30 ELR 20487 | Environmental Law Reporter | copyright © 2000 | All rights reserved
A.G.G. Enterprises, Inc. v. Washington County, OregonNo. CIV. 99-1097-KI (D. Or. April 6, 2000)
The court holds that the Federal Aviation Administration Authorization Act (FAAAA) preempts an Oregon county's and city's solid waste collection, storage, transport, and disposal ordinances. The ordinances require anyone transporting solid waste in the city or county to obtain a certificate, license, or permit. However, an applicant must show that the service area has not been allocated to another waste hauler, or is not being served by the certificate holder, or is not being adequately served by the certificate holder and there is a substantial demand from customers in the area for a change of service. The court first holds that the waste hauler challenging the ordinance has standing because it has alleged a redressable injury. The court next holds that the case is ripe for review even though the waste hauler never applied for a certificate. Based on the application process and both governments' failure to ever award new certificates except through ownership transfer, it would have been futile for the waste hauler to pursue applications. The court further holds that it does not need to abstain from hearing the case under Burford v. Sun Oil Co., 319 U.S. 315 (1943).
The court goes on to hold that the solid waste ordinances are preempted by the FAAAA. The FAAAA preempts state or local laws related to a motor carrier's or a motor private carrier's transportation of property. Here, the waste hauler is a motor carrier because it does not perform any service other than transportation. Further, the mixed solid waste collected from commercial and industrial customers by the waste hauler is property under the FAAAA. The waste has an economic value even though it is being discarded by the generators. The court further holds, however, that the ordinances do not violate the dormant U.S. Commerce Clause. The ordinances do not have a primary purpose of regulating interstate commerce, and they do not discriminate against out-of-state interests. Moreover, the burden imposed on interstate commerce is not clearly excessive in relation to the putative local benefits. The court, therefore, enjoins the county and city from enforcing the ordinances against the waste hauler.
Counsel for Plaintiff
Russell M. Allen
Allen, Sheridan & Kreitzberg
425 Columbia Park Bldg.
1099 SW Columbia St., Portland OR 97201
Counsel for Defendants
John M. Junkin
Bullivant, Houser & Bailey
300 Pioneer Tower
888 SW 5th Ave., Portland OR 97204
[30 ELR 20487]
Plaintiff A.G.G. Enterprises, Inc. ("AGG") brought this action against defendants Washington County, Oregon (the "County"), and the City of Beaverton, Oregon (the "City"), seeking to have Chapter 8.04 of the Washington County Code on Solid Waste Control1 and Chapter 4.08 of the City of Beaverton Code on Solid Waste Control declared unenforceable for three reasons: (1) preemption by the Federal Aviation Administration Authorization Act of 1994 ("FAAAA"); (2) violation of the Commerce Clause; and (3) violation of the Equal Protection Clause. I conclude that the ordinances as enforced against AGG are preempted by the FAAAA.
A similar case. Woodfeathers, Inc. v. Washington County, Oregon, CV96-257-HA, was heard by the Honorable Ancer Haggerty. Judge Haggerty issued an injunction after holding that the County ordinance was preempted by the FAAAA and violated the dormant Commerce Clause. The Ninth Circuit reversed and ordered the case dismissed without prejudice, holding that the court should have abstained because of an action pending in state court. Woodfeathers, 180 F.3d 1017 [29 ELR 21233] (9th Cir. 1999). AGG operated in the County while the injunction was in place but ceased operations there after the Ninth Circuit decision. It filed this action a few months later.
A two-day court trial was held. Having considered the arguments of counsel, testimony of witnesses, and other evidence introduced by the parties, I make the following findings of fact and conclusions of law.
AGG is in the business of hauling mixed solid waste ("MSW") and source-separated recyclable materials, typically contracting with businesses and construction companies to provide drop boxes at their sites. AGG does not provide services to residential customers, except in very limited cases which are not an issue in this action. It has the authority to transport property in interstate commerce under a Federal Highway Administration permit and an Oregon Department of Transportation motor carrier permit. AGG is headquartered in Multnomah County, which only regulates this type of business to the extent that a license is required of the hauler but the number of haulers is not limited and they are not confined to particular geographic areas. AGG wishes to expand operations to unincorporated Washington County and the City of Beaverton,2 which enacted the ordinances at issue.
AGG brings its MSW loads to a material recovery facility ("MRF") and drops the load on the ground in a sorting area. MRF employees then sort, separate, and remove the recyclable material, primarily wood, plastic, metal, drywall, cardboard, glass, and concrete. The MRF then transports the remaining material, namely the "garbage," to local transfer stations for eventual transport to landfills.
East County Recycling, Inc. ("ECR"), the MRF used by AGG, recycles fifty to sixty percent of all loads delivered to its facilities by AGG and others. ECR sells recycled wood materials as hog fuel or mulching materials, recycled metals for use in steel and other metal manufacturing, and cardboard for use in manufacturing paper. Ceramics, concrete, asphalt, and glass are ground into a base rock product sold for use on highway construction projects. The MSW loads vary from ten to ninety percent recyclable material. It is possible for a MSW load to contain nothing recyclable but this is not a common occurrence.
AGG charges its customers, also known as generators, a hauling fee and possibly a tipping fee. The tipping fee is the amount charged to AGG by the facility where AGG leaves the load and is passed on from [30 ELR 20488] AGG to its customer. Some Washington County landfills charge $ 40 per ton tipping fee; the Metro landfill charges $ 68 per ton; ECR charges $ 62.50 per ton. Some source-separated recyclable loads generate a rebate from the recycler where AGG takes them. AGG passes this rebate back to its customer. Metal, cardboard, and glass, depending on the market conditions, can generate a large enough rebate to more than cover the hauling fee, resulting in net money paid to the generator for selling recyclables. ECR keeps the money it makes from selling the recyclables it reclaims from the MSW loads.
Some of AGG's customers have contractual provisions to recycle a certain amount of their waste materials. Use of AGG, and its use of the MRF, is one way to comply. Although the customers could separate the recyclables at their own sites, it would require paying employees to do so and dedicating space for multiple drop boxes to contain the separated recyclables.
Some of AGG's customers in Multnomah County would also like to use its services in Washington County. These customers prefer to use a single hauler to reduce the interactions required to deal with numerous haulers in the separate geographic areas in which they do business. The customers testifying were also happy with AGG's prices and service level.
AGG also hauls source-separated recyclable materials interstate between Oregon, Idaho, and Washington. Although this is a regular part of AGG's business, it is not the company's primary focus or primary source of revenue.
The ordinances make it unlawful for anyone to collect, store, transport or dispose of any waste3 or solid waste in their areas of jurisdiction without receiving a certificate, license, or permit,4 or to conduct the activities in service areas not covered by the certificate. WCC 8.04.120; BC 4.08.030. To receive a County certificate under the new ordinance for an area the applicant is not serving, the applicant must show that the service area has not been allocated to another, or is not being served by the certificate holder, or is not being adequately served by the certificate holder and there is a substantial demand from customers within the area for a change of service. WCC 8.04,170. The City ordinance allows nonexclusive licenses for each service area, BC 4.08.040, but the City has never awarded more than one license for a geographic area. The franchisees are required to service both residential and commercial customers in their geographic areas. Civil penalties can be assessed for violations.
The State of Oregon has a goal of recovering at least fifty percent from the general solid waste stream by January 1, 2000, ORS 459A.010(1). The franchise process and the ordinances are the City and County's way of supporting that goal by providing service at a reasonable cost to all residential and commercial customers.
Neither the County nor the City has awarded a new franchise since the ordinances were put in place, in 1969 in the case of the County and over twenty years in the case of the City. The ordinances contain no mechanism to periodically award franchises anew after an open bidding process. A few franchises have been transferred when a hauler was purchased.
AGG does not hold any of the certificates required by the ordinances. When it tried to expand its business from Multnomah to Washington County, AGG received citations from both the County and the City. After the Woodfeathers decision was reversed, the City informed AGG that it would not take further action on AGG's application for a license. AGG has not applied for a certificate from the County.
Gail Woodworth has been openly engaged in transporting construction debris in Washington County for over twenty years. His company hauls both source-separated recyclables and MSW loads. Woodworth has neither of defendants' solid waste certificates but has never been challenged by the County or City about his right to transport these loads. Woodworth was the president of the Oregon Dump Truck Association in 1987-1988 and knows of none of its several hundred members operating without certificates who have been challenged by a government entity. Because of staff limitations, the County's enforcement mechanism is driven by complaints. Very few complaints about unauthorized drop boxes have ever been received by the County. In particular, the County has never received a complaint about a dump truck operator hauling MSW loads without authorization.
