The opinion
Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
10-20-1995
Harvey & Harvey v Chester
Precedential or Non-Precedential:
Docket 94-1924
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 94-1924
HARVEY & HARVEY, INC.,
Appellant
v.
COUNTY OF CHESTER; PENNSYLVANIA DEPARTMENT
OF ENVIRONMENTAL RESOURCES; CHESTER COUNTY
SOLID WASTE AUTHORITY; SOUTHEASTERN CHESTER
COUNTY REFUSE AUTHORITY
On Appeal from the United States District Court
For the Eastern District of Pennsylvania
(D.C. Civ. No. 94-cv-03615)
No. 94-3622
TRI-COUNTY INDUSTRIES, INC.
v.
COUNTY OF MERCER PENNSYLVANIA;
MERCER COUNTY SOLID WASTE AUTHORITY;
COMMONWEALTH OF PENNSYLVANIA,
DEPARTMENT OF ENVIRONMENTAL RESOURCES
THE COUNTY OF MERCER, PENNSYLVANIA;
THE MERCER COUNTY SOLID WASTE AUTHORITY;
and COMMONWEALTH OF PENNSYLVANIA,
DEPARTMENT OF ENVIRONMENTAL RESOURCES,
Appellants
On Appeal from the United States District Court
For the Western District of Pennsylvania
1
(D.C. Civ. No. 93-cv-00592)
Argued: June 6, 1995
Before: BECKER, NYGAARD, and ALITO,
Circuit Judges.
(Filed October 20, l995)
JAMES McC. GEDDES, ESQUIRE (ARGUED)
PHILIP TRAINER, JR., ESQUIRE
STEVEN T. MARGOLIN, ESQUIRE
Ashby & Geddes
One Rodney Square
P. O. Box 1150
Wilmington, DE 19899
Counsel for Harvey & Harvey, Inc.,
Appellant in No. 94-1924
JOHN S. HALSTED, ESQUIRE
THOMAS L. WHITEMAN, ESQUIRE
Office of County Solicitor
2 North High Street
Courthouse, Suite 7
West Chester, PA 19380
Counsel for County of Chester,
Appellee in No. 94-1924
DENNIS W. STRAIN, ESQUIRE (ARGUED)
MARK L. FREED, ESQUIRE
Commonwealth of Pennsylvania
Department of Environmental Resources
555 North Lane
Suite 6015, Lee Park
Conshohocken, PA 19482-2233
Counsel for Pennsylvania Department
Environmental Resources,
Appellee in No. 94-1924
JAMES E. McERLANE, ESQUIRE (ARGUED)
Lamb, Windle & McErlane, P.C.
24 East Market Street
P. O. Box 565
West Chester, PA 19381-0565
Counsel for Chester County Solid
2
Waste Authority,
Appellee in No. 94-1924
JOSEPH C. CRAWFORD, ESQUIRE
Wolf, Block, Schorr & Solis-Cohen
S.E. Corner 15th & Chestnut Streets
Packard Building, 12th Floor
Philadelphia, PA 19102
Counsel for Delaware County Solid
Waste Authority,
Amicus-Appellee in No. 94-1924
THOMAS J. MAY, ESQUIRE (ARGUED)
THOMAS W. KING, III, ESQUIRE
Dillon McCandless & King
128 West Cunningham Street
Butler, PA 16001
Counsel Tri-County Industries, Inc.,
Appellee in No. 94-3622
RONALD D. AMRHEIN, JR., ESQUIRE
William J. Madden, P.C.
165 Euclid Avenue
P. O. Box 981
Sharon, PA 16146
Counsel for Mercer County Solid Waste
Authority and the County of Mercer,
Appellant in No. 94-3622
MICHAEL D. BUCHWACH, ESQUIRE
Pennsylvania Department of
Environmental Resources
Office of General Counsel
RR#2, Mosiertown Road
P. O. Box 614
Meadville, PA 16335-8311
DENNIS W. STRAIN, ESQUIRE (ARGUED)
KRISTEN M. CAMPFIELD, ESQUIRE
GAIL B. PHELPS, ESQUIRE
Pennsylvania Department of
Environmental Resources
Office of Chief Counsel
9th Floor, MSSOB
400 Market Street
Harrisburg, PA 17105-8464
3
Counsel for Commonwealth of
Pennsylvania, Department of
Environmental Resources,
Appellant in No. 94-3622
___________________________
OPINION OF THE COURT
___________________________
BECKER, Circuit Judge.
These appeals, briefed separately but listed together
for oral argument, both present Commerce Clause challenges to
municipal "flow control" ordinances. These ordinances require
waste haulers, like the plaintiffs in each case here, to bring
solid waste picked up within the municipal boundaries to
designated landfill sites located within a state. These
designated sites, in turn, usually charge "tipping fees"
considerably higher than other, non-designated sites located
nearby in other states. In each case we must determine whether
these ordinances, which threaten haulers taking waste to
nondesignated sites with fines and suspension, impermissibly
discriminate against interstate commerce.
In one case Harvey & Harvey ("Harvey"), an interstate
collector, hauler and processor of municipal solid waste, brought
suit against Chester County, the Chester County Solid Waste
Authority ("the Authority")0 the Southeastern Chester County
0
The authority is a Pennsylvania municipal corporation
established by the County Commissioners in 1984 for the purpose
of operating the Lanchester Landfill.
4
Refuse Authority ("SECCRA")0 and the Pennsylvania Department of
Environmental Resources (the "DER"). It seeks to have the
County's flow control plan declared unconstitutional under the
dormant Commerce Clause. The district court denied Harvey's
motion for a preliminary injunction. Concluding that the plan
does not discriminate against interstate commerce, it held that
the Pike balancing test, see Pike v. Bruce Church, Inc., 397 U.S.
137, 90 S. Ct. 844 (1970), which Harvey acknowledged that it
could not meet, would apply. (Sept. 8, 1994 Order.) Because the
district court did not consider whether the Chester County flow
control scheme offered out-of-state landfill operators an equal
opportunity to compete for the county's waste disposal business,
we vacate and remand for further proceedings.
In the other case Tri-County Industries, Inc. ("Tri-
County"), a hauler of residential and commercial solid waste
throughout Mercer County and in other Western Pennsylvania and
Ohio counties, brought suit against the County of Mercer and the
Mercer County Solid Waste Authority ("MCSWA"). It sought both a
declaratory judgment that the county's flow control plan violated
the dormant Commerce Clause and a permanent injunction enjoining
its enforcement. The district court, concluding that the plan
improperly impeded interstate commerce, granted final judgment on
stipulated facts in favor of Tri-County. We hold that the
district court erred in concentrating on the operation of the
ordinance and concomitantly in failing to consider whether out-
0
SECCRA owns the SECCRA landfill.
5
of-state interests competed on a level playing field. Therefore,
the order in Tri-County must also be vacated and remanded.
I. FACTS AND PROCEDURAL HISTORY
A. THE SOLID WASTE CRISIS
During the 1970s and '80s, national environmental
concerns fostered stricter state regulation of waste disposal.
This regulation led to a large number of landfill closures
throughout the United States, creating shortages in many places
and driving up landfill pricing. See Eric S. Petersen & David N.
Abramowitz, Municipal Solid Waste Flow in the Post-Carbone World,
22 FORDHAM URB. L.J. 361 n.33 (1995); see also Harvey SA 382
(Kerns); James C. Vago, Comment, The Uncertain Future of Flow
Control Ordinances: The Last Trash to Clarkstown?, 22 N. KY. L.
REV. 93, 98 (1995). Pennsylvania was no exception. It too
experienced inadequate and rapidly diminishing disposal capacity
for municipal waste. See 53 P.S. §4000.102(a)(2) (legislative
findings).
Waste disposal methods, ranked in descending order of
environmental impact, include: source reduction and reuse, waste
combustion, and landfilling. See Vago, 22 N. KY. L. REV. at 106.
Environmentally advanced, innovative waste disposal facilities
can cost "in the tens to hundreds of millions of dollars to
construct." See Vago, 22 N. KY. L. REV. at 108. State and
federal environmental mandates often require the use of these
new, more expensive facilities. Petersen & Abramowitz, 22 FORDHAM
URB. L.J. at *7 [n.66]. Securing long term access to disposal
facilities necessary to protect the citizens' health and safety
6
"requires long-term commitments, debt and security." Id. [n.66].
Methods less protective of the environment generally have lower
capital and operating costs, and thus can charge a lower tipping
fee.
B. THE RESPONSE
Until the Tax Reform Act of 1986 repealed many of the
tax incentives, most waste disposal facilities were privately
owned and operated. ID. at *4 [n.36]. In response to the tax
changes and increased costs caused by environmental regulation,
increased public ownership became necessary, shifting the
financing burden to the local governments. With this burden came
risk. Even where the municipal government contracts with a
private operator to construct or upgrade the disposal facility,
the municipality often continues to bear the risk of an
inadequate waste supply through municipal guarantees.
Consequently, "it is the ability of local governments to control
these haulers and where they transport the collected waste that
often determines the feasibility of the solid waste processing
disposal programs." See Petersen & Abramowitz, 22 FORDHAM URB.
L.J. at *2 [n.31].
Flow control ordinances, enacted by a number of states
attempting to deal with these waste disposal crises, create a
system in which waste haulers are licensed by the municipality
and are directed to take the waste collected to landfills that
have been designated by the county. By conditioning the haulers'
licenses on their compliance, local governments can assure a
certain minimum revenue at the designated sites. Flow control
7
both guarantees that a certain volume will be deposited and
enables the operators of the designated landfill to collect a
"tipping fee"0 high enough to cover the cost of processing.
Indeed, tipping fees are typically based on both the system's
construction cost and the estimated amount of waste that will be
deposited there annually. In some cases, the municipalities
actually set the tipping fee contractually.
