Petition for Writ of Certiorari — A. G. G. Enterprises, Inc. v. Washington County
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Supreme Court, US.
1) FILEO
01180 5 JUN -6 2002
No.
OFFIGE OF THE CLERIC
IN THE
Supreme Court of the United States
OCTOBER TERM, 2001
A.G.G. Enterprises, Inc.,
Petitioner
v.
Washington County and City of Beaverton,
Respondents
Pride Disposal Co.; Swatco Sanitary Service Inc.; United
Disposal Service Inc.; Hillsboro Garbage Disposal Inc.;
Washington County Drop Box Service Inc.; West Beaverton
Sanitary Service Inc.; Aloha Garbage & Recycling Inc.; Don’s
Garbage Service Inc; Garbarino Disposal & Recycling Service
Inc.; Oregon Refuse & Recycling Association; .
United States of America,
Intervenors
On Petition for Writ of Certiorari to the
United States Court of Appeals
for the Ninth Circuit
PETITION FOR A WRIT OF CERTIORARI
Lawrence R. Davidson
Counsel of Record and for Petitioner
1850 Benjamin Franklin Plaza
One S.W. Columbia Sireet
Portland, Oregon 97258
(503)-229-0199
ALTREC ET AAT TARA! RSE RY AECL NE IPERS ORIN SS UREN TNE
2 O
In their normal course of business, commercial
entities such as manufacturers, construction contractors and
a myriad of various other businesses discard materials
which can be recycled and reused.
QUESTIONS PRESENTED
1. Whether recyclable materials collected from
commercial and industrial accounts, commingled with
nonrecyclable materials and transported to recycling facilities,
are property within the meaning of 49 U.S.C. § 14501(c)(1).
2. If the commodities described in Question 1
constitute property, whether the states are prohibited by 49
U.S.C. § 14501(c)(1) from regulating their transportation.
il
LIST OF PARTIES
The parties to the proceeding below are as follows:
Lawrence R. Davidson
1850 Benjamin Franklin Plaza
One S.W. Columbia Street
Portland, Oregon 97221
Telephone: 503-229-0199
Attorney for Petitioner
A.G.G. Enterprises, Inc.
Dan R. Olsen
Washington County Counsel
155 N. Ist Avenue
340 Public Services Bldg.
Hillsboro, OR 97124
Telephone: 503-846-8747
Attorney for Respondent
Washington County, Oregon
William J. Scheiderich
City Attorney’s Office
P.O. Box 4755
Beaverton, Oregon 97076
Telephone: 503-526-2215
Attorney for Respondent :
City of Beaverton, Oregon
ili
Barnes H. Ellis
James N. Westwood
Stephen a. Redshaw
STOEL RIVES, LLP
Suite 2600
900 S.W. Fifth Avenue
Portland, Oregon 97204
Telephone: 503-224-3380
Attorneys for Intervenor
Oregon Refuse & Recycling Association
Edward J. Sullivan
James R. Herald
Preston Gates & Ellis, LLP
Suite 1400
222 S.W. Columbia Street
Portland, Oregon 97201-3200
Telephone: 503-228-3200
Attorneys for Intervenors:
Pride Disposal Co.
Swatco Sanitary Service, Inc.
United Disposal Service, Inc.
Hillsboro Garbage Disposal, Inc.
Washington County Drop Box Service, Inc.
West Beaverton Sanitary Service, Inc.
Aloha Garbage & Recycling, Inc.
Garbarino Disposal & Recycling Service, Inc.
IV
G. Frank Hammond
Cable Huston Benedict Haagensen & Lloyd, LLP
Suite 2000
1001 S.W. Fifth Avenue
Portland, Oregon 97204
Telephone: 503-224-3092
Attorneys for Intervenor
Don’s Garbage Service, Inc.(Waste Management, Inc)
Mark B. Stern |
Dana J. Martin
U.S. Attorney
Civil Division, Room 9108
Department of Justice
601 D Street, N.W.
Washington, D.C. 20530-0001
Telephone: 202-514-5089
SN Eat Din craee
Attorneys for Intervenor
United States of America
Rule 29.1 Listing
A.G.G. Enterprises, Inc. has no_ parent
Bib aids see
companies nor non-wholly owned subsidiaries.
Vv
TABLE OF CONTENTS
Page
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RULE 29.1 LISTING ..........0s000000. ssseesessneessensecaesssesassasessess iv
TABLE GF CONTENT cccosnstesssssessinsiatssisnascsssanaasenstavens V
TABLE GE AUTHOR Ge wrcessinsintncniascnsnasscrarssstasanesiens vii
PETITION FOR WRIT OF CERTIORARI ...........cessceeeees l
CHIMING BID vcsssssssscnniicensitinsnsannniastensnctanishhantnaipicann 2
FETC TRIN ncxsosesisnistinssatniaisisniiianisnninsstiianiadisddadaaiasiioans 2
STATUTORY PROVISION INVOLVED.......0..... cee ssoed
STATEMENT OF THEE CASE sicsrissacsnissnnsnstnsnncicebsaninanons 3
FID sciiscsisitssetadaninisaneminsibadaicsiandiabsitinhaeadjdanicniaaia 3
Pes TNO ssccscnicsctniisittcstnipaniniannitinnbaiecaniinn 8
REASONS FOR GRANTING THE PETITION................ 9
I. | The Questions Presented Are Important.......... 9
II. The Decision of the Court of Appeals is
ATONE ccicnnstnnnatxsercasionsaniinnsbenaiansnnenndiniun 14
BET, Fills LO OF RO esesiicicoensesiesrcnssirniasmanias 22
CONCLUSION ......... sosnhinenssebnisdniastitingaasatembimmandijanaeniatl 24
vi
TABLE OF CONTENTS, CONT.
APPENDIX
U.S. Court of Appeals Decision ............sccceeereeees la
District Court DoCuMents.............cccceeceeeerseeereenees 18a
COIDEBE BR sccsccrecencscessccesstasesesesconsssnesnssetssnaeusennnnet 18a
POTMRAMORe TAIRCUION .....cecccccccccesceccesssessccseeesce 46a )
| __ E EE T 49a |
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vii
TABLE OF AUTHORITIES
Cases Page
A.G.G. Enterprises, Inc. v. Washington
County, Or, et al., 2000 WL 361892
A I, PED crnstentnctncicnssserniicinsscnsinantaneeicnions 2,4,7,8,13,19
AGG Enterprises, Inc. v. Washington
County, et al,.281 F.3d 1324
(9th Cir. 2002).................... sidisaabebiciaaaansesicidiialianinal 2,9,13,14,20
AGG Enterprises, Inc. v. Washington County
County, Or, et. al., 145 F. Supp. 2d 1215
SW Aaa acisaatesaiilesiiantaditicientsaceh tenhannctahisaniiciadadaaaqunadianindeisateagint 9
Chevron U.S.A. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984) ........cccccccceees 20
Federal Express Corporation v. California
Public Utilities Commission, 936 F.2d 1075
(9th Cir. 1991), cert. den. 112 S. Ct. 2956 (1992)............ 16
Joray Trucking
ee es i dichithipisniviesictnniinscnaetcissennaninodakeitiiis 14
Kelley v. U.S., 69 F.3d 1503
ERPs BERNE nectncensetncensteteicnensincanenasics 10,11,18,19,20
Our Garage and Wrecker Service, et. al. v. City of
Columbus, et. al., 257 F. 3d 506 (6” Cir. 2001), cert.
granted, City of Columbus, et. al., v. Ours Garage &
Wrecking Service, Inc., 122 S.Ct. 802 (2002) ............ 21
Pleasant Hill Bayshore Disposal v. Chip It
Recycling, Inc., et al., 110 Cal.Rptr. 2d 708
I iit si icicaciniirerbicniniedannanenncgsanneininnsines 14,19,20
Vili
Transportation of “Waste” Products for
Reuse in Recycling, 114 M.C.C. 92 (1971) .......cceceeees 14,15
Whitman v. American Trucking
Associations, Inc., 121 §.Ct. 903,
531 U.S. 457, 149 L. Ed. 2d 1 (2001)... ee 24
Woodfeathers , Inc., v. Washington County, Oregon,
15, fee NT 6,7
Woodfeathers , Inc., v. Washington County, OR
eg Le A, ee 7
Statutes
cae ED tcicticecnteaienidenicntnhinitddenaennianisinniiaiomceesi 16
ee ac Se te iicieinsinnsisiigiiensiitiedierscantibiatinadibantiibanianliidaiie 2
PTA. B Bee satnicensinictansnncnniibencsitatpuiniinnsaiininiaiana 15
EE. © Bee cicceihisncanitinivncinicssentidainannabapiaianisaniniaiiin 16
GDB. © UF I ccinsnsinienasetininninsinsanniisesuinninns 15,16
49 U.S.C. § 14501(c)(1) ....2,6,8,9,10,14,16,18,19,20,21,22
TL, © Fe ae sitieseetinnsiitasiinnianiiiaiiisininiianinitioninain 21
Trucking Industry Regulatory Reform Act of 1994,
Pub. L. No. 103-311, 108 Stat. 1686, § 206(d).............. 15
Federal Aviation Administration Authorization
Act of 1994, § 601,”
Pub.L. No. 103-305, 108 Stat. 1569...... 16,17,18,19,21,22
ER Le SR ALE it OM gh a A RR ee
be A
ix
Miscellaneous
Congressional Record:
House Rep. No. 103-240, 103d Cong. 2d Sess.
Reprinted in 1994 U.S.C.A.A.A 1676, 1757
Sara schuinssdjbeeauaitaniiniadinnttieleisidiedhidaaabasaenianAtniatebensannnnicen’ 17
140 Cong. Rec. E 1830-03, 1994 WL 498156-7
NE ile BOW ikensianiniedcsansdatsbansissnssncsassmnaiacnsatouns 21
140 Cong.Rec. S 13283-02 (September 12, 1994).....21
140 Cong. Rec. E2204-03 (October 7, 1994) ............ 21
l
IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 2001
A.G.G. Enterprises, Inc., Petitioner
v.
Washington County and City of Beaverton, Respondents
Pride Disposal Co.; Swatco Sanitary Service Inc.; United
Disposal Service Inc.; Hillsboro Garbage Disposal Inc.;
Washington County Drop Box Service Inc.; West Beaverton
Sanitary Service Inc.; Aloha Garbage & Recycling Inc.;
Don’s Garbage Service Inc.; Garbarino Disposal & Recycling
Service Inc.; Oregon Refuse & Recycling Association;
United States of America,
Intervenors
PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
NINTH CIRCUIT
A.G.G. Enterprises, Inc. respectfully petitions for a writ
of certiorari to review the judgment and opinion of the United
States Court of Appeals for the Ninth Circuit in this case.
eee
2
OPINIONS BELOW
The opinion of the United States Court ‘° Appeals for
the Ninth Circuit (App. la) is reported at 281 F.3d 1324
(2002). The opinion of the district court (App. 18a) is
reported at 2000 WL 361892.
JURISDICTION
On March 12, 2002, the United States Court of Appeals
for the Ninth Circuit entered its order and opinion in this case.
The jurisdiction of this Court is invoked under 28 U.S.C. §
1254(1).
STATUTORY PROVISION INVOLVED
The relevant statute! is as follows:
49 U.S.C. § 14501. Federal authority over
intrastate transportation
(c) Motor carriers of property. —
(1) General rule—Except as provided in
paragraphs (2) and (3), a State, political
subdivision of a State, or political authority of
2 or more States may not enact or enforce a
law, regulation, or other provision having the
force and effect of law related to a price,
route, or service of any motor carrier (other
than a carrier affiliated with a direct air carrier
covered by section 41713(b)(4)) or any motor
private carrier, broker, or freight forwarder
with respect to the transportation of property.
' Other statutes, not central to the questions presented and cited in this
petition, are set forth in App. 51a-53a.
3
STATEMENT OF THE CASE
Facts
Recyclable materials. On a daily basis,
manufacturers, construction contractors and commercial
enterprises discard materials that can be recycled. These
recyclable commodities include items such as wood, metal,
cardboard, ceramics, tile, concrete, asphalt, roofing material,
glass and drywall (Supplemental Excerpts of Record [“SER”]
2, 12-14, 23). These are “dry” recyclable commodities, not to
be confused with “wet” garbage or putrescible garbage. This
case concerns only “dry” recyclable materials (SER 22-23).
MRFs and MSW. _ Material recovery facilities
(“MRFs”) are establishments that specialize in the sorting
of commingled, dry recyclable materials. Prior to transport
to the MRF, the dry recyclable materials may be
commingled with nonrecyclable material, which is referred
to as mixed solid waste (“MSW”). MRFs sell the sorted
recyclable materials on the open market. After sorting, the
nonrecyclable material is transported from the MRF to a
landfill.
Landfills. The other place to which an MSW load
may be transported is a landfill, where the recyclable
materials are not sorted, and are iustead covered up and are
lost forever.
4
Perpetual exclusive franchises. Since the late
1960s, Oregon local governments, such as Washington
County and the City of Beaverton, have regulated their solid
waste industry by carving up their geographic territories and
awarding those divided territories to noncompetitive
franchises. These franchises, who pay franchise fees to the
local government, are for both residential customers as well as
commercial accounts such as manufacturers, businesses and
construction companies. No new franchise has been granted
in Washington County since 1969, nor for more than 20 years
in the City of Beaverton. (App. 24a).
Industry consolidation/vertical integration/burying
of MSW loads. In 1996, there were 26 franchised haulers in
Washington County, but by 2000, there were only 17, the
result of acquisitions by Waste Management, Inc. and one
other company.” Waste Management, Inc. also owns one of
the two landfills in Washington County (SER 36-38), which
creates additional incentives to bury recyclable commodities
in the landfill rather than transport them to a MRF, since the
transporter/landfill owner gets paid twice, once for the
transport and once for the dump (SER 15-16). As a result of
this vertical integration, MSW loads that once were sorted and
recycled are now landfilled (SER 33-34).
2 Waste Management, Inc. itself is a behemoth, the result of a recent
merger between the nation’s largest and third-largest waste companies,
Waste Management, Inc. and USA Waste, Inc.
5
Fruits of competitive enterprise. The City of
Portland and Multnomah County are open to competition for
the transportation of MSW to MRFs and do not use the
franchise system except for residential service. The City of
Portland has won national recognition for its recycling efforts.
The City of Portland collects revenues from the transportation
of solid waste through the use of a tonnage fee instead of
through a franchise fee.
The franchisees in Washington County do not utilize
the services of MRFs. Instead, the franchisees landfill these
loads, even though they know there is recycling in every bit of
the loads (SER 41, 43).
The business of AGG. A.G.G. Enterprises, Inc.
(“AGG”) is licensed by the Federal Higaway Administration
as a motor carrier of property (SER 4, 44). As part of its
business, AGG enters into transportation contracts with
various construction companies, manufacturers and
businesses to provide drop boxes at the business’s place of
operation. The business places both recyclable materials and
nonrecyclable materials into these drop boxes. Frequently,
AGG’s customers are bound by contract to recycle. Some
commercial customers want AGG to transport MSW to MRFs
because it brings them closer to meeting state and regionally
mandated recycling goals (SER 9, 39).
AGG provides no residential garbage collection or
curbside service (SER 2-3). AGG does provide “wet”
Pao eA AE las NTR. eo Nad bias PREP OLMES
6
garbage collection, not material to this case, in Multnomah
County and the City of Portland.
ECR, a MRF. AGG transports most of its MSW loads
to East County Recycling (“ECR”), a MRF (SER 17, 22).
AGG also utilizes several other recycling facilities (SER 130).
ECR does not accept wet garbage, nor does it accept
hazardous or toxic materials (SER 194, 22-23). ECR is in
business to recover anything out of the dry waste system that
it can take in and develop and move out for a fee (SER 17,
22). ECR can sort recyclable materials more efficiently than
many businesses (SER 30-31).
High recovery rate. ECR’s recovery rate, i.e.
successful removal of recyclable materials from the MSW, is
50% to 60%, with approximately 60,000 tons processed per
year (SER 25, 49-50). If concrete and asphalt were included,
ECR’s recovery rate would be 85% to 90% (SER 28-29).
Intrastate deregulation. In 1994, Congress passed
legislation, now codified at 49 U.S.C. § 14501(c)(1), which
prohibits states and their subdivisions from regulating the
intrastate transportation of “property” by motor carrier,
thereby opening up the intrastate markets to competition.
Previously, in 1980, Congress deregulated the transportation
of property by motor carrier in interstate commerce.
Woodfeathers litigation. In 1996 a roofing company
filed suit against Washington County, alleging that 49 U.S.C.
§ 14501(c)(1) preempted Washington County’s ordinance
7
regarding the transportation of MSW to MRFs. The district
court agreed, held that MSW constituted property, and issued
a preliminary and permanent injunction enjoining Washington
County from enforcing its ordinance. Woodfeathers, Inc. v.
Washington County, Oregon, 1997 WL 311480. °
The Ninth Circuit reversed on abstention grounds, due
to a prior state proceeding involving Woodfeathers, stating
that preemption was not readily apparent. Woodfeathers, Inc.
v. Washington County, OR, 180 F.3 1017, 1022 (9th Cir.
1999).
Enforcement/citations. | While Woodfeathers was
pending, AGG was cited by both Washington County and
City of Beaverton for transporting MSW without having an
exclusive franchise (Excerpts of Record [“ER”] 131-133, SER
14, App. a). These citations were dismissed after the district
court issued the preliminary injunction in Woodfeathers, Inc.
v. Washington County, supra.
At the city’s urging, AGG then applied for a license
from the City of Beaverton. After a long delay and
immediately following the Ninth Circuit’s reversal in
Woodfeathers, the City of Beaverton abruptly informed AGG
that it would not take further action on AGG’s application.
(ER 134). AGG did not apply for a permit with Washington
County, which has not issued a new franchise since 1969.
> Judge Haggerty also found that the ordinances constituted an undue
burden on interstate commerce and thus ran afoul of the Commerce
Clause of the United States Constitution.
8
The district court found, just as did the district court in
Woodfeathers, that such application would have been futile.
(App. 24a, 28a).
Proceedings Below
AGG filed a complaint in the United States District
Court for the District of Oregon, alleging that Washington
County’s and the City of Beaverton’s solid waste ordinances
were preempted by 49 U.S.C. § 14501(c)(1), and requesting
the court to issue a permanent injunction against Washington
County and the City of Beaverton as to the enforcement of the
portion of the ordinances which conflicted with federal law.
The district court allowed intervention in support of the
defendants by Oregon Refuse and Recycling Association, a
statewide association of franchised haulers, as well as several
individual franchise haulers operating within the defendants’
geographical limits.
The district court granted AGG’s motion for a
permanent injunction, holding that the transportation of the
MSW, when collected from commercial and _ industrial
accounts, are “property” within the meaning of 14501(1)(c),
and that the local and state regulations of the transportation of
those loads was thus preempted (App. 36a-37a). *
* AGG also alleged that the ordinances were contrary to the Commerce
Clause of the United States Constitution as they imposed barriers to the
free flow of interstate commerce and that the ordinances, as enforced
and applied to AGG, violate the equal protection provisions of the
Fourteenth Amendment to the United States Constitution and the
comparable provision in the Oregon Constitution. The district court
“
The Ninth Circuit reversed and held that Section
14501(c)(1) did not preempt the local regulation of the
collection of the MSW, stating that Congress did not show a
clear and manifest intent to do so.” (App. 16a).
REASONS FOR GRANTING THE PETITION
I. The Questions Presented Are Important
Extensive national interest. As evidenced by the
amici briefs filed in the Ninth Circuit®, there has been
tremendous national interest in this case, from the recycling
industry, private industry, consumer interests, state and local
governments, and national waste hauling companies. All
interested groups are represented. The issues have been fully
briefed, and the case is set for final resolution by this court.
National welfare affected. The issues in this case are
of national significance and exceptional importance and
directly affect the welfare of the nation.
Legal roadmap provided. The Ninth Circuit’s opinion
overlooks longstanding precedent of the Interstate Commerce
ruled that the ordinances did not constitute an undue burden upon
interstate commerce, and did not address the equal protection issue.
AGG did not cross-appeal those holdings.
* In a separate proceeding filed while this case was appealed in the
Ninth Circuit, AGG sought comparable relief from the district court
regarding the consolidation of smaller loads for transport to the MRF.
The district court denied that request. AGG did not appeal that
decision. A.G.G. Enterprises, Inc. v. Washington County, et al, 145 F.
Supp. 2d 1215, 1224 (D. Or. 2001).
* Amici curiae are listed at App 54a-56a.
10
Commission (“ICC”), the agency that has long been vested
with responsibilities regarding recyclable materials’, as well
as congressional precedent. The ICC and Congress have
provided a series of decisions and policies that provide this
court with the necessary information to provide a reasoned
decision. Of course, the states do not want this court to
review that legacy, and have dug in to prevent this from
occurring.
Impeded competition. In 1994 Congress passed
legislation permitting competitive services for the
transportation of recyclable materials. Eight years later, the
states are still protecting turf that is no longer theirs.
Congress and the ICC have a long history of extending
favorable legislation and regulation to nurture the recycling
industry, by easing the transportation-related regulatory
requirements pertaining to recyclable material.
Judicial v. legislative relief. The states are
attempting to accomplish through the courts what they were
unable to accomplish through legislation, which is to
overturn the offending portion of 49 U.S.C. § 14501 (c)(1).
First they attempted legislative relief (p. 21, infra), which
failed. Then they attempted judicial relief (Kelley, p.18
infra) which failed. The towing industry (p. 21, infra),
’ The ICC has recently been sunsetted, and its functions transferred to
its successor, the Surface Transportation Board.
11
pursued legislation for the identical issue, and the states
need to follow that lead.
De facto conflict. There is tension between the
holdings of Kelley and this case, which while not involving
identical issues, nevertheless address similar preemption
issues. Seven years after Kelley, the states still refuse to
acknowledge federal preemption in this area.
No trampling of states’ rights. The recyclable
industry has changed. Construction debris should no
longer be landfilled. “Garbage” and “refuse” are not the
operative words, although those are the words used by
others which distort the focus and which demonstrates a
mentality that evolves from the era when everything was
landfilled. Instead, the operative words are “recyclable
materials” and “recycling facilities”. The local governments
are still free to regulate the transportation and disposal of the
nonrecyclable materials that flow out of the MRF.
Trampling rights of business. By continuing to
regulate the transportation of recyclable materials, the states
are infringing on the inability of manufacturers, commercial
establishments and businesses to make their own decision
about their own soon-to-be discarded recyclable materials.
That decision has been shifted by the local governments to the
local franchisee, which in many cases is also the owner or
operator of a landfill. As the owner or operator of a landfill, —
these franchises, which are frequently national waste
12
companies, thus get paid twice, once for the transport and
once for the dump. And all of this occurs in the name of the
states traditional powers over the collection of garbage.
Industry juggernaut. Washington County, a
microcosm of what this case is about, has not granted a new
franchise for more than 30 years, since 1969. In the
meantime, national waste handling companies, such as Waste
Management, Inc., have bought up franchises in Washington
County, which has seen the number of franchised haulers, just
in the tiny four year period from 1996 to 2000, dwindle from
26 to 17, as the industry has consolidated.* Waste
Management, Inc. owns a jandfill in Washington County, as
well as being a franchised hauler, and is thus a “vertically
integrated” company by virtue of its status of both a
transporter and the owner of the landfill.
Unburying is not possible. This abhorrent practice of
diverting good, valuable MSW loads to the landfill instead of
transporting these MSW loads to the MRF has negatively
impacted the recycling industry including MRFs such as ECR.
For example, ECR previously received MSW loads from a
location 60 feet from its premises. However, those loads are
now landfilled (SER 33-34). Once those those recyclable
materials are buried, they are forever gone. This nation no
* Waste Management, Inc. intervened in the district court proceedings
through one of its wholly owned companies, Don’s Garbage Service,
Inc., without disclosing to the district court its ownership of this
company.
13
longer has the luxury, if it ever really did, of landfilling ever-
diminishing natural resources, when those _ recyclable
materials could instead be recycled and reused.
—
License to destroy. The act of a business of discarding
its recyclable materials should not be turned into a license by
others to effectively destroy those recyclable materials when
federal law provides an alternative. The disposition by
manufacturers, construction companies, commercial
establishments and businesses of their recyclable materials is
of tremendous importance to this country’s welfare. Congress
has a longstanding policy of protecting recyclable materials,
and that policy needs to be adhered to at the state level.
