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Sonoma County's garbage hauler Ratto Group ordered to pay in landfill dispute

Sonoma County's dominant garbage hauler has paid more than $3.5 million to the operators of a Solano County landfill who accused it of breaching a contract between the two companies.

The Ratto Group of Companies was ordered to pay the sum to Potrero Hills Landfill Inc. by an arbitrator, who found the Santa Rosa company failed to live up to the terms of a 2009 contract, attorneys representing the landfill announced Thursday.

The Ratto Group had agreed to use Potrero Hills as the exclusive disposal site in any bid it submitted to Sonoma County for its garbage hauling contract, said Palo Alto attorney Jack Hursh, who represented the landfill.

The Ratto Group broke its obligation when it submitted a bid to transport the county's waste to a competing landfill operator, Hursh said.

Eric Koenigshofer, a spokesman for the Ratto Group, said the arbitrator made several mistakes in interpreting the several overlapping contract provisions that dealt with exclusivity.

A retired judge who oversaw the arbitration proceedings decided the award in August and the San Francisco Superior Court confirmed it in October.

The award includes $2.5 million in compensatory damages and more than $1 million in attorney fees and other costs to the Potrero Hills landfill and its parent company, Waste Connections Inc. The Ratto Group has already paid the award, Hursh said.

"This is an industry where long-term contracts like these are the rule not the exception," said Hursh. "This sends a message that these contracts will be enforced."

Koenigshofer said the Ratto Group would have appealed the ruling — and won — if the dispute had been in court instead of arbitration.

"We think that the arbitrator is just completely wrong," he said. "We also believe serious mistakes were made in the arbitrator's awarding of damages."

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