Municipalities, counties and other public authorities are now on solid ground when passing "flow control" ordinances directing waste to publicly owned or operated landfills. On April 30, 2007 the US Supreme Court handed down its decision in United Haulers Association, Inc. v. Oneida-Herkimer Solid Waste Management Authority, 500 U.S. ___ (2007), finally answering a question arguably left unresolved by its earlier decision in C&A Carbone, Inc. v. Clarkstown, 511 U.S. 383 (1994). While a local government may not discriminate in favor of a privately owned landfill, it is well within its power to discriminate in favor of a publicly owned landfill.
In the 1980s, New York's Oneida and Herkimer counties were facing what they considered to be a crisis. Private landfills in the region were operating without permits and in violation of state regulations, leading to the closure of more than a dozen facilities and a federal cleanup site in Oneida County. In response, the two counties went to the New York legislature, which created the Oneida-Herkimer Solid Waste Management Authority to collect, process and dispose of solid waste in the counties.
While private haulers would continue to do curbside pick-up, nearly all other solid waste management, including an extensive recycling program, was handed over to the Authority. As compensation for its waste management role, the Authority charged a "tipping fee" significantly higher than the fees charged by private landfills and waste management companies. The Authority's tipping fees ranged from $86 to as much as $172 per ton, as opposed to disposing of waste out of state for between $37 and $55 per ton including transportation. To ensure that customers and waste haulers would not choose to haul their waste to the cheaper private facilities, the counties adopted "flow control" ordinances requiring that all solid waste generated within the counties be delivered to the Authority's processing sites.
United Haulers Association, Inc., a trade association of solid waste management companies, together with six haulers operating in Oneida and Herkimer counties, filed suit, claiming the ordinance constituted unfair discrimination in violation of the Commerce Clause of the US Constitution.
Carbone and the Commerce Clause
In the 1994 Carbone case, the Supreme Court struck down a flow control ordinance passed by the town of Clarkstown, New York. Clarkstown's ordinance was passed on almost identical facts to those presented in Oneida-Herkimer except that the ordinance directed all solid waste be sent to a private landfill.
The Commerce Clause of the US Constitution provides that Congress shall have the right to regulate commerce "among the several States." The courts have long held that even though there is no explicit restraint on the authority of the states to regulate commerce, there is an implicit prohibition on the states passing laws that will discriminate against interstate commerce – this is the
so-called "dormant" Commerce Clause.
In Carbone, the Court used this dormant Commerce Clause power to strike down flow control ordinances that discriminated in favor of private landfills. Citing a long line of cases opposing similar ordinances, the Court found that the flow control ordinance in Carbone was "just one more instance of local processing requirements that we have held invalid" where "offending local laws hoard a local resource . . . for the benefit of local businesses."
Unlike the private landfill in Carbone, the government is "vested with the responsibility for protecting the health, safety and welfare of its citizens." Local governments have long had the authority to regulate solid waste management, and the Court held that "[w]aste disposal is both typically and traditionally a local government function." The Court found convincing the "particular policies," such as recycling, that were implemented as part of the Authority's waste management program. Therefore, ordinances regulating solid waste management such as flow control are imbued with protection of health, safety and welfare and are not the type of "simple economic protectionism" that the Court struck down in cases like Carbone.
Furthermore, the Court found that flow control ordinances favoring public landfills treat every private business, whether in state or out of state, exactly the same. Because all private businesses are treated the same, the ordinances do not discriminate against interstate commerce.
The immediate impact of the United Haulers decision will be to lay to rest any lingering doubt caused by Carbone regarding the power of local governments to pass flow control ordinances directing solid waste to locally owned public landfills. Given the reduction in the number of publicly owned landfills, the decision may not have a major impact on private solid waste companies in the near term. However, with the added assurance of a clear Supreme Court ruling, municipalities may begin use flow control to take greater control of their local solid waste issues – possibly even stirring renewed interest in municipal operation of landfills and waste management. Municipalities can assure themselves a steady source of revenue should they choose to own or operate their own landfills.
This decision also signals new opportunities for private landfill companies to serve as contract operators for publicly owned landfills, as there can be a more secure income stream to ensure the success of public-private solid waste management ventures. In addition, municipalities that own their own landfills will now be able to confidently underwrite more aggressive recycling programs in light of the United Haulers decision.