_ Court sanctioned value evaporation. The district court
found that the MSW loads have value and that the business of
MRFs such as ECR “is based on the economic value inherent
in the material”. (App. 35a). However, the Ninth Circuit’s
decision allows that value to be lost even though it
acknowledged that 80% to 90% of any load may be
recyclable. (App. 15a-16a). The ICC and Congress have
established laws and policies to prevent this backward form of
thought process to govern today’s world, and a
pronouncement from this court is needed to implement those
laws and policies.
District courts’ disdain. Both district courts, in the
Woodfeathers case and in this case, refused to condone the
14
defendants’ practices and issued their respective permanent
injunctions.
II. The Decision of the Court of Appeals is Erroneous
The Ninth Circuit relied upon a recent decision by a
California Court of Appeals court (p. 19, infra) which was
completely unencumbered by knowledge regarding even the
undisputed portion of 49 U.S.C § 14501(c)(1). But first a
look at the legal history of the transportation of recyclable
materials.
ICC Precedent. We start with the ICC case of Joray
Trucking, 99 M.C.C. 109 (1969). Joray involved construction
debris that was taken to a landfill, a “wasteland”, a word used
several times in that opinion. The ICC concluded that this
unwanted demolition debris had negative value, and thus did
not have the attributes commonly associated with “property”.
99 M.C.C. at 110. _So in 1969 the country is landfilling
construction debris that has no value, and that construction
debris is not considered to be property.
Then, just two years later, the ICC stated its “concern
with . . . the deterioration of our natural surroundings caused
by . . . the misuse and depletion of our land and natural
resources.” Transportation of “Waste” Products for Reuse
and Recycling, 114 M.C.C. 92 (1971). In this proceeding, the
ICC said it “intend[ed] to give practical effect to this concern .
. and to take positive and concrete action to support and
encourage antipollution programs” such as recycling. Jd. at p.
i er ate aT ae A ERT eee
15
93. The ICC concluded that these recyclable commodities
were “property”, stating that the recyclable materials “will
become vital elements in the manufacturing process in which
they are to be utilized. . . .”. Jd. at 104-05. Thus, recyclable
materials qualify as property if they are of value in the
manufacturing stream. Otherwise, the entire rulemaking
exercise in Waste Products would have been a futility.
Congressional protection of recyclables. Congress
itself has specifically addressed the importance of the
transportation of recyclable materials. For example, former
49 U.S.C. § 10733 (App. 51a), enacted in 1980, provided an
exception from normal tariff filings and permitted carriers to
provide transportation of recyclable materials without charge
or at a reduced rate. It is obvious that Congress deemed it
ii.. oortant that the transportation of recyclable materials not be
impeded in any way.”
The vestiges of this Congressional protection of the
transportation of recyclable materials are still present in the
federal statutes at 49 U.S.C. § 13709(h)(1)(C). (App. 52a).
This statute, which addresses the procedure for resolving
certain tariff-related claims (which, again, is largely mooted
due to the passage of TIRRA), provides an exception from
liability for these claims for (1) small business concerns under
° The need for this statute became moot, and was thus repealed, when
Congress eliminated the tariff filing requirements for interstate motor
carriers through the passage of the Trucking Industry Regulatory
Reform Act of 1994. Pub. L. No. 103-311, 108 Stat. 1686, § 206(d).
16
the Small Business Act, (2) charitable and similar
organizations pursuant to [26 U.S.C.] Section 501(c)(3) of the
Internal Revenue Code, and (3) recyclable materials.
Recyclable materials are in nice, protected company.
Note also that Congress has traditionally allowed the
transportation of mixed loads. See 49 U.S.C. § 13507 (App.
51a), permitting the transportation of regulated and
unregulated property in the same vehicle.
Reasons for 49 U.S.C. § 14501(c)(1). The genesis of
49 U.S.C. § 14501(c)(1) was a food fight in which Federal
Express and the United Parcel Service were engaged. Federal
Express was organized as an air carrier, whereas UPS was
organized as a motor carrier. The battle, over what state law
or regulation applied to whom and how, ended up before the
Ninth Circuit. Federal Express Corporation v. California
Public Utilities Commission, 936 F.2d 1075 (9th Cir. 1991),
cert. den. 112 S. Ct. 2956 (1992).
Legislative history. Legislation was introduced via
an aviation bill, contained in Section 601 of the Federal
Aviation Administration Authorization Act of 1994
(“FAAAA”), Pub. L. No. 103-305, 108 Stat. 1569, to
eliminate the state economic regulation of all intrastate motor
carrier transportation (excluding household goods). As seen
in the conference report, Congress was aware of ICC
precedent and was assured that the traditional collection of
garbage would not be impacted by this legislation:
17
The conferees further clarify that the motor
carrier preemption provision does not preempt
State regulations of garbage and refuse
collectors. The managers have been informed
by the Department of Transportation that
under ICC case law, garbage and refuse are
not considered “property.” Thus garbage
collectors are not considered “motor carriers
of property” and are thus unaffected by this
provision.
House Rep. No. 103-240, 103rd Cong. 2d Sess., reprinted
in 1994 U.S.C.A.A.N. 1676, 1757 (1994).
Impact of legislation. The legislation passed both
houses of Congress and became law. The change in the motor
carrier industry was dramatic. Prior to the FAAAA, in most
states only a chosen group of carriers, much like the
franchises in this case, could transport a particular commodity
within a particular region. For example, a motor carrier
needed Oregon Public Utility Commission approval to
transport a load of steel from Portland, Oregon to Eugene,
Oregon, even though a carrier without OPUC authority could
transport that same commodity from Portland, Oregon to
Sacramento, California, waving its federal authority at the
OPUC’s office in Salem on its way down Interstate 5. Upon
the passage of the FAAAA, all state-issued motor carrier
certificates of authority, except for those pertaining to the
movement of household goods, which were valuable and
transferable prior to the passage of the FAAAA, became
worthless overnight.
18
Kelley v. U.S. This legislation got the states and their
friends all worked up and several of them marched off to
federal court to have this preposterous legislation, as they
viewed it, overturned. However, the 10th Circuit confirmed
its legitimacy, notwithstanding its unintuitive origins. Kelley
v. U.S, 69 F.3d 1503 (10th Cir. 1995). The states there
claimed that the FAAAA:
[p]reempts not only state economic regulation —_
of intrastate trucking, but also “state tort laws, _
state antitrust loss, state consumer protection _
loss, state laws regarding cargo loss and
damage claims, state laws governing the
transportation of solid and hazardous waste,
and state uniform commercial codes.
Id. at 1508. The Kelley court rejected these arguments, stating
that the means chosen by Congress were reasonably adapted
to the ends sought by Congress. It further downplayed these
doomsday claims of the states, stating:
Finally, although § 601 may have had some
unintended effects, such as freeing the reigns
on intrastate towing and wrecker services,
plaintiffs have not cited any cases holding that
unintended effects of legislation, by
themselves, serve to make the legislation
irrational for purposes of Commerce Clause
analysis.
Id. at 1509. Thus, intended or even if unintended, 49 U.S.C. §
14501(c)(1) preempts the transportation of recyclable
materials to recycling facilities.
19
Thus, everyone knew back in 1995 that Congress,
through an aviation bill, deprived the states of their ability to
economically regulate their intrastate transportation of
property by motor carrier. The states and their friends refuse
to acknowledge that reality.
District court decision. The district court concluded
that the local and state regulation of these MSW loads, when
transported to a MRF, were preempted by 49 U.S.C. §
14501(c)(1). (App. 36a-37a). In reaching this conclusion, the
district court reviewed legislative history, as well as the
historical treatment of this subject by the ICC. (App. 33a-
36a).
California court confusion. Later, however, the court
in Pleasant Hill Bayshore Disposal, Inc. v. Chip-It Recycling,
Inc., 110 Cal. Rptr. 2nd 708 (Cal. App. 1 Dist. 2001), which
did not cite Kelley, stated that it was inconceivable that
Congress intended to preempt state economic regulation of
intrastate motor carriage. /d. at p. 175. Lest there be any
doubt what the court was thinking, the court stated:
The clear impression is that this is, as its name
states, a congressional measure devoted to
aviation.
Id. at p. 714. The California court did not even know,
or at least certainly demonstrated no knowledge, that
Congress had, seven years earlier and apart from the disputed
recyclables issue, preempted the states’ ability to
20
economically regulate its own intrastate motor carrier
industry.
Even the federal government weighed in long after the
briefing was done and shortly prior to oral argument. The
government confirmed the constitutionality of 49 U.S.C.§
14501(c)(1), albeit also offering its gratuitous and erroneous
comments that 49 U.S.C § 14501(c)(1) did not apply to the
transportation in issue.
Fortuituous adverse decision? Perhaps this decision
from this state appellate court is fortuitous, as it crystallizes
the misunderstanding of the fact that Congress deregulated
intrastate surface transportation via an aviation appropriation
bill. Legislation meanders through Congress on a line that is
frequently more east-west than north-south. There are
stranger stories about riders of various varieties being
attached to various pieces of legislation. The procedure need
not be intuitive, as long as the product is rational.
Ninth Circuit decision. The Ninth Circuit, which also
did not cite Kelley (cited in AGG’s appellate brief), refused to
even consider or discuss, the ICC cases (App. 14a),
notwithstanding the well-known maxim that an agency’s
determination or treatment of a regulation is entitled to
considerable weight. Chevron U.S.A. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984). Instead, it found
false solace in relying upon the uninformed holding in
Pleasant Hill. (App. 16a).
21
Post-legislation activity: Towing industry. To be
sure, the passage of the FAAAA caught some off guard. The
people in the towing industry, itself also traditionally
regulated by state and local authorities, suddenly found
themselves without the ability to regulate in this area. They
went back to Congress and got themselves an exception from
the exemption, through the addition of subsection (2) (C) to
49 U.S.C. § 14501(c). (App. 53a). This subsequent
legislation is the subject of a proceeding now before this
court. Our Garage and Wrecker Service et. al. v. City of
Columbus, et. al., 257 F. 3d 506 (6" Cir. 2001), cert. granted,
City of Columbus, et. al. v. Ours Garage & Wrecker Service,
Inc., et. al., 122 S.Ct. 802 (2002).
Failed technical corrections bills. There was further
post-legislation concern as well about the impact of 49 U.S.C.
§ 14501(c)(1). One month after Congress passed the FAAAA,
technical corrections bills were submitted in both the House
of Representatives and Senate. 140 Cong. Rec. E1830-03,
1994 WL 498156-7; 140 Cong. Rec. $13283-02 (Sept. 12,
1994). Reference was made to an opinion of the ICC general
counsel that the “movement of metal scrap from or to a
foundry” would constitute the transportation of property
within the preemptive sweep of Section 601(c). 140 Cong.
Rec. E2204-03 (October 7, 1994). This is hardly surprising.
There is a common sense distinction between recyclables
22
transported in a commercial context, as opposed to the
curbside or residential collection of recyclable materials.
These technical corrections bill died. Since 49 U.S. C.
§ 14501 (c) (1) has not been “technically corrected” it still, at
a minimum, technically preempts the transportation of
recyclable materials to a recycling facility.
End result. The bottom line is that Congress knew
what it was doing when it passed the FAAAA. Consistent
with congressional policy and ICC precedent, Congress
intended that the transportation of recyclable materials from
construction sites, manufacturers and commercial
establishments would be treated differently than curbside,
residential collection which homeowners see on a weekly or
periodic basis in their neighborhoods. Congress intended to
allow the unshackled transportation of recyclable materials to
recycling facilities, an activity that does not interfere with the
states’ police power over the transportation of garbage and
refuse.
In order to get relief from the FAAAA, the states need to
do what the towing industry did, dust off the technical
corrections bills and get their exemption from preemption.
The fix they need to seek is legislative, not judicial.
Ill. High Level of Interest
Extensive amici interest. As evidenced by the
intervention at the district court level, and the numerous briefs
filed with the Ninth Circuit (App. 54a-56a), there has been
23 }
tremendous interest in this proceeding, an interest level which |
exceeds the interest level in many of the cases accepted for
review. There are no known other pending cases, at either
the district court or circuit court level, which address this
issue.
Improper objectives. The intervenor haulers
confirmed that although there is recycling in every bit of
garbage, they nevertheless take their mixed garbage loads to
the landfill (SER 41, 43). A MRF, on the other hand, with its
lower labor costs and higher expertise in sorting recyclable
materials, can handle this job much more efficiently (SER 30-
31). The states only want the ability to regulate, and the
industry only wants the ability to improve its bottom line.
