Hub City Solid Waste Services, Inc. v. City of Compton

In Hub City Solid Waste Services, Inc. v. City of Compton (2010) 186 Cal.App.4th 1114, the appellants challenged the adverse judgment on a conflict of interest claim by arguing that corporate consultants do not owe municipalities a fiduciary duty. (Hub City, supra, 186 Cal.App.4th at p. 1125.) The court did not decide this argument, concluding that the limited liability company's status as the contracting entity with the city was immaterial because the actions of the company's president fell within the scope of Government Code section 1090. (Hub City, supra, at p. 1127.) Thus, the court's decision was based on the fact the president of the consulting company was an "officer" under the statute and his individual actions influenced the city's contracting decisions. (See id. at p. 1125.) As to the evidence presented, the court concluded it established that the president's actions fell within the ambit of Government Code section 1090 because he was intricately involved in the city's waste management decisions and proposed franchising the city's waste management decisions. (Hub City, supra, at p. 1125.) As a result, the subsequent franchise agreement between the city and another of the president's companies was invalidated.