Individual haulers are concerned that their established relationships with customers, and their profitability, will be jeopardized if AGG, and presumably others, do business in the County and the City by "cream-skimming" the most profitable jobs, those for commercial customers. The haulers are required by their certificates to also service the less profitable residential customers within their exclusive territories. All rates are regulated so that services the County and the City deem essential, such as less profitable residential recycling, are provided to all customers while haulers maintain a reasonable profit margin.
I. Justiciability of the Case
Defendants claim that the court should not hear this case for several reasons: (1) AGG lacks standing; (2) AGG's claims are not ripe for review; and (3) the court should abstain.
To meet the standing requirements of Article III, "a plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief. The injury must be distinct and palpable [,] not merely speculative, and the harm must be imminent and not hypothetical." Houston v. Roe, 177 F.3d 901, 907 (9th Cir. 1999) (citation omitted), cert. denied, 120 S. Ct. 1168 (2000).
AGG has standing to raise its claims. It has been cited under both ordinances at issue and is asking this court to prohibit enforcement of the ordinances so that it may continue expanding its business into Washington County. Thus, its injury would be redressed by the requested relief. Although AGG is not currently operating in the County or the City, and consequently could not be cited for its activities today, the harm is not hypothetical or speculative. Based on their past conduct, the City and the County intend to enforce the ordinances. There is no requirement that AGG continue to incur civil penalties while this case is adjudicated.
Defendants also contend that this case is not ripe for review because AGG has not applied for a certificate from the County, failed to complete the application process with the City, and failed to exhaust its administrative remedies. Defendants also contend that withholding review will not result in any direct and immediate hardship to AGG.
Ripeness is determined by a two-prong test: (1) the fitness of the issue for judicial decision; and (2) the hardship to the parties of withholding court consideration. Municipality of Anchorage v. United States, 980 F.2d 1320, 1323 [23 ELR 20302] (9th Cir. 1992). Review is postponed if the "systemic interest in postponing adjudication due to lack of fitness outweighs the hardship on the parties created by postponement." Id.
I first note that if AGG is correct that the ordinances are unconstitutional or are preempted by federal law, it should not be required to apply for a certificate to challenge the ordinances in this court. This is a different situation than if the ordinances were valid but the governments were illegally withholding certificates. For the same reason, a more developed evidentiary record is not relevant to the questions that this court will answer. The hardship on AGG of withholding review is that its business activities, and subsequent profits, are restricted. I disagree with defendants' contention that postponing review will have no effect on AGG's day-to-day affairs. Applying defendants' argument, I do not see how this action would ever be considered ripe because AGG would never suffer a hardship.
I also conclude, based on the application process with the City, and both governments' failures to ever award new certificates except through ownership transfer, that it would have been futile for AGG to [30 ELR 20489] pursue applications with either the City or the County. Moreover, even if AGG had been awarded a geographic area in which to do business, it would still have been prohibited from working in all parts of the City and unincorporated Washington County, as it wishes to do. Because there is a sufficient factual record for the issues before the court, I conclude that the case is ripe for judicial review.
Finally, defendants contend that the court should abstain under the Burford abstention doctrine from adjudicating AGG's claims because my ruling could impair the operation of the City and County's comprehensive regulatory schemes.
The Supreme Court began explaining the Burford abstention doctrine in Burford v. Sun Oil Co., 319 U.S. 315, 332 (1943), when discussing its reluctance to decide questions turning on largely local issues.
Where timely and adequate state-court review is available, a federal court sitting in equity must decline to interfere with the proceedings or orders of state administrative agencies: (1) when there are difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar; or (2) where the exercise of federal review of a question in a case and in similar cases would be disruptive of state efforts to establish a cohorent policy with respect to a matter of substantial public concern.
New Orleans Public Service, Inc. v. Council of New Orleans, 491 U.S. 350, 361 (1989) (internal quotation omitted). The Ninth Circuit has added additional requirements before Burford abstention is justified:
1) the state must have concentrated suits involving the local issue in a particular court; 2) the federal issues must not be easily separable from complicated state law issues with which the state courts may have special competence; and 3) federal review might disrupt state efforts to establish a coherent policy.
Fireman's Fund Insurance Co. v. Quackenbush, 87 F.3d 290, 296 (9th Cir. 1996).