Given the municipalities' reliance on the higher rates
in effect when the municipalities were constructing and financing
these facilities, flow control ordinances have been crucial to
the financial viability of these facilities in the wake of the
precipitous decline of tipping fees.0 Indeed, flow control has
"been a vital economic element in supporting dozens of major
waste-to-energy and landfill-based waste disposal programs
involving billions of dollars in capital investment." Petersen &
Abramowitz, 22 FORDHAM URB. L.J. at *2 [n.25].0
0
The tipping fee is the price charged haulers to dump a ton of
waste at a landfill.
0
Although the waste disposal crisis had evidenced an acute
shortage of environmentally sound landfill capacity, the market
eventually responded to the increased price; in fact, there were
so many entrants into the waste disposal market, constructing so
many new facilities, that tipping fees collapsed. Thus, while
landfills could contract for tipping fees between $35.00 per ton
(Mercer County) and $52.00 per ton (Chester County) approximately
five years ago, current spot rate tipping fees are approximately
$17.50 - $30.00 per ton.
0
Until C & A Carbone, Inc. v. Town of Clarkstown, 114 S.Ct. 1677
(1994), discussed infra, these ordinances had withstood a variety
of constitutional challenges, including due process, antitrust,
and Commerce Clause challenges. Petersen & Abramowitz, 22 FORDHAM
URB. L.J. at *8-9 [nn.67-110]. Indeed, through the late 1980s,
federal courts entertaining Commerce Clause challenges to flow
control found that even flow control schemes involving export
8
C. PENNSYLVANIA'S MUNICIPAL WASTE ACT
In responding to its own solid waste crisis, the
Pennsylvania legislature enacted the Municipal Waste Act (the
"Act") to protect the public health, safety and welfare from the
short- and long-term dangers of the transportation, processing,
treatment, storage and disposal of municipal waste. See 53 P.S.
§4000.102(b)(3). The Act establishes a system requiring each
county to plan for the long-term processing and ultimate disposal
of its waste. In authorizing each county to adopt flow control
ordinances, the Act explicitly set forth the policy goal of such
flow control legislation:
Authorizing counties to control the flow of
municipal waste is necessary, among other
reasons, to guarantee the long-term economic
viability of resource recovery facilities and
municipal waste landfills, to ensure that
such facilities and landfills can be
financed, to moderate the cost of such
facilities and landfills over the long term,
to protect existing capacity and to assist in
the development of markets for recyclable
materials by guaranteeing a steady flow of
such materials. §102(a)(10).
Under the Act, counties may designate for a ten-year
period the facilities at which waste generated within the county
will be processed or disposed. See 53 P.S. § 4000.303(e). Such
facilities do not have to be located within the county, although
one provision of the Act states that "[p]roper and adequate
processing and disposal of municipal waste generated within a
county requires the generating county to give first choice to new
bans had only an incidental burden on commerce, and therefore did
not discriminate against interstate commerce. ID. at *9 [n.100].
9
processing and disposal sites located within that county." 53
P.S. §4000.102(6). Each county must consider alternative
facilities and programs, and "provide reasonable assurances that
the county utilized a fair, open and competitive process for
selecting such facilities or programs from among the alternatives
which were suggested to the county." 53 P.S. §4000.502(f)(2). In
addition, if a county proposes to own or operate a municipal
waste processing or disposal facility, it must explain the basis
for such a proposal, giving consideration to the comprehensive
costs and benefits of private ownership and operation of such
facilities. 53 P.S. §4000.502(m).
The facilities designated by a county, and the process
by which they are chosen, must be set out in a municipal waste
management plan. 53 P.S. §4000.502(f). During its preparation,
the plan is reviewed by a county advisory committee made up of
representatives from the county's municipalities, civic groups,
and industry. The committee makes suggestions and proposes any
changes it believes are appropriate. 53 P.S. §4000.503(a). At
least thirty days before submitting any proposed plan revisions
to the Department of Environmental Resources ("DER"), the county
must submit a copy of the proposed revision to the County
Advisory Committee. 53 P.S. § 4000.503(d). The county must also
make the plan available for a ninety-day public review and
comment period, and hold at least one public hearing on the
proposed plan during this period. 53 P.S. §4000.503(c).
After adoption by the county, a plan must undergo a
municipal ratification process requiring approval by fifty
10
percent of the municipalities in the county, representing at
least fifty percent of the population. 53 P.S. §§4000.503(d);
504(c). The plan must then be submitted to the DER for approval,
after which any party objecting to the plan may appeal to the
Pennsylvania Environmental Hearing Board. If a county chooses to
require that municipal waste be processed or disposed of at
designated facilities by means other than contract (e.g., by
ordinance), the plan must explain the basis for such a proposal
and include a copy of the proposed flow control ordinance or
other legal instrument. 53 P.S. § 4000.502(1).
The plan, and the list of facilities designated by the
county for processing and disposal, may be revised by the county
at any time but must be revised at least three years prior to the
time that the remaining capacity for a county is exhausted. 25
Pa. Code § 272.251(b); 25 Pa. Code § 272.251(a)(1).
D. THE HARVEY CASE
1. The Chester County Plan
Harvey is a Delaware corporation operating in
Pennsylvania, Maryland and Delaware as an interstate collector,
hauler and processor, inter alia, of municipal solid waste.
Harvey is a licensed hauler of municipal solid waste in Chester
County, Pennsylvania.
On May 30, 1989, the Chester County Board of
Commissioners appointed the Chester County Act 101 Municipal
Waste Advisory Committee. The Committee evaluated six potential
waste management methods in order to select the components that
11
would constitute the Chester County solid waste management
system: waste reduction, recycling, waste-to-energy technology,
a trash-for-ash exchange, transfer stations and landfilling. In
addition, the Committee participated in four day-long site
inspections of existing waste disposal and processing facilities
located in Baltimore, Maryland and Chester County, Montgomery
County, Philadelphia, and York, Pennsylvania. The Committee also
attended a presentation on the Westinghouse resource recovery
facility located in the City of Chester, Pennsylvania.
The Committee held 13 meetings between July 11, 1989,
and March 20, 1990, to discuss the elements of the County's waste
management plan. Although these meetings were open to the
public, they were advertised only in the Daily Local News, a
Westchester paper with a circulation of approximately 45,000.
The Committee then prepared a draft plan, and on May 29 and May
31, 1990, conducted public hearings to entertain public comment
on the draft plan. The record does not reveal how these public
meetings were advertised or how many people attended. The
Committee approved revisions based on that public comment. Harvey
did not participate in the process, either as an advocate of an
alternative site or as a commenter. The record does not contain
any explanation for Harvey's absence, but it appears that Harvey
did not have significant business in the County prior to 1990.
The County Commissioners adopted the updated Plan on
September 25, 1990, and the DER granted its final approval on
April 11, 1991. The Plan contained key components of the
committee's draft plan, including the decision to designate the
12
Southeastern Chester County Refuse Authority Sanitary Landfill
(the "SECCRA Landfill") and the Chester County Solid Waste
Authority Lanchester Sanitary Landfill ("Lanchester Landfill") as
the primary disposal sites for the County. The County selected
these two sites from among those considered because "the haulers
of trash in the County had established a historical pattern of
disposal at these landfills." County Br. at 11. In fact, the
County had played a role in financing the Lanchester landfill. In
1984, the County purchased it and turned its operation over to
the Authority. The County financed the purchase with $42.55
million in Authority revenue bonds which carry a County
guarantee. After the purchase, the County guaranteed an
additional $41.5 million in Authority debt, secured a $9.2
million letter of credit, and agreed to provide the Authority
with an additional $9.5 million for landfill projects.
In response to concerns voiced by Committee members
that the "northern tier" of the County might be adversely
affected by the system proposed by the Committee (i.e.,
designating only the SECCRA and Lanchester landfills), the
Committee voted to recommend that the Pottstown Landfill, a
privately owned facility located in adjacent Montgomery County,
be included in the Plan as a disposal option.0
Initially, the 1990 Plan did not mandate the adoption
of flow control. The DER informed Chester County during its
0
The Pottstown facility was approved to receive waste only from
certain areas within the county, and the amount of waste it could
receive was capped at the amount deposited by the county at the
facility in 1989.
13
review process, however, that it would not approve the Plan
unless the County flow controlled its waste. DER letters of
3/12/91; 4/11/91; committee notes. Consequently, the County
commissioners enacted a flow control ordinance on April 2, 1992.
The ordinance divides the County into two service areas: the
SECCRA Landfill service area and the Lanchester Landfill Service
Area. Municipal waste generated in these service areas must be
disposed of at the facility designated by the County to receive
the waste. A certain amount of waste may also be taken to the
Pottstown landfill. The terms of the ordinance permit amendment
to designate other facilities and do not prohibit out-of-state
facilities from applying.0 However, the indentures of the
revenue bonds and administrative agreements between the County
and the Authority stipulate that the County will oppose the
construction, acquisition, operation or designation of any
facility that might divert revenue from Lanchester. (Committee
letters to DER seeking permission not to consider additional
sites for designation).
2. Procedural History
0
The Ordinance defines a Designated facility as follows:
the Lanchester Sanitary Landfill owned and operated by
the Chester County Solid Waste Authority, located in
Honeybrook Township, Chester County and Caernarvon and
Salisbury Townships, Lancaster County; the Southeastern
Chester County Refuse Authority Sanitary Landfill,
located in London Grove Township, Chester County; the
Pottstown Landfill owned and operated by SCA Services
of Pennsylvania, Inc., located in West Pottsgrove
Township, Montgomery County; or any other County
designated Municipal Waste processing or disposal
facility.
