By Charlie Tyer

State and local governments are spending large sums of money on solid waste management. Many have adopted "flow control" laws as a part of their approach to managing solid waste. Such laws regulate where solid waste can be taken within a state, county or municipality. These laws are not just aimed at just keeping waste out of certain areas, but are part of a larger plan for processing waste and regulating it. Thus, flow control laws may address both the importation and exportation of waste.

Such plans become all the more necessary when one considers that EPA and many states have adopted a waste management hierarchy which emphasizes first the reduction of wastes, then their reuse when possible, followed by recycling, then recovery of energy, and last landfilling. Hence, landfills are the last recourse recommended for dealing with our wastes. Recycling programs in particular have gained in popularity in recent years in hundreds of communities. They, like recovery efforts, require some control over waste flow to make them economical and effective.

Today large amounts of waste are transported across state and other governmental jurisdiction lines for disposal at lower cost, or due to unavailable alternatives. For economic and environmental reasons, opposition to importation of waste has grown in many communities. Thus, flow control laws can help control disposal costs by regulating the volume and content of waste that goes into a landfill. They can also help produce revenue for particular facilities by tipping fees, and be used to assure minimum amounts of waste needed to efficiently and economically operate. And, they can serve environmental purposes by restricting the amount and contents of what goes into landfills.

But, solid waste flow control laws can have a negative impact on waste operators and haulers, as well as the affected governmental entities. Challenges are therefore often brought under the U. S. Constitution's commerce clause. To examine this issue, and recent federal court decisions, it is useful to distinguish between regulating the importation of waste versus its exportation.

Article I, section 8 of the U. S. Constitution gives Congress the authority to regulate commerce with foreign nations, between the states, and with Indian tribes. Legal authorities say the commerce clause has two functions: one, it is the source of congress' power to regulate interstate commerce; second, it gives the courts the power to limit state interference with such commerce. The second function is referred to as the "dormant Commerce Clause." The Supreme Court set the standard for evaluating state regulation of solid waste under the dormant commerce clause in the 1978 case Philadelphia v. New Jersey. The statute being challenged forebade the importation of waste from outside of New Jersey using the argument that the state was trying to protect the health, safety and welfare of its citizens.

The Court disagreed. It said waste was involved in interstate commerce. And, the law in question was discriminatory by being "protectionist" and therefore in violation of the commerce clause. There had to be some reason apart from the origin of the waste to treat it differently said the Court. In an effort to be creative, the states have tried to find ways to deal with their waste problems without violating the Philadelphia decision. Such efforts have included restricting landfills to accepting only local municipal waste, levying additional fees on out-of-state waste, giving preference to in-state waste, requiring some type of reciprocal law, agreement or standards by generators of waste, or other regulations which subtlely restrict acceptance of waste.

Two Supreme Court cases in 1992 dealt with the importation of waste and the restrictions which could be placed on it, thereby broadening the Philadelphia case. The first case was Chemical Waste Management, Inc. v. Guy Hunt, Governor of Alabama. [112 S. Ct. 2009 (1992)] An increase in out-of-state waste into Alabama had resulted in the state imposing an annual cap on the amount of hazardous waste it would accept, and an additional fee on out-of-state hazardous waste. The Alabama Supreme Court held the added fee was valid because it advanced a legitimate local purpose (health and safety) that could not have otherwise been achieved without discriminating against out-of-state waste. The U. S. Supreme Court reversed the Alabama Court saying less discriminatory options did exist.

The second 1992 case was Fort Gratiot Sanitary Landfill, Inc. v. Michigan Dept. of Natural Resources. This time the Court said that state regulations that restricted its landfills from accepting only locally generated waste violated the commerce clause. The county in question (St. Clair) did not allow disposal of any nonlocal waste in its solid waste plan. This included waste from other counties in the state, as well as out-of-state waste. It argued that this blanket restriction did not therefore discriminate against interstate commerce since importation restrictions applied equally to all outside of the county. The Supreme Court disagreed saying that "a State (or one of its political subdivisions) may not avoid the Commerce Clause's strictures by curtailing the movement of articles of commerce through subdivisions of the State, rather than through the State itself." [112 S. Ct. at 2021 (1992)]

In 1994 the Court heard another case dealing with regulating the importation of wastes. Oregon Waste Systems Inc. v. Department of Environmental Quality [114 S. Ct. 1345 (1994)] dealt with the assessment of fees for the disposal of out-of-state waste in Oregon. The state had levied a higher surcharge on out-of-state waste. The logic was that the state and its local governments were paying for the disposal of out-of-state waste and that some of that needed to be borne by those who shipped it to Oregon. The Oregon Supreme Court upheld the charge using that logic. The U. S. Supreme Court disagreed, however, finding the surcharge facially discriminatory and therefore invalid under the dormant Commerce Clause, thereby rejecting the argument that the surcharge was a "compensatory tax" needed to make shippers of out-of-state waste pay their share of costs imposed on Oregon. The Court said that to justify such a tax, the state would have to identify the burden for which the state was attempting to compensate. The Court said they did not find this--the specific charge justification--which would have justified the burden created on interstate commerce.

