Opinion
No. X02 CV 04-0185580-S
May 30, 2008
I. BACKGROUND and PROCEDURAL HISTORY
Plaintiffs comprise a class of seventy municipalities in the State of Connecticut who have entered into contracts with defendant Connecticut Resources Recovery Authority (hereinafter referred to as "CRRA"). The contracts are due to expire in the year 2012, unless renewed by the parties. These seventy municipalities comprise CRRA's Mid-Connecticut Project (hereinafter referred to as "Mid-Conn Project").
CRRA was established by statute in 1973 to help Connecticut's municipalities manage, recycle and dispose of solid waste. It was also created by the state in order to carry out the state's solid waste management plan. The named plaintiffs have brought this action individually and on behalf of the seventy Connecticut municipalities that comprise CRRA's MidConn Project. This action was certified as a class action on March 21, 2006.
On June 19, 2007, this Court held that CRRA had illegally loaned money to Enron. When Enron collapsed, CRRA lost its revenue stream from this loan. In order to keep the enterprise viable, CRRA increased the "tip fees" which it charged the municipalities for processing the trash from $51 per ton in the budget year of 2002 to $69 per ton in the budget year of 2007. The Court held that these increases were a direct result of the Enron collapse since the actual expenses of CRRA had decreased over the same period of time that the "tip fees" had increased.
After the collapse of Enron, CRRA, under the direction of the Attorney General for the State of Connecticut, proceeded to sue various banks, attorneys, and Enron. CRRA recovered substantial sums of money as the result of these lawsuits.
In its June 19, 2007 ruling the Court ordered that a constructive trust be established for the benefit of the municipalities in the sum of $35,873,732.25 as restitution for the increased tipping fees which the municipalities had incurred as a result of the failed Enron Transaction and their portion of the improper allocation of the monies from the Non Project Ventures Account. The Court held that the money represented an amount by which CRRA would be unjustly enriched if it was allowed to retain subject monies which it had received from recoveries in some of its lawsuits. Further, the Court ordered that, effective for the budget on Fiscal Year 2008 and each budget year thereafter, CRRA was enjoined from passing any of the costs of the failed Enron Transaction to the municipalities.
On October 25, 2007, this Court issued a further decision regarding CRRA's Fiscal Year 08 budget, in which the Court, after a hearing, found that CRRA had included Enron-related expenses in the Fiscal Year 08 budget, in contravention of the Court's prior order. As a result of said finding, the Court ordered that the Enron-related expenses be stricken from the Fiscal Year 08 budget and a new budget was to be created in accordance with the Court's ruling.
CRRA recently announced its Fiscal Year 09 budget. Plaintiffs have filed a Motion to Enforce Judgment and Enjoin CRRA from Subverting the Prior Judgment of the Court. In their motion plaintiffs claim that the Fiscal Year 09 budget includes millions of dollars in improper, inflated and unnecessary expenses intended to enable CRRA to recoup a substantial portion of the monies this court ordered distributed to the plaintiffs as the result of a December 2007 order of the Court.
CRRA has objected to the motion on the grounds that the court does not have jurisdiction to hear the motion because the monies have been paid to the towns, although the case remains on appeal to the Supreme Court of Connecticut. CRRA has also filed a Motion in Limine to restrict the scope of any hearing in the matter to the one budget item which, it argues, could conceivably be argued to be an Enron-related item — the Debt Service Stabilization Fund.
The Court heard the parties on May 21, 2008, at which time the Court reserved decision on the matters. Of interest to the Court was the following statement of CRRA's President, Mr. Kirk, to the news media, represented to the court by plaintiffs' counsel, and confirmed unchallenged by defense counsel:
Mr. Kirk: $35.6 million has to be recollected. So tipping fees will be exactly $35.6 million higher than they would have been otherwise.
Interviewer: So you're saying they're going to get a break now, but a few months down the road they're going to end up paying more?
Mr. Kirk: Yes.
Plaintiffs contend that this statement, coupled with the increase in the Fiscal Year 09 budget demonstrates an intent on the part of CRRA to recoup, through inflated tipping fees, in violation of its contracts with the towns, all of the monies ordered by the court to be paid by CRRA in restitution in the form of a constructive trust, thus frustrating and subverting the prior judgment of the court.
II. LAW
C.G.S. Section 52-212a provides, in relevant part:
Unless otherwise provided by law and except in such cases in which the court has continuing jurisdiction, a civil judgment or decree rendered in the Superior Court may not be opened or set aside unless a motion to set aside is filed within four months following the date on which it was rendered or passed . . .
The primary purpose of Section 52-212a is to protect the finality of judgments. Kim v. Magnotta, 249 Conn. 94, 102, 733 A.2d 809 (1999). Although occasionally referred to as a statute implicating a trial court's subject matter jurisdiction, Section 52-212a actually "operates as a constraint, not on the trial court's jurisdictional authority, but on its substantive authority to adjudicate the merits before it." Id. at 104.
A Superior Court certainly has the inherent power to effectuate and vindicate its judgments. AvalonBay Communities, Inc. v. Plan Zoning Comm'n, 260 Conn. 232, 241, 796 A.2d 1164 (2002). However, the case law is clear that a court can only exercise that power beyond the four-month period set forth in Section 52-212a in the following circumstances:
(1) when a party fails to comply with the terms of a plain, unambiguous court order or consent judgment. Rocque v. Light Sources, Inc., 275 Conn. 420, 433, 881 A.2d 230 (2005). In Rocque the Supreme Court explained that a trial court has "continuing jurisdiction to effectuate its prior judgments, either by summarily ordering compliance with a clear judgment or by interpreting an ambiguous judgment and entering orders to effectuate the judgment . . ." Id. at 433.
