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Home / Featured / Court upholds $10M judgment against Kansas City

Court upholds $10M judgment against Kansas City

The Western District Court of Appeals on Tuesday upheld a $10.2 million judgment against Kansas City for the city’s 2010 decision to end a trash-rebate program that had been in place since the 1970s, in violation of an agreement between multi-family building owners and the city.

The plaintiffs in the case, Sophian Plaza Association, Townsend Place Condominium and Stadium View Apartments, brought the class-action matter against the city in 2015.

They represent a class of 500 to 600 class members who are managers and owners of trailer parks, condos, apartments and buildings containing seven or more units in Kansas City from 2010 to the present.

The trash rebates stem from the 1970s, when the city first passed an earnings tax. As part of its campaign for the tax, the city represented to voters that it would provide free trash pickup to residents.

After the tax passed, the city passed an ordinance in 1971 providing trash collection for residents but exempted trash from trailer parks or buildings with more than seven units, prompting litigation.

Missouri Court of Appeals Western District, located in Kansas City. Photo by Scott Lauck.

Missouri Court of Appeals Western District, located in Kansas City. Photo by Scott Lauck.

A Platte County judge found the ordinance to be unconstitutional in 1976. Plaintiffs of the litigation and the city filed a stipulation and agreement in which the city agreed to either provide trash service or pay a cash equivalent to those impacted by the exemption.

The stipulation and agreement were incorporated into a modified judgment. The modified judgment also included a mandatory injunction directing the city to either provide trash services or the cash equivalent.

The trash-rebate program began in 1977 and continued until 2010, when the city ended it as a cost-savings measure.

In February 2017, following a bench trial, Platte County Circuit Judge James W. Van Amburg found the city had willfully violated the 1976 judgment and awarded the plaintiffs $10,274,704 in damages. Van Amburg also awarded the plaintiffs $4,109,881 in attorneys’ fees, with $1,421,598 to be paid by the city in addition to the compensatory damages award and the remainder to be paid from the class recovery.

The city appealed the ruling to the Western District. The city raised nine separate points on appeal, including challenging the standing of the plaintiffs and the amount of attorneys’ fees awarded.

In an opinion written by Judge Alok Ahuja, with Judges Karen King Mitchell and Edward R. Ardini Jr. concurring, the court ruled that the plaintiffs had standing to bring an action.

The city’s argument was that the plaintiffs lacked standing because they were not parties to the 1976 agreement.

Ahuja wrote that the claim that they lack the standing to enforce the modified judgment “ignores the language of the judgment, the context in which it was entered, and the City’s actions following entry of the Modified Judgment.”

He wrote that the terms of the judgment, as well as the circumstances leading up to and following it, show the modified judgment was intended to provide relief to all owners of multiple-dwelling-unit buildings and trailer parks, which had been excluded by city ordinance.

The city also argued that there were not special circumstances in the case to justify a fee award to the plaintiffs, and the award was excessive because there was no underlying evidentiary support offered for the requested fees and expenses.

The panel disagreed, ruling that Van Amburg did not abuse his discretion by awarding the fees.

Gladstone attorney Gregory Leyh represented the plaintiffs. He could not immediately be reached for comment.

Chris Hernandez, the city’s spokesman, said in a statement the city’s legal staff is reviewing the ruling and examining potential next steps.

“We knew this would be a difficult case, but on behalf of Kansas City’s taxpayers, we have been fighting for relief on this issue,” he said. “The rebate program is not sustainable from either a budgetary or environmental standpoint.”

The case is Sophian Plaza Association et al. v. City of Kansas City, WD80678.