I fully agree that the waste control systems in the County and the City are issues of great local concern. AGG claims, however, that the government entities are overstepping their authority and violating federal law and the federal Constitution. The issues before me do not turn on state law. This is true even though, if AGG prevails, many state and local government laws pertaining to solid waste may have to change. "The state's attempts to establish a coherent policy are of little consequence, as it is the constitutionality of the state's efforts to do precisely this which is currently in question." Id. at 297. Although AGG could have its claims heard in state court, federal court is also appropriate. I decline to abstain.
Under Article VI of the Constitution, the laws of the United States are the supreme law of the land and any conflicting state law is without effect. Southern Pacific v. Oregon PUC, 9 F.3d 807, 810 (9th Cir. 1993). Congress may preempt state laws by explicitly defining the extent to which preemption occurs. Id. When determining if a state statute is preempted by federal law, the "sole task is to ascertain the intent of Congress." California Federal Sav. and Loan Ass'n v. Guerra, 479 U.S. 272, 280 (1987).
Congress acted to deregulate the motor carrier industry when it enacted the Federal Aviation Administration Authorization Act of 1994 ("FAAAA"). The Act contains a preemption provision:
(1) General rule. . . . [A] State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law . . . related to a price, route, or service of any motor carrier . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.
49 U.S.C. § 14501(c). The difficulty lies in the fact that the term "property" is not defined in the Interstate Commerce Act.
A. Motor Carrier
Defendants contend that AGG is neither a motor carrier nor a motor private carrier and, thus, the FAAAA cannot apply to it. Defendants contend that under the "primary business test" distinguishing between the two, AGG would be a motor private carrier. Since the trips at issue are not interstate commerce, however, defendants contend that AGG does not fulfill this prong of the motor private carrier definition.
The Interstate Commerce Commission ("ICC") does not have jurisdiction over the transportation of property by motor vehicle when the property is transported by a person engaged in a business other than transportation and the transportation is within the scope of and furthers a primary business of the person other than transportation. Nuclear Diagnostic Laboratories, Inc., 131 M.C.C. 578, 581 (1979); American Trucking Assoc. v. I.C.C., 672 F.2d 850, 851 (11th Cir. 1982). Several factors are considered.
I conclude that under the primary business test, AGG is a motor carrier and not a motor private carrier. The terms written on the back of AGG's standard contract state that AGG acquires title to waste materials once they are loaded onto its trucks. Another term, however, differentiates waste materials from recyclables. It is undisputed that AGG passes tipping fees through to the customer and returns to customers rebates which are obtained from the source-separated loads. Although there are no rebates from the MSW loads, I am unwilling to compartmentalize AGG's business to that extent. AGG does not perform any service other than transportation. It does not store the loads, does not consolidate partial loads from different customers before transporting to the MRF or another recycler, and does not perform any type of service on the load except to transport it to a proper disposal facility. This is different from the trucker in Nuclear Diagnostic which sold containers and other materials to its customers, conducted monitoring tests on the loads of radioactive waste, sealed containers, stored loaded containers, and consolidated containers before transporting to the final disposal sites. Id. at 583. AGG's primary business is to transport the loads from the customer site to a disposal facility, nothing more.
Motor carrier is defined as "a person providing motor vehicle transportation for compensation." 49 U.S.C. § 13102(12). AGG fits this description. Accordingly, the FAAAA can apply to it.
As mentioned above, the FAAAA preempts laws relating to the transportation of property but does not define property. Defendants contend that the MSW loads are not property, and thus can be regulated locally, because these loads have a negative value to the generator, AGG's customers, who must pay to have them hauled away.
The ICC analyzed the meaning of property in conjunction with the Interstate Commerce Act in Joray Trucking Corp., 99 M.C.C. 109 (1965). A trucker sought a certificate to haul rock and debris generated from excavations and building demolitions. The ICC concluded that the debris, which would be disposed of as fill for wasteland, had a negative value as a commodity because it was not purchased from the contractors seeking its removal. Id. at 110.
A court may look to the legislative history for evidence of congressional intent if the statute is ambiguous. United States v. Daas, 198 F.3d 1167, 1174 (9th Cir. 1999). Although the lack of a statutory definition does not require a finding of ambiguity, id., the parties have offered several definitions of property. One ordinary meaning is: "the right to possess, use, and dispose of something; ownership." Webster's New World College Dictionary 1078 (3rd ed. 1996).
When enacting the FAAAA, Congress noted Joray's definition. The House Conference Report states:
The conferees further clarify that the motor carrier preemption provision does not preempt State regulation of garbage and refuse collectors. The managers have been informed by the Department of Transportation that under ICC case law, garbage and refuse are not considered "property". Thus garbage collectors are not considered "motor carriers of property" and are thus unaffected by this provision.
H.R. Conf. Rep. No. 103-677, at 208 (1994), reprinted in 1994 U.S.C.C.A.N. 1715.
After the FAAAA was enacted, a member of the House of Representatives introduced into the record a letter from the general counsel of the ICC commenting on whether the act preempts state economic regulation of the curbside collection of recyclables. The counsel stated that garbage and refuse are not considered property under the relevant [30 ELR 20490] statutes, and noted the distinction between the curbside collection of recyclables and recyclables in commercial quantities, referring to Transportation of Waste Products for Reuse, 114 M.C.C. 92 (1971). 140 Cong. Rec. E2204-03 (October 7, 1994) (extension of remarks by Hon. Norman Mineta).
In Waste Products, the ICC held that waste materials purchased for use in recycling programs are property under the Act. The ICC noted that its jurisdiction would cover both the transportation from reclamation centers to recycling plants and then from the recycling plants to the manufacturing plants. In the ICC's view, the recycling plants provide processing, such as grinding or crushing, to ready the commodity for the manufacturing process.
The explanation in Waste Products clearly applies to AGG's transportation of source-separated loads from the generator to the recycling plants, such as Smurfit. The transport of MSW loads also falls within the reasoning in Waste Products. The separation of the recyclables at the MRF is similar to the grinding of glass into cullet at a recycling center. Both processes are necessary to prepare the commodity for reentry into the manufacturing stream.
I conclude that the MSW loads have an economic value even though they are being discarded by the generators. ECR's business is based on the economic value inherent in the material. I see no reason to restrict the determination of economic value to the generators' view rather than to the manufacturing stream as a whole. There was also testimony that the paper mills could not run without the ability to purchase recycled paper. Further, some of the generators have contractual obligations to recycle some of their waste. Although it would be difficult to quantify the economic value flowing from compliance with this obligation, a value exists as part of the reason that the contracts are awarded.
I also disagree with defendants' position that the determination of what constitutes property is made solely on the basis of economic value. The ordinary meaning of property includes the concept of ownership and its related obligations, specifically here, to properly dispose of the material rather than dumping it in a manner which might be inexpensive and easy but illegal.
My choice of a broader definition of property is supported by Nuclear Diagnostic Laboratories, Inc., 131 M.C.C. 578 (1979). The ICC reversed itself and ultimately concluded that radioactive waste material destined for burial was property under the act:
Our dismissal of the application in the instant proceeding was based upon our conclusion that radioactive waste materials destined for burial do not constitute "property" because they lack economic value. Upon further reflection, we conclude that the economic value of hazardous materials, including radioactive waste destined for burial, should not be the sole criterion for determining whether these commodities are "property" subject to the general jurisdiction of the Commission. "Property" is not defined in the Interstate Commerce Act and, as we noted in our prior report, the word is subject to many different meanings. "Property" connotes ownership as well as value. Something that is owned can be "property" notwithstanding its lack of economic value.
Id. at 580.
In summary, I conclude that both the source-separated loads6 and the MSW loads, when collected from commercial and industrial accounts, are "property" as the word is used in the FAAAA. The local or state regulation of these loads is thus preempted by the FAAAA, including the two ordinances at issue.
III. Dormant Commerce Clause
AGG contends that the ordinances are unconstitutional barriers to interstate commerce. It contends that the ordinances are a direct burden on interstate commerce because they do not permit AGG to transport loads from the County and the City in interstate commerce. Alternatively, AGG contends that the indirect burden on interstate commerce is not balanced by the local benefits provided by the ordinances.
Two types of state regulations might burden interstate commerce: (1) those that directly burden interstate commerce or that discriminate against out-of-state interests; and (2) those that burden interstate transactions only incidentally. Regulations in the first category are unconstitutional unless the state can demonstrate that a legitimate local interest unrelated to economic protection is served by the regulation and no less discriminatory alternative exists. Regulations in the second category are analyzed under the Pike balancing test, Pike v. Bruce Church, 397 U.S. 137 (1970). Kleenwell Biohazard Waste v. Nelson, 48 F.3d 391, 395 [25 ELR 20867] (9th Cir.), cert. denied, 515 U.S. 1143 (1995).
