HUB CITY SOLID WASTE SERVICES, INC. v. City of Compton

This conflict of interest case grew out of a suit and cross-action centering on the activities of appellants Michael Aloyan and Hub City Solid Waste Services, Inc. (HUB). The City of Compton had awarded a 15-year waste collection franchise to HUB. Some years later, Compton terminated the franchise. HUB sued for breach of contract. Compton cross-complained against HUB and Aloyan, seeking to void the contract and disgorge funds from appellants.

The trial court found that Aloyan was HUB’S alter ego, and granted summary adjudication in favor of Compton on its claim for declaratory relief that it did not breach the franchise agreement when terminating it. At trial, Compton advanced two conflict of interest theories under Government Code section 1090 (section 1090), arguing that Aloyan had a prohibited financial interest in the franchise because of his role in managing Compton’s in-house waste division, and the franchise was void because members of the Compton city council had illegal interests related to campaign contributions and favors given by HUB and Aloyan. A jury unanimously found that appellants had violated section 1090 and were liable for over $22 million in damages…