Amicus Curiae Brief — Chemical Waste Management, Inc. v. Hunt

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No. 91-471

a CLERK

In the Supreme Court of the Gnited States

OCTOBER TERM, 1991

CHEMICAL WASTE MANAGEMENT, INC., PETITIONER

Vv.

Guy HUNT, GOVERNER OF THE STATE OF ALABAMA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF ALABAMA

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE

KENNETH W. STARR

Solicitor General

BARRY M. HARTMAN

Acting Assistant Attorney

General

LAWRENCE G. WALLACE

Deputy Solicitor

HARRIET S. SHAPIRO

Assistant to the Solicitor

General

PETER R.STEENLAND, JR.

GERALD H. YAMADA ANNE S. ALMY

Principal Deputy General Attorneys

Counsel

LISA K. FRIEDMAN Department of Justice

Associate General Washington, D.C. 20530

Council for Solid Waste (202) 514-2217

and Emergency Response

ANGELIA SOUDER BLACKWELL

Attorney

Environmental Protection

Agency

Washington, D.C. 20460

en a TT

> fan

QUESTIONS PRESENTED

1. Whether a disposal tax that applies only to wastes

generated outside the State violates the Commerce Clause.

2. Whether a disposal tax that applies only to waste

disposed of at “commercial” hazardous waste disposal

facilities violates the Commerce Clause.

3. Whether a limitation on the amount of hazardous

waste that may be disposed of annually at such facilities

violates the Commerce Clause.

TABLE OF CONTENTS

Page

es conenevosonsnccesecs l

ee ncsncnoocoeces 4

i ssnencecocnuecesoce 20

TABLE OF AUTHORITIES

Cases:

Alabama v. EPA, 871 F. 2d 1548 (11th Cir.), cert. denied, 2

cas raeccsnsnsnaseoenessooeoesooes

Alabama ex rel. Siegelmann v. EPA, 925 F.2d 385 (11th = 2

American Trucking Ass’ns, Inc. v. Scheiner, 483 U.S. 266 9

EE

Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 (1984)......... 15,16

City of Philadelphia v. New Jersey, 437 U.S. 263 (1984)..... 7,10,11

-12,13

Coe v. Errol, 116 U>S. 517 (1886)..................cccccssssssssesseeees 12

Commonwealth Edison Co.v. Montana, 453 U.S. 609 14,15

i ciesctcnedsnnccccusesssocersococsevececcscses

Complete Auto Transit, Inc. v. Brady, 4830 U.S. 274 (1977) 14

Government Suppliers Consolidating Services, Inc. v. 12

Bayh, 753 F. Supp 739 (S.D. Ind. 1990)..........0... eee

Hardage v. Atkins, 582 F. 2d 1264 (10th Cir. 1978)............ 12

Hazardous Waste Treatment Councii v. South Carolina, 7,12,19

|

Illinois v. General Electric Co., 683 F. 2d 206 (7th Cir. 12

1982), cert. denied, 461 U.S. 913 (1983)...0.... eee

Maine v. Taylor, 477 U.S. 13331 (1986)... eee 9,10,13

Maryland v. Louisiana, 451 U.S. 725 (1981)... ee 914,15

16

McKesson Corp. vy. Division of Alcoholic Beverages & 16

TOORCCO, BES GB. Cl. BESS (1GGO).....n....n...2ccececcccccccceeseceesees

(III)

IV

Cases—Continued

National Solid Waste Management Ass'n v. Voinovich,

763 F. Supp 244 (S.D. Ohio 1991), appeal pending, No.

Re ae a ctcitectercitrnnetnenncenintittetnitneiidinciestanieniinnention

National Solids Wastes Management Ass'n v. Alabama

- Dep't of Envtl. Management, 729 F. Supp 792 (N.D.

Ala.1990

National Solid Wastes Management Ass’n vy. Alabama

Dep't of Envtl. Management, 910 F2d. 713, amended

924 F.2d 1001 (11th Cir.) cert denied, 111 S. Ct. 2800

COE Diicesisctndacdvacintctinvstsntictancnttbiassidiaisbibisidachinbibmibmpeinedtiviess

New Energy Co. v. Limbach, 486 U.S. 269 (1988)...............

O’Niel v. Picilo, 883 F. 2d 176 (ist Cir. 1989), cert. denied,

Sa a Fe Ce ieinieeehseininteecsahbincicacieisbdigecctinn

Pike v. Bruce Church, Inc. 397 U.S. 187 (1970)................

Washington State Bldg. & Constr. Trades Council v.

Spellman, 684 F. 2d 627 (9th cir. 1982) cert denied 461

U.S. 918 (1983)

Westinghouse Electric Corp. v. Tully, 466 U.S. 388 (1984)..

Woodruff v. Parham, 75 U.S. (8 Wall.) 123 (1869).............

Consiitution, statutes and regulations:

U.S. Const.:

Art. I, § 10, cl. 2 (Commerce Clause)...........................

