Priority Waste Service, Inc. v. Santek Environmental, LLC

06/28/2021

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

April 20, 2021 Session

PRIORITY WASTE SERVICE, INC., ET AL.

v. SANTEK ENVIRONMENTAL, LLC, ET AL.

Appeal from the Circuit Court for Bradley County

No. V-19-420 Lawrence Howard Puckett, Judge

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No. E2020-01073-COA-R3-CV

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The plaintiffs in this action are operators of businesses that collect and transport

municipal solid waste. The plaintiffs filed suit against the defendants, a company that

operates a landfill and the county that is a partial owner of the landfill, alleging violations

of certain statutes regulating solid waste disposal and landfill operations. Upon a motion

to dismiss filed by the defendants, the trial court dismissed the plaintiffs’ claims based

upon, inter alia, the plaintiffs’ lack of standing and the court’s determination that the

statutes did not create a private right of action. The plaintiffs have appealed. Discerning

no reversible error, we affirm the trial court’s dismissal of the plaintiffs’ claims.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court

Affirmed; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which D. MICHAEL

SWINEY, C.J., and KRISTI M. DAVIS, J., joined.

Hoyt O. Samples, Chattanooga, Tennessee, for the appellants, Priority Waste Service,

Inc., and Steve Fraker d/b/a Industrial Refuse Service.

John W. Dawson, IV, and Brooke E. Howlett, Nashville, Tennessee, and Crystal R.

Freiberg, Cleveland, Tennessee, for the appellees, Santek Environmental, LLC, and

Bradley County, Tennessee.

OPINION

I. Factual and Procedural Background

On August 7, 2019, the plaintiffs, Priority Waste Service, Inc. (“Priority”), and

Steve Fraker d/b/a/ Industrial Refuse Service (collectively, “Plaintiffs”), filed a complaint

in the Bradley County Circuit Court (“trial court”) against the defendants, Santek

Environmental, LLC (“Santek”), and Bradley County, Tennessee (“the County”)

(collectively, “Defendants”). Plaintiffs alleged that they were each in the business of

collecting and transporting municipal solid waste and that Santek operated a competing

solid waste collection business. Plaintiffs additionally alleged that Santek operated the

Bradley County Sanitary Landfill (“the Landfill”) on behalf of the County, by virtue of

agreements between the County and Santek or its predecessor dating back to 1999.

In their complaint, Plaintiffs averred that on July 1, 2015, Priority had entered into

an agreement with Santek’s predecessor, providing for the disposal of Priority’s collected

solid waste at the Landfill. Plaintiffs further averred that Santek had breached that

agreement by charging rates in excess of those agreed upon by the parties. Plaintiffs also

asserted in their complaint that the Landfill was being operated in a manner that violated

Tennessee Code Annotated § 68-211-874, known as the “Landfill Statute,” and § 68-211-

835, known as the “Tipping Fee Statute.” In addition, Plaintiffs alleged that Santek had

engaged in deceptive business practices in violation of the Tennessee Consumer

Protection Act (“TCPA”) by charging itself artificially low tipping fees. Plaintiffs sought

a temporary injunction in addition to an award of compensatory damages, treble

damages, and attorney’s fees.

On September 6, 2019, the County filed an answer. Although the County

acknowledged its partial ownership of the Landfill, it denied any wrongdoing or liability

while asserting various affirmative defenses. Santek subsequently filed a motion to

dismiss the complaint, pursuant to Tennessee Rule of Civil Procedure 12.02(6), asserting

that Plaintiffs had failed to state a claim upon which relief could be granted. Santek also

filed a motion for a protective order, wherein Santek sought a stay of discovery until its

motion to dismiss could be addressed. On October 8, 2019, the trial court entered an

agreed order staying discovery.

On October 15, 2019, Plaintiffs filed a notice of voluntary dismissal, pursuant to

Tennessee Rule of Civil Procedure 41.01, concerning the TCPA claims contained in their

complaint. Plaintiffs concomitantly filed a brief in opposition to Santek’s motion to

dismiss. Santek subsequently filed an amended motion to dismiss on October 17, 2019,

and a second amended motion to dismiss on October 31, 2019. In its second amended

motion to dismiss, Santek averred that (1) Priority’s breach of contract claims should be

dismissed because Priority had failed to show that it incurred any damages, (2) Plaintiffs’

claims under Tennessee Code Annotated §§ 68-211-835 and -874 should be dismissed

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because such statutes did not provide for a private right of action and because Santek was

neither a county nor an agent of a county, and (3) Plaintiffs’ claims under Tennessee

Code Annotated §§ 68-211-835 and -874 should be dismissed because Plaintiffs lacked

standing. On January 6, 2020, the trial court entered an order directing the parties to

further brief certain issues.

