Government & Politics

Court ruling says KC must pay $10 million for trash rebates

A judge ruled against Kansas City and for a class of plaintiffs Tuesday in a lawsuit over Kansas City’s trash rebate program. Dennis Walker was a representative of the class of plaintiffs.
A judge ruled against Kansas City and for a class of plaintiffs Tuesday in a lawsuit over Kansas City’s trash rebate program. Dennis Walker was a representative of the class of plaintiffs.

In a scathing decision, a Platte County judge ruled Tuesday that Kansas City must pay $10 million in damages for violating a prior court order involving payments for trash services.

“The court finds that the city knowingly, intentionally and deliberately chose to not to comply with the modified judgment by eliminating the trash rebate program,” Circuit Judge James Van Amburg wrote in his ruling.

He found the city will owe members of the class-action lawsuit $10.2 million for actual and special damages, plus attorneys fees. He also said the city must pay $2,846 per day until it complies with its trash collection obligations.

The city said it plans to appeal. If it loses on appeal, the trash payments could total millions more.

The case stems from a 1976 court order relating to the city’s earnings tax. A Platte County judge said at the time that Kansas City had improperly created two classes of earnings-tax-paying residents, because the city provided free trash pickup for single-family residences but not for large apartment buildings. His 1976 order required the city to make payments to multifamily buildings with seven or more units to cover their trash services.

The City Council decided in 2010 to halt those payments because of severe budget constraints. That was when Mark Funkhouser was mayor, and none of the existing council members were in office. The payments stopped for most apartment owners, except for the Heartland Apartment Association, a group that reached a separate legal settlement after it threatened to sue.

In February 2015, a lawsuit was filed, arguing that other residents besides those in the Heartland Apartment Association deserved the same benefit. The case was certified as a class action, with residents of the Sophian Plaza Association, Townsend Place Condominium Association and several hundred other building owners and managers. Van Amburg conducted a trial in December, and on Tuesday he found solidly for the plaintiffs.

The ruling cites a deposition from City Manager Troy Schulte, that he had wanted the Law Department to seek court approval to halt the program but that never happened.

“The Court finds that the City explicitly considered and discussed the wisdom of seeking judicial relief before taking any action to eliminate trash rebate program benefits to Class members. The court finds that the city did not seek judicial relief before eliminating the trash rebate program in 2010,” the ruling said. “City Manager Schulte testified that the city’s knowing violation of the mandatory injunction was a calculated risk that the city would be sued.”

The plaintiffs’ attorneys were pleased with Tuesday’s ruling.

“Today’s judgment means that court orders must be followed,” said Greg Leyh, who represented the class along with attorney Rick Lombardo. “The City was found in civil contempt because, over the course of several years and many discussions among city council members, staff and city lawyers, the City was knowingly contemptuous of a court order mandating trash services be provided to class members across the city."

Dennis Walker, a class representative who with his wife, Rita, owns the Stadium View Apartments near the Truman Sports Complex, said he had had no doubt the plaintiffs would win, given the city’s admission that it chose to defy the court order.

“It’s score one for the little guy,” Walker said Tuesday. “It’s such a slam dunk.”

But Chris Hernandez, spokesman for Kansas City municipal government, said the city will appeal.

“We knew this would be a difficult case, but on behalf of Kansas City’s taxpayers, we intend to take this case to the next level,” Hernandez said. “... The rebate program is not sustainable from either a budgetary or environmental standpoint, and we will continue fighting for relief on this issue.”

Hernandez acknowledged the city provides free trash service to residents because they pay the earnings tax. “However, none of the condos and complex owners who sued the city actually pay the E-tax. They are all exempt,” he said. “Also, we limit residents to two bags of trash at the curb for both environment and cost reasons. But no one at apartment complexes makes sure that each household complies with that limit. Since apartment complex owners are not buying into our sustainability and budgetary goals, why should we subsidize them?”

Lynn Horsley: 816-226-2058, @LynnHorsley