# NRC Environmental Services Inc. v. Barnards Holdings, Inc.

> District Court, D. Oregon · December 12, 2022

URL: https://www.frixlaw.com/law-library/cases/10395440

## Case

- **Court:** District Court, D. Oregon
- **Decided:** December 12, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

NRC ENVIRONMENTAL SERVICES, No. 3:19-cv-01133-JR
INC., a Washington corporation,

Plaintiff,
FINDINGS OF FACT AND
v. CONCLUSIONS OF LAW

BARNARDS HOLDINGS, INC., fka
WATER TRUCK SERVICE, INC., an
Oregon corporation, and BOB JONAS, an
individual domiciled in Oregon,

Defendants.
__________________________________
RUSSO, Magistrate Judge:

Plaintiff NRC Environmental Services, Inc. (“NRC”) initiated this breach of contract action
against defendants Barnards Holdings, Inc, formerly known as Water Truck Service, Inc. (which
was operated in conjunction with Stormwater Recycling, Inc.) (collectively “WTS”) and Bob
Jonas. The Court conducted a bench trial from November 14 through November 17, 2022.
“In an action tried on the facts without a jury . . . the court must find the facts specially and
state its conclusions of law separately.” Fed. R. Civ. P. 52(a)(1). “The findings and conclusions
may appear . . . in an opinion or a memorandum of decision filed by the court.” Id. To that end,
the Court directed both parties to file Proposed Findings of Fact and Conclusions of Law. Although

portions of each parties’ proposed findings and conclusions have been adopted, this Order reflects
the Court’s independent review of the record and the law.
The Court finds the following witnesses credible and has relied on their testimony: Robert
Keesee, Robert Ransdell, Sarah Glathar, Anne Marie Skinner, and Serena Morones. The Court
also finds that the following witnesses proffered testimony that was relevant and credible as to
certain facts: Mr. Jonas and Christopher Rich.
GENERAL BACKGROUND

I. WTS Operations
WTS held itself out as providing “environmental, infrastructure maintenance and
infrastructure inspection services, including catch basin cleaning, vacuum and material handling,
water transporting, sewer and pipe cleaning, and street and parking lot sweeping.”
Mr. Jonas and his wife purchased property on Clutter Road – which contained a home,
onion shed, large barn, and farm field – in an unincorporated part of Washington County, Oregon
(“Clutter Facility”). Mr. Jonas subsequently added additional structures to that property.
In 1996, WTS began operating out of the Clutter Facility. The property served two business
endeavors relevant to this dispute – i.e., wastewater pretreatment and street sweeping, which were
conducted from a building and cement pad, respectively. Concerning the latter, WTS used the
Clutter Facility as an interim amenity where it would unload the street sweepings and separate out
the recyclable cans/bottles and garbage; the remaining content was reloaded into drop boxes for
transport to other locations (typically Dayton Ecology Composting, a composting facility owned
by Mr. Jonas that held a “solid waste disposal site” permit with the Oregon Department of
Environmental Quality (“ODEQ”)). Street sweepings were transported away from the Clutter
Facility within a couple of days. Depending on the time of year, the street sweepings then were

either directly applied to composting or soil amendment, or further processed and screened in order
to separate the inorganic material (e.g., sand, gravel, etc., otherwise known as “fines”) from the
organic material (e.g., leaves and larger debris), both of which were usually repurposed.
Mr. Jonas operated another facility located on Killingsworth Street in Multnomah County,
Oregon (“Killingsworth Facility”) in conjunction with the Clutter Facility’s pretreatment activities.
In particular, water vacuumed into WTS’ trucks was taken to the Clutter Facility to undergo a
physical separation process, where the solids were separated from the liquids by processing
through a variety of equipment. The Clutter Facility is not connected to the sanitary sewer so the
treated water was held in a tank until it was trucked to the Killingsworth Facility for discharge.
The by-products of the separation process were taken to the Hillsboro Landfill for disposal. The

only permit WTS held in association with these activities was from the Portland Bureau of
Environmental Services (“BES”).
II. Underlying Business Transaction
On January 6, 2017, the parties executed an Asset Purchase Agreement (“APA”), pursuant
to which NRC purchased WTS’ operations, along with all associated properties, assets, goodwill,
and rights. NRC paid Mr. Jonas the full $3,500,000 purchase price, except for the $350,000
Indemnity Holdback Amount.
New York law governs “any disputes arising under [the APA] or related hereto (whether
for breach of contract, tortious conduct or otherwise).”
Sections 2.8, 2.13, and 2.19 of the APA contain WTS’ representations and warranties.
Section 2.8 is entitled “Compliance with Laws” and specifies:
Since January 1, 2012, (i) the Business has been, and is currently, conducted in
compliance with all applicable Law, (ii) each Seller has been, and is currently, in
compliance with all applicable Law, and (iii) no Seller has received any written
notice alleging any violation under any Law. No Seller is currently liable for the
payment of any claims, damages, fines, penalties, or other amounts, however
designated, for failure to comply with any Laws and, to the Knowledge of Sellers,
no material expenditures are or will be required to remain in compliance with such
Laws. To the Knowledge of Sellers, there is not any present or proposed
requirement of any applicable Law that is due to be imposed on the Business or a
Seller that is reasonably likely to increase the costs of complying with such Law or
that would render illegal or restrict the operations of the Business or a Seller.

The APA defines “Knowledge of Sellers” as “the collective knowledge of Bob Jonas, Jamie
Hartley, and Kayla Hartley, who will each be deemed to have ‘Knowledge’ of a particular fact or
other matter if such individual is actually aware or ought reasonably to have been aware of such
fact or other matter had such individual made all usual and reasonable inquiries and all inquiries
which would have been reasonable in light of each individuals’ position or knowledge.” And “Law”
is defined as “any provision of any federal, state, local, foreign, international, municipal or
administrative order, constitution, law, common law and the law of equity, ordinance, license,
permit, regulation, rule, Order, code, plan, statute or treaty of and the departmental or regulatory
policies and guidelines of, a Governmental Entity.”
Section 2.13, titled “Permits,” states:
Schedule 2.13 contains a true and correct list of all Permits held by a Seller. Sellers
hold all Permits which are required for the ownership, lease, or operation of, or
necessary for it to own, lease or operate, the Acquired Assets and conduct the
Business. All such Permits are in full force and effect, and no Seller is in default
(or with the giving of notice or lapse of time or both, would be in default) under
any such Permits. There are no Legal Proceedings pending or, to the Knowledge of
Sellers, threatened, that seek the revocation, cancellation, suspension, or adverse
modification of a Permit held by a Seller. All required filings with respect to such
Permits have been timely made and all required applications for renewal thereof
have been timely filed. No consent, notice or other notification is required under
any Permit as a result of the Transactions and the effectiveness of the Permits will
not be affected by the consummation of the Transactions.

“Permit” means “any permit, license, approval, Order, concession, clearance, registration,
certificate, franchise, qualification, Consent or authorization issued by a Governmental Entity.”
Schedule 2.13 listed a number of business licenses, as well as a State of Oregon Construction
Contractors Board license and two transportation carrier licenses.
Section 2.19 pertains to “Environmental Matters”:
Sellers have been in the past and currently are, and the Business has been and
continues to be conducted, in compliance in all material respects with all
Environmental Laws. To the Knowledge of Sellers, no event has occurred or
circumstances exists that (with or without notice of lapse of time) (a) would
constitute or result in a material violation by a Seller of, or a failure on its part to
comply with any Environmental Law, (b) would reasonably be expected to result
in material Liability under any Environmental Law, or (c) would give rise to any
material obligation on the part of the Seller to undertake, or to bear all or any portion
of the cost of, any remedial action of any nature; Sellers have obtained and maintain
all Permits relating to or required under Environmental Laws to conduct the
Business (the “Environmental Permits”). Sellers are and have been in material
compliance with, and have timely made all reports, submissions, filings, or renewal
applications required under, such Environmental Permits. A list of all
Environmental Permits is set forth in Schedule 2.19.

The APA defines “Environmental Law” as “any Law which relates to or otherwise imposes
Liability or standards of conduct relating to environmental, health or safety matters [including but
not limited to] any Law governing the use, storage, disposal, cleanup, generation, treatment,
transportation, or remediation of Hazardous Substances.” WTS’ most recent BES permit (which
was non-transferrable) was the only permit disclosed under Schedule 2.19.
Section 6.1 sets forth the applicable statutes of limitations related to Sections 2.8, 2.13, and
2.19:
All of the representations and warranties of Buyer and Seller Parties set forth in this
Agreement will survive the Closing and will terminate on the date that is 18 months
after the Closing Date except . . . the representations and warranties set forth in . . .
Section 2.19 [will] survive the Closing until 60 days following the expiration of the
statute of limitation applicable to matters covered thereby (after giving effect to any
waiver or extension thereof granted by the applicable party). Notwithstanding the
preceding sentence, any representation or warranty in respect of which indemnity
may be sought under this Agreement will survive the time at which it would
otherwise terminate pursuant to the immediately preceding sentence if written
notice of the inaccuracy or breach thereof giving rise to such right of
indemnification has been given prior to such time.

Section 7.1 prescribes the requirements for providing written notice of a claim.: “All
notices and communications hereunder will be deemed to have been duly given and served . . . by
email” to the following address: earlybirdmom03@yahoo.com. A copy must be sent to counsel,
but “will not constitute notice to [defendants].” Thus, any purported liability for the breach of
Section 2.8 or 2.13 expired 18 months after January 6, 2017 – or on July 6, 2018 – unless notice
was given in accordance with Section 7.1.
WTS agreed to indemnify NRC “from, against and in respect of any Losses” arising out of
or relating to “any breach of any representation or warranty made by [or] nonfulfillment or breach
of any covenant or agreement of a Seller Party contained” in the APA. “‘Losses’ means any and
all claims, damages, deficiencies, fines, fees, losses, Liabilities, penalties, diminution in value, lost
profits, Taxes, interest, payments (including those arising out of any Order or Legal Proceeding),
and reasonable costs and expenses (including interest, court costs, reasonable fees of attorneys,
accountants, and other experts or other expenses incurred in investigating, preparing, defending,
avoiding, or settling any claim, default, or assessment).”
Finally, the APA provides the Indemnity Holdback Amount is payable by NRC “(o)n the
first Business Day following the 18 month anniversary of the Closing Date” – i.e., July 7, 2018 –
to the extent it “exceeds the sum of (i) the aggregate amount of indemnification claims validly
made [and then pending] and (ii) the aggregate of all Finally Determined Losses.” The “Indemnity
Holdback Amount will be used to satisfy all Final Determined Losses for which a Buyer
Indemnified Party is entitled to indemnification hereunder, except that the obligations to so
indemnify, defend and hold harmless will not be limited to the Indemnity Holdback Amount.”
“‘Finally Determined Losses’ means all Losses for which a ‘final determination’ has been made.”
A “final determination,” in turn, exists when “the parties to the dispute have reached an agreement

in writing” or “a court of competent jurisdiction will have entered a final Order.”
Mr. Jonas and his wife retained ownership of the Clutter Facility following the APA. NRC
leased the Clutter Facility from Mr. Jonas pursuant to a separate agreement (“Clutter Lease”) with
a five year term. WTS also coterminously assigned NRC its lease obligations related to the
Killingsworth Facility (“Killingsworth Assignments”).
III. Proceedings Before This Court
NRC initiated this action in July 2019, alleging the following claims: (1) breach of Sections
2.8, 2.13, and 2.19 of the APA; (2) negligent misrepresentation; and (3) mutual or unilateral
mistake. NRC’s third claim was subsequently withdrawn in light of the parties’ partial settlement.
Defendants were ultimately granted summary judgment as to NRC’s negligent

misrepresentation claim, and breach of contract claims under Sections 2.8 and 2.13 of the APA as
to the Clutter Facility. NRC, in turn, was granted summary judgment as to its breach of contract
claim under Section 2.19 of the APA as to the Clutter Facility’s wastewater pretreatment
operations. See generally NRC Env’t Serv., Inc. v. Barnards Holdings, Inc., 2021 WL 2673781 (D.
Or. Apr. 19, 2021), adopted by 2022 WL 444373 (D. Or. Feb. 14, 2022).
NRC is seeking $2,376,630 in damages related to its remaining claims, plus interest
($97,356 associated with the Clutter Facility’s operations; $163,151 for the City of Portland
Conditional Use Permit (“CUP”); $1,110,131 for future out-of-pocket expenses arising from
improvements to the Killingsworth Facility1 required by the CUP; and $1,005,992 for lost street
sweeping profits through 2024). Pl.’s Trial Mem. 22 (doc. 105).
Additionally, the parties each seek contractual attorney fees and costs. Finally, defendants
assert a counterclaim for the APA’s Indemnity Holdback Amount of $350,000 (plus 9% judicial

interest from July 2018).
FINDINGS OF FACT
A. Considering the evidence presented and weighing credibility of the witnesses, the Court finds
as follows as to the Killingsworth Facility:
1. Title 17 of the Portland City Code (“PC”) governs public improvements, including
sanitary and storm water collection systems. BES is responsible for the application and
enforcement of Title 17 and has authority to develop and require permits, authorizations,
inspections, and other forms of review and approval.
2. Title 33 of the PC separately governs planning and zoning. The Portland Bureau of
Development Services (“BDS”) is responsible for the application and enforcement of Title 33,

including land use approvals and permits related to the Portland Zoning Code, which applies to all
land within the city.
3. The Killingsworth Facility is zoned General Industrial 2 under the Portland Zoning Code.
4. In August 2010, BES issued WTS an industrial wastewater discharge permit for a
Centralized Waste Treatment Facility, which allowed WTS to discharge water that was pretreated

1 As addressed below, Ms. Morones, NRC’s damages expert, calculated future out-of-pocket
expenses arising from improvements to the Killingsworth Facility at $1,003,955 based on
averaging two September 2020 construction bids 2020 and then multiplying them by a present
value factor of 0.90 (this corresponds to a discount rate of 10.6% premised on NRC’s weighted
average cost of capital, which is a measure of the expected return on investment for the company’s
cash flow using industry benchmarks and NRC’s financial characteristics). The present value
factor multiplier accounts for the difference between Ms. Morones’ and NRC’s figures.
at the Clutter Facility into the Portland sewer system via the Killingsworth Facility (“2010 Permit”).
(Stipulated Fact #20)
5. At some unspecified time after 2010, defendants began treating and discharging septage
and grease-trap wastewater at the Killingsworth Facility.

6. In July 2011, BDS determined these operations violated Title 33 of the PC and advised
defendants to “[c]ease the waste-related use at this property” or obtain a CUP.
7. In November 2011, BDS and BES conferred and instructed defendants that they could
continue disposal operations without obtaining a CUP as follows:
[D]isposal of the excess storm water runoff which is typically pulled from catch
basins, underground electrical or underground storm vaults, storm swales, oil/water
separators, and leachate (typically storm water from the land fill/dump) is allowed
without a Conditional Use Review and will not be viewed as a waste-related use if
no treatment occurs on the site. The trigger for requiring a Conditional Use Review
all depends on whether or not the material is receiving treatment at the site. If the
treated stormwater is simply transported to this site and meets acceptable levels for
disposal into the sanitary sewer system without further treatment, then no
Conditional Use Review would be required and this would not be considered a
Waste Related Use.

If any of the wastewater creates additional residual waste, it will then be viewed as
a Waste-Related Use and will require a Conditional Use Review.

(Stipulated Fact #25)

8. Defendants initiated the process to obtain a CUP but ultimately determined that it was
too costly and instead elected to stop processing septage at the Killingsworth Facility, representing
to BDS that “[r]esidual waste will not be generated on site; separation will occur [at the Clutter]
facility.” (Stipulated Facts #23-24)
9. In February 2012, BDS inspected the Killingsworth Facility in response to an odor
complaint to confirm it was simply a “discharge point-of-compliance.” (Stipulated Fact #26)
10. In March 2012, BES advised BDS “[a]ll of the processing equipment has been sold and
removed from the property,” and indicated that WTS “no longer produced any residual solid waste,
and only use the site as a discharge point.” (Stipulated Facts #27-28)
11. In October 2013, BDS issued a Notice of Zoning Violation to WTS in association with

“[w]aste related activities on the site (NRC paint solids disposal) without the required
Conductional Use Review for a waste-related use.” This notice advised:
Waste-related uses are characterized by uses that received solid or liquid wastes
from others for disposal on the site or for transfer to another location, uses that
collect sanitary wastes, or uses that manufacture or produce goods from the
biological decomposition of organic material . . . Land Use Review records shows
that there is no approved Conditional Use Review at this site.

Previous determinations and information to you identified that as long as no
treatment of liquids or solids was occurring at the site, the use would not fall into a
waste-related use category. Based on that determination, you ceased all processing
of septage to separate solid wastes. As long as no treatment occurs for the liquids
introduced to the City’s sanitary/storm system at this discharge point, this is not
characterized as a waste related use.

On August 2nd and 3rd, we received a report and subsequent evidence that NRC
was cleaning out and disposing of liquids and solid wastes from their tanker truck.
This included pumping out their truck into a drop box to allow the paint solids to
settle and dry which then required disposal off-site at a landfill. This is considered
processing of solid waste and therefore constitutes a waste-related use at this site.

12. WTS immediately ceased allowing NRC to dispose of paint solids at the Killingsworth
Facility.
13. Also in October 2013, BDS confirmed that “WTS activities at this site are not a waste-
related use, they are just disposing of their treated stormwater into the City’s system at this site as
allowed by their BES permit.”
14. In December 2013, BDS reiterated “that the trigger for requiring a Conditional Use
Review [at the Killingsworth Facility] all depends on whether or not the material is receiving
treatment at the site” or [i]f any of the wastewater creates additional residual waste.”
15. In May 2014, BES inspected the Killingsworth Facility, during which it noted an
oil/water separator as an added pretreatment system.
16. In May 2015, BES inspected the Killingsworth Facility, during which it observed the
presence of “pH Adjustment” equipment and oil/water separators, which were “filled w[ith]

floating oil [and] need[ed] to be pumped.” BES instructed defendants that “[a]ll wastewater
containing settleable solids must go through [the Clutter Facility] first.”
17. In June 2015, BES renewed WTS’ industrial wastewater discharge permit (“2015
Permit”), which allowed WTS to discharge waste streams from leachate or “generated in the
cleaning of oil interceptors (catch basins, oil/water separators, vaults, etc.), where the solids have
been removed through treatment”; any wastewater “delivered directly to the permittee’s Portland
facility from the generating source . . . shall not contain solids that can be screened out, or are
readily settleable.” (Stipulated Fact #21)
18. The 2015 Permit required WTS to “comply with all other applicable City, State and
Federal regulations.”

19. WTS’ October 2015 “Waste Acceptance and Treatability Plan” for the Killingsworth
Facility (which was furnished to NRC in December 2016) provided for pH adjustment treatments
and the use of oil/water separators. (Stipulated Fact #41)
20. In November 2015, BES inspected the Killingsworth Facility, during which it
documented the presence of pH adjustment systems, oil/water separators, and carbon filters.
21. On January 10, 2017, four days after the APA was executed, BES inspected the
Killingsworth Facility to verify that all of WTS’ activities had been terminated, and documented
the presence of oil/water screens and pH processing chemicals. (Stipulated Facts #49-50)
22. Mr. Jonas acknowledged pH treatment and oil/water separation occurred at the
Killingsworth Facility, and that NRC purchased equipment and chemicals related thereto pursuant
to the APA. (Stipulated Facts #36-37, 42)
23. Mr. Jonas testified that WTS never notified BDS of the addition of this equipment.

24. Prior to the APA, Dr. Ransdell toured the Killingsworth Facility with Mr. Hartley on
behalf of NRC, and observed oil-water separators and the PH system, but was otherwise unaware
of any information or directives from BDS limiting the Killingsworth Facility’s operations solely
to the discharge of pretreated wastewater.
25. Dr. Ransdell testified that NRC used WTS’ October 2015 “Waste Acceptance and
Treatability Plan” in developing its own plan and in seeking its own BES permit.
26. When NRC assumed WTS’ operations, Mr. Keesee and Dr. Ransdell both witnessed
several inches of sludge at the bottom of the tanks at the Killingsworth Facility.
27. NRC cleaned the equipment at the Killingsworth Facility and disposed of the sludge
left by defendants’ operations.

28. Dr. Ransdell testified that it became clear early on that the Killingsworth Facility’s
existing equipment would not allow NRC to meet discharge requirements so NRC immediately
began looking into new equipment.
29. On January 31, 2017, Dr. Ransdell sent an email to the City of Portland, posing certain
inquiries “[a]s we start going through a redesign of the WTS system on Killingsworth.”
30. In February 2017, a representative from ProAct sent Dr. Ransdell specifications for a
200 gmp water treatment system; Dr. Ransdell advised that putting the system indoors would be
preferrable due to a potential issue with the neighborhood association. (Stipulated Facts #52, 61)
31. In March 2017, Mr. Keesee circulated a proposal “to upgrade the wastewater treatment
system at the former WTS water plant,” explaining “[t]he City of Portland was in the process of
requiring WTS to either shut down the system or upgrade it when we made the purchase of WTS.
(They said this information would not be shared with NRC at that time as the transaction as not

complete).”
32. In April 2017, NRC executed a contract with ProAct. (Stipulated Fact #53)
33. In May 2017, NRC obtained its own industrial wastewater discharge permit from BES
for the Killingsworth Facility, which was subsequently revised and renewed (“2017 Permit”).
(Stipulated Facts #22, 129-30)
34. The 2017 Permit approved one additional waste stream.
35. In August 2017, ProAct installed the water treatment system at the Killingsworth
Facility, which additionally required widening the entry-way to accommodate a tank. (Stipulated
Facts #54-55)
36. The new ProAct system included a COWS 250-Oil Water Separator, End Suction

Centrifugal Transfer Pump, 2-Stage Bag Filter Systems, Clay/Zeolite Absorber, and Granular
Activated Charcoal Absorber. (Stipulated Fact #56)
37. Dr. Ransdell and Mr. Keesee testified that these upgrades essentially duplicated WTS’
operations but were necessary to replace the existing faulty or failing equipment.
38. NRC also purchased and installed additional tanks and a basket strainer at the
Killingsworth Facility. (Stipulated Facts #57, 60)
39. In October 2017, NRC submitted an Early Assistance Application with BDS for a
centralized wastewater treatment facility, at which point it learned that, in 2011, WTS had initiated,
but never completed, the process to obtain a CUP.
40. In November 2017, NRC participated in a Pre-Application Conference with the City of
Portland related to the Killingsworth Facility.
41. In December 2017, BDS and BES determined NRC needed a CUP and Development
Review Permit, respectively, to operate the Killingsworth Facility. (Stipulated Fact #70)

42. Also in December 2017, a BDS correspondence reflected: “NRC is treating wastewater
[at the Killingsworth Facility] via oil/water separators” and “this would differentiate the current
operation from the 2011 [WTS] case, in which you stated there was no processing of wastes
occurring.”
43. NRC hired PBS Engineering and Environmental Inc. (“PBS”) to ensure it complied
with all permitting requirements. PBS provided civil engineering, planning/landscape architecture,
geotechnical engineering, and surveying services required for a CUP, and also prepared NRC’s
CUP application.
44. NRC also hired A Acoustics, Corbin Consulting Engineers, Inc., and Livermore
Architecture & Engineering to comply with the City of Portland’s CUP application and review.

These companies provided a sounds study, outdoor mitigation plan, and nuisance mitigation site
plan, respectively.
45. On June 7, 2018, NRC sent a Notice of Claim in regard to the Killingsworth Facility
via email to defendants’ counsel and the earlybirdmom03@yahoo.com address.
46. In July 2018, BDS issued a notice to NRC’s landlord that the Killingsworth Facility “is
not in compliance with Portland’s Zoning Code,” which could be corrected by ceasing waste-
related uses – i.e., “all treatment and disposal of wastewater” – or applying “for a Type III
Conditional Use Review.” (Stipulated Fact #68)
47. In March 2019, NRC submitted its Revised Type III Conditional Use Review
application to the City of Portland. (Stipulated Fact #69)
48. In June 2019, the City of Portland approved NRC’s application for a CUP related to
the Killingsworth Facility.

49. Dr. Ransdell and Mr. Keesee testified that NRC negotiated an additional ten-year term
for its third-party lease related to the Killingsworth Facility (set to commence upon the expiration
of the current lease term on August 31, 2023) and was looking into purchasing the property in light
of its unique characteristics.
50. NRC’s out-of-pocket costs incurred for the CUP total $163,151.
51. Ms. Morones testified that NRC’s future costs to comply with the CUP and complete
all of the improvements discussed therein are $1,003,955.
52. Mr. Keesee testified that NRC has not yet completed the work required under the CUP
because it is still soliciting bids, a process which was considerably slowed by the pandemic, NRC’s
other acquisitions, and this lawsuit.

B. Considering the evidence presented and weighing credibility of the witnesses, the Court finds
as follows as to the Clutter Facility’s street sweeping operations:
1. The Washington County Community Development Code (“CDC”) governs land use in
Washington County and sets standards and requirements for developing and using land within the
unincorporated portion of Washington County.
2. The ODEQ is the chief environmental regulatory agency for the State of Oregon and
regulates solid waste.
3. At the time the APA was executed, the Clutter Facility was zoned FD-20. (Stipulated
Fact #18)
4. Prior to 2003, the Clutter Facility was zoned as a MAE District.
5. NRC acquired the street sweeping contracts with the cities of Woodburn, McMinnville,
Hillsboro, Wilsonville, Gresham, and Tigard via the APA. (Stipulated Fact #82)
6. Prior to the APA, defendants brought street sweepings from, on average, eight trucks

per day to the Clutter Facility, where they were unloaded onto a single pad, screened for
recyclables and trash, reloaded into drop boxes, and transported to another location within one to
three days.
7. Prior to the APA, defendants sometimes disposed of street sweepings at the Riverbend
Landfill.
8. Prior to the APA, defendants tested the inorganic material screened from the street
sweepings twice per year; if they met the standards for “clean fill,” they were slated for re-use.
9. Leaf season in Oregon comprises a portion of the fall and winter months.
10. During leaf season, street sweeping materials consist primarily of leaves.
11. At all other times of the year, organics make up a small fraction of street sweepings.

