the conspiracy.

Oakland also argues that this figure necessarily includes inefficiencies built into Vista and the conspirators' operations which the receiver did not eliminate. The court finds that Oakland has offered no evidence to indicate any specific inefficiencies which the court could include in these calculations. The United States argues that the Michigan Disposal contract obtained by Ferrantino is the most appropriate comparison for the free market price.

There is no dispute that the Michigan Disposal contract was acquired without any illegal behavior. Vista's contract price is only slightly more than the Michigan Disposal price. Therefore, the United States argues that Oakland did not suffer any injury. Oakland argues that the fact that the two prices are so closely linked illustrates that Ferrantino was in fact maintaining his monopoly at his monopoly prices.

The court is not convinced by the United States' argument. While the Michigan Disposal contract was acquired legitimately, clearly there was indication that over the year after Ferrantino acquired the contract other competitors were ready to compete for the second sludge hauling contract. The Michigan Disposal contract only guaranteed tons per day to Michigan Disposal and therefore Michigan Disposal could have lost significant business and profits.

The reason that Ferrantino became involved in the conspiracy was to prevent a competitor from taking away Ferrantino's business by charging a lower price.

Therefore, the court finds a comparison with the Michigan Disposal price inappropriate. Oakland paid DWSD for treatment of its waste from to The losses caused to Oakland by excess charges were included in those payments.

DWSD then paid Vista and the receiver for its services. The entire sum of excess charges was included in the payments made by DWSD to Vista and the receiver between and , commingled with the other ratepayers' money. Therefore, all excess charges were clearly in the hands of Vista and the receiver. If money is redeposited into a fund with the intent to restore trust funds, the redeposited funds are subject to the constructive trust. Alioto v.

United States, F. At the time these orders were entered, Vista was in the hands of a receiver. No exhibit B to the Agreement was ever agreed upon by the parties. The United States addressed this argument in its motion for summary judgment.

The court will consider this argument as part of the analysis for the motion to reopen proofs. The United States also cites two cases from other states in which a release was held to discharge a guarantor and a surety. Knight v Cheek, A. Joseph S.

Smith Roofing, Inc. Second, the United States is neither a guarantor nor a surety in the instant action. Search Cases. Search by Topics and Jurisdiction. Search by Topic Only. My Stuff. Legal Insights. Search History.

Starred Cases. Accounts Settings. Search All Courts. This Document Cites the Following Cases:. United Mine Workers of America. Calage v. University of Tennessee. GROSS v.

This case is cited by:. Citation is not available at this time. Please check back later. This case cites:. Michigan February 3, Case No. Legal Standard A motion to reopen evidence is within the discretion of the trial judge. Motion to Reopen Proofs 1. Availability of the Agreement The United States argues that it could not discover the Agreement earlier because the Agreement contains a "gag" provision.