Appendix — Essex County Utilities Authority v. Atlantic Coast Demolition & Recycling, Inc.
Supreme Court brief1997
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J
a,
OFFICE UF THE CLERK
In The
Supreme Court of the United States
October Term, 1996
*
ESSEX COUNTY UTILITIES AUTHORITY,
HUDSON COUNTY IMPROVEMENT AUTHORITY,
MERCER COUNTY IMPROVEMENT AUTHORITY,
PASSAIC COUNTY UTILITIES AUTHORITY, et al.,
Petitioners,
ATLANTIC COAST DEMOLITION
& RECYCLING, INC., et al.,
Respondents.
*
On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Third Circuit
>
APPENDIX TO PETITION FOR WRIT OF CERTIORARI
¢
Decotus, Fitzpatrick & GLUCK
Attorneys for Petitioners
Essex County Utilities Authority
Hudson County Improvement
Authority
Mercer County Improvement
Authority
Passaic County Utilities Authority
Glenpointe Centre West
500 Frank W. Burr Boulevard
Teaneck, New Jersey 07666
(201) 928-1100
]. SHELDON COHEN
Of Counsel
BENJAMIN CLARKE
]. SHELDON COHEN*
On the Brief
*Counsel of Record
COCKLE LAW BRIEF PRINTING CO., (800) 225-6964 ¥ | “
OR CALL COLLECT (402) 342-2831 y% *
APPENDIX TO PETITION
TABLE OF CONTENTS
Page
A - Opinion of the United States Court of
Appeals for the Third Circuit, 48 F.3d 701 (3d
es RT cd 3 bra 04 CaCanas cea eeo eco enkere App. 1
B -— Transcribed Oral Decision of the United
States District Court for the District of New
i ED 6 nihetvetecKenbhwoanekaued App. 44
C - Order of the United States District Court for
the District of New Jersey Denying Prelimi-
nary Injunctive Relief (9/10/93).......... App. 97
D - Order of the United States District Court for
the District of New Jersey Entering Final
FOGIINE CAI DII PE < oon tecsccccccanecewes App. 100
E — Opinion of the United States Court of
Appeals for the Third Circuit, 112 F.3d 652
RR Srey ore rere oe App. 102
F — Order of the United States Court of Appeals
for the Third Circuit Sur Petition for Rehear-
2 8 gt es er Pre ee rrer Tore App. 178
G - Opinion of the United States District Court
for the District Court of New Jersey, 893
Pome. Dk CEPDCS. WORD. os oie cc scsweccccs App. 182
H - Opinion of the United States District Court
for the District Court of New Jersey, 909
ee ke. : App. 219
I - Opinion of the United States District Court
for the District Court of New Jersey, 931
FSupp. 341 (D.NJ. 1996)... .........4.25- App. 248
App. 1
APPENDIX A
ATLANTIC COAST DEMOLITION &
RECYCLING, INC. Appellant,
V.
BOARD OF CHOSEN FREEHOLDERS OF
ATLANTIC COUNTY; Atlantic County Util-
ities Authority; Board of Chosen Freeholders
of Camden County; Pollution Control Financ-
ing Authority of Camden County; Scott
Weiner, individually and in his capacity as
Commissioner of New Jersey Department of
Environmental Protection and Energy.
No. 94-5173.
United States Court of Appeals,
Third Circuit.
Argued Sept. 13, 1994.
Decided Feb. 16, 1995.
Sur Petition for Rehearing March 28, 1995.
Pennsylvania operator of transfer station and recyc-
ling center for construction and demolition debris
brought action asserting Commerce Clause challenge to
constitutional validity of New Jersey solid waste regula-
tory scheme. The United States District Court for the
District of New Jersey, Joseph E. Irenas, J., entered judg-
ment against operator, and operator appealed. The Court
of Appeals, Stapleton, Circuit Judge, overruling J. Fili-
berto Sanitation, 857 F.2d 913, held that: (1) New Jersey’s
waste flow control regulations, requiring that residual
waste from mixed waste loads be returned to each waste
district’s designated facility unless facility was compen-
sated for lost waste revenue, favored district’s designated
App. 2
facilities at expense of out-of-state providers of process-
ing and disposing services, thus discriminating against
interstate commerce and, therefore, heightened scrutiny
test, rather than mere balancing test, was applicable
under dormant commerce clause analysis; (2) fact that
New Jersey had not placed absolute bar on utilization of
out-of-state facilities as designated facilities did not
transform fundamentally discriminatory scheme into
nondiscriminatory one; (3) fact that waste flow regula-
tions were part of larger utility regulation system did not
exempt them from heightened scrutiny test; and (4) waste
flow regulations were not protected from dormant com-
merce clause scrutiny under market participant excep-
tion.
Reversed and remanded.
Mark R. Rosen (argued), Jodi Isenberg, Mesirov, Gel-
man, Jaffe, Cramer & Jamieson, Haddonfield, NJ, for
appellant.
James J. Ciancia, Acting Atty. Gen., Andrea M. Silk-
owitz, Asst. Atty. Gen., Gail M. Lambert (argued), Stef-
anie A. Brand, Deputy Attys. Gen., Newark, NJ, for
appellee Scott Weiner.
William J. Linton, Atlantic County Utilities Authority,
Pleasantville, NJ, for appellee Atlantic County Utility
Authority.
Frederick J. Schuck, Camden, NJ, for appellee Bd. of
Chosen Freeholders of Camden County.
ii MA ai
Paty orn
App. 3
Jonathan L. Williams, J.S. Lee Cohen (argued),
Michael S. Caro, DeCotiis, Fitzpatrick & Gluck, Hacken-
sack, NJ, for amici curiae Hudson County Improvement
Authority, Passaic County Utilities Authority and Essex
County Utilities Authority Mercer County Imp. Author-
ity.
Joseph J. Slachetka, John A. Mercer, Jr., Higgins,
Slachetka & Long, Laurel Springs, NJ, for amicus curiae
Cape May County Mun. Utilities Authority.
Gail B. Phelps, Asst. Counsel, Bureau of Regulatory
Counsel, Harrisburg, PA, for amicus curiae Pennsylvania
Dept. of Environmental Resources.
Betty Jo Christian, Paul J. Ondrasik, Jr., William T.
Hassler, Steptoe & Johnson, Washington, D.C. (Bruce J.
Parker, Alan S. Ashkinaze, Of Counsel), and Michael F.
Riccardelli, Ronald S. Bergamini, Riccardelli, Rose &
Hoonhoudt, Montclair, NJ, for amici curiae City of Jersey
City, Borough of Northvale, C & A Carbone, Inc.,
National Solid Wastes Management Ass’n, and Waste
Management Ass’n of New Jersey.
Before: STAPLETON, ALITO and LEWIS, Circuit
Judges.
OPINION OF THE COURT
STAPLETON, Circuit Judge:
This appeal concerns the constitutional validity of
New Jersey’s solid waste regulatory scheme. Atlantic
Coast Demolition and Recycling, Inc. (“Atlantic Coast”)
sought to enjoin enforcement of New Jersey’s waste flow
App. 4
regulations on the ground they violate the dormant Com-
merce Clause. The district court entered judgment in
favor of defendant New Jersey Department of Environ-
mental Protection and Energy (“the Department”), find-
ing that the flow control regulations did not impose an
unconstitutional burden on interstate commerce. Atlantic
Coast appealed. We will reverse.
Shortly after the district court entered final judgment
upholding the flow control regulations, the Supreme
Court issued its decision in C & A Carbone, Inc. v. Town of
Clarkstown, ___ U.S. __, 114 S.Ct. 1677, 128 L.Ed.2d 399
(1994), in which the Court struck down a local flow
control ordinance of the Town of Clarkstown, New York,
as violative of the dormant Commerce Clause. In light of
the Supreme Court’s recent teachings, we conclude that
the district court erred in holding that the regulations do
not discriminate against interstate commerce and in
applying the balancing test set forth in Pike v. Bruce
Church, Inc., 397 U.S. 137, 90 S.Ct. 844, 25 L.Ed.2d 174
(1970). Because the district court did not consider
whether the regulations could pass muster under the
stricter dormant Commerce Clause test applicable to dis-
criminatory measures, we will vacate the district court's
judgment and remand so that the district court may
determine whether the regulations can be upheld despite
their discriminatory effect.}
1 The district court had jurisdiction over this matter
pursuant to 28 U.S.C. § 1331 as the constitutionality of state
regulations was challenged and we have jurisdiction over this
appeal from the district court’s final judgment pursuant to 28
U.S.C. § 1291.
i aaa ci
App. 5
I.
The facts of this case are generally not in dispute.?
The necessary factual background concerns New Jersey’s
waste management system and Atlantic Coast’s activities.
A. New Jersey’s Solid Waste Management System
New Jersey has an extensive statutory and regulatory
system governing the management and disposal of solid
waste. This highly regulated system grew out of a crisis
that began in the 1970s as a result of wide-spread illegal
practices in the then private, unregulated waste disposal
market and the closing of many landfills due to unsani-
tary conditions and noncompliante with newly enacted
federal regulations. This crisis has been documented in
the caselaw of both this court and the New Jersey courts.
See, e.g., J. Filiberto Sanitation v. Department of Envtl. Pro-
tection, 857 F.2d 913, 918-19 (3d Cir.1988); Trade Waste
Management Ass‘n, Inc. v. Hughey, 780 F.2d 221, 223 (3d
Cir.1985); A.A. Mastrangelo, Inc. v. Commissioner of Depart-
ment of Envtl. Protection, 90 N.J. 666, 449 A.2d 516, 518-19,
2 While the Department argues that some of the district
court’s findings of fact were clearly erroneous, the “facts” it
takes issue with actually involve the district court’s application
of the governing legal principles to the facts, which we discuss
infra. The factual background summarized by the district court
in its oral opinion of September 8, 1993, is supported by the
record and is therefore not clearly erroneous. See Cox v. Keystone
Carbon Co., 894 F.2d 647, 650 (3d Cir.) (the reviewing court is not
to substitute its own findings for that of the district court, but
“may only make an assessment of whether there is enough
evidence to support such findings”), cert. denied, 498 U.S. 811,
111 S.Ct. 47, 112 L.Ed.2d 23 (1990).
App. 6
521 (1982); Hackensack Meadowlands Dev. Comm’‘n v. Munic-
ipal Sanitary Landfill Auth., 68 N.J. 451, 348 A.2d 505
(1975), rev'd sub nom. City of Philadelphia v. New Jersey, 437
U.S. 617, 98 S.Ct. 2531, 57 L.Ed.2d 475 (1978); Southern
Ocean Landfill, Inc. v. Mayor & Council of the Township of
Ocean, 64 N.J. 190, 314 A.2d 65, 66-67 (1974); In re Scioscia,
216 N.J.Super. 644, 524 A.2d 855, 857 (Ct.App.Div.1987).
As the Department has observed in a recent update to its
Statewide Solid Waste Management Plan:
By the early 1980s, the department had
closed, or was in the process of closing, over 300
unsafe or unregulated landfills that posed
serious environmental hazards or had exhausted
capacity. However, the department’s persistent
actions to implement rigorous environmental
standards on landfill construction and opera-
tions, coupled with a steady influx of millions of
tons of waste annually from neighboring states
during the 1970s, resulted in a_serious shortfall
of disposal capacity in the state... .
By the late 1980s, the “solid waste crisis”
had become a national issue, and New Jersey,
the most densely populated state in the union,
was at the forefront of both the problem and the
solution. Responding to the need to develop
safe, efficient systems, by 1990 the state/county
planning process produced 13 new major dis-
posal facilities. .. . Despite this remarkable pro-
gress, however, a number of additional counties
were forced by the continuing capacity short-
ages to make disposal arrangements with out-
of-state facilities, and New Jersey, once a net
importer of waste, became a net exporter with
peak exports of 28% of all solid waste generated
in the state in 1988. As national attention
i i i lt
App. 7
focused on the environmental concerns associ-
ated with solid waste management practices, a
number of states moved to restrict the importa-
tion of waste. On several occasions, New Jersey
waste was banned, without notice, from out-of-
state facilities, resulting in serious disruptions
of service and unhealthy conditions as waste
collected in the streets.
New Jersey Dep’t of Envtl. Protection and Energy, Div. of
Solid Waste Management, Solid Waste Management State
Plan Update: 1993-2002, Executive Summary 1-2 (Draft
Jan. 1993) (App. 511-12) [hereinafter State Plan Update-
Executive Summary].
New Jersey’s existing statutory and regulatory waste
management system is the result of attempts to respond to
this crisis. The two major statutory provisions of New Jer-
sey’s solid waste management system are the Solid Waste
Management Act (“SWMA”), N.J.Stat.Ann. § 13:1E-1 to -207
(West 1991 & Supp.1994), and the Solid Waste Utility Control
Act (“SWUCA”), N.J.Stat.Ann. § 48:13A-1 to -13 (West
Supp.1994). These acts were passed in 1970 to establish a
statutory framework to coordinate “all solid waste collection,
disposal, and utilization activity” in the state, N.J.Stat.Ann.
§ 13:1E-2(b)(1) (West 1991), and to regulate the rates at which
these services are provided as a means of providing safe,
adequate, and proper waste management services,
N.J.Stat.Ann. § 48:13A-2 (West Supp.1994).
3 An attempt to conserve landfill space by instituting a
qualified ban on the importation of solid waste was struck down
by the United States Supreme Court as violative of the dormant
Commerce Clause in City of Philadelphia v. New Jersey, 437 U.S.
617, 98 S.Ct. 2531, 57 L.Ed.2d 475 (1978).
App. 8
The Department is vested with broad regulatory
authority, while direct management responsibility is del-
egated to the twenty-two solid waste management dis-
tricts that comprise the state, one for each of New Jersey’s
counties plus the Hackensack Meadowlands District. See
N.J.Stat.Ann. § 13:1D-19 (West 1991). Each solid waste
district is responsible for developing a ten-year solid
waste management plan that must be approved by the
Department before it is implemented. Id. §§ 13:1E-20,
13:1E-24 (West 1991). In each waste district, solid waste
disposal is managed either directly by the county govern-
ment or by municipal authorities created and designated
by the district for this purpose.5 Each district’s waste plan
must provide for “sufficient [and] suitable” disposal facil-
ities to treat and accommodate all solid waste generated
within the waste district; the districts may meet this
obligation by contracting with public or private entities
or by constructing and operating the waste facilities
themselves. Id. § 13:1E-21 to -22 (West 1991); §§ 40:14B-19
(West 1991), 40:37A-55 (West 1991), 40:37C-5 (West 1991).
By the early 1980s the Department had approved solid
4 Solid waste management functions delegated to the Board
of Public Utilities were transferred to the Department in 1991.
See Reorganization Plan No. 002-1991, set out as note under
N.J.Stat.Ann. § 13:1D-1 (West 1991).
> These local agencies may be municipal utilities
authorities, county improvement authorities, or pollution
control financing authorities. See N.J.Stat.Ann. §§ 40:14B-1, -22.1
(West 1991 & Supp.1994); 40:37A-103 (West Supp.1994);
40:37C-3 (West 1991). Five of the waste districts manage through
county control while eleven use the utilities authority model
and the remaining six use either county improvement or
pollution control financing authorities.
App. 9
waste management plans for each of the twenty-two solid
waste districts. State Plan Update-Executive Summary,
supra, at 1 (App. 511).
In addition to this system of local district manage-
ment, the disposal facilities® themselves are subject to
state regulation by the Department. The private or public
entity performing the disposal service must register with
and obtain approval from the Department before provid-
ing disposal service, N.J.Stat.Ann. § 13:1E-5 (West 1991),
and must obtain a certificate of public convenience and
necessity from the Board of Regulatory Commissioners,
id. § 48:13A-6 (West Supp.1994). To register with the
Department, a waste disposal facility must obtain a solid
waste permit which is granted only after review of the
appropriateness of the facility’s location, its effect on the
surrounding community, and its consistency with the
state and district solid waste plans. N.J.Admin.Code tit.
7, §§ 26-2.3 to -2.4; 26-2.8 to -2.9. Waste disposal permits
are also conditioned on the facility’s operator satisfying
the “integrity” requirements contained in N.J.Stat.Ann.
§ 13:1E-126 to -135 (West 1991 & Supp.1994),” and only
disposal facilities included in a district plan will receive
6 Disposal facilities include transfer stations (at which solid
waste is transferred from collection vehicles to haulage vehicles
for transportation to an offsite disposal facility), resource
recovery centers (which engage in both recycling and waste
disposal), sanitary landfills, and incinerators. N.J.Stat.Ann.
§ 48:13A-3 (West Supp.1994).
7 These requirements were enacted in response to the
illegal anticompetitive activities that previously existed within
the private waste industry.
App. 10
operating permits, id. §§ 13:1E-4, -26 (West 1991 &
Supp.1994).
Additionally, all disposal facilities-are regulated on
the state level as public utilities. N.J.Stat.Ann. § 13:1E-27
regulation, the disposal facilities must therefore provide
their services at just and reasonable rates, id. § 48:13A-2
(West Supp.1994). Pursuant to traditional utility regula-
tion, the disposal facilities must therefore provide their
services at just and reasonable rates, id. § 48:13A-2 (West
Supp.1994), in a nondiscriminatory manner, id. §§ 48:3-3,
-4 (West Supp.1994), and may not abandon or discontinue
service without authorization, id. § 48:2-24 (West 1969).
Nor may the solid waste facilities adjust their rates with-
out regulatory approval. Id. § 48:2-21 (West 1969).
Like waste disposal, solid waste collection was origi-
nally regulated under the utility structure as well, but
pursuant to the Solid Waste Collection Regulatory
Reform Act, which became effective in 1992, waste collec-
tion services will no longer be regulated as public util-
ities, although they will continue to be under the
supervision of the Board of Regulatory Commissioners.
See N.J.Stat.Ann. §§ 48:13A-7.1 to -7.23 (West Supp.1994).
Thus, although waste collection rates will no longer be
regulated, a company will still be required to register and
obtain a certificate of public convenience before perform-
ing waste collection services in the state. See id.
§ 13:1E-5(a) (West 1991); id. § 48:13A-6 (West Supp.1994).
Full rate deregulation of the waste collection industry
will occur in April 1996.8
8 Under the former rate regulation system, the regulated
rate for government-owned disposal facilities became, by
ODL AN AAA a es WE or
App. 11
Additionally, the Board of Regulatory Commissioners
may designate a district as a solid waste disposal fran-
chise area to be served by one or more entities engaged in
waste disposal. N.J.Stat.Ann. § 48:13A-5 (West
Supp.1994). According to the Department, such fran-
chises have been awarded to most of the districts and
public authorities responsible for the waste districts’
solid waste management.? A franchise grants a solid
waste disposal facility the “exclusive right to control and
provide for the disposal of solid waste, except for recycl-
able material whenever markets for those materials are
available, within a district or districts” as long as the
proposed franchise is consistent with the district’s solid
waste plan. Id. The district government or public author-
ity, as franchisee, may operate the disposal facility itself,
or contract with another district or with a private facility.
As an integral part of the district plan and utility
regulation system, the Department and waste districts are
authorized under the SWMA and SWUCA to direct the
flow of waste to designated facilities. N.J.Stat.Ann.
§ 48:13A-4(c) (West Supp.1994); Op.N.J. Att’y Gen. No. 3
(1980). It is the resultant waste flow regulations that
Atlantic Coast challenges in this action. The waste flow
requirements enable the waste districts to control the
processing and disposal of all solid waste generated
operation of law, a component of the tariff of all solid waste
collectors. N.J.Stat-Ann. § 48:13A-7.8 (West Supp.1994). This
aspect of the system will continue until full deregulation in
1996.
? Amici Hudson County Improvement Authority, Passaic
County Utilities Authority, and Essex County Utilities
Authority have all been awarded such franchises.
App. 12
within the district. See Op.N.J. Att’y Gen. No. 3 (1980).
The district plans specify to which disposal facility the
waste from each of New Jersey’s 567 municipalities is
directed, and these designations are codified as Depart-
ment regulations. N.J.Admin.Code tit. 7, § 26-6.5.
These waste flow measures do not apply to separated
recyclable materials. N.J.Admin.Code tit. 7, § 26-1.1(a)(1).
The separation of recyclables from other waste at the source
of the waste and the marketing of recyclables may be per-
formed competitively by private entities, and these activities
are subject to much less stringent overall regulation than
waste management services. See, e.g., N.J.Admin.Code tit. 7,
§§ 26A-1.4(a)(2) (exemption of traditional recyclables from
Department approval process), 26A-3.1 (regulation of non-
traditional recyclables). Mixed waste, because it contains
both waste and recyclables and therefore presents environ-
mental risks not associated with separated recyclables, is
subject to the waste flow regulations. Under recently pro-
mulgated regulations that memorialize the Department's
previously informal “Pereira policy,” mixed-waste generated
within a waste district may be removed from the district for
separation without initial processing at the designated dis-
posal facility, as long as the nonrecyclable residue, or a
similar kind and amount, is returned to the designated
disposal facility, or if, in lieu of returning any residue waste,
a payment equal to the tipping fees that would otherwise be
due for the nonrecyclable portion is paid to that facility.
N.J.Admin.Code tit. 7, §§ 26-6.9, 26-2B.9.
The disposal charges, or tipping fees!° charged by the
designated waste facilities are used for operating
10 Tipping fees are the rates that a disposal facility or
transfer station charges the hauler who deposits waste at the
App. 13
revenues. See, e.g., N.J.Stat.Ann. § 40:14B-22.1 (West
Supp.1994). Because the county governments and public
authorities that manage these facilities may raise funds
for capital construction by issuing revenue bonds, the
tipping fees may also be pledged toward repayment of
the bonds. According to the Department, approximately
$1.6 billion in revenue debt has been issued by and
remains outstanding to the county governments and
authorities. The tipping fees are set by the Board of
Regulatory Commissioners at a rate that will enable the
waste district to recover the costs associated with its solid
waste management plan, including costs associated with
disposal and recycling. See N.J.Stat.Ann. § 48:13A-6.3
(West Supp.1994). Because the districts are engaged in
aggressive disposal management and recycling programs,
the tipping fees are quite high. Thus, it is often less
expensive to dispose of solid waste generated in New
Jersey at facilities located in a neighboring state, even
when transportation costs to transport the waste to the
out-of-state facility are factored in.
The disposal facilities are designated through the
district planning process. N.J.Admin.Code tit. 7, § 26-6.6.
The designated facilities may be located within the waste
district, in another waste district pursuant to an inter-
district plan, or out-of-state. Thus, a district plan can
propose a contract with an out-of-state disposal facility.
However, district plans must be approved by the Depart-
ment and the Department candidly acknowledges that
facility. J. Filiberto Sanitation v. Department of Envtl. Protection,
857 F.2d 913, 916 (3d Cir.1988).
App. 14
the twin “goals of 60% recycling and disposal self-suffi-
ciency for the nonrecyclable waste stream . . . form the
core of New Jersey’s current solid waste management
system and constitute the statewide solid waste manage-
ment objectives, criteria and standards with which the
[district] plans must be consistent.” Appellee’s Br. at 11.
Thus, as the district court found:
Although it is not the subject of a clear
legislative direction [sic], it is equally clear that
the D.E.P.E. administers the law with the speci-
fic goal that all waste generated in New Jersey
be disposed of within the borders of the state.
The 1993 solid waste management state plan
update, which was admitted into evidence and
herein referred to as the Update, provides: “As a
key policy objective, New Jersey will continue to
move toward achievement of self-sufficiency in
disposal capacity. The Department’s objective is
to eliminate reliance on out-of-state disposal
within a seven-year period.”