14
Harvey filed its complaint in the district court on
June 15, 1994, challenging Chester County's flow control plan
under the Federal Constitution's Commerce Clause, Art. I, § 8,
Cl. 3. Harvey alleged that the regulations isolate the County
from the interstate solid waste market by prohibiting the export
of locally generated waste to out-of-state disposal and by
similarly prohibiting the import of waste processing and disposal
services from out of state. On June 27, 1994, Harvey moved for a
preliminary injunction to enjoin enforcement of the relevant
regulations adopted pursuant to the ordinance. After a hearing,
the district court denied the motion on the grounds that Harvey
had made an insufficient showing of immediate and irreparable
harm. A trial date was set for September 12, 1994.
Prior to trial, the parties filed cross motions to
determine the standard of review and, thus, who would bear the
burden of proof. The district court granted the defendants'
motion to apply the Pike v. Bruce Church, Inc., 397 U.S. 137, 90
S. Ct. 844 (1970) balancing test since it found that the Chester
County Ordinance did not discriminate on its face or in purpose
or effect against interstate commerce. September 8, 1994 Order.
Harvey conceded that it could not prove its case under the Pike
standard and therefore stipulated to an order of final judgment
Harvey appealed.
E. THE TRI-COUNTY CASE
1. The Mercer County Plan
Plaintiff/appellant, Tri-County Industries, Inc., is a
Pennsylvania corporation doing business in Mercer County,
15
Pennsylvania. In late 1989, the Mercer County Commissioners
formed the Mercer County Solid Waste Authority ("MCSWA") to
implement the County's duties under the Act. Mercer County
generates approximately 5,000 tons of municipal waste each month.
After retaining the services of an independent
consultant, Mercer County decided that the best solution for this
fairly small county would be to contract with a single disposal
facility. The County prepared detailed bid specifications for
the needed municipal waste capacity. The Request for Proposals
("RFP") was advertised nationwide and was obtained by twenty-
three companies around the country. Although many of these
companies were located in Pennsylvania, others were located in
Ohio, New York, Maryland, New Jersey, Minnesota and Louisiana.
Only four companies, including the appellee, Tri-County,
submitted a bid in response to the RFP, and none of these was
from outside Pennsylvania. The successful bidder was Waste
Management of Pennsylvania, the owner of a landfill in Butler
County.
By its terms the process outlined by Mercer County in
its RFPs does not discriminate against in- or out-of-state
interests. The RFP requirements apply equally to all disposal
facilities, irrespective of their location. Id, see also RFP
1.4(g). The plan was submitted to DER in the fall of 1990 and
approved in March, 1991. After DER approved the Plan, MCSWA
contracted with the successful bidder, and Mercer County adopted
the now contested Ordinance, No. 6-1991. The ordinance requires
each hauler in the county to obtain a license and to haul
16
municipal waste generated in the county to the landfill
designated in the county plan "as it may be revised from time to
time." Section 3, 6-1991.
Although the Plan required Tri-County to haul the waste
to the Butler facility and pay the $35 per ton tipping fee, Tri-
County in fact took some of its waste to two other facilities in
Ohio which charged tipping fees of only $17.20 and $27.95 per
ton. Of the approximately 600 to 900 tons of waste Tri-county
hauled monthly, it took 500 tons per month to the non-designated,
Ohio facilities. The MCSWA notified Tri-County by letter dated
March 19, 1993, that it would hold a hearing on April 15, 1993,
to determine whether Tri-county's waste hauling license should be
revoked for its failure to deliver all of its waste to the
designated facility.
2. Procedural History
In response to this notice of hearing, Tri-County filed
this declaratory judgment action in the district court seeking a
declaration that the ordinance violated the Commerce Clause, and
a permanent injunction enjoining its enforcement. It also moved
for a preliminary injunction, and the district court held
hearings on that motion, which the court then denied. After some
discovery, the parties filed a joint stipulation of fact and a
joint motion to enter judgment on the basis of the evidence
before the district court.
In October 1994, the district court entered judgment
for Tri-County on the grounds that the ordinance, by requiring
that all waste generated within the county be taken to the
17
designated landfill in Butler County, operated to impermissibly
burden interstate commerce. This appeal followed.
Both of these appeals involve the district courts'
choice of the applicable legal standard. Since this involves the
selection, interpretation and application of legal precepts, our
review is plenary. See Doe v. American Red Cross, 14 F.3d 196
(3d Cir. 1993).
II. THE LEGAL FRAMEWORK
A. THE GENERAL COMMERCE CLAUSE JURISPRUDENCE
The Commerce Clause provides that "[t]he Congress shall
have Power . . . to regulate Commerce . . . among the several
States." U.S. Const. Art. I, § 8, cl. 3. "Although the Clause
speaks in terms of powers bestowed upon Congress, the Court has
long recognized that it also limits the power of the States to
erect barriers against interstate trade." Lewis v. B.T.
Investment Managers, Inc., 447 U.S. 27, 35, 100 S. Ct. 2009, 2015
(1980). That is, the Commerce Clause has a negative or dormant
aspect which limits state authority to regulate areas where
"Congress has not affirmatively acted to either authorize or
forbid the challenged state activity." Atlantic Coast Demolition
& Recycling, Inc. v. Board of Chosen Freeholders of Atlantic
County, 48 F.3d 701, 710 (3d Cir. 1995) (quoting Norfolk Southern
Corp. v. Oberly, 822 F.2d 388, 392 (3d Cir. 1987)). None of the
parties has argued that Congress has either prohibited or
authorized the flow control ordinances at issue here.0
0
As with any dormant commerce clause issue, "[i]t is well
established that Congress may authorize the States to engage in
18
Consequently, we must consider whether these ordinances violate
the dormant Commerce Clause.
In considering Commerce Clause challenges, courts
should "'determine whether action taken by state or local
authorities unduly threatens the values the Commerce Clause was
intended to serve.'" Norfolk Southern Corp. v. Oberly, 822 F.2d
388, 399 (3d Cir. 1987) (quoting Wardair Canada, Inc. v. Florida
Dept. of Revenue, 477 U.S. 1, 106 S.Ct. 2369, 2372-73 (1986)).
"[T]he Commerce Clause is designed to eliminate protectionist
restrictions on interstate trade which typically characterize
international trade, such as embargoes, quotas, and tariffs."
Oberly, 822 F.2d at 399; see also New Energy Co. v. Limbach, 486
U.S. 269, 273 (1988) (explaining purpose of the clause as
prohibiting "economic protectionism -- that is, regulatory
regulation that the Commerce Clause would otherwise forbid." See
Maine v. Taylor, 477 U.S. 131, 138, 106 S. Ct. 2440, 2447 (1986).
Congress can in effect overturn a Supreme Court decision simply
by explicitly giving the states the authority to regulate. In
her concurrence in Carbone, Justice O'Connor considered whether
Congress' passage of the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. § 6941 et seq., constituted such an
authorization. Although she conceded that the statute (in
conjunction with its legislative history) could be read to
empower states to adopt flow control ordinances, she maintained
that, in order to authorize potentially discriminatory state
regulation, Congress must speak explicitly and unmistakably.
Carbone, 114 S. Ct. at 1691-92. Because RCRA did not constitute
such an explicit pronouncement, she concluded that RCRA could not
serve as the necessary enactment. In the wake of Carbone,
Congress has considered legislation providing for such explicit
authorization of flow control schemes. Although the Senate
passed the bill known as the Interstate Transportation of
Municipal Solid Waste Act of 1995, S.534, see 141 Cong. Rec.
S.6728, which would have grandfathered many of the flow control
ordinances enacted to finance existing facilities, the bill has
not passed the House. Thus, we must consider whether the
ordinances involve here survive the Carbone test.
19
measures designed to benefit in-state economic interests by
burdening out-of-state competitors"). Because of that animating
purpose, the Court has applied a two-step inquiry to determine
whether a challenged ordinance or regulation violates the
Commerce Clause.
The first step involves determining whether the
ordinance discriminates against interstate commerce;
discrimination is defined as the "differential treatment of in-
state and out-of-state economic interests that benefits the
former and burdens the latter." Oregon Waste Syst. Inc. v. Dept.
of Environmental Quality of Oregon, 114 S.Ct. 1360 (1994). If "a
state law is shown to discriminate against interstate commerce
'either on its face or in practical effect,' the burden falls on
the State to demonstrate both that the statute 'serves a
legitimate local purpose,' and that this purpose could not be
served as well by available nondiscriminatory means." Maine v.
Taylor, 106 S. Ct 2440, 2447 (citing Hughes v. Oklahoma, 441 U.S.
at 336, 99 S. Ct. at 1736); Foster-Fountain Packing Co. v.
Haydel, 278 U.S. 1, 10 (1928).
But if the ordinance does not discriminate against
interstate commerce either in purpose or effect, it is subjected
to a balancing test whereby the statute will be upheld unless
"the burden imposed on such commerce is clearly excessive in
relation to the putative local benefits." Pike v. Bruce Church
Inc., 397 U.S. 137, 142 (1970). For instance, in Minnesota v.
Clover Leaf Creamery Co., 449 U.S. 456, 101 S. Ct. 715 (1981),
the Court upheld a Minnesota statute that banned the retail sale
20
of milk in plastic jugs. Because the statute imposed burdens on
both in-state and out-of-state dairies, it was subjected only to
the Pike balancing test. After determining which standard to
apply, courts must then determine whether the statute can meet
the test enunciated under the appropriate standards.
