Casella Waste Systems will pay New York state $100,000 and change the terms of some waste-hauling contracts to settle a case concerning alleged anti-competitive business practices in upstate New York.
The Rutland-based company also must notify the Attorney General’s Office if it acquires any smaller competitors in certain upstate counties, where the case was centered.
In a July news release, New York Attorney General Eric T. Schneiderman said the agreement resolved “concerns that Casella’s restrictive contracting practices, combined with its market dominance and pattern of acquisitions of smaller competitors, unlawfully restrained competition in the North Country and Southern Tier.”
Joe Fusco, Casella vice president, said the company’s service contract is an industry standard, but that the state’s AG found the duration and termination clauses concerning. He disputed Schneiderman’s characterization of the company’s contracts as “unlawful.”
“He assured us in our discussion that we were not being accused of doing anything unlawful,” Fusco said.
He said the company voluntarily changed the terms of the contracts in question to give the state “a greater comfort level.”
Casella agreed to similar deals with the Vermont Attorney General in 2002 and again in 2011, when the firm was penalized $1 million for violating the terms of its earlier settlement.
The recently settled case in New York alleged that Casella had established market dominance in the region through unfair business practices that reduced competition.
Specifically, regional contracts for collecting and disposing of dumpster waste gave Casella excessive rights to serve the customers for up to five years. Canceling service was discouraged by termination fees up to six times the contract’s monthly bill. Another provision granting Casella the right to match competing offers further deflated potential competition, Schneiderman’s office said.
“(L)ong term, restrictive contracts can raise the costs and risks associated with new entry or expansion in a market, and tend to entrench the market position of the dominant firm,” the press release said. “In this case, Casella’s market position was also strengthened by its pattern of acquiring smaller competitors in its key markets.”
The settlement applies to the counties where Casella has the strongest market presence: St. Lawrence, Franklin, Clinton, Chautauqua, Cattaraugus, Allegany, Steuben, Schuyler, Chemung and Tompkins.
“We were not asked to change the terms of the contracts in any other part of New York state,” Fusco said. He said contracts elsewhere in New York can last from three to five years.
