Americans pay a “tort tax” of $865 billion a year, according to last year’s estimate by the Pacific Research Institute. This figure represents money taken out of the economy via awards, settlements, lawsuit-avoidance tactics and price inflation of products and services provided by litigation-prone industries. The scholarship is challenging, but the principle is quite simple. When a lot of people sue, costs rise.
That’s what makes the reaction of Connecticut Resources Recovery Authority members to a tipping-fee increase so puzzling. The towns sued the CRRA over its failed investment in Enron and won a $36 million judgment last year. Though the case is on appeal to the state Supreme Court, the CRRA has distributed $27 million to the municipalities. The towns’ lawyers will get $9 million if the appeal fails.
The CRRA said all along the fees it charges its 70 member towns were set to increase, and that they would go up more if it lost the case than if it won. Sure enough, the quasi-public agency announced last month a fee increase from $61 per ton to $76. “It’s just outrageous,” said the towns’ lawyer, David Golub. “It smacks of retaliation. The towns we’ve talked to are outraged and believe it’s completely unacceptable. They believe the legislature needs to intercede.”
CRRA spokesman Paul Nonnenmacher linked the increase to the expected $115 million cost of closing its Hartford landfill. Nobody is suggesting closing a landfill is cheap, but let’s get real. The court relieved the CRRA of $36 million. Call it justice or a loss or a tort tax, but it’s a big chunk of money and it’s gone.
Last fall, CRRA officials prepared a chart that showed tipping fees would rise whether they won or lost the towns’ lawsuit, for all the usual reasons, including the landfill project. If the agency won the lawsuit, fees would rise to between $69 and $80 per ton from 2008-13; if it lost, $86 to $89 from 2009-12. The CRRA never attempted to conceal the obvious impact of the lawsuit, and the announced increase falls well within the range the agency predicted last October.
It seems Mr. Golub and his fellow lawyers, soon to be $9 million richer, forgot to tell the town officials there is no free lunch.