Mr. Rich estimated that leaves might only comprise 10% of the collected material.
12. In September 2013, ODEQ instructed Mr. Jonas that he could not take street sweepings
(except during leaf season) to Dayton Ecology Composting because “it is outside the scope of the
compost permit.” In particular, ODEQ explained:
street sweepings from cities who routinely collect the debris from streets and gutters
and storm drains . . . is a solid waste and has no use in composting since it is mostly
inorganic material (sand, gravel, dirt, litter . . .). This issue has come up over and
over as far as street sweepers wanting to find some inexpensive way to dispose of
a solid waste other than at the landfill.
ODEQ reiterated “this is not a new issue, and there is a history as to why this material is regulated,”
and asked Mr. Jonas to apply for a Beneficial Use Determination (“BUD”) “[i]f you choose to
continue to accept this material.”
13. In February 2014, Mr. Jonas received an ODEQ notice related to Dayton Ecology

Composting explicitly advising that street sweepings could not be held at an interim facility absent
a BUD:
On a previous inspection I noted that a pile of street sweepings was present on the
site. WTS has contracts with various cities to conduct street sweeping. Approved
feedstocks for composting can include leaves from street cleanup. It does NOT
include dirt, gravel and other debris that is swept from catch basins, streets, or
parking lots during times of the year when leaf cleanup is not occurring. This
material is a regulated solid waste that requires proper disposal at a permitted
landfill or other approved site. Street sweepings are known to contain petroleum
hydrocarbons, metals, litter, and other pollutants. If the material is to be used for
any other purpose, a [BUD] would need to be completed by DEQ. This would
require submittal of a BUD application to DEQ that characterizes the material
through sampling and/or other means and includes the proposed end use of the
material. This information would then be evaluated by DEQ staff.

I sent Bob several emails about street sweepings not being allowed at the site and
also included this information in a previous inspection report.

This material cannot be brought to this or any other site for stockpiling or use
(including as a base for the composting area) without some sort of plan and
approval from DEQ.

During this inspection, the pile of sweepings remained on the site and Bob said that
it had been screened to remove debris and was to be used between windrows to
level the areas. This is a violation of solid waste rules as explained above. The
material needs to be removed from the site and disposed of properly and no more
material brought in without specific approval from DEQ.

ODEQ’s report subsequently repeated that street sweepings “are not allowed to be used as a
feedstock or for any other purpose on the site (including storage) without proper testing and a BUD
issued by DEQ,” and screening them to remove organics from inorganics is “a violation of the
solid waste rules.”
14. In April 2014, ODEQ issued a Warning Letter to Dayton Ecology Composting for
violating Or. Admin. R. 340-093-0040(1) associated with the presence of street sweepings. Mr.
Jonas was instructed to “[r]emove and properly dispose of the street sweepings identified at the
site and ensure that no more of this material is brought to this site.”

15. Mr. Jonas “agreed to have the street sweepings piles taken for proper disposal at the
landfill and to not bring any more of this material to the site.”
16. In May 2014, Mr. Jonas applied for and obtained a Waste Management profile at the
Riverbend Landfill for WTS street sweeping disposal.
17. At least as of 2014, Jonas knew or reasonably should have known non-leaf season street
sweepings, whether stowed temporarily at the Clutter Facility or otherwise, were regulated as solid
waste and subject to ODEQ oversight if not disposed of at a landfill (and irrespective of where the
organic and inorganic materials ended up after separation).
18. After 2014, defendants continued to temporarily store street sweepings containing
organics and inorganics at the Clutter Facility, and directly transport those materials to Dayton
Ecology Composting (and other unidentified facilities) for separation, composting, and/or reuse.2

19. ODEQ was unaware of WTS’ trucking and street sweeping operations until May 2016
when it received an inquiry from Multnomah County concerning whether an ODEQ permit was
required to temporarily stockpile street sweepings. Multnomah County included WTS as part of
its inquiry because WTS “does the reuse.” ODEQ asked Multnomah County to reach out to
defendants to determine the confines of their operations and “if their facility needs a permit as
well.” Despite repeated requests for information, Mr. Jonas was completely unresponsive. ODEQ

2 In May 2016, ODEQ ordered Dayton Ecology Composting to “immediately cease accepting all
feedstock types,” including leaves from street sweepings. ODEQ did not authorize Dayton
Ecology Composting to resume operations until August 2017.
indicated that it would perform a site visit at WTS’ “facility in the next few months” or sooner if
possible, explaining “[u]nfortunately some of these companies fall through the cracks permit-wise.”
20. In March 2016, ODEQ replied as follows to an inquiry from Ms. Glathar concerning
another facility’s street sweeping operations: “For at least the past 10 years, DEQ’s position has

been that facilities that aggregate street sweepings prior to disposal will require a transfer station
permit. Unfortunately, we do not have the staffing to search out these facilities and request permits
from facilities as they come to our attention.”
21. In June 2016, the Washington County Department of Health and Human Services
responded to an odor complaint relating to the Clutter Facility. At the site, Washington County
“detected an odor of what smelled like anaerobic rotting yard debris” on a portion of the property
leased to a third-party landscaping company. Washington County “advised [the] company [that it]
could not bring waste materials . . . on to the property for composting without first obtaining
permits from DEQ, METRO, and Washington County.” It also separately informed Mr. Jonas that
“composting as it was currently being done was not an allowed use of his property without first

obtaining the appropriate permits.” (Stipulated Facts #75-79)
22. The Washington County Department of Health and Human Services complaint was
closed in July 2016 following a subsequent site visit at which no yard debris or odor was observed.
(Stipulated Facts #80-81)
23. Also in July 2016, Metro inspected the Clutter Facility to determine whether “a solid
waste facility license [was required for WTS] to operate a yard debris reload facility.” The
inspection form notes that, “[i]n addition to operating the yard debris reload, [WTS] provides street
sweeping”, and reflects Mr. Hartley’s comment that defendants agglomerated street sweepings
from various municipalities at the Clutter Facility and then brought them to “Riverbend Landfill
for disposal.” WTS’ yard debris activities were separately described.
24. Metro ultimately determined that the Clutter Facility “is located outside of the Metro
jurisdictional boundary and therefore is not subject to Metro’s facility authorization requirements.”

25. In January 2017, Multnomah County notified ODEQ that NRC had bought WTS.
ODEQ responded that it would “reach out to NRC” and clarified Multnomah County would not
need an ODEQ permit to send inorganic fines “to a mine reclamation location” if the tested “street
sweeping grit” levels “are below the clean fill levels . . . But we would still need to figure
something out for the organics portion as that would not meet the definition for clean fill.”
26. Later in January 2017, ODEQ received a copy of the June 2016 Washington County
Department of Health and Human Services odor complaint and Metro investigation. ODEQ
queried in response: “Is anyone aware of this company? . . . Have we always had yard debris
reloads on [solid waste transfer station] permits?”
27. In February 2017, ODEQ resolved that “we generally do not put yard debris only

transfer states under permit . . . unless there is a problem with the facility or if they are transferring
food waste or some other stinky material. However, given [the] enforcement history with Bob
Jonas and his methods of operation have not been the best environmentally I would suggest
someone investigate in person and determine if a permit is necessary.”
28. In June 2018, ODEQ inspected the Clutter Facility to “follow up on an odor complaint
as well as to determine if site activities required a DEQ solid waste permit.” ODEQ “observed a
large pile of street sweeping debris onsite. DEQ also observed several smaller piles. According to
NRC personnel, the pile is separated into an organics fraction from the larger debris. The larger
debris is sent to Hillsboro Landfill for disposal.” (Stipulated Fact #88)
29. ODEQ informed NRC “that site activities would likely require a solid waste permit”:
These activities include the accumulation and separation of street sweeping debris
as well as wastewater pretreatment. Wastewater pre-treatment activities that are
covered under a separate wastewater treatment permit are not typically required to
obtain a DEQ solid waste permit. However, the wastewater treatment activities
conducted at this facility are not regulated under a wastewater pretreatment permit.

(Stipulated Facts #71-72)

30. In August 2018, ODEQ notified NRC that the Clutter Facility needed “a solid waste
transfer station permit . . . The site operations that require a permit are the street sweeping
collection and segregation and the wastewater treatment (since the activity is not regulated under
a pre-treatment permit” to a Publicly Owned Treatment Works (“POTW”). (Stipulated Fact #75)
31. In September 2018, ODEQ informed NRC that “[s]treet sweepings are not considered
clean fill” and “organics from street sweepings are not an approved compost feedstock” – i.e., they
“would likely require a DEQ beneficial use determination or other approval,” which was “unlikely
[to be] granted” given the presence of “PAHs, pesticides, and other contaminants in street
sweepings.”
32. In November 2018, an internal ODEQ email indicates it had “told NRC that they need
a solid waste permit for [the Clutter Facility] mostly because they accumulate street sweeping
debris.”
33. In December 2018, ODEQ issued a Warning Letter to NRC for violating Or. Admin.
R. 340-093-0050(1), noting that, during the June 2018 inspection,
DEQ observed a stockpile of street sweepings at the facility and a wastewater pre-
treatment system that does not have a wastewater treatment permit [although the
wastewater pre-treatment system was not operational during the site visit]. This
constitutes an illegal disposal site [and] Class I solid waste violation.

ODEQ detailed the following corrective actions: (1) “NRC must immediately cease accepting
street sweeping debris at this facility”; (2) “[b]y January 31, 2019, NRC must submit to DEQ an
operations plan detailing how the material will be stored in accordance with all regulatory
requirements”; and (3) “[b]y May 12, 2019, NRC must remove all street sweeping debris from the
facility.”
34. At the end of 2018, the Riverbend Landfill closed, making landfill disposal more

expensive. (Stipulated Fact #114)
35. Mr. Keesee testified that NRC developed two of its own landfills, at which in-house
pricing would be available.
36. In May 2019, NRC entered into a Mutual Agreement and Final Order with Washington
County, pursuant to which NRC agreed to pay $9,600 in association with the violations outlined
in the December 2018 Warning Letter and “relocate [its] solid waste activities from the [Clutter]
Facility to a new location that can be permitted by DEQ.” (Stipulated Facts #119-126)
37. In December 2019, NRC advised ODEQ that it had “closed all existing contractual
agreements” for street sweeping services. (Stipulated Fact #102)
38. In February 2020, NRC provided its Final Report of Operational Activities pursuant to

the Mutual Agreement and Final Order, confirming that “[a]ll work related to the street sweeping
operation ceased on December 18, 2019” and “there are no prohibited (i.e., non-putrescible, non-
hazardous or hazardous) wastes located” at the Clutter Facility. (Stipulated Facts #107-10)
39. In March 2020, ODEQ notified NRC that it had complied with the terms of the Mutual
Agreement and Final Order. (Stipulated Fact #128)
40. Dr. Ransdell and Ms. Skinner testified that NRC retained the services of a real estate
agent and diligently searched for a replacement property where NRC could resume street sweeping
operations.
41. After viewing multiple properties, NRC was unable to find a suitable location and
permanently closed its street sweeping branch.
42. NRC continues to conduct some business activities at the Clutter Facility and elected
to treat the Clutter Lease as having a six (as opposed to five) year term ending December 31, 2022.

43. NRC’s street sweeping operations were profitable in 2017 but dropped in 2018 and,
ultimately, had a net loss in 2019. (Stipulated Facts #111-13)
44. NRC incurred costs totaling $19,351 to retain counsel and defend against the ODEQ
enforcement action, and $74,861 in increased disposal costs for street sweeping waste to timely
comply with ODEQ’s requirements.
45. NRC incurred $3,144 for land use planning services and a Pre-Application Conference
associated with Washington County’s zoning requirements.
46. Ms. Morones testified that NRC’s lost street sweeping profits totaled $1,005,991. Ms.
Morones adequately identified the information and explained the basis for her lost profit
calculations. She similarly explained how she reached her conclusions and considered and

eliminated other damages sources based on her knowledge and experience. Defendants did not
proffer any contrary expert testimony or alternate damages figure, or meaningfully call into
question Ms. Morones’ assumptions and methodologies, which are generally accepted within the
industry.
C. Considering the evidence presented and weighing credibility of the witnesses, the Court finds
as follows as to the Clutter Facility’s wastewater pretreatment operations:
1. The Court previously determined at summary judgment that, based on defendants’ own
characterization of WTS’ wastewater pretreatment activities, the Clutter Facility qualified as a
“Solid Waste Transfer Station” under the CDC. NRC Env’t Serv., 2021 WL 2673781 at *23.
2. Defendants did not apply for or obtain any permits or land use approvals from
Washington County for their Clutter Facility operations. (Stipulated Facts #16-17)
3. Prior to the APA, BES inspected the Clutter Facility’s pretreatment operations on
approximately an annual basis.

4. The Clutter Facility is not mentioned in either the 2010 or 2015 Permits, and the only
location identified is the address of the Killingsworth Facility.
5. Mr. Keesee testified that the Clutter Facility’s pretreatment system was in “poor shape”
and there were “no available replacement parts.”
6. NRC determined it was more costly to truck the pretreated water into Portland for
discharge from unincorporated Washington County than to treat the wastewater on-site at the
Killingsworth Facility.
7. In March 2018, BES inquired whether the Clutter Facility was “under a different permit?”
Dr. Ransdell responded: “No, not really. They are receiving some portion of the wastes, and
separating out the liquids, but the only treatment we do happens at Killingsworth.”

8. In June 2018, ODEQ inspected the Killingsworth Facility, denoting “NRC has a
Centralized Waste Treatment permit with the City of Portland” and that “[a]ll wastewater storage
and treatment activities are conducted onsite in a warehouse,” including the screening to remove
the larger solids from liquids. ODEQ indicated that “a DEQ solid waste transfer station permit”
was not required for these activities.
9. ODEQ also inspected the Clutter Facility in June 2018 and described NRC’s
pretreatment activities as follows:
The wastewater treatment process is conducted inside a building. The process was
not running during the site visit. According to NRC, they are updating the process.
Wastewater accepted [consists] of catch basin liquids and solids from cleaning and
maintenance of stormwater components. Solids generated from the process are
disposed on at Hillsboro Landfill. Liquids are sent to NRC’s facility on NE
Killingsworth in Portland for additional treatment and discharge into the city of
Portland’s sewer system. This activity is not covered under a wastewater treatment
permit.