1. Triggering Strict Scrutiny: Discriminatory
Purpose or Effect
A regulation serving a protectionist purpose is
obviously invalid since a discriminatory purpose is a fortiori
illegitimate. See Philadelphia v. New Jersey, 437 U.S. at 624,
98 S. Ct. at 2535 (characterizing a statute with a protectionist
purpose as virtually per se invalid). More benign purposes,
however, do not immunize the statute from the challenge since
"the evil of protectionism can reside in legislative means as
well as legislative ends." Id. at 626, 2536; see also Fort
Gratiot Landfill v. Michigan Department of Natural Resources, 112
S. Ct. 2019, 2024 (1992) (invalidating legislation with
legitimate goals since even valid purposes may not be
accomplished "by the illegitimate means of isolating [the county]
from the national economy").
If a statute's purpose is not manifestly
discriminatory, the court must determine "how directly [the
statute] burdens interstate commerce and how evenhandedly it
impacts interstate and intrastate commerce." Stephen D. DeVito,
Jr. Trucking v. RISWMC, 770 F. Supp. 775, 781 (D.R.I. 1991); see
also Carbone, 104 S. Ct. at 1684 (courts look beyond explicit
terms of statute to examine its practical purpose or effect);
21
Hughes, 441 U.S. at 336, 99 S. Ct. at 1736; Taylor, 477 U.S. at
138, 106 S. Ct. at 2447; Fort Gratiot, 112 S. Ct. at 2023-25
(either purpose or effect can trigger strict scrutiny); Norfolk
S. Corp. v. Oberly, 822 F.2d 388, 406 (3d Cir. 1987). This court
has expressed some doubt whether a showing of discriminatory
effect alone could suffice. See Oberly, 822 F.2d at 400-01 n.18.
But Carbone and the entire line of recent Supreme Court cases
have clarified that either purpose or effect will trigger strict
scrutiny analysis. We also note that where the showing of effect
is weak, demonstrating discriminatory purpose buttresses the
case.
As we explained, the purpose of the dormant Commerce
Clause is to prevent "[s]tate and local governments [from using]
their regulatory power to favor local enterprise by prohibiting
patronage of out-of-state competitors or their facilities."
Carbone, 114 S. Ct. at 1684; see also H.P. Hood & Sons, Inc. v.
Du Mond, 336 U.S. at 537-38 ("What is ultimate is the principle
that one state in its dealings with another may not place itself
in a position of economic isolation."). The purpose of the
dormant Commerce Clause is not to protect individual firms. In
Exxon Corp. v. Maryland, 437 U.S. 117, 126, 98 S. Ct. 2207, 2214
(1978), the Supreme Court upheld a statute prohibiting a
petroleum producer or refiner from operating retail service
stations within the state. The Court explained:
While the refiners will no longer enjoy their
same status in the Maryland market, in-state
independent dealers will have no competitive
advantage over out-of-state dealers. The fact
that the burden of a state regulation falls
22
on some interstate companies does not, by
itself, establish a claim of discrimination
against interstate commerce.
Id. at 2214. Conversely, the one-time selection of an in-state
interest does not by itself establish a discriminatory effect
unless the selection confers an unreasonably long-term benefit.
This Court has recently rejected attempts to
characterize all legislative schemes which award business to a
successful bidder as Commerce Clause violations. Atlantic Coast,
48 F.3d at 714-15. Although we recognized that regulations of
public utilities (including those that require the utility to
secure its capacity within the state) are now subject to the same
Commerce Clause scrutiny as non-utility statutes, we found
significant precedent for local government authorities to select
a single service provider in the public utility context:
A gas or electric utility granted a franchise
to serve the needs of all residents within a
local area is not ordinarily required to
commit to producing its electricity or
securing its natural gas supply within that
area as well. Normally, both in-state and
out-of-state interests may, therefore,
compete equally for the franchise award and
the creation of a captive consumer base does
not, under these circumstances, discriminate
against electricity and gas generated or
produced out of state.
48 F.3d at 715.
Carbone explicitly rejected the argument that a
disputed statute would have to favor all in-state businesses as a
group -- a statute may be invalid if it favors only a single or
finite set of businesses. 114 S. Ct. at 1682-83. Consequently,
23
where a challenge is based on the alleged favoritism of a finite
set of in-state interests (rather than all in-state businesses),
it must be demonstrated that the ordinance actually favors the
chosen in-state providers. That the ordinance requires the use
of the selected facility, thus prohibiting the use of non-
designated facilities (which may be out of state), does not
itself establish a Commerce Clause violation.
B. THE SOLID WASTE COMMERCE CLAUSE JURISPRUDENCE
The Early Cases
The Supreme Court first recognized that the interstate
hauling of solid waste was commerce for the purposes of Commerce
Clause analysis in City of Philadelphia v. New Jersey, 437 U.S.
617 (1978). In that case, the Court struck down a New Jersey
ordinance that prohibited the importation of solid or liquid
waste that originated out-of-state. While New Jersey could
pursue its goal of restricting access to its diminishing waste
disposal facilities, it could not do so by blocking only out-of-
state waste. Id. at 626-27. The Court explained that such a
clear example of purposeful economic protectionism -- a virtual
import ban -- is subject to a per se rule of invalidity. Id. at
625.
Despite the solid waste disposal crisis of the 1980s,
the Supreme Court has invalidated each of the ordinances that
attempted to ban or to levy differential surcharges on waste
generated out-of-state. See, e.g., Fort Gratiot, 112 S. Ct. at
2019 (1992) (invalidating regulation prohibiting out-of state
waste in the landfill unless authorized by Congress); Oregon
24
Waste Sys. Inc. v. Dept. of Environmental Quality of Oregon, 114
S. Ct. 1346 (1994) (voiding differential charge); Chemical Waste
Management Inc. v. Hunt, 112 S. Ct. 2009 (1992) (same).
In response to these successful constitutional
challenges, municipalities sought other means of managing solid
waste disposal. Instead of attempting to limit the quantity of
waste by banning or discouraging the importation of out-of-state
waste, local governments opted to expand the capacity of their
waste disposal facilities. They obtained the financing for these
expansions by adopting flow control ordinances, which were
necessary to reassure the bondholders (and the underwriters).
Dormant Commerce Clause challenges to these statutes ensued.
C. CARBONE
In C & A Carbone, Inc. v. Town of Clarkstown, 114 S.
Ct. 1677 (1994), the Supreme Court transposed its skepticism of
waste control initiatives to flow control ordinances. Reversing
the decision of an intermediate appellate court, the Court struck
down Clarkstown's law requiring all nonhazardous solid waste
within the town, whether or not generated in the town, to be
deposited at a town-designated transfer station. The town had
arranged with a private contractor to construct the designated
site (which was within the town, and perforce in-state) in return
for the town's commitment to deliver and pay for the processing
of at least 120,000 tons of solid waste annually. At the end of
a five year period, the town could purchase the facility for one
dollar. Because the town's guaranteed tipping fee was higher
than the cost on the private market, the town needed to adopt the
25
flow control ordinance to obtain the fee from the haulers and to
minimize its own obligations under the guarantee agreement.
The Court found that Clarkstown's ordinance
discriminated against interstate commerce by bestowing a favored
status on the single waste processor within the town and by
"depriving competitors, including out-of-state firms, of access
to a local market," 114 S. Ct. at 1680. The Court was
unpersuaded by the argument that the ordinance did not
discriminate because it applied equally to in-state and out-of-
state haulers. Id. at 1682 (citing Dean Milk Co. v. Madison, 71
S. Ct. 295 (1951); Fort Gratiot Sanitary Landfill, Inc. v.
Michigan Dept. of Natural Resources, 112 S. Ct. 2019, 2024
(1992)). Instead, the Court regarded Clarkstown's ordinance as
"just one more instance of local processing requirements" that
the Court has long held invalid. Id. at 1682-83 (citing cases
involving statutes that required various articles of commerce to
be processed within their state of origin). The Clarkstown
statute fit this mold since its terms explicitly required "all
solid waste within or generated within the Town of Clarkstown . .
. [to be] delivered to the Town of Clarkstown solid waste
facility at Route 303, West Nyack, New York and such other sites,
situated in the Town." Carbone, 114 S. Ct. at 1685 app. The
statute did not mention any possibility of adding additional or
alternative sites.
Because the single site designated by the ordinance was
in state, the Court presumed that Clarkstown's ordinance had the
"design and effect" of hoarding a local resource. Id. at 1683.
26
That Clarkstown intended the scheme to serve as a financing
measure imparted it with a discriminatory purpose, according to
the Court. 114 S. Ct. at 1684. Although the majority rejected
Justice O'Connor's view that, to be discriminatory, a law must
discriminate against out-of-state interests as a group, the Court
still required that the law discriminate in favor of an in-state
interest. 114 S. Ct. at 1682-83. Moreover, the Clarkstown
ordinance did not provide for amendment to add other, perhaps
out-of-state sites, and did not limit the period of the
designation. Indeed, the town's likely ownership of the transfer
station after five years seems to render the station's monopoly
permanent.
Since Carbone, flow control ordinances have been
subjected to searching Commerce Clause scrutiny. Some
commentators have characterized the language of the Carbone
opinion as exceptionally broad, and acknowledged that the
decision places the "painstakingly privatized waste disposal
systems" in jeopardy by denying the municipalities the principal
means of support they have used to finance such facilities.
Petersen & Abramowitz, 22 FORDHAM URB. L.J. at *15 [n.170]; see
also Vago, The Uncertain Future of Flow Control Ordinances, 22 N.
KY. L. REV. at 105, 107 (citing examples of endangered
facilities); and 109 (describing impracticality of Court's
municipal bond suggestion). While Carbone undisputedly sweeps
quite broadly, we do not read it to establish a per se rule
subjecting all flow control ordinances to strict scrutiny.
27
Whether strict scrutiny applies is crucial because its
application is usually fatal to a challenged regulation.
