Alameda County Appeals Court Rules Against Excessive Trash Hauling Fees

A California appeals court has ruled in favor of Oakland’s landlords challenging the legality of garbage collection franchise fees paid to that city by private companies. Similar franchise fees are paid by trash haulers in the City of Los Angeles to secure one of seven trash hauling monopolies granted by the City.

The landlords had alleged that a $28 million franchise fee paid to Oakland by haulers Waste Management and California Waste Solution was passed onto property owners in the form of higher garbage collection fees. They further claimed Oakland’s franchise fees were illegal under the California Constitution and amounted to an improperly imposed tax. Does any of this sound familiar, Los Angeles landlords?

A grand jury in Alameda Count found that the franchise fees paid to the City of Oakland by trash haulers were “disproportionately higher” than franchise fees paid to other cities within the Bay Area. Although a lower trial court initially dismissed the lawsuit, ruling that the franchise fees were in fact fees from private companies, not taxes, the landlords appealed, and the First Appellate District reversed the trial court’s decision to dismiss the case, holding that “a franchise fees may constitute a tax to the extent it is not reasonably related to the value received from the government.”