Republic Services and Allied Waste Sued Over So-Called Recovery Fees
Another garbage story: Republic Services and Allied Waste Industries, two large waste-removal companies based in Phoenix that merged last year, are being sued in a class-action that alleges they over-charged for services.
Specifically, the suit -- as published in Courthouse News today -- alleges the company charged its nationwide clients "recovery fees" for certain environmental or fuel costs. However, the company still charged the fees even when costs went down, the suit alleges.
The plaintiffs, which include property and management companies, also claim the CEO of Allied Waste, John Zillmer, admitted in 2007 the fees were just a "cover" to raise prices:
In a March 6, 2007 conference call with investors Allied Waste's Chairman and Chief Executive Officer John Zillmer, stated: One of the things that did help us, frankly, was the price of the - fuel price increases that allowed us to go to the customer and really begin to accelerate pricing in a meaningful way. I would say that the companies all used that as [their cover] to really begin the process of getting pricing moving. Allied Waste Industries, Inc. at Citigroup Global Industrial Manufacturing Conference - Mar. 6, 2007) (bracketing in original transcript).
This sounds like it could be a case of buyer's remorse on the part of the plaintiffs. But everyone knows the waste-disposal industry isn't run by Boy Scouts.