Art. VI, cl.2 (Supremacy Clause)................ccccccccsssesssees

Amend. XIV:

NN Fe INI a seisiccschacisinscictnnpaseapniieridaieoiinumaatiioants

Ee Te

Comprehensive Environmental Response, Compensation

and Liability Act, 42 U.S.C. 9601 ef seq...............ccceeeeeeeeee

Se He Me Ci iicincideeninctesesneerenstentcsinnssennctnnniannnen

a A LG Ok | ren

Low Level Radioactive Waste Policy Amendments Act of

SE, Se ie. He casecenesecccoctncinitenienttiinamsnaneess

12

3,4,12

16

10

14,15,1

8

12

16

12

Page

3,4,5,6,

11,12,1

3,16,19

3

15

16

10

10

10

7,11

a

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a

Vv

Page

Resourse Conservation and Recovery Act, 42 U.S.C. 6901 — 1,17

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i a eespiamuseiouaieiie 1-2

a inci 2

| St EEE ees ne) eRe a 2

| ESE SRR AE ee CTRL Eee 2

Superfund Amendments and Reauthorization Act, 42 19

ae audeemanaaadaeapeiiabeeiopeses

Ala. Code (Supp. 1989):

I a cteiamenaaciens 3

I, 2

eS iia ae one 5

TRESS SURE ao Sie Seen OI Mama are S na 4

Oe eiaaiel 4

iss capac anntebeaianaiaedads 17

Miscellaneous: Page

H.R. 739, 102d Cong., Ist Sess. (1991)............0.....cccccccscoceeee 11

H.R. 1525, 102d Cong., Ist Sess. (1991)..............cceeceeeeeeeeeeee 11

H.R. 2380, 102d Cong., Ist Sess. (1991)................cccccccccceeees 11

oS SS fe ae | |__| Se eeenee enna ll

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In the Supreme Court of the Gnited States

OCTOBER TERM, 1991

No. 91-471

(CHEMICAL WASTE MANAGEMENT, INC., PETITIONER

v.

GuUY HUNT, GOVERNER OF THE STATE OF ALABAMA,

ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF ALABAMA

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE

This brief is submitted in response to the

Court's invitation to the Solicitor General to express

the views of the United States.

STATEMENT

Petitioner owns and operates the Emelle Facility, a

hazardous waste treatment and disposal landfill in

western Alabama. In 1987, the United States

Environmental Protection Agency issued a permit for

the Emelle Facility under the provisions of the

Resource Conservation and Recovery Act, 42 U.S.C.

6901 et seg. (RCRA). Under that Act the EPA

Administrator is charged with "establishing such

performance standards as may be necessary to protect

human health and the environment." 42 U.S.C.

(1)

2

6924(a). Permits may be issued upon a determination

of compliance with those standards. 42 U.S.C. 6925(c).

RCRA, however, is an exercise in cooperative

federalism. States may be authorized to administer and

enforce an equivalent hazardous waste program in lieu

of the federal program. 42 U.S.C. 6926. In addition,

"[njothing in [RCRA] shall be construed to prohibit

any State from imposing any requirements which are

more stringent than those imposed by [federal]

regulations." 42 U.S.C. 6929. Alabama, in fact, has a

permitting requirement applicable to the Emelle

Facility pursuant to Ala. Code § 22-30-12.

In the late 1980's, Alabama and its officials became

alarmed about the large volume of hazardous wastes,

principally from outside Alabama, brought to the

Emelle Facility for disposal. The Emelle facility

receives a considerable portion of all hazardous waste

which is generated and landfilled in the United States.

The overwhelming majority of hazardous’ waste

received at Emelle comes from outside the State of

Alabama. The State's response to these

circumstances principally has been to erect barriers

to the interstate component of the waste disposal

activities at Emelle. First, in 1988, state officials

sued the Environmental Pfotection Agency to restrain

shipments of PCB-contaminated dirt from a Texas

Superfund site to the Emelle Facility. See Alabama

v. EPA, 871 F.2d 1548 (11th Cir.), cert. denied, 493

U.S. 991 (1989). Aiabama obtained preliminary and

permanent injunctive relief from “the United States

District Court for the Middle District of Alabama; on

appeal, the Eleventh Circuit reversed, dissolved the

injunction and dismissed the case for lack of subject

matter jurisdiction. 871 F.2d at 1560. The delay in

effectuating the Superfund remedy cost’ the

government hundreds of thousands of dollars. See

generally Alabama ex rel. Siegelman v. EPA, 925

F.2d 385 (11th Cir. 1991).

3

In the summer of 1989, the Alabama legislature and

executive agencies took further steps to restrain

petitioner's interstate trade at Emelle. The

legislature enacted the Holley Bill, Ala. Code § 22-30-

11 (Supp. 1989), which prohibited facilities in Alabama

from aceepting wastes generated in other States

where the generating State either prohibits the

treatment or disposal of hazardous wastes, or has no

existing facility for the treatment or disposal of

hazardous wastes and has not entered into an

agreement with Alabama. On its effective date, the

Holley Bill prevented the Emelle facility from

accepting wastes generated in 22 States and the

District of Columbia. The Alabama Department of

Environmental Management also promulgated two sets

of regulations in 1989. One set required the Stace's

approval before wastes could be shipped to Emelle; the

other set required certain types of hazardous wastes

to be treated prior to disposal in a landfill.

