The higher court found that Fort Smith’s actions, though deceptive, did not rise to the level of an illegal exaction. | Rawf8/Shutterstock
The Arkansas Supreme Court overturned a lower court’s ruling that citizens were entitled to restitution of recycling fees after a city was discovered to be dumping recyclables in the landfill.
In a March 16 ruling, the Supreme Court found that the city of Fort Smith had not committed illegal exaction and had not been unjustly enriched by collecting a monthly sanitation fee for the collection and disposal of solid waste, despite dumping recyclables collected in separate bins into a landfill.
That decision overturned a lower circuit court’s ruling that the citizens in the class-action lawsuit brought by Jennifer Merriott were entitled to $745,057.85 in restitution.
The higher court found that because the monthly fee covered curbside pickup of trash, recyclables and yard waste, and because Fort Smith did not charge a separate, independent fee for curbside recycling, there was no misuse of fees even if the city did not actually recycle what it collected.
“Fort Smith charged a unified fee that Fort Smith could, and did, spend within the sanitation department,” the Supreme Court opinion stated.
According to the court documents, Fort Smith for years had a no-cost processing contract for recycling, but when the contract expired in 2014 and the processor proposed a $35-per-ton processing fee to continue the service, the city instead began dumping most of its recycling in the landfill.
“It continued to run a separate curbside-recycling route, advertise its recycling program and give warning stickers to residents that failed to properly separate their trash and their recyclables,” the court documents stated. “This occurred despite Fort Smith’s practice of dumping the recyclables.”
The class-action lawsuit came after April 2017 press coverage informed residents of the disposal method. Fort Smith contracted with a new recycling vendor in July 2017.
“The circuit court held that citizens paid a sanitation fee for what they thought included recycling. Fort Smith then committed an illegal exaction when it failed to disclose it wasn’t using the fee for that purpose,” the court documents note, but explained that “this reasoning is emotionally compelling but fails to satisfy” the requirements for illegal exaction.
That’s because the city used the fee for its intended purpose, the Supreme Court held.
“The circuit court’s findings that Fort Smith failed to notify the public, deceived citizens and destroyed public trust are indisputable,” the court documents state. “But those facts do not make the sanitation fee’s relationship to the services less reasonable.”
The opinion added that “unjust enrichment does not exist to punish but to restore wrongful benefits, and there was no evidence that Fort Smith retained financial benefits from its actions that could be returned to the Class.”
In a statement sent to 40/29 News, Fort Smith City Administrator Carl Geffken said the city apologized for dumping the recyclables and that it was pleased with the Supreme Court’s decision.
“The city was trying its best to collect trash and added recycling as an optional service without increasing the fee,” Geffken said, adding that “since July 2017, 100% of the recycled materials we collect have been brought to our recycle vendor that came to Fort Smith to start a recycling business.”
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