D. ATLANTIC COAST
We applied Carbone in Atlantic Coast Demolition &
Recycling, Inc. v. Board of Chosen Freeholders of Atlantic
County, 48 F.3d 701 (3d Cir. 1995). Atlantic Coast involved a
challenge to New Jersey's solid waste management regime, which
was adopted in response to that state's especially severe solid
waste crisis during the 1970s and '80s. Provisions of the Solid
Waste Management Act, N.J. Stat. Ann. §13:1E-1 to -207 (West 1991
& supp. 1994), and the Solid Waste Utility Control Act, N.J.
Stat. Ann. § 48:13A-1 to 13 (West Supp. 1994), authorized the
local waste districts to adopt flow control ordinances mandating
the delivery of certain wastes to designated facilities that
charge higher tipping fees in order to cover operating expenses
and repay revenue bonds used to finance the capital expenditures
of constructing these facilities.
In addressing the challenge, we rejected the attempt to
frame the issue as one of the constitutionality of the statute
after the designation was made, thus refuting the contention that
the challenged ordinance, which required waste to be deposited at
the designated facility (which was in-state), amounted to an
export ban. We found significant precedent allowing local
government authorities to select a single service provider in the
public utility context:
A gas or electric utility granted a franchise
to serve the needs of all residents within a
local area is not ordinarily required to
28
commit to producing its electricity or
securing its natural gas supply within that
area as well. Normally, both in-state and
out-of-state interests may, therefore,
compete equally for the franchise award and
the creation of a captive consumer base does
not, under these circumstances, discriminate
against electricity and gas generated or
produced out of state.
48 F.3d at 715.
Nevertheless, in Atlantic Coast there were strong
indications that in-state and out-of-state businesses did not
compete equally. The designation process set forth in the
state's regulations under SWUCA and SWMA, N.J. Admin. Cod tit. 7,
§26-6.6, allowed for the designation of facilities in the waste
district, in another waste district or out-of-state. The state's
Department of Environmental Protection and Energy ("D.E.P.E.")
admitted, however, that its goal was to secure the state's self
sufficiency in non-recyclable waste disposal. Moreover, a
district wishing to designate an out-of-state facility had to
certify to the Department that there were no suitable
alternatives within the state, either in their waste district or
in another waste district. See N.J. Stat Ann. §13:1E-21 (1991).
Accordingly, the district court found that it was "clear that the
D.E.P.E. administers the law with the specific goal that all
waste generated New Jersey be disposed of within the borders of
the state." (Civ. No. 93-cv-02669) (JEI).
Rather than representing a truly open and competitive
process, we found that New Jersey "designation process is
intended to favor operators that have facilities already located
29
within, or those that are willing to construct a facility within,
the state." 48 F.3d at 708. Indeed, in rejecting the argument
that out-of-state businesses could compete for designation, we
explained that the New Jersey regime, with its "core" goal of New
Jersey's waste self-sufficiency in five years, assured that "out
of state facilities do not compete on anything approaching a
level playing field." 48 F.3d at 713. In interpreting Carbone,
therefore, Atlantic Coast did not consider all flow control
ordinances to be per se discriminatory (and consequently subject
to strict scrutiny analysis). Instead, we focused on the
process, and invalidated a scheme in which the process
discriminated against out-of-state facilities.
E. OTHER CIRCUITS
Other circuits applying Carbone have upheld flow
control ordinances. The Tenth Circuit held that an Oklahoma
county's scheme requiring operators of industrial waste disposal
sites to obtain conditional use permits did not discriminate
against interstate commerce. See Blue Circle Cement v. Board of
County Comm'rs, 27 F.3d 1499, 1512 (10th Cir. 1994) (remanding
for the application of the Pike test). The ordinance did not
discriminate against the out-of-state plaintiff seeking to
operate a hazardous waste fuel (HWF) conversion facility since
"[i]ts site conditions apply equally, regardless of the origin of
the HWF's being burned and it confers no advantages on in-state
30
entities seeking to store, treat, recycle, or dispose of HWFs as
against out-of-state firms." Id. at 1512.0
F. SUMMARY OF APPLICABLE PRINCIPLES
From our review of the caselaw, we derive the following
relevant principles. Local government acts that categorically
favor all in-state providers clearly violate the dormant Commerce
Clause. Acts that concentrate waste hauling or processing
business in the hands of a single or finite set of in-state
providers are also suspect from a dormant Commerce Clause
perspective. Although such regulations ultimately prohibit the
transport of solid waste to nondesignated sites -- which, in
these cases, amounts to a prohibition on the export of waste to
other states -- the fact that the designated sites happened to be
in-state does not, standing alone, establish that the flow
control schemes discriminate against interstate commerce. To
determine whether these flow control schemes actually
discriminate against interstate commerce (triggering strict
scrutiny analysis) the court must closely examine: (1) the
designation process; (2) the duration of the designation; and (3)
the likelihood of an amendment to add alternative sites, for
signs that out-of-state bidders do not in practice enjoy equal
access to the local market.
0
In Kleenwell Biohazard Waste v. Nelson, 48 F.3d 391, 398 (9th
Cir. 1995), the Ninth Circuit held that Washington's scheme
requiring solid waste haulers to obtain certification from a
state commission did not discriminate against out-of-state
interests. The Washington scheme did not, however, designate a
landfill or require that certified haulers use a particular
facility and thus did not present the same issue we confront
today.
31
These precepts are fully consistent with the precedents
in this area. While Carbone clearly has broad application, it
did not establish a per se rule subjecting all flow control
ordinances to strict scrutiny. The Court's discussion reveals
that its decision was not based on the fact that waste was
required to be processed at a single plant. Instead, the Court
regarded Clarkstown's ordinance as "just one more instance of
local processing requirements" that the Court has long held
invalid. Id. at 1682-83 (citing cases involving statutes that
required various articles of commerce to be processed within
their state of origin). And in interpreting Carbone, this Court
has focused on the process of selecting waste service providers
rather than on the effect of the regulation once a provider or
providers have been chosen. See Atlantic Coast, 48 F.3d at 713.
That a flow control ordinance requires all waste to be processed
or deposited in state for some fixed period of time, therefore,
does not necessarily violate the dormant Commerce Clause unless
out-of-state businesses did not compete on an even playing field
for the designation. If it were the designation of a single site
that offended the Commerce Clause, then a scheme "hoarding
business" for an out-of-state interest would be invalid even
though the scheme in no way advanced a protectionist purpose or
effect.
While the process in Atantic Coast clearly favored in
state bidders, not every process used to select a single provider
is necessarily infected with this same parochialism. We believe,
in fact, that a local authority could choose a single provider --
32
without impermissibly discriminating against inter-state commerce
-- so long as the selection process was open and competitive and
offered truly equal opportunities to in- and out-of-state
businesses. See discussion of Exxon and Atlantic Coast, supra at
24 & 30-31.
The burden of showing that the statute discriminates
rests on the party challenging the statute. See, e.g., Hughes v.
Oklahoma, 441 U.S. 322, 336 (1979) ("The burden to show
discrimination rests on the party challenging the validity of the
statute . . . ."); J. Filiberto Sanitation, Inc. v. Dept. of
Environmental Protection, 857 F.2d 913, 919 (3d Cir. 1988) ("As
the party attacking the statute, Filiberto bears the burden of
showing discrimination"). To make this showing, a plaintiff
challenging a designation scheme like the one at issue here must
show that the designation process favors, either purposely or in
effect, in-state sites. We recognize the difficulties of
ascertaining whether long-term designations are really necessary,
and whether the selection criteria are truly objective. Courts
considering flow control schemes where only in-state facilities
are designated must therefore keep this difficulty in mind when
scrutinizing the allegedly discriminatory criteria proffered by
challengers. Admittedly, we cannot cite any authority for the
sort of inquiry we will describe, but this area of law is
nascent, and we are constrained to draw upon notions of
reasonableness to effectuate the relevant policies.
As discrimination may reside in either purpose or
effect, a number of things can demonstrate that the designation
33
process impermissibly favored in-state interests/bidders.
Certainly, there could be direct evidence of favoritism, as there
was in Atlantic Coast, or corrupt payments. Or a seemingly
neutral bid specification with an entirely legitimate purpose,
such as a specified proximity requirement, may have the effect of
giving in-state interests an advantage. For instance, the
incentive to protect a municipal investment, exemplified by the
attempt in Carbone to minimize the town's exposure under the
guarantee agreement, would impermissibly skew the process against
a new -- potentially out-of-state -- provider attempting to gain
designation in order to compete with an existing in-state
facility.
Moreover, there may be aspects of a flow control regime
that appear to be so unnecessarily restrictive that a factfinder
reasonably could conclude that their real purpose was to entrench
the local interest once selected by a neutral designation
process. Examples of such regulations are excessively long
periods of exclusive service rights under the designation, or an
absence of any allowance or the absence of any real possibility
for the designation of additional, potentially out-of-state
sites.0
0
There are, of course, others. While we are reluctant to pass on
the reasonableness of the long-term tipping fees contracted for
by some municipalities implementing flow control, there may be
cases where the contractual fee is so much higher than both the
spot rate and the rates prevailing at the time of contract that
one could conclude that the designation was being used as a
vehicle to deliver an extraordinary profit to a favored facility.
34
The governmental defendants can rebut a putative
showing of discrimination by presenting evidence demonstrating
that the designation process was open, fair, and competitive,
i.e., determined by objective criteria which do not have the
effect of favoring in-state interests. Courts should require
that government defendants produce substantial evidence in order
to rebut the plaintiff's showing. Such evidence might include
bid solicitation, selection criteria, evaluation of bidders, et
alia, but such evidence alone may be insufficient to prove the
flow control scheme's neutrality. The government defendants in
these cases might also present additional evidence, such as
statistical evidence or expert testimony, demonstrating that
different aspects of the designation process are as neutral to
out-of-state interests in practice as they appear on their face.