Following the filing of briefs by the parties, Plaintiffs filed a motion on February

10, 2020, seeking to amend their complaint. Plaintiffs sought to add a claim for

declaratory relief as well as claims that the agreements between Santek and the County

violated Tennessee Code Annotated § 5-19-103(4) because such agreements had not been

properly approved by the County’s legislative body. Plaintiffs further sought to add

claims that Defendants’ actions had violated both the Commerce and Equal Protection

Clauses of the United States Constitution. Although Defendants opposed such

amendments, the trial court granted Plaintiffs permission to amend their complaint by

order entered on April 6, 2020.

On May 28, 2020, Defendants filed a motion to dismiss Plaintiffs’ amended

complaint. In addition to the previously asserted bases for dismissal, Defendants also

averred that Plaintiffs had no standing to seek declaratory relief and that the agreement

between the County and Santek was valid because it was approved by the County and its

Sanitation Board. Defendants also contended that Plaintiffs’ constitutional claims had no

basis.

Defendants concomitantly filed certain documents with the trial court, including

various resolutions adopted by the Bradley County Commission and a Solid Waste Needs

Assessment prepared for the County in 2013. Plaintiffs filed a responsive brief opposing

dismissal of their claims, arguing that the trial court should treat the motion to dismiss as

a motion for summary judgment due to the filing of documents outside the pleadings.

The trial court entered an order on July 28, 2020, granting Defendants’ motion and

dismissing all of Plaintiffs’ claims pursuant to Tennessee Rule of Civil Procedure

12.02(6). The court determined in pertinent part:

1. Plaintiffs’ claims against the County and Santek seeking declaratory

and/or injunctive relief under the provisions of the Solid Waste

Disposal Act, codified at Tennessee Code Annotated § 68-211-101,

et seq., “fail[ed] to state claims upon which relief can be granted

because the Act creates no private right of action.”

2. Plaintiffs lacked standing to bring their claims against the County

and Santek under the Solid Waste Disposal Act.

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3. Plaintiffs lacked standing to bring a cause of action for declaratory

and/or injunctive relief arising from the contracts between the

County and Santek because “the answer and pleadings show [such

contracts] to have been duly authorized by the County in accord with

the Solid Waste Disposal Act.”

4. Plaintiffs lacked standing to bring a cause of action for declaratory

and/or injunctive relief arising from the contracts between the

County and Santek because Plaintiffs were not parties to those

contracts.

5. The actions and contracts between the County and Santek challenged

by Plaintiffs’ complaint “fall within the broad powers granted to

[the County] by the Solid Waste Disposal Act, Tenn. Code Ann. §

68-211-835 (f) and by the provisions of Tenn. Code Ann. § 5-19-103

and 5-19-107.”

6. Tennessee Code Annotated §§ 68-211-835 and 68-211-874 did not

apply to the contracts between the County and Santek because the

County is not the operator of the landfill, does not charge “tipping

fees,” and receives no money for which it is required to account

under the above sections, and Santek is a private entity not subject to

those provisions.

7. “The allegation that the contracts between Bradley County and

Santek favor Santek over Plaintiffs does not state a cause of action

under the Commerce Clause and/or the Equal Protection Clause of

the Fourteenth Amendment upon which relief may be granted.”

8. Priority “has failed to state a claim of breach of contract upon which

relief can be granted against Santek because the complaint fails to

allege sufficient facts.” Santek has not refused to perform the

contract. The allegation that Santek charges Priority a greater

tipping fee than it charges itself does not state a claim upon which

declaratory and/or injunctive relief can be granted nor does it state a

breach of contract claim upon which relief can be granted to Priority.

Plaintiffs timely appealed.

II. Issues Presented

Plaintiffs present the following issues for our review, which we have restated

slightly:

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1. Whether the trial court erred by considering matters outside the

pleadings when ruling on Defendants’ motion to dismiss.

2. Whether the trial court erred by failing to apply the Tipping Fee

Statute and the Landfill Statute to Defendants’ activities.

Defendants present the following additional issue:

3. Whether the trial court correctly held that Plaintiffs lacked standing

to assert their claims based upon the Solid Waste Disposal Act or

contracts between the County and Santek.

