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Waste Management of Pennsylvania, Inc. v. Shinn

ELR Citation: 27 ELR 20270
Nos. 94-1983, 938 F. Supp. 1243/(D.N.J., 09/27/1996)

The court holds that New Jersey's self-sufficiency policy, whose goal is to eliminate the use of out-of-state disposal facilities by the year 2000, violates the Commerce Clause of the U.S. Constitution. The state implemented the policy by either rejecting long-term out-of-state disposal contracts, issuing emergency redirection orders (EROs) that redirected solid waste to in-state facilities, or by banning the use of out-of-state disposal facilities effective December 31,1999. The court first holds that the suit by out-of-state disposal companies against the state and municipal utilities is justiciable. Although the EROs are no longer effective and it is unlikely that the agency will issue further EROs redirecting solid waste in light of a state court holding that there was no emergency to warrant such an order, the state has not completely abandoned the self-sufficiency policy. The court next holds that the companies' claims for declaratory relief voiding the EROs and for injunctive relief preventing their implementation is barred by the Eleventh Amendment to the U.S. Constitution. The court also holds, however that the Eleventh Amendment does not bar it from granting prospective relief in the form of an injunction against implementation of the self-sufficiency policy if that policy is found to be unconstitutional. The court then holds that the state's self-sufficiency policy violates the Commerce Clause. Based on the policy's stated objectives and the methods by which the state elected to implement these objectives, the court finds that it is discriminatory on its face and in its effect against out-of-state solid waste disposal providers. The state's plan implementing the policy expressly provides that new long-term proposals or contracts for the use of out-of-state disposal facilities will not be approved. Further, the state has failed to provide evidence that the policy serves a legitimate local interest and there is no evidence in the record to support the proposition that it could not achieve this goal by less restrictive means. The court next holds that the companies' affirmative relief claims relating to the EROs are not barred by the state's claim-preclusion rule, which requires a litigant to assert all related claims against all parties in one action or be precluded from bringing it in a second. The previous proceedings in state court were for appellate review and not for affirmative relief. The court holds, however, that the companies' claims based on the Contract Clause are barred by the doctrine of claim preclusion, because the state appellate court adjudicated that issue when it adjudicated the validity of an ERO. The court next holds that there is insufficient evidence to support a finding that the president of a county that contracted with one of the companies for waste-disposal services is immune from suit. Although the president is immune from suit to the extent that he did not knowingly violate the law, the company alleged that the county and its president did not merely follow the state's self-sufficiency policy, but conspired to divert the company's fees. The court holds that there is insufficient evidence to enter summary judgment in favor of the county and its president that the license agreement they reached with the company for solid-waste disposal was not a legally protectable right. It is not readily apparent that the process by which the license agreement was entered into violated the applicable statute. The court next holds that the damages asserted by the solid-waste company are not speculative merely because they cannot be determined at this time. Last, the court holds that the license agreement for disposal does not support a waiver of the company's right to seek redress for invalid redirection orders. An exception in the license agreement to the county's obligation to deliver waste to the company's landfill is provided for waste that has been validly redirected.

Counsel for Plaintiffs
Robert F. Hecht
Stradley, Ronon, Stevens & Young
2600 One Commerce Sq., Philadelphia PA 19103
(215) 564-8000

Counsel for Defendants
Leslie D. Rosenthal, Deputy Attorney General
Attorney General's Office
R.J. Hughes Justice Complex, Trenton NJ 08625
(609) 292-4925