(2) when the court enters an order that, while not so ambiguous as to be unenforceable, nonetheless requires interpretation in order to effectuate the court's original judgment. In AvalonBay, supra, 260 Conn 250-51, the Supreme Court concluded that the trial court had continuing jurisdiction to interpret the terms "reasonable and necessary" so as to effectuate its judgment:
"We recognize the terms `reasonable and necessary are not self-defining and may be open to differing rational interpretations. That does not mean, however, that they are so unclear and ambiguous as to be unenforceable. Rather, we conclude that, when the parties were unable to agree whether certain conditions met the requirements of the rescript, it was proper for the plaintiff to invoke the trial court's continuing jurisdiction to interpret and effectuate the rescript in post-judgment proceedings. We further conclude that the trial court's order that the conditions it had determined to be unreasonable and unnecessary must be modified or rescinded was an effectuation, not a modification, of that rescript and was, therefore, within the trial court's continuing jurisdiction."
(3) when the trial court enters an ongoing mandatory or prohibitory injunction, i.e. an injunction that regulates a party's conduct over a period of time, and changed circumstances warrant modification or vacature of the injunction. See AvalonBay, supra, 240 n. 8.
CRRA contends that plaintiffs' motion provides no legal basis for invoking the continuing jurisdiction exception to Section 52-212a. Plaintiffs argue that this court, by virtue of its prior decision, has continuing jurisdiction in this matter. They state that the "law is well-established that this court has continuing jurisdiction to enforce its judgment and prevent a party from subverting its injunctions." As the Appellate Court has stated:
Courts may issue post-judgment remedial orders to enforce their permanent injunctions. For example, courts have the jurisdiction to hold offending parties in civil contempt pending compliance. Furthermore, in dealing with judgments that decree injunctive relief . . . courts have inherent power to change or modify their own injunctions where circumstances or pertinent law have so changed as to make it equitable to do so. Courts have in general the power to fashion a remedy appropriate to the vindication of a prior judgment. Having found, noncompliance, the court, in the exercise of its equitable powers, necessarily had the authority to fashion whatever orders were required to protect the integrity of its original judgment.
Hall v. Dichello Distributors, Inc., 14 Conn.App. 184, 192-93, 540 A.2d 704 (1988).
Plaintiffs argue that the court actually issued two injunctions in this matter. The first was an order establishing the creation of a constructive trust. The second was the injunction barring CRRA from passing any Enron-related costs to the municipalities.
The Court requires an evidentiary hearing in order to determine if the allegations raised by the plaintiffs are true. The allegations raise serious questions of defendant's compliance with the Court's prior decision. Indeed, if the defendant is raising its tipping fees in an effort to recoup the monies established in the constructive trust, and not for the legitimate purpose of establishing a budget based upon net operating costs, the very integrity of the Court's June 2007 ruling is compromised. This case presents an unusual situation because, unlike the majority of court decisions, this case involves an ongoing relationship in which the parties are bound by contract until 2012. If CRRA is allowed to raise the "tipping fees," as alleged by the plaintiffs, the net result, if proven by the plaintiffs, could not be countenanced by the Court. By way of analogy, it would be akin to a municipality that had a special assessment against only a group of individuals that had been successful in a lawsuit against the municipality the prior year. The Court must conduct a hearing to insure the integrity of its prior decision.
Second, a hearing is justified based upon the grounds that the phrase "Enron-related expenses," while not so ambiguous as to be unenforceable, requires interpretation in order to effectuate the Court's original judgment. Clearly, the Court retained continuing jurisdiction to enforce the injunction barring CRRA from charging the municipalities for any "Enron-related expenses." Aside from the Debt Stabilization Fund, of which it appears that there is no dispute that it is Enron-related, the Court poses the following issue: If CRRA is allowed to raise "tipping fees," as alleged, solely to recoup the amount which the Court held that it was unjustly enriched by the recoveries on some of the Enron lawsuits, could such a recoupment, besides affecting the integrity of the Court's decision, be deemed an Enron-related expense barred by the injunction? In effect, if the allegation is true, would not CRRA be recouping monies which the Court ordered that it had been unjustly enriched as the result of the Enron litigation? Would not the imposition of additional "tipping fees" in order to recoup said monies, a fortiori, be an Enron-related expense to the municipalities?
Therefore, the Court finds that it does have jurisdiction to entertain all issues raised by the plaintiffs' motion. A hearing will be scheduled on the matter as soon as practicable.
III. CONCLUSION
For the foregoing reasons, CRRA's objection to the hearing on the Plaintiffs' Motion to Enforce Judgment and Enjoin CRRA from Subverting the Prior Judgment of the Court is denied. Insofar as the Motion in Limine seeks a clarification of the Court's initial postcard ruling on the scope of the hearing, that motion is granted. Insofar as the Motion in Limine seeks to limit the testimony at the hearing, the motion is denied. The motion filed by the plaintiffs for a continuance until the scope of the hearing is determined and the objection thereto, have been rendered moot by this decision.