III. Standard of Review

As our Supreme Court has explained with regard to motions seeking dismissal of a

complaint pursuant to Tennessee Rule of Civil Procedure 12.02(6):

A Rule 12.02(6) motion challenges only the legal sufficiency of the

complaint, not the strength of the plaintiff’s proof or evidence. The

resolution of a 12.02(6) motion to dismiss is determined by an examination

of the pleadings alone. A defendant who files a motion to dismiss “‘admits

the truth of all of the relevant and material allegations contained in the

complaint, but . . . asserts that the allegations fail to establish a cause of

action.’” Brown v. Tenn. Title Loans, Inc., 328 S.W.3d 850, 854 (Tenn.

2010) (quoting Freeman Indus., LLC v. Eastman Chem. Co., 172 S.W.3d

512, 516 (Tenn. 2005)).

In considering a motion to dismiss, courts “‘must construe the

complaint liberally, presuming all factual allegations to be true and giving

the plaintiff the benefit of all reasonable inferences.’” Tigg v. Pirelli Tire

Corp., 232 S.W.3d 28, 31-32 (Tenn. 2007) (quoting Trau-Med [of Am., Inc.

v. Allstate Ins. Co.], 71 S.W.3d [691,] 696 [(Tenn. 2002)]). A trial court

should grant a motion to dismiss “only when it appears that the plaintiff can

prove no set of facts in support of the claim that would entitle the plaintiff

to relief.” Crews v. Buckman Labs. Int’l, Inc., 78 S.W.3d 852, 857 (Tenn.

2002). We review the trial court’s legal conclusions regarding the

adequacy of the complaint de novo.

Webb v. Nashville Area Habitat for Humanity, Inc., 346 S.W.3d 422, 426 (Tenn. 2011)

(other internal citations omitted).

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IV. Consideration of Matters Outside the Pleadings

Plaintiffs argue on appeal that the trial court erred by considering matters outside

the pleadings, specifically the resolutions adopted by the Bradley County Commission,

when ruling on Defendants’ motion to dismiss filed pursuant to Tennessee Rule of Civil

Procedure 12.02(6). The trial court apparently considered the resolutions when ruling on

Defendants’ motion, as evinced by the court’s specific reference to contracts between the

County and Santek having been “duly authorized” by the County. Plaintiffs contend that

consideration of such matters should have resulted in the trial court’s analysis of the

motion pursuant to Tennessee Rule of Civil Procedure 56, which Plaintiffs posit would

have necessitated “different timelines” and completion of discovery before a ruling could

be rendered.

Generally, “[i]f matters outside the pleadings are presented in conjunction with

either a Rule 12.02(6) motion [to dismiss] or a Rule 12.03 motion [for judgment on the

pleadings] and the trial court does not exclude those matters, the court must treat such

motions as motions for summary judgment and dispose of them as provided in Rule 56.”

Patton v. Estate of Upchurch, 242 S.W.3d 781, 786 (Tenn. Ct. App. 2007). Exceptions to

this general rule exist, however, for “matters incorporated by reference or integral to the

claim, items subject to judicial notice, matters of public record, orders, items appearing in

the record of the case, and exhibits attached to the complaint whose authenticity is

unquestioned.” W. Exp., Inc. v. Brentwood Servs., Inc., No. M2008-02227-COA-R3-CV,

2009 WL 3448747, at *3 (Tenn. Ct. App. Oct. 26, 2009) (quoting Ind. State Dist. Council

of Laborers v. Brukardt, No. M2007-02271-COA-R3-CV, 2009 WL 426237, at *8

(Tenn. Ct. App. Feb. 19, 2009) (stating that the above-listed items “may be considered . .

. without converting the motion into one for summary judgment.”)).

In the case at bar, the resolutions adopted by the Bradley County Commission

constitute matters of public record. See Tenn. Code Ann. § 10-7-301 (2020) (defining

“public record or records” as “all documents, papers, letters, maps, books, photographs,

microfilms, electronic data processing files and output, films, sound recordings, or other

material, regardless of physical form or characteristics made or received pursuant to law

or ordinance or in connection with the transaction of official business by any

governmental agency.”). As such, the trial court’s consideration of such documents did

not necessitate converting the motion to dismiss to a motion for summary judgment.1 See

W. Exp. Inc., 2009 WL 3448747, at *3; see also Athena of S.C., LLC v. Macri, No.

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In its order, the trial court did not indicate that it had relied on the 2013 Solid Waste Needs Assessment

for any purpose. Assuming, arguendo, that the trial court did rely on such document in its analysis, we

note that this document would also be considered a public record because it was required by the Solid

Waste Act and was therefore “made or received pursuant to law or ordinance or in connection with the

transaction of official business by [a] governmental agency.” See Tenn. Code Ann. § 10-7-301

(containing definition of “public records”); see also Tenn. Code Ann. § 68-211-811 (reflecting

requirement for needs assessment for counties).