(Stipulated Fact #74)
10. NRC never told ODEQ that the Clutter Facility’s pretreatment operations were
regulated by a POTW. (Stipulated Fact #73)
CONCLUSIONS OF LAW
1. Under New York law, a contract is interpreted to give effect to the intent of the parties
as expressed by its language, which “is a matter of law for the court to decide.” Morgan Stanley
Grp. Inc. v. New England Ins. Co., 225 F.3d 270, 275 (2d Cir. 2000) (citations and internal
quotations omitted). Where the parties’ intent is “clearly and unambiguously set forth, effect must
be given to the intent as indicated by the language used.” Int’l Klafter Co., Inc. v. Cont’l Cas. Co.,
Inc., 869 F.2d 96, 99 (2d Cir. 1989) (citation and internal quotations omitted). “A contract is
unambiguous when the contractual language has a definite and precise meaning about which there
is no reasonable basis for a difference of opinion.” Keiler v. Harlequin Enters. Ltd., 751 F.3d 64,
69 (2d Cir. 2014).
2. To prevail on a breach of contract claim, a plaintiff must prove “(1) a contract; (2)
performance of the contract by one party; (3) breach by the other party; and (4) damages.” Rexnord
Holdings, Inc. v. Bidermann, 21 F.3d 522, 525 (2d Cir. 1994); see also CBS Inc. v. Ziff-Davis Pub.
Co., 75 N.Y.2d 496, 503-04, 553 N.E.2d 997, 1001 (1990) (“[t]he express warranty is as much a
part of the contract as any other term . . . and the right to indemnification depends only on
establishing that the warranty was breached”).
3. “Contract provisions that provide that representations and warranties survive a closing.”
In re Residential Cap., LLC, 524 B.R. 563, 592 (Bankr. S.D. N.Y. 2015).
4. The APA is an enforceable contract between NRC and defendants.
5. NRC performed its obligations under the APA by paying the purchase price, less the
$350,00 Indemnity Holdback Amount.
6. NRC provided timely notice of its Killingsworth Facility claims, thereby preserving its

allegations of breach under Sections 2.8 and 2.13 of the APA past the 18-month survival period.
7. Mr. Jonas expressly warranted under Section 2.19 of the APA that: (1) WTS “has been
and continues to be conducted, in compliance in all material respects with all Environmental Laws”
and “ha[s] obtained and maintain[s] all Permits relating to or required under Environmental Laws
to conduct the Business”; and (2) he and Mr. and Ms. Hartley had no knowledge of any “event
[that] has occurred or circumstances that exist [that] (a) would constitute or result in a material
violation by [WTS] of, or a failure on its part to comply with any Environmental Law, (b) would
reasonably be expected to result in material Liability under any Environmental Law, or (c) would
give rise to any material obligation on the part of [WTS] to undertake, or to bear all or any portion
of the cost of, any remedial action of any nature.”

8. City, county, and state land use and zoning laws fall within the ambit of Section 2.19,
which unambiguously pertains to health, safety, and the environment.
9. Although NRC’s activities subsequent to the execution of the APA may be relevant to
causation and damages, the sole focus for determining breach is defendants’ activities prior to and
on the date of the APA.
10. The fact an operator does not subjectively believe it requires a permit is not an excuse
for failure to comply with regulations applicable to those operations.
11. While enforcement occurs on a complaint basis, the applicable laws, and written
correspondences of ODEQ, the City of Portland, and/or Washington County make clear that a
company is required to obtain all requisite permits prior to commencing any regulated activity.
A. The Court concludes as to the Killingsworth Facility:

1. Pursuant to the PC, waste related uses are allowed in areas zoned General Industrial 2 if
approved through the conditional use process. PC §§ 33.140.100, 33.815.010.
2. Both the PC and BES permits define “pretreatment” as “the reduction of the amount of
pollutants, the elimination of pollutants, or the alteration of the nature of pollutant properties in
wastewater in accordance with federal, state, and local laws, regulations and permits prior to or in
lieu of discharging or otherwise introducing such pollutants into the City sewer system.” PC §
17.34.020(S); see also Or. Admin. R. 340-45-0010(19) (ODEQ defines “pretreatment” as “the
waste treatment that might take place before discharging to a sewerage system including but not
limited to pH adjustment, oil and grease removal, screening, and detoxification”); Or. Admin. R.
340-45-0010(30) (“‘Treatment’ or ‘Waste Treatment’ means altering the quality of wastewater by

physical, chemical, or biological means, or a combination of them, that reduces the tendency of
the wastes to degrade water quality or other environmental conditions”).
3. The BES permits define “solid waste” consistent with the PC and Oregon law as “[a]ny
garbage, refuse, or sludge from a waste treatment plant, water supply treatment place, or air
pollution control facility including solid, liquid, semisolid, or contained gaseous material resulting
from industrial, commercial, mining, and agricultural operations, and from community activities.”
See PC § 17.102.020(LL) (“‘Solid Waste’ has the meaning given in ORS 459.005(24)”).
4. Oil qualifies and is regulated as a “solid waste.”
5. Mechanically separating oil from wastewater and adjusting PH qualifies as
“pretreatment.”
6. WTS’ operations at the Killingsworth Facility, at least as of 2014-2015, included
wastewater pretreatment and resulted in residual solid waste.

7. Based on BDS’ directives and the PC, WTS’s activities at the Killingsworth Facility
required approval by the City of Portland through a conditional use review.
8. WTS never formally applied for or held a CUP.
9. NRC has established that WTS breached Sections 2.8, 2,13, and 2.19 of the APA as to
the Killingsworth Facility.
7. NRC has established that WTS’ breaches caused its damages associated with obtaining
and complying with a CUP for the Killingsworth Facility.
8. NRC is awarded $1,167,106 as to this claim, plus interest.
B. The Court concludes as to the Clutter Facility’s street sweeping operations:
1. Under Oregon law, “solid waste” is defined as

all useless or discarded putrescible and nonputrescible materials, including but not
limited to garbage, rubbish, refuse, ashes, paper and cardboard, sewage sludge,
septic tank, and cesspool pumpings or other sludge, useless or discarded
commercial, industrial, demolition and construction materials, discarded or
abandoned vehicles or parts thereof, discarded home and industrial appliances,
manure, vegetable or animal solid and semisolid materials, dead animals, and
infectious waste.

