Beveridge & Diamond litigators secured a ruling in Los Angeles County, California Superior Court applying equitable estoppel against Los Angeles County in a permit challenge on behalf of firm client Chiquita Canyon LLC, a subsidiary of Waste Connections. Judge Daniel Murphy issued the ruling on November 13, 2019, allowing Chiquita Canyon to challenge operational conditions set by the County in a conditional use permit (CUP) for Chiquita Canyon Landfill. Chiquita Canyon LLC v. Los Angeles County, 2019 WL 6122160.

Los Angeles County issued a new CUP for the Landfill in July 2017, imposing extensive fees and conditions governing the Landfill. Chiquita Canyon filed a lawsuit in October of that year to challenge many of those conditions and fees, including conditions setting limits on the amounts of solid waste the Landfill can receive and directing the Landfill to support the County’s legislative agenda on certain solid waste issues.

In 2018, the trial court granted the County's motion to strike Chiquita Canyon's claims targeting 13 operational conditions, valued at over $100 million, ruling that California law only allowed challenges to fee provisions in the CUP. The court further ruled that under California law, Chiquita Canyon forfeited the ability to challenge the operational conditions of the CUP because the Landfill had accepted the permit and continued operations.

Chiquita Canyon's petition for an interlocutory appeal of the decision was granted, and the California Court of Appeal reversed the trial court in February 2019, ruling that Chiquita was entitled to prove facts showing that equitable estoppel barred the County from arguing a forfeiture of Chiquita’s right to sue over the operational conditions.

Last week, after the parties conducted extensive discovery, the trial court found that the Los Angeles County Planning Department had directed Chiquita Canyon that it could reserve its rights to challenge all provisions of the CUP, stating that "in these circumstances, substantial injustice would result from a failure to uphold an estoppel against [the] County."

Judge Murphy wrote that "[t]he July 2017 CUP contains numerous operating or use-related conditions that the petitioner challenges. Halting landfill operations to challenge those conditions would have been detrimental both to the petitioner's business and to [the] County's waste management needs. There is strong evidence that the county, through statements and conduct of its planning department, reasonably caused the petitioner to believe that it could continue its ongoing operations while challenging permit conditions if it placed its reservation of rights in a separate document. The county did not object to the reservation of rights prior to its demurrer."

This ruling in Chiquita’s favor follows a February 2019 win by the B&D team securing a decision vacating a $5.1 million County Enforcement Order for fees and penalties against Chiquita Canyon. The County alleged that Chiquita Canyon owed the County millions of dollars in solid waste disposal fees for beneficial use materials used by Chiquita at the Landfill for maintenance purposes. The Hearing Officer rejected the County's arguments that disposal fees applied to beneficial use materials and voided all fees and penalties.

Regarding the equitable estoppel ruling, John Musella, a Chiquita spokesman, said that “Chiquita Canyon is pleased with the ruling and appreciates the court’s close attention to the evidence. This ruling will allow Chiquita Canyon to proceed with its full lawsuit seeking reasonable permit governance that allows the landfill to operate safely, generate fair fees for the county and continue to provide affordable waste disposal services to a growing local economy, as Chiquita has for nearly 50 years."

B&D’s team included Principals Jimmy Slaughter (Washington, DC) and Gary Smith (San Francisco), and Associates Megan Morgan (Baltimore) and Jake Duginski (San Francisco).

Trial on Chiquita Canyon’s full claims is set for April 23, 2020.

View news coverage of this decision in Waste360 and Waste Dive.