Don Van der Linde? Wasteworks whacks recycler with RICO
Just when we thought it couldn'tÃ?Â
Just when we thought it couldn't get any hotter, the Rivanna Solid Waste Authority recently turned up the heat on its $3.5 million lawsuit against recycling entrepreneur Peter Van der Linde, accusing him of running a Mafia-style trash operation.
Authority lawyers have now decided to sue Van der Linde under provisions of RICO, the Racketeer Influenced and Corrupt Organizations Act, the federal law passed in 1970 for the government's fight against organized crime, such as the Hell's Angels and the Gambino family. Controversially, RICO has been applied more liberally in recent years, allowing private parties to sue, but the Authority must still prove a "pattern of racketeering activity."
While Van der Linde's lawyer, Lamar Garren, stops short of calling it an intimidation tactic, he says it certainly "ups the ante."
Under RICO, Van der Linde's assets could be seized, and if found liable, the judge could triple any damage award. There's also a chance Van der Linde could do jail time. RICO also lessens the burden of proof on the Authority, as showing a mere "pattern of activity" has always been sufficient evidence for a RICO conviction.
Initially, Van der Linde says he was a bit fearful when he heard the word RICO, as the seizure of assets could potentially shut down the $11 million construction recycling facility he opened last December and threatens an impending expansion into household waste.
"It's a legal terrorist tactic," says the outspoken businessman, adding that the Authority must have thought he'd give up by now. "But they didn't know who they were dealing with," he says. "I don't know what 'give up' means."
The Authority alleges that Van der Linde, who has long run a dumpster business, ordered his drivers and other employees to lie about the origins of their loads when they were brought to the nearby RSWA-sponsored transfer station at Zion Crossroads (which is just yards away from Van der Linde's new facility), run by BFI at the time (BFI was later sold to Allied Waste, which recently merged with Republic Services), thereby avoiding the RSWA's $16 "Service Contribution Fee" charged to all trash originating in Albemarle County.
Of course, the RSWA may have been fleeced by its own partner in trash long before Van der Linde came into the picture, as RSWA documents obtained by the Hook show that BFI employees were “completely unaware” of their duty to collect a “service contribution fee" in 2005, seven years after the fee arrangement was inked, and that the Authority was prepared to take legal action. But that's another story.
On July 31, the two sides squared off at a hearing in Charlottesville Circuit Court, part of the discovery phase of a jury trial scheduled for next June, during which Authority lawyer Jonathan Blank with McGuireWoods presented documents, provided by BFI, that showed a sudden drop in the amount of Albemarle trash Van der Linde's drivers declared between August 2006 and September 2007.
Van der Linde has argued that BFI's scale-master stopped asking his drivers about the origins of their loads during that time, and has provided the Authority's lawyers with the results of a private investigation that shows, via audio and visual recordings, that the scale-master rarely asked anyone. What's more, Van der Linde has argued that there was no incentive for him to lie about trash origins, as BFI actually charged him more for bringing out-of-area loads.
In 2006, Van der Linde sued the RSWA, claiming the service contribution fee was unconstitutional and gave BFI an unfair competitive advantage, as the private hauler was exempt from the fee. Van der Linde lost the case, as the judge ruled that the issue was better addressed through the political process.
Ironically, the man the RWSA has accused of not paying those service fees would be the one to undo the fee system. Today, because Van der Linde's new facility is offering the same services for less, the RSWA has acknowledged that it won't be able to "function" under the fee system.
Though just a hearing, Blank appeared to be in prosecutorial mode, seven times using the word "liar" to describe Van der Linde, accusing him of destroying key documents, and appearing to fish for an early ruling from judge Edward Hogshire, telling the judge that documents would "prove his guilt."
"I have a serious problem. I need the court's help," said Blank, informing the judge that taxpayer money was being used to pay for the expensive lawsuit. "If we don't need to proceed, we will save a ton of money."
"We just had to sit there on our hands and listen to that," said Van der Linde later. "That hearing was the first case I've had of feeling violated."