Petitioner challenged the Holley Bill and both sets

of regulations in a_ suit alleging violation of the

Commerce Clause and the Supremacy Clause. The

United States District Court forethe Northern

District of Alabama upheld the challenged law and

regulations in early 1990. National Solid Wastes

Management Ass'n v. Alabama Dep't of Envtl.

Management, 729 F. Supp. 792. The Eleventh Circuit

reversed in part and held that the Holley Bill violated

the inherent prohibitions of the Commerce Clause

because it "plainly distinguishes among wastes based

on their origin, with no other basis for the

distinction." National Solid Waste Ass'n v. Alabama

Dep't of Envtl. Management, 910 F.2d 713, 720,

amended, 924 F.2d 1001 (1991), cert. denied, 111 S. Ct.

2800 (1991). In particular, the Eleventh Circuit found

that the State's interest in ensuring adequate capacity

for Alabama-generated wastes and the dangers of

transportation of hazardous wastes did not justify the

4

State's differential treatment of out-of-state wastes.

910 F.2d at 720.

In 1990, the Alabama legislature enacted Act No. 90-

326, which represents the third attempt in as many

years to curtail petitioner's interstate commerce in

hazardous wastes. Three parts of Act No. 90-326 are

at issue here. First, Section 22-30B-23(b) imposes “an

additional fee levied at the rate of [$]72.00 per ton"

for “waste and substances which are generated outside

of Alabama and disposed of at a commercial site in

Alabama." Pet. App. 106a (the Additional Fee).

Second, Section 22-30B-23(a) levies "a fee to be paid by

the operators of each commercial site for the disposal

of hazardous waste in the amount of [$]25.60 per ton."

Pet. App. 106a. (the Base Fee). Finally, the Act

restricts the amount of hazardous wastes that may be

disposed of at any commercial site during any twelve-

month period after October 1, 1991, to the amount that

was disposed of during the period July 15, 1990 to

July 14, 1991. Jd. at 112a (the Cap Provision). The

Act was to become effective on July 15, 1990. Id. at

113a.

Petitioner commenced this action in Alabama circuit

court challenging Act No. 90-326 on federal and state

constitutional grounds. After a trial, the circuit

court found that the $72 Additional Fee is

unconstitutional as a violation of the Commerce

Clause (Pet. App. 85a). It found that hazardous

wastes are an article of interstate commerce and that

the Additional Fee facially discriminates against such

commerce. IJ/bid. The trial court also concluded that

the State had failed to meet the heavy burden of

demonstrating that the discriminatory legislation

advances a legitimate state purpose that cannot be

adequately served by non-discriminatory alternatives.

Id. at 85a-86a. The court found that legitimate state

concerns about the dangerousness of hazardous waste

and the desire to minimize the generation of such

wastes could more directly be met by _ non-

5

discriminatory measures; there was no demonstration

that the Additional Fee could be deemed a

compensatory tax to equalize the burden on in-state

and out-of-state generators; and the State's interest in

forcing other States to develop waste disposal capacity

does not justify discriminatory legislation. Jd. ai 86a-

88a & n.6.

On the other hand, the circuit court upheld both

the Base Fee and the Cap Provision of Act 90-326.

The court ruled that because those provisions do not

facially discriminate against interstate commerce, the

balancing test set forth in Pike v. Bruce Church Inc.,

397 U.S. 137 (1970), should be used to assess their

validity. Pet. App. 66a, 72a. Applying that test, the

court concluded that the local benefits of the Base

Fee's compensation for the financial risks to the State

for hazardous waste disposal activities and _ its

deterrence to landfilling hazardous wastes are not

clearly outweighed by the impact on_ interstate

commerce. /d. at 67a. Similarly, the Cap Provision

was held to be supported by legitimate local interests

in conserving the State's natural resources and

protecting its citizens' health and safety that are not

clearly outweighed by the impact on_ interstate

commerce. /d. at 72a-73a. The court nevertheless

noted (id. at 73a, 92a-93a) that the invalidity of the

Additional Fee might require modification of the Cap

Provision to reflect a base period unaffected by

unconstitutional discrimination.

Both petitioner and the respondents appealed to the

Alabama Supreme Court. That court upheld the

circuit court's rulings on the Base Fee and Cap

Provision on the basis of the lower court's opinion.

Pet. App. 17a-37a. It reversed the circuit court's

ruling that the Additional Fee is unconstitutional as a

violation of the Commerce Clause. The state supreme

court found that the Additional Fee serves legitimate

local purposes that can not adequately be served by

6

nondiscriminatory alternatives -- specifically (id. at

44a):

(1) protection of the health and safety of the

citizens of Alabama from toxic substances; (2)

conservation of the environment and the state's

natural resources; (3) provision for

compensatory revenue for the costs and

burdens that out-of-state waste generators

impose by dumping their hazardous waste in

Alabama; (4) reduction of the overall flow of

wastes traveling on the state's highways,

which flow creates a great risk to the health

and safety of the state's citizens.

The court noted that hazardous wastes are

permanently buried at Emelle and stated that "nothing

in the Commerce Clause compels the State of

Alabama to yield its total capacity for hazardous

waste disposal to other states" (id. at 45a). It

concluded that a non-discriminatory tax on _ both

Alabama and out-of-state generated waste is not an

available alternative "because Alabama is bearing a

grossly disproportionate share of the burdens of

hazardous waste disposal for the entire country" (id.

at 46a).

Justice Houston concurred. He reasoned that

hazardous waste is not an article of commerce

protected under the Commerce Clause of the

Constitution, observing that the contrary conclusion of

the Eleventh Circuit is not binding on the state

supreme court (Pet. App. 48a).

DISCUSSION

The Supreme Court of Alabama and the United

States Court of Appeals for the Eleventh Circuit have

come to opposite conclusions concerning restrictions

by the State of Alabama on interstate commerce in

hazardous waste disposal. The state court has ruled

in this case that the disproportionate role played by

7

the Emelle Facility in the national waste disposal

effort is a legitimate state concern that justifies

discriminatory burdens placed on disposal of wastes

generated in other States. The Eleventh Circuit has

ruled that such concerns do not authorize the State of

Alabama to enact legislation that discriminates on the

basis of the State of origin of the waste. In light of

the Emelle Facility's role in the national waste

disposal effort, this conflict concerning the law

governing that facility, by itself, merits resolution by

this Court.

More broadly, however, the struggle between

petitioner and the State of Alabama does not stand

alone on the legal landscape. Disposal of waste --

whether solid, hazardous, or nuclear -- has become an

extremely controversial and divisive issue across the

Nation. Many state and local governmental units have

sought to relieve pressure generated by local

constituencies by enacting legislation that

discriminates against wastes generated out-of-state.

Until the present case, in the absence of authorizing

federal legislation,! those legislative efforts have

regularly been struck down under authority of this

Court's decision in City of Philadelphia v. New

Jersey, 437 U.S. 617 (1978). The Supreme Court of

Alabama, however, found that case inapplicable in the

context of hazardous waste disposal. This Court's

precedent is likely to encourage similar efforts by

l See, e.g., the Low Level Radioactive Waste Policy Amendments

Act of 1985, 42 U.S.C. 2021b-2021i, discussed in the government's brief

in opposition in State of New York v. United States, County of

Allegheny v. United States, and County of Cortland v. United States,

Nos. 91-543, 91-558, and 91-563.

8

other States.2 Review by this Court is, in our

judgment, therefore is warranted. .

1. The State of Alabama plainly has legitimate and

well-founded concerns about the disposal of hazardous

wastes at the Emelle Facility. The health, safety and

welfare of its citizens in the area of the facility, the

safety of travelers on the roads leading to the facility,

and the future condition of the natural resources and

the environment of the State are all potentially

implicated by the disposal of hazardous wastes. That

being so, the State of Alabama enjoys a large measure

of legislative and regulatory authority over the Emelle

Facility under its traditional police powers.

The Alabama Supreme Court relied upon many of

these concerns as the basis for upholding the

Additional Fee enactment in this case (Pet. App. 44a).

But because these legitimate state concerns can

effectively be served by non-discriminatory enactments,

we are unpersuaded that under this Court's

jurisprudence they justify the Additional Fee

requirement's discriminatory treatment of wastes

generated out-of-state.

2 In Hazardous Waste Treatment Council v. South Carolina, 945

F.2d 781, 792 (1991), the Fourth Circuit recently summarized the

dangers inherent in such a proliferation of restrictive state laws:

[Tjhe effect of every state designing particular limits and

bars for out-of-state waste could be catastrophic. Indeed, such

treatment of hazardous waste—in essence, ensured

nontreatment of some hazardous waste—might destroy not

only the theoretical principle of a national economic union,

but contains the real potential to destroy land, if not also

persons, within the union. [BJetter that hazardous waste be

treated and disposed of somewhere, even if spread

disproportionately among the states, than that future

Superfund sites arise.

—_—_ = -

9

In addition, the Alabama Supreme Court justified

the discriminatory nature of the Additional Fee as a

legitimate attempt to force

the states that are using Alabama as a

dumping ground for their hazardous wastes to

bear some of the costs for the increased risk

they bring to the environment and the health

and safety of the people of Alabama.

Pet. App. 44a. A tax or fee imposed upon the disposal

of hazardous waste that is designed to compensate the

State for the expenses of regulating, monitoring and

dealing with the adverse effects of that activity

clearly serves a legitimate state purpose. But a fee

that discriminates against waste generated out-of-state

is not necessary or appropriate for this purpose.

Indeed, if a disproportionate portion of the hazardous

waste disposed of in Alabama is generated out-of-state,

then that same portion of a non-discriminatory tax on

waste disposal would obviously be borne by generators

in other States.

Alabama could properly impose a compensatory tax

on interstate commerce in hazardous waste "that

equalizes previously unequal tax burdens by offsetting

‘a specific tax imposed only on intrastate commerce

for a substantially equivalent event." American

Trucking Ass'ns, Inc. v. Scheiner, 483 U.S. 266, 287

(1987); accord, e.g., Maryland v. Louisiana, 451 U.S.

725, 759 (1981). But the circuit court correctly found

(Pet. App. 88a n.6) that the State had not adequately

demonstrated that the Additional Fee served as a

compensatory tax for other taxes borne by in-state

generators (ibid.). The Alabama Supreme Court did

not disturb this finding, and respondents do _ not

contend in this Court that the Additional Fee can be

justified as a traditional compensatory tax.

Nor does the State's unquestioned power to protect

its environment against the risk of degradation,

recognized in Maine v. Taylor, 477 U.S. 131 (1986),

10

justify the discriminatory Additional Fee. Maine v.

Taylor upheld the State's ban on the importation of

live bait fish; the dispositive fact in that case was

that the out-of-state bait fish contained a parasite that

the local fish did not, and thus posed a new risk.

Alabama has not established that the out-of-state

waste disposed of at Emelle is significantly different

from such waste generated in Alabama.?

Respondents assert (Hunt Br. in Opp. 12-13)4 that

the discriminatory fee is warranted by the risk that,

if the State is ultimately required to bear the costs

of cleaning up the Emelle Facility, it will be unable

to obtain any meaningful contribution from the out-of-

state generators. But federal law provides the State

with ample authority to impose the financial costs of

cleaning up the Emelle Facility on the generators of

the waste -- both in-state and out-of-state. The

Comprehensive Environmental Response, Compensation

and Liability Act (CERCLA), 42 U.S.C. 9601 et seq.,

generally subjects petitioner, as owner and operator of

the facility, and the generators of the waste to strict,

joint and several liability for "all costs of removal or

remedial action incurred by a State." 42 U.S.C.

9607(aX(1) and (3)A). See, e.g., O'Neil v. Picillo, 883

F.2d 176 (ist Cir. 1989), cert. denied, 493 U.S. 1071

(1990). Furthermore, it is far from certain that any

particular in-state generator, currently exempted from

the Additional Fee, will be in existence or located in

Alabama when and if clean-up of Emelle is eventually

3 Par from casting doubt on the continuing vitality of City of

Philadelphia, Maine v. Taylor cites and quotes that decision with

approval several times. See 477 U.S. at 148-149 & n. 19, 152.

4 “Hunt Br. in Opp.” refers to the brief in opposition filed by counsel

of record Bert S. Nettles. “Sizemore Br. in Opp.” refers to the brief in

opposition filed by counsel of record William Coleman.

1]

required.° Accordingly, respondents' asserted

justification for the Additional Fee's disparate

treatment of out-of-state generators based on the risk of

ultimate state liability is highly speculative. Such

speculative concerns do not support that Fee under this

Court's precedents. To be sure, those concerns may

properly be presented to Congress as a basis for urging

enactment of federal legislation specifically authorizing

States within which major hazardous waste disposal

facilities are located to adopt designated limitations on

interstate waste shipments.® See Sizemore Br. in Opp. 7-8

(national waste disposal problems involve "policy issues in

need of a comprehensive legislative solution by

Congress"). But Congress has not acted in this respect.

Absent such federal legislation, this Court's decisions

make clear that the State is precluded by the Commerce

Clause from granting Alabama's businesses preferential

access to the Emelle Facility and imposing upon out-of-

5 In any event, any risks of ultimate state liability for the Emelle

Facility that do exist are borne by the State and its taxpayers as a

whole rather than the in-state generators of hazardous waste favored

by the Additional Fee provision.

6 For example, Congress might consider the enactment of federal

statutory provisions similar to those contained in the Low-Level

Radioactive Waste Policy Amendments Act of 1985, 42 U.S.C. 2021b-

2021i, discussed in the government’s brief in opposition in State of New

York v. United States, County of Allegheny v. United States, and

County of Cortland v. United States, Nos. 91-543, 91-558, and 91-563. In

fact, several bills contemplating limitations on, and the imposition of

differential fees for, interstate waste disposal are currently pending

before the House Committee on Energy and Commerce (e.g., H.R. 739,

1525, 2380, 102d Cong., Ist Sess. (1991)) and the Senate Committee on

Environment._and Public Works (e.g., S. 153, 174, 197, 241, 592, 102d

Cong., Ist Sess. (1991)). Representatives of EPA have testified before

these Committees regarding several of these bills, and the National

Governor's Association has recently adopted a policy statement

supporting congressional authorization of differential fees.

12

state generators a financial burden that the State is

unwilling to place on its own citizens.’ As in City of

Philadelphia v. New Jersey, 437 U.S. at 627, the State is

pursuing entirely legitimate goals by means forbidden by

this Court's precedents interpreting the Commerce

Clause.

Several federal courts of appeals have found this Court's

decision in City of Philadelphia v. New Jersey, supra,

applicable to discriminatory state barriers to trade in

hazardous waste disposal despite the obvious risks to the

environment inherent in such substances. National

Solid Wastes Management Ass'n v. Alabama Dep't of

Envtl. Management, 910 F.2d at 718-719; Hardage v.

Atkins, 582 F.2d 1264, 1266 (10th Cir. 1978); ef. Illinois v.

General Electric Co., 683 F.2d 206, 214 (7th Cir. 1982)

(spent nuclear fuel) cert denied, 461 U.S. 913 (1983);

Washington State Bldg. & Constr. Trades Council v.

Spellman, 684 F.2d 627, 631 (9th Cir. 1982) (low level

radioactive waste), cert. denied, 461 U.S. 913 (1983). See

also Hazardous Waste Treatment Council v. South

Carolina, 945 F.2d 781, 787 (4th Cir. 1991) (preliminary

injunction upheld on Commerce Clause grounds).8 The

7 This Court has long recognized that the Commerce Clause

imposes restraints on discrimination by one State against the products

of another that are analogous to the express limitations of Art. I, § 10,

Cl. 2 on the power of a State, without congressional consent, to impose

imposts or duties on imports from or exports to foreign countries. See,

e.g., Woodruff v. Parham, 75 U.S. (8 Wall.) 123, 136-140 (1869); Coe v.

Errol, 116 U.S. 517, 526 (1886). The facially discriminatory tax imposed

by the Additional Fee is the functional equivalent of a tariff at the

State’s border. =

8 Federal district courts, relying on City of Philadelphia, have also

invalidated discriminatory disposal fees. See National Solid Waste

Management Ass'n v. Voinovich, 763 F. Supp. 244, 262-263 (S.D. Ohio

1991), appeal pending, No. 91-3466 (6th Cir.); Government Suppliers

Consolidating Services, Inc. v. Bayh, 753 F. Supp. 739, 769-770 (S.D.

Ind. 1990).

13

attempt of the Supreme Court of Alabama to distinguish

this Court's precedent in City of Philadelphia on the

ground of the greater environmental! risks associated with

hazardous waste is accordingly unsupported by lower

court precedent. Where, as here, a facility is duly licensed

and permitted for treatment and disposal of wastes

generated within the State, we believe that City of

Philadelphia's rationale precludes discrimination against

similar wastes generated in other States unless Congress

authorizes such discrimination -- which it has not done.

The Additional Fee therefore does not meet the governing

legal standard, which is whether Alabama "has legitimate

reasons, ‘apart from their origin, to treat [out-of-state

waste products] differently." Maine v. Taylor, 477 U.S. at

152, quoting City of Philadelphia v. New Jersey, 437 U.S.

at 627. Accordingly, the decision below upholding the

Additional Fee is out of step with this Court's holding in

City of Philadelphia and post-Philadelphia lower court

precedent.

2. The second question presented is whether imposition

of a Base Fee of $25.60 per ton for substances consigned to

a commercial hazardous waste disposal facility within the

State violates the Commerce Clause despite its facial

neutrality. Petitioner argues that the legislation

categorizes waste disposal activities in a manner that

subjects almost all waste generated outside the State to

the Base Fee while practically exempting in-state

generated waste. Pet. 18. This, together with the

evidence of an express legislative purpose to discriminate

against out-of-state generated waste, it argues, is

sufficient to subject the Base Fee requirement to the

strict scrutiny under the Commerce Clause applicable to

facially discriminatory state actions. Pet. 18-21.

Respondents do not dispute that the Base Fee imposes a

tax on interstate commercial activity. See Hunt Br. in

Opp. 16; Sizemore Br. in Opp. 16-20. Instead, they contend

that the Base Fee does not discriminate against interstate

waste, but rather reflects a rational distinction between

disposal of hazardous waste by landfill -- which occurs

14

almost exclusively at Emelle -- and the surface

containment or treatment of waste water, which includes

the bulk of the noncommercial disposal of hazardous waste

generated within the State. Sizemore Br. in Opp. 18-19;

Hunt Br. in Opp. 16-19. Respondents also assert that,

because the Base Fee does not discriminate against

interstate commerce on its face or in its effects, the

Alabama courts correctly upheld it under the balancing

test of Pike v. Bruce Church, Inc., 397 U.S. 137, 142

(1970)("Where the statute regulates evenhandedly to

effectuate a legitimate local public interest, and its effects

on interstate commerce are only incidental, it will be

upheld unless the burden imposed on such commerce is

clearly excessive in relation to the putative local

benefits."). See Pet. App. 65a-67a; id. at 20a.

We submit that the Alabama courts erred in using the

Pike balancing test -- which applies to disparate effects of

regulatory measures -- to evaluate petitioner's challenge

to the Base Fee as in effect a tax on the interstate disposal

of hazardous waste. As this Court explained in Maryland

v. Louisiana, 451 U.S. 725, 754 (1981):

The State's right to tax interstate commerce is

limited, and no state tax may be sustained unless

the tax: (1) has a substantial nexus with the State;

(2) is fairly apportioned; (3) does not discriminate

against interstate commerce; and (4) is fairly

related to the services provided by the State.

Accord, e.g., Complete Auto Transit, Inc. v. Brady, 430

U.S. 274, 287 (1977); Amerada Hess Corp. v. New Jersey

Taxation Division, 490 U.S. 66, 72 (1989).