Or. Rev. Stat. § 459.005(24). It does not include “[m]aterials used for fertilizer or for other
productive purposes or which are salvageable such as materials used on land in agricultural
operations.” Id.
2. The ODEQ regulates solid waste “disposal sites,” which are defined as:
land and facilities used for the disposal, handling or transfer of or energy recovery,
material recovery, and recycling from solid wastes, including but not limited to
dumps, landfills, sludge lagoons, sludge treatment facilities, disposal sites for septic
tank pumping or cesspool cleaning service, transfer stations, energy recovery
facilities, incinerators for solid waste delivered by the public or by a collection
service, composting plants and land and facilities previously used for solid waste
disposal at a land disposal site[.]

OAR § 340-090-0010(11).
3. “‘Transfer Station’ means a fixed or mobile facility other than a collection vehicle where
solid waste is taken from a smaller collection vehicle and placed in a larger transportation unit for
transport to a final disposal location.” Or. Admin. R. 40-093-0030(96). “Transfer stations” are
“disposal sites.” Or. Admin. R. 40-096-0040(1), 40-093-0050(2)(f).
4. An ODEQ permit is required to operate a “disposal site” unless its activities are limited
to “[r]eceiving source separated materials for purposes of material recovery.” Or. Rev. Stat. §§
459.205, 459.245; Or. Admin. R. 40-093-0050(3)(d)(B). “‘Material Recovery’ means any process
of obtaining from solid waste, by pre-segregation or otherwise, materials which still have useful
physical or chemical properties and can be reused, recycled, or composted for some purpose.” Or.
Admin. R. 40-093-0030(64). And “‘Source Separate’ means that the person who last uses
recyclable materials separates the recyclable material from solid waste.” Or. Admin. R. 40-093-
0030(93).
5. Operations involving solid waste and/or environmental waste are not specifically
authorized in Washington County’s FD-20 District and are therefore prohibited uses. CDC § 308.
6. Accordingly, for a street sweeping facility to be permittable under the FD-20 designation,
it had to be lawfully established at the time of re-zoning. CDC §§ 308-2, 308-2.2, 430-127.2, 430-
127.3, 430-129.
7. WTS’ relevant operations were not confined to yard debris. Rather, WTS received mixed
loads of organics, inorganics, and trash/recyclables from multiple generators for intermediate
storage and trash/recyclable sorting prior to disposal and/or reuse at one or more other facilities.
8. Non-leaf season street sweepings that are commingled or aggregated in this manner

qualify as “solid waste.”
9. The agricultural use exclusion does not apply to the majority of the street sweepings
managed at the Clutter Facility.
10. The existence of a potential beneficial use does not exempt solid waste from appropriate
regulation. See Tire Jockey Serv., Inc. v. Dep't of Env't Prot., 591 Pa. 73, 915 A.2d 1165, 1189
(2007) (in addressing whether an interim tire facility qualified for an exception under similar waste
permitting rules, the court rejected the plaintiff’s argument that used tires “are not waste because
they will be recycled for use as a substitute for a commercial product or as an ingredient in an
industrial process” and instead held that “the plain language of the exception to the definition of
‘waste’ provides that such material is not waste when recycled, not before the material is recycled”)

(internal brackets and quotations omitted; emphasis in original).
11. Separation of the organics from the inorganics, and subsequent disposal/reuse thereof,
never occurred at the Clutter Facility, such that the source separation/material recovery exclusion
is inapplicable.
12. Although the organics and inorganics may not constitute “solid waste” individually or
once screened and separated from a larger pile (and, in the case of inorganics, tested), exceptions
or exclusions are determined when the material is being placed into the ground or used beneficially.
Thus, while the street sweepings were at the Clutter Facility, they did not qualify as clean fill or
for the agricultural use exception.
13. At a minimum, a BUD was required for WTS to legally operate the Clutter Facility’s
street sweeping operations prior to and at the time of the APA based on ODEQ’s directives and
Oregon law.
14. Defendants also needed a permit to operate the Clutter Facility as a street sweeping

facility when the area was zoned as a MAE District in order to have had the option of submitting
a Type I Procedure review to continue those operations once the area was designated FD-20.
15. Defendants never applied for any Washington County or ODEQ permits, or a BUD.
16. NRC established WTS breached Section 2.19 of the APA as to the Clutter Facility’s
street sweeping activities.
17. NRC established that WTS’ breach caused its lost profit damages associated with the
closure of Clutter Facility’s street sweeping operations.
18. NRC has also established that WTS’ breach caused the Washington County land use
and zoning damages.
19. NRC has not established that its damages emanating from the ODEQ’s enforcement

action were caused by WTS’ breach. NRC changed operations at the Clutter Facility to the extent
that it began stockpiling street sweepings, which was the subject of the ODEQ’s enforcement
action.
20. NRC is awarded $1,009,135 on this claim, plus interest.
C. The Court concludes as to the Clutter Facility’s wastewater pretreatment operations:
1. As determined at summary judgment, WTS breached Section 2.19 of the APA as to the
Clutter Facility’s wastewater pretreatment activities.
2. Irrespective of whether WTS’ wastewater pretreatment activities were licensed as a
POTW3 under the 2010/2015 Permits (such that they were not subject to ODEQ oversight), the
Clutter Facility was not operating in compliance with Washington County’s zoning and land use
regulations.

3. NRC has not established that any additional damages were caused by WTS’ breach.
4. The record reflects that NRC began transitioning its wastewater pretreatment operations
away from the Clutter Facility sometime in 2018 and it does not seek any lost profits associated
with these operations since they were successfully transitioned to the Killingsworth Facility.
5. All other claimed Clutter Facility damages have been addressed in relation NRC’s claim
surrounding WTS’ street sweeping operations.
D. The Court concludes as to the remaining claims:
1. Defendants initially asserted additional counterclaims that were settled earlier in this
litigation. As stated in the parties’ stipulation, NRC owes defendants $22,328.24, inclusive of any
and all claims for attorney fees, costs, and interest, but which may be offset against any money

judgment NRC obtains.
2. Defendants are entitled to the $350,000 Indemnity Holdback Amount, to be offset
against NRC’s damages. Per the APA, the Indemnity Holdback Amount did not become due until
the resolution of these proceedings and issuance of a corresponding final judgment.
3. NRC is entitled to attorney fees and costs pursuant to the APA in association with
defendants’ breaches.

3 A POTW “includes any devices and systems, owned by a State or municipality, used in the
collection, transportation, storage, treatment, recycling and reclamation of wastewater.” PC §
17.34.020(R). Accordingly, POTWs are synonymous with municipal sewage systems that
discharge wastewater directly into public water ways. See, e.g., Ark. Poultry Fed’n v. U.S. Env’t
Prot. Agency, 852 F.2d 324, 326 (8th Cir. 1988); PC § 17.34.020(B)-(C), (O)-(Q).
IT IS SO ORDERED.
DATED this 12th day of December, 2022.

___________/_s/_ J_o_l_ie_ _A_._ R_u_s_s_o___________
Jolie A. Russo
United States Magistrate Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10395440. Public record. Not legal advice.