App. 1017.
Accordingly, a waste district that is unable to identify
sufficient existing waste facilities or suitable sites within
the district, or within another district pursuant to an
interdistrict agreement, to meet the district’s waste needs
must certify to the Department the absence of suitable in-
district sites and the failure to reach an interdistrict
agreement. See N.J.Stat.Ann. § 13:1E-21 (West 1991). Only
after such a certification, can a waste district plan that
designates an out-of-state disposal site receive Depart-
ment approval. In re Long-Term Out-of-State Waste Disposal
Agreement Between County of Hunterdon & Glendon Energy
Commission, 237 N.J.Super. 516, 568 A.2d 547, 551-53
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App. 15 ‘
(Ct.App.Div.), certif. denied, 121 N.J. 647, 583 A.2d 337
(1990).11 Thus, the designation process is intended to
favor operators that have facilities already located within,
or those that are willing to construct a facility within, the
state.
B. Atlantic Coast’s Activities
Atlantic Coast is a Pennsylvania corporation that was
formed in 1989 to operate a transfer station and recycling
center for construction and demolition (“C & D”) debris.
This facility is located in Philadelphia. Atlantic Coast is
11 As quoted in In re Waste Disposal Agreement, the 1985
Update to the Statewide Solid Waste Management Plan
contained the following statement:
“The Department considers the use of out-of-
state disposal facilities to be inappropriate as a long-
range solid waste management option. .. .
The uncertainty inherent in use of out-of-state
facilities conflicts with the philosophy of the Solid
Waste Management Act, which is that districts should
be able to plan for and predict the availability of
disposal capacity to meet their needs. The
Department has allowed several districts to rely upon
out-of-state facilities, as a short-term option, in cases
where districts have not been able to secure
interdistrict agreements for access to in-state capacity.
However, it is critical that districts which do rely on
out-of-state disposal capacity, secure enforceable
assurances from those facilities in order to ensure
continued use until in-state facilities can be brought
on line. It is equally critical that those districts
develop an in-state solution as quickly as
practicable.”
In re Waste Disposal Agreement, 568 A.2d at 551.
App. 16
licensed by the Commonwealth of Pennsylvania Depart-
ment of Environmental Resources to accept for processing
at its facility various types of construction and demolition
debris, including uncontaminated rock, soil, ferrous met-
als, and wood; recyclables; and unmarketable construc-
tion and demolition materials. Atlantic Coast processes
the C & D debris by separating the recyclable materials
from the nonrecyclable. The nonrecyclable residue waste
is then shipped to landfills for disposal. During periods
relevant to this appeal, Atlantic Coast was transporting
the nonrecyclable waste to a landfill in Ohio. The major-
ity of the waste processed at the Atlantic Coast facility is
not recyclable; by weight only approximately eight and
one-half to twenty percent of the waste is recycled.}?
Thus, most of the materials received by Atlantic Coast are
shipped to a landfill for disposal.
Construction and demolition debris is generated
when a building is constructed, demolished, or refur-
bished. It is not composed of a single material, but is
rather a mixture of recyclable and nonrecyclable mate-
rials. As a practical matter, C & D waste is not source
separated, that is, the generator of the debris does not
separate out the recyclable materials at the construction
site. Prior to separation the mixture of recyclable and
nonrecyclable materials is considered waste, but once the
recyclable portion is separated out, only the remaining
12 This figure varies depending on whether wood is
included as a recyclable material. Atlantic Coast was at one time
stockpiling the wood at its facility for a particular purchaser, but
it appears that in the absence of that arrangement the wood is
disposed of as waste.
App. 17
nonrecyclable portion is considered waste. Thus, if Atlan-
tic Coast collects C & D debris from a construction site in
New Jersey and transports it to its facility for separation
and processing, the waste it collects is subject to New
Jersey waste flow regulations. This means that it is
required by those regulations to return the nonrecyclable
waste (or equivalent waste) to the source district’s desig-
nated disposal facility or to pay to that facility an amount
equal to the tipping fee it would pay if it returned that
portion of the C & D debris to the designated facility.
Because of its proximity to New Jersey’s southern
counties, Atlantic Coast sought to gain access to the New
Jersey’s C & D debris market, but its efforts to be
included as a designated facility in a district waste man-
agement plan were unsuccessful. Atlantic Coast rejected
the alternate means of serving the New Jersey market,
i.e., returning the residual waste to the designated facili-
ties for processing or paying a compensating fee, as too
costly. Following its unsuccessful efforts to serve the New
Jersey market, Atlantic Coast filed an action in the district
court challenging the constitutionality of New Jersey’s
solid waste flow control regulations.!%
13 In addition to the Commissioner of the New Jersey
Department of Environmental Protection and Energy, Atlantic
Coast named as defendants two county governments - the
Board of Chosen Freeholders of Atlantic County and the Board
of Chosen Freeholders of Camden County, and the solid waste
authorities within those counties — the Atlantic County Utilities
Authority and the Pollution Control Financing Authority of
Camden County. Atlantic Coast subsequently reached a
settlement agreement with the county and authority
defendants, pursuant to which those defendants would not
participate in the district court action or in any appeals, but
App. 18
In its complaint, Atlantic Coast sought a declaration
that the district waste plans identified in the flow control
regulations violate the Commerce Clause and a perma-
nent injunction barring the defendants from prohibiting
or interfering with the transportation of construction and
demolition debris from its generation or collection within
New Jersey, or in Atlantic and Camden Counties in par-
ticular, to facilities outside the state. Although the scope
of Atlantic Coast’s attack on the New Jersey solid waste
management system was somewhat unclear from the
complaint, the district court concluded that Atlantic
Coast’s main contention centered on the waste flow regu-
lations. At oral argument before this court, counsel for
Atlantic Coast reiterated that its dormant Commerce
Clause allegation and its claim for relief were limited to
the waste flow regulations, and in particular the require-
ment that residual waste from mixed waste loads be
returned to each district’s designated facility unless the
facility is compensated for the lost waste revenue.
C. The District Court Proceedings
Atlantic Coast moved for a preliminary injunction.
Following a short period of intense discovery, an eviden-
tiary hearing was held on Atlantic Coast’s motion, at
which a substantial amount of deposition and live testi-
mony was admitted. The district court promptly issued
an opinion declining to enter a preliminary injunction.
After further discovery, the parties elected to submit the
would be bound by the court’s determination. The Department
therefore became the sole remaining defendant.
;
App. 19
case on its merits based on the preliminary injunction
record without supplementation. Ultimately, the district
court entered final judgment in the Department’s favor
based on the findings and conclusions in its oral opinion
of September 8, 1993. This appeal followed.!4
Il.
The fundamental issue presented by this appeal is
whether the district court erred in concluding that the
New Jersey regulatory waste flow scheme does not vio-
late the dormant Commerce Clause. To determine this
fundamental issue, three subsidiary issues must be
decided: (1) whether the district court erred in applying
14 This court granted a stay pending the Supreme Court’s
disposition in C & A Carbone, Inc. v. Town of Clarkstown. After the
Supreme Court issued its opinion on May 16, 1994, invalidating
the Clarkstown waste flow ordinance, Atlantic Coast filed a
motion with this court for summary reversal of the district
court’s final order or expedited disposition of the appeal. We
denied the motion for summary reversal but expedited the
appeal. Amicus curiae briefs were submitted in support of the
Department’s position by Hudson County Improvement
Authority, Passaic County Utilities Authority, Essex County
Utilities Authority, and Mercer County Improvement Authority
(“Hudson County Amici”); by Cape May County Municipal
Utilities Authority; and by the Pennsylvania Department of
Environmental Resources. An amicus curiae brief in support of
Atlantic Coast’s position was submitted by the City of Jersey
City, the Borough of Northvale, C & A Carbone, Inc., National
Solid Wastes Management Association, and Waste Management
Association of New Jersey (“the Municipal and Trade
Association Amici”). Additionally, we granted the Hudson
County Amici leave to participate in oral argument.
App. 20
the Pike balancing test, rather than what we have termed
the “heightened scrutiny” test,5 (2) whether the New
Jersey waste flow regulations are excepted from the stric-
tures of Commerce Clause scrutiny under the market
participant doctrine, and (3) if not, whether these regula-
tions meet the applicable Commerce Clause test in light
of New Jersey’s particular circumstances. We conclude
that New Jersey’s waste flow regulations, in effect and by
design, discriminate against interstate commerce and that
heightened scrutiny under the dormant Commerce
Clause is required. We reject the Department’s argument
that New Jersey’s regulation of waste disposal through a
utility system requires application of the less stringent
balancing test, and likewise reject its argument that New
Jersey is entitled to the market participant exception.
Because the district court did not consider whether the
waste flow regulations can be upheld despite their dis-
criminatory effect, we will remand to the district court so
that it may make this determination in the first instance.
III.
The Commerce Clause grants to Congress the affir-
mative power “[t]o regulate Commerce . . . among the
several States.” U.S. Const. art. I, § 8, cl. 3. “Although the
Clause thus speaks in terms of powers bestowed upon
Congress, the [Supreme] Court long has recognized that
it also limits the power of the States to erect barriers
against interstate trade.” Lewis v. BT Investment Managers,
15 See Norfolk Southern Corp. v. Oberly, 822 F.2d 388 (3d
Cir.1987).
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App. 21
Inc., 447 U.S. 27, 35, 100 S.Ct. 2009, 2015, 64 L.Ed.2d 702
(1980). The negative or dormant aspects of the Commerce
Clause that limit state authority apply to subject areas in
which “Congress has not affirmatively acted to either
authorize or forbid the challenged state activity.” Norfolk
Southern Corp. v. Oberly, 822 F.2d 388, 392 (3d Cir.1987).
Thus, any state regulation of interstate commerce is sub-
ject to scrutiny under the dormant Commerce Clause
unless such regulation has been preempted or expressly
authorized by Congress. The district court held that Con-
gress has legislated in the area of solid waste disposal but
“expressly left to the states the primary role in the collec-
tion and disposal of solid waste.” App. 1015-16 (citing the
Waste Disposal Act, codified at 42 U.S.C. § 6901(A)(4)).
The parties have not advanced either a preemption or
authorization argument before this court, and we decline
to examine the issue further.!° We therefore turn to the
issues of whether and how New Jersey’s waste flow
16 We note, however, that Justice O’Connor, concurring in
the result reached by the C & A Carbone Court, recently rejected
the argument that the federal Waste Disposal Act authorizes
discriminatory solid waste measures. C & A Carbone, Inc. v. Town
of Clarkstown, U.S. __, __, 114 S.Ct. 1677, 1691, 128 L.Ed.2d
399 (1994) (O’Connor, J., concurring in the judgment). The
district court’s determination that Congress has authorized
concurrent state legislation in the area of solid waste
management is not inconsistent with Justice O’Connor’s
conclusion that discriminatory measures are not authorized. We
note further that several competing federal measures that
expressly authorized local waste flow restrictions, as well as
waste importation and exportation bans, were introduced
during the 103d Congress, but were not enacted into law. At
least one of these measures has been introduced for
consideration by the current Congress as well.
App. 22
regulations affect interstate commerce. The Supreme
Court’s recent decision in C & A Carbone, Inc. v. Town of
Clarkstown, __ U.S. __, 114 S.Ct. 1677, 128 L.Ed.2d 399
(1994), provides significant guidance with respect to
these issues, and we begin with a review of the opinion of
the Court in that case.
A.
The solid waste flow control ordinance before the
court in C & A Carbone required that all waste within the
town of Clarkstown, New York, be processed at a desig-
nated transfer station which the town had caused to be
built to comply with a consent decree between the town
and the New York State Department of Environmental
Conservation. C & A Carbone, ___ U.S. at __, 114 S.Ct. at
1680. To finance the new facility, the town entered into an
arrangement with a local private contractor under which
the contractor would build the facility, operate it for five
years, and then turn it over to the town for one dollar. In
return, the town guaranteed the contractor a tipping fee
of $81.00 per ton and guaranteed that a minimum of
120,000 tons of waste would be deposited at the transfer
station for processing each year. If the total waste brought
to the facility was less than 120,000 tons in any year, the
town would make up the difference in the lost fees. Id.
To ensure that the contractor would receive the
agreed upon sums, the town enacted its flow control
ordinance. The town was thus assured of customers for
the new transfer facility and could finance the facility
through the mandated tipping fees. C & A Carbone, who
operated a recycling center within the town, was found to
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ADAIR Ae 23k ANd AIRS A PON he Se melons Sibi Soe &
App. 23
be violating the ordinance by transporting waste from its
facility to out-of-state locations for processing. C & A
Carbone challenged the constitutionality of the ordinance
based on the dormant Commerce Clause. The New York
courts concluded that the town’s ordinance did not dis-
criminate against interstate commerce because it applied
“evenhandedly to all solid waste processed within the
Town.” Town of Clarkstown v. C & A Carbone, 182 A.D.2d
213, 587 N.Y.S.2d 681, 686 (1992). The Supreme Court
reversed.
The Supreme Court first concluded that the ordi-
nance did regulate interstate commerce, rejecting the
town’s contention that its flow control did nothing more
than delay the entry of garbage into the stream of inter-
state commerce until it was safe. The Court noted that
Carbone received and processed solid waste from out of
state, and the requirement that it route that waste
through the town’s transfer station increased the cost of
processing for out-of-state waste generators. More impor-
tantly for present purposes, the Court pointed out that
the relevant stream of interstate commerce was not the
market for solid wastes, but rather the market for solid
waste processing and disposal services. “[W]hat makes
garbage a profitable business is not its own worth but the
fact that its possessor must pay to get rid of it. In other
words, the article of commerce is not so much the solid
waste itself, but rather the service of processing and
disposing of it.” C & A Carbone, ___ U.S. at __, 114 S.Ct.
at 1682.
in addition to the effect on the cost to out-of-state
possessors of garbage, the Court stressed that “even as to
waste originant in Clarkstown, the ordinance prevents
App. 24
everyone except the favored local operator from perform-
ing the initial processing step” and thus “deprives out-of-
state businesses of access to a local market.” Id. at ___, 114
S.Ct. at 1681. The conclusion that the ordinance affected
interstate commerce was, accordingly, inescapable.
Having concluded that the town’s ordinance affected
interstate commerce, the Court addressed whether its
effect was a discriminatory one — whether it operated to
favor local commercial interests or disfavor out-of-state
ones. This was important because a local measure that
discriminates against interstate commerce on its face or in
effect can be upheld only if it falls within “a narrow class
of cases in which the municipality can demonstrate,
under rigorous scrutiny, that it has no other means to
advance a legitimate local interest.” Id. at__, 114 S.Ct. at
1683. Such protectionist measures are thus subjected to
heightened scrutiny as compared with local measures
that pursue a legitimate local interest evenhandedly and
impose only an incidental burden on interstate com-
merce. Nondiscriminatory measures will be upheld
unless the incidental “burden on interstate com-
merce . . . is ‘clearly excessive in relation to the putative
local benefits.’ ” Id. at ___, 114 S.Ct. at 1682 (quoting Pike
v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 847, 25
L.Ed.2d 174 (1970)). Because the Court found the “practi-
cal effect and design” of the Clarkstown ordinance dis-
criminatory, it held that heightened scrutiny was required
and that the Pike balancing test was inappropriate. See id.,
__ US. __, 114 S.Ct. at 1684.
Clarkstown’s flow control ordinance regulated the
local market for solid waste processing services in a
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App. 25
protectionist manner. It allowed only the favored opera-
tion to process waste located within the limits of the town
and the Court found this “no less discriminatory because
in-state or in-town processors are also covered by the
prohibition.” Id. at __, 114 S.Ct. at 1682. In support of
these conclusions, the Court cited Dean Milk Co. v. Mad-
ison, 340 U.S. 349, 71 S.Ct. 295, 95 L.Ed. 329 (1951), which
involved a dormant Commerce Clause challenge to a city
ordinance requiring that all milk sold in the city be pas-
teurized within five miles of the city limits. The ordi-
nance was held to be an unjustifiable protectionist
measure because it favored milk processors located
within a five-mile radius. The Dean Milk court found
“immaterial [the fact] that Wisconsin milk from outside
the [local] area [was] subjected to the same proscription
as that moving in interstate commerce.” Dean Milk, 340
U.S. at 354 n. 4, 71 S.Ct. at 298 n. 4, quoted in, C&S A
Carbone, ___ U.S. at __, 114 S.Ct. at 1682.
The Clarkstown ordinance was found to be “just one
more instance of local processing requirements
that . . . long have [been] held invalid.” Id. at ___ 114
S.Ct. at 1682. Citing a long line of cases in which local
processing requirements had been stricken, the Court
described the evil there addressed and the evil of Clarks-
town’s flow control ordinance as follows:
The essential vice in laws of this sort is that they
bar the import of the processing service. Out-of-
state meat inspectors, or shrimp hullers, or milk
pasteurizers, are deprived of access to local
demand for their services. Put another way, the
offending local laws hoard a local resource — be
it meat, shrimp, or milk — for the benefit of local
businesses that treat it.
App. 26
The flow control ordinance has the same
design and effect. It hoards solid waste, and the
demand to get rid of it, for the benefit of the
preferred processing facility. The only conceiv-
able distinction from the cases cited above is
that the flow control ordinance favors a single
local proprietor. But this difference just makes
the protectionist effect of the ordinance more
acute. In Dean Milk, the local processing require-
ment at least permitted pasteurizers within five
miles of the city to compete. An out-of-state
pasteurizer who wanted access to that market
might have built a pasteurizing facility within
the radius. The flow control ordinance at issue
here squelches competition in the waste-pro-
cessing service altogether, leaving no room for
investment from outside.
__ US. at __, 114 S.Ct. at 1683.
Having determined that heightened scrutiny rather
than interest balancing was appropriate, the Court held
that Clarkstown had “any number of nondiscriminatory
alternatives for addressing the health and environmental
problems alleged to justify the ordinance in question.” Id.
at ___, 114 S.Ct. at 1683. In the course of so holding, the
Court recognized that the flow control ordinance was
adopted by the town as a means of financing the con-
struction of a needed processing facility. This did not aid
the town case, however, because there was a non-discrim-
inatory alternative available:
Clarkstown maintains that special financing
is necessary to ensure the long-term survival of
the designated facility. If so, the town may sub-
sidize the facility through general taxes or
municipal bonds. But having elected to use the
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App. 27
open market to earn revenues for its project, the
town may not employ discriminatory regulation
to give that project an advantage over rival busi-
nesses from out of State.
___ ~-US. at __, 114 S.Ct. at 1684 (citation omitted).
B.
New Jersey’s flow control regulations accomplish on
a district level substantially what Clarkstown’s flow con-
trol ordinance accomplished on a local level. They favor
the district’s designated facilities at the expense of out-of-
state providers of processing and disposal services that
would otherwise compete for the opportunity to service
solid waste generated within the district. Here, as in C &
A Carbone and Dean Milk, it is immaterial that the desig-
nated facilities are favored over other in-state facilities as
well as over out-of-state ones. Similarly, it is irrelevant
here, as in Dean Milk, that an out-of-state firm willing to
build an in-district facility is entitled to compete to have
that facility become a designated facility. Like the govern-
mental entities in the other cases involving local process-
ing requirements, New Jersey is regulating a market
which the Commerce Clause intended to be open to non-
local competitors. More specifically, New Jersey is regu-
lating the market for solid waste processing and disposal
services in each of the districts by directing district con-
sumers of those services to utilize a favored service pro-
vider who, in the absence of exceptional circumstances,
operates a local facility. It necessarily follows, we con-
clude, that any Commerce Clause analysis of New Jer-
sey’s flow control regulations must employ the
App. 28
heightened scrutiny test and that the district court erred
by subjecting them only to the balancing test of Pike.'7
‘
It is true, as the Department stresses, that New Jersey
has not placed an absolute bar on the utilization of out-
of-state facilities as designated facilities. This, however,
does not transform a fundamentally discriminatory
scheme into a non-discriminatory one. While out-of-state
facilities can compete to become designated facilities, the
Department acknowledges that it approves district plans
only if they are consistent with the “core” goal of having
all of New Jersey’s solid waste processed and disposed of
in New Jersey within the next five years. This can be
accomplished, and is being accomplished, only by select-
ing existing and proposed in-state facilities whenever
possible. In short, out-of-state facilities do not compete
on anything approaching a level playing field. Wyoming v.
Oklahoma, 502 U.S. 437, 455, 112 S.Ct. 789, 801, 117
17 In applying the Pike test, the district court relied on J.
Filiberto Sanitation v. Department of Envtl. Protection, 857 F.2d 913
(3d Cir.1988). We there found that a requirement that all waste
generated in a county be processed at the county’s transfer
station did not have any effect on interstate commerce because
the waste entered the interstate market after processing, and
then noted that the rule would have met the Pike test as well.
Our holding that the waste flow restriction did not affect
interstate commerce is inconsistent with C & A Carbone and is.
therefore overruled. To the extent Filiberto can- be read to
authorize the application of the Pike balancing test to New
Jersey’s waste flow regulations it is also inconsistent with C & A
Carbone and is overruled.
App. 29
L.Ed.2d 1 (1992) (“The volume of commerce affected mea-
sures only the extent of the discrimination; it is of no
relevance to the determination whether a State has dis-
criminated against interstate commerce.”).
In reaching our conclusion that the appropriate Com-
merce Clause measuring rod is heightened scrutiny, we
have not been unmindful of the Department’s insistence
that the public utility aspects of New Jersey’s solid waste
system distinguish the flow control regulations here from
the Clarkstown ordinance. In substance, the Department
urges that (1) Clarkstown’s transfer station was not a
regulated public utility; (2) New Jersey’s designated facil-
ities are regulated public utilities; (3) what Atlantic Coast
finds objectionable in the waste flow regulations - the
monopoly and resulting captive customer base of the
designated facilities - is inherent in any public utility
regulatory scheme; (4) Commerce Clause analysis in the
context of state public utility regulation has consistently
employed the balancing test of Pike; and (5) state public
utility regulation is upheld where, as here, the burdens
on commerce are not disproportionate to the local bene-
fits.
While we agree with the Department’s first three
propositions, we do not read the dormant Commerce
Clause jurisprudence to suggest that state utility regula-
tion is to be judged by different standards than other
state regulation. When state utility regulation is protec-
tionist, the Supreme Court has employed heightened
scrutiny; where it is not, a benefits and burdens analysis
has been applied.
App. 30
In New England Power Co. v. New Hampshire, 455 U.S.
331, 334-36, 102 S.Ct. 1096, 1098-99, 71 L.Ed.2d 188 (1982),
the Supreme Court reviewed an order of the New Hamp-
shire Public Utility Commission that required the New
England Power Company, a consortium of Connecticut
River hydroelectric power companies, to reserve for New
Hampshire residents an amount of power equal to the
amount generated by the consortium within that state.
The Court found that the Commission’s order was essen-
tially an “exportation ban” that placed a direct and sub-
stantial burden on interstate commerce and therefore
applied the heightened scrutiny test to the discriminatory
order. Id. at 339, 102 S.Ct. at 1100-01.
Subsequently, in Arkansas Electric Cooperative Corp. v.
Arkansas Public Service Commission, 461 U.S. 375, 103 S.Ct.
