Opinion
DOCKET NO. A-5826-12T1
09-23-2014
BRIDGEWATER RESOURCES, INC., Plaintiff-Respondent, v. BLUE STAR CARTING, INC., Defendant-Appellant.
Marc J. Friedman, attorney for appellant. Sills Cummis & Gross, attorneys for respondent (Mark E. Duckstein, of counsel and on the brief; James M. Hirschhorn, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Alvarez, Waugh and Carroll. On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-319-12. Marc J. Friedman, attorney for appellant. Sills Cummis & Gross, attorneys for respondent (Mark E. Duckstein, of counsel and on the brief; James M. Hirschhorn, of counsel and on the brief). PER CURIAM
This is a collection action in which defendant Blue Star Carting, Inc. appeals from a June 21, 2013 Law Division order granting summary judgment to plaintiff Bridgewater Resources, Inc. (BRI), in the amount of $112,350.10. The order also denied defendant's cross-motion for summary judgment, which sought $52,774.39 for fuel surcharges charged by BRI, which Blue Star contended were unlawful.
The facts as found by the motion judge are essentially undisputed. BRI operates a solid waste transfer station in Bridgewater, New Jersey. Blue Star is engaged in the business of waste disposal. BRI charges waste haulers and waste disposal companies such as Blue Star a fee for dumping solid waste at BRI's facility.
Blue Star was formerly a customer of BRI, and the parties had a long-standing business relationship. Their relationship ended when Blue Star failed to pay numerous invoices totaling $114,458.42 for disposal fees charged by BRI from May 2011, through September 2011. In its invoices, BRI itemized the amounts charged to Blue Star, which included BRI's disposal fee, a host community fee, and a fuel surcharge.
On September 19, 2011, Blue Star addressed a letter to the New Jersey Department of Environmental Protection (NJDEP), complaining that BRI's invoices included an unauthorized fuel surcharge, and that other customers of BRI were receiving a more favorable waste disposal rate than that being charged to Blue Star. On October 19, 2011, Deborah Pinto, Chief of the NJDEP's Bureau of Solid Waste Compliance & Enforcement, acknowledged receipt of Blue Star's letter. In her response, Pinto advised:
The [NJDEP] has retained the services of a private auditing firm, Haag & Company, Certified Public Accountant (Haag) in order to investigate effective competition in the solid waste collection and disposal markets in New Jersey. In addition to auditing solid waste collection companies, Haag will be evaluating solid waste disposal utilities to determine whether facilities have provided an undue preference to select customers or demonstrated rate discrimination in any manner.Pinto's letter also provided Blue Star with the name of a contact person to call with any additional questions. According to the parties, no further communication from the NJDEP was ever received following Pinto's initial acknowledgement of Blue Star's complaint.
Haag's first assignment will be to review BRI's records and determine whether BRI has discriminated against any customer or class of customer and also to investigate whether an undue preference has been granted to select customers. Staff will provide Haag with your letter and the customers you have identified will have their rates reviewed along with all major customers using the BRI facility.
On March 7, 2012, BRI filed its complaint in the Law Division, seeking payment on its outstanding invoices in the sum of $114,458.42. Following a modest intervening payment by Blue Star, that amount was reduced to $112,350.10. Blue Star answered, and asserted a counterclaim in which it alleged that BRI was charging it a fuel surcharge of $1.90 per ton that was neither authorized by statute or regulation nor provided for in BRI's tariff on file with the NJDEP.
Following a period of discovery, the parties filed competing summary judgment motions. In a short oral opinion, the judge found no dispute that BRI had performed the services requested by Blue Star and that BRI's invoices were unpaid. The court determined that the regulatory violations alleged by Blue Star were not material to the contract between the parties, and could be addressed by the appropriate regulatory authorities in connection with the complaint that Blue Star had already commenced. Accordingly, the court entered summary judgment against Blue Star for $112,350.10, and denied its cross-motion.