[The dormant commerce clause concept refers to a self bestowed court power to determine whether a state regulation, absent congressional action in an area, impedes the flow of interstate commerce.]

Thus, the Court appears to have taken a strict interpretation of the commerce clause in the cases cited above. While there appears at first blush to be no way around these interpretations, that may not be true. An exception was earlier acknowledged by the Court in 1976 in the case Hughes v. Alexandria Scrap Corporation. This case involved the State of West Virginia posing more stringent regulations on out-of-state scrap processors. The key distinction was that the State seemingly entered the market place and participated in the activity in question--removal of scrap autos from the streets by giving a bounty to processors and favoring in-state processors. Thus was created the "market participant exception."

The Court said: "Nothing in the purposes animating the Commerce Clause prohibits a State, in the absence of congressional action, from participating in the market and exercising the right to favor its own citizens over others." [426 U. S. at 806 (1976)] In the words of one legal expert, the "theory of this new ... exception is that the Commerce Clause's restrictions should not apply to publicly owned operations which function as a market participant because the citizens of a state that fund a project should have the right to restrict the benefits to themselves." (Gold, 29).

Subsequently, some other courts have relied on this case (and others unrelated to solid waste) to uphold restrictions on importation of waste valid when they concern a government owned facility. Since the vast majority of landfills are publicly owned, the market participation exception may be a significant legal way to prevent importing waste into states and counties.

In addition, another exception has been recognized by the Supreme Court in an earlier decision. This case was Pike v. Bruce Church, Inc., a 1970 case in which the Court articulated something called the "balancing test" under the Commerce Clause. The Court said:

The balancing test has been used at the state court level to uphold a prohibition against out-of-county waste going to a private landfill in a county that had no other alternative in a situation in which a "severe shortage" of space existed. [Borough of Glassboro v. Gloucester County Board of Chosen Freeholders, 100 N. J. 134 (1985)] The U. S. Supreme Court allowed this decision to stand.

  A distinction between excluding out-of-state waste versus nonlocal waste has been important in solid waste planning. However, the Fort Gratiot case has brought that into question now due to the Court saying that banning out-of-state and nonlocal waste violated the rules established in both the Philadelphia case and the Pike case and suggesting that a local government cannot curtail movement of waste "through or into its jurisdiction." (37)

Besides regulations dealing with importation of waste, states and some localities have also attempted to regulate the exportation of waste. This is usually done to channel waste to special waste facilities to ensure their financial viability. In the 1980s these types of regulations were upheld by the courts. Three cases in the 1990s, however, seem to have altered the legal status of such restrictions. The federal lower court cases in question are DeVito, Jr. Trucking, Inc. v. Rhode Island Solid Waste Management Corp. (1991), Waste Systems Corp. v. County of Martin (1992), and Container Corp. of Carolina v. Mecklenburg County (1992). The DeVito case involved a Massachusetts company which hauled waste from Rhode Island to Massachusetts and Maine. Rhode Island wanted to prohibit carrying waste anywhere not licensed by Rhode Island, in part due to revenue declines at the only licensed landfill in the state. The court struck down the rule arguing that out-of-state haulers and facilities were negatively impacted and interstate commerce eliminated.

The Waste Systems case involved a Minnesota county that had disposed of its waste in Iowa but had built with another county a new composting facility and wanted to direct its waste there. Clearly directing waste there was a revenue issue to ensure financial viability. But this was viewed negatively by the court. Alternative disposal techniques and long-term solutions were not taken into consideration by the court. The DeVito case was cited and the rule struck down.

Finally, the Mecklenburg County case was a federal district court case in which the county had a flow control ordinance saying that waste was to be disposed of at county-designated landfills or waste-to-energy facilities. The landfill in the county was slated to close so the county entered an agreement with Browning-Ferris Industries (BFI) to take all waste not used for recycling and energy purposes to a landfill in a neighboring county operated by BFI. Previously the Container Corporation of Carolina (CCC) had been taking waste from the county to a landfill in South Carolina. CCC sued and the federal court injoined the county saying that blocking the flow out of a state can be as protectionist as blocking flow inward.