Municipalities that have adopted flow control schemes would also
be wise to demonstrate that the goals of the designation process
included capacity assurance and the protection of the public
health and safety.
If the government defendant cannot satisfactorily
demonstrate that the ordinance does not have the purpose or
effect of discriminating against interstate commerce, it must
then prove that the ordinance survives strict scrutiny analysis
(in order to have the ordinance upheld). This comports with
other dormant Commerce Clause contexts where, once a plaintiff
has shown that a law or regulation discriminates against
interstate commerce, "the burden falls on the State to
demonstrate both that the statute 'serves a legitimate local
35
purpose,' and that this purpose could not be served as well by
available nondiscriminatory means." Maine v. Taylor, 477 U.S. at
138, 106 S. Ct. at 2447 (quoting Hughes v. Oklahoma, 441 U.S.
322, 336, 99 S. Ct. 1727, 1736 (1979). Of course, if the
defendants succeed in the first showing, then the ordinance would
be subject only to the Pike balancing test under which the
plaintiff must prove that "the burden imposed on such commerce is
clearly excessive in relation to the putative local benefits."
See Pike, 397 U.S. at 142, 90 S. Ct. at 847.0
V. APPLICATION TO THESE CASES
A. HARVEY
In granting judgment for Chester County, the district
court determined that the Ordinance "does not discriminate on its
face nor is the primary purpose or effect" to discriminate. The
court, however, demanded too much, for in order to find a dormant
Commerce Clause violation there is no requirement that
discrimination must be the "primary" purpose or effect. This
erroneous legal conclusion would alone mandate that we set aside
the judgment and remand for consideration under the proper legal
standard. Moreover, the current record creates the strong
impression that the Chester County process was not sufficiently
open, and that there was no real potential for amendment that
0
We assume that these flow control ordinances will always have a
sufficient effect on interstate commerce to warrant at least some
Commerce Clause scrutiny.
36
could offer out-of-state bidders a fair chance at Chester
County's business.0
In combination, Pennsylvania's Act 101 and the Chester
County ordinance require that waste from within Chester County be
disposed of at one of the County's designated sites, all of which
are located within the Commonwealth. Harvey contends that,
because the County's Plan, adopted pursuant to the flow control
ordinance, specifies only the Lanchester, SECCRA, and Pottstown
facilities, the entire flow control scheme facially discriminates
against inter-state commerce. We disagree. As in the public
utility context described supra, local governments have the
capacity, in the practical exercise of their police powers, which
are at their strongest in the health and safety area, to contract
with specific businesses to provide certain services.
Furthermore, to accept Harvey's contention that a plan
designating in-state sites facially discriminates against
interstate commerce would require a local government to select
out-of-state sites, irrespective of their merits, in order to
withstand Commerce Clause scrutiny. This result plainly cannot
prevail.
0
We have considered the joint motion of defendants (Chester
County, the Authority, the Commonwealth of Pennsylvania, and the
DER) to strike portions of appellant's opening brief and
appendix. Essentially, the defendants argue that Harvey has
relied on different excerpts from various depositions, agreements
and exhibits than it did in the district court. But because the
parts, albeit different parts, of the disputed materials were
submitted to the district court, the materials were incorporated
by reference into the record in their entirety. Thus, the Motion
will be denied.
37
Also contrary to Harvey's assertions, this case does
not resemble those cases involving export or import bans (we will
refer to the alleged violation here as a ban on the importation
of waste disposal site services) since those cases explicitly
banned out-of-state interests from participating in the local
market because they were from outside the state. See, e.g.,
Philadelphia, 437 U.S. at 624; Fort Gratiot, 112 S. Ct. at 2024.
We do not mean to suggest that the ordinance must have the
purpose of discriminating against inter-state commerce, for it is
well settled that ordinances which have the effect of
discriminating also violate the Commerce Clause. See Carbone,
114 S.Ct at 1684; Fort Gratiot, 112 S. Ct. at 2023-25. But if
effects are the purported basis for unconstitutionality, the
statute must have the consistent effect or the inherent bias of
favoring one or more in-state interests.
Harvey might still prevail if it can demonstrate that
the Act or the Ordinance discriminates through some aspect of the
selection process which favors in-state bidders for the
designation because they are local facilities. Although Act 101
does not require flow control ordinances, it does offer
guidelines to those localities which adopt them. We will
therefore examine both the Act and Chester's Plan, as implemented
by its ordinances.
1. Act 101
The Act does not mandate flow control ordinances; it
only authorizes counties to adopt them. SA 385; §303(a)-(e). One
of the County's witnesses claimed that Pennsylvania's Act 101
38
directs the county to use a fair, open and competitive process to
select its providers, see 53 P.S. §4000.502(f)(2) (requiring plan
to describe alternative facilities considered and "provide
reasonable assurances that the county utilized a fair, open and
competitive process for selecting such facilities or programs
from among alternatives"); 53 P.S. §4000.503(c) (requiring the
county to make the plan available for a 90-day public review
period and hold at least one public hearing on the proposed
plan); 53 P.S. §4000.502(d) (providing that when additional
disposal capacity is needed, "the county shall give public notice
of such a determination and solicit proposals and recommendations
regarding facilities and programs to provide such capacity").
While these provisions of the Act suggest an open
process, other provisions do not seem so neutral. One provision,
for example, provides that "[p]roper and adequate processing and
disposal of municipal waste generated within a county requires
the generating county to give first choice to new processing and
disposal sites located within that county." 53 P.S.
§4000.102(6). Another provision states that County waste
management plans "shall identify the general location within a
county where each municipal waste processing or disposal facility
. . . will be located and . . . explain how the site will be
chosen. For any facility that is proposed to be located outside
the county, the plan shall explain in detail the reasons for
selecting such a facility." 53 P.S. §4000.502(g) (emphasis
added). By imposing an incremental administrative burden on
counties attempting to designate a facility outside its borders,
39
these provisions clearly express a preference that counties use
sites within their borders. While not as strong an expression of
favoritism, the Act's preference for in-county sites resembles
the policies we found offensive in Atlantic Coast.
Although Pennsylvania's policy preferences evidence
some intent to favor in-state sites, Harvey did not attack the
Act directly and did not rely upon any of these passages of the
Act. With the provisions nonetheless in mind, we will therefore
proceed to examine the County's implementation of the waste
disposal planning mandate to determine whether Chester County
officials in fact favored sites within the county.
2. The Plan
We do not doubt that the county's legitimate intention
to comply with the Act0 motivated its adoption of flow control.
But legitimacy of purpose generally does not end our inquiry. If
the manner in which the county implemented its flow control
system, particularly the process used to designate the ten year
providers, favored in-county interests, then the flow control
ordinance has the effect of discriminating against interstate
commerce and must be subject to the strict scrutiny test
enunciated in Taylor and Philadelphia.
Chester County does indeed appear to have favored in-
county interests. It is true that one cannot draw any inferences
about the equity of the designation process from its description
0
There are indications that the state authority, the DER, was
going to withhold approval of the plan unless it included flow
control. SA331.
40
in the Chester ordinance. Section 2 of the ordinance originally
defined "designated facilities" as "those processing or disposal
facilities designated by resolution of the Chester County Board
of Commissioners adopted in accordance with the Plan." (SA 252).
The lateear whether the Committee actually considered designating
those sites or whether it was simply investigating an alternative
method of waste disposal. If the Committee never considered
designating those sitesy."
Other provisions of the Plan, however, do reveal a bias
for designating in-county sites. For instance, the Plan provides
that "The County will consider developing an in-County resource
recovery facility" (emphasis added), if in-County landfill
capacity becomes unavailable, or if the County cannot secure
sufficient capacity outside the county. These particular
provisions of the Plan reveal that the Committee intended to keep
the waste disposal business within the County.
Although the county was not favoring all in-County
sites simply because they were in state (thus not favoring in-
County sites as a group), this does not preclude a finding of
impermissible discrimination. Establishing discrimination
requires only a demonstration that out-of-state interests did not
compete for designation on a level playing field. We believe
that the County's economic interest in keeping the business at
home and the Plan's legislative history, see, e.g., A135, suggest
that the designation process did not offer a level playing
41
field.0 That the county sought only to provide environmentally
safe waste disposal capacity, a legitimate exercise of its police
powers, would not save the Plan: as we have explained, "the evil
of protectionism can reside in legislative means as well as
legislative ends." Philadelphia, 437 U.S. at 627.
a. Designation
Harvey claims that, in preparing the Plan, "the County
never considered any out-of-state landfill for designation or
allowed any such facility to submit a bid to accept County
waste." If supported, these allegations would establish that
out-of-state sites did not compete on a "level playing field" and
that the process had the effect of discriminating against
interstate commerce. At least some of these accusations are not
borne out by the record, however. The County included a
description of the Waste Advisory Committee's consideration of
alternative sites, one of which was in Baltimore, Maryland, and
one in Philadelphia.0
0
Although the county's pre-existing economic interest in the
designated landfill creates the incentive for the county to favor
these in-state sites in violation of the dormant commerce clause,
not every case where the county has an economic stake in the
designated site will result in such a violation. The county
could, for example, have selected the designated sites in an
open, fair and competitive process, and then made investments in
improving those sites. The length of the period of designation
would, of course, have to be related to the amount of the
investment.
0
It is not clear whether the Committee actually considered
designating those sites or whether it was simply investigating an
alternative method of waste disposal. If the Committee never
considered designating those sites, that would increase the
impression that the process favored the in-state facilities.