The key documents, Blank revealed, were the "field tickets" handed to drivers, which told them where the dumpsters for pick-up were located. Blank argued they were the "Rosetta Stone" that would help determine how much local trash Van der Linde brought in.
"But they've said they didn't need to keep the field tickets," said Hogshire.
Another Van der Linde lawyer, Corban Klug, pointed out that the field tickets weren't the "lovely" and orderly documents Blank suggested–- merely drivers' directions. He said that all the documentation about the origins of each load were available on the company's computer, which the defense had repeatedly offered to hand over to the RSWA for a forensic analysis, so origins weren't lost when they discarded tickets.
"But you did," said Blank excitedly, pointing out that the judge had ordered Van der Linde to preserve all his documents at a hearing last summer.
"Look, you've got the whole package," said Hogshire, referring to the offer to hand over the computer. "Why wouldn't that work?
Blank complained that the plaintiff didn't have the resources or the know-how to examine the computer, and he again reminded the judge about taxpayer money.
"You can figure it out," said Hogshire.
As for Van der Linde's lawyers, Hogshire had equally strong words.
"Knowing you were going through litigation, why in the world would you destroy the field tickets?" he asked. "As evidence, originals would be better, as opposed to computer documents. I can't imagine anyone 'innocently' destroying documents."
Later, defense counsel Garren told the Hook that he couldn't comment on the existence of the field tickets, but was confident that the information on Van der Linde's computer, which would include everything about his business, would be sufficient in determining the origins of trash loads.
Although the Authority has refused to discuss the case–- indeed, Charlottesville Mayor Dave Norris, County Supervisors Anne Mallek and Sally Thomas, the RSWA's own citizens advisory board, and other officials first learned about about the lawsuit from a Hook reporter–- it appears the RICO move stems from the testimony and evidence, in particular one of those field tickets, supplied by a former Van der Linde employee, Richard Wade Kendrick of Palmyra.
While every other Van der Linde employee has denied wrongdoing in depositions, Kendrick has said that Van der Linde did indeed ask his drivers to lie.
"He didn't directly tell drivers; he ran it through his dispatcher," said Kendrick, who called a Hook reporter in June to complain that the coverage of Van der Linde had been too favorable.
"He's guilty," said Kendrick. "He's guilty of fraud and conspiracy. Every time he opens his mouth it's a lie."
As part of its RICO move, Authority lawyers have deposed all of Van der Linde's drivers for questioning, and have blamed the company dispatcher, Jeanie Donnelly, a mother of four, for conspiring with drivers to bilk the RSWA out of millions in fees.
"He said we would be terminated if we didn't use other places outside the district on our bills," said Kendrick. "The drivers are all guilty. No other drivers are speaking up because they are afraid of being fired."
According to Van der Linde, however, Kendrick had already been fired–- and arrested–- when he gave the interview.
Van der Linde says Kendrick sent him an "extortion letter" in April asking for $75,000 or else he would tell the RSWA he was asked to lie. Van der Linde took the letter to police, and Kendrick was arrested April 30. Apparently, it wasn't the first time.
As part of Kendrick's upcoming attempted extortion trail, which will take place in December in Fluvanna County, the Charlottesville court learned that Kendrick had been convicted of numerous felonies and had spent more than 20 years in jail, facts Blank acknowledged during the hearing when he mentioned who had given him the sample field ticket, and that Kendrick himself acknowledged during his deposition.
However, Kendrick claims that he simply asked Van der Linde for money to hire a lawyer to represent the drivers in the RSWA's lawsuit, but then Van der Linde charged him with extortion.
"We don't think much of the RSWA's theory," says defense counsel Garren, "and the testimony of the other drivers is not consistent with Mr. Kendrick's."
Asked what might be behind the RSWA's decision to use RICO, to embrace Kendrick as its star witness, and Blank's aggressive manner so early in the game, Garren said he could only speculate.
"We honestly don't know," he said.
February 14, 2008–Coming soon! van der Linde's amazing recycling machine
April 2, 2009–What a Waste: Is the trash Authority going obsolete?
May 29, 2009–Recycle this! Van der Linde steps up tone
August 17, 2009–Trash talkin’: Waste war could decide the future