Naked support. If you strip away the states’ turf
protection, as well as the self-interest of the landfill industry,
there is no support for the states’ and intervenors’ position.
There are no public interest groups clamoring to be protected
against the recycling of recycling materials by manufacturers
and commercial and business concerns. On the other hand,
there is strong support from entities like the American Forest
and Paper Association, Association of California Recycling
Industries, Californians against Waste, California Research
Recovery Association, Grass Roots Recycling Network,
Independent Recyclers Counsel, and the Northern California
Recycling Association (App. 54a), all of whom desire that
these recyclable materials be recycled instead of landfilled.
24
This court has recently granted review in a case
involving public interests where there was a decision from
only one circuit. Whitman v. American Trucking
Associations, Inc., 121 S. Ct. 903, 531 U.S. 457 (2201).
CONCLUSION
This petition is not about AGG, which is only a bug
on the windshield of the solid waste industry. Instead, it is
about implementing legislation passed by Congress eight
years ago, which, together with the ICC, has a long history
of protecting and nurturing the recycling industry. The
states have resisted the need to come to grips with this
legislation as well as with the evolution of the recycling
industry.
This case has been briefed more fully, with extensive
intervention and amici involvement, than many of the cases
accepted for review by this court. This court is urged to
accept this petition. |
One person’s trash is another person’s treasure.
Respectfully submitted,
aa oceiaicilea € Dwele
Lawrence R. Davidson
Counsel of Record and for Petitioner
1850 Benjamin Franklin Plaza
One SW Columbia Street
Portland, OR 97258
(503) 229-0199
-la-
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
AGG ENTERPRISES, Oregon
corporation,
Plaintiff-Appellee,
UNITED STATED OF AMERICA,
Intervenor,
V.
WASHINGTON COUNTY, CITY OF
BEAVERTON,
Defendants, No. 00-35449
D.C. No.
PRIDE DISPOSAL CO.; SWATCO CV-99-01097-GMK
SANITARY SERVICE INC.; UNITED
DISPOSAL SERVICE INC., HILLSBORO
GARBAGE DISPOSAL INC.;
WASHINGTON COUNTY DROP BOX
SERVICE INC.; WEST BEAVERTON
SANITARY SERVICE INC.,
Intervenors,
and
OREGON REFUSE & RECYCLING
ASSOCIATION,
Defendant-intervenor-Appellant.
- 24 -
AGG ENTERPRISES, Oregon
corporation,
Plaintiff-Appellee,
Vv.
WASHINGTON COUNTY, CITY OF
BEAVERTON,
Defendants,
PRIDE DISPOSAL Co.; SWATCO
SANITARY SERVICE INC.; UNITED
DISPOSAL SERVICE INC., HILLSBORO
GARBAGE DISPOSAL INC.;
WASHINGTON COUNTY DROP BOX
SERVICE INC.; WEST BEAVERTON
SANITARY SERVICE INC., ALOHA
GARBAGE & RECYCLING INC., DON’S
GARBABE SERVICE; GARBARINO
DISPOSAL & RECYCLING SERVICE
INC.
Intervenors-Appellants,
OREGON REFUSE & RECYCLING
ASSOCIATION,
Defendant-intervenor.
No. 00-35509
D.C. No.
CV-99-01097-GMK
|
-3a-
AGG ENTERPRISES, Oregon
corporation,
Plaintiff-Appellee,
UNITED STATED OF AMERICA,
intervenor,
Intervenor,
V.
WASHINGTON COUNTY,
Defendants-Appellant,
and
CITY OF BEAVERTON,
Defendant, No. 00-35510
D.C. No.
PRIDE DISPOSAL CO.; SWATCO CV-99-01097-GMK
SANITARY SERVICE INC.; UNITED
DISPOSAL SERVICE INC., HILLSBORO
GARBAGE DISPOSAL INC.;
WASHINGTON COUNTY DROP BOx
SERVICE INC.; WEST BEAVERTON
SANITARY SERVICE INC., ALOHA
GARBAGE & RECYCLING INC., DON’S
GARBABE SERVICE; GARBARINO
DISPOSAL & RECYCLING SERVICE
INC.
Intervenors,
and
OREGON REFUSE & RECYCLING
ASSOCIATION,
Defendant-intervenor
AGG ENTERPRISES, Oregon
corporation,
Plaintiff-Appellee,
Vv.
WASHINGTON COUNTY,
Defendant,
OREGON REFUSE & RECYCLING
ASSOCIATION,
Defendant-Intervenor. No. 00-35511
D.C. No.
PRIDE DISPOSAL CO.; SWATCO CV-99-01097-GMK
SANITARY SERVICE INC.; UNITED
DISPOSAL SERVICE INC., HILLSBORO OPINION
GARBAGE DISPOSAL INC.;
WASHINGTON COUNTY DROP BOX
SERVICE INC.; WEST BEAVERTON
SANITARY SERVICE INC., ALOHA
GARBAGE & RECYCLING INC., DON’S
GARBABE SERVICE; GARBARINO
DISPOSAL & RECYCLING SERVICE
INC.
Intervenors,
and
CITY OF BEAVERTON,
Defendant-Appellant.
Appeal from the United States District Court
For the District of Oregon
Garr M. King, District Judge, Presiding
Argued and Submitted
November 5, 2001—Portland, Oregon
Filed March 12, 2002
~- 5a -
Before: Procter Hug, Jr., Thomas G. Nelson, and
Ronald M. Gould, Circuit Judges.
Opinion by Judge Gould
COUNSEL
Dan R. Olsen, Washington County Counsel, Hillsboro,
Oregon, and Williams J. Scheiderich, City Attorney’s Office,
Beaverton, Oregon, for the defendant-appellants.
Barnes H. Ellis, James N. Westwood, Stephen A. Redshaw,
Stoel Rives LLP, Portland, Oregon, G. Frank Hammond,
Cable Huston Benedict Haagensen & Lloyd LLP, Portland,
Oregon, Edward J. Sullivan, James R. Herald, Preston Gates
& Ellis, LLP, Portland, Oregon for the intervenors-appellants
and defendant-intervenor-appellant.
Lawrence R. Davidson, Portland, Oregon, Jeffrey M.
Batchelor and Paul Bierly, Markowitz, Herbold, Glade &
Mehlhaf, P.C., Portland, Oregon, for the plaintiff-appellee.
Mark B. Stern, Dana J. Martin, Department of Justice Civil
Division, Washington, D.C., for intervenor.
Jay W. Beattie, Lindsay, Hart, Neil & Weigler, LLP, Portland,
Oregon, John Douglas Moore, Henn, Etzel and Moore, Inc.,
- 6a -
Oakland, California, Robert B. Rocklin, Assistant Attorney
General, Salem, Oregon, Scott M. DuBoff, Wright &
Talisman, P.C., Washington, D.C., Richard E. Norris, Mark S.
Coon, and John L. Kortum, Archer Norris, Richmond,
California, Vicki W.W. Lai, Yarmuth Wilsdon Calfo PLLC,
Seattle, Washington, John Kelly Astor, Astor & Phillips, Los
Angeles, California, John J. Welsh, Burke, Williams &
Sorensen, LLP, Los Angeles, California, James K. Sells,
Silverdale, Washington, Todd E. Thompson, Howard, Rice,
Nemerovski, Canady, Falk & Rabkin, San _ Francisco,
California, for amici curiae.
OPINION
GOULD, Circuit Judge:
OVERVIEW
Defendants-Appellants City of Beaverton and
Washington County, Oregon appeal the district court’s entry
of a permanent injunction preventing them from enforcing
their trash-hauling regulations against plaintiff-appellee AGG
Enterprises (“AGG”). AGG collects and disposes of loads of
construction materials -- mixed solid waste containing part
recyclables and part non-recyclables — from its nonresidential
customers. Defendants consider mixed solid waste the same
as regular garbage or refuse, and they want AGG to be subject
to their trash-hauling regulations.
-Ja-
AGG sued defendants for injunctive relief from those
regulations in the district court, claiming that local trash-
hauling regulations were preempted by a provision in the
Federal Aviation Administration Authorizing Act of 1994
(“FAAAA”), 49 U.S.C. § 14501(c), that preempted state
regulation of motor carriers transporting property. The
district court granted a permanent injunction.
Defendants claim that the district court erred because
Congress did not intend for mixed solid waste to be
considered “property,” and therefore the local regulations are
not preempted. We agree, reverse the district court, and
vacate the permanent injunction.
FACTUAL BACKGROUND
Plaintiff-appellee AGG Enterprises, Inc. (“AGG”) is a
waste removal service with operations in Oregon, Idaho, and
Washington. AGG contracts with customers at commercial,
industrial, and construction sites to collect materials such as
brick, glass, tile, concrete, wood, cardboard, plastic, and
metal. AGG’s intra-Oregon services are at issue.
AGG handles two types of trash loads: recyclable
presorted by customers (“source sorted”), and unsorted loads
of non-recyclable, dry garbage mixed with recyclables
(“mixed solid waste” or “MSW”). Only the MSW loads are
at issue.
After AGG picks up the MSW loads from its
customers, it delivers the loads to East County Recycling
ie.
(“ECR”), a material recovery facility. ECR separates
recyclables, recycles them, and hauls non-recyclables to a
landfill. Neither AGG nor any AGG customer receives a
rebate for the recyclable portion of a mixed solid waste load.
According to AGG, customers with high labor costs find it
cost-effective to have AGG pick up their mixed solid waste
loads rather than to sort the recyclables themselves. AGG
claims that the government-licensed trash haulers available to
these customers will not take MSW to a recycling center such
as ECR. AGG suggests that these customers rely on AGG to
meet recycling commitments.
AGG does not know exactly how much of a
customer’s load is recyclable. AGG brings almost all its loads
to ECR. ECR collects 60,000 tons of MSW per year, and
claims that it recycles 50% to 60% of that. The owner of
ECR stated that “he played with the numbers” one time to try
to take into account the concrete and asphalt recycling from
the MSW, and that brought the recycling rate up to 80% to
90%. Under the most extreme view, on average at least 10%
to 20% of each load is garbage that is not recyclable.
Defendants-appellants Washington County and City
of Beaverton (“Beaverton”) regulate trash collection through
the use of exclusive franchises. Both issue licenses or
certificates granting exclusive authority to collect waste in
one of 35 geographical areas. Under both systems, the
exclusive franchisee provides residential and commercial
+ Oa.
collection. Neither defendant regulates source sorted
recyclables. Businesses and persons may haul waste they
generate, without a license or certificate.
AGG does not hold an exclusive license. As a result,
Beaverton cited AGG for unauthorized collection of solid
waste, a violation with a maximum fine of $250. AGG then
applied for a license from the City of Beaverton. After
Beaverton informed AGG it would not take further action on
AGG’s licensing application, AGG brought suit for injunctive
relief in the district court.’
The district court found that plaintiff was a “motor
carrier” transporting “property” and that the Federal Aviation
Administration Authorizing Act of 1994 (“FAAAA”)
preempted the defendants’ exclusive licensing schemes. The
district court granted plaintiff the permanent injunction, and
defendants and intervenors appealed.”
DISCUSSION
I. Standard of Review
' Several hauling companies with exclusive licenses from
Beaverton and Washington County intervened on the side of
the defendants.
* The United States of America intervened as a right on appeal
to defend the FAAAA against a claim by defendants that the
FAAAA, if preemptive of trash-hauling regulation, violates
the Commerce Clause. We do not reach that issue in view of
our conclusion below that the FAAAA did not preempt the
power of local jurisdictions to regulate garbage collection.
- 10a-
We review de novo the district court’s decision
regarding preemption. See Nathan Kimmel, Inc. v.
Dowelanco, 275 F.3d 1199, 1203 (9th Cir. 2002). We review
de novo the district court’s interpretation and construction of
the FAAAA. See Rowe v. Laidlaw Transit, Inc., 244 F.3d
1115, 1117 (9th Cir. 2001).
II. Language of the Statute
[1] Under the Supremacy Clause of the Constitution,
federal law is the “supreme Law of the Land.” U.S. Const.
art. VI. Federal law overrides any conflicting state or local
law. See Pacific Gas and Electric Co. v. State Energy
Resources Conservation & Development Commission, 461
U.S. 190, 204 (1983). Federal preemption “may -be either
express or implied, and ‘is compelled whether Congress’
command is explicitly stated in the statute’s language or
implicitly contained in its structure and purpose.’ ” Branco v.
