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Red River Serv. Corp. v. Minot, City of

Citation: 28 ELR 21337
No. 97-2979, 146 F.3d 583/46 ERC 1902/(8th Cir., 06/10/1998)

The court holds that a city's refusal to allow a waste transport company to dispose of solid waste from a military base in the city's landfill did not violate the U.S. Constitution's Commerce Clause. The court first holds that the city's policy does not have a discriminatory effect on interstate commerce because the market participation doctrine applies. The city has chosen to limit those who can dispose of municipal solid waste in its landfill, but it has not attempted to regulate the flow of waste within or beyond its own market. As a market participant, it has the freedom to choose its trading partners without regard to the company's contractual obligations to the military base. The court rejects the company's argument that the city cannot be a market participant because public funds established now support the landfill. The city has not engaged in the sweeping regulation characteristic of a state acting in its distinctive governmental capacity, but instead is functioning in a true proprietary capacity. The court also rejects the company's argument that the market participation doctrine should not apply because the city is hoarding a scare natural resource. The city landfill is not a natural resource, but rather a good publicly produced and owned in which the city may favor its residents. The court next rejects the company's argument that the outcome of this case should be governed by flow control cases rather than the market participation doctrine. The cases cites by the company deal with fundamentally different factual situations because, here, no third-party seller exists. The city is the seller, and it has in no way discriminated against the flow of interstate commerce.

The court next holds that the city's decision to refuse the company's solid waste from the military base does not violate the company's equal protection rights under the Fourteenth Amendment. The city's decision to limit the landfill is rationally related to the legitimate state interest of preserving the useful life of its landfill for its residents. The court then holds that an oral contract between the city and the company was not created when the company obtained a quote from the city on tipping fees for municipal solid waste. The city never had any formal communications with the company about landfill rates or access until after the company had been awarded the military base contract. In addition, because the city never allowed the company to deposit any municipal waste in its landfill, even before formally denying the request, the company could not have partially performed an oral contract to deposit municipal solid waste in the landfill. Last, the court holds that a letter from a city official does not support the company's argument that the city should be estopped from denying that a contract exists for the disposal of the military base's municipal solid waste. The letter contains neither a clear statement of permission nor terms, conditions, rates, or other information one would expect in a letter creating a contract. And the company cannot claim that it did not know or could not have found out that the city was contemplating limits on access to the landfill.

Counsel for Appellant
Robert Rau
Law Offices of Robert Rau
102 Heritage Pl., Minot ND 58702
(701) 852-3578

Counsel for Appellee
Nevin Van de Streek
Eaton, Van de Streek & Ward
201 S. Main St., Ste. 200, Minot ND 58701
(701) 852-4837

Before Wollman and Loken, JJ.