42
But other aspects of the County's process are less
reassuring. While the Committee met 13 times to discuss various
aspects of the plan and evaluate the alternative waste disposal
strategies and facilities (app 23), and while these meetings were
supposed to be open to the public, they were advertised in only
one small, local newspaper, the Daily Local News. Public
hearings to review the draft Plan were held on May 29 and 31,
1990, but there is no reason to believe that those meetings were
any better publicized.0 In the end, the Committee selected the
two in-county sites that already served as the primary disposal
sites for the County's waste. The Pottstown facility was
designated as an alternate only after the process was concluded
(as the result of two letters and public comment received during
the review and comment period). Two factors in particular create
the impression that parochialism rather than competition
determined the outcome of the designation process: (1) that
established local businesses won the designation; and (2) that
the Pottstown site was designated as an alternative after the
process had concluded -- a status that appears to have been
specially created for this situation.
b. Escape Valves: Amendment
0
Of course, if the County can demonstrate on remand that the
relevant out-of-state market participants knew about the
designation opportunity anyway -- and perhaps word of such
proposals travels quickly through the trade grapevine -- that
would rebut the evidence about the lack of adequate publicity and
tend to show that the process was open. Similarly, if the County
could demonstrate that the publication was a specialized trade
journal which effectively notified the relevant market
participants despite its relatively small circulation, that would
also refute evidence that the bidding process was closed.
43
The capacity to amend the Plan in order to add
additional sites does not appear sufficiently to mitigate the
effect of having chosen the established in-state interests. If
the amendment process were open and fairly liberal, it could
conceivably save the initially discriminatory effect of "home
cooking." But the amendment process in Chester's Plan is quite
constrained: additional sites can only be designated if the
existing facilities have insufficient capacity, are unable to
obtain expansion permits, develop unforeseen environmental
problems which preclude continued use of those facilities, or are
subject to regulatory changes which affect their capacity or
preclude their continued use. See Chester County Selection and
Justification of Municipal Waste Management Program § 6.3.4. The
prospect that an out-of-state site could gain designation through
the amendment process is too remote to equalize the opportunity
for out-of-state businesses, which were initially shut out, to
participate in the local waste disposal market.
There were, moreover, indications that the Committee
had no intention of designating additional facilities. First,
one of the Committee members wrote to the DER specifically
requesting guidance on whether the County was "obligated to
review each request formally" since it did "not wish to designate
additional disposal facilities at this time." Second, the
Authority had covenanted in the 1990 bond indenture not to
"construct, acquire or operate" any waste processing plants,
44
structures, facilities or properties which would compete for
revenues with those already designated by the Authority.0
c. Economic Interest
It also appears that Chester County may have had an
economic motive for favoring certain in-county sites. The County
had purchased the Lanchester landfill through the issuance of
$42.55 million in revenue bonds. (b.8). The County has
guaranteed an additional $41.5 million in Authority debt, secured
a $9.2 million letter of credit, and committed to provide the
Authority with an additional $9.5 million for landfill projects.
That the flow control ordinance was not adopted until after the
county had financed the authority's purchase of SECRA does not
lessen its incentive to assure the Authority's revenues and
thereby shield its exposure under the guarantee agreement.
Flow control certainly would be an effective means to
achieve this end: designation conferred on the three selected
sites the capacity to charge 200-300% of the prevailing tipping
fees at alternative sites. Lanchester charged $57 per ton and
SECCRA charged $52 per ton. The Baltimore facility, by contrast,
charged only $34 per ton. Furthermore, the legislative history
of the flow control scheme suggests that this financial pressure
did indeed play a role. The County's Administrative Agreement
with the Authority also reflects this pressure. In that
0
Despite this documentary evidence indicating that there was
little chance of an amendment, Chester County's counsel
represented at oral argument that the county would consider
amending the Plan to designate any facility that submitted a
suitable bid. The district court will want to probe these
conflicting indications on remand.
45
agreement, the County committed "not to adopt a new Plan or to
amend the existing plan in such a manner as to reduce the
existing service area of the Authority or to narrow the
definition of municipal waste directed to the Authority, [the
owner of the SECCRA facility]." SA 373, §6(a) [Amended and
Restated Administrative Agreement].
The need to protect the county's financial interests
thus appears to have played a role in the county's decision to
adopt flow control. In this respect, this case closely resembles
Carbone, where the Supreme Court found discriminatory
Clarkstown's "avowed purpose . . . [of] retain[ing] the
processing fees charged at the transfer station to amortize the
cost of the facility." 104 S. Ct. at 1680.
3. Summary
While the Act requires a fair, open and competitive
process, and while the Committee did consider at least one out-
of-state and several out-of-county sites, it appears that Chester
County's designation process did not afford other sites,
including out-of-state sites, a level playing field. Because,
for the many reasons stated, the process appears to have been
biased in favor of the Lanchester, SECCRA and Pottstown
facilities, the Plan and its implementing ordinances might have
the effect of discriminating against interstate commerce.
Nevertheless, because the district court did not have the benefit
of Atlantic Coast or of the clarifications we offer today, we
will remand so that the district could may consider Chester
County's flow control scheme in light of these principles. We
46
therefore reverse the judgment and remand for further proceedings
consistent with this opinion.
B. TRI-COUNTY INDUSTRIES, INC. V. COUNTY OF MERCER
The district court in the Western District of
Pennsylvania found that the Mercer County flow control scheme
enacted pursuant to the Act discriminated against interstate
commerce and granted injunctive relief in favor of the
plaintiff/hauler. The district court opined: "It is the
designation of a single, in-state landfill, rather than the
process by which it was designated, that has resulted in the
discrimination against interstate commerce." This conclusion is
at odds with our conclusion that the focus should be on the
designation process, on the reasonableness of the duration of the
designation and on the practical likelihood of an amendment to
designate an out-of-state facility.
Despite the erroneous legal standard used by the
district court, we could affirm its decision if it appeared that
these aspects of Mercer County's flow control scheme
discriminated against interstate commerce. But we are not
convinced that the facts in the record can establish either that
Mercer County's designation process was truly discriminatory,
that the contractual tipping fee was unreasonable at the time the
site was selected, or that there was insufficient likelihood of
amendment to show that the scheme discriminated against out-of-
state bidders. For these reasons, and those explained infra, we
must reverse and remand for further development of these aspects
in order to gauge the real extent of the opportunity enjoyed by
47
out-of-state providers to participate in the Mercer County waste
disposal market.
The Mercer County scheme resulted in the designation of
a single site. Although the designated site is not located
within Mercer County, it is in Pennsylvania. It is possible that
the site's selection resulted from in-state prejudice. Because
Carbone rejected the argument that a statute had to favor all in-
state interests as a group in order to be discriminatory, the
fact that Mercer's scheme allegedly favors only a single in-state
site does not preclude a Commerce Clause challenge. Nevertheless,
that only one in-state site has been selected under the county's
designation process provides less evidence that the process has a
discriminatory effect -- that is, that the process tends to
select in-state sites -- than if a greater number of in-state
sites had been selected in the designation process.
As with Harvey, the flow cr Discriminatory Effect
We still must directly address the question whether the
selection criteria have the effect, irrespective of the County's
intent or its economic interests, of favoring in-state interests.
We emphasize that this case does not involve facial discrimina-
tion: the designation process set objective criteria to choose
the facility. Moreover, the RFP requirements appmpt to open its
designation process to out-of-state sites. Unlike Atlantic Coast,
where the scheme had the explicit goal of securing in-state
disposal capacity, Mercer County officials testified that no
preference was given to in-state or out-of-state facilities. And
unlike Chester County, the county prepared detailed bid
48
specifications and advertised its RFP nationwide. Twenty three
companies purchased the RFP package, including companies from
Pennsylvania, Ohio, New York, Maryland, New Jersey, Minnesota and
Louisiana. Only four companies submitted bids in response to the
RFP, and they all had landfills in Pennsylvania. The appellee,
Tri-County, was among the four which submitted bids. As the
district court acknowledged:
"[T]he failure of the Authority to designate
an out-of-state disposal facility was not the
result of discrimination. Rather, it was
attributable to the failure of any out-of-
state disposal facility to bid on the
contract, and the evidence clearly
established that the procedures followed by
the Authority in selecting a disposal site
were "fair, open and competitive," as
required by Act 101.
Dist. Ct. Op. at 13. (citation omitted). These facts certainly
suggest that the process was fair, open, and competitive.
Nevertheless, on remand Tri-County may be able to identify
specifications of the bid or decisional criteria with a
discriminatory effect.
2. Lack of Economic Interest
Because the county had a relatively small economic
interest in the facilities economic performance (it received a $1
per ton surcharge on the waste dumped at the facility), the
district court concluded that the ordinance did not foster
economic protectionism. As we have seen, and as the district
court recognized, that the ordinance serves legitimate local
purposes, does not save Mercer County's flow control scheme if
49
it has the effect of favoring in-state interests. But the
relative lack of economic interest refutes at least one basis for
the argument that the designation process did not really offer a
level playing field to out-of-state competitors.
3. Potential for Discriminatory Effect
We still must directly address the question whether the
selection criteria have the effect, irrespective of the County's
intent or its economic interests, of favoring in-state interests.
We emphasize that this case does not involve facial discrimina-
tion: the designation process set objective criteria to choose
the facility. Moreover, the RFP requirements applied equally to
all disposal facilities, irrespective of their location. While
this provision appears to rule out special dispensations for in-
state sites, it does not preclude the possibility that some of
the requirements were in practice more burdensome for out-of-
state interests. That a number of out of state companies
requested the RFP package but that not a single out-of-state
interest submitted a bid raises the concern that some aspect of
the RFP discouraged out of state interests.
We recognize, of course, that there was a considerable
attrition rate in this process overall, which may indicate that
Mercer County's business was not terribly attractive to any
landfill operator. Indeed, of the twenty-three companies (in- or
out-of-state) who requested the package, only four submitted a
bid. On this record, however, it is impossible to determine
whether the bid requirements had -- or would tend to have -- a
disparate effect on out-of-state businesses. On remand, the
50
district court might consider statistical or other evidence
regarding the differential drop out rates of firms in this
contested designation process and/or expert testimony on the
issue whether any specific RFP requirement was in fact more
costly or burdensome for an out-of-state site to comply with.