UFCW-Northern California Employers Joint Pension Plan,
No. 00-15884, 2002 WL 200910, at *2 (9th Cir. Feb. 11,
2002) (quoting Jones v. Rath Packing Co., 430 U.S. 519, 525
(1977). We must decide whether the FAAAA preempts local
entities from regulating the collection of MSW loads-
[2] Preemption analysis begins with the “presumption
that Congress does not intend to supplant state law.” New
York State Conference of Blue Cross & Blue Shield Plans v.
Travelers Ins. Co., 514 U.S. 645, 654 (1995). Also, “in cases
. . . where federal law is said to bar state action in fields of
- lla-
traditional state regulation, we have worked on _ the
assumption that the historic police powers of the States were
- not to be superseded by the Federal Act unless that was the
clear and manifest purpose of Congress.” Jd. at 655 (internal
citations omitted). Although Congress clearly intended the
FAAAA to preempt some state regulations, we consider this
“presumption against the preemption of state police power
regulations” when we analyze the scope of the preemption.
Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1966).
[3] Congress has recognized that waste hauling is a
traditional state and local function subject to state regulation.
See 42 U.S.C. § 6901(a)(4) (stating that “the collection and
disposal of solid waste should continue to be primarily the
function of State, Regional and local agencies”). Our
precedent has recognized the strong local governmental
interest in regulating garbage collection. Kleenwell
Biohazard Waste and General Ecology Consultants, Inc. v.
Nelson, 48 F.3d 391, 398 (9th Cir. 1995). One could hardly
imagine an area of regulation that has been considered to be
more intrinsically local in nature than collection of garbage
and refuse, upon which may rest the health, safety, and
aesthetic well-being of the community. See generally
California Reduction Co .v. Sanitary Reduction Works of San
Francisco, 199 U.S. 306, 318 (1905); Kleenwell, 48 F.3d at
398. The historic responsibility of local governments to
ensure safe and comprehensive garbage collection posts a
- 12a -
strong caution against the possibility that Congress lightly
would preempt local regulation in this field.
[4] Our inquiry under Blue Cross, and in light of this
cautionary history, is whether it was the “clear and manifest”
intention of Congress to preempt local regulation of the
collection of loads containing part recyclable materials and
part non-recyclables. 514 U.S. at 655.
We previously have held that the FAAAA’s
preemption of regulation of the collection of mixed solid
waste is not “readily apparent.” See Woodfeathers, Inc. v.
Washington County, Oregon, 180 F.3d 1017, 1022 (9th Cir.
1999). Woodfeathers was a case about Younger abstention,
and when we held that preemption was not “readily apparent,”
we were deciding only that FAAAA preemption of MSW
regulation was an unsettled issue. See id. at 1021-22. We
pick up now where we left off in Woodfeathers to decide the
issue we there stated was undecided.
[5] To determine Congress’ intent on preemption, we
begin with the “text of the provision in question, and move
on, as need be, to the structure and purpose of the Act in
which it occurs.” Blue Cross, 514 U.S. at 655. Section
601(c) of the FAAAA provides: |
(c) Motor carriers of property. —
(1) General Rule. — Except as provided in
paragraphs (2) and (3), a State, political
subdivision of a State, or political authority of
2 or more States may not enact or enforce a
- 13a-
law, regulation, or other provision having the
force and effect of law related to a price,
route, or service of any motor carrier . . . or
any motor private carrier, broker, or freight
forwarder with respect to the transportation of _
property.
49 U.S.C. § 14501(c). “Property” is the operative word for
our analysis, but Congress did not define the term. Nor is the
meaning of “property” perfectly clear from the context of the
statute. So, to interpret this statute in accord with Congress’
intent, it is appropriate that we look beyond the text of the
statute to determine Congress’ purpose in enacting this
statute.
Ill. Legislative History
[6] Legislative history shows that the major purpose
of the FAAAA preemption clause was to “level the playing
field between air carriers on the one hand and motor carriers
on the other with respect to intrastate economic trucking
regulation... .” H.R. Conf. Rep. No. 103-677, at 82 (1994),
reprinted in 1994 U.S.C.C.A.N. 1715, 1754. Congress was
concerned that package delivery companies organized as
“motor carriers,” such as UPS, were subject to state
regulation, whereas companies organized as “air carriers,”
such as Federal Express, were free from state regulation. See
id. Although this shows Congress had an intent different than
preempting state regulation of solid waste collection, it does
not settle the issue, because Congress may have had more
than one purpose.
- 14a-
[7] Other legislative history gives insight into the
intent of Congress on the scope of preemption and regulation
of solid waste collection:
The conferees further clarify that the motor
carrier preemption provision does not preempt
State regulation of garbage and _ refuse
collectors. The managers have been informed
by the Department of Transportation that
under ICC case law, garbage and refuse are
not considered ‘property.’ Thus garbage
collectors are not considered ‘motor carriers of
property’ and are thus unaffected by this
provision.
H.R. Conf. Rep. No. 103-677, at 85 (1994), reprinted in 1994
U.S.C.C.A.N. 1715, 1757. We said in dicta in Woodfeathers
that the force of this piece of legislative history was debatable
because the Interstate Commerce Commission (“ICC”) case
law, which Congress was told did not consider garbage and
refuse “property,” is equivocal as to whether it could be
“property” or not. 180 F.3d at 1022. However, it is irrelevant
in our present analysis whether or not ICC case law is
equivocal. We are not concerned with what ICC case law
says, but with what Congress intended in its statute and at
most with what Congress thought ICC case law said. That is
what shows us whether Congress had a “clear and manifest”
intent to preempt state regulation of the collection of MSW
loads. This legislative history is important, because it shows
that if Congress exhibited any clear intent, it was an intent not
to preempt state and local regulation of solid waste collectors.
- l5a-
Even if Congress was misinformed as to what ICC case law
held, it believed that the statute it was passing would not
affect local regulation of garbage and refuse collection.
AGG offers no other contrary legislative history to
show an intent by Congress to preempt local waste collection
laws.’ Instead, AGG claims that the legislative history does
not hurt its case. AGG argues that ICC case law considers
MSW loads “property,” and that therefore MSW is not
“garbage and refuse,” and is unaffected by the legislative
history.
[8] We decline AGG’s invitation delicately to parse
the holdings of several ICC cases in combination. As stated
above, we need not scrutinize ICC case law. About 40% to
50% of the MSW loads taken by AGG is non-recyclable
garbage and must be taken to a landfill. Even under the
highest proposed recycle rate, when the recycling center
“played with the numbers,” an average of 10% to 20% of the
> AGG presents a few comments from members of Congress
on a failed technical corrections bill. See, e.g.,140 Cong. Rec.
E1830-02 (daily ed. Sept. 12, 1994) (statement of Rep.
Cantwell). The comments declare that curbside recycling
should be considered the same as garbage and refuse, in that
the FAAAA should have no preemptive effect on such
regulation. AGG tries to parlay these comments to show that
while curbside recycling was meant to be the same as garbage
and refuse, MSW should be considered “property.” We do
not subscribe to AGG’s interpretation for whatever weight
these post-enactment comments might be worth.
tte eer ne
- 16a -
MSW load was non-recyclable. So it is undebatable that at
least ten to twenty percent of everything AGG collects,
thousands of tons, is “garbage and refuse.” This is a lot of
garbage, and we cannot accept the argument that Congress
precluded local government entities from regulating its
collection. Absent a “clear and manifest” purpose, if not an
explicit instruction, from Congress, we decline to divest state
and local governments of this area of regulation, crucial to
health and safety. To the contrary, “Congress’ intent not to
preempt the area of solid waste collection is unambiguous.
Our decision is consistent with a persuasive decision
of the California Court of Appeal that parallels this case. See
Pleasant Hill Bayshore Disposal, Inc. v. Chip-It Recycling,
Inc., 110 Cal. Rptr. 2d 708, 714 (Cal. Ct. App. 2001). That
court ruled that the FAAAA does not preempt local regulation
of the collection of MSW loads. We agree with the court that
“[i]t verges on the inconceivable that Congress had such an
intent. There is nothing in the language or legislative history
of [§ 601(c) of the FAAAA] giving the least credence to [the
MSW hauler’s] claim that Congress intended to make itself
the sole authority in a field where local authority has been
traditionally accepted as preeminent.” /d. at 717.
[9] We conclude that Congress did not show a “clear
and manifest” intent to end state and local regulation of
‘garbage and refuse collection merely because the load
includes some recyclable material. That the load includes a
- 17a-
significant amount of garbage is sufficient to permit local
regulation.’
CONCLUSION
[10] We hold that the FAAAA does not preempt
local regulation of the collection of mixed solid waste. We
reverse the district court’s decision, vacate the permanent
injunction, and remand for further proceedings consistent with
this opinion.
REVERSED, VACATED, and REMANDED.
* We express no opinion whether Congress intended to
preempt regulation of source separated recyclables.
- 18a-
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
A.G.G. ENTERPRISES, INC., an
Oregon Corporation,
Plaintiff, Civil No. 99-1097-KI
v.
OPINION
WASHINGTON COUNTY,
OREGON and CITY OF
BEAVERTON, OREGON,
Defendants
Russell M. Allen
William G. Sheridan, Jr.
Allen, Sheridan & Kreitzberg, LLP
1099 S.W. Columbia, Suite 425
Portland, Oregon 97201
Lawrence R. Davidson
1850 Benjamin Franklin Plaza
One S.W. Columbia Street
Portland, Oregon 97258
Attorneys for Plaintiff A.G.G. Enterprises, Inc.
John M. Junkin
Renee E. Roghauge
Jason H. Eaton
Bullivant Houser Bailey, P.C.
300 Pioneer Tower
888 S.W. Fifth Avenue
Portland, Oregon 97204-2089
Attorney for Defendants
- and -
- 19a -
Barnes H. Ellis
Stephen A. Redshaw
Stoel Rives, LLP
900 S.W. Fifth Avenue, Suite 2600
Portland, Oregon 97204-1268
Attorney for Intervenor Oregon Refuse and
Recycling Association
KING, Judge:
Plaintiff A.G.G. Enterprises, Inc (“AGG”) brought
this action against defendants Washington County, Oregon
(the “County”), and the City of Beaverton, Oregon (the
“City”), seeking to have chapter 8.04 of the Washington
County Code on Solid Waste Control’ and Chapter 4.08 of the
City of Beaverton Code on Solid Waste Control declared
unenforceable for three reasons: (1) preemption by the
Federal Aviation Administration Authorization Act of 1994
(“FAAAA”); (2) violation of the Commerce Clause; and (3)
violation of the Equal Protection Clause. I conclude that the
ordinances as enforced against AGG are preempted by the
FAAAA.
A similar case, Woodfeathers, Inc. v. Washington
County, Oregon, CV96-257-HA, was heard by the Honorable
' This ordinance was amended in December 1999, after AGG
filed this action. AGG seeks only declaratory and injunctive
relief. The parties agree that the court’s analysis:should be
focused on the new version of the ordinance.
- 20a -
Ancer Haggerty. Judge Haggerty issued an injunction after
holding that the County ordinance was preempted by the
FAAAA and violated the dormant Commerce Clause. The
Ninth Circuit reversed and ordered the case dismissed without
prejudice, holding that the court should have abstained
because of an action pending in state court. Woodfeathers
180 F.3d 1017 (9th Cir. 1999). AGG operated in the County
while the injunction was in place but ceased operations there
after the Ninth Circuit decision. It filed this action a few
months later.
A two-day court trial was held. Having considered
the arguments of counsel, testimony of witnesses, and other
evidence introduced by the parties, | make the following
findings of fact and conclusions of law.
FACTS
AGG is in the business of hauling mixed solid waste
(“MSW”) and source-separated recyclable materials, typically
contracting with businesses and construction companies to
provide drop boxes at their sites. AGG does not provide
services to residential customers, except in very limited cases
which are not an issue in this action. It has the authority to
transport property in interstate commerce under a Federal
Highway Administration permit and an Oregon Department of
Transportation motor carrier permit. AGG is headquartered in
Multnomah County, which only regulates this type of
business to the extent that a license is required of the hauler
-2la-
but the number of haulers is not limited and they are not
confined to particular geographic areas. AGG wishes to
expand operations to unincorporated Washington County and
the City of Beaverton’, which enacted the ordinances at issue. |
AGG brings its MSW loads to a material recovery
facility (“MRF”) and drops the load on the ground in a sorting
area. MRF employees then sort, separate, and remove the
recyclable material, primarily wood, plastic, metal, drywall,
cardboard, glass, and concrete. The MRF then transports the
remaining material, namely the “garbage,” to local transfer
stations for eventual transport to landfills.
East County Recycling, Inc. (“ECR”), the MRF used
by AGG, recycles fifty to sixty percent of all loads delivered
to its facilities by AGG and others. ECR sells recycled wood
materials as hog fuel or mulching materials, recycled metals
for use in steel and other metal manufacturing, and cardboard
for use in manufacturing paper. Ceramics, concrete, asphalt,
and glass are ground into a base rock product sold for use on
highway construction projects. The MSW loads vary from
ten to ninety percent recyclable material. It is possible for a
MSW load to contain nothing recyclable but this is not a
common occurrence.
AGG charges its customers, also known as generators,
? Unless there is a reason to differentiate between the political
entities or their geographic areas, I will refer to them
collectively as Washington County.
- 22a -
a hauling fee and possibly a tipping fee. The tipping fee is the
amount charged to AGG by the facility where AGG leaves the
load and is passed on from AGG to its customer. Some
Washington County landfills charge $40 per ton tipping fee;
the Metro landfill charges $68 per ton; ECR charges $62.50
per ton. Some source-separated recyclable loads generate a
rebate from the recycler where AGG takes them. AGG passes
this rebate back to its customer. Metal, cardboard, and glass,
depending on the market conditions, can generate a large
enough rebate to more than cover the hauling fee, resulting in
net money paid to the generator for selling recyclables. ECR
keeps the money it makes from selling the recyclables it
reclaims from the MSW loads.
Some of AGG’s customers have _ contractual
provisions to recycle a certain amount of their waste
materials. Use of AGG, and its use of the MRF, is one way to
comply. Although the customers could separate the
recyclables at their own sites, it would require paying
employees to do so and dedicating space for multiple drop
boxes to contain the separated recyclables.
Some of AGG’s customers in Multnomah County
would also like to use its services in Washington County.
These customers prefer to use a single hauler to reduce the
interactions required to deal with numerous haulers in the
separate geographic areas in which they do business. The
customers testifying were also happy with AGG’s prices and
- 23a-
service level.
AGG also hauls source-separated recyclable materials
interstate between Oregon, Idaho, and Washington. Although
this is a regular part of AGG’s business, it is not the
company’s primary focus or primary source of revenue.
The ordinances make it unlawful for anyone to collect,
store, transport or dispose of any waste’ or solid waste in their
areas of jurisdiction without receiving a certificate, license, or
permit*, or to conduct the. activities in service areas not
covered by the certificate. WCC 8.04.120; BC 4.08.030. To
receive a County certificate under the new ordinance for an
area the applicant is not serving, the applicant must show that
the service area has not been allocated to another, or is not
being served by the certificate holder, or is not being
adequately served by the certificate holder and there is a
substantial demand from customers within the area for a
change of service. WCC 8.04.170. The City ordinance
allows nonexclusive licenses for each service area, BC
4.08.040, but the City has never awarded more than one
license for a geographic area. The franchisees are required to
> Waste is defined as “material that is no longer useable or
wanted by the source of the material, which material is to be
utilized or disposed by another.” “Utilized” includes
recycling. WCC 8.04.020(Q).
* The Washington County Code and Beaverton Code use
slightly different terminology although the idea is the same. I
will use the words “certificate” or “franchise” unless it is
necessary to distinguish.
- 24a -
service both residential and commercial customers in their
geographic areas. Civil penalties can be assessed for
violations.
The State of Oregon has a goal of recovering at least
fifty percent from the general solid waste stream by January 1,
2000. ORS 459A.010(1). The franchise process and the
ordinances are the City and County’s way of supporting that
goal by providing service at a reasonable cost to all residential
and commercial customers.
Neither the County nor the City has awarded a new
franchise since the ordinances were put in place, in 1969 in
the case of the County and over twenty years in the case of the
City. The ordinances contain no mechanism to periodically
award franchises anew after an open bidding process. A few
franchises have been transferred when a hauler was
purchased.
AGG does not hold any of the certificates required by
the ordinances. When it tried to expand its business from
Multnomah to Washington County, AGG received citations
from both the County and the City. After the Woodfeathers
| decision was reversed, the City informed AGG that it would
not take further action on AGG’s application for a license.
AGG has not applied for a certificate from the County.
Gail Woodworth has been openly engaged in
transporting construction debris in Washington County for
over twenty years. His company hauls both source-separated
- 25a -
recyclables and MSW loads. Woodworth has neither of
defendants’ solid waste certificates but has never been
challenged by the County or City about his right to transport
these loads. Woodworth was the president of the Oregon
Dump Truck Association in 1987-1988 and knows of none of
its several hundred members operating without certificates
who have been challenged by a government entity. Because
of staff limitations, the County’s enforcement mechanism is
driven by complaints. Very few complaints about
unauthorized drop boxes have ever been received by the
County. In particular, the County has never received a
complaint about a dump truck operator hauling MSW loads
without authorization.
Individual haulers are concerned that their established
relationships with customers, and their profitability, will be
jeopardized if AGG, and presumably others, do business in
the County and the City by “cream-skimming” the most
profitable jobs, those for commercial customers. The haulers
are required by their certificates to also service the less
profitable residential customers within their exclusive
territories. All rates are regulated so that services the County
and the City deem essential, such as less profitable residential
recycling, are provided to all customers while haulers
maintain a reasonable profit margin.
- 26a -
; DISCUSSION®
; I. —— Justiciability of the Case
A. Standing
:
i Defendants claim that the court should not hear this
1 case for several reasons: (1) AGG lacks standing; (2) AGG’s
claims are not ripe for review; and (3) the court should
abstain.
To meet the standing requirements of Article III, “a
plaintiff must allege personal injury fairly traceable to the
defendant’s allegedly unlawful conduct and likely to be
redressed by the requested relief. The injury must be distinct
and palpable [,] not merely speculative, and the harm must be
imminent and not hypothetical.” Houston v. Roe, 177 F.3d
901, 907 (9th Cir. 1999) (citation omitted), cert. denied, 120
S. Ct. 1168 (2000).
AGG has standing to raise its claims. It has been cited
under both ordinances at issue and is asking this court to
prohibit enforcement of the ordinances so that it may continue
expanding its business into Washington County. Thus, its
injury would be redressed by the requested relief. Although
AGG is not currently operating in the County or the City, and
consequently could not be cited for its activities today, the
harm is not hypothetical or speculative. Based on their past
3 * Defendants and the various intervenors split the briefing
: _task and join the arguments presented by the others. I will
refer to all as defendants unless it is necessary to distinguish.
:
-27a-
conduct, the City and the County intend to enforce the
ordinances. There is no requirement that AGG continue to
incur civil penalties while this case is adjudicated.
B. Ripeness
Defendants also contend that this case is not ‘ripe for
review because AGG has not applied for a certificate from the
County, failed to complete the application process with the
City, and failed to exhaust its administrative remedies.
Defendants also contend that withholding review will not
result in any direct and immediate hardship to AGG.
Ripeness is determined by a two-prong test: (1) the
fitness of the issue for judicial decision; and (2) the hardship
to the parties of withholding court consideration.
Municipality of Anchorage v. United States, 980 F.2d 1320,
1323 (9th Cir. 1992). Review is postponed if the “systemic
interest in postponing adjudication due to lack of fitness
outweighs the hardship on the parties created by
postponement.” Id.
I first note that if AGG is correct that the ordinances
are unconstitutional or are preempted by federal law, it should
not be required to apply for a certificate to challenge the
ordinances in this court. This is a different situation than if
the ordinances were valid but the governments were illegally
withholding certificates. For the same reason, a more
developed evidentiary record is not relevant to the questions
that this court will answer. The hardship on AGG of
- 28a -
withholding review is that its business activities, and
subsequent profits, are restricted. I disagree with defendants’
contention that postponing review will have no effect on
AGG’s day-to-day affairs. Applying defendants’ argument, I
do not see how this action would ever be considered ripe
because AGG would never suffer a hardship.
I also conclude, based on the application process with
the City, and both governments’ failures to ever award new
certificates except through ownership transfer, that it would
have been futile for AGG to pursue applications with either
ee ed a avin sary joe o
the City or the County. Moreover, even if AGG had been
awarded a geographic area in which to do business, it would
still have been prohibited from working in all parts of the City
and unincorporated Washington County, as it wishes to do.
Because there is a sufficient factual record for the issues
before the court, I conclude that the case is ripe for judicial
review.
o. Abstention
Finally, defendants contend that the court should
abstain under the Burford abstention doctrine from
adjudicating AGG’s claims because my ruling could impair
the operation of the City and County’s comprehensive
regulatory schemes.
The Supreme Court began explaining the Burford
abstention doctrine in Burford v. Sun Oil Co., 319 U.S. 315,
332 (1943), when discussing its reluctance to decide questions
- 29a -
turning on largely local issues.
Where timely and adequate state-court review
is available, a federal court sitting in equity
must decline to interfere with the proceedings
or orders of state administrative agencies: (1)
when there are difficult questions of state law
bearing on policy problems of substantial
public import whose importance transcends
the result in the case then at bar; or (2) where
the exercise of federal review of a question in
a case and in similar cases would be disruptive
of state efforts to establish a coherent policy
with respect to a matter of substantial public
concern.
New Orleans Public Service, Inc. v. Council of New Orleans,
491 U.S. 350, 361 (1989) (internal quotation omitted). The
Ninth Circuit has added additional requirements before
Burford abstention is justified:
1) the state must have concentrated suits
involving the local issue in a particular court;
2) the federal issues must not be easily
separable from complicated state law issues
with which the state courts may have special
competence; and 3) federal review might
disrupt state efforts to establish a coherent
policy.
Fireman’s Fund Insurance Co. v. Qua h, 87
F.3d 290, 296 (9th Cir. 1996).
I fully agree that the waste control systems in the
County and the City are issues of great local concern. AGG
claims, however, that the government entities are
overstepping their authority and violating federal law and the
- 30a -
federal Constitution. The issues before me do not turn on
state law. This is true even though, if AGG prevails, many
state and local government laws pertaining to solid waste may
have to change. “The state’s attempts to establish a coherent
policy are of little consequence, as it is the constitutionality of
the state’s efforts to do precisely this which is currently in
question.” Id. at 297. Although AGG could have its claims
heard in state court, federal court is also appropriate. I decline
to abstain.
Il. Preemption
Under Article VI of the Constitution, the laws of the
United States are the supreme law of the land and any
conflicting states law is without effect. Southern Pacific v.
Oregon PUC, 9 F.3d 807, 810 (9th Cir. 1993). Congress may
preempt state laws by explicitly defining the extent to which
preemption occurs. Id. When determining if a state statute is
preempted by federal law, the “sole task is to ascertain the
intent of Congress.” California Federal Sav. and Loan Ass’n
v. Guerra, 479 U.S. 272, 280 (1987).
Congress acted to deregulate the motor carrier
industry when it enacted the Federal Aviation Administration
Act of 1994 (“FAAAA”). The Act contains a preemption
provision:
(1) General rule. . . . [A] State, political
subdivision of a State, or political
authority of 2 or more States may not
-3la-
enact or enforce a law . . . related to a
price, route, or service of any motor
carrier . . . or any motor private carrier,
broker, or freight forwarder with respect to
the transportation of property.
49 U.S.C. § 14501(c). The difficulty lies in the fact that the
term “property” is not defined in the Interstate Commerce
Act.
A. Motor Carrier.
Defendants contend that AGG is neither a motor
carrier nor a motor private carrier and, thus, the FAAAA
cannot apply to it. Defendants contend that under the
“primary business test” distinguishing between the two, AGG
would be a motor private carrier. Since the trips at issue are
not interstate commerce, however, defendants contend that
AGG does not fulfill this prong of the motor private carrier
definition.
The Interstate Commerce Commission (“ICC”) does
not have jurisdiction over the transportation of property by
motor vehicle when the property is transported by a person
engaged in a business other than transportation and the
transportation is within the scope of and furthers a primary
business of the person other than transportation. Nuclear
Diagnostic Laboratories, Inc., 131 M.C.C. 578, 581 (1979);
American Trucking Assoc. v. 1.C.C., 672 F.2d 850, 851 (11th
Cir. 1982). Several factors are considered.
I conclude that under the primary business test, AGG
4
4
;
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i.
;
:
q
:
‘
:
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4
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a
eit
- 32a -
is a motor carrier and not a motor private carrier. The terms
written on the back of AGG’s standard contract state that
AGG acquires title to waste materials once they are loaded
onto its trucks. Another term, however, differentiates waste
materials from recyclables. It is undisputed that AGG passes
tipping fees through to the customer and returns to customers
rebates which are obtained from the source-separated loads.
Although there are no rebates from the MSW loads, I am
unwilling to compartmentalize AGG’s business to that extent.
AGG does not perform any service other than transportation.
It does not store the loads, does not consolidate partial loads
from different customers before transporting to the MRF or
another recycler, and does not perform any type of service on
the load except to transport it to a proper disposal facility.
This is different from the trucker in Nuclear Diagnostic which
sold containers and other materials to its customers,
conducted monitoring tests on the loads of radioactive waste,
sealed containers, stored loaded containers, and consolidated
containers before transporting to the final disposal sites. Id. at
583. AGG’s primary business is to transport the loads from
the customer site to a disposal facility, nothing more.
Motor carrier is defined as “a person providing motor
vehicle transportation for compensation.” 49 U.S.C. §
13102(12). AGG fits this description. Accordingly, the
FAAAA can apply to it.
- 33a-
B. Property
As mentioned above, the FAAAA preempts laws
relating to the transportation of property but does not define
property. Defendants contend that the MSW loads are not
property, and thus can be regulated locally, because these
loads have a negative value to the generator, AGG’s
customers, who must pay to have them hauled away.
The ICC analyzed the meaning of property in
conjunction with the Interstate Commerce Act in Joray
Trucking Corp., 99 M.C.C. 109 (1995). A trucker sought a
certificate to haul rock and debris generated from excavations
and building demolitions. The ICC concluded that the debris,
which would be disposed of as fill for wasteland, had a
negative value as a commodity because it was not purchased
from the contractors seeking its removal. Id. at 110.
A court may look to the legislative history for
evidence of congressional intent if the statute is ambiguous.
United States v. Daas, 198 F.3d 1167, 1174 (9th Cir. 1999).
Although the lack of statutory definition does not require a
finding of ambiguity, id., the parties have offered several
definitions of property. One ordinary meaning is: “the right to
possess, use, and dispose of something; ownership.”
Webster’s New World College Dictionary 1078 (3rd ed.
1996).
When enacting the FAAAA, Congress noted Joray’s
definition. The House Conference Report states:
Reset ast 9
egieh
- 34a -
The conferees further clarify that the motor
carrier preemption provision does not preempt
State regulation of garbage and refuse
collectors. The managers have been informed
by the Department of Transportation that
under ICC case law, garbage and refuse are
not considered “property”. Thus garbage
collectors are not considered “motor carriers
of property” and are thus unaffected by this
provision.
H.R. Conf. Rep. No. 103-677, at 208 (1994), reprinted in
1994 U.S.C.C.A.N. 1715.
After the FAAAA was enacted, a member of the
House of Representatives introduced into the record a letter
from the general counsel of the ICC commenting on whether
the act preempts state economic regulation of the curbside
collection of recyclables. The counsel stated that garbage and
refuse are not considered property under the relevant statutes,
and noted the distinction between the curbside collection of
recyclables and recyclables in commercial quantities,
referring to Transportation of Waste Products for Reuse, 114
M.C.C. 92 (1971). 140 Cong. Rec. E2204-03 (October 7,
1994) (extension of remarks by Hon. Norman Mineta).
In Waste Products, the ICC held that waste materials
purchased for use in recycling programs are property under
the Act. The ICC noted that its jurisdiction would cover both
the transportation from reclamation centers to recycling plants
and then from the recycling plants to the manufacturing
plants. In the ICC’s view, the recycling plants provide
- 35a -
processing, such as grinding or crushing, to ready the
commodity for the manufacturing process.
The explanation in Waste Products clearly applies to
AGG’s transportation of source-separated loads from the
generator to the recycling plants, such as Smurfit. The
transport of MSW loads also falls within the reasoning in
Waste Products. The separation of the recyclables at the MRF
is similar to the grinding of glass into cullet at a recycling
center. Both processes are necessary to prepare the
commodity for reentry into the manufacturing stream.
I conclude that the MSW loads have an economic
value even though they are being discarded by the generators.
ECR’s business is based on the economic value inherent in
the material. I see no reason to restrict the determination of
economic value to the generators’ view rather than to the
manufacturing stream as a whole. There was also testimony
that the paper mills could not run without the ability to
purchase recycled paper. Further, some of the generators
have contractual obligations to recycle some of their waste.
Although it would be difficult to quantify the economic value
flowing from compliance with this obligation, a value exists
as part of the reason that the contracts are awarded.
I also disagree with defendants’ position that the
determination of what constitutes property is made solely on
the basis of economic value. The ordinary meaning of
property includes the concept of ownership and its related
- 36a -
obligations, specifically here, to properly dispose of the
material rather than dumping it in a manner which might be
inexpensive and easy but illegal.
My choice of a broader definition of property is
supported by Nuclear Diagnostic Laboratories, Inc. 131
M.C.C. 578 (1979). The ICC reversed itself and ultimately
concluded that rz ‘‘oactive waste material destined for burial
was property under the act:
Our cismissal of the application in the
instant proceeding was based upon our
conclusion that radioactive waste materials
destined for burial do not constitute “property”
because they lack economic value. Upon
further reflection, we conclude that the
economic value of hazardous materials,
including radioactive waste destined for
burial, should not be the sole criterion for
determining whether these commodities are
“property” subject to the general jurisdiction
of the Commission. “Property” is not defined
in the Interstate Commerce Act and, as we
noted in our prior report, the word is subject to
many different meanings. “Property”
connotes ownership as well as_ value.
Something that is owned can be “property”
notwithstanding its lack of economic value.
Id. At 580.
In summary, I conclude that both the source-separated
- 37a-
loads® and the MSW loads, when collected from commercial
and industrial accounts, are “property” as the word is used in
the FAAAA. The local or state regulation of these loads is
thus preempted by the FAAAA, including the two ordinances
at issue.
III. Dormant Commerce Clause
AGG contends that the ordinances are
unconstitutional barriers to interstate commerce. It contends
that the ordinances are a direct burden on interstate commerce
because they do not permit AGG to transport loads from the
County and the City in interstate commerce. Alternatively,
AGG contends that the indirect burden on_ interstate
commerce is not balanced by the local benefits provided by
the ordinances.
Two types of state regulations might burden interstate
commerce: (1) those that directly burden interstate commerce
or that discriminate against out-of-state interests; and (2)
those that burden interstate transactions only incidentally.
Regulations in the first category are unconstitutional unless
the state can demonstrate that a legitimate local interest
unrelated to economic protection is served by the regulation
and no less discriminatory alternative exists. Regulations in
° | realize that defendants are currently not trying to regulate
the source-separated loads with a fair market value because of
an exemption under state law. ORS 459A.075. Because all
of the evidence was presented, however, I will decide. the
federal questions concerning these loads also.
- 38a -
the second category are analyzed under the Pike balancing
test, Pike v. Bruce Church, 397 U.S. 137 (1970). Kleenwell
Biohazard Waste v. Nelson, 48 F.3d 391, 395 (9th Cir.), cert.
denied, 515 U.S. 1143 (1995).
If the primary purpose of the regulation is to regulate
interstate commerce or if it favors in-state interests over out-
of-state interests, it is generally in the first category.
Regulations in the second category are those designed to
address a legitimate local concern and only incidentally affect
interstate commerce. The party challenging the validity of the
regulation has the burden of demonstrating that it has a
discriminatory purpose or effect. Id. at 398 and n.8.
In Kleenwell, the challenged regulation required all
solid waste collection companies within the state to obtain a
certificate of public convenience before collecting waste. The
plaintiff solid waste collector specialized in medical waste.
The court concluded the regulation at issue fell into the
second category because it addressed a legitimate local
concern, the safe disposal of solid waste, and it allowed both
in-state and out-of-state firms to obtain the certificate. Id. at
398. After applying the Pike test, the court upheld the
regulatory scheme.’ Id. at 399.
In another solid waste case, C & A Carbone, Inc. v.
Town _ of Clarkstown, New York, 511 U.S. 383 (1994), the
” The plaintiff only challenged the state’s ability to impose a
certification requirement and did not challenge the state’s refusal to
grant it a certificate.
- 39a -
Supreme Court determined that the challenged ordinance
directly regulated interstate commerce and applied the test
from the first group above. The ordinance was a flow control
ordinance which required all solid waste in the town, whether
generated there or brought there for processing, to be
processed at a designated transfer station before leaving the
town. The Court determined that the ordinance discriminates
against interstate commerce because it drove up costs for out-
of-state interests who disposed of their waste with haulers
located in the town and it deprived out-of-state businesses
access to a local market. “The essential vice in laws of this
sort is that they bar the import of the processing service. . .
[T]he offending laws hoard a local resource [here, solid
waste]. . . for the benefit of local business that treat it.” Id. at
392. The law was struck down.
The collection and disposal of solid waste is
considered primarily a function of state and _ local
governments. Kleenwell, 48 F.3d at 398. The Supreme Court
has rejected the contention that any regulation affecting
particular companies engaged in interstate commerce
necessarily represents a direct burden. Id. at 397, citing
Exxon Corp. v. Governor of Maryland, 437 U.S. 117 (1978).
The ordinances before me do not have a primary purpose of
- 40a -
regulating interstate commerce. Out-of-state interests are not
discriminated against. It is true that the haulers in place when
the ordinances were enacted were given an advantage in
retaining their territories. Those haulers, however, could have
been out-of-state firms. Although no one is getting a new
territory and territories have not been reassigned except
through sale of the original hauler, both in-state and out-of-
state haulers can compete for the purchase of an existing
franchise. Currently, Waste Management, a_ national
corporation, owns several of the certificates. Accordingly, I
conclude that the ordinances burden interstate commerce only
indirectly and the Pike test should be used to analyze their
constitutionality.
The Pike balancing test recognizes that
incidental burdens on interstate commerce
may be unavoidable when a State legislates to
safeguard the health and safety of its people.
Accordingly, under the Pike test, “[w]here the
statute regulates even-handedly to effectuate a
legitimate local public interest, and its effects
on interstate commerce are only incidental, it
will be upheld unless the burden imposed
upon such commerce is clearly excessive in
relation to the putative local benefits.”
Kleenwell, 48 F.3d at 399 (internal quotation and citation
omitted, emphasis in the original, quoting Pike, 397 U.S. at
142). The party challenging the regulation must establish that
the burden on interstate commerce clearly outweighs the local
benefits arising from the regulation. Id.
-4la-
The local interest being protected by the ordinances is
to provide safe, affordable and efficient waste disposal for all
residential and commercial customers within Beaverton and
unincorporated Washington County. This is a legitimate area
of local concern and implicates public health and safety
issues.
AGG relies on U&I Sanitation, 205 F.3d 1063, 2000
WL 199230 (8th Cir. 2000), which analyzed a flow control —
solid waste ordinance requiring all garbage collected within
the city limits, except garbage destined for out-of-state
disposal, to be processed at the city-owned transfer station
that provided no recycling. Under the Pike test, the court
concluded that the ordinance violated the Commerce Clause
because of its effect in removing recyclables from the
manufacturing stream. Although the effect of one city’s
ordinance might be minimal, the court considered the effect if
all cities enacted similar ordinances, consequently
substantially diminishing the market in recyclables. Id. at *4-
>.
The ordinances before me are not flow control
ordinances. The incidental burden that I find in them is that
new companies, such as AGG, have a difficult, if not
impossible, time entering the market in Beaverton or
unincorporated Washington County. Although franchises
have been purchased, this is not a common event. Moreover,
the ordinances limit the hauler to its franchised geographic
- 42a -
area rather than allowing county-wide operations. The new
companies, particularly AGG, might be more willing to take
the MSW loads to a MRF rather than to a landfill. This would
increase the available recyclables and have an incremental
effect on interstate commerce. There is nothing in the
ordinances, however, which prevents the franchisees from
utilizing a MRF. It appears not to be happening because of a
lack of MRFs in Washington County and no financial
incentives to drive the MSW loads the extra distance for
disposal at a MRF.
U&I_ Sanitation also considers less burdensome
alternatives in the balance. Id. at *4. Portland and
Multnomah County do not regulate commercial hauling by
dividing the area into exclusive franchises. Haulers must be
licensed but there was no evidence presented that licenses are
limited if the basic requirements are met. AGG contends that
this method should be used in defendants’ geographic areas.
Certainly this is a possible alternative. One of
_ defendants’ concerns, however, was to provide affordable
service to isolated rural customers. No evidence was
presented comparing the population densities of Washington
and Multnomah Counties. Portland is densely populated and
would not present that issue.
After balancing the local public interest and the
effects on interstate commerce, I conclude that the burden
imposed upon interstate commerce is not clearly excessive in
re
- 43a -
relation to the putative local benefits. Accordingly, I find that
the ordinances do not violate the Commerce Clause.
IV. Equal Protection Clause
Because I concluded above that the ordinances are
preempted by the FAAAA, I decline to address AGG’s final
constitutional argument concerning violation of the Equal
Protection Clause.
V. Injunctive Relief
Now that AGG has prevailed on the merits, I have the
discretion to grant a permanent injunction enjoining
defendants from enforcing the ordinances against AGG.
Permanent injunctive relief is only appropriate if plaintiffs
will suffer irreparable injury and monetary damages will not
adequately compensate them for their injuries. Walters v.
Reno, 145 F.3d 1032, 1048 (9th Cir. 1998), cert. denied, 526
U.S. 1003 (1999).
While the injunction was in place during the
Woodfeathers case, AGG expanded its business into the
County and City. It ceased operations there when that
injunction was dissolved. AGG’s customers want to hire it
for their work in those regulated areas. I believe that if AGG
attempted to work there without protection of an injunction,
haulers would continue to file complaints and AGG would
continue to be cited under the ordinances.
Thus, we have a company which has been in business
for many years, which has shown the ability to expand its
- 44a -
business into defendants’ geographic areas, and which has
current customers willing to hire it to work in those areas.
Prohibiting AGG from working in defendants’ geographic
areas without paying fines and associated legal fees, when
defendants are overstepping their authority, is an irreparable
injury. Moreover, there is no reasonable way to calculate the
monetary damages because the injury would continue
indefinitely into the future. An injunction is an appropriate
remedy.
CONCLUSION
Chapter 8.04 of the Washington County Code on
Solid Waste Controi and Chapter 4.08 of the City of
Beaverton Code on Solid Waste Control, when enforced to
prohibit AGG from transporting source-separated loads and
mixed solid waste loads, are preempted by the Federal
Aviation Administration Authorization Act of 1994, 49
U.S.C. § 14501(c), because they are related to service by a
motor carrier with respect to the transportation of property.
A permanent injunction will be put in place. AGG
should circulate a proposed injunction to defendants and
intervenors within a week from the date of this opinion. If the
parties can agree on language, a stipulated permanent
injunction should be submitted within three weeks. If the
parties cannot agree, each should submit a proposed
injunction and/or their objections to the other proposed
injunctions, within three weeks.
Fe ee nS ee ea Lee a ee
- 45a -
DATED this 6th day of April, 2000.
GARR M. KING
United States District Court Judge
- 46a -
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
A.G.G. ENTERPRISES, INC., an __)
Oregon Corporation, )
)
Plaintiff, ) Civil No. 99-1097-KI
V. )
) PERMANENT
WASHINGTON COUNTY, ) INJUNCTION
OREGON and CITY OF )
BEAVERTON, OREGON, )
)
Defendants. )
)
On April 6, 2000, this Court issued an Order and
Opinion in the above-captioned matter. Consistent with
this Court’s opinion, the Court orders as follows:
~~~ 1. On April 6, 2000, this Court filed an Opinion
which declared that Chapter 8.04 of the Washington
County code on Solid Waste Control and Chapter 4.08 of
the City of Beaverton Ordinance on Solid Waste Control,
when enforced to prohibit plaintiff A.G.G. Enterprises, Inc.
from transporting source-separated loads of recyclable
materials and mixed loads of solid waste and recyclable
materials, are preempted by the Federal Aviation
Administration Authorization Act of 1994, 49 U.S.C. §
14501(c), because they are regulating service performed by
- 47a -
a motor carrier with respect to the transportation of
property.
2. Consistent with that opinion, Washington
County, Oregon is permanently enjoined from enforcing its
Solid Waste Control Code to the extent of imposing
substantive standards affecting the price, route or service of
plaintiff A.G.G. Enterprises, Inc. in the transport of source-
separated loads of recyclable materials and mixed loads
containing solid waste and recyclable materials for single
generator non-residential accounts from, in and through
Washington County to manufacturers, recycling facilities
or material recovery facilities, but not to a transfer station
or landfill.
3. The City of Beaverton is permanently enjoined
from enforcing its Solid Waste Control Code to the extent
of imposing substantive standards affecting the price, route
or service of plaintiff A.G.G. Enterprises, Inc. in the
transport of source-separated loads of recyclable materials
and mixed loads containing solid waste and recyclable
materials for single generator non-residential accounts
from, in or through the City of Beaverton to manufacturers,
recycling facilities or material recovery facilities, but not to
a transfer station or landfill.
- 48a -
4. For purposes of this injunction, multi-family
accounts such as apartment complexes or condominiums
are considered to be residential accounts.
5. Pursuant to LR 54.1 and 54.4, plaintiff shall file
and serve on all parties its Bill of Costs, no later than 14
days after the entry of this Judgment.
IT IS SO ORDERED.
DATED this 9th day of May, 2000.
GARR M. KING
United States District Court Judge
- 49a -
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
A.G.G. ENTERPRISES, INC., an
Oregon Corporation,
Plaintiff, Civil No. 99-1097-KI
V.
)
)
)
)
)
) JUDGMENT
WASHINGTON COUNTY, )
CITY OF BEAVERTON, )
OREGON REFUSE & )
RECYCLING ASSOCIATION, __)
)
)
Defendants.
)
KING, Judge:
This action came on for trial before the Court,
Honorable Garr M. King, District Judge, presiding, and the
issues having been duly tried and a decision having been duly
rendered;
IT IS ORDERED AND ADJUDGED that Chapter
8.04 of the Washington County Code on Solid Waste Control
and Chapter 4.08 of the City of Beaverton Ordinance on Solid
Waste Control, when enforced to prohibit plaintiff A.G.G.
Enterprises, Inc., from transporting source-separated loads of
recyclable materials and mixed loads of solid waste and
recyclable materials, are preempted by the Federal Aviation
Administration Authorization Act of 1994, 49 U.S. C. §
14501(c), because they are regulating service performed by a
- 50a -
motor carrier with respect to the transportation of property,
and that plaintiff A.G.G. Enterprises, Inc., recover its costs of
action.
IT IS SO ORDERED.
DATED this 10th day of May, 2000.
GARR M. KING
United States District Court Judge
s
-5la-
49 U.S.C. § 10733. Rates for transportation of
recyclable materials (repealed)
(a) A motor carrier of property providing
transportation subject to the jurisdiction of the
Commission under subchapter II of chapter
105 of this title may provide transportation of
recyclable materials without charge or at a
reduced rate.
(b) In this section, “recyclable materials”
means waste products for recycling or reuse in
the furtherance of recognized pollution control
programs.
(Added Pub. L 96-296 § 32(a), July 1,
1980, 94 Stat. 824.)
49 U.S.C. § 13507. Mixed loads of regulated and
unregulated property
A motor carrier of property providing
transportation exempt from jurisdiction under
paragraph (6), (8), (11), (12), or (13) of
section 13506(a) may transport property under
such paragraph in the same vehicle and at the
same time as property which the carrier is
authorized to transport under a registration
issued under section 13902(a). Such
transportation shall not affect the unregulated
status of such exempt property or the
regulated status of the property which the
carrier is authorized to transport under such
registration.
- 52a -
49 U.S.C. § 13709. Procedures for resolving
claims involving unfiled, negotiated
transportation rates
(h) Claims’ involving small-business
concerns, charitable organizations, and
recyclable materials. —
(1) In general.—Notwithstanding
subsections (b), (c), and (d), a person from
whom the additional legally applicable and
effective tariff rate or charges are sought shall
not be liable for the difference between the
carrier’s applicable and effective tariff rate
and the rate originally billed and paid—
(A) if such a person qualifies as a small-
business concern under the Small Business
Act (15 U.S.C. 631 et seq.).
(B) if such a person is an organization
which is described in section 501(c)(3) of the
Internal Revenue Code of 1986 and exempt
from tax under section 501(a) of such Code, or
(C) if the cargo involved in the claim is
recyclable materials.
(2) Recyclable materials defined.—In this
subsection, the term “recyclable materials”
means waste products for recycling or reuse in
the furtherance of recognized pollution control
programs.
- 53a-
49 USC. § 14501. Federal authority over
intrastate transportation
(c) Motor carriers of property. —
(2) Matters not covered. Paragraph 1—
(C) does not apply to the authority of a
State or a political subdivision of a State to
enact or enforce a law, regulation, or other
provision relating to the price of for-hire
motor vehicle transportation by a tow truck, if
such transportation is performed without the
prior consent or authorization of the owner or
operator of the motor vehicle.
- 54a -
AMICI CURIAE BRIEFS
Filed on behalf of petitioner A.G.G. Enterprises, Inc.:
American Forest & Paper Association
Represented by:
Paul S. Cosgrove
Jay W. Beattie
Lindsay, Hart, Neil & Weigler, LLP
1300 S.W. 5th Avenue, Suite 3400
Portland, Oregon 97201-5696
Association of California Recycling Industries (ACRI),
Californians Against Waste (CAW), California Resource
Recovery Association (CRRA), Grass Roots Recycling
Network (GRRN), Independent Recyclers Council (ICR), and
the Northern California Recycling Association (NCRA)
Represented by:
John Douglas Moore
Henn, Etzel and Moore, Inc.
1970 Broadway, Suite 950
Oakland, California 94612
Filed on behalf of respondents/intervenors:
State of Oregon
Represented by:
Hardy Myers
Michael D. Reynolds
Robert B. Rocklin
Assistant Attorney General
400 Justice Building
Salem, Oregon 97301-4096
- 55a -
Washington Refuse & Recycling Association
Represented by:
James K. Sells
Ryan Sells Uptegraft, Inc. P.S
Washington Refuse & Recycling Association
9657 Levin Rd. N.W., Suite 240
Silverdale, Washington 98383
Snohomish County
Represented by:
Scott T. Wilsdon
Vicki W.W. Lai
Yarmuth Wilsdon Calfo PLLC
3080 Washington Mutual Tower
1201 Third Avenue
Seattle, Washington 98101-3000
California Refuse Removal Council
Represented by:
John Kelly Astor
George R. Phillips, Jr.
James R. Coelho
Astor & Phillips
800 Wilshire Boulevard, Suite 1500
Los Angeles, California 90017
Solano Garbage Company
Represented by:
Richard E. Norris
Mark S. Coon
John L. Kortum
Archer Norris
3260 Blume Drive, Suite 400
Richmond, California 94596
Waste Systems, Inc.
Represented by:
Todd E. Thompson
Howard, Rice, Nemerovski, Canady, Falk & Rabkin
Three Embarcadero Center, 7th Floor
San Francisco, California 94111-4065
City of Alameda, City of Alhambra, City of Camarillo, City
of Carlsbad, City of Dana Point, City of Glendale, City of
Hawthorne, City of Monterey, City of Newport Beach, City of
Redlands, City of San Buena Ventura, City and County of San
Francisco, City of San Jose, City of San Juan Capistrano, City
of San Luis Obispo, City of Santa Paula, City of Sunnyvale,
City of Tracy, City of Vacaville, California State Association
of Counties and Solid Waste Association of North America.
Represented by:
John J. Welsh
Rufus C. Young, Jr.
Burke, Williams & Sorensen, LLP
611 West Sixth Street, Suite 2500
Los Angeles, California 90017
Bristol Resource Recovery Facility Operating Committee,
Cape May County Municipal Utilities Authority, Marion
County, Oregon, Minnesota Resource Recovery Association,
Montgomery County, Ohio and the Montgomery County
Solid Waste District, Resource Authority in Sumner County,
Tennessee, Solid Waste Authority of Central Ohio, City and
County of Spokane, Washington and the Spokane Regional
Solid Waste System, City of Tacoma, Washington, York
County Solid Waste and Refuse Authority, and the
Association of Washington Cities, Inc.
Represented by:
Scott M. DuBoff
Michael J. Thompson
Wright & Talisman, P.C.
1200 G Street, N.W., Suite 600
Washington, D.C. 20005-3802
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.