On appeal, Blue Star essentially argues, as it did before the Law Division, that (1) BRI's imposition of a fuel surcharge was unauthorized by the NJDEP and violates the filed rate doctrine; and (2) BRI, by allegedly offering other customers more favorable rates, unfairly discriminated against Blue Star in violation of N.J.S.A. 48:3-1 and -2. In response, BRI contends that (1) Blue Star misconstrues the applicable NJDEP regulations, and that the total rate BRI charged Blue Star, including the fuel surcharge, is lawful because it does not exceed the peak rate that BRI is permitted to charge; and (2) Blue Star failed to produce any competent evidence of unjust or unreasonable rate discrimination by BRI. BRI further notes that the NJDEP authorized an investigation yet never took any action on Blue Star's administrative complaint. This, it posits, at least impliedly establishes that BRI did not violate any applicable regulations. While we cannot necessarily equate the NJDEP's silence or inaction with a finding that no regulatory violation occurred, for the reasons that follow we agree that Blue Star's arguments lack merit, and affirm the trial court's judgment.
When a party appeals from a trial court order granting or denying a summary judgment motion, we "'employ the same standard [of review] that governs the trial court.'" Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010) (quoting Busciglio v. DellaFave, 366 N.J. Super. 135, 139 (App. Div. 2004)). Thus, we must determine whether there was a genuine issue of material fact, and if not, whether the trial court's ruling on the law was correct. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We review legal conclusions de novo. Henry, supra, 204 N.J. at 330.
The filed rate, or as it is sometimes called, filed tariff doctrine, "is a product of the deference which courts give to the ratemaking and regulatory processes of administrative bodies." Richardson v. Standard Guar. Ins. Co., 371 N.J. Super. 449, 459-60 (App. Div. 2004). This court-created doctrine "forbids a regulated entity [from] charg[ing] rates for its services other than those properly filed with the appropriate . . . regulatory authority." Weinberg v. Sprint Corp., 173 N.J. 233, 242 (2002) (citations omitted); Smith v. SBC Commc'ns, Inc., 178 N.J. 265, 272, 274-75 (2004). Pursuant to the doctrine, customers of the regulated entity are presumed to have knowledge of the filed rate. Weinberg, supra, 173 N.J. at 242.
In Weinberg, supra, 173 N.J. at 241 n.2, the court noted that all events on which plaintiff based his complaint occurred before the Federal Communications Commission (FCC) ended the practice of setting rates, terms, and conditions through tariffs. Consequently, the Court commented that the FCC's changes "may affect the future viability of the doctrine in the telecommunications field." Ibid.
Analogous developments similarly call into question the continued applicability of the filed rate doctrine in the solid waste disposal industry, which in New Jersey is regulated under the Solid Waste Management Act (SWMA), N.J.S.A. 13:1E-1 to - 99.47, and the Solid Waste Utility Control Act (SWUCA), N.J.S.A. 48:13A-1 to -13. In 1991, the Legislature deregulated the rates imposed by solid waste collectors such as Blue Star. N.J.S.A. 48:13A-7.15. Partial deregulation of disposal rates in the industry followed after the then-existing regulatory scheme was declared unconstitutional in Atl. Coast Demolition & Recycling, Inc. v. Bd. of Chosen Freeholders, 112 F.3d 652, 667, 673 (3d Cir. 1997).
Pursuant to N.J.S.A. 48:13A-4, the NJDEP is responsible for adopting "appropriate rules, regulations or administrative orders for the regulation of rates and public utility aspects of the solid waste disposal industry." It is also empowered to "direct any person engaging in the solid waste disposal business to furnish proof that the rates charged" are reasonable, and to order adjustments in the tariff should it find those rates excessive. N.J.S.A. 48:13A-7.
Currently, N.J.A.C. 7:26H-1.13 mandates that tariffs for collection and disposal utilities, such as BRI, showing rate schedules for various types of service and contracts, be filed in accordance with N.J.A.C. 7:26H-4, which in turn provides:
(a) All solid waste collection and disposal utilities shall file tariffs with the Department, on forms provided by the Department, and shall keep a copy of all tariffs open to public inspection on the premises of the utility or at the office of
a designated agent. Tariffs must show the service area, standard terms and conditions, and all general privileges and franchises granted. The tariffs shall be available during office hours, and shall be produced on demand for any Department official, local government official or any person for examination during normal business hours.
(b) All of the highest solid waste utility disposal facility tariff rates on file with and approved by the Department as of November 10, 1997, shall constitute the peak rates for each solid waste type, Statewide, except that the peak rates for privately owned sanitary landfill facilities shall be adjusted in accordance with N.J.A.C. 7:26H-8.3.
