Garbage II

Discriminatory Taxes

In the prior panel, we looked at two cases in which States attempted to preserve scare disposal resources by regulating or prohibiting the transportation of solid waste from other states. Another way of attempting to preserve scarce local disposal resources might be to impose a disposal tax. Such a tax might be defended as an encouragement to other states to take care of their own solid waste locally. It is difficult to find a disposal site. There are zoning, environmental and local public opposition to overcome. Once a disposal location has been established, if outstate waste begins to flow in, it shortens the life of this important community asset. Two cases in the 1990's dealt with discriminatory taxation of solid waste disposal.

In the first, Chemical Waste Management, Inc. v. Hunt, 504 U.S. 334 (1992), the Court considered a hazardous waste disposal fee imposed by Alabama on hazardous wastes generated outside the State and disposed of at a commercial facility in Alabama. The fee dud not apply to such waste having a source in Alabama. Under Philadelphi v New Jersey and Fort Gratio, "no state may attempt to isolate itself from a problem common to the several States by raising barriers to the free flow of interstate commerce." The State Act's additional fee facially discriminates against hazardous waste generated outside Alabama, and the Act has plainly discouraged the full operation of petitioner's facility, the Court reasoned. Such a burdensome tax imposed on interstate commerce alone is generally forbidden and is typically struck down without further inquiry. However, here the State argues that the additional fee serves legitimate local purposes. Dissenting, once again, the Chief Justice stated:

• In short, the Court continues to err by its failure to recognize that waste - in this case admittedly hazardous waste - presents risks to the public health and environment that a State may legitimately wish to avoid, and that the State may pursue such an objective by means less Draconian than an outright ban. Under force of this Court's precedent, though, it increasingly appears that the only avenue by which a State may avoid the importation of hazardous wastes is to ban such waste disposal altogether, regardless of the waste's source of origin. The Court errs in substantial measure because it refuses to acknowledge that a safe and attractive environment is the commodity really at issue in cases such as this. ... The result is that the Court today gets it exactly backward when it suggests that Alabama is attempting to "isolate itself from a problem common to the several States." To the contrary, it is the 34 States that have no hazardous waste facility whatsoever, not to mention the remaining 15 States with facilities all smaller than Emelle, that have isolated themselves.

The Chief Justice noted that States can achieve similar objectives by running disoposal facilities directly under the public mantle. The Commerce Clause, he pointed out, does not require publicly owned disposal sites from accepting only local waste:

Another Try: Fort Gratiot Landfill v. Michigan DNR, 504 U.S. 353 (1992)

• Other mechanisms also appear open to Alabama to achieve results similar to those that are seemingly foreclosed today. There seems to be nothing, for example, that would prevent Alabama from providing subsidies or other tax breaks to domestic industries that generate hazardous wastes. Or Alabama may, under the market participant doctrine, open its own facility catering only to Alabama customers. See, e.g., White v. Massachusetts Council of Constr. Employers, Inc., 460 U.S. 204, 206 -208 (1983); Reeves, Inc. v. Stake, 447 U.S. 429, 436 -437 (1980); Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 810 (1976). But certainly we have lost our way when we require States to perform such gymnastics when such performances will in turn produce little difference in ultimate effects. In sum, the only sure byproduct of today's decision is additional litigation. Assuming that those States that are currently the targets for large volumes of hazardous waste do not simply ban hazardous waste sites altogether, they will undoubtedly continue to search for a way to limit their risk from sites in operation. And each new arrangement will generate a new legal challenge, one that will work to the principal advantage only of those States that refuse to contribute to a solution.

The succeeding challenge came shortly thereafter in Oregon Waste Systems, Inc. v. Dept. of Environmental Quality of Oregon, 511 U.S. 93, 98 (1994), the Court considered a differential taxing scheme imposed by Oregon. The State imposed a $2.50 per ton surcharge on the in-state disposal of solid waste generated in other States and an $0.85 per ton fee on the disposal of waste generated within Oregon. The Court found Oregon's surcharge facially invalid under the dormant Commerce Clause. The Court applied the Pike Test, which we have discussed in previous panels. Under that test, one determine whether a tax discriminates against, or regulates evenhandedly with only incidental effects on, interstate commerce. If the restriction is discriminatory - i.e., favors in-state economic interests over their out-of-state counterparts - it is virtually per se invalid, the Court noted. "Oregon's surcharge is obviously discriminatory on its face. It subjects waste from other States to a fee almost three times greater than the charge imposed on in-state waste, and the statutory determinant for whether the fee applies is whether or not the waste was generated out of state." Because the surcharge was discriminatory, the virtually per se rule of invalidity - not the Pike balancing test - provides the proper legal standard for these cases, the Court held. "Thus, the surcharge must be invalidated unless respondents can show that it advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives."