Garbage III

Solid waste originally consisted of decomposable organic garbage which could be safely pitched in town dumps, there to decompose into harmless fill. But the chemical revolution brought us a massive waste disposal problem. Industrial waste: paints and plastics, electronics, solvents and metals, all found their way into the solid waste stream. And waste disposal techniques lagged behind. Free market economics could not account for this problem; indeed free market economics actually misdirected hazardous waste to the least environmentally sound disposal sites. During the 1970's numerous landfill failures, and costly cleanup litigations, led states and the federal government to use licensing and regulation to force solid waste to environmentally preferable locations. These new disposal sites would be tremendously expensive. Nobody would build them unless a secure supply of waste to pay higher tipping fees could be guaranteed. But if these facilities charged higher tipping fees, that would redirect the private waste stream to cheaper less environmentally sound alternatives.

Encouraged by federal regulators, all over the country, local government began to solve this problem with flow control regulation. Under this scheme, a private entrepreneur would construct a costly processing or disposal facility; in return, local government would pass ordinances requiring all solid waste to be delivered to the new facility. Often the local government signed a "put-or-pay" contract with the facility, under which the locality would guarantee delivery of a minimum volume of waste at a fixed price. Waste-to-energy incinerators, recycling centers, transfer stations, modern lined landfills, composting operations were funded by this device. Few, if any, predicted that this would lead to a dormant commerce clause problem.

However, in C & A CARBONE, INC. v. CLARKSTOWN (1994) , the hauling industry successfully challenged local government's flow control powers under the dormant commerce clause. Clarkstown had agreed to allow a private contractor to construct within town limits a solid waste transfer station to separate recyclable from non recyclable items and to operate the facility for five years, at which time the town would buy it for one dollar. To finance the transfer station's cost, the town guaranteed a minimum waste flow to the facility, for which the contractor could charge the hauler a tipping fee which exceeded the disposal cost of unsorted solid waste on the private market. In order to meet the waste flow guarantee, the town adopted a flow control ordinance, requiring all non hazardous solid waste within the town to be deposited at the transfer station. No disposal company could ship such waste to alternative in-state or out-state locations.

The Supreme Court focused on the inter-state flow of garbage in commerce. Clarkstown pointed out that its ordinance reached only waste within its jurisdiction, "and is, in practical effect, a quarantine: it prevents garbage from entering the stream of interstate commerce until it is made safe." Pointing to Philadelphia v. New Jersey, the Court rejected this position, which it called an "outdated and mistaken concept of what constitutes interstate commerce." "While the immediate effect of the ordinance is to direct local transport of solid waste to a designated site within the local jurisdiction, its economic effects are interstate in reach. The Carbone facility in Clarkstown receives and processes waste from places other than Clarkstown, including from out of State. By requiring Carbone to send the nonrecyclable portion of this waste to the Route 303 transfer station at an additional cost, the flow control ordinance drives up the cost for out-of-state interests to dispose of their solid waste. Furthermore, even as to waste originant in Clarkstown, the ordinance prevents everyone except the favored local operator from performing the initial processing step. The ordinance thus deprives out-of-state businesses of access to a local market." The Court continued:

• With respect to this stream of commerce, the flow control ordinance discriminates, for it allows only the favored operator to process waste that is within the limits of the town. The ordinance is no less discriminatory because in-state or in-town processors are also covered by the prohibition. In Dean Milk Co. v. Madison, 340 U.S. 349 (1951), we struck down a city ordinance that required all milk sold in the city to be pasteurized within five miles of the city lines. We found it "immaterial that Wisconsin milk from outside the Madison area is subjected to the same proscription as that moving in interstate commerce." Id., at 354, n. 4.

The Township pointed out that it had a valid interest in preventing local interests from being subjected to potential Superfund liability for improper disposal of solid waste. But the Court rejected this rationale: the Township could not indirectly regulate the disposal of waste elsewhere:

• Nor may Clarkstown justify the flow control ordinance as a way to steer solid waste away from out-of-town disposal sites that it might deem harmful to the environment. To do so would extend the town's police power beyond its jurisdictional bounds. States and localities may not attach restrictions to exports or imports in order to control commerce in other states. Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511 (1935) (striking down New York law that prohibited the sale of milk unless the price paid to the original milk producer equalled the minimum required by New York).

