Solid Waste & Recycling

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American Flow Control

The United States Supreme Court has ruled in favour of a local municipal waste management authority in a case involving "flow control" regulations enacted by two counties in the State of New York. The...


The United States Supreme Court has ruled in favour of a local municipal waste management authority in a case involving “flow control” regulations enacted by two counties in the State of New York. The case is that of United Haulers Association vs. Oneida-Herkimer Solid Waste Management Authority — the decision was released on April 30, 2007. It’s the first time the U.S. Supreme Court has ruled on an issue relating to solid waste management in thirteen years, and the case is getting a lot of attention south of the border.

“Flow control” ordinances

In 1989 and 1990, Oneida and Herkimer Counties, respectively, passed laws that required waste generated within the counties to be directed to landfills and processing facilities owned by the Oneida-Herkimer Solid Waste Management Authority (the “Authority”). United Haulers, a trade group representing six private waste haulage companies, commenced litigation against the Authority in 1995 at the District Court level.

United Haulers alleged that the ordinances that regulated the collection, processing, transfer and disposal of solid waste within the counties violated the “Commerce Clause” of the U.S. Constitution and were, therefore, unconstitutional. United Haulers argued that requiring delivery of waste to local facilities reduced interstate trade in waste and waste disposal services, and prevented the use of facilities located outside the counties. They also argued that the ordinances prevented haulers from securing preferable tipping fees at other landfills by requiring waste to be delivered to facilities owned by the Authority, which charged much higher tip fees.

The last time that this issue was considered was in 1994, when the U.S. Supreme Court ruled in C & A Carbone, Inc. vs. Town of Clarkstown that a flow control ordinance in a town in New York discriminated against interstate commerce. That ordinance required all solid waste to be processed at a designated transfer station before leaving the municipality. The transfer station in question was built and operated by a private company for a period of five years (during which time the company recouped its capital investment) after which the facility was transferred to the town. The U.S. Supreme Court found the ordinance to be invalid under the Commerce Clause because it deprived competitors, including out-of-state companies, of access to a local market.

Lower Court decision in United Haulers

The District Court initially ruled in favour of United Haulers in 2000, relying on the U.S. Supreme Court’s ruling in the Carbone case. The Authority appealed that decision and, in July 2001, the U.S. Court of Appeals for the Second Circuit overturned the lower court’s ruling. The Appeals Court found that there was a critical distinction between this case and the Carbone case in that, unlike the Carbone case, the facilities are publicly owned and, therefore, the ordinances do not favour one private company over another and do not discriminate against interstate commerce.

The Appeals Court decided that legislation should be upheld where its intent is “even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental.” The Appeals Court stated that the only exception to this is where “the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” The Appeals Court sent this balancing question back down to the District Court and the District Court ruled in favor of the Authority.

United Haulers appealed that decision and, in February 2006, the U.S. Court of Appeals for the Second Circuit ruled for the second time in favor of the Authority. As a result, United Haulers brought a petition to the U.S. Supreme Court.

Issues considered by the Supreme Court

The case raised two legal issues for determination by the U.S. Supreme Court. The first is whether the prohibition against controlling the flow of solid waste that was recognized in the previous Carbone decision is inapplicable when the flow is being directed to a publicly-owned facility. The second is whether a flow control ordinance that requires delivery of all solid waste to a publicly-owned local facility imposes so “insubstantial” a burden on interstate commerce that the ordinance satisfies the Commerce Clause if it serves even a minimal local benefit.

The U.S. Supreme Court found that the flow control ordinances did not discriminate against interstate commerce and that there were compelling reasons to justify treating these laws differently from laws favoring particular private businesses over their competitors. The ordinances enabled the counties to pursue particular policies with respect to waste handling, while allocating the costs of those policies on citizens and businesses according to the volume of waste they generate.

The ruling is an interesting one in that it provides municipalities with the authority to control waste management within their boundaries, provided that they do not provide any competitive advantages to a particular private company in doing so. This ruling may encourage other local governments to adopt similar rules, and over time such arguments could succeed in Canadian courts, too.

Rosalind Cooper, LL.B. is a partner with Fasken Martineau DuMoulin LLP, with offices across Canada. Ms. Cooper is based in Toronto, Ontario. Contact Rosalind at rcooper@tor.fasken.com


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