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Garbage truck Republic Services

A Republic Services truck is pictured in Missoula in July of 2016.

The former owners of Southgate Mall have sued the only garbage-hauling company in Missoula, Republic Services, alleging it double-billed the mall by more than $100,000.

Southgate Mall Associates filed the complaint in U.S. District Court in Missoula on Nov. 22 and alleged “breach of contract, fraud, unjust enrichment and deceit resulting from a multi-year scheme perpetrated by Republic Services to overcharge for trash removal services.”

Republic Services declined to comment to the Missoulian for this story, but in the original complaint filed with the court, the company's attorneys denied the allegations and called them "frivolous" in a response to attorneys for the previous mall owner.

“The local business team has investigated SMA’s allegations and determined that SMA (Southgate Mall Associates) was not improperly billed,” wrote Republic Services’ lawyer Victoria Stazio to a lawyer for Southgate Mall in an email quoted in the complaint.

Republic Services had not officially filed any response in court as of Monday. A lawyer for Southgate Mall Associates declined to comment for this story.

Essentially, Southgate Mall Associates alleges that Republic Services billed two tenants of the mall, Dillard’s and Herberger’s, for trash removal while simultaneously billing the mall’s owners for trash removal service, unbeknownst to either party.

In its lawsuit, Southgate Mall Associates contends it paid for approximately $102,945.99 in trash removal services that it never received. Instead, according to the suit, the service went to — and also was paid for by — third parties.

Southgate Mall Associates allege that they entered into a contract with Republic Services in 2013 for trash removal on a monthly fee schedule, but the invoices submitted by Republic did not specify in detail the locations of the dumpsters for which “Republic was purportedly providing trash removal services.”

Southgate Mall Associates did not have access to the internal bills or financial records of any of its tenants, including Dillard's and Herberger's, according to the lawsuit. Also, Dillard’s and Herberger’s entered into similar contracts with Republic for trash removal.

In April 2018, Washington Prime Group purchased the mall from Southgate Mall Associates, and Herberger’s became a tenant of Washington Prime Group. Shortly thereafter, Herberger’s declared bankruptcy and terminated its tenancy. The new owners, WPG, then arranged for cancellation of Herberger’s trash-removal contract with Republic.

“Upon doing so, WPG discovered that both WPG and Herberger’s had been paying Republic for the same trash removal service and that Republic was double-billing its customers for the very same service,” the lawsuit states. “Having discovered Republic’s double-billing scheme, WPG then conducted an investigation and discovered that Republic had been double-charging for trash removal from Dillard’s as well.”

Washington Prime Group then notified Republic, and the lawsuit said Republic acknowledged “what it described as an error and issued WPG a credit for the double-billing from the time WPG purchased the Mall assets.”

In April 2019, WPG informed Southgate Mall Associates that Republic had been double-billing Herberger’s, Dillard’s and WPG, and that it appeared Republic had similarly double-billed SMA before WPG’s purchase, according to the suit.

In the lawsuit, Southgate Mall Associates claims it has determined that from 2013 through early 2018, Republic double-billed them in the amount of $102,945.99.

Southgate Mall Associates claim they twice requested that Republic acknowledge double-billing and repay the amount.

In her email to SMA's attorneys provided in the complaint, Republic Services’ lawyer Stazio denied the allegations in the lawsuit.

“During the relevant time periods, 2013 to 2018, Republic Services had an account with Herberger’s and Dillard’s. These companies were billed for their service, which was separate and distinct from the service provided to SMA during this time. There was no double billing for the same containers or services. There was no error.”

Stazio goes on to say that while a credit was indeed provided to the new mall owner, Washington Prime Group, the “credit was based on an error made when WPG took over the mall’s waste service. The error was unrelated to SMA and never affected its account, service or invoices.”

Stazio said her team believes, based on information provided by SMA and an investigation by her team, that SMA is “assuming it was incorrectly billed merely because of the issue with WPG’s account.

“SMA is incorrect and its allegations have no merit,” Stazio concluded. “Furthermore, the spreadsheet SMA provided as support for its alleged damages is inaccurate. The spreadsheet’s accuracy is irrelevant, however, given that SMA suffered no injury at all. Should SMA continue to pursue litigation, we will seek all fees and costs allowed by contract and law for defending a frivolous lawsuit.”

In response to that letter, lawyers for Southgate Mall Associates responded that they stood by their original allegations and asked for documentation for Republic’s assertion that there was no double-billing.

Southgate Mall Associates is asking the court to award damages, punitive damages, interest, reasonable attorney fees and costs incurred in prosecution of the action as well.

In August 2019, by a vote of 3-1, the Montana Public Service Commission denied an application by a competing trash-hauling company called L&L Site Services to operate in Missoula County. That means Republic Services maintains an effective monopoly on garbage hauling in the county.

“The Commission finds that the public convenience and necessity does not require granting of an additional operating authority in Missoula County,” the order stated.

Jean Curtiss, a former Missoula County Commissioner who served in that position for 17 years, supported Republic Services during a PSC hearing. She testified that she's heard few complaints about Republic, other than people who are unaware of who should remove roadkill from public roads. She also testified that Republic has been a "strong corporate citizen" and that her office received fewer complaints after Republic purchased the business that previously provided service to Seeley-Swan.

The PSC regulates utilities in Montana, and by law new utilities must prove that they can qualify for a Certificate of Public Convenience and Necessity to operate, with the five-member PSC board as the arbiter. The PSC has reversed itself twice on allowing L&L to compete in Missoula, having first denied then granted the company permission in 2018.

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