San José Settles Lawsuit With Duong Family Waste Company
San José will spend about $3.3 million to settle a yearslong lawsuit with California Waste Solutions, the city’s main recycling contractor, whose owners, David and Andy Duong, are charged with bribery and conspiracy in a corruption scheme centered in Oakland.
The payout will end the lengthy litigation and is primarily going toward startup costs for CWS and another small recycling contractor to begin a curbside battery collection service for single-family homes in the city, according to city memos and contract documents.
San José will also be on the hook for the ongoing costs of battery collection services through the two contractors for a minimum of five years and potentially as long as a decade as a part of the settlement agreement, the documents said, but an estimate of what the total spend would amount to wasn’t immediately available. The city and the company are both paying for their own legal costs.
The San José City Council unanimously approved the settlement agreement in late June. Councilmember Peter Ortiz was absent.
“CWS is extremely pleased to have achieved a fair settlement with the City of San José that will benefit the city’s residents,” Douglas Straus, an attorney for the company, told KQED in a text message. “CWS looks forward to providing recycling services in San José for many years to come in a positive, collaborative relationship with the city, its staff and its residents.”
Susana Alcala Wood, the city attorney for San José, did not immediately respond to requests for comment about the settlement Friday.
California Waste Solutions filed the lawsuit in January 2023, alleging several wrongs by the city, including breach of contract, unfair dealing, unequal treatment and race discrimination.
The company claimed the city was not doing enough to help prevent residents from putting extra trash in their recycling bins, forcing the recycler to “collect and process massive amounts of garbage at an extra cost to [CWS] of tens of millions of dollars,” court filings said.
The misplaced garbage made it “impossible” to meet required recycling minimums, leading to millions of dollars worth of diversion penalties on the company, the complaint said. It also claimed the city discriminated against the company because it is an immigrant-owned business, treating it differently than other non-minority waste contractors.
San José refuted the claims from the start, contending it did extensive work to support the company and educate residents on proper trash and recycling disposal practices, and claimed CWS was not meeting the standards needed for its role.
It also increased the company’s annual compensation and offered financial incentives worth millions, it said in past court filings.
“Due to CWS’s historically deficient performance under the contract throughout the years, the city could have re-initiated the competitive [bidding] process and sought out another service provider for residential recycling. But instead, the city decided to give CWS another chance,” the city filings said.
San José signed a 15-year contract extension with the company in July 2021 that runs through June 2036. The lawsuit’s allegations only applied to CWS’s previous contract with the city, which began in 2010, city reports said.
A judge granted the city’s request to throw out the discrimination and unequal treatment allegations in the case due to an expired statute of limitations in late 2025. Following that order, the litigation, including pretrial motions and hearings, as well as settlement discussions, continued.
About a year and a half after the San José lawsuit was filed, the powerful, politically connected Duong family was swept up in the beginnings of what would become a sprawling FBI corruption probe centering on then-Oakland Mayor Sheng Thao.
The Oakland waterfront offices CWS occupied were raided by the FBI, along with the homes of CEO David Duong and his son, Andy, in June 2024. Federal authorities alleged a “pay-to-play” corruption scheme involving Thao, her romantic partner Andre Jones and the Duongs, who were all charged with multiple counts of bribery and conspiracy in January 2025. They have all pleaded not guilty.
Andy Duong also faces an additional charge of making a false statement to a government agency.
Asked if the attention on the federal criminal case in Oakland involving David and Andy Duong affected the company’s lawsuit and settlement negotiations in San José, Straus, the attorney for CWS, said no.
“No, they are completely unrelated,” he said. Straus and the firm he works for, Buchalter, are not representing the Duongs in the criminal case.
The city said CWS provides recycling services to about 75% of the city’s single-family homes, while the remaining portion is handled by Waste Connections of California, Inc., known as GreenTeam of San José in the city.
Under the settlement terms, San José will pay $1 million to CWS and $250,000 to GreenTeam for their respective startup costs for the battery collection program. The city will also spend $750,000 for program outreach to residents.
The city will pay the two contractors 82 cents per household per month for the battery collection services, the city reports said. In the first year, San José estimated the costs of collection services to be about $1.29 million.
“Ongoing costs will be evaluated after the first full year of program implementation,” city reports said.
“Unlike neighboring cities, San José does not currently offer battery collection through its residential garbage and recycling program, and the addition of this service provides a convenient way for residents to safely dispose of used batteries,” city reports said.