The Base Fee clearly satisfies three of the four relevant

factors. The first factor requires a threshold inquiry to

ensure that the interstate activity has sufficient

relationship to the State to justify the levying of a tax on

it. Commonwealth Edison Co. v. Montana, 453 U.S. 609,

626 (1981). Here, the fact that the disposal activities

subject to the tax take place within Alabama provides the

necessary state relationship. The second factor, fair

15

apportionment, requires consideration when a number of

States could tax the same activity, raising the problem of

multiple taxation. See Amerada Hess Corp. v. New

Jersey Taxation Division, 490 U.S. at 73. Since the

taxable event here, the disposal of waste, occurs solely

within the State of Alabama, a state tax on that disposal

cannot give rise to multiple taxation problems and raises

no apportionment questions. Cf. Commonwealth Edison

Co. v. Montana, 453 U.S. at 617 (severance tax).

The fourth factor is also satisfied here; the Base Fee is

fairly related to the services provided by Alabama. The

"fair relation" factor does not require a closer fit between

the services provided by the State and the revenue

generated by the tax than that imposed by the Due

Process Clause. Commonwealth Edison Co. v. Montana,

453 U.S. at 622-623. It is sufficient if "the measure of the

tax [is] reasonably related to the extent of the contact" (id.

at 626, emphasis omitted). Accordingly, a tax measured by

the tonnage of wastes disposed of within the State

apparently satisfies the fourth factor.

The difficult question is whether, under this Court's

taxation of interstate commerce jurisprudence, the Base

Fee "discriminates against interstate commerce"

(Maryland v. Louisiana, 451 U.S. at 754). The lower

courts answered this question by first determining that

the Base Fee did not facially discriminate against

interstate commerce, and then holding that it satisfied the

test of Pike v. Bruce Church, Inc., supra. Pet. App. 20a;

id. at 66a-67a. The first inquiry was plainly

underinclusive, because this Court has consistently

looked beyond facial non-discrimination in tax cases to

evaluate the impact of the tax in practical effect and to

evaluate the discriminatory purpose of a tax provision.

See, e.g., Maryland v. Louisiana, 451 U.S. at 756-757;

Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 270 (1984).

The second inquiry is irrelevant. This Court's

precedents do not rely on the Pike test in tax cases. By

its own terms, that test applies to state regulation, not

taxation (see quotation, p. 14, supra). Moreover,

16

considering "putative local benefits" in evaluating a State's

obvious interest in tax revenues would suggest that any

state tax scheme would meet the Pike test. Indeed, in the

present case, the trial court found (Pet. App. 67a) that

"[t]he fee benefits the state by compensating it for the

financial responsibilities and risks it bears on account of

commercial hazardous waste disposal activities." In the

tax context, the Pike test would be virtually no test at all.

But this Court's decisions make clear that the

Commerce Clause ban on discriminatory state taxes is not

so easily avoided. This Court has stated that "a tax may

violate the Commerce Clause if it is facially

discriminatory, has a discriminatory intent, or has the

effect of unduly burdening interstate commerce."

Amerada Hess Corp. v. New Jersey Taxation Division, —

490 U.S. at 75. The Court has applied this test to strike

down state taxes that include credits or offsets for in-state

activities. Maryland v. Louisiana, 451 U.S. at: 756-757;

Westinghouse Electric Corp. v. Tully, 466 U.S. 388, 406-

407 (1984). See also New Energy Co. v. Limbach, 486 U.S.

269 (1988). Even a facially neutral exemption from taxation

is invalid if the exempted product or activity is likely to be

a product of local business and a discriminatory purpose

can be demonstrated. Bacchus Imports, Ltd. v. Dias, 468

U.S. at 270; ef. McKesson Corp. v. Division of Alcoholic

Beverages & Tobacco, 1108. Ct. 2238, 2247 n.15 (1990).

The question presented by this case is nevertheless not

the same as that in the exception, credit or offset cases. In

the present case, the allegation is that when the

legislature defined the taxable activity by limiting it to

disposal at a "commercial site" (Pet. App. 105a), the state

tax captured virtually all interstate commerce in

hazardous waste and excluded almost all in-state

generated waste. The lower courts found (Pet. App. 22a-

24a; id. at 67a-7la) that commercial waste disposal differed

sufficiently from the related non-commercial activity to

permit the Base Fee to withstand an Equal Protection

Clause challenge. It is, however, far from clear that that

very permissive standard suffices in evaluating a dormant

17

Commerce Clause challenge to an_ allegedly

discriminatory tax. This question was not considered

below.

The factual context in which that question is presented

in this case is also in dispute. The parties disagree in this

Court about which in-state hazardous waste activities

should be considered in evaluating the relative impact of

the Base Fee on in-state and interstate commerce. The

major dispute between the parties centers on how to

characterize hazardous wastes undergoing treatment in

surface impoundments. Such impoundments account for

approximately two-thirds of in-state génerated waste (see

Pet. 5 n.2; Sizemore Br. in Opp. 3-4). The findings of fact

in the lower courts do not directly address the status of

these surface impoundments, although the issue was

raised in petitioner's filings.9

The issue is not free from doubt. There are certainly

differences between treatment of hazardous wastes in

surface impoundments and disposal of hazardous wastes in

landfills such as Emelle. As respondents observe

(Sizemore Br. in Opp. 4), the hazardous wastes treated in

surface impoundments are largely wastewater. On the

other hand, the two types of treatment are in many

respects similar. For example, surface impoundments are

regulated under the Resource Conservation and Recovery

Act, 42 U.S.C. 6901 et seq., and are required to have

groundwater monitoring wells to determine whether any

hazardous wastes leaking from the impoundments have

contaminated the underlying aquifer. 40 C.F.R. 265.90.