1905, 76 L.Ed.2d 1 (1983), in rejecting an outdated Com-
merce Clause utility test that focused on whether the
state was regulating wholesale or retail sales of gas or
electricity, the Supreme Court noted: “Our constitutional
review of state utility regulation in related contexts has
not treated it as a special province insulated from our
general Commerce Clause jurisprudence.” Id. at 391, 102
S.Ct. at 1916 (citing New England Power Co., 455 U.S. 331,
102 S.Ct. 1096, 71 L.Ed.2d 188 (1982)). The Court then
articulated the Pike balancing test as “[o]ne recent refor-
mulation of the [Court’s dormant Commerce Clause]
test” and, after noting that the regulation at issue did not
implicate economic protectionism and would involve
only an incidental effect on interstate commerce, applied
the balancing test to conclude that the regulation did not
violate the Commerce Clause. Id. at 393-95, 102 S.Ct. at
err i
App. 31
1917-18.18 Although the Arkansas Electric Court did not
expressly characterize the regulation before it as non-
discriminatory, the Court’s opinion can only be read as
implicitly rejecting application of the heightened scrutiny
test because it found no discrimination against interstate
commerce.
More recently, the Supreme Court applied the height-
ened scrutiny test to protectionist state public utility reg-
ulation in Wyoming v. Oklahoma, 502 U.S. 437, 112 S.Ct.
789, 117 L.Ed.2d 1 (1992). The state statute there under
attack required that all coal-fired electricity plants located
within the state of Oklahoma burn at least ten percent
Oklahoma mined coal. The Court concluded that the stat-
ute discriminated against interstate commerce and struck
it down under the dormant Commerce Clause, noting
that the question of which level of scrutiny to apply to
the protectionist measure was “not a close call.” Id. at 800
n. 12, 112 S.Ct. at 455 n. 12.
Based on this Supreme Court case law, we reject the
Department’s contention that because the waste flow reg-
ulations are part of a larger utility regulation system, they
are not subject to the heightened scrutiny test despite any
discriminatory effect.
18 The issue in Arkansas Electric Cooperative Corp. was
whether the Arkansas Public Service Commission had violated
the Supremacy or Commerce Clauses by asserting regulatory
jurisdiction over the wholesale rates that the cooperative
charged to its retail members, all of whom were located within
the state. Wholesale rates charged by cooperatives was one area
of wholesale electricity sales that the federal legislation and
rules did not govern. See 461 U.S. at 377, 381-82, 103 S.Ct. at
1908-09, 1910-11.
App. 32
We have found only one Supreme Court case in
which a Commerce Clause challenge was made based on
the exclusionary effects of a monopoly created by a state
public utility regulatory scheme. In that case, Panhandle
Eastern Pipe Line Co. v. Michigan Public Service Commission,
341 U.S. 329, 71 S.Ct. 777, 95 L.Ed. 993 (1951), the Court
sustained the state utility commission’s refusal to allow
an out-of-state natural gas supplier to sell natural gas to
industrial consumers in an area where a Michigan public
utility had been granted an exclusive certificate of public
convenience and necessity. Panhandle is not helpful here,
however, because it was decided before Arkansas Electric.
As we have noted, the Court there rejected the bright line
test of cases like Public Utilities Commission v. Attleboro
Steam & Electric Co., 273 U.S. 83, 47 S.Ct. 294, 71 L.Ed. 54
(1927), and Cities Service Gas Co. v. Peerless Oil & Gas Co.,
340 U.S. 179, 71 S.Ct. 215, 95 L.Ed. 190 (1950), that
regarded state regulation of wholesale utility markets as
a direct burden on interstate commerce and state regula-
tion of retail utility markets as “essentially local” in
nature and as having only an incidental effect on inter-
state commerce. The Court in Panhandle Eastern sustained
the local gas company’s monopoly on the authority of
Cities Service and the wholesale/retail distinction there
reflected.
Now that the Supreme Court has rejected this distinc-
tion and made it clear in Arkansas Electric that public
utilities regulation is not a special category for Commerce
Clause purposes, it well may be that the heightened
scrutiny test would be applied to a situation like that
presented in Panhandle Eastern where an out-of-state firm
challenges its exclusion from the local franchise market.
App. 33
A strong argument can be made that the rationale in C &
A Carbone would require use of this test. See __ U.S. at
__, 114 S.Ct. at 1682 (finding the ordinance discrimina-
tory because “it allows only the favored operator to
process waste that is within the limits of the town” and
“no less discriminatory because in-state or in-town pro-
cessors are also covered by the prohibition”). We do not
suggest, however, that traditional public utilities regula-
tion of retail sales would be invalidated by heightened
scrutiny. Where the regulation is addressed to a utility,
like a local gas utility and unlike Atlantic Coast, whose
service requires a tangible distribution system, a fran-
chise monopoly may be the only economically feasible
alternative. -
We note that there is a discriminatory aspect to the
waste flow control regulations in the context of New
Jersey’s scheme that is not present in a situation like that
presented in Panhandle Eastern. A gas or electric utility
granted a franchise to serve the needs of all residents
within a local area is not ordinarily required to commit to
producing its electricity or securing its natural gas supply
within that area as well. Normally, both in-state and out-
of-state interests may, therefore, compete equally for the
franchise award and the creation of a captive consumer
base does not, under these circumstances, discriminate
against electricity and gas generated or produced out of
state.
Under New Jersey’s system, collectors of waste -
those who supply disposal services at the retail level — are
required to secure processing and disposal services from
the designated, franchised facility and out-of-state dis-
posal firms are thus excluded not only from the market
App. 34
for such services during the franchise period but also
from competing for the franchise. The burden on the flow
of services from out of state in the situation now before
us is thus far greater than the burden on the flow of
electricity and gas from out-of-state in the traditional
public utility regulation situation.
We thus conclude that the public utility aspects of
New Jersey’s solid waste disposal scheme do not require
application of the Pike balancing test.
IV.
As an alternative to its argument that the nature of
the New Jersey waste disposal scheme distinguishes it
from the ordinance in C & A Carbone and requires that its
waste flow regulations be subject to a more lenient level
of scrutiny, the Department contends that the nature of
the system earns the regulations the protection of the
market participant doctrine. The Supreme Court has rec-
ognized what amounts to an exception from the restraints
of the dormant Commerce Clause for otherwise discrimi-
natory action taken by a governmental entity in its role as
a market participant, rather than as a market regulator.
The market participant doctrine “differentiates between a
State’s acting in its distinctive governmental capacity, and
a State’s acting in the more general capacity of a market
participant.” New Energy Co. of Indiana v. Limbach, 486 U.S.
269, 277, 108 S.Ct. 1803, 1809, 100 L.Ed.2d 302 (1988).
When a governmental entity enters the market place in a
capacity analogous to that of private market participants
and makes decisions analogous to those made by private
App. 35
market participants, its decisions are not subject to dor-
mant Commerce Clause scrutiny. Thus, “ ‘[t]he Com-
merce Clause does not prohibit all state action designed
to give its residents an advantage in the marketplace, but
only action of that description in connection with the State's
regulation of interstate commerce.’ ” Oregon Waste Systems v.
Department of Environmental Quality, _. U.S. __, __n. 9,
114 S.Ct. 1345, 1354 n. 9, 128 L.Ed.2d 13 (1994) (quoting
New Energy Co. of Indiana v. Limbach, 486 U.S. 269, 278, 108
S.Ct. 1803, 1810, 100 L.Ed.2d 302 (1988)).
The Supreme Court has found the market participant
doctrine to be applicable in only three cases: Hughes v.
Alexandria Scrap, 426 U.S. 794, 808-09, 810, 96 S.Ct. 2488,
2497, 2498, 49 L.Ed.2d 220 (1976) (upholding a program
involving payments by a state for auto scrap where the
payments were restricted to in-state processors for state-
titled vehicles); Reeves, Inc. v. Stake, 447 U.S. 429, 100 S.Ct.
2271, 65 L.Ed.2d 244 (1980) (sustaining a restriction on the
sale of government-produced cement to state residents);
and White v. Massachusetts Council of Construction Workers,
Inc., 460 U.S. 204, 103 S.Ct. 1042, 75 L.Ed.2d 1 (1983)
(upholding an executive order requiring that city resi-
dents comprise at least one-half the staff of all public
works construction projects funded in whole or part by
city funds or city-administered federal funds). Two
important characteristics tie these three cases together. In
each situation the government was participating directly
in some aspect of the market as a purchaser, seller, or
producer, and the alleged discriminatory effects on the
interstate market flowed from these market actions.
In the solid waste arena, the Supreme Court has not
yet reviewed a case involving a government-owned waste
App. 36
facility and the Court has consequently left unanswered
the question as to what effect government ownership of a
waste facility would have on otherwise discriminatory
waste measures. See City of Philadelphia v. New Jersey, 437
U.S. at 627 n. 6, 98 S.Ct. at 2537 n. 6 (reserving the
question whether a governmental unit who operates a
landfill is a market participant); Oregon Waste Systems, ___
U.S. at ___n. 9, 114 S.Ct. at 1354 n. 9 (finding impermissi-
bly discriminatory a state statute directing private land-
fills to pass on a mandated surcharge on out-of-state
generated waste and declining to address the issue
whether Oregon could accomplish its “cost-spreading”
through market participation). This court, however, has
applied the market participant doctrine in the context of a
publicly owned waste disposal facility. In Swin Resource
Systems, Inc. v. Lycoming County, 883 F.2d 245, 250 (3d
Cir.1989), cert. denied, 493 U.S. 1077, 110 S.Ct. 1127, 107
L.Ed.2d 1033 (1990), we held that the local government
did not violate the dormant Commerce Clause by charg-
ing at the county-operated landfill a higher disposal fee
for waste generated outside a local area than for locally-
generated waste, stating:
If Maryland may decree that only those
with Maryland auto hulks will receive state
bounties, it would seem that Lycoming can sim-
ilarly decree that only local trash will be dis-
posed of in its landfill on favorable terms. If
South Dakota may give preference to local con-
crete buyers when a severe shortage makes that
resource scarce, it would seem that Lycoming
may similarly give preference to local garbage
(and hence local garbage-producing residents)
when a shortage of disposal sites makes land-
fills scarce. And if Boston may limit jobs to local
App. 37
residents, we see no reason why Lycoming may
not limit preferential use of its landfill to local
garbage (and hence local garbage-producing
residents).
Swin Resource Systems, 883 F.2d at 250 (footnote omitted).
We held that the county, rather than regulating the waste
disposal market, was “deciding the conditions under
which [a private waste processor] could use [the public]
landfill.” Id. at 249. The county was simply operating a
government facility in a manner that favored its own
citizens over others, and its activities did not have
“downstream” effects.'9
The Department argues that the market participant
doctrine is applicable here because New Jersey partici-
pates (or directs local government entities to participate)
in the waste disposal market as sellers and purchasers of
waste disposal services and disposal capacity. The dis-
tricts “sell” waste disposal services, according to the
Department, through the designated disposal facilities.
Where a district has opted not to own or operate the
designated facilities directly, it “purchases” these services
- for “resale” by contracting with private facilities for the
19 In South-Central Timber Dev. v. Wunnicke, 467 U.S. 82, 104
S.Ct. 2237, 81 L.Ed.2d 71 (1984), a four-justice plurality held that
the market participant doctrine did not apply to an Alaska
regulation requiring in-state processing of timber obtained by
private companies from state forest land because it had the
effect of controlling aspects of the timber market in which the
government, acting as a timber seller, did not participate. 467
U.S. at 97-99, 104 S.Ct. at 2245-47 (opinion of White, J.). The
regulation was thus seen as having impermissible
“downstream” effects.
App. 38
provision of waste disposal services. Thus, the Depart-
ment maintains, the waste flow regulations simply repre-
sent a means by which the state manages the districts’
market participation and the regulations are therefore
protected from Commerce Clause scrutiny under the mar-
ket participant doctrine.
While we do not quarrel with the Department's char-
acterization of the districts’ activities as involving pur-
chases and sales of disposal service and capacity, we
cannot agree with its conclusion that the waste flow
regulations, therefore, cannot be violative of the dormant
Commerce Clause. When a public entity participates in a
market, it may sell and buy what it chooses, to or from
whom it chooses, on terms of its choice; its market partic-
ipation does not, however, confer upon it the right to use
its regulatory power to control the actions of others in
that market. In Wyoming v. Oklahoma, 502 U.S. 437, 112
S.Ct. 789, 117 L.Ed.2d 1 (1992), for example, an Oklahoma
statute required all electrical utilities in the state, includ-
ing state-owned utilities, to burn a mixture of coal con-
taining at least ten percent Oklahoma-mined coal. The
Court recognized that Oklahoma could legitimately
impose this restriction on state-owned utilities because,
as a market participant, it was entitled to make its own
decisions regarding energy source purchases. That fact
did not, however, immunize from dormant Commerce
Clause review its attempt to regulate the behavior of
others in the market. As we have earlier noted, the Court
applied heightened scrutiny and found the statute
invalid.2° Oklahoma’s participation in the market as an
20 The Court refused to uphold that portion of the statute
that applied specifically to the state-owned utility after
App. 39
electricity producer did not permit it to regulate in a
discriminatory manner privately owned utilities in the
same market.
Under New Jersey’s solid waste disposal program,
the districts are doing more than making choices about
what waste they will accept even in those instances
- where the district owns the designated facility. The waste
flow regulations purport to control the market activities
of private market participants. Those regulations do not
concern only the manner of operation of the government-
owned or government-managed designated disposal
facilities; they require everyone involved in waste collec-
tion and transportation to bring all waste collected in the
district to the designated facilities for processing and
disposal. They do not merely determine the manner or
conditions under which the government will provide a
service, they require all participants in the market to
purchase the government service - even when a better
price can be obtained on the open market. New Jersey’s
waste flow control regulations were thus promulgated by
it in its role as a market reguator, not in its capacity as a
market participant. As a result, those regulations are not
immune from review under the Commerce Clause.
determining that it could not be severed from the remaining
provisions. Wyoming, 502 U.S. at 457-61, 112 S.Ct. at 802-04. In so
doing, the Court stated: “We leave to the Oklahoma Legislature
to decide whether it wishes to burden this state-owned utility
when private utilities will otherwise be free of the Act’s
restrictions.” Id. at 461, 112 S.Ct. at 804.
App. 40
V.
Because we conclude that the waste flow regulations
discriminate against interstate commerce on their face or
in effect, and that they are not protected from dormant
Commerce Clause scrutiny under the market participant
exception, the only remaining question is whether the
regulations can survive the heightened scrutiny test.
“[O]nce a state law is shown to discriminate against
interstate commerce either on its face or in practical
effect, the burden falls on the State to demonstrate both
that the statute serves a legitimate local purpose, and that
this purpose could not be served as well by available
nondiscriminatory means.” Maine v. Taylor, 477 U.S. 131,
138, 106 S.Ct. 2440, 2447, 91 L.Ed.2d 110 (1986) (internal
quotations and citation omitted). While Atlantic Coast
urges us to decide whether the Department has so dem-
onstrated, we decline to do so.
When the district court decided this case, C & A
Carbone had not been decided and J. Filiberto Sanitation v.
Department of Environmental Protection, 857 F.2d 913 (3d
Cir.1988), was the law of this circuit. Understandably
relying on Filiberto, the district court balanced the bene-
fits to New Jersey against the burden on interstate com-
merce under Pike. It therefore had no occasion to consider
whether the Department had accomplished the much
more onerous task of demonstrating that there is no
alternative to its waste flow control regulations that
would accomplish its legitimate objectives.
The parties compiled a very substantial record in the
district court, much of which consisted of live testimony
the district court had the benefit of hearing. Based on that
App. 41
record, it is not difficult to believe the Department and
the amici when they insist that New Jersey has one of the
most serious and complex solid waste problems in the
country. At the same time, it is apparent from the record
that the feasibility and effectiveness of alternative mea-
sures pose technologically and economically complex
issues. While these issues have been touched upon in the
briefing before us, it is fair to say that they have not been
the focus of the parties’ efforts on this appeal.?! In this
context, we believe that this court, the parties, and the
public deserve the benefit of the district court’s views
before this controversy is finally resolved.
We are mindful of the fact that New Jersey has
vowed not to abandon its present system until compelled
to do so and of Atlantic Coast’s contention that it suffers
more irreparable injury with each passing month. We
note, however, that Atlantic Coast is free at any time to
apply again for pendente lite relief. The district court's
prior decision to deny such relief was based primarily on
its conclusion that Atlantic Coast had failed to demon-
strate a likelihood of success on the merits of its chal-
lenge. This conclusion was based in turn on its view that
the more lenient Pike test was the applicable one. After
21 The district court is in a far better position than we to
evaluate whether the focus of the efforts of the parties before it
would have been substantially the same had C & A Carbone been
earlier decided. Accordingly, we leave it to the discretion of the
district court in the first instance whether to resolve the
remaining issues, including the issue of the appropriate form of
relief if relief is to be granted, on the basis of the current record
or to reopen the record for supplementary evidence.
App. 42
C & A Carbone, the likelihood of success issue is a mate-
rially different one from that which the district court
previously addressed.
VL.
Because the waste flow regulations discriminate
against interstate commerce by restricting the access of
out-of-state facilities to waste processing and disposal
service markets, they can be upheld only if they can
survive the heightened scrutiny required by C & A Car-
bone. Because the district court analyzed the waste flow
regulations under the more lenient Pike balancing test, we
will remand for application of the appropriate test. For
the foregoing reasons, the district court’s judgment in
favor of the Department will be reversed and this case
will be remanded for further proceeding consistent with
this opinion.
Before: SLOVITER, Chief Judge, BECKER,
STAPLETON, MANSMANN, HUTCHINSON, SCIRICA,
COWEN, NYGAARD, ALITO, ROTH, LEWIS, McKEE,
and SAROKIN, Circuit Judges.
SUR PETITION FOR REHEARING
March 28, 1995
The petition for rehearing filed by appellee, Commis-
sioner, NJ Dept. of Env. Protection having been submitted
to the judges who participated in the decision of this
Court and to all the other available circuit judges of the
circuit in regular active service, and no judge who con-
curred in the decision having asked for rehearing, and a
majority of the circuit judges of the circuit in regular
App. 43
active service not having voted for rehearing by the court
in banc, the petition for rehearing is denied.
App. 44
APPENDIX B
U.S. DISTRICT COURT
DISTRICT OF NEW JERSEY.
ATLANTIC COAST DEMOLITION
AND RECYCEING, INC.,
VS.
BOARD OF CHOSEN
FREEHOLDERS OF
_ATLANTIC COUNTY, ET AL,
DEFENDANTS.
DOCKET NUMBER 93-2669
DECISION ON MOTION
SEPTEMBER 8, 1993
UNITED STATES COURTHOUSE
CAMDEN, NEW JERSEY, 08101
BEFORE: THE HONORABLE JOSEPH E. IRENAS,
U.S. DISTRICT COURT JUDGE,
DISTRICT OF NEW JERSEY
APPEARANCES:
MESSRS. MESIROV, GELMAN, JAFFEE,
CRAMER AND JAMIESON
BY: MARK ROSEN, ESQUIRE
AND
JODI ISENBERG, ESQUIRE,
ATTORNEYS FOR PLAINTIFFS.
GAIL LAMBERT, DEPUTY ATTORNEY
GENERAL,
AND
App. 45
STEFANIE A. BRAND, DEPUTY ATTORNEY
GENERAL
ATTORNEYS FOR THE STATE OF NEW JERSEY
STEPHEN J. DANER,
REGISTERED PROFESSIONAL
REPORTER,
CERTIFIED SHORTHAND
REPORTER,
OFFICIAL U.S. REPORTER
WITNESS INDEX
(NONE THIS DATE)
EXHIBITS MARKED IN EVIDENCE
(NONE THIS DATE)
[p. 5] (THE FOLLOWING TAKES PLACE IN OPEN
COURT).
THE COURT: I THOUGHT I WOULD SAY
REMAIN SEATED, BUT YOU WOULD RISE ANYHOW.
RATHER THAN MAKE YOU DEFY GRAVITY.
FIRST I WOULD LIKE TO THANK COUNSEL FOR
BOTH SIDES FOR DOING A VERY THOROUGH JOB
AND WORKING DURING THE SUMMER TIME, VERY
SHORT TIME FRAME, UNDER GREAT PRESSURE TO
MAKE A, TO MAKE A GOOD RECORD.
I APOLOGIZE IN ADVANCE THAT I DOUBT THAT
MY ORAL OPINION WILL BE THE SAME QUALITY AS
THE LEGAL WORK THAT WAS DONE BY COUNSEL AT
THESE THREE SIDES HERE, MAYBE MORE. MISS LON-
DON IS TWO SIDES BY HERSELF. BUT, BY THE ATTOR-
NEYS IN THIS CASE.
GIVEN A WEEK, I SUPPOSE WE COULD CRANK
SOMETHING OUT THAT ALMOST WOULD PASS BLUE
App. 46
BOOK MUSTER. BUT GIVEN THE CASE WILL BE MOST
LIKELY GOING TO THE THIRD CIRCUIT IN ANY
CASE, REGARDLESS OF THE OUTCOME, I FELT IT
WAS BETTER TO RENDER AN ORAL DECISION NOW,
THAN, AND TO GET IT OVER WITH, IF YOU WILL.
I'M GOING TO PROCEED FIRST BY MAKING
FINDINGS OF FACT. I AM THEN GOING TO SET
FORTH THE SUMMARY JUDGMENT STANDARD AND
THEN ANALYZE EACH OF THE FACTORS UNDER
THE SUMMARY JUDGMENT - EXCUSE ME, THE PRE-
LIMINARY JUDGMENT STANDARD. QUITE OBVI-
OUSLY THE GREATEST PORTION OF THAT WILL BE
THE LIKELIHOOD OF SUCCESS ON THE MERITS. I’LL
DEAL WITH THEM, [p. 6] WITH EACH OF THE OTHER
ISSUES AS WELL.
I’M GOING TO START OUT WITH THE FINDINGS
OF FACT.
THIS BY THE WAY - SOMEONE CAN BE GARBAGE
IN AND GARBAGE OUT CASE. TALKING COM-
PLTERS. WE HAD GARBAGE IN AND GARBAGE OUT.
(1) THE ISSUE OF SOLID WASTE MANAGEMENT
AND DISPOSAL REACHED A STATE OF CRISIS IN THE
1970S AND 1980S, AS A RESULT OF EXPANDING ENVI-
RONMENTAL AWARENESS, INCREASED REGULA-
TION AT THE FEDERAL AND STATE LEVELS, AND A
SHORTAGE OF ENVIRONMENTALLY ACCEPTABLE
LANDFILLS AND INCINERATORS.
(2) THE SCARCITY OF LANDFILLS AND INCIN-
ERATORS COINCIDED WITH A PERSISTENT
INCREASE IN THE AMOUNT OF SOLID WASTE PRO-
DUCED IN THE PUBLIC AND PRIVATE SECTORS.
THESE TRENDS MADE LANDFILL SPACE EVEN MORE
VALUABLE, WHILE ENCOURAGING THE SPREAD OF
“ILLEGAL DUMPING” OF SOLID WASTE AT
UNAUTHORIZED SITES.
App. 47
(3) THE SOLID WASTE MANAGEMENT ISSUE
WAS AND REMAINS PARTICULARLY CRITICAL IN
NEW JERSEY BECAUSE OF ITS DENSE POPULATION,
LIMITED LAND AVAILABILITY, SENSITIVE NATURAL
RESOURCE AREAS, AND THE SIGNIFICANT URBAN
AND INDUSTRIAL DEVELOPMENT.
(4) AT THE TIME OF THE SUPREME COURT
DECISION IN PHILADELPHIA VS. NEW JERSEY, 437
U.S. 617, 1977, AVAILABLE LANDFILL SPACE WAS IN
SHORT SUPPLY RELATIVE TO THE AMOUNT OF
WASTE. SINCE THEN, FEDERAL AND STATE LEGISLA-
TIVE EFFORTS [p. 7] HAVE SPURRED NEW DEVELOP-
MENT IN RECYCLING, INCINERATION, AND
ADVANCED DISPOSAL TECHNIQUES. AS A RESULT,
THERE HAS BEEN SOME IMPROVEMENT IN THE
AVAILABILITY OF DISPOSAL SITES, AND EVEN SOME
COMPETITION AMONG SITES.
(5) AT THE TIME OF THE PHILADELPHIA DECI-
SION, THE MAJORITY OF WASTE DISPOSAL FACILI-
TIES WERE PRIVATELY OWNED AND OPERATED.
SINCE THEN, STATES LIKE NEW JERSEY HAVE TAKEN
AN ACTIVE, IF NOT PROPRIETARY ROLE IN WASTE
DISPOSAL AND/OR RESOURCE RECOVERY. FOR
. EXAMPLE, THE STATE HAS EMPLOYED ITS FRAN-
CHISING AUTHORITY TO GRANT FRANCHISES IN
THIRTEEN OF THE TWENTY-TWO WASTE MANAGE-
MENT DISTRICTS; ELEVEN OF THESE GRANTS ARE
TO COUNTIES OR THEIR AGENCIES. IN OTHER
WORDS, NEW JERSEY HAS GONE BEYOND PRO-
MULGATING REGULATIONS ON WASTE MANAGE-
MENT TO PARTICIPATING ACTIVELY IN THE
PROCESS THROUGH COUNTY GOVERNMENTS OR
INDEPENDENT GOVERNMENTAL AGENCIES. I
DON’T HAVE THE PAGE CITE, BUT IT IS IN THERE
UNDER THE FRANCHISE SECTION.
App. 48
(6) PRIOR TO 1980, SOLID WASTE MANAGE-
MENT IN NEW JERSEY WAS HANDLED ON AD HOC
BASIS. THE LEGISLATIVE FINDINGS THAT ACCOM-
PANIED THE SOLID WASTE MANAGEMENT ACT
(SWMA), N.J.S.A. 13:1E-1 ET SEQ., NOTED WITH DIS-
APPROVAL THAT, “THE MANAGEMENT OF SOLID
WASTE IN NEW JERSEY CONSISTS LARGELY OF
PIECEMEAL, UNCOORDINATED ACTIVITIES DEVEL-
OPED TO MEET THE IMMEDIATE NEEDS OF LOCAL
GOVERNMENT WITH LITTLE, IF ANY, REGARD FOR
REGIONAL PLANNING AND COORDINATION.”
ENACTMENT [p. 8] OF THE SWMA WAS DESIGNED.
TO RECTIFY THE PERCEIVED FLAWS OF THE AD HOC
SYSTEM: LACK OF COORDINATION AMONG THE
COUNTIES AND BETWEEN THE STATE AND COUNTY
GOVERNMENTS; FOCUS ON SHORT-TERM, RATHER
THAN LONG-TERM GOALS; LOCAL, RATHER THAN
REGIONAL PLANNING; AND ABSENCE OF STATE
SUPERVISORY GUIDELINES.
(7) THE CURRENT SYSTEM IN NEW JERSEY FOR
MANAGEMENT OF SOLID WASTE DISPOSAL IS
BASED ON THE SWMA. IT ESTABLISHES A GENERAL,
STATEWIDE STATUTORY FRAMEWORK WITHIN
WHICH THE COUNTIES OPERATE. IT THEN DELE-
GATES RESPONSIBILITY TO THE COUNTIES FOR
DEVELOPING WASTE DISPOSAL PLANS THAT
ENCOURAGE SOURCE SEPARATION AND RECYC-
LING. A KEY COMPONENT OF THE COUNTY PLANS
IS CONTROL OVER THE FLOW DIRECTION OF
WASTES, SO THAT WHERE POSSIBLE, WASTE IS DIS-
POSED OF IN THE COUNTY PURSUANT TO AN
INTERCOUNTY AGREEMENT.
(8) IF A COUNTY CURRENTLY LACKS SUFFI-
CIENT DISPOSAL AND CAPABLE - TWENTY-ONE OF
App. 49
THE COUNTIES, ONE IS THE HACKENSACK MEDOW-
LANDS [sic] DISTRICT, SOMETIMES SAY COUNTY,
SOMETIMES DISTRICT.
IF A COUNTY CURRENTLY LACKS SUFFICIENT
DISPOSAL FACILITY, IT MAY ARRANGE FOR OUT-OF-
COUNTY, AND EVEN OUT-OF-STATE DISPOSAL.
BEFORE LEAVING THE COUNTY, A HAULER OF
WASTE GENERATED WITHIN THE COUNTY MUST
TRANSPORT THE WASTE TO A DESIGNATED TRANS-
FER STATION. PROCEDURES AT THESE TRANSFER
_ STATIONS DIFFER, BUT, AT THE VERY LEAST, THE [p.
9] CONTENTS OF THE TRUCKS ARE ACCOUNTED
FOR, WEIGHED, VISUALLY INSPECTED AND
DIRECTED TO A PARTICULAR LOCATION.
MERCER COUNTY IS ONE SUCH EXAMPLE OF A
COUNTY THAT HAS CONTRACTED WITH AN OUT-
OF-STATE FACILITY FOR WASTE DISPOSAL: TRUCKS
LEAVING THE COUNTY FIRST PASS THROUGH A
TRANSFER STATION, WHERE THE CONTENTS OF THE
TRUCK ARE THEN EXAMINED, REMOVE THE TAR-
PAULIN AND LOOK AT THE TOP OF THE TRUCK,
ACCOUNTED FOR; AND THEN THE TRUCK IS
DIRECTED TO A DISPOSAL FACILITY IN PENNSYLVA-
NIA WHERE AN AGENCY IN MERCER COUNTY HAS
PURCHASED AIRSPACE TO MEET THE LONG-TERM
PROJECTED NEEDS. I THINK THAT’S THE GROSS
LANDFILL IF I'M NOT MISTAKEN TAKEN.
(9) THE COSTS OF DISPOSING SOLID WASTE IN
NEW JERSEY, MEASURED IN TERMS OF “TIPPING
FEES,” ARE QUIT [sic!' EXPENSIVE RELATIVE TO FEES
AVAILABLE ELSEWHERE. LANDFILL ARE AVAILABLE
IN NEIGHBORING STATES EVEN WITH ADDITIONAL
TRANSPORTATION COSTS, ARE FREQUENTLY
CHEAPER THAN STATE FACILITIES. STATE, I DON’T
MEAN STATE RUN, BUT FACILITIES IN THE STATE OF
NEW JERSEY.
ee
App. 50
(10) NEW JERSEY HAS MADE CONSIDERABLE
EFFORTS TO IMPLEMENT COUNTY RECYCLING PRO-
GRAMS AND TO EDUCATE THE PUBLIC ABOUT THE
BENEFITS OF RECYCLING. THESE EFFORTS HAVE
REALIZED SUCCESS: ACCORDING TO STATISTICS
FOR THE CALENDAR YEAR 1991, 52 PERCENT OF THE
TOTAL WASTE STREAM WAS RECYCLED, AND THE
PERCENTAGE IS EXPECTED TO INCREASE. THAT [p.
10] WAS ADMITTED INTO EVIDENCE IN THIS CASE.
(11) A UNIFIED WASTE DISPOSAL SYSTEM
RESTRICTING THE MOVEMENT OF SOLID WASTE
WITHIN THE STATE BENEFITS THE CITIZENS OF NEW
JERSEY. CURTAILING THE TRANSPORT OF SOLID
WASTE ON ROADS IN THE STATE REDUCES THE
WEAR AND TEAR CAUSED BY GARBAGE TRUCKS. IT
LIKEWISE CUTS DOWN ON THE AMOUNT OF DEBRIS
CAUSED BY TRASH FALLING FROM THE TRUCKS.
SUCH MEASURES ALSO REDUCE THE ODOR THAT
EMANATES FROM TRASH IN TRANSIT.
(12) A WASTE DISPOSAL SYSTEM THAT MAN-
DATED THAT NON-RECYCLABLE SOLID WASTES BE
DISPOSED OF IN THE COUNTY OF ORIGIN FACILI-
TATES ENFORCEMENT EFFORTS. STATE AND
COUNTY OFFICIALS ARE BETTER ABLE TO KEEP
TRACK OF WASTES GENERATED WITHIN A GIVEN
COUNTY. ESPECIALLY IN COUNTIES THAT DO NOT
CONTAIN A DISPOSAL SITE, WHERE HAULERS ARE
PROCESSED THROUGH A TRANSFER STATION
BEFORE BEING DIRECTED TO A DISPOSAL SITE IN
ANOTHER COUNTY OR STATE, A FLOW CONTROL
SYSTEM GREATLY INCREASES THE ABILITY OF
COUNTY OFFICIALS TO KEEP TRACT [sic] OF, AND
THEREBY CONTROL SOLID WASTE, PREVENT ILLE-
GAL DUMPING.
(13) AFFORDING COUNTY OFFICIALS A MEANS
OF OVERSIGHT OVER THE DISPOSAL OF SOLID
iseeses
wh
Se Pe ne eee hee
App. 51
WASTE GENERATED WITHIN A COUNTY REDUCES
THE OPPORTUNITIES FOR ILLEGAL DUMPING BY
EFFECTING A MORE EFFICIENT USE OF LIMITED
ENFORCEMENT RESOURCES.
(14) TO THE EXTENT THE SOLID WASTE MAN-
AGEMENT ACT, N.J.S.A. 13:1E-1 ET SEQ, REQUIRES
CAPITAL EXPENDITURES TO [p.11] MEET ITS MAN-
DATE, E.G., FOR THE CONSTRUCTION OF NEW
FACILITIES, THE ACQUISITION OF SITES FOR LAND-
FILLS, ETCETERA, THE THE [sic] ABILITY OF LOCAL
GOVERNMENT UNITS TO FINANCE AND/OR PAY
FOR THESE PROJECTS, WHETHER THROUGH BOND-
ING OR TAX REVENUES, IS DEPENDENT ON THE
EXISTENCE OF SOLID WASTE TO BE PROCESSED
AND/OR DISPOSED OF BY THESE FACILITIES.
REQUIRING ALL WASTE GENERATED WITHIN A PAR-
TICULAR COUNTY TO BE DISPOSED OF WITHIN
THAT COUNTY IS A REASONABLE METHOD OF
ENSURING ADEQUATE SUPPLY OF SOLID WASTE. IT
ENHANCES THE ABILITY OF LOCAL GOVERNMENT
UNITS TO SECURE FUNDS TO CONSTRUCT THESE
FACILITIES, AND ENHANCES THE LOCAL GOVERN-
MENT UNITS TO RECOUP THEIR INVESTMENTS.
(15) RELIANCE ON PRIVATE, OUT-OF-STATE DIS-
. POSAL SOURCES FOR THE LONG-TERM DISPOSAL OF
SOLD [sic] WASTES GENERATED WITHIN THE STATE
MIGHT REASONABLY BE CONSIDERED UNRELIABLE
AND IMPRUDENT. NEW JERSEY WOULD NOT BE
ABLE TO GUARANTEE THE AVAILABLE [sic] OF SUF-
FICIENT SPACE TO MEET NEEDS.
THE OUT-OF-STATE FACILITY ALSO CANNOT
GUARANTEE ITS OWN STATES LEGISLATURE WOULD
REFRAIN FROM ACTING IN THAT AREA. AFTER ALL,
THE LIFE OF A LANDFILL IS AT LEAST PARTLY A
FUNCTION OF STATE REGULATIONS. THE LEGISLA-
TURE OF A STATE MIGHT DIRECTLY CLOSE DOWN
App. 52
THE LANDFILL; IT MIGHT ALSO REDUCE ITS INTAKE
CAPACITIES INDIRECTLY BY STATUTE OR REGULA-
TIONS. IN EITHER EVENT, THE OUT-OF-STATE FACIL-
ITY COULD OFFER NO ASSURANCES AS TO THE
AVAILABILITY OF SPACE OR THE [p. 12] CONSIS-
TENCY OF REQUIREMENTS FOR ACCEPTING NEW
JERSEY WASTE.
MOREOVER, PRIVATE CONTRACTS ARE, WHILE
SUBJECT TO ACTION FOR BREACH, WHICH IS A
RISKY MEANS OF ENSURING ABIDANCE WITH CON-
TRACT PROVISIONS. WHERE, AS HERE, A STATE
OPERATES UNDER A MANDATE TO DEVISE LONG-
TERM PLANS FOR DISPOSAL OF SOLID WASTE,
RELIANCE ON OUT-OF-STATE SOURCES OF DIS-
POSAL IS FRAUGHT WITH CONSIDERABLY MORE
RISK THAN A PLAN WHICH RELIES ON IN-STATE
DISPOSAL SCHEMES.
(16) THE DEPENDENCE ON OUT-OF-STATE
FACILITIES NOT ONLY LEAVES NEW JERSEY VUL-
NERABLE TO THE LEGISLATURE OF THE RECIPIENT
STATE; BUT IT ALSO LEAVES NEW JERSEY VULNER-
ABLE TO FEDERAL LEGISLATION, UNDER THE COM-
MERCE CLAUSE, THAT WOULD ALLOW STATES TO
LIMIT OR CONDITION THE ACCEPTANCE OF SOLID
WASTE FROM OTHER STATES. CONGRESS COULD
MOST EASILY PASS A BILL WHICH WOULD ALLOW
STATES TO LIMIT OR CONDITION ACCEPTANCE OF
SOLID WASTE FROM OTHER STATES. THIS ONLY
UNDERSCORES NEW JERSEY’S VULNERABILITY IF IT
WERE TO RELY ON OUT-OF-STATE DISPOSAL
SOURCES.
I NOTE AT LEAST IN THE HAZARDOUS WASTE
AREA IT MIGHT ALREADY BE ARGUED THAT CON-
GRESS HAS MANDATED EACH STATE PROVIDE FOR
DISPOSAL OF ITS OWN WASTES. REFERRING TO 42
U.S.C. SECTION 9604, CITING CAPITAL (A) SUB (A),
App. 53
WHICH MANDATES EACH STATE HAVE ADEQUATE
CAPACITY FOR THE DESTRUCTION, TREATMENT OR
SECURE DISPOSITION OF ALL HAZARDOUS WASTES
THAT ARE REASONABLY EXPECTED TO BE [p. 13]
GENERATED WITHIN THE STATE DURING THE 20-
YEAR PERIOD FOLLOWING THE DATE OF SUCH
CONTRACT OR COOPERATIVE AGREEMENT AND TO
BE DISPOSED OF, TREATED, OR DESTROYED. IT
WOULD BE A SIMPLE MATTER FOR THE LEGISLA-
TURE TO SAY EACH STATE HAS TO TAKE CARE OF
ITS OWN WASTE AND LEAVE THOSE THAT HAVE
NOT DONE SO IN A MUCH WEAKER POSITION.
(17) PLAINTIFF, ATLANTIC COAST DEMOLITION
AND RECYCLING, INC., ATLANTIC COAST, IS A
PENNSYLVANIA CORPORATION WITH ITS PRINCI-
PAL PLACE OF BUSINESS LOCATED AT 1107 SOUTH
34TH STREET, PHILADELPHIA, PENNSYLVANIA. IT IS
A WHOLLY OWNED SUBSIDIARY OF UNITED WASTE
SYSTEMS, INC.
(18) ATLANTIC COAST WAS ORGANIZED IN 1989
TO OPERATE A TRANSFER STATION AND RECYC-
LING CENTER FOR CONSTRUCTION AND DEMOLI-
TION OF C AND D DEBRIS. IT ENTERED INTO A
LONG-TERM LEASE FOR THE SITE OF THE 34TH
STREET FACILITY IN 1990.
I BELIEVE THAT THE PLAINTIFF IN FACT PUR-
CHASED THE SITE FROM MR. DELLA OR FROM A
COMPANY OR ENTITY OR PARTNERSHIP WITH
WHICH MR. DELLA WAS ASSOCIATED.
(19) INITIALLY, ATLANTIC COAST WAS ISSUED
A PERMIT BY THE CITY OF PHILADELPHIA FOR THE
RECYCLING OF CERTAIN METALS, PAPER, WOOD,
STONE AND CONCRETE. IN 1988, HOWEVER, THE
COMMONWEALTH OF PENNSYLVANIA ENACTED A
STATE-WIDE WASTE MANAGEMENT SCHEME, THE
MUNICIPAL WASTE PLANNING RECYCLING AND
App. 54
WASTE REDUCTION ACT, 53 PENNSYLVANIA STAT-
UTES, SECTIONS 4000.101 ET SEQ. ATLANTIC COAST
SHUT DOWN OPERATIONS FROM [p. 14] 1990
THROUGH 1993 TO EFFECT COMPLIANCE WITH THE
NEW STATUTE.
(20) PERMIT NUMBER 101581 WAS GRANTED BY
THE COMMONWEALTH OF PENNSYLVANIA DEPART-
MENT OF ENVIRONMENTAL RESOURCES (PADER) IN
OCTOBER OF 1992, AND ATLANTIC COAST
REOPENED ITS 34TH STREET FACILITY IN FEBRUARY
OF 1993. THE PERMIT ALLOWED ATLANTIC COAST
TO ACCEPT FOR PROCESSING AT THE FACILITY VAR-
IOUS TYPES OF CONSTRUCTION AND DEMOLITION
WASTE INCLUDING UNCONTAMINATED ROCK,
UNCONTAMINATED FERROUS METALS, WOOD,
RECYCLABLES UNCONTAMINATED SOIL, AND NON-
MARKETABLE CONSTRUCTION AND DEMOLITION
MATERIALS. THE LAST OF THESE IS UNSUITABLE
FOR PROCESSING; INSTEAD, IT IS STOCKPILED,
SHIPPED TO LANDFILLS AND BURIED.
(21) CONSTRUCTION AND DEMOLITION
DEBRIS, CLASSIFIED IN NEW JERSEY AS CLASS 13
SOLID WASTE, IS UNIQUE IN SEVERAL RESPECTS.
THIS TYPE OF WASTE IS GENERATED WHEN A
BUILDING IS CONSTRUCTED, DEMOLISHED, OR
REFURBISHED. IT IS NOT COMPOSED OF A SINGLE
MATERIAL, BUT RATHER OF A MIXTURE OF RECYCL-
ABLE AND NON-RECYCLABLE MATERIALS. IF THE
GENERATOR OF THE DEBRIS SEPARATES OUT THE
RECYCLABLE PORTIONS AT THE SITE, “SOURCE SEP-
ARATION”, THE SEPARATED PORTION IS NOT CON-
SIDERED WASTE, ALTHOUGH THE NON-
RECYCLABLE COMPONENTS ARE. AS A PRACTICAL
MATTER, MOST CONSTRUCTION AND DEMOLITION
WASTE IS NOT SOURCE SEPARATED. IN EFFECT, THIS
MEANS THAT CONSTRUCTION AND DEMOLITION
App. 55
DEBRIS, EVEN THAT WHICH IS PARTIALLY RECYCL-
ABLE, IS OFTEN DEEMED NON-RECYCLABLE WASTE
AND MUST BE DISPOSED OF [p. 15] IN LANDFILLS. IN
NEW JERSEY, SUCH WASTE WOULD BE SUBJECT TO
FLOW DIRECTION CONTROL, AND WOULD HAVE TO
BE DISPOSED OF IN ITS COUNTY OF ORIGIN OR IN A
COUNTY SPECIFIED BY INTERCOUNTY AGREEMENT,
WHICH WE WILL HEAR MORE LATER.
(22) THE OPERATIONAL SCHEME AT ATLANTIC
COAST IS AS FOLLOWS: TRUCKS CARRYING DEBRIS
ENTER INTO THE FACILITY, AND THEIR CONTENTS
ARE EXAMINED BY OVERHEAD CAMERA AND
VISUAL INSPECTION TO VERIFY THAT ONLY
ACCEPTABLE DEBRIS IS ON BOARD. FROM THERE,
THE TRUCKS PROCEED TO A WEIGH STATION AND
THEN TO A CONCRETE PAD, ONTO WHICH THE
CONTENTS ARE DUMPED. RECYCLABLE MATERIALS
ARE REMOVED AND REMAINDER IS STOCKPILED
FOR FUTURE SHIPMENT BY RAIL TO A LANDFILL IN
OHIO.
(23) IF WOOD IS EXCLUDED FROM THE CALCU-
LATIONS, ATLANTIC COAST RECYCLES 8 AND ONE-
HALF PERCENT BY WEIGHT IT RECEIVES; IF WOOD IS
INCLUDED, THE FIGURE MAY BE AS HIGH AS 20
PERCENT. IN EITHER CASE, MOST OF THE MATE-
RIALS RECEIVED AT THE ATLANTIC COAST FACILITY
ARE SHIPPED TO OHIO FOR DISPOSAL AT A LAND-
FILL.
(24) THE HIGH PERCENTAGES OF MATERIALS
SHIPPED TO A LANDFILL, RATHER THAN
RECYCLED, IS ENTIRELY CONSISTENT WITH THE
CORPORATE DIRECTIVES OF ATLANTIC COAST AND
UNITED WASTE. THE PRESIDENT OF UNITED WASTE
NOTED DURING THE HEARING FOR A PRELIMINARY
INJUNCTION THAT IS IS [sic] CHEAPER, AND THUS
PREFERABLE, TO SHIP ITEMS TO A LANDFILL
App. 56
RATHER THAN RECYCLE [p. 16] THEM. I’M READING
FROM PAGE 152, LINE 19 OF THE TRANSCRIPT
THROUGH PAGE 154, LINE 7.
THE COURT: FOR A GIVEN TON YOU DO
MAKE MORE MONEY GOING TO OHIO OR
RECYCLING.
THE WITNESS: FOR A GIVEN TON WITH
THE EXCEPTION I WOULD SAY OF THE
WOOD CHIPPING WHICH WE THINK WILL
ADD PROFITS TO BUSINESS, THE RECYC-
LING PROBABLY BREAK EVEN TO A SLIGHT
LOSS.
THE COURT: SO THAT THE SHIPPING TO
OHIO FOR A TON -
THE WITNESS: SHIPPING TO OHIO FOR A
TON WE HAVE IN THE AFFIDAVIT AND WE
THINK IT COST US NOW APPROXIMATELY
30, 40 PERCENT OF THE 42 DOLLARS.
I NOTE 42 DOLLARS IS WHAT THEY CHARGE THE
CUSTOMER. THEIR TIPPING FEE.
THE COURT: RIGHT NOW IT’S MORE PROF-
ITABLE TO SEND IT TO OHIO?
THE WITNESS: YES.
THE COURT: PRIOR TO THE FACT THAT
YOU ARE LOOSING OR MAKING MONEY
FOR A GIVEN TON OF GOODIES, IT IS
CHEAPER YOU, YOU DO BETTER SENDING
IT TO OHIO RATHER THAN RECYCLING?
THE WITNESS: OTHER THAN THE WOOD,
BECAUSE THE WOOD IS SO BULKY IN THE
RAILROAD CAR, IT’S CRUSHED AND
PRESSED TO GET THE WEIGHT OUT. SO I
App. 57
WOULD SAY [p. 17] OTHER THAN THE
r : WOOD MY VIEW WOULD BE, YES, THAT’S
CORRECT.
THEN BY MR. ROSEN QUESTIONING -
QUESTION: MR. SHEEHAN, YOU SAID
IN RESPONSE TO MY LAST QUESTION AND
THEN WENT INTO A COMMENT. I’M NOT
SURE YOU MEANT YES OR YES TO
ACKNOWLEDGE MY QUESTION.
IF THE COMPANY HAD TO SEND ALL
THE NONRECYCLABLE WASTE BACK AND
ONLY TOOK THE RECYCLABLES WOULD IT,
WOULD ATLANTIC COAST BE PROFITABLE
A. I DIDN’T FINISH MY RESPONSE.
THE WAY THE TRANSFER STATION
MAKES ITS PROFITS AND THIS IS TRUE TO A
LARGE EXTENT IN SOME OF OUR COLLEC-
TION OPERATIONS, IS THAT YOU MAKE THE
. MONEY ON THE TRANSPORTATION AND
: i DISPOSAL AND YOU DO THE RECYCLING
BECAUSE IT’S ENVIRONMENTALLY THE
RIGHT THING TO DO OR YOU ARE
REQUIRED TO DO UNDER THE REGULA-
TIONS. YOU, YOU SERVE AS A LANDFILL
BASE. BUT THE MONEY IS PAID ON THE
TRANSPORTATION AND DISPOSAL.
Q. IF THE COMPANY DID RECYCLING AND
NOT TRANSPORTATION AND -
A. GO OUT OF BUSINESS PROBABLY IN A
SHORT PERIOD OF TIME.
wd
(25) BECAUSE OF ITS PROXIMITY TO THE
SOUTHERN COUNTIES [p. 18] OF NEW JERSEY,
ATLANTIC COAST SOUGHT TO GAIN ACCESS TO THE
- App. 58
NEW JERSEY CONSTRUCTION AND DEMOLITION
WASTE MARKET. REPRESENTATIVES FROM ATLAN-
TIC COAST AND ITS PARENT, UNITED WASTE, CON-
TACTED REPRESENTATIVES OF THE NEW JERSEY
DEPARTMENT OF ENVIRONMENTAL PROTECTION
AND ENERGY, “DEPE”, AND VARIOUS COUNTY GOV-
ERNMENTS TO OBTAIN INFORMATION REGARDING
ELIGIBILITY REQUIREMENTS. DESPITE VARIOUS
EFFORTS, ATLANTIC COAST WAS UNSUCCESSFUL IN
BEING INCLUDED IN ANY COUNTY’S WASTE MAN-
AGEMENT PLAN.
(26) IN STARK CONTRAST TO THE TWO-YEAR
SHUTDOWN TO COMPLY WITH PENNSYLVANIA
REQUIREMENTS, ATLANTIC COAST FILED SUIT A
MERE TWO MONTHS AFTER FAILING TO BE
INCLUDED IN ANY COUNTY PLAN. IT DID THIS
DESPITE CONFLICTING INTERPRETATIONS OF NEW
JERSEY REQUIREMENTS, SOME OF WHICH INDI-
CATED THAT THE COMPANY COULD RECEIVE NEW
JERSEY SOLID WASTE EVEN THOUGH NOT NAMED
IN A COUNTY PLAN. IN ADDITION, ATLANTIC
COAST DID NOT INVESTIGATE, EXCEPT IN THE
MOST~-CURSORY FASHION, THE POSSIBILITY OF
BECOMING A REPOSITORY FOR SOLID WASTE FROM
NEW JERSEY, THIS DESPITE THE FACT ITS COMPETI-
TORS IN PENNSYLVANIA ARE ACCEPTING NEW JER-
SEY WASTE. ATLANTIC COAST ‘FAILED TO EXPLORE
THE OPPORTUNITIES AVAILABLE TO IT FOR PARTICI-
PATING IN THE DISPOSAL OF NEARLY 20 PERCENT
OF THE SOLID WASTE GENERATED IN NEW JERSEY,
WHICH IS CURRENTLY EXPORTED TO FACILITIES IN
OTHER STATES.
App. 59
(27) THE FINANCIAL PICTURE OF ATLANTIC
COAST INDICATES [p. 19] THAT AFTER A FEW
MONTHS IN OPERATION, SALES FIGURES HAD
BEGUN TO LEVEL OFF IN JUNE, JULY AND AUGUST
OF 1993. HOWEVER, AT THIS POINT PLAINTIFF’S
ALLEGATIONS ARE SIMPLY INSUFFICIENT - I
SHOULD SAY PLAINTIFF’S EVIDENCE ARE SIMPLY
INSUFFICIENT TO ESTABLISH THE EXTENT TO
WHICH ACCESS TO NEW JERSEY MARKETS WOULD
IMPROVE ATLANTIC COAST’S FINANCIAL PICTURE.
IT IS TOO EARLY TO ASSESS THE IMPACT OF START-
UP COSTS AND INTERCORPORATE PAYMENTS.
MOREOVER, PLAINTIFF HAS NOT DEMONSTRATED
THE PERCENTAGE OF CURRENT CLIENTS WHO ARE
FROM NEW JERSEY, TO SAY NOTHING OF CLASSIFY-
ING THEM ACCORDING TO SOURCE SEPARATION OR
NON-SOURCE SEPARATION. IN SHORT, THE ALLEGA-
TIONS REGARDING THE IMPORTANCE OF NEW JER-
SEY CLIENTS TO THE CONTINUED EXISTENCE OF
ATLANTIC COAST HAVE NOT BEEN CORROBO-
RATED. ALTHOUGH IN TESTIMONY THERE WAS A
LOSS AND A SHARPLY INCREASED LOSS IN JULY
AND AUGUST, THERE REALLY IS NO ANALYSIS OF
WHAT CAUSED THAT LOSS, WHAT THE BREAK EVEN
POINT WOULD BE. NO FINANCIAL ANALYSIS OF
PROFITABILITY BY LINE, WHETHER BE WOOD CHIP-
PING, BY RECYCLING, CHIPPING AND DISPOSAL. I
CONSIDER THIS FAIRLY SIGNIFICANT ONLY
BECAUSE THE FINANCIAL RECORDS ARE SOLELY IN
THE POSSESSION OF ATLANTIC AND UNITED. NOT
SOMETHING THE STATE HAS ACCESS TO.
App. 60
(28) NOTWITHSTANDING THE FACT THAT
ATLANTIC COAST HAS EXCLUSIVE CONTROL OVER
ITS FINANCIAL RECORDS, NONE HAS BEEN
OFFERED TO THE COURT IN THIS PROCEEDING.
THAT IS, [p. 20] NOTHING HAS BEEN PROFFERED TO
THE COURT TO DEMONSTRATE WITH ANY SORT OF
PRECISION THE IMPACT OF ACCESS TO THE NEW
JERSEY MARKETS. SUCH RECORDS ARE PARTIC-
ULARLY NECESSARY IN CASES LIKE THIS INVOLV-
ING A WHOLLY OWNED SUB SUBSIDIARY, WHERE
ACCOUNTING PROCEDURES FOR SUBSIDIARIES ARE
OFTEN EXTREMELY COMPLEX. FOR EXAMPLE, TESTI-
MONY AT THE HEARING REVEALED THE EXISTENCE
OF A 4 PERCENT “MANAGEMENT FEE” THAT WAS
OWED EACH MONTH TO THE PARENT COMPANY,
WHICH NECESSARILY AFFECTED THE FINANCIAL
STATEMENTS OF ATLANTIC COAST. THERE IS ALSO
NO INDICATION HOW THE LOSSES INCURRED DUR-
ING THE 1990-92 SHUTDOWN OF THE FACILITY HAVE
BEEN AMORTIZED. EVEN IF THE COURT ACCEPTS AS
A GIVEN, WHICH IT DOES, THE PROPOSITION THAT
ACCESS TO NEW JERSEY WASTE WOULD IMPROVE
THE COMPANY ’S FINANCIAL POSITION, IT CANNOT
DISCERN THE QUANTUM OF IMPROVEMENT WITH-
OUT ANY DETAILED - WITHOUT DETAILED FINAN-
CIAL DATA.
THE LEGAL CONCLUSIONS THAT FOLLOW MAY
ALSO CONTAIN ADDITIONAL FACTUAL FINDINGS.
THEREFORE, THE FACTUAL FINDINGS OF THIS SEC-
TION SHALL BE DEEMED SUPPLEMENTAL BY ANY
FACTUAL FINDINGS INCLUDED, BURIED OR IMBED-
DED IN MY CONCLUSIONS OF LAW.
App. 61
THE THIRD CIRCUIT MAINTAINS A STRINGENT
FOUR-PART STANDARD FOR THE AWARD OF A PRE-
LIMINARY INJUNCTION, RECOGNIZING THAT THE
GRANT OF INJUNCTIVE RELIEF IS AN “EXTRAORDI-
NARY REMEDY WHICH SHOULD BE GRANTED ONLY
IN [p. 21] LIMITED CIRCUMSTANCES.” INSTANT AIR
FREIGHT CO. VS. C.F. AIR FREIGHT INC., 882 F.2D 797,
800, (3D CIR. 1989). THE DISTRICT COURT MUST BAL-
ANCE ONE (1) THE LIKELIHOOD THAT THE MOVANT
WILL PREVAIL ON THE MERITS AT A FINAL HEAR-
ING; (2) THE EXTENT TO WHICH THE PLAINTIFF IS
BEING IRREPARABLY HARMED BY THE CONDUCT
COMPLAINED OF; (3) THE EXTENT TO WHICH THE
DEFENDANTS WILL SUFFER IRREPARABLE HARM IF
THE PRELIMINARY INJUNCTION IS ISSUED; AND (4)
THE PUBLIC INTEREST. S & R CORPORATION VS.
JIFFY LUBE INTERNATIONAL, INC. 968 F.2D 371, 374
(3D CIR. 1992) KERSHNER VS. MAZURKIEWICZ, 670
F.2D 440, 443 (3D CIR. 1982); IN RE ARTHUR
TREACHER’S FRANCHISEE LITIGATION, 689 F.2D 1137,
1143 (3D CIR. 1982). THE DISTRICT COURT MAY BAL-
ANCE THE POSSIBILITY OF HARM TO THIRD PER-
~ SONS, OR TO THE PUBLIC INTEREST. KERSHNER, 670
F.2D AT 443; ELI LILLY AND CO. VS. PREMO PHAR-
MACEUTICAL LABORATORIES, INC., 630 F.2D 120
(1980).
AS FOR THE REQUIREMENT OF IRREPARABLE
HARM, THE MOVANT IS REQUIRED TO MAKE A
“CLEAR HOWING [sic] OF IMMEDIATE IRREPARABLE
INJURY.” HOHE VS. CASEY, 686 F.2D 69, 72 (3D CIR.
1989); ECRI VS. MCGRAW HILL, INC., 809 F.2D 223, 226
(3D CIR. 1987).
App. 62
IN ADDITION, THE MOVANT MUST DEMON-
STRATE TO THE COURT “A REASONABLE PROBA-
BILITY EVENTUAL SUCCESS IN THE LITIGATION.”
OBURN VS. SHAPP, 521 F.2D 142, 148 (3D CIR. 1975).
THE COURTS HAVE, HOWEVER, EASED THE
REQUIREMENT [p. 22} SLIGHTLY “WHERE FACTORS
OF IRREPARABLE HARM, INTERESTS OF THIRD PAR-
TIES AND PUBLIC CONSIDERATIONS STRONGLY
FAVOR. THE MOVING PARTY.” CONSTRUCTORS
ASSOCIATION OF WESTERN PENNSYLVANIA VS.
KREPS, 573 F.2D 811, 815 (3D CIR. 1978).
NOW, THE BULK OF MY LEGAL CONCLUSIONS
ARE GOING TO DEAL WITH THE LIKELIHOOD OF
SUCCESS ON THE MERITS, WHICH I THINK OCCUPY
98 PERCENT, IF NOT 100 PERCENT OF OUR ORAL
ARGUMENT. BUT I DO THINK THE OTHER THREE
STANDARDS ARE SOMEWHAT IMPORTANT.
LET ME FIRST TALK ABOUT THE FOURTH OF
THEM, THE PUBLIC INTEREST, IN WEIGHING THE
PUBLIC INTEREST. AT THIS POINT NEW JERSEY, AND
I WILL BE GOING INTO IT AT GREAT LENGTH OR
GREATER LENGTH WHEN I DO THE LIKELIHOOD OF
SUCCESS ON THE MERITS, HAS DEVELOPED A COM-
PLEX INTEGRATED STATEMENT TO DEAL WITH THE
SOLID WASTE CRISES. IT IS DONE SO, AS I INDI-
CATED DURING COLLOQUY, WITH A GREAT DEAL
OF SUCCESS. THERE IS NO QUESTION IN MY MIND
THAT A HOLDING THAT CONSTITUTIONALLY WHAT
MAY BE CALLED THE HEART, TO SOME DEGREE, OF
THE NEW JERSEY SYSTEM, THE FLOW DIRECTIVES,
ONE CAN ARGUE THAT THE HEART OF THE ENTIRE
EEO
App. 63
SYSTEM IS THE COUNTY DIRECTIONS, THE PROVI-
SIONS WHICH DIRECT WASTE FROM THE COUNTY
BE DISPOSED OF IN THE COUNTY WOULD BE
EXTRAORDINARILY DISRUPTIVE TO THE CURRENT
SYSTEM. AND THAT IN THE SHORT RUN, AT LEAST,
THE PUBLIC WOULD SUFFER. I KNOW AN ARGU-
MENT CAN BE MADE THAT THE BENEFITS OF FREE
ENTERPRISE AS IN THE TELEPHONE COMPANY OR
[p. 23] OTHER ANTITRUST CASES TO THE BENEFIT OF
THE PUBLIC, THERE IS NO QUESTION THAT WHEN
YOU DISRUPT A SYSTEM AS BROAD AND COMPLEX
AS THIS ONE, BY, TO SOME DEGREE I DON’T MEAN
IT IN A PEJORATIVE WAY, BUT SKIMMING OFF A
CERTAIN CLASS OF WASTE, YOU WILL CERTAINLY IN
THE SHORT-TERM HURT THE PUBLIC INTEREST. I SO
FIND. TO THE EXTENT THAT THAT IS A FACTOR, I
THINK THE PUBLIC INTEREST HERE AT LEAST IN
THE SHORT-TERM, THAT ANALYSIS, THAT WEIGH-
ING OF THAT, WEIGHS IN FAVOR OF DENIAL OF
PRELIMINARY INJUNCTION.
IT HAS NO REAL FACTOR, WEIGHS NO WEIGHT
AT THE ULTIMATE CONSTITUTIONALITY, OF
COURSE, OF THE REGULATION IN QUESTION. BUT
AT THE PRELIMINARY DISCUSSION STAGE TO THE
EXTENT IT IS A FACTOR, I THINK IT WEIGHS
AGAINST THE GRANTING OF A PRELIMINARY
INJUNCTION. IF [T WOULD WEIGH IN FAVOR OF IT,
THE INJUNCTION WOULD BE GRANTED. YOU MAY
WELL GIVE SOME TIME FOR IMPLEMENTING, AS i
ONCE DID IN A CASE, GIVE THE STATE A TIME TO
CHANGE.
App. 64
THE NUMBER TWO AND THREE ELEMENTS OF
THE PRELIMINARY INJUNCTION ANALYSIS ARE,
THE EXTENT TO WHICH PLAINTIFF IS BEING HARM
[sic] BY THE CONDUCT COMPLAINED OF, AND THE
EXTENT TO WHICH THE DEFENDANT WILL SUFFER
IRREPARABLE HARM IF THE PRELIMINARY INJUNC-
TION IS ISSUED.
AS I INDICATED IN MY FINDINGS OF FACT, I’M
ACCEPTING THE PROSPECT THAT A PHILADELPHIA
TRANSFER STATION OR MATERIAL RESOURCE OR
RECOVERY FACILITY IS ALLOWED TO TAKE [p. 24]
NEW JERSEY WASTE, A CHANCE WOULD BE MORE
PROFITABLE IF NOT, IF A PHILADELPHIA TRANSFER
STATION OR MRF IS ALLOWED TO TAKE WASTE,
CHANCES ARE IT WOULD BE MORE PROFITABLE
THAN IF NOT ALLOWED TO TAKE WASTE OR MORE
PROFIT THAN NOT ALLOWED TO TAKE WASTE. AND
I ALSO REALIZE THAT YOU DON’T HAVE THE NOR-
MAL ANALYSIS HERE OF ADEQUACY OF REMEDY AT
LAW BECAUSE ANY LOSSES THEY SUSTAINED, IF AT
THAT TIME THE STATUTE IS UNCONSTITUTIONAL,
ARE NOT RECOVERABLE IN AN ACTION BECAUSE
THE STATE, I BELIEVE, WOULD BE BASICALLY
IMMUNE FROM DAMAGE, NOT INJUNCTIVE ACTION
OR NOT CONSTITUTIONAL ACTION, BUT WITHOUT
GOING INTO IT, THE CHANCES OF ANYBODY
RECOVERING DAMAGES ON THE GROUNDS A PAR-
TICULAR REGULATION VIOLATED THE COMMERCE
CLAUSE ARE PRETTY REMOTE. PROBABLY BE
PROVEN WRONG ON THAT, BUT I’M GOING ON
THAT ASSUMPTION.
App. 65
THE REAL PROBLEM HERE ON THE QUESTION
OF BOTH IRREPARABLE HARM AND THE EXTENT TO
WHICH THE DEFENDANTS WILL SUFFER IRREPAR-
ABLE HARM, IS THE VERY CONCLUSIORY [sic]
FINANCIAL INFORMATION PUT IN. WE WERE TOLD
THERE WAS A LOSS, BUT IMPOSSIBLE FOR JUST
FOUR OR FIVE MONTH PERIOD, BUT IMPOSSIBLE TO
REALLY DETERMINE WHAT EXTENT THAT LOSS IS
BECAUSE YOU COULDN’T GET WASTE FROM NEW
JERSEY - A LOT OF WASTE IN NEW JERSEY IN PENN-
SYLVANIA. THERE WAS TESTIMONY, AND I’LL FIND
THERE WAS A FAIRLY SUBSTANTIAL VALUE OF
WASTE COMING IN FROM NEW JERSEY. IT WASN’T
NO NEW JERSEY WASTE. I HEARD TESTIMONY THAT
I THOUGHT THAT SOUNDED LIKE 25 OR 30 [p. 25]
PERCENT. AGAIN, NO REAL DOCUMENTATION PUT
IN THAT WOULD TELL ME EXACTLY WHAT WAS
GOING TO NEW JERSEY AND THE KIND OF THINGS
GOING FROM NEW JERSEY. BUT THERE WASN’T -
THERE WAS NO NEW JERSEY WASTE GOING IN.
THERE WAS QUITE A BIT OF NEW JERSEY WASTE
‘COMING IN. SOME INDICATION MAYBE IN AUGUST
IT BEGAN TO FALL OFF BECAUSE OF THREATENED
ENFORCEMENT ACTIONS BY THE STATE. BUT ABSO-
LUTELY NO QUANTIFICATION OF WHAT THE FALL
OFF WAS, WHAT THE CAUSE WAS, WHETHER FALL
OFF IN THE NEW JERSEY BUSINESS. THERE SEEMS TO
BE A REFERENCE TO PUT IN REAL HARD CORE
FINANCIAL DATA. YOU WOULD ALMOST EXPECT IN
A CASE LIKE THIS AN EXPERT ACCOUNTING WIT-
NESS TO COME IN AND SAY, HERE IS THE OPERA-
TION. HERE ARE THE FINANCIALS. HERE IS HOW
App. 66
WE MAKE MONEY. HERE IS HOW WE LOSE MONEY.
THIS Is WHAT WE WOULD PREDICT IF NEW JERSEY
WAS OPEN. THESE ARE THE CONTRACTS WE
WOULD HAVE. INSTEAD IT WAS KIND OF AMOR-
PHOUS, IN GENERAL. NOT ONE STANDING
EXTRAORDINARY EFFORT IN, BUT TO THE CASE
TOGETHER BY THE PLAINTIFF.
ON BALANCE, CERTAINLY I FIND THAT THERE IS
A PRETTY STRONG PROBABILITY THAT BEING AT
LEAST TO SOME EXTENT BARED [sic] FROM THE
NEW JERSEY MARKET PLACE HAS CAUSED A SOME
LOSS OF PROFITS TO THE PLAINTIFF BUT HOW
MUCH, TO WHAT EXTENT, WHAT EXTENT THE SITU-
ATION WOULD IMPROVE, JUST IMPOSSIBLE FOR ME
TO DETERMINE.
I THINK ON BALANCE, AT THIS STAGE IN THE
LITIGATION, REALLY DIFFICULT FOR ME TO SAY
THAT THE PLAINTIFF HAS BEEN [p. 26] IRREPARABLY
HARMED. THAT THE PLAINTIFF IS LOSING MONEY, I
ACCEPT. I HAVE NO FINANCIALS TO DISPUTE IT.
THEY SAY THEY ARE LOSING MONEY. I ACCEPT
THEY ARE LOSING MONEY. BUT THAT LOSS IS TIED
DIRECTLY TO NEW JERSEY’S STATUTORY AND REGU-
LATORY SCHEME IS VERY HARD FOR ME TO FIND.
I HAVE BEEN SWAMPED WITH A GREAT DEAL OF
INFORMATION, BUT I HAVE BEEN ASKED TO
ACCEPT ON FAITH THAT IF WE CAN ONLY GET INTO
NEW JERSEY WE WOULD MAKE TONS OF BUCKS,
BUT WE HAVEN’T BEEN ABLE TO GET INTO NEW
JERSEY AND THEREFORE WE ARE LOSING MONEY.
App. 67
NOW, EVEN THOUGH THAT ALONE MIGHT BE
GROUNDS FOR ME TURNING DOWN THE PRELIMI-
NARY INJUNCTION, I HAVE THIS INHERENT GUT-
LIKE, JUDGE-LIKE FEELING THAT WHERE CONSTITU-
TIONAL RIGHTS ARE INVOLVED AND CONSTITU-
TIONAL, ALLEGED CONSTITUTIONAL VIOLATIONS,
ONE MIGHT ARGUE THAT THAT ALMOST IS PER SE
IRREPARABLE HARM.
QUITE CANDIDLY, IN TRYING TO GET MY
HANDS AROUND THIS CASE, I HAVE NOT DONE
EXTENSIVE RESEARCH ON, YOU KNOW, BEYOND
THE ROUTINE ON THE STANDARD FOR PRELIMI-
NARY INJUNCTION, I DON’T KNOW LURKING OUT
THERE, THERE IS A LINE OF CASES THAT SAY THAT
CERTAINLY WERE PERSONAL RIGHTS - IF
THURGOOD MARSHAL ANALYSIS WOULD APPLY,
DEALING WITH THAT KIND OF ISSUE, THERE’S NO
DOUBT IN MY MIND THERE IS IRREPARABLE HARM
PRESUMED. FIRST AMENDMENT ISSUE. YOU
WOULDN’T WORRY WHETHER THE PERSON WAS
LOSING MONEY OR NOT. [p. 27] BUT HERE WE ARE
DEALING WITH AN ECONOMIC ISSUE. DOLLARS
AND CENTS. DOING BUSINESS.
IF I APPLY THE TRADITIONAL NOTIONS OF
IRREPARABLE HARM ELEMENTS, I DON’T THINK
THE PLAINTIFF HAS DONE IT.