In 1994 the U. S. Supreme Court decided its first flow control case in C & A Carbone, Inc. v. Town of Clarkstown [114 S. Ct. 1677 (1994)]. This case originated in Clarkstown, New York and involved the city's flow control ordinance requirement that all nonhazardous waste generated in the city be deposited at a transfer station in the city before being further disposed of. Carbone operated a transfer station which accepted waste from Clarkstown and elsewhere. He processed the waste removing the recyclables and then disposed of the waste both in- or out-of-state as conditions allowed. In 1989 the city was forced to close its landfill. It then contracted with a private firm to build and operate a transfer station in the town. As a part of the agreement with the private company, the city was required to deliver a certain amount of waste to the station or pay a penalty.

The city amended its zoning ordinance to preclude all other transfer stations within the town and passed a flow control ordinance directing waste brought into or generated within the city to this specific station. Carbone bypassed this station and took waste to other states for disposal to save money. The city moved to stop him from these actions. Carbone argued that the flow control ordinance violated the commerce clause. New York's Supreme Court, however, found a local interest in the ordinance and that it was evenhanded. It used the Pike balancing test and ruled that the legitimate local interest and significant public concern weighed in favor of the constitutionality of the ordinance.

The U. S. Supreme Court overturned the state Supreme Court arguing the ordinance was facially invalid and that the city had other means to advance its legitimate local interest. Interstate commerce, it said, was unduly burdened. Allowing only one transfer station within the city to process waste from within the city was felt to be discriminatory. And, discriminating against interstate commerce to favor a local business was per se invalid unless the city could show under rigorous scrutiny that no other means were available to accomplish a legitimate local interest.

With this ruling, the Supreme Court seems to be saying that local government must allow its waste to travel in interstate commerce. If that is so, then local government solid waste planning may be virtually impossible.

As a result of court decisions, importation of household and hazardous waste will continue into states with privately owned facilities. Additional fees on out-of-state generators are illegal. New facilities are effectively discouraged from being built and exportation is encouraged since it cannot be easily blocked due to interpretations of the Commerce Clause. As one legal authority puts it, "The Commerce Clause was crafted 200 years ago to assure federal control over the movement of goods among the states forming a new nation. The founding fathers could have had no inkling of the current solid waste crisis, a waste crisis which grows more difficult every day." (Gold, 45)

On the exportation side of the waste crisis, the cases cited above raise an "ominous new cloud over state and local plans to manage solid waste." (46) The fact that a carefully prepared plan can be used to justify restrictions seems to have no bearing. The result is that flow control regulations have been recently construed as "protectionist" and held to be unconstitutional. The only recourse may be for governments to own and manage a facility to find a possible exception. But, even this may not be sufficient. Thus, a great deal of uncertainty exists about flow control laws and their legality.

This has led some authorities to call for Congress to legislate in this area giving states and local governments the needed power to manage solid waste. Otherwise, badly needed facilities will not be built. Facilities that need to be both environmentally and financially sound. Such facilities and plans by local governments will require some ability to impact importing and exporting waste from a jurisdiction. Costs and risks need to be fairly shared. The current uncertainty does not contribute to a fair sharing of costs and risks, but results in inequities between localities and states. Change is needed.

Sources:

Martin E. Gold, "Solid Waste Management and the Constitution’s Commerce Clause," The Urban Lawyer, Vol. 25, no. 1 (Winter 1993): 21-48.

Richard J. Roddewig and Glenn C. Sechen, "Municipal Solid Waste: The Uncertain Future of Flow Control a Municipal Perspective," The Urban Lawyer, Vol. 26, no. 4 (Fall 1994): 801-816.

Robert H. Freilich, Angela S. Jones and Barbara A. Washington, "The Supreme Court and State and Local Government: Small Change for a Changing Court," The Urban Lawyer, Vol. 26, no. 4 (Fall 1994): 623-711.

U. S. Advisory Commission on Intergovernmental Relations. Federal Regulation of State and Local Governments: The Mixed Record of the 1980s. Washington, D. C.: U. S. Advisory Commission on Intergovernmental Relations, 1993. (See especially chapter 6.}

This article appeared in the South Carolina Policy Forum magazine in the Fall 1995 issue, volume 6, number 4 on pages 22-27.