4. Amendment
It is important to note that Mercer's scheme would be
less problematic if a realistic opportunity existed for an out-
of-state landfill to compete for at least some of the county's
business within a reasonable period, either because amendment to
designate an additional site was more likely or because the
contract period was not so long. Although the County did have
the capacity to amend its Plan to designate an additional site0,
the County conceded that it probably did not have enough waste to
justify adding another facility, especially since the county had
been advised that it would be most efficient for it to use a
single site. Dist. Ct. Op., Add. 32-33. The designation of the
site in this case, therefore, effectively amounts to the grant of
a monopoly for the period of the designation. Because the Act
required the counties to secure ten-year access to disposal
capacity, we will not attribute a discriminatory motive to the
county's effective grant of a ten-year monopoly in this case.0
0
Section 3 of the Ordinance No. 6-1991 provides: "All Municipal
Waste shall be transported to and delivered to the Facility
designated by MCSWA from time to time. . . ."
0
Although we do not infer a discriminatory purpose from the
length of the contractual period, we concede that this would be
an easier case if the losers in the designation process were not
precluded from the local market for ten years. Nevertheless, we
cannot say, given the costs of constructing and operating
51
5. Economic Favoritism
The possibility still exists, however, that the county
contracted for a tipping fee that was so high relative to the
ten-year tipping fees (the rate that the parties would be willing
to fix for the entire period) prevailing in the market at the
time of contracting that it would suggest an attempt to confer
some extraordinary, super-monopolistic profit on the chosen
landfill operator. It is not clear whether, in addition to
securing ten-year disposal capacity, the Act required the County
to lock in a price as well. Regardless, we would not infer any
discrimination from the County's desire to lock in the price
unless it turns out that the price was unreasonable at the time
the site was selected. Although the County appears to have made
a "bad bet" on the price of long term waste disposal,0 the market
could just as easily have moved in the opposite direction and
made county officials look financially savvy.0 Indeed, the
differential between the contracted tipping fee and the spot
market is much smaller than it is in the Harvey case: the
contractual tipping fee was $35 per ton relative to the spot
rates of $17.20 at the American Waste Landfill or the $27.95 due
at the Carbon Limestone Landfill.
environmentally sound facilities, that the ten-year period was
unreasonable.
0
Spot market tipping fees, fees charged to dump waste today only,
have declined precipitously since the County made its contract
with the facility in Butler County. Spot rates currently are
apparently approximately $17.50 - $30.00 per ton.
0
County officials apparently chose to lock in the tipping fee out
of their concern that tipping fees would continue to escalate.
See dist. ct. adjudication.
52
Appellees devote considerable effort to their attempts
to demonstrate the less restrictive alternative means of ensuring
long term environmentally safe waste disposal capacity. We do
not pass on the efficacy of these alternative strategies. If the
district court decides on remand that the Mercer County
designation scheme has the effect of discriminating against out-
of-state interests, it must then under the strict scrutiny
standard address both the question whether the government
interest is strong enough and whether less discriminatory means
to achieve the same goal are available.
VI. CONCLUSION
For the foregoing reasons, we will vacate the orders of
the district courts in these two cases, and remand for further
proceedings consistent with this opinion. Parties to bear their
own costs.
____________________________
53
Harvey v. County of Chester, No. 94-1924
Tri County v. County of Mercer, No. 94-3622
NYGAARD, Circuit Judge, dissenting.
In each of the two cases before us in this appeal, the
majority reverses the district court and remands the cause for it
to further scrutinize the designation process. I must
respectfully dissent.
Discriminatory purpose or effect triggers heightened
scrutiny. The outcome of a selection process, however open that
process may be, can be discriminatory in its practical effect.
Regardless of the designation process employed, in each case a
designation was made in the context of a flow control scheme; in
each case, that flow control designation constituted an
impermissible discrimination against interstate commerce and by
effect alone triggered heightened scrutiny. I would affirm the
order in Tri-County, in which I conclude the district court
properly applied heightened scrutiny. I would reverse the order
in Harvey & Harvey, and remand to the district court for it to
apply the heightened scrutiny standard, because it failed to do
so, despite the discriminatory effect of the designation in the
context of flow control.
54
The articles of commerce involved in these cases are
both the waste itself and the disposal services it requires.
"Solid waste, even if it has no value, is an article of
commerce." Fort Gratiot Landfill v. Michigan Dep't of Natural
Resources, 504 U.S. 353, 359, 112 S.Ct. 2019, 2023 (1992).
Although the Supreme Court in Carbone suggested that "the article
of commerce is not so much the solid waste itself, but rather the
service of processing and disposing of it," C & A Carbone, Inc.
v. Town of Clarkstown, N.Y., U.S. , 114 S.Ct. 1677, 1682
(1992) (emphasis supplied), the Court has not eliminated
consideration of waste as an article of commerce. Whether
dealings between Pennsylvania generators of waste and out-of-
state waste disposal service companies are "viewed as 'sales' of
garbage or 'purchases' of transportation and disposal services,
the commercial transactions unquestionably have an interstate
character." Fort Gratiot, 504 U.S. at 359, 112 S.Ct. at 2023.
In Carbone the Supreme Court held that a flow control
ordinance coupled with a designation discriminated in its effect
because it allowed only the designated operator to provide waste
services within the geographic limits of the municipality. In
Carbone, the town of Clarkstown designated a single, in-state
facility to provide initial processing services for waste; its
designation was part of a flow control scheme, which required all
to use the designated facility. The court found that "[t]he
ordinance thus deprives out-of-state businesses of access to a
local market." 114 S.Ct. at 1681. Likewise, in the cases before
us, out-of-state providers of waste services cannot accept waste
55
or sell services except to the extent that waste would be
delivered to a designated facility; flow control mandates that
waste only be delivered to a designated facility.
As in the Carbone case, "the real question is whether
the flow control ordinance is valid despite its undoubted effect
on interstate commerce." Id. at 1682 (emphasis supplied).0 And,
again as in the Carbone case, "find[ing] that the ordinance
discriminates against interstate commerce, we need not resort to
the Pike test." Id.
Thus, heightened scrutiny must be applied in the cases
before us, because, regardless of the process employed in
selecting waste service providers, the effect discriminates
against interstate commerce. The Supreme Court "interpret[s] the
Commerce Clause to invalidate local laws that impose commercial
barriers or discriminate against an article of commerce by reason
of its origin or destination out of State." Id. (emphasis
supplied).
Heightened scrutiny analysis dictates that
"[d]iscrimination against interstate commerce in favor of local
business or investment is per se invalid, save in a narrow class
of cases in which the municipality can demonstrate, under
rigorous scrutiny, that it has no other means to advance a
legitimate local interest." Carbone, 114 S.Ct. at 1683 (citing
0
Significantly, the Carbone court did not engage in an analysis
of the process by which the Clarkstown facility was selected. It
looked only to effect.
56
Maine v. Taylor, 477 U.S. 131, 106 S.Ct. 2440 (1986)).0 The
Carbone court specifically rejected the contentions of amici in
that case that designation coupled with a flow control scheme fit
into the narrow class of permissible discrimination. In Carbone,
the amici "suggest[ed] that as landfill space diminishes and
environmental cleanup costs escalate, measures like flow control
become necessary to ensure the safe handling and proper treatment
of solid waste. The teaching of our cases is that these
arguments must be rejected absent the clearest showing that the
unobstructed flow of interstate commerce itself is unable to
solve the local problem." 114 S.Ct. at 1683.
Although assurance of ten years of disposal capacity
for county waste and of the proper disposal of waste generated in
a county are laudable goals, the designation of facilities under
a flow control scheme may not be essential for the achievement of
those goals. For example, the county might receive assurances of
ten years of capacity from a few disposal facilities without then
requiring all county-generated waste actually to be disposed of
at those same specific facilities. The goal of providing ten
years of disposal capacity need not require that each facility,
to accept waste, must provide an assurance of ten years of
capacity.0 Like the municipality in Carbone, the county in each
0
Once "shown to discriminate against interstate commerce either
on its face or in practical effect, the burden falls on the State
to demonstrate both that the statute serves a legitimate local
purpose, and that this purpose could not be served as well by
available nondiscriminatory means." Maine, 477 U.S. at 138, 106
S.Ct. at 2447 (internal quotations and citation omitted).
0
To the extent that the county might be providing an exclusive
franchise to accept waste as payment in exchange for the
57
of the cases before us has open to it "any number of
nondiscriminatory alternatives for addressing the . . . problems
alleged to justify the ordinance in question." Id.
As the holding of the Supreme Court in Carbone compels,
the Tri-County district court applied the heightened scrutiny
test upon finding that the Mercer County ordinance was
discriminatory in its practical effect. The district court ruled
in favor of Tri-County Industries, Inc., because the defendants
failed to meet their burden of demonstrating the unavailability
of nondiscriminatory alternatives. I would affirm the district
court for the reasons it gave in its well-reasoned opinion. The
Harvey & Harvey district court overlooked the discriminatory
effect of designation in a flow control scheme. For that reason,
it failed to require heightened scrutiny. I would reverse its
holding that Pike scrutiny applied, and remand. Pike v. Bruce
Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 847 (1970).
assurance of ten years of capacity, the scheme of flow control
coupled with designation would in essence constitute a county
scheme to finance the capacity assurance received, providing as
payment the granting of a monopoly and its concomitant profits
and stability in exchange for the assurance. The permissibility
of such an arrangement is highly doubtful.
58