ON THE OTHER HAND, IF I INCORPORATE INTO
IT A VIOLATION OF ONE’S CONSTITUTIONAL
RIGHTS, IN THIS SENSE, CAN NEVER REALLY BE RET-
ROACTIVE REMEDIES, NEVER REALLY MAKE THE
PERSON WHOLE WHEN IT’S ALL OVER. WHETHER
App. 68
BECAUSE OF THE 11TH AMENDMENT LIMITATIONS,
SUITS AGAINST STATES OR ON OTHER KINDS OF
THINGS, IT WOULD BE TRUE IN A THURGOOD MAR-
SHAL TYPE CASE. FOR THAT REASON, ALL THOUGH
[sic] YOU KNOW MY HOLDING ON THE CONSTITU-
TIONAL GROUND, THEY HAVE NOT MET THE IRREP-
ARABLE HARM, BECAUSE OF THE POSSIBILITY THE
THIRD CIRCUIT WILL SAY THERE WERE CONSTITU-
TIONAL RIGHTS CONCERNING A LIKELIHOOD OF
SUCCESS ON THAT ISSUE, THE IRREPARABLE HARM
WOULD BE PRESUMED, AS I KNOW THERE ARE
CASES HOLDING THAT IN OTHER AREAS OF CON-
STITUTIONAL PRECEDENTS, I’M GOING TO GO INTO
THE ISSUE OF THE MERITS OF THE CASE ITSELF.
THE DECISION OF THE [sic] WHAT FOLLOWS IS
BASICALLY MY CONCLUSIONS OF LAW, ALTHOUGH
I, FOR LACK OF TIME, THEY WILL BE BURIED IN
HERE, AS NOTED EARLIER, SOME FURTHER FAC-
TUAL FINDINGS. TO THE EXTENT I MAKE FACTUAL
RATHER THAN LEGAL FINDINGS, I DO NOT MEAN
TO MAKE THEM SOLELY BECAUSE THEY ARE IN
WHAT I’M CALLING MY FINDINGS OF LAW DIS-
TINCT FROM MY FINDINGS OF FACT.
[p. 28] (1) THE DECISION OF THE SUPREME
COURT IN CITY OF PHILADELPHIA VS. NEW JERSEY,
1977, WHICH WAS 437 U.S. 617, THE COURT APPLIED
THE “DORMANT” ASPECT OF THE COMMERCE
CLAUSE, ARTICLE I, SECTION 8, OF THE UNITED
STATES CONSTITUTION TO INVALIDATE A NEW JER-
SEY LAW WHICH FORBID THE IMPORTATION OF
GARBAGE INTO THE STATE, FOR THE STATED PUR-
POSE OF PRESERVING THE STATES’S DWINDLING
ee
Neen
App. 69
LANDFILL SPACE. BY THE WAY, THE REFERENCE TO
THE DORMANT ASPECT, IF YOU READ THE COM-
MERCE CLAUSE, IT TALKS ABOUT THE FEDERAL
GOVERNMENT’S AFFIRMATIVE RIGHT TO REGULATE
INTERSTATE COMMERCE. IT DOESN’T SPEAK IN
TERMS OF WHAT THE STATE CAN’T DO, BUT HAS
BEEN INTERPRETED FOR 150 YEARS, PROBABLY, TO
NOT ONLY AFFIRMATIVELY GIVE THE FEDERAL
GOVERNMENT THE RIGHT TO LEGISLATE IN THE
INTERSTATE COMMERCE AREA, BUT DORMANT
ASPECTS TO BAR THE STATE FROM ACTING IN
THOSE AREAS WHERE THE FEDERAL GOVERNMENT
HAS NOT ACTED.
THIS HOLDING WAS RECENTLY REAFFIRMED,
AND AS I WILL TALK ABOUT LATER, ARGUABLY,
EXPANDED. FORT GRATIOT SANITARY LANDFILL VS.
MICHIGAN DEPARTMENT OF NATURAL RESOURCES,
112 SUPREME COURT, 2019, 1992, A CASE IN WHICH
PRIVATE LANDFILL OWNERS WERE FORBIDDEN TO
ACCEPT ANY WASTE NOT GENERATED IN THE
COUNTY WHERE THE LANDFILL WAS LOCATED.
THIS WAS HELD TO VIOLATE THE COMMERCE
CLAUSE EVEN THOUGH IT IMPACTED ON GARBAGE
GENERATED WITHIN THE STATE AS WELL AS WITH-
OUT.
ALTHOUGH THE COURT TALKED ABOUT GAR-
BAGE AS AN ARTICLE [p. 29] OF COMMERCE - I’M
NOW BACK TO THE PHILADELPHIA/NEW JERSEY
CASE, THE COURT TALKED ABOUT GARBAGE AS AN
ARTICLE OF COMMERCE, THE REAL ARTICLE OF
COMMERCE WAS LANDFILL SPACE, AND THE NEW
JERSEY LAW PROPERLY COULD BE LOOKED AT ASA
App. 70
LAW FORBIDDING THE EXPORT OF LANDFILL SPACE
TO NEIGHBORING STATES.
ALTHOUGH NOT MADE CLEAR IN THE OPINION,
IT WAS WRITTEN IN AN ENVIRONMENT WHERE
MANY, IF NOT MOST LANDFILLS WERE PRIVATELY
RUN OPERATIONS WHICH MADE A PROFIT BY SELL-
ING “SPACE” TO WHOEVER SHOWED UP AND PAID
FOR IT. THE SUPREME COURT HELD THAT SIMPLY
BARRING OUT-OF-STATE GARBAGE WAS NOT THE
TYPE OF LEGITIMATE REGULATION WHICH COULD
WITH STAND [sic] A COMMERCE CLAUSE ASSAULT
NOTWITHSTANDING SOME IMPACT ON INTERSTATE
COMMERCE. PIKE VS. BRUCE CHURCH, INC., 397 U.S.
137. IF NEW JERSEY HAD A PRIVATELY OWNED FAC-
TORY WHICH MADE AN ANTIBIOTIC WHICH WAS IN
SHORT SUPPLY IN THE NORTHEAST, THE STATE
COULD NOT SOLVE THE PROBLEMS OF ITS CITIZENS
BY BANNING ITS EXPORT TO NEW YORK. IN LIKE
FASHION, NEW JERSEY WAS NOT ALLOWED TO BAN
THE EXPORT OF ITS SCARCE LANDFILL SPACE.
NEW JERSEY, SAID THE SUPREME COURT, COULD
CERTAINLY REGULATE LANDFILLS TO PRESERVE
SPACE, WETLANDS, ETCETERA, BUT NOT IN A WAY
WHICH PLACE [sic] THIS BURDEN SOLELY ON CITI-
ZENS OF OTHER STATES.
IN QUOTING FROM ANOTHER CASE, AT PAGE
627, THE SUPREME [p. 30] COURT REFERRED TO
RESTRICTIONS ON “PRIVATELY OWNED ARTICLES
OF TRADE.” IT IS SOMEWHAT SILLY TO REFER TO
PRIVATE OWNERSHIP OF GARBAGE OR WASTE
App. 71
WHICH IS NOT ONLY ABANDONED BY ITS GENERA-
TOR, BUT FOR WHOSE DISPOSAL THE GENERATOR
GENERALLY PAYS. INDEED, I DOUBT THE STATE
WOULD HAVE TO PAY COMPENSATION IF IT WERE
TO EXERCISE EMINENT DOMAIN OVER ALL OF ITS
GARBAGE. AS THE SUPREME COURT SENSED, ON
PAGE 628, BUT COULD NOT QUITE GRASP, THE REAL
ARTICLE OF COMMERCE WAS LANDFILL SPACE,
NOT GARBAGE. INDEED, IN SOME VERY REAL
SENSE, GARBAGE OR WASTE, LIKE IT OR NOT,
REALLY BECOMES THE PROPERTY OF THE STATE
WHEN IT IS ABANDONED BY THE OWNER THE
STATE DEALS WITH ITS NEW FOUND [sic] PROPERTY
EITHER BY TAKING POSSESSION OF IT AND DEAL-
ING WITH IT, AS IS DONE WITH MOST HOUSEHOLD
GARBAGE, OR BY ORDERING THE GENERATOR TO
PAY FOR AND ARRANGE FOR ITS DISPOSAL. IN
RECENT YEARS GOVERNMENTAL ENTITIES
REPLACED PRIVATE ENTERPRISE AS THE PROVIDER
OF FACILITIES, SUCH AS INCINERATORS, FOR THE
ULTIMATE DISPOSAL OR RECYCLING OF WASTE
STREAMS.
LET ME DELINEATE. I’M NOT SUGGESTING OWN-
ERSHIP IN ANY WAY LESSONS [sic] THE HOLDING
THAT THE ARTICLE OF COMMERCE AS CORRECTLY
POINTED OUT IN COLLOQUY, WHATEVER MAY
ONCE HAVE BEEN THE LAW, TO THAT EXTENT
STATE OWNERSHIP OF AN ITEM MAY CEASE TO
MAKE IT AN ARTICLE OF COMMERCE. THAT HAS
LONG SINCE BEEN REPLACED. I SAY IT ONLY TO PUT
IN CONTEXT OF WHAT IS REALLY GOING ON. NOT
TO SUGGEST THAT I AM MAKING A [p. 31] HOLDING
App. 72
BASED ON THE THEORY THAT THE GOVERNMENT
OWNS ALL THE WASTE AND, THEREFORE, SOME-
HOW WOULD BE IMMUNE FROM THE COMMERCE
CLAUSE OR OTHERWISE GARBAGE IS NOT REALLY
AN ARTICLE OF COMMERCE.
ON PAGE 629 THE COURT STATES THAT “THERE
HAS BEEN NO CLAIM HERE THAT THE VERY MOVE-
MENT OF WASTE INTO OR THROUGH NEW JERSEY
ENDANGERS HEALTH, OR THAT WASTE MUST BE
DISPOSED OF AS SOON AS AND AS CLOSE TO ITS
POINT OF ORIGIN AS POSSIBLE. THE HARMS
CAUSED BY WASTE OR ARE SAID TO HAVE [sic]
ARISE AFTER ITS DISPOSAL IN LANDFILL SITES.”
THIS IS, I GUESS THE SUPREME COURT’S REPEATED
HABIT OF SUGGESTING THEY KNOW EVERYTHING
ABOUT EVERYTHING. WHEN ACTUALLY GO WELL
BEYOND THE RECORD THEY HAD BEFORE THEM.
ANYONE WHO HAS DRIVEN BEHIND A LARGE
TRUCK TRANSPORTING WASTE WILL KNOW THAT
THIS IS A HIGHLY DUBIOUS PROPOSITION. THIS IS A
FINDING OF FACT IN 1977 AND NOT A CONCLUSION
OF LAW, DO NOT CONDITION IT BINDING AS A MAT-
TER OF LAW.
(2) THROUGHOUT THE 1970S AND 1980S, THE
DISPOSITION OF SOLID WASTE HAS BEEN AN [sic] A
STATE OF CRISES [sic]. BOROUGH OF GLASSBORO VS.
GLOUCESTER BOARD, 100 N.J. 134 (1985); J. FILIBERTO
SANITATION VS. DEPARTMENT OF ENVIRONMENTAL
PROTECTION 857 F.2D 913 (3D. CIR. 1988).
(3) ALTHOUGH THE FEDERAL GOVERNMENT
HAS LEGISLATED IN THE FIELD OF SOLID WASTE
App. 73
DISPOSAL IN THE PROVISIONS OF THE RESOURCE
CONSERVATION ACT OF 1976, NOW CODIFIED AS
THE SOLID [p. 32] WASTE DISPOSAL ACT FOUND AT
42 U.S.C. SECTION 6901, ET. SEQ, IT IS CLEAR THAT
CONGRESS EXPRESSLY LEFT TO THE STATES THE PRI-
MARY ROLE IN THE COLLECTION AND DISPOSAL OF
SOLID WASTE. LOOK AT 42 U.S.C. SECTION 6901(A)(4).
(4) THE NEW JERSEY SOLID WASTE MANAGE-
MENT ACT, N.J.S. ANNOTATED SECTIONS 13:1E-1 TO
1E-198, WEST 1979 AND SUPP. 1988), THE ACT, SETS
FORTH A COMPREHENSIVE WASTE MANAGEMENT
PROGRAM FOUNDED ON THE DETERMINATION
THAT “COLLECTION, DISPOSAL AND UTILIZATION
OF SOLID WASTE IS A MATTER OF GRAVE CONCERN
TO ALL CITIZENS AND IS AN ACTIVITY THOR-
OUGHLY AFFECTED WITH THE PUBLIC INTEREST.”
SECTION 13:LE-2(A).
I DO NOT THINK AS A MATTER OF LAW THERE IS
ANY DOUBT THAT THE COLLECTION DISPOSAL OF
SOLID WASTE IS A MATTER TRADITIONALLY
AFFECTED WITH THE PUBLIC INTEREST SUBJECT TO
- THE EXERCISE OF THE STATE POLICE POWER AND A
MATTER OF PARTICULAR STATE CONCERN.
(5) THE ACT GIVES THE D.E.P.E. RESPON-
SIBILITY FOR PROMULGATING AND UPDATING A
STATEWIDE SOLID WASTE MANAGEMENT PLAN.
SECTION 13:1E-6(A)(3). EACH COUNTY IN NEW JER-
SEY IS DESIGNATED AS A SOLID WASTE DISTRICT
AND HACKENSACK MEDOWLANDS [sic] WITH
RESPONSIBILITY OF DEVELOPING A DISTRICT SOLID
WASTE MANAGEMENT PLAN BASED ON STATE
App. 74
GUIDELINES. SECTION 13:1E-19 TO 21 AND 23. NO
PLAN MAY BE ADOPTED WITHOUT A PUBLIC HEAR-
ING AND OPPORTUNITY FOR WRITTEN COMMENT.
SECTION 13:1E-23. UPON ADOPTION, A DISTRICT
PLAN [p. 33] MUST BE REVIEWED AND APPROVED BY
D.E.P.E.
(6) ALTHOUGH IT IS NOT THE SUBJECT OF A
CLEAR LEGISLATIVE DIRECTION, IT IS EQUALLY
CLEAR THAT THE D.E.P.E. ADMINISTERS THE LAW
WITH THE SPECIFIC GOAL THAT ALL WASTE GENER-
ATED IN NEW JERSEY BE DISPOSED OF WITHIN THE
BORDERS OF THE STATE. THE 1993 SOLID WASTE
MANAGEMENT STATE PLAN UPDATE, WHICH WAS
ADMITTED INTO EVIDENCE AND HEREIN REFERRED
TO AS THE UPDATE, PROVIDES: “AS A KEY POLICY
OBJECTIVE, NEW JERSEY WILL CONTINUE TO MOVE
TOWARD ACHIEVEMENT OF SELF-SUFFICIENCY IN
DISPOSAL CAPACITY. THE DEPARTMENT’S OBJEC-
TIVE IS TO ELIMINATE RELIANCE ON OUT-OF-STATE
DISPOSAL WITHIN A SEVEN-YEAR PERIOD.”
(7) THE FOREGOING POLICY IS IMPLEMENTED
THROUGH THE INDIVIDUAL PLANS PREPARED BY
EACH OF THE STATES 22 DISTRICTS, 21 COUNTIES
AND THE HACKENSACK MEADOWLANDS. THE
CORE OF THESE PLANS ARE THE “INTERDISTRICT
AND INTRADISTRICT DISTRICT SOLID WASTE FLOW”
REGULATIONS WHICH ARE FOUND IN N_J.A.C.
7:26-6.1 ET SEQ. SECTION 6.5 OF THESE REGULA-
TIONS SETS FORTH ON A DISTRICT BY DISTRICT
BASIS WHERE VARIOUS KINDS OF WASTE STREAMS,
INCLUDING TYPE 13, WHICH IS INVOLVED IN THIS
CASE, MUST BE DISPOSED. IN SIMPLEST TERMS,
Se ee SR Oe ee
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App. 75
THOSE DISTRICTS WHICH HAVE ADEQUATE INCIN-
ERATOR OR LANDFILL SPACE OR HAVE ACCESS TO
SUCH FACILITIES IN OTHER DISTRICTS WITH WHOM
THEY HAVE AGREEMENTS, MUST DISPOSE OF THE
WASTE IN THE COUNTY WHERE IT IS GENERATED
OR WITH WHOM THE GENERATING [p. 34] COUNTY
HAS AN AGREEMENT. WHERE THERE IS INSUFFI-
CIENT DISPOSAL FACILITIES, THE WASTE MUST
FIRST BE TAKEN TO A TRANSFER STATION WITHIN
THE COUNTY WHERE THE WASTE IS GENERATED
FROM WHICH IT IS “TRANSPORTED TO PERMITTED
‘OUT-OF-STATE’ FACILITIES IN ACCORDANCE WITH
THE LAWS AND REGULATIONS OF THE RECEIVING
STATE.”
THAT IS A MANTRA REPEATED OVER AND OVER
AGAIN FOR TRANSFER STATIONS ARE INVOLVED IN
SECTION 6.5. TRANSFER STATIONS ARE SOMETIMES
PUBLIC ENTITIES AND SOMETIMES PRIVATE ENTI-
TIES. IT IS GENERALLY THE TRANSFER STATION
WHICH CONTRACTS WITH THE OUT-OF-STATE
FACILITIES FOR DISPOSAL. AS A MATTER OF ADMIN-
ISTRATION, PROBABLY [sic] IS SOME DISPUTE AS TO
WHETHER THE CONTRACT FOR DISPOSAL BY THE
TRANSFER STATION MUST BE OR MUST NOT BE
INCLUDED IN THE COUNTY PLAN AND APPROVED
BY THE COUNTY. BUT IN ANY CASE, IT IS THE
TRANSFER STATION WHICH IS IN A SENSE RESPON-
SIBLE FOR OUT-OF-STATE DISPOSAL.
THE CORE OF THIS LAWSUIT IS THE ALLEGA-
TION THAT THE FLOW DIRECTIVES EMBODIED IN
N.J.A.C. 7:26-6.5 ARE UNCONSTITUTIONAL
RESTRAINTS ON INTERSTATE COMMERCE. THE
App. 76
PLAINTIFF ARGUES THAT IF IT IS UNLAWFUL FOR A
STATE TO BAN THE IMPORTATION OF GARBAGE
AND, REFER TO EXPORTATION OF DISPOSAL FACILI-
TIES, IT IS LIKEWISE UNLAWFUL TO BAN THE
EXPORTATION OF GARBAGE, WHICH MIGHT BE
VIEWED AS IMPORTATION OF DISPOSABLE, ITSELF.
[p. 35] IT MIGHT BE NOTED HERE THAT THE
VARIOUS ENTITIES INVOLVED IN THE SOLID WASTE
DISPOSAL SCHEME ARE GENERALLY DEEMED PUB-
LIC UTILITIES AND SUBJECT TO REGULATION BY
THE D.E.P.E.. SEE N.J.S.A. 48:13A-1 THROUGH 13 AND
N.J.S.A. 13:1D-1. BY BEING DEEMED PUBLIC UTILITIES
THE RATES ARE SUBJECT TO REVIEW. THERE ARE
CERTIFICATES OF CONNIVANCE AND NECESSITY
AND GENERAL PARAPHERNALIA SURROUNDING
THE REGULATION OF A PUBLIC UTILITY.
INTERDISTRICT AND INTRADISTRICT WASTE
FLOW DIRECTIVES ARE ALSO SUBJECT TO BOARD
APPROVAL PURUSANT [sic] TO N.J.S.A. 48:13A-4(C).
WHAT IS NOW THE D.E.P.E. ORIGINALLY HAD BEEN
THE B.U.P. [sic) AND THEN THE BOARD OF REGULA-
TORY COMMISSIONERS. BUT ASSUME NOW THE
PROVISIONS OF 48:13A-4(C) ARE REGULATED ONCE
AGAIN BY D.E.P.E. YOU MIGHT ALSO LOOK AT A.A.
MASTRANGELO CASE I CITED FOR DISCUSSION GEN-
ERALLY OF THAT SUBJECT. D.E.P.E. OBVIOUSLY HAS
A SIGNIFICANT ROLE IN THE REGULATION AND
ISSUANCE OF CERTIFICATES OF PUBLIC CONNIV-
ANCE [sic] AND NECESSITY.
(8) CONSTRUCTION AND DEMOLITION MATE-
RIALS, C AND D, WHICH ARE THE SUBJECT OF THIS
App. 77
SUIT FALL WITHIN THE DEFINITION OF TYPE 13
WASTE. N.J.A.C. 7:26-2.13(G)(L)(III). IT IS OBVIOUS
THE TYPE 13 WASTE CONTAINS SOME RECYCLABLE
MATERIAL AS DEFINED IN N.J.A.C. 7:26A-1.3. IF
THESE RECYCLABLE MATERIALS ARE “SOURCE SEP-
ARATED” AS DEFINED IN N,J.A.C. 7:26-1.4, THEY ARE
NOT DEFINED AS WASTE WHICH IS [p. 36] SUBJECT
TO THE FLOW DIRECTIVES. N.J.A.C. 7:26-6.3(A)(6).
HOWEVER, IF POTENTIAL RECYCLABLES ARE MIXED
WITH NON-RECYCLABLES THE TOTAL MIXED LOAD
IS TYPE 13 WASTE SUBJECT TO THE FLOW DIREC-
TIVES.
IN THIS CASE WE HAVE HEARD TESTIMONY
ABOUT MIXED LOADS AND THAT IS EXACTLY WHAT
WE ARE TALKING ABOUT, WASTE WHICH HAS SOME
RECYCLABLE MATERIAL IN IT, BUT WHICH IS STILL
TYPE 13 WASTE UNTIL SOMEBODY GETS AROUND
TO SEPARATE [sic] INTO RECYCLABLE AND NON-
RECYCLABLES.
(9) IN ADDITION TO LANDFILLS AND INCIN-
ERATORS, THERE ARE TWO OTHER TYPES OF WASTE
HANDLING FACILITIES WHICH SHOULD BE NOTED
HERE: TRANSFER STATIONS AND MATERIAL RECOV-
ERY FACILITIES, BOTH WHICH ARE DEFINED IN
N.J.A.C. 7:26-1.4. MRF’S ARE FACILITIES WHICH MAN-
UALLY OR MECHANICALLY SEPARATE USEFUL
MATERIALS FROM A WASTE STREAM AND RETURN
THEM TO THE ECONOMIC MAINSTREAM. IN SHORT,
THEY RECYCLE. A TRANSFER STATION MEANS “A
FACILITY AT WHICH SOLID WASTE IS TRANSFERRED
FROM ONE SOLID WASTE VEHICLE TO ANOTHER
SOLID WASTE VEHICLE FOR TRANSPORTATION TO A
App. 78
SOLID WASTE FACILITY.” SINCE FEW MRF’S CAN
RECYCLE 100 PERCENT OF WHAT THEY TAKE IN, IT
IS FAIR TO SAY ALL MRF’S ARE ALSO TRANSFER
STATIONS. IT SHOULD BE NOTED THAT NJ.A.C.