[N. J.A.C. 7:26H-4.2.]
Changes to the rate regulations were accompanied by a May 13, 2008 NJDEP announcement to solid waste disposal utilities, as follows:
Important Notice to Solid Waste Disposal Utilities
On May 5, 2008 the Department of Environmental Protection (Department) adopted new regulations and readopted existing regulations, with various changes, related to the Solid Waste Utility Control Act, the Commercial Landfill Regulatory Reform Act and the Solid Waste Collection Regulatory Reform Act. These new rules, amendments and readopted provisions can be found in the solid waste utility regulations, N.J.A.C. 7:26H-1 [to -5.24]. One change in particular is of importance to solid waste disposal utilities. The
definition of "Peak Rate" has been changed to read:
"Peak rate" means the highest solid waste disposal utility tariff rate on file with and approved by the Department for each waste type . . . . as of November 10, 1997. When a solid waste disposal utility owner or operator petitions the Department for a rate above the existing peak rate, upon Department approval, the new rate becomes the peak rate for all solid waste disposal utilities for that particular waste.
As of May 5, 2008, all disposal utilities may adjust rates up or down without Department approval as long as the statewide peak rate is not exceeded. The peak rate for each ID waste type is as follows:
Type 10 $130.55
Type 13 $144.00
Type 23 $144.54
Type 25 $90.00
Type 27 $172.87
Type 27A $163.00
These rates are exclusive of host community benefit charges and taxes, such as the recycling enhancement tax, which may be added to the peak rate to arrive at a facility's tipping fee. Solid waste disposal utilities are required to petition the Department for an increase above the statewide peak rate. If the new rate is approved by the Department, that new rate becomes the statewide peak rate for that waste type.
Codified at N.J.A.C. 7:26H-3.10(b).
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Thus, under the current regulatory scheme, the "peak rate" that BRI was permitted to charge Blue Star was its tariff rate on file with the NJDEP as of November 10, 1997. BRI's tariff, effective for Somerset County and on file with the NJDEP since July 1, 1995, is $87.15 per ton for Types 10 and 13 waste. The tariff does not contain any separate reference to a fuel surcharge.
We conclude that the filed rate doctrine does not apply here, in light of the current regulatory scheme which allows a waste disposal utility to set rates according to market conditions as long as they do not exceed its peak rate. BRI's invoices demonstrate that it billed Blue Star at the rate of $71.80 per ton, which is well below both BRI's filed rate and the statewide peak rate. Arguably, were the filed rate doctrine applicable, Blue Star would be obligated to pay BRI at its filed tariff rate of $87.15 per ton, a result it undoubtedly does not seek.
Blue Star's chief complaint involves BRI's addition of a $1.90 per ton fuel surcharge, which effectively increases BRI's billing rate from $71.80 to $73.70 per ton. Blue Star argues that this surcharge was never approved by the NJDEP. However, rates for solid waste disposal service which do not propose increases in charges above the peak rate, do not require prior NJDEP approval. See N.J.A.C. 7:26H-1.12(c) and -3.10(b). Thus, even if we accept Blue Star's position that BRI's fuel surcharge, which we note BRI fully disclosed, constituted an increase in the tariff rate, no NJDEP approval was required as BRI's total charge does not exceed its peak rate.
Finally, Blue Star argues that BRI discriminated by extending more favorable billing rates to certain of its customers, contrary to N.J.S.A. 48:3-1 and -2. Blue Star's only factual support for this argument is the certification of its vice-president, Jeannette DeCuollo, who averred that she had "researched this issue and . . . determined that BRI has charged preferential rates to" four named companies.
Initially we note that DeCuollo's certification appears to rest entirely on inadmissible hearsay rather than competent evidence as to the facts asserted. See R. 1:6-6. Additionally, she attaches only two invoices relating to but one of BRI's four customers who allegedly receive preferential treatment. This scant documentary evidence shows that BRI billed its customer at the rate of $70.65 per ton, a negligible difference from the rate BRI charged Blue Star. The invoices further show that BRI charged this other customer a fuel surcharge, as it did Blue Star. Blue Star was obligated to demonstrate that BRI's rates and practices were "unjustly discriminatory" or "unduly preferential." N.J.S.A. 48:3-1 and -2. It failed to do so.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION