Two rental property owners filed a class action lawsuit Thursday against the city of Los Angeles over its recycling and trash-hauling program, claiming that changes implemented last year violate a state law that prohibits the imposition of taxes which have not been approved by voters.
The franchise waste-hauling system called RecycLA was approved by the City Council in late 2016 and became operational July 1, 2017, with the goal of expanding recycling opportunities to thousands of businesses and apartment buildings while also cutting down on pollution by reducing the number of trucks on the street and requiring service providers to transition to low-emission trucks.
Under the program, seven companies handle an estimated $3.5 billion in commercial waste hauling in Los Angeles. Each company is assigned as the sole trash hauler for commercial sites and multi-family complexes in one or more of the city’s 11 zones, as opposed the previous system where customers could pick and choose between a variety of companies.
Frederick Leeds and Malcolm Bennett are co-lead class representatives in the class action lawsuit which claims the city has imposed an unconstitutional and illegal tax through a “franchise fee,” which has resulted in certain property owners paying more than others for the same services, and some customers paying much more for trash services than they used to.
The lawsuit claims a portion of the franchise fee is placed into the city’s general fund, and not for any designated program. The complaint alleges that by implementing the RecycLA program, the city has illegally imposed a tax in violation of Proposition 218 and the California Constitution. Prop 218 requires new taxes to be approved by voters on a ballot.
“Since its inception, the RecycLA program has been an unmitigated disaster,” plaintiff attorney Brian Kabateck said. “This hurts small business owners and their tenants who are shouldering this unfair tax burden to help fill the city’s coffers.”
Elena Stern, a spokeswoman for the Department of Public Works, said she had not seen the complaint yet and added that the department does not typically comment on pending litigation.
The lawsuit alleges that the illegal tax collected by the city under the RecyLA program is estimated at over $15 million to date. The plaintiffs are demanding a refund and damages from the city of Los Angeles.