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E2016-00224-COA-R3-CV, 2016 WL 5956984, at *5 (Tenn. Ct. App. Oct. 14, 2016)

(“Courts may also consider matters that the complaint incorporates by reference, items

subject to judicial notice, orders, and matters of public record without converting a

motion to dismiss into a motion for summary judgment.”). We therefore conclude that

this issue is without merit.

Plaintiffs also argue that the resolutions filed by Defendants were “deficient on

their face” and therefore should not have been relied upon by the trial court when

rendering its judgment. We note, however, that Plaintiffs failed to raise this as an issue in

their statement of the issues. As such, we determine that any issue concerning the

validity of the resolutions filed with the trial court has been waived on appeal. See

Gibson v. Bikas, 556 S.W.3d 796, 810 (Tenn. Ct. App. 2018) (explaining that a party’s

request for attorney’s fees on appeal would not be considered because it had not been

raised as an issue in the statement of the issues); Ethridge v. Estate of Ethridge, 427

S.W.3d 389, 395 (Tenn. Ct. App. 2013) (“Issues not raised in the statement of the issues

may be considered waived.”).

V. Statutory Provisions

Plaintiffs argue that the trial court erred by failing to apply the Tipping Fee Statute

and the Landfill Statute to Defendants’ activities in order to impose liability. These

statutory provisions are found within the Solid Waste Management Act of 1991, codified

at Tennessee Code Annotated § 68-211-801, et seq. (2013 & Supp. 2020) (“Solid Waste

Act”). The Landfill Statute, codified at Tennessee Code Annotated § 68-211-874 (2013),

provides generally that counties, municipalities, and solid waste authorities “shall account

for financial activities related to the management of solid waste in accordance with

generally accepted accounting principles” and describes how such accounting should be

accomplished. The Landfill Statute further provides in pertinent part: “No state funds

for solid waste management shall be released to a county, solid waste authority or

municipality unless financial activities related to the management of solid waste are

accounted for” in a specific manner. See id.

The Tipping Fee Statute, codified at Tennessee Code Annotated § 68-211-835

(Supp. 2020), provides in pertinent part that counties, municipalities, and solid waste

authorities that own “a municipal solid waste disposal facility or incinerator may impose

a tipping fee upon each ton of municipal solid waste or its volume equivalent received at

such solid waste disposal facility or incinerator.” The statute also provides that “[s]uch a

tipping fee shall be set by the governing body of the county or municipality, or by the

board of directors of the solid waste authority.” See id. The Tipping Fee Statute further

directs, inter alia, the manner in which such fees may be collected and spent. See id.

Plaintiffs contend that Defendants have failed to comply with the requirements of

the Landfill Statute and the Tipping Fee Statute in their operation of the Landfill.

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Plaintiffs have sought a declaratory judgment stating that the agreements between Santek

and the County are violative of these statutes. The trial court dismissed Plaintiffs’ claims,

however, determining that the Solid Waste Act created no private right of action and that

Plaintiffs lacked standing. We agree with the trial court’s determination that the above-

mentioned statutes create no private right of action.

“A private right of action allows a person to sue to remedy a wrong or prevent a

wrong caused by another party’s violation or threatened violation of a statute.”

Affordable Constr. Servs., Inc. v. Auto-Owners Ins. Co., 621 S.W.3d 693, 696 (Tenn.

2021) (“It is the exclusive province of the legislature—not the courts—to create a

statutory private right of action.”). In order to state a cause of action to enforce a duty or

requirement imposed by a statute, “the plaintiff must show that the legislature intended

for a private right of action to exist.” Id. Although the Tipping Fee Statute provides a

means for counties, municipalities, and solid waste authorities to set “tipping” and other

fees to be collected by the operator of a landfill, it does not expressly create a private

right of action allowing landfill users to sue concerning such fees. Similarly, the Landfill

Statute places requirements upon counties, municipalities, and solid waste authorities

related to the manner in which they account for financial activities concerning solid waste

management. The Landfill Statute does not, however, expressly create a private right of

action enabling third parties to sue to enforce these requirements.

In instances when a statute does not expressly create a private right of action, this

Court may “examin[e] the statute’s structure and legislative history” to determine

whether the legislature intended to imply a private right of action. See id. at 696. In

doing so, we must consider the following factors outlined by our Supreme Court:

(1) whether the party bringing the cause of action is an intended

beneficiary within the protection of the statute,

(2) whether there is any indication of legislative intent, express or

implied, to create or deny the private right of action, and

(3) whether implying such a remedy is consistent with the underlying

purposes of the legislation.

Id. at 697. Considering the above factors in this matter, we determine that no private

right of action benefitting a third party is implied within the Tipping Fee Statute or the

Landfill Statute.

With regard to the first factor, both the Tipping Fee Statute and the Landfill

Statute appear intended to regulate the activities of counties, municipalities, and solid

waste authorities in connection with their management of solid waste. Viewing the Solid

Waste Act as a whole, its provisions are directed toward counties, municipalities, and

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solid waste authorities and operate to specify the manner in which solid waste facilities

and landfills can be managed, with an emphasis on environmental concerns. In fact, the

Solid Waste Act is but one part of Title 68, dealing with “Health, Safety, and

Environmental Protection,” and Chapter 211, “Solid Waste Disposal.” A number of the

subsections within the Solid Waste Act confer authority upon the “board,” defined as “a

board, established to manage the affairs of a municipal solid waste management region,”

or the commissioner of environment and conservation to enforce the requirements

contained therein, rather than providing for private enforcement. See, e.g., Tenn. Code

Ann. §§ 68-211-802, -813, -814, -816, -853.

Furthermore, the public policy expressly stated in the Solid Waste Act is

to protect and enhance the quality of [the state’s] environment, to institute

and maintain a comprehensive, integrated, statewide program for solid

waste management, which will assure that solid waste facilities, whether

publicly or privately operated, do not adversely affect the health, safety and

well-being of the public and do not degrade the quality of the environment

by reason of their location, design, method of operation or other means and

which, to the extent feasible and practical, makes maximum utilization of

the resources contained in solid waste.

It is further declared to be the policy of this state to educate and

encourage generators and handlers of solid waste to reduce and minimize to

the greatest extent possible the amount of solid waste which requires

collection, treatment, incineration or disposal through source reduction,

reuse, composting, recycling and other methods.

It is further declared to be the policy of this state to promote markets

for, and engage in the purchase of, goods made from recovered materials

and goods which are recyclable.

Tenn. Code Ann. § 68-211-803 (2013) (paragraph numbering omitted). Nothing in the

statute demonstrates a legislative intent to protect a waste collection company’s ability to

compete in the market. Moreover, nothing in the statute indicates a legislative intent to

create a private right of action, and we determine that implying such a right of action

would be inconsistent with the underlying purposes of the legislation. We therefore

conclude that the Solid Waste Act does not provide a private right of action, express or

implied, that would allow Plaintiffs to file suit to enforce its terms in this situation.

Our decision is further supported by prior decisions of this Court and our Supreme

Court holding that other sections of Title 68, Chapter 211 do not confer a private right of

action for persons who claim to have been harmed by an alleged violation of such

statutory provisions. See Goff v. Elmo Greer & Sons Constr. Co., Inc., 297 S.W.3d 175,

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186 (Tenn. 2009) (“[T]he Solid Waste Disposal Act . . . does not provide a private right

of action for persons harmed by a violation of its provisions.”); Wayne Cty. v. Tenn. Solid

Waste Disposal Control Bd., 756 S.W.2d 274, 283 (Tenn. Ct. App. 1988) (“[N]othing in

the Act expressly gives the Board or the Commission the authority to grant remedial

relief to private parties.”). Accordingly, we affirm the trial court’s dismissal of Plaintiffs’

claims based on the Landfill Statute and the Tipping Fee Statute. Further arguments

concerning Plaintiffs’ standing to bring claims pursuant to these statutes are thus

pretermitted as moot.

VI. Conclusion

For the foregoing reasons, we affirm the trial court’s judgment dismissing

Plaintiffs’ claims. We remand this matter to the trial court for collection of costs assessed

below. Costs on appeal are taxed to the appellants, Priority Waste Service, Inc., and

Steve Fraker d/b/a Industrial Refuse Service.

s/ Thomas R. Frierson, II_____________

THOMAS R. FRIERSON, II, JUDGE

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