Appeals Court: Bob Gregory, Stanley Mayfield Must Sue Republic Services Alone. Class Action Status Denied

AUSTIN, TX — The Texas 3rd Court of Appeals affirmed a Tom Green County district court ruling that denied creating a class-action lawsuit for San Angelo businesses who allegedly were overcharged by Republic Services for years.

The decision is a blow to the plaintiffs headed by Texas Disposal Systems CEO Bob Gregory who sought to open his lawsuit, filed through a separate San Angelo-based company he controls, Acme Iron and Metal, to all San Angelo businesses.

The only other San Angelo business on the lawsuit is Mayfield Paper, headed by Stanley Mayfield, who had joined the lawsuit when it was filed.

The lawsuit, Acme Iron & Metal Company, a D/B/A of TxAlloy, Inc.; and Mayfield Paper vs. Republic Services, seeks to remedy the charging of unauthorized fuel and environmental recovery fees by Republic since 1989. The use of the noun “Republic” refers to the current company and the previous companies that were bought-out by Republic over the years, including Trash-Away and Duncan Disposal.

The plaintiffs attempted to get all San Angelo businesses that purchased Republic’s services since 2000 certified as a class. Those businesses, the plaintiffs argued, had been overcharged for years for “Fuel Charges/Environmental Recovery Fees” in amounts where no City of San Angelo government record could be found authorizing those additional fees.

Because Republic enjoys an exclusive arrangement with the City for the collection of commercial trash from primarily dumpsters inside the city limits, the trash contracts required City Council approval of all fees for services to be charged to commercial customers.

Republic, through its agreement in 2014 with the City to refund $6.3 million in unauthorized fees dating back to 2004, the year of the preceding exclusive contract with the City, recognized it had a problem.

The 3rd Court of Appeals, based in Austin, heard oral arguments on the case at the Tom Green County Courthouse in Oct. 2018. The hearing included fiery debate over the motivation of Gregory et. al. to file the lawsuit at all.

The plaintiffs filed motions to certify two subclasses, and both were denied by the district court. The first subclass were San Angelo businesses allegedly overcharged by Republic from 2000-2004 under a contract that preceded the 2004 trash pickup contract; and a second subclass of San Angelo businesses allegedly overcharged throughout the 10-year duration of the 2004 contract.

For both subclasses, the appellate court agreed with the district court that the plaintiff’s argument did not satisfy all requirements of Rule 42(a) of the Texas Rules of Civil Procedure.

For the year 2000 subclass, the appellate court agreed that there were too many variables in determining each San Angelo customer’s damages, and they do not necessarily share a commonality necessary for creating a class.

For the 2004 class, the appellate court, recognizing that the plaintiff may appeal their decision to the Texas Supreme Court, sent a strong message.

The 2004 class enjoyed the $6.3 million voluntary refund by Republic. Because of Republic’s voluntary remedy, the proposed class had no real claims, the appellate court argued.

Then the 3rd Court embedded a poison pill into their opinion for any anticipated appeal to a higher court.

“Rather than seeking damages, Plaintiffs seek to reform Texas law and policy by litigating this case to the Texas Supreme Court to ask for a rule of law that allows lawsuits solely for punitive damages and attorney's fees; they pursue this reform because ‘the current law actually provides an incentive’ for behavior like Republic's that ‘assess[ ed] improper and ii legal charges for years, and only refund[ ed] those charges once its misconduct became public knowledge.’”

Gregory has argued the overcharges were intentional and maliciously perpetrated on unwitting San Angelo customers by the officers the Republic Services Corporation. Therefore, he argues, the damages could be treble. He also argues that the overcharging may be more than the $6.3 million refunded by Republic. Who knows, he argues, it was Republic’s hired accountant who audited the overcharges back to 2004.

The 3rd Court’s decision today only denies the establishment of a class. The lawsuit will continue. The plaintiffs’ next move can be appealing the 3rd Court’s decision to the Texas Supreme Court. We could not contact Gregory by phone before publishing this article.