Carbone represents perhaps a strained extension of the Court's prior precedents. In Dean Milk, Madison Wisconsin was attempting to protect all local milk producers functioning in the private marketplace. Here, Clarkstown was attempting fulfill an important governmental public health function. The dissent explained:

• There are, however, both analytical and practical differences between this and the earlier processing cases, differences the majority underestimates or overlooks but which, if given their due, should prevent this case from being decided the same way. First, the terms of Clarkstown's ordinance favor a single processor, not the class of all such businesses located in Clarkstown. Second, the one proprietor so favored is essentially an agent of the municipal government, which (unlike Carbone or other private trash processors) must ensure the removal of waste according to acceptable standards of public health. Any discrimination worked by Local Law 9 thus fails to produce the sort of entrepreneurial favoritism we have previously defined and condemned as protectionist. .... The majority ignores this distinction between public and private enterprise, equating Local Law 9's "hoard[ing]" of solid waste for the municipal transfer station with the design and effect of ordinances that restrict access to local markets for the benefit of local private firms. But private businesses, whether local or out of State, first serve the private interests of their owners, and there is therefore only rarely a reason other than economic protectionism for favoring local businesses over their out-of-town competitors. The local government itself occupies a very different market position, however, being the one entity that enters the market to serve the public interest of local citizens quite apart from private interest in private gain.

USA RECYCLING: Carbone prohibits local government from directing the flow of solid waste to privately operated favored solid waste facilities by licensing or designation. But it does not prevent government from exercising its core governmental functions. A good example of the difference may be found in the case USA RECYCLING, INC. v. TOWN OF BABYLON (2d Cir., 1995). The Town of Babylon passed an ordinance which precluded businesses from individually hiring garbage haulers and instead hired a single hauler to collect all garbage within the town's newly created commercial garbage district. The Town permitted the hauler to dump garbage for free at a local incinerator, which the Town owned exclusive rights to use. To finance this system, the town assessed a flat tax on all commercial property and charged user fees to generators of commercial waste.

USA Recycling challenged this ordinance as interference with interstate commerce. At the outset, it is important to recognize that the case involves two exercises of governmental power. The first, is the power to declare solid waste collection and disposal as an exclusively governmental function. There is a limit to this power: local government could not, presumably, prohibit private enterprise from operating restaurants, dairies, or construction companies. But garbage collection and disposal, like the distribution of water, or the maintenance of public roads, is an historic public function. As the Babylon court pointed out:

• For ninety years, it has been settled law that garbage collection and disposal is a core function of local government in the United States. At their option, cities may provide garbage pick-up to their citizens directly (that is, through town employees or an independent contractor), or they may rely on a closely regulated privatemarket to provide those services. In 1905, the Supreme Court turned away two challenges, brought on takings and due process grounds, to city ordinances in San Francisco and Detroit that gave a single scavenger firm the exclusive right to collect and dispose of city garbage. California Reduction Co. v. Sanitary Reduction Works , 199 U.S. 306 (1905); Gardner v. Michigan, 199 U.S. 325 (1905).

And so, the Town of Babylon was well within its rights to relegate to itself entirely the collection and disposal of solid waste. The commerce clause was not implicated in any way by this decision. Local government has complete freedom to determine the manner in which its governmental functions will be conducted. That left only a challenge to the decision to utilize a local hauler for this service. Here, USA Recycling argued, in essence, that the Carbone decision created a constitutionally preferred regimen for the disposal of solid waste. But the Court disagreed:

• Babylon's waste management plan, which so closely resembles those approved by the Supreme Court in California Reduction and Gardner , neither discriminates against, nor imposes any incidental burdens on, interstate commerce. In reaching that conclusion, we reject the plaintiffs' contention that the Carbone decision fashioned from the "dormant" Commerce Clause a new, and unprecedentedly sweeping, limitation on local government authority to provide basic sanitation services to local residents and businesses, on an exclusive basis and financed by tax dollars. Such a limitation, to borrow the words of the Supreme Court, "would interfere significantly with a State's ability to structure relations exclusively with its own citizens. It would also threaten the future fashioning of effective and creative programs for solving local problems and distributing governmental largesse. A healthy regard for federalism and good government renders us reluctant to risk these results." Reeves, Inc. v. Stake , 447 U.S. 429, 441 (1980) (citation omitted).

The Supreme Court has repeatedly recognized the power of local government to deliver local services and spend local money as it sees fit, without commerce clause constraints. This recognition, rests upon a recognition that if the federal government is going to interfere with local government operations, that decision should come not from the Courts, but from Congress itself. For more on this topic, see the next panel.