Waste Connections False Fuel and CPI Increases in Fees Class Action

Two different kinds of overcharges are at issue in this class action, brought against Waste Connections US, Inc., Waste Connections of the Carolinas, Inc., and Waste Connections of SC, Inc. The complaint alleges that the companies overcharge their customers through both unlawful and excessive fuel surcharges and price increases.

The complaint calls Waste Connections “one of the largest solid waste disposal companies in the United States, with nearly $5 billion in annual revenue.”

Waste Connections contracts with small businesses to provide waste disposal at a fixed price over multiple years. The complaint claims, “The uniform language at issue in these agreements specifies that Waste Connections may increase this fixed price, but only to pass[ ]through specific increases in costs it might incur in providing services.” For example, it is permitted to “proportionately” pass through to customers increases in fuel and material costs.

Waste Connections does impose a “Fuel & Material Surcharge,” but the complaint claims that it is not actually related to any such costs: “In fact, during the time period at issue, Waste Connections effectively has no increased fuel or material costs, nor has it ever attempted to quantify such costs or to tie the methodology or amount of the ‘Fuel & Material Surcharge’ to such costs.” Instead, the complaint says it is “a hidden profit device” that simply pads bills at the customers’ expense.

The language in the contracts also allows Waste Connections “to adjust for increases in the Consumer Price Index” (CPI), which is one way of measuring inflation. But the complaint alleges that Waste Connections has applied automated price increases that are go well beyond rises in the CPI: “These price increases are imposed frequently and are significant in amount, often exceeding 50% over the course of a contractual term, and greatly exceed any actual CPI increase.”

The complaint quotes the Waste Connections 2018 Form 10-K as saying that “inflation has not materially affected our operations in recent years.”

Two class have been proposed for this action:

• The Surcharge Class is all persons or entities who live in the US who entered into a contract with Waste Connections that provides “[b]ecause disposal, fuel, materials and operations costs constitute a significant portion of the cost of Contractor’s services provided hereunder, Customer agrees that Contractor may increase rates hereunder proportionately to adjust for any increase in such costs” and paid Waste Connections a “Fuel & Material Surcharge.”
• The Rate Increase Class is all persons or entities who live in the US and who entered into a contract with Waste Connections that provides “Customer agrees that the rates charged by Contractor hereunder shall be increased from time to time to adjust for increases in the Consumer Price Index” and paid more than their contractually agreed upon rates as a result of increases.

Article Type: Lawsuit
Topic: Contract
Tags: Breach of Contract, Deceptive Pricing/Undisclosed Surcharges, False or unlawful fuel surcharges