7:26-6.5 REFERS TO AT LEAST ONE FACILITY AS A
TRANSFER STATION IN MERCER COUNTY, WHICH IS
NOT TECHNICALLY BECAUSE UNDER THE REGULA-
TIONS BECAUSE THE WASTE IS NOT UNLOADED
AND RELOADED. [p. 37] WERE IT IN NEW JERSEY, IT
APPEARS THAT ATLANTIC WOULD BE A MRF. ALSO
NOTE TRANSFER STATION IS ALSO DEFINED IN
N.J.S.A. 48:13A-3 AND MRG [sic] IS DESIGNED [sic]
DEFINED AT 48:13A-7.3 AND SAYS THAT A, “MATE-
RIALS RECOVERY FACILITY MEANS A TRANSFER
STATION .. . ” SO ALTHOUGH THERE ARE SEPARATE
DEFINITIONS WHEN I SAY TRANSFER STATION IS, A
MRF’S IS A TRANSFER STATION AND ATLANTIC’S
FACILITY WOULD BE DEEMED A TRANSFER STATION
AS WELL AS A MRF.
(10) TRANSFER STATIONS MAY PLAY A MAJOR
ROLE IN DEALING WITH THAT PORTION OF THE
NEW JERSEY WASTE STREAM WHICH IS DISPOSED
OF AT OUT-OF-STATE LOCATIONS. AS NOTED AT
PAGE 47 OF THE UPDATE, “MOST OF THE WASTE
EXPORTED OUT-OF-STATE IS FIRST DELIVERED AND
TRANSFERRED INTO LARGE TRAILERS AT ONE OF
THE 17 REGIONAL TRANSFER STATIONS LOCATED
IN THE STATE. IN ADDITION TO THESE 17 REGIONAL
FACILITIES, APPROXIMATELY 33 OTHER TRANSFER
STATIONS SERVE THE IN-STATE DISPOSAL SYSTEM
DEVELOPED BY THE COUNTIES.” PAGE 47 OF THE
UPDATE SHOWS THAT I THINK IN 1991 MAYBE OUT
App. 79
OF DATE, BUT 22 PERCENT OF NEW JERSEY’S WASTE
IS STILL DISPOSED OF IN OUT-OF-STATE LANDFILL
FACILITIES IN PENNSYLVANIA, WEST VIRGINIA,
NEW YORK, OHIO AND KENTUCKY. TO THE EXTENT
THAT A TRANSFER STATION IS DESIGNATED AS A
PERMITTED DISPOSAL SITE IN THE FLOW DIREC-
TION REGULATIONS, OF N.J.A.C. 7:26-6.5, SUCH
TRANSFER STATION IS GENERALLY, IF NOT EXCLU-
SIVELY LOCATED IN THE COUNTY WHERE THE
WASTE IS GENERATED OR IN THE [p. 38] COUNTY
WITH WHOM THE GENERATING COUNTY HAS AN
APPROVED INTERDISTRICT AGREEMENT.
(11) ONE OF THE MINOR MYSTERIES OF THIS
LITIGATION IS THE SO-CALLED PEREIRA MEMORAN-
DUM OF JUNE 7, 1983, FOUND AT EXHIBIT D OF THE
BRAND AFFIDAVIT. THIS MEMO WOULD ALLOW
TRANSFER STATIONS, WHICH AS I NOTED EARLIER,
INCLUDE MRF’S TO ACCEPT WASTE GENERATED IN
ANOTHER COUNTY PROVIDED THAT THE NON-
RECYCLABLE PORTION OF THE WASTE STREAM OR
_ITS EQUIVALENT, IS RETURNED TO THE SITE DESIG-
NATED FOR DISPOSAL BY N.J.A.C. 7:27-6.5. AN
EXPANDED VERSION OF THIS POLICY WAS ISSUED
AS A PROPOSED REGULATION AT 24 N.J. REGISTER
3286, 1992, AND THAT REGULATION IS EXPECTED TO
BE FINAL BY SEPTEMBER 21ST, 1993, WITHIN ONE
YEAR AFTER IT WAS PROPOSED.
SEE N.J.A.C. 1:30-4.2(B). IT IS THE LEGAL POSI-
TION OF THE STATE THAT ANY HAULER CAN TAKE
App. 80
A MIXED C AND D LOAD TO ATLANTIC FOR PRO-
CESSING, AS LONG AS THE NON-RECYCLABLE POR-
TION OF THE WASTE STREAM, WHICH IS MOST OF IT,
IS RETURNED TO THE COUNTY OF ORIGIN.
THERE APPEARS FROM THE TESTIMONY TO BE
SOME CONFUSION, TO PUT IT MILDLY, AS TO THE
OPERATION OF THE PEREIRA POLICY. FIRST OF ALL,
THE COUNTIES THEMSELVES VERY CLEARLY FROM
WHAT I HEARD IN TESTIMONY AND FROM THE
WHISPERING I HEARD IN THE AUDIENCE CLEARLY
INTERPRET THE PLAN DIFFERENTLY. ONE MAJOR
DIFFERENCE IS WHETHER IT HAS TO BE INCLUDED
AS PART OF THE COUNTY PLAN, FOR INSTANCE, TO
IMPLEMENT OR WHETHER A HAULER [p. 39] CAN
MERELY JUST GRAB A LOAD OF WASTE AND HOT
FOOT IT TO PHILADELPHIA WITH IT, SO LONG AS
HE BRINGS IT BACK. THAT IS JUST ONE CONFUSION.
ANOTHER CONFUSION IS WHETHER A FRANCHISE
AREA WOULD PERMIT THE PEREIRA POLICY TO
OPERATE. IN OTHER WORDS, 13 FRANCHISES
GRANTED IN THE STATE. ANOTHER QUESTION
WHICH LAST ARISEN [sic] IS CAN A HAULER IN
THAT AREA GRAB A LOAD OF GARBAGE AND HOT
FOOT IT TO PHILADELPHIA WITHOUT GETTING
SOMEBODY IN THE COUNTY MIGHTY UPSET, EVEN
IF WILLING TO BRING BACK THE NON-RECYCLABLE
WASTE STREAM. THERE APPEARS TO BE A FURTHER
AMBIGUITY. NUMBER ONE, WHETHER THE PEREIRA
POLICY IS NOW LAW OR WHETHER IT WILL BECOME
LAW. I SUPPOSE WE HEARD REPRESENTATIONS
THAT THE LAST ACT TO MAKE IT A REGULATION
App. 81
WILL TAKE PLACE IN THE NEXT TWO WEEKS. BUT IT
HADN’T TAKEN PLACE YET.
FOR WHATEVER IT IS WORTH, IF YOU WANT TO
LOOK AT A LITTLE HISTORY OF THAT YOU CAN
READ THE CASE OF REGIONAL RECYCLING VS.
STATE, N.J. 568, 571, 1992, WHICH WILL EXPLAIN WHY
THE STATE HAS PROPOSED THE REGULATION IT
HAS PROPOSED.
NOTWITHSTANDING THERE HAS BEEN A LOT OF
SMOKE AND SPARKS AND FIRE OVER THE PEREIRA
MEMORANDUM IT APPEARS THAT THE POLICY,
EVEN WHATEVER ITS CONTOURS, IS OF LITTLE
PRACTICAL VALUE TO PLAINTIFF IN THIS CASE
WHICH CANDIDLY CONCEDES THAT IT DOES NOT
MAKE MUCH MONEY, IF ANY, ON RECYCLING, BUT
RATHER ON THE ULTIMATE DISPOSAL OF THE [p. 40]
NON-RECYCLABLES BY RAIL TO OHIO. THUS, ITS
COMPETITIVE THRUST IN NEW JERSEY IS THAT ITS
TIPPING FEES ARE FAR LESS THAN THOSE AT NEW
JERSEY DISPOSAL SITES. REQUIRING THE BULK OF
THE WASTE - REMEMBER TALKING ANYWHERE
FROM 80 TO 91, 92 PERCENT OF IT, TO BE SHIPPED
BACK TO NEW JERSEY WOULD NOT ONLY CREATE
PRACTICAL OPERATIONAL PROBLEMS FOR ATLAN-
TIC, BUT ALSO ELIMINATE THE REAL COMPETITIVE
COST ADVANTAGE WHICH ATLANTIC WISHES TO
HAVE IN COMPETING FOR NEW JERSEY WASTE.
SO ALTHOUGH I HAVE BEEN ENLIGHTENED
BEMUSED AND AMUSED BY THE PEREIRA MEM-
ORANDUM, THE ONLY THING NOT INTRODUCED IN
EVIDENCE IS PROVE [sic] THERE REALLY A [sic] A
App. 82
MR. PEREIRA. I WAS CONVINCED BY THE DIRECTOR
OF RESEARCH THERE’S NO SUCH PERSON. A STAMP.
WHO SIGNED THE LETTER? I MADE AN EFFORT FOR
YEARS TO FIND THAT PERSON. I WAS CONVINCED
HE DIDN’T EXIST. SO I HAVE NO PROOF MR. PEREIRA
EXISTS, EVEN IF HE SIGNED THE PEREIRA MEM-
ORANDUM, IT DIDN’T HAVE MUCH OF AN IMPACT
ON THIS LITIGATION, BUT ENJOYED LISTENING TO
IT.
(12) IT SHOULD BE MADE CLEAR AT THIS
POINT THAT NOTHING IN NEW JERSEY’S LAWS OR
REGULATIONS MAKES IT ILLEGAL FOR PLAINTIFF
TO COMPETE FOR ITS SHARE OF THE WASTE
STREAM THAT IS STILL DISPOSED OF OUTSIDE THE
STATE. INDEED, THE EVIDENCE SHOWS THAT
PLAINTIFF IS DIRECTLY COMPETITIVE WITH COM-
PANIES LIKE GROW LANDFILL, WHICH ACCEPTS
CONSIDERABLE WASTE FROM NEW JERSEY. PLAIN-
TIFF OBJECTS TO REGULATIONS WHICH FORBID
INDIVIDUAL HAULERS OR GENERATORS FROM
DECIDING [p. 41] TO DIRECTLY SHIP THEIR WAYS
OUT-OF-STATE IN CONTRAVENTION OF THE FLOW
DIRECTIVES CONTAINED IN SECTION 6.5. ALTER-
NATIVELY THEY SAY IF YOU CAN PUT ME IN THE
PLAN AS APPROVED WITH THE DESIGNATION,
THAT WOULD ACHIEVE THE SAME THING. BUT THE
REAL HEART OF THE COMPLAINT IS THAT THEY
ARE FORBIDDEN AND THEY ARE FORBIDDEN FROM
HAVING A HAULER DECIDE I’LL PICK UP THE C
AND D WASTE AT THE COURTHOUSE IN CAMDEN
AND TRUCK IT RIGHT OVER TO PHILADELPHIA AND
PAY ME 42 BUCKS AND BE DONE WITH IT. IT CAN’T
App. 83
DO THAT UNDER THE CURRENT FLOW REGULA-
TIONS AND THEY CAN’T DO THAT EVEN UNDER AN
EXPANSIVE READING OF PEREIRA, BECAUSE THEY
WOULD BE REQUIRED TO TAKE 90 PERCENT OF THE
WASTE AND SHIP IT BACK TO NEW JERSEY, WHICH
THEY CLEARLY DO NOT DO FOR 42 DOLLARS A TON.
(13) THE LEGAL ANALYSIS IN THiS CASE
COULD BEGIN AND END WITH THE FILIBERTO CASE,
WHICH IS VERY MUCH ON POINT. INDEED, THE
ONLY REAL DIFFERENCE BETWEEN THAT CASE AND
THE ONE AT BAR IS THAT THE PLAINTIFF WAS A
HAULER RATHER THAN A MRF OR TRANSFER STA-
TION AND THE ONLY FLOW DIRECTIVE AT ISSUE
WAS HUNTERDON COUNTY’S, RATHER THAN FLOW
DIRECTIVES GENERALLY. NOT ONLY AM I BOUND BY
THE THIRD CIRCUIT PRECEDENT, IN AT LEAST THIS
INSTANCE, I AGREE WITH IT AND ADOPT IT AS MY
OWN, THE LEGAL CONCLUSIONS SET FORTH
THEREIN.
A. NEW JERSEY’S WASTE FLOW DIRECTIVES
ARE CLEARLY NOT PROTECTIONIST RULES
DESIGNED TO PROTECT NEW JERSEY ECONOMIC
‘INTERESTS AND ARE NOT PER SE INVALID, BUT
RATHER, BUT RATHER [p. 42] SUBJECT TO THE BAL-
ANCING TEST OF PIKE VS. BRUCE CHURCH, 397 U.S.
137, 142, 1970). INDEED, TO THE EXTENT, AS PLAIN-
TIFF ARGUES, THAT NEW JERSEY CITIZENS ARE BUR-
DENED BY HIGH DISPOSAL COSTS RESULTING FROM
THESE AND RELATED REGULATIONS, IT IS FURTHER
PROOF OF LACK OF DISCRIMINATORY INTENT. AS
NOTED AT PAGE 921 OF FILIBERTO, “THE EXISTENCE
OF SUBSTANTIAL IN-STATE INTERESTS HARMED BY
App. 84
A REGULATION IS A POWERFUL SAFEGUARD
AGAINST LEGISLATIVE DISCRIMINATION.”
B. AT THE ROOT OF THE CASE IS THE LONG
TERM STATE POLICY THAT WASTE GENERATED IN
THIS STATE BE DISPOSED OF IN THIS STATE AND, AS
A COROLLARY THE SAME RULE IS GENERALLY
APPLIED ON A COUNTY BY COUNTY BASIS. THERE IS
A STRONG, IF NOT OVERWHELMING EVIDENCE
THAT THIS IS A SOUND POLICY ADOPTED IN AN
AREA WHICH IS CLEARLY AFFECTED BY THE PUBLIC
INTEREST AND WHICH REQUIRE SUBSTANTIAL
GOVERNMENT REGULATIONS. IT IS REALLY UNDIS-
PUTED THAT WASTE DISPOSAL PLANS MUST BE
MADE ON A LONG-RANGE BASIS, AND LONG-TERM
RELIANCE ON OUT-OF-STATE DISPOSAL SOURCES
MUST BE DEEMED RISKY SINCE NEW JERSEY CAN-
NOT CONTROL EITHER THE PRIVATE OR PUBLIC
ENTITIES ENGAGED IN THESE ACTIVE OUT-OF-
STATE.
C. IN ADDITION TO THE WISDOM OF PROVID-
ING IN-STATE DISPOSAL, MINIMIZING THE MOVE-
MENT OF WASTE TO SEVERAL OTHER BENEFITS. IT
MAKES THE ENFORCEMENT OF WASTE DISPOSAL
REGULATIONS MUCH EASIER FOR THE OBVIOUS
REASON THAT DIRECTING FLOW AND LIMITING
MOVEMENT MAKES IT EASIER FOR [p. 43] ENFORCE-
MENT OFFICIALS TO KEEP AN EYE ON THINGS. LIM-
ITING THE MOVEMENT OF WASTE HAS CLEAR
ENVIRONMENTAL BENEFITS AS ANYONE WHO HAS
DRIVEN BEHIND A WASTE TRUCK KNOWS. THE
AVAILABILITY OF WASTE ALSO HELPS INSURE THE
FINANCIAL VISIBILITY OF THE VARIOUS EXPENSIVE
App. 85
FACILITIES WHICH MUST BE OPERATED TO DISPOSE
OF THE WASTE STREAM. NEW JERSEY MUST BUILD
AND OPERATE FACILITIES GEARED TO HANDLE A
WASTE STREAM OVER A LONG PERIOD. IF NO
WASTE IS AVAILABLE, THE FINANCING OF THESE
FACILITIES IS JEOPARDIZED. IN SHORT, NEW JERSEY
OVER THE LAST 15 YEARS HAS ADOPTED AND
IMPLEMENTED A COMPLEX, INTEGRATED STRAT-
EGY FOR DEALING WITH A SERIOUS CRISIS IN AN
AREA OF PECULIAR GOVERNMENT CONCERN.
WHILE INTERSTATE COMMERCE MAY BE INCIDEN-
TALLY AFFECTED, ANY REASONABLE APPLICATION
OF THE BALANCING TEST DEMONSTRATES THAT
LEGITIMATE LOCAL CONCERNS FAR OUTWEIGH
ANY NEGATIVE IMPACT ON INTERSTATE COM-
MERCE. INDEED, IT MAY NOT BE TOO MUCH TO SAY
THAT THE STATE’S ABILITY TO REGULATE SOLID
WASTE DISPOSAL WOULD BE SEVERELY IMPAIRED IF
IT COUNT NOT ISSUE FLOW DIRECTIVES OF THE
TYPE CONTAINED IN N.,J.A.C. 7:26-6.5. I BELIEVE A
GOOD ANALOGY, ALTHOUGH I HAVE BEEN GIVING
BAD GRADES FOR ANALOGIES, AND MAY RECEIVE
~ ONE, ONE ANALOGY IS SEWER TREATMENT PLANT.
THE STATE GOT ABOUT BUILDING VERY EXTENSIVE
SEWER TREATMENT PLANTS AND PARALLEL REGU-
LATIONS REQUIRING MOST SOURCES OF SEWAGE
TC SEND THEIR SEWAGE TO PARTICULAR PLANTS.
IF SOME PLANT, SOMEBODY SENT A TRUCK TO [p.
44] TAKE THE STUFF AWAY FOR CHEAPER DISPOSAL
IN PHILADELPHIA, YOU WOULD HAVE VERY SEVERE
IMPACT ON THE OVERALL PLANNING AND
FINANCING OF THESE TYPES OF FACILITIES.
App. 86
(14) I NOTE THAT A SIMILAR HOLDING IN FILI-
BERTO MAY BE FOUND CLARKSTOWN VS. C & A CAR-
BONE, 587 N.Y.S. 2ND 681, NEW YORK APPELLATE
DIVISION, 1992, A CASE IN WHICH CERT HAS APPAR-
ENTLY BEEN GRANTED BY THE U.S. SUPREME
COURT AFTER CERT WAS DENIED BY THE NEW
YORK COURT OF APPEALS.
(15) I FIND THE DECISION IN SPORHASE VS.
NEBRASKA, 458 U.S. 941, 1981, TO BE VERY INSTRUC-
TIVE. IN THAT CASE THERE WERE FOUR CONDI-
TIONS TO THE IN. :RSTATE TRANSFER OF
NEBRASKA GROUNDWATER TO NEIGHBORING
STATES. THE FOURTH CONDITION, THAT THE
NEIGHBORING STATE RECIPROCALLY PERMIT THE
TRANSFER OF THE GROUNDWATER TO NEBRASKA,
WAS HELD TO BE UNCONSTITUTIONAL RESTRAINT
ON COMMERCE WHICH BORE NO LEGITIMATE
RELATION TO A PROPER GOVERNMENTAL END.
HOWEVER, THE FIRST THREE CONDITIONS, WHICH
WERE APPLIED TO INTERSTATE, BUT NOT INTRA-
STATE, TRANSFERS, WERE SUSTAINED AS LEGITI-
MATE EXERCISES OF STATE POWER, DESPITE THE
NEGATIVE EFFECT ON COMMERCE. I.E. THE SALE OF
WATER. THESE CONDITIONS WERE, A, THE WITH-
DRAWAL OF WATER BE REASONABLE, B, THAT IT
NOT BE CONTRARY TO THE CONSERVATION AND
USE OF GROUNDWATER AND, C, THAT IT NOT BE
CONTRARY TO THE PUBLIC INTEREST. MOREOVER,
ANY SUCH TRANSFER REQUIRED A STATE PERMIT.
THESE CONDITIONS WERE HELD TO BE CONSTITU-
TIONALLY VALID [p. 45] NOTWITHSTANDING THEIR
App. 87
OBVIOUS IMPACT ON INTERSTATE COMMERCE. JUS-
TICE STEVENS WROTE: “ALTHOUGH COMMERCE
CLAUSE CONCERNS ARE IMPLICATED BY THE FACT
THAT SECTION 46-613.01 APPLIES TO INTERSTATE
TRANSFERS, BUT NOT TO INTRASTATE TRANSFERS,
THERE ARE LEGITIMATE REASONS FOR THE SPECIAL
TREATMENT ACCORDED REQUESTS TO TRANSPORT
GROUNDWATER ACROSS STATE LINES. OBVIOUSLY,
A STATE THAT IMPOSES SEVERE WITHDRAWAL AND
USE RESTRICTIONS ON ITS OWN CITIZENS IS NOT
DISCRIMINATING AGAINST INTERSTATE COM-
MERCE WHEN IT SEEKS TO PREVENT THE UNCON-
TROLLED TRANSFER OF WATER OUT OF THE STATE.
AN EXEMPTION FOR INTERSTATE TRANSFER
WOULD BE INCONSISTENT WITH THE IDEAL OF
EVENHANDEDNESS IN REGULATION. AT LEAST IN
THE AREA IN WHICH APPELLANTS’ NEBRASKA
TRACT IS LOCATED, THE FIRST THREE STANDARDS
OF SECTION 46-613.01 MAY WELL BE NO MORE
STRICT IN APPLICATION THAN THE LIMITATIONS
UPON INTRASTATE TRANSFERS IMPOSED BY THE
UPPER REPUBLICAN NATURAL RESOURCES DIS-
TRICT.
MOREOVER, IN THE ABSENCE OF A CONTRARY
VIEW EXPRESSED BY CONGRESS, WE ARE RELUC-
TANT TO CONDEMN AS UNREASONABLE, MEA-
SURES TAKEN BY A STATE TO CONSERVE AND
PRESERVE FOR ITS OWN CITIZENS THIS VITAL
RESOURCE IN TIMES OF SEVERE SHORTAGE. OUR
RELUCTANCE STEMS FROM THE “CONFLUENCE OF
SEVERAL REALITIES.” CITING HICKLIN VS. ORBECK,
437 U.S. 518, 534, 1978.
App. 88
THE CONTINUANCE OF SEVERE REALITIES ARE
THOSE TO WHICH [p. 46] I HAVE ALREADY
REFERRED IN THE REJECTION OF NEW JERSEY’S
CURRENT SOLID WASTE DISPOSAL SYSTEM.
THE ANALOGY TO OUR CASE IS COMPELLING.
FLOW DIRECTIVES APPLY EVEN HANDEDLY TO GAR-
BAGE WHICH MOVES INTERSTATE AS WELL AS
INTRASTATE. AND THERE CAN BE NO DOUBT THAT
TO THE EXTENT THE WASTE STREAM IS A “VITAL
RESOURCE” IN THE OVERALL SOLID WASTE MAN-
AGEMENT SYSTEM, ITS CONTROL IS OF VITAL CON-
CERN TO THE STATE. MOREOVER, AS IN NEBRASKA,
NEW JERSEY DOES NOT HAVE AN ABSOLUTE BAN
ON INTERSTATE SHIPMENT OF WASTE. RATHER, THE
FLOW IS CONTROLLED TO ACHIEVE OVERALL
STATE GOALS.
(15) THIRD CIRCUIT JURISPRUDENCE IN
RELATED TYPES OF CASES EMPHASIZE THE NEED
TO APPLY THE BALANCING TEST IN AREAS WHERE
REVIEWING LEGISLATION IN AREAS OF PECULIAR
STATE INTEREST, WHICH CERTIANLY [sic] INCLUDED
SOLID WASTE MANAGEMENT AND IS CONSISTENT
WITH DECISIONS ARE CONSISTENT WITH FILIBERTO.
