Bagford v. Ephraim City

John M. Bagford and Fae H. Bagford (plaintiffs) owned and operated a garbage collection and disposal business called the Sanpete Valley Disposal and Landfill in Sanpete County, Utah. The Bagfords provided residential and commercial services in Ephraim City (city) (defendant), other municipalities in the county, and unincorporated areas in the county. The Bagfords used informal, oral agreements to provide customers services on a weekly basis. In 1989, the city accepted bids for garbage-collection services to bring the city into compliance with federal and state health and safety regulations. The Bagfords did not win the bid for the residential service contract. In October 1989, the city enacted Ordinance 10-412 (ordinance), which charged residential electrical service rates to all residences for garbage-collection services arranged by the city. Residents were required to pay for the garbage-collection services whether they used the services or not. Subsequently, the Bagfords’ 176 residential customers terminated their contracts with the Bagfords. The Bagfords maintained their 32 commercial customers in the city. The Bagfords brought an inverse-condemnation suit against the city, alleging that their oral agreements with city customers were protectable property interests and that they were entitled to damages because the ordinance constituted a taking in violation of Article 1, § 22 of the Utah Constitution. The district court found for the city, concluding that the Bagfords did not have a protectable property interest and were not prohibited from competitive business.