Judge: Evidence shows Waste Management had ‘anti-competitive goals’ and ‘lack of business ethics’

By Dan Christensen, FloridaBulldog.org

A Broward judge has ruled that Davie businessman Ron Bergeron can seek punitive damages against Waste Management and LGL Recycling, a company controlled by Palm Beach trash kingpin Anthony Lomangino, for allegedly conspiring to ruin his flourishing recycling business.

“Bergeron has complained throughout this litigation that it was Waste Management’s plan to put Sun Bergeron out of business as its competitor (and destroy Bergeron’s interest in it),” wrote Broward Chief Judge Jack Tuter.

“The evidence proffered in support of this motion illustrates Waste Management and LGL’s calculated efforts to achieve its anti-competitive goals and its lack of business ethics, including spreading falsehoods and misstatements of fact and intent to antitrust regulators; to Sun Bergeron’s governmental customers; and to Bergeron.”

Tuter held that the evidence produced for his inspection in court papers and during two days of pre-trial hearings “sufficiently outlines a scheme to put Sun Bergeron out of business by depleting its assets, interfering with or taking control of its government contracts and closing the deal [despite] knowing it needed Bergeron’s approval.”

At the same time, Tuter denied Bergeron’s request that it be allowed to seek punitive damages from defendants Lomangino and LGL executives Charles Lomangino, his son; nephew Charles Gusmano, and former Sun Bergeron board member John Casagrande.

The judge cautioned, however, that his Aug. 5 findings were preliminary. “Nothing in this order should be construed the Court has made any determination as to whether the plaintiff [Bergeron] can actually prove by clear and convincing evidence, their right to recover punitive damages,” he said.

Six days later, on Aug. 11, LGL attorney Bruce Rogow asked the Fourth District Court of Appeals to quash Tuter’s order, saying Tuter’s order did not follow proper statutory procedures. On Friday, Rogow asked Tuter to delay the non-jury trial, now set to begin Oct. 11, until the appeals court rules. Today, August 24, Tuter denied postponing the trial saying the request was “premature.”

A JOINT VENTURE GOES SOUR

Bergeron’s company, Bergeron Environmental and Recycling, had once been partners with LGL when it was known as Sun Recycling. In 2012-2013, their joint venture, Sun Bergeron, broke Waste Management’s 25-year-old monopoly on the county’s disposal business by contracting with 17 Broward cities to process tons of their recycled trash. The change led to substantial savings for those cities and taxpayers.

Sun Recycling was owned by Anthony Lomangino’s Southern Waste Systems (SWS). And in January 2016, in the middle of Sun Bergeron’s five-year recycling contracts with those 17 municipalities, SWS sold itself to Waste Management, which owns the Monarch Hill landfill in North Broward. The price of the asset purchase agreement was $525 million.

Waste Management’s acquisition of SWS both jacked up the cost of recycling, in some cases to twice what Sun Bergeron charged, while at the same time leading to a significant reduction in recycling across Broward. More trash, including trash that was once recycled, is now being dumped at Monarch Hill.

Bergeron Environmental quickly sued for breach of contract and conspiracy. Bergeron says Lomangino, a prominent financial supporter of former President Donald Trump, secretly negotiated the deal behind his back. Bergeron also alleges that Waste Management misled state and federal anti-trust regulators to win approval of the SWS deal.

WASTE MANAGEMENT ASSURANCES

According to Tuter’s order, “Waste Management in numerous writings unabashedly assured the Joint Venture’s governmental customers that ‘nothing would change’ for them once Waste Management took control of the Joint Venture’s contracts; Waste Management represented to those customers that Waste Management intended to perform the ‘Sun Work’ under the Joint Venture.

“Bergeron complains that Waste Management’s public statements were untruthful and calculated to mislead,” Tuter’s order goes on. “Waste Management never disclosed to Bergeron, to the Joint Venture’s customers or to regulators that in order to justify its purchase price of $525 million, the revenue and waste tons from the Sun Bergeron contracts had to be converted to Waste Management’s exclusive use. Simply put, the plaintiff argues Waste Management could not achieve its necessary profits and recoup its investment in the transaction if Waste Management performed or renewed Sun Bergeron’s contracts on their same terms, conditions and prices.”

“If the evidence at trial supports the Plaintiff’s proffer it would establish that LGL and Waste set out on a path or scheme to hide from antitrust regulators the truth about the transaction and close a deal they necessarily knew was tainted,” the order says. “LGL and Waste were so concerned that Bergeron would sue for being both left out of the transaction but proceeding with the closing despite knowing the[y] needed Bergeron’s consent to complete the deal that they set aside $20 million dollars for indemnity.”

The bench trial, whenever it begins, is expected to last five weeks. Judge Tuter will decide not only the law, but the facts. No matter which side prevails, appeals are anticipated.

Should Bergeron prove its right to recover punitive damages, a second trial will be held regarding the amount, if any, Bergeron would receive. Tuter’s order says he will permit “financial discovery” of the defendants should that be necessary.