Thus, to the extent that the Base Fee is designed to

compensate the State for monitoring costs and potential

costs of clean-up, those interests are to some degree

9 Petitioner's argument that the Base Fee is discriminatory in

effect was based upon the figures on hazardous waste that are

described in the petition (Pet. 5 n.2). Furthermore, petitioner

specifically referred to impoundments as hazardous waste facilities

equivalent to commercial waste disposal sites.

18

implicated by the exempted surface impoundments. The

Alabama statute does not explicitly distinguish between

the two types of treatments, and respondents do not

identify any other materials indicating that Alabama in

fact relied on this distinction in enacting the Base Fee

provision.

In light of this unresolved dispute over the appropriate

categorization of surface impoundments, we submit that it

would be premature for this Court to undertake on this

record to define a standard for determining when a state

tax with a disparate impact on like-kind in-state and

interstate commerce unlawfully discriminates against

interstate commerce. If petitioner's categorization of

hazardous waste activities were to be upheld by the lower

courts, and its allegation sustained that the State had

"gerrymandered" its definition of a taxable event so as to

exclude 98 percent of in-state commerce while including

virtually all interstate commerce, the Base Fee probably

should be deemed to discriminate in effect against

interstate commerce within the meaning of this Court's

tax precedents. There would seem to be little analytical

basis for distinguishing between tax schemes with

exceptions, offsets or credits for in-state activities and

those in which the definition of the taxable event has been

artfully drawn in the first instance to exclude comparable

in-state activities. On the other hand, if the courts below

conclude that surface impoundments are not comparable to

landfills, it will be necessary to consider the relevance of

that distinction to the legislative decision to impose the

base fee only on commercial facilities, whatever the nature

of their disposal facilities, particularly given the evidence

of a legislative intent to limit interstate shipments.

In any event, the Alabama Supreme Court used the

wrong test, that of Pike v. Bruce Church, Inc., supra, to

evaluate the constitutional validity of the Base Fee under

the Commerce Clause. Therefore, as to question two of the

petition, this Court should grant, vacate and remand for

further consideration, under appropriate legal standards,

of the validity of the Base Fee.

19

3. The final provision of Act No. 90-326 challenged by

the petitioner is the Cap Provision, which limits the

amount of waste that may be disposed of in any 12-month

period. We submit that, subject to the limitations of the

Due Process, Takings, and Supremacy Clauses, States

have authority to impose non-discriminatory limitations

on the quantities of wastes to be disposed of within their

borders. The Cap Provision of Act No. 90-326, however,

presents two substantial issues. First, as the circuit

court recognized (Pet. App. 73a, 92a-93a), the benchmark

period for determining the waste volume under the Cap

Provision was affected by the discriminatory Additional

Fee. A complete remedy for the effects of the

impermissible Additional Fee should accordingly include

some adjustment of the Cap Provision. Second, the Cap

Provision contains authority for the Governor to waive

the volume limitation if "necessary to protect human

health or the environment in the state" or if necessary to

allow the State to comply with its obligations to assure

disposal capacity. Pet. App. 113a. If this waiver provision

allows a waiver to respond to a public health or

environmental emergency only in Alabama, it raises a

substantial issue under the Commerce Clause of

underinclusion. Cf. Hazardous Waste Treatment Council

v. South Carolina, 945 F.2d at 791 n.14 (questioning

constitutionality of a requirement that a certificate of

need to construct a new facility may not consider out-of-

state need).19

For both of the above reasons, we submit that the third

issue presented in the petition requires further

10 Respondents suggest that the Cap Provision also permits the

State “to provide for disposal of out-of-state waste it guaranteed in the

regional agreements required under [The Superfund Amendments and

Reauthorization Act, 42 U.S.C, 9604(c)(9)]" (Hunt Br. in Opp. 22).

The appropriate interpretation of this state statutory provision should

be considered by the courts below in the first instance.

20

consideration by the courts below before it would be ripe

for review by this Court.

CONCLUSION

The petition for a writ of certiorari should be granted.

As to the first question presented, the Court may wish to

consider summary reversal. As to the second and third

questions presented, the judgment below should be

. vacated, and the case remanded for further consideration

under the proper legal standards.

Respectfully submitted.

KENNETH W.STARR

Solicitor General

BARRY M. HARTMAN

Acting Assistant Attorney

General

LAWRENCE G. WALLACE

Deputy Solicitor

HARRIET S. SHAPIRO

Assistant to the Solicitor

General

PETER R.STEENLAND, JR.

GERALD H. YAMADA ANNES. ALMY

Principal Deputy General Attorneys

Counsel

LISA K. FRIEDMAN

Associate General

Council for Solid Waste -

and Emergency Response

ANGELIA SOUDER BLACKWELL

Attorney

Environmental Protection .

Agency

JANUARY 1992