Solid Waste & Recycling

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Flow Control Before U.S. Courts (Again)

Last year witnessed renewed interest in the pesky issue of inter-jurisdictional waste transportation. No less than two federal pieces of legislation threatened to close the U.S. border to Canadian was...


Last year witnessed renewed interest in the pesky issue of inter-jurisdictional waste transportation. No less than two federal pieces of legislation threatened to close the U.S. border to Canadian waste. As of press time, one bill had been changed to remove the “offensive” provisions and the other was set aside for the time being. The State of Michigan was also dealing with different proposals that would reduce, tax or eliminate waste imports from Canada.

With all this in the background, activity in the U.S. on issues related to “flow control” (i.e., regulatory control of inter-jurisdictional waste movement) is informative; as it gives some sense of how the issue is being dealt with south of the border. Two recent cases are interesting in this regard, especially since they support opposing positions.

The first, IESI AR Corporation v. Northwest Arkansas Regional Solid Waste Management District, was decided by the 8th Circuit Court on January 5, 2006. The Northwest Arkansas Regional Waste Management District (RSWMD) regulates solid waste management in six northwest counties. In 1995, Arkansas Waste Industries (AWI) received approval from the RSWMD to haul waste it collected within the district from its transfer station to a landfill owned and operated by IESI Corporation (IESI) located in the White River district, which is adjacent to the RSWMD. In July 2000, IESI purchased AWI’s transfer station. IESI assumed that the authorization which had been granted to AWI was included in the purchase.

In July 2001, the RSWMD enacted rules that allowed its board to decide on the transfer of waste into or out of the district limits. These rules provided, among other things, that anyone desiring to transfer locally-collected solid waste to a disposal site outside the district must apply to the RSWMD and receive permission to do so. The rules did not apply to waste destined for out-of-state disposal. There was only one privately-owned landfill and one transfer station within the RSWMD limits.

The RSWMD notified IESI that it only acquired the rights owned by AWI, that is, to haul only the waste collected from AWI routes. The RSWMD then contacted private haulers stating that they needed to apply for approval, as required by the regulations, before delivering solid waste to IESI’s transfer station. The haulers stopped using IESI’s transfer station and began to deliver their solid waste to the single in-district landfill instead.

IESI filed suit against RSWMD in federal district court, alleging discrimination against interstate commerce, unlawful monopoly, and tortious interference with contracts. The district judge found no discrimination because the rule applied only to in-state disposal and did not block access to any out-of-state waste handling facility. Moreover, the local benefits from the state-wide system outweighed the negligible burden on commerce. The other claims were deemed to have no legal merit.

The U.S. Court of Appeals for the Eighth Circuit affirmed the lower court ruling for substantially the same reasons.

The second case, Fulton County v. City of Atlanta, et al., was decided by the Supreme Court of Georgia. In that case, the City of Atlanta, which is located in both Fulton and DeKalb Counties, transported its municipal solid waste to the Live Oak Landfill in DeKalb County prior to Live Oak’s closure in 2004.

Anticipating the closure, the city entered into contracts with Advanced Disposal Services and Republic Services of Georgia for the transportation of waste to transfer stations in Fulton County and through Fulton County to landfills in other nearby counties.

In November 2004, the Fulton County Board of Commissioners requested that the city and the haulers comply with a state law that prohibited the interstate and intrastate transportation of waste (unless the county where the waste was collected and the county where the waste was disposed expressly authorized such activity). The city and the haulers responded that the state law was unconstitutional. Fulton County filed suit in state court, requesting an injunction to prohibit the out-of-county transfer of the waste. The defendants filed a motion stating that the undisputed facts entitled them to judgment as a matter of law.

On July 5, 2005, Judge Michael D. Johnson of the Superior Court of Fulton County ruled in favour of the defendants. The judge found the state law was invalid under the Commerce Clause and according to Fort Gratiot Sanitary Landfill, Inc. v. Michigan Department of Natural Resources, a 1992 case in which the U.S. Supreme Court declared that a Michigan statute unconstitutionally burdened interstate commerce by restricting the importation for disposal of out-of-county waste without approval of the receiving county. As a result, the state law was similar to, but even more onerous than, restrictions the high court struck down as discriminatory against interstate commerce. The court was particularly unimpressed with the argument that a statute which addressed inter-county, not interstate, commerce was immune from Commerce Clause scrutiny.

The case is now before the Georgia Supreme Court, which heard oral arguments from the parties on January 17. A decision is due within the next few months.

As can be seen in these cases, the acceptance of the use of flow controls will be dependant on the facts in each case and the interpretation of the law on flow controls. The interesting thing is that courts will find in favour of different positions depending on the particular facts of each case and the (sometimes differing) views of the state of the law by the courts. Whether the Georgia Supreme Court decides to uphold that decision cannot be predicted at this time. However, the current apparently conflicting decisions demonstrate the unpredictability of the courts in such matters. That, perhaps obvious, conclusion should be considered as future court cases involving U.S. flow control regulation of Canadian waste arise.

Adam Chamberlain is a certified specialist in environmental law with Aird & Berlis in Toronto, Ontario. Contact Adam at achamberlain@airdberlis.com


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