Ogden Martin Systems, Inc., Cross-Appellee v. San Bernardino County, California, Cross-Appellant

Ogden Martin Systems (“Ogden Martin”) entered into a cost-sharing contract with San Bernardino County (“County”) for development of a waste disposal facility. The facility was never built, and Ogden Martin sued on the contract for reimbursement of its costs and alternatively for the equitable remedy of rescission. The district court granted summary judgment for the County, finding rescission inappropriate because the County had received no benefit, and that the contract was voidable because Ogden Martin had violated state franchise tax laws. Both rulings were in error, and we reverse.

I

In 1982, the County hired a consulting firm to determine the feasibility of building a waste-to-energy facility as an alternative to using landfills to dispose of solid waste. The consulting firm advised the County to construct the facility, although it warned the County that all such facilities emit air pollutants. In 1984, the County signed a memorandum of understanding with a contractor providing that the County would use its “best efforts” to develop the waste-to-energy facility. When one of the subcontractors withdrew, the County solicited Ogden Martin to participate in the project.

Ogden…