Scranton agrees to pay $385,000 to settle second trash fee lawsuit

Apr. 7—Nearly 6,000 Scranton residents would receive a partial refund of trash collection fees paid from 2014 to 2018 under a proposed $385,000 settlement of a class action lawsuit.

The agreement, filed late Thursday in Lackawanna County Court, would compensate residents who joined a 2016 lawsuit Adam Guiffrida filed that challenged the city's $300 annual garbage fee.

The deal is separate and in addition to a proposed $10 million settlement of a class action suit filed by Mark Schraner and Mari Carr that would refund penalties, interest and costs charged to residents who were delinquent in paying refuse account bills.

The Schraner/Carr agreement calls for the city to pay $2.5 million to refund people who paid delinquency penalties and to forgive $7.5 million in penalties, interest and costs tacked on to liens filed against those who did not pay.

Under the Guiffrida deal, 5,914 residents who signed on to the lawsuit after it was certified as a class action in January 2018 would receive a share of the settlement fund for each year they paid refuse collection fees from Jan. 1, 2014 through Dec. 31, 2018.

Philadelphia attorney Patrick Howard, who filed the suit on behalf of Guiffrida and other class members, is seeking $115,500 in attorney's fees, which along with litigation costs would be deducted from the settlement fund.

Lackawanna County Judge James Gibbons scheduled a hearing for April 21 to review the terms of the deal. If approved, a second hearing would be held at a yet unspecified date to grant final approval. Class members will have an option to opt out of the settlement or challenge the terms of the deal.

Jessica Eskra, solicitor, said the city plans to seek a loan to pay both the $385,000 Guiffrida settlement and $2.5 million earmarked for the Schraner/Carr settlement, less $50,000 that will be paid by insurance.

Guiffrida at one time owned more than three dozen rental properties. His lawsuit alleged the city's $300 annual garbage fee was arbitrarily set and improperly generates more money than is required to provide garbage collection services.

The city maintained the fee does not cover all costs involved, including salaries, benefits, landfill tipping fees and other expenses.

The settlement does not reduce the $300 fee, though it notes the city in 2018 began offering a 10% discount if the full bill was paid by the due date.

Howard, who also represented the plaintiffs in the Schraner/Carr lawsuit, believes the settlement is a fair resolution to the case.

Had the plaintiffs taken the case to trial and prevailed, they would not recover any money, he noted in an email. The judge was tasked only with determining if the city handled the money correctly. If he did, that would have allowed individual plaintiffs to seek a refund, which, given the likelihood the city would have appealed, would take years to resolve.

"This settlement brings some financial compensation to those who paid without ongoing litigation," Howard said.

The settlement notes the city does not admit any wrongdoing.

Mayor Paige Gebhardt Cognetti said she's pleased to have a resolution to the garbage fee cases, which were among several significant lawsuits she inherited from prior administrations that had the potential to financially decimate the city if it lost the cases.

Those cases included a challenge to the city's rental registration fees, a lawsuit over missing sewer easements and a suit that challenged the city's collection of wage, real estate, amusement, business privilege, mercantile and local services taxes.

Coupled with the garbage fees suits, the city had a combined potential and liability of $180 million, Eskra said. Each of those lawsuits have now been settled for a combined total just over $3 million, she said.

"It's important to look at where we could have been," Cognetti said. "We settled for a fraction of what those determinations could have been. I'm so proud of our legal team and happy we can go forward with a clean slate in terminating the large financial liabilities that were hanging over us."

Contact the writer: tbesecker@timesshamrock.com; 570-348-9137; @tmbeseckerTT on Twitter.