If the primary purpose of the regulation is to regulate interstate commerce or if it favors in-state interests over out-of-state interests, it is generally in the first category. Regulations in the second category are those designed to address a legitimate local concern and only incidentally affect interstate commerce. The party challenging the validity of the regulation has the burden of demonstrating that it has a discriminatory purpose or effect. Id. at 398 and n.8.
In Kleenwell, the challenged regulation required all solid waste collection companies within the state to obtain a certificate of public convenience before collecting waste. The plaintiff solid waste collector specialized in medical waste. The court concluded the regulation at issue fell into the second category because it addressed a legitimate local concern, the safe disposal of solid waste, and it allowed both in-state and out-of-state firms to obtain the certificate. Id. at 398. After applying the Pike test, the court upheld the regulatory scheme.7 Id. at 399.
In another solid waste case, C&A Carbone, Inc. v. Town of Clarkstown, New York, 511 U.S. 383 [24 ELR 20815] (1994), the Supreme Court determined that the challenged ordinance directly regulated interstate commerce and applied the test from the first group above. The ordinance was a flow control ordinance which required all solid waste in the town, whether generated there or brought there for processing, to be processed at a designated transfer station before leaving the town. The Court determined that the ordinance discriminates against interstate commerce because it drove up costs for out-of-state interests who disposed of their waste with haulers located in the town and it deprived out-of-state businesses access to a local market. "The essential vice in laws of this sort is that they bar the import of the processing service. . . . The offending laws hoard a local resource [here, solid waste] . . . for the benefit of local business that treat it." Id. at 392. The law was struck down.
The collection and disposal of solid waste is considered primarily a function of state and local governments. Kleenwell, 48 F.3d at 398. The Supreme Court has rejected the contention that any regulation affecting particular companies engaged in interstate commerce necessarily represents a direct burden. Id. at 397, citing Exxon Corp. v. Governor of Maryland, 437 U.S. 117 (1978). The ordinances before me do not have a primary purpose of regulating interstate commerce. Out-of-state interests are not discriminated against. It is true that the haulers in place when the ordinances were enacted were given an advantage in retaining their territories. Those haulers, however, could have been out-of-state firms. Although no one is getting a new territory and territories have not been reassigned except through sale of the original hauler, both in-state and out-of-state haulers can compete for the purchase of an existing franchise. Currently, Waste Management, a national corporation, owns several of the certificates. Accordingly, I conclude that the ordinances burden interstate commerce only indirectly and the Pike test should be used to analyze their constitutionality.
The Pike balancing test recognizes that incidental burdens on interstate commerce may be unavoidable when a State legislates to safeguard the health and safety of its people. Accordingly, under the Pike test, "where the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed upon such commerce is clearly excessive in relation to the putative local benefits."
[30 ELR 20491]
Kleenwell, 48 F.3d at 399 (internal quotation and citation omitted, emphasis in the original, quoting Pike, 397 U.S. at 142). The party challenging the regulation must establish that the burden on interstate commerce clearly outweighs the local benefits arising from the regulation. Id.
The local interest being protected by the ordinances is to provide safe, affordable and efficient waste disposal for all residential and commercial customers within Beaverton and unincorporated Washington County. This is a legitimate area of local concern and implicates public health and safety issues.
AGG relies on U&I Sanitation, 205 F.3d 1063, 2000 WL 199230 [30 ELR 20382] (8th Cir. 2000), which analyzed a flow control solid waste ordinance requiring all garbage collected within the city limits, except garbage destined for out-of-state disposal, to be processed at the city-owned transfer station that provided no recycling. Under the Pike test, the court concluded that the ordinance violated the Commerce Clause because of its effect in removing recyclables from the manufacturing stream. Although the effect of one city's ordinance might be minimal, the court considered the effect if all cities enacted similar ordinances, consequently substantially diminishing the market in recyclables. Id. at *4-5.
The ordinances before me are not flow control ordinances. The incidental burden that I find in them is that new companies, such as AGG, have a difficult, if not impossible, time entering the market in Beaverton or unincorporated Washington County. Although franchises have been purchased, this is not a common event. Moreover, the ordinances limit the hauler to its franchised geographic area rather than allowing county-wide operations. The new companies, particularly AGG, might be more willing to take the MSW loads to a MRF rather than to a landfill. This would increase the available recyclables and have an incremental effect on interstate commerce. There is nothing in the ordinances, however, which prevents the franchisees from utilizing a MRF. It appears not to be happening because of a lack of MRFs in Washington County and no financial incentives to drive the MSW loads the extra distance for disposal at a MRF.
U&I Sanitation also considers less burdensome alternatives in the balance. Id. at *4. Portland and Multnomah County do not regulate commercial hauling by dividing the area into exclusive franchises. Haulers must be licensed but there was no evidence presented that licenses are limited if the basic requirements are met. AGG contends that this method should be used in defendants' geographic areas.
Certainly this is a possible alternative. One of defendants' concerns, however, was to provide affordable service to isolated rural customers. No evidence was presented comparing the population densities of Washington and Multnomah Counties. Portland is densely populated and would not present that issue.
After balancing the local public interest and the effects on interstate commerce, I conclude that the burden imposed upon interstate commerce is not clearly excessive in relation to the putative local benefits. Accordingly, I find that the ordinances do not violate the Commerce Clause.
IV. Equal Protection Clause
Because I concluded above that the ordinances are preempted by the FAAAA,I decline to address AGG's final constitutional argument concerning violation of the Equal Protection Clause.
V. Injunctive Relief
Now that AGG has prevailed on the merits, I have the discretion to grant a permanent injunction enjoining defendants from enforcing the ordinances against AGG. Permanent injunctive relief is only appropriate if plaintiffs will suffer irreparable injury and monetary damages will not adequately compensate them for their injuries. Walters v. Reno, 145 F.3d 1032, 1048 (9th Cir. 1998), cert. denied, 526 U.S. 1003 (1999).
While the injunction was in place during the Woodfeathers case, AGG expanded its business into the County and City. It ceased operations there when that injunction was dissolved. AGG's customers want to hire it for their work in those geographic areas. I believe that if AGG attempted to work there without the protection of an injunction, haulers would continue to file complaints and AGG would continue to be cited under the ordinances.
Thus, we have a company which has been in business for many years, which has shown the ability to expand its business into defendants' geographic areas, and which has current customers willing to hire it to work in those areas. Prohibiting AGG from working in defendants' geographic areas without paying fines and associated legal fees, when defendants are overstepping their authority, is an irreparable injury. Moreover, there is no reasonable way to calculate the monetary damages because the injury would continue indefinitely into the future. An injunction is an appropriate remedy.
Chapter 8.04 of the Washington County Code on Solid Waste Control and Chapter 4.08 of the City of Beaverton Code on Solid Waste Control, when enforced to prohibit AGG from transporting source-separated loads and mixed solid waste loads, are preempted by the Federal Aviation Administration Authorization Act of 1994, 49 U.S.C. § 14501(c), because they are related to service by a motor carrier with respect to the transportation of property.
A permanent injunction will be put in place. AGG should circulate a proposed injunction to defendants and intervenors within a week from the date of this opinion. If the parties can agree on language, a stipulated permanent injunction should be submitted within three weeks. If the parties cannot agree, each should submit a proposed injunction and/or their objections to the other proposed injunctions, within three weeks.
1. This ordinance was amended in December 1999, after AGG filed this action. AGG seeks only declaratory and injunctive relief. The parties agree that the court's analysis should be focused on the new version of the ordinance.
2. Unless there is a reason to differentiate between the political entities or their geographic areas, I will refer to them collectively as Washington County.
3. Waste is defined as "material that is no longer useable or wanted by the source of the material, which material is to be utilized or disposed by another." "Utilized" includes recycling. WCC 8.04.020(Q).
4. The Washington County Code and Beaverton Code use slightly different terminology although the idea is the same. I will use the words "certificate" or "franchise" unless it is necessary to distinguish.
5. Defendants and the various intervenors split the briefing task and join the arguments presented by the others. I will refer to all as defendants unless it is necessary to distinguish.
6. I realize that defendants are currently not trying to regulate the source-separated loads with a fair market value because of an exemption under state law. ORS 459A.075. Because all of the evidence was presented, however, I will decide the federal questions concerning these loads also.
7. The plaintiff only challenged the state's ability to impose a certification requirement and did not challenge the state's refusal to grant it a certificate.
30 ELR 20487 | Environmental Law Reporter | copyright © 2000 | All rights reserved