NORFOLK SOUTHERN CORPORATION VS. OBERLEY,
822 F.2D 388, THIRD CIRCUIT, 1987; OLD BRIDGE
CHEMICALS VS. N.].D.E.P., 965 F.2D 1287, THIRD CIR-
CUIT, 1992; AND HARVEY & HARVEY VS. DELAWARE
SOLID WASTE AUTHORITY, 600 F. SUPP. 1369, 1985, ALL
UPHELD STATE REGULATORY MEASURES NOTWITH-
STANDING INCIDENTAL BURDENS ON INTERSTATE
COMMERCE. THE HARVEY & HARVEY OPINION WAS
DECIDED BY JUDGE STAPLETON WHILE A DISTRICT
App. 89
COURT JUDGE, NOW ON THE THIRD CIRCUIT. I
DON’T KNOW IF IT MAKES IT A THIRD CIRCUIT
OPINION OR NOT.
[p. 47] (16) PLAINTIFF ARGUES THAT FILIBERTO
SHOULD BE DISREGARDED BECAUSE OF THE POOR
RECORD MADE IN THAT CASE. I REFER TO COLLO-
QUY FOR THE ARGUMENTS THAT WERE MADE WHY
THAT RECORD WAS NOT FULSOME. I CANNOT SO
EASILY DISREGARD A THIRD CIRCUIT OPINION,
PARTICULARLY ONE WHICH TRULY SETS UP THE
ISSUE VERY, VERY SQUARELY. AS THE TESTIMONY IN
THIS CASE SHOWS, THE ECONOMIC INTERESTS OF
THE HAULER AND THE MRF OR TRANSFER STATION
WITH RESPECT TO A FLOW DIRECTION REGULA-
TIONS ARE REALLY IDENTICAL. FILIBERTO VERY
SQUARELY PRESENTS THE ISSUE RAISED IN THIS
CASE.
PLAINTIFF ALSO ARGUES THAT FORT GRATIOT
IMPLICITLY OVERRULES FILIBERTO. I DISAGREE.
FORT GRATIOT MEARLY [sic] REAFFIRMS THE 1977
NEW JERSEY CASE WHICH SAYS THAT A STATE CAN-
NOT BAN OUT-OF-STATE GARBAGE SIMPLY BECAUSE
IT COMES FROM OUT-OF-STATE AND THAT THIS
BAN IN NOT CURED BECAUSE THERE IS A SIMILAR
BAN BEfWEEN COUNTIES IN MICHIGAN. WHAT I
FOUND COMPELLING IN THAT CASE, THERE WAS
NOT A HINT AND THE COURT SO STATED
SQUARELY, THAT THERE WAS ANY PUBLIC POLICY
OF ANY KIND BEHIND THE BAN OTHER THAN MAK-
ING SURE THAT OUT-OF-STATE INTERESTS DID NOT
BENEFIT FROM THE STATE’S PRIVATELY OPERATED
LANDFILLS. AS NOTED IN COLLOQUY THE COURT
App. 90
EXCLUDED CONSIDERATION OF PUBLICLY OPER-
ATED FACILITIES. THAT CASE, THAT CASE, FORT
GRATIOT, BESPEAKS A VERY SPARCE RECORD OF
THE KIND THAT ROSEN WAS TALKING ABOUT. THIS
IS A FAR CRY FROM THE ELABORATE SYSTEM OF
CONTROLLING THE WASTE STREAM [p. 48]
ADOPTED IN NEW JERSEY, INCLUDING THE FLOW
DIRECTIVES AT ISSUE IN THIS CASE.
PLAINTIFF ARGUES THAT, PARTICULARLY IN
THIS CASE, THAT EVEN THE OBJECTIVES OF THE
NEW JERSEY PLAN ARE NOT BEING CARRIED OUT;
FOR ONE REASON OR ANOTHER THIS WASTE
COULD BE MORE EFFECTIVELY DISPOSED OF AT HIS
FACILITY AT A LOWER COST AND NO ENVIRON-
MENTAL NEGATIVES, WITH MORE RECYCLING AND
SAVING NEW JERSEY LANDFILL SPACE. SOME HOW
OR OTHER THE FACT THE NEW JERSEY LEGISLATIVE
GOALS ARE NOT BEING CARRIED OUT IS SOME HOW
A REASON FOR NOT ENFORCING IT. QUITE OBVI-
OUSLY WHEN A STATE ADOPTS A VERY INTRICATE
LEGISLATIVE SCHEME AND BASES THAT LEGISLA-
TIVE SCHEME OR PLAN ON FIVE OR SIX BASIC FIND-
INGS, EVERY SINGLE REGULATION AND EVERY
SINGLE DECISION MADE PURSUANT TO THAT PLAN
IS NOT GOING TO CARRY OUT EVERY SINGLE GOAL.
IT IS NOT FOR ME TO DECIDE IF THE PLAN COULD
HAVE BEEN IMPLEMENTED IN A BETTER MANNER
OR WHETHER THERE WAS SOME OTHER WAY THE
STATE COULD HAVE DONE IT. RATHER, IT IS FOR ME
TO DECIDE IF THE STATE HAS ACTED FOR PROTEC-
TIONIST REASONS OR TO DEAL WITH A SERIOUS
PROBLEM OF PUBLIC INTEREST.
App. 91
HERE, WHERE I HAVE A THIRD CIRCUIT OPIN-
ION, I'M NOT ON POINT, CLOSE TO ON POINT, TWO
OR THREE OTHER CIRCUIT CASES WHICH ARE SUP-
PORTIVE OF THAT OPINION, I SIMPLY CANNOT SAY
THAT ON THE MERITS OF THIS CASE THE PLAINTIFF
HAS A LIKELIHOOD OF SUCCESS.
[p. 49] SO FOR THAT REASON AND ALL THE
OTHER REASONS I HAVE OUTLINED, THE PLAIN-
TIFF’S APPLICATION FOR PRELIMINARY-INJUNC-
TION WILL BE DENIED AND AN ORDER WILL BE
ENTERED BY THE COURT. IT WILL PROBABLY BE IN
THE MORNING CONSIDERING THE HOUR.
I DON’T WANT TO HEAR REARGUMENT. ANY-
THING FURTHER THAN REARGUE?
MS. BRAND: JUST A QUESTION. THE STATE
FILED A MOTION FOR SUMMARY JUDGMENT AS
WELL. IS THAT BEING ADDRESSED TODAY?
THE COURT: THE ANSWER IS, NO. I'M NOT
GOING TO ADDRESS IT TODAY. AT THIS POINT I’M
DENYING, MAYBE I SHOULD HAVE FOCUSED ON IT.
LET ME PUT IT THIS WAY, I DON’T KNOW IF EITHER
OF YOU WANT TO MAKE A BIGGER RECORD, A BET-
TER RECORD OR MORE COMPLETE RECORD. THERE
ARE A LOT OF AREAS - I COULD HAVE DECIDED
THE CASE ON AFFIDAVITS. I DID IT TO MAKE A
BETTER RECORD. CLEARLY THERE ARE CONTESTED
ISSUES OF FACT. CERTAINLY SOME CONTESTED. I
HATE TO BRING UP THE PEREIRA MEMORANDUM,
BUT ISSUES OF FACT. FINANCIAL INFORMATION
FOR INSTANCE. AT THIS POINT IT WASN’T BRIEFED
IN A SUMMARY JUDGMENT BASIS, SO I’M GOING TO
App. 92
TREAT IT AS A DENIAL OF A PRELIMINARY INJUNC-
TION.
IF BOTH PARTIES AGREED THAT I SHOULD
DECIDE IT ON THE RECORD BEFORE ME, I WILL DO
SO. IF THE PARTIES BOTH THOUGHT YOU OBVI-
OUSLY WOULD AGREE - IT REALLY IS IF MR. REA-
SON [p. 50] WOULD AGREE, IF THEY THINK THE
RECORD IS ADEQUATE FOR WHATEVER APPEAL HE
WOULD WANT TO TAKE, THAT’S A DIFFERENT
STORY.
MR. ROSEN: THE ANSWER, YOUR HONOR,
IS I HAVE NO OBJECTION TO YOUR DECIDING THE
SUMMARY JUDGMENT MOTION AS A SUMMARY
JUDGMENT MOTION. THE ISSUE OF WHETHER ON
THE ASSUMPTION YOU MIGHT DENY SUMMARY
JUDGMENT ON DISPUTED ISSUES OF FACT, BUT THE
LEGAL DETERMINATIONS, I WOULD LIKE AN
OPPORTUNITY TO SPEAK TO MY CLIENT. BUT I
WOULD HOPE IF ANY FURTHER PROCEEDINGS,
THAT THEY COULD BE SCHEDULED IN A WAY I
DON’T HAVE TO CHOSE BETWEEN - THE DEADLINE
OBVIOUSLY STARTS FROM THE ENTRY OF YOUR
HONOR’S ORDER DENYING MY PRELIMINARY
INJUNCTION, ON THE APPEAL OF THAT, AS
OPPOSED TO APPEAL FROM A FINAL ORDER.
THE COURT: SORRY, I DON’T FOLLOW YOU.
YOU HAVE AN ALL WRITS RIGHT.
MR. ROSEN: I CAN GO UP NOW.
THE COURT: WHETHER A FINAL JUDG-
MENT OR NOW YOU HAVE A RIGHT OF APPEAL.
App. 93
MR. ROSEN: RIGHT. HERE IS THE ANSWER,
AND OBVIOUSLY MY CLIENT IS IN THE BACK, I
HAVEN’T SPOKEN TO HIM SINCE YOUR HONOR
GAVE THE RULING. I DON’T RECALL WHAT THE
RULE IS, BUT I HAVE A CERTAIN NUMBER OF DAYS
FROM THE TIME YOUR HONOR SIGNS THE ORDER,
PRESUMABLY TOMORROW, I WOULD LIKE TO -
[p. 51] THE COURT: YES.
MR. ROSEN: TO APPEAL TO THE THIRD CIR-
CUIT ON THE GROUND OF DENIAL OF A MOTION
FOR PRELIMINARY INJUNCTION.
THE COURT: YES.
MR. ROSEN: ONCE YOUR HONOR RULES
ON THE MOTION FOR SUMMARY JUDGMENT, IF
YOUR HONOR WOULD GRANT IT, AND OBVIOUSLY
NOT CONCEDING THE POINT, BUT IF YOU GRANT IT,
THEN IT WOULD BE A FINAL ORDER AND CERTAIN
PERIOD OF TIME FOR THAT. WHAT I WOULD HOPE IS
IF, AFTER CONFERRING WITH MY CLIENT, IF WE
WANT TO COME BACK AND, FOR EXAMPLE, EXPAND
THE RECORD AS TO FINANCIAL INJURY TO US,
THAT IT COULD BE SCHEDULED IN SUCH A WAY SO
THAT I WOULDN’T HAVE TO CHOSE [sic] BETWEEN
RUSHING TO THE COURTHOUSE TO FILE MY
APPEAL ON THE PRELIMINARY INJUNCTION
INSTEAD OF RUSHING TO THE COURTHOUSE TO
FILE MY APPEAL ON THE FINAL ORDER. BECAUSE
OBVIOUSLY THERE ARE, TO SOME EXTENT, DIFFER-
ENT ISSUES IF [sic] TERMS OF THE STANDARD OF
REVIEW. THAT WOULD BE MY ONLY QUESTION. A
SCHEDULING THING. I CAN’T ANSWER TODAY
App. 94
RIGHT NOW IN TERMS OF CLOSING THE RECORD. I
DO NOT OBJECT TO YOUR HONOR ACTING ON THE
SUMMARY JUDGMENT MOTION BECAUSE FRANKLY,
AND I HAVE LOST SO FAR, MAYBE I’M BATTING 1,000,
I CANNOT CONCEDE CONSISTENT WITH RULE 56
HOW IT COULD BE GRANTED, BECAUSE THEY DID
NOT SUBMIT THE RULE 12(G) STATEMENT. I SUBMIT-
TED AN AFFIDAVIT EXPLAINING THE FACTUAL
ISSUES -
THE COURT: I WILL DO - I WON’T DEAL
WITH THE [p. 52] SUMMARY JUDGMENT MOTION
TODAY. GIVEN THE FACT WE DECIDED THE PRELIM-
INARY INJUNCTION, I QUITE CORRECTLY DID NOT
REVIEW IT FROM THAT STANDARD IN APPLYING
THE STANDARD OF REVIEW, FROM THAT POINT OF
VIEW. TECHNICALITIES OF THE RULE HAVE NOT
BEEN COMPLIED WITH. NO WAY OF CRITICISM OF
ANYONE. YOU’RE FOCUSING ON THE INJUNCTION.
I’LL STICK TO MY ORIGINAL POINT AND GIVE YOU
TIME TO CONSULT RIGHT NOW. I’M NOT BEATING
YOU TO THE DOOR. I’LL GIVE YOU A HALF-AN-
HOUR TO CONSULT. I'LL MAKE A FINAL DECISION.
IF YOU STIPULATE THE RECORD WHICH IS PRETTY
EXTENSIVE, EXCEPT IN ONE REGARD, AND ALSO
MAKE IT A FINAL JUDGMENT, IT ELIMINATES ALL
THE ISSUES ABOUT THE FINANCIALS. I BELIEVE THE
FINANCIAL CONDITION IS RELEVANT ONLY TO THE
PRELIMINARY INJUNCTION. I DON’T THINK HAS A
WHIT OF RELEVANCE TO THE FINAL ISSUE.
MR. ROSEN: THAT’S MY UNDERSTANDING.
App. 95
THE COURT: UNLESS I 4M MISSING IT,
THEY COULD LOSE MONEY DOING NEW JERSEY
BUSINESS AND IT IS THEIR RIGHT. THEY HAVE A
CONSTITUTIONAL RIGHT TO DO WHAT THEY WANT
TO DO. BUT THE STATE DOESN’T HAVE A CONSTITU-
TIONAL RIGHT TO DO WHAT IT Is DOING. THE FACT
THEY ARE LOSING MONEY WOULD BE AN IRRELE-
VANCY. ONE THING YOU DO By AGREEING TO A
FINAL JUDGMENT NOW, YOU GET IT OUT OF THE
CASE.
MR. ROSEN: MAY WE GO @FF THE RECORD?
THE COURT: NO. RATHER THAN THAT,
RIGHT NOW YOU KNOW WHAT MY RULING IS. I’LL
ADJOURN THE HEARING RIGHT NOW [p. 53] FOR A
HALF-AN-HOUR. I’LL GIVE YOU TIME TO TALK TO
YOUR CLIENT AND ALSO TALK TO ME IN CHAM-
BERS IF YOU WANT TO.
MR. ROSEN: THAT WOULD BE HELPFUL.
THE COURT: EITHER ONE OF THOSE TWO
THINGS OR BOTH.
WE WILL RESUME - IF YOU DON’T WANT TO DO
ANYTHING, YOU DON’T HAVE TO GO BACK. THAT
WILL BE THE END OF IT. BUT ANY REASON YOU
WANT ME TO, I DON’T HAVE THE RULE TO CITE, BUT
IT PROVIDES I CAN TREAT A PRELIMINARY INJUNC-
TION AS A FINAL HEARING.
MR. ROSEN: I UNDERSTAND THAT.
THE COURT: I’LL HAVE THE RULE CITED.
App. 96
IF YOU AGREE, I’LL GO BACK ON THE THE [sic]
RECORD AND MAKE MY RULING, WHICH I THINK
THE RESULT IS PREDICTABLE. I CAN SEE SOME
ADVANTAGE TO YOU DOING THAT. ONLY DISAD-
VANTAGE WOULD BE SOME PIECE OF A RECORD
THAT I CAN’T RIGHT NOW THINK OF.
MR. ROSEN: I UNDERSTAND.
THE COURT: THAT YOU WOULD WANT TO
CONSENT TO. I DON’T KNOW. I’LL GO OFF RECORD
NOW AND TERMINATE THE PROCEEDINGS,
ADJOURN FOR THE DAY.
(AT WHICH TIME THE MATTER WAS CON-
CLUDED)
[p. 54] CERTIFICATE
I, STEPHEN J. DANER, OFFICIAL COURT REPOR-
TER FOR THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF NEW JERSEY, CERTIFIED SHORT-
HAND REPORTER, DO HEREBY CERTIFY THAT THE
FOREGOING IS A TRUE AND ACCURATE TRANSCRIP-
TION OF MY ORIGINAL STENOGRAPHIC NOTES TO
THE BEST OF MY ABILITY OF THE MATTER HEREIN-
BEFORE SET FORTH.
/s/ S. Daner
STEPHEN J. DANER
OFFICIAL U.S. REPORTER
N. J. CERTIFICATE
NO. X101514
DATE: 1-5-94
App. 97
APPENDIX C
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
ATLANTIC COAST
DEMOLITION &
RECYCLING, INC.,
Plaintiff
v.
BOARD OF CHOSEN
FREEHOLDERS OF
ATLANTIC COUNTY,
POLLUTION CONTROL
FINANCING AUTHORITY
OF ATLANTIC COUNTY,
BOARD OF CHOSEN
FREEHOLDERS OF
CAMDEN COUNTY,
ATLANTIC COUNTY
UTILITIES AUTHORITY
and SCOTT A. WEINER,
individually and in his
capacity as Commissioner
of New Jersey Department
_of Environmental
Protection and Energy,
Defendants
APPEARANCES:
Mark R. Rosen
Jodi Isenberg
MESIROV GELMAN JAFFE CRAMER & JAMIESON
44 Tanner Street, P.O. Box 183
Haddonfield, NJ 08033
Attorney for Plaintiff _
HONORABLE
JOSEPH E. IRENAS
CIVIL ACTION NO.
93-2669 (JEI)
ORDER DENYING
* PLAINTIFF’S MOTION
FOR TEMPORARY
‘ RESTRAINING ORDER
AND PRELIMINARY
INJUNCTION
(Filed Sept. 10, 1993)
App. 98
Gail M. Lambert
Stefanie A. Brand —
Deputy Attorney General
Division of Law
124 Halsey Street — 5th Floor
P.O. Box 45029
Newark, NJ 07101
Attorneys for Defendants
Leslie G. London
McMANIMON & SCOTLAND
One Gateway Center
Newark, NJ 07102
Attorney for Amici Curiae Mercer County
Improvement Authority and Gloucester County
Improvement Authority
IRENAS, District Judge,
This matter having come before the Court on Septem-
ber 8, 1993, on plaintiff, Atlantic Coast Demolition &
Recycling, Inc.’s motion for a temporary restraining order
and preliminary injunction pursuant to Fed. R. Civ. P. 65,
and the Court having reviewed the briefs in support and
in opposition, as well as the briefs submitted by amici
curiae, and having heard the arguments of the parties, for
the reasons set forth in an opinion delivered in open
court comprising findings of fact and conclusions of law,
which opinion is incorporated herein by reference, and
good cause appearing.
IT IS on this 10th day of September, 1993,
App. 99
ORDERED THAT the plaintiff, Atlantic Coast Demo-
lition & Recycling, Inc.’s motion for temporary restrain-
ing order and preliminary injunction is hereby DENIED.
/s/ Joseph E. Irenas
JOSEPH E. IRENAS
U.S.D.J.
App. 100
APPENDIX D
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
ATLANTIC COAST HONORABLE
DEMOLITION & : JOSEPH E. IRENAS
i ESR te Ee ‘CIVIL ACTION NO.
Plaintiff 93-2669 (JEI)
V. °
BOARD OF CHOSEN ‘ ORDER DENYING
FREEHOLDERS OF ’ PLAINTIFF’S MOTION
ATLANTIC COUNTY, ‘ TO PLACE THE CASE
POLLUTION CONTROL <‘_ IN THE SUSPENSE
FINANCING AUTHORITY ‘DOCKET, AND, IN THE
OF ATLANTIC COUNTY, ‘* ALTERNATIVE, TO
BOARD OF CHOSEN ‘ DISMISS THE ACTION
FREEHOLDERS OF ’ WITHOUT PREJUDICE
CAMDEN COUNTY, ‘AND ORDER ENTERING
ATLANTIC COUNTY ‘ FINAL JUDGMENT
UTILITIES AUTHORITY
and SCOTT A. WEINER,
individually and in his
capacity as Commissioner
of New Jersey Department
of Environmental
Protection and Energy,
Defendants
APPEARANCES:
MESIROV GELMAN JAFFE CRAMER & JAMIESON
By: Mark R. Rosen, Esq.
Stephen Bayer, Esq.
44 Tanner Street, P.O. Box 183
Haddonfield, NJ 08033
Attorneys for Plaintiff
App. 101
FRED DE VESA, ACTING ATTORNEY GENERAL
Gail M. Lambert, D.A.G.
Stefanie A. Brand, D.A.G.
Division of Law
124 Halsey Street — 5th Floor
P.O. Box 45029
Newark, NJ 07101
Attorneys for Defendants
IRENAS, District Judge:
This matter having come before the Court on plain-
tiff’s motion for leave to place this action in the “sus-
pense” docket, or, in the alternative, to dismiss the action
without prejudice, and the Court having reviewed the
briefs in support and in opposition, and having heard the
arguments of the parties, and neither party having
desired to submit additional evidence, for the reasons set
forth in an opinion delivered in open court on even date
herewith, which opinion is incorporated herein by refer-
ence, and good cause appearing.
IT IS on this 28th day of February, 1994,
ORDERED THAT
1. Plaintiff’s motion for leave to place this action in
‘the “suspense” docket, or, in the alternative, to dismiss
the action without prejudice is hereby DENIED; and
2. Based_on the findings of fact and the conclusions
of law stated in the oral opinion delivered by this Court on
September 8, 1993, final judgment is ENTERED in favor of
the defendants pursuant to Fed. R. Civ. P. 52 and 58.
/s/ Joseph E. Irenas
JOSEPH E. TRENAS
U.S.D]J.
App. 102
APPENDIX E
ATLANTIC COAST DEMOLITION
& RECYCLING, INC., Plaintiff,
Vz.
BOARD OF CHOSEN FREEHOLDERS OF
ATLANTIC COUNTY; Atlantic County Util-
ities Authority; Board of Chosen Freeholders
of Camden County; Pollution Control Financ-
ing Authority of Camden County; Scott A.
Weiner, Individually and in his capacity as
Commissioner of New Jersey Department of
Environmental Protection and Energy, Defen-
dants,
Mercer County Improvement Authority; Hud-
son County Improvement Authority; Essex
County Utilities Authority; Passaic County
Utilities Authority; Cape May County Munici-
pal Utilities Authority; Camden County
Energy Recovery Associates, L.P., Intervenor-
Defendants
C & A CARBONE, INC.; Bret Schundler,
Mayor, in his capacity as Mayor of city of
Jersey City; John Rooney, Mayor, in his capac-
ity as Mayor of Borough of Northvale;
National Solid Waste Management Associa-
tion, New Jersey Chapter; Waste Management
Association of New Jersey; City of Passaic;
City of Paterson; Dwight Destefan, Mayor,
Individually and in his capacity as Mayor of
the Township of River Vale, Plaintiffs,
V.
Robert C. SHINN, Jr., Individually and in his
capacity as Commissioner of New Jersey
Department of Environmental Protection and
App. 103
Energy; New Jersey Department of Environ-
mental Protection and Energy; Larry J.
McClure, Individually and in his official
capacity as Executive Director of the Bergen
County Utilities Authority; Bergen County
Utilities Authority; Mark Guarino, Individu-
ally and in his official capacity as Director of
the Bergen County Health Department; Bergen
County Health Department; Kenneth Blane,
Individually and in his official capacity as
Executive Director of the Hudson County
Improvement Authority; Hudson County
Improvement Authority; Carol Ann Wilson,
Individually and in her official capacity as
Director of the Hudson County Health Depart-
ment; William P. Schuber, Individually and in
his official capacity as County Executive for
Bergen County; Robert C. Janiszewski, Indi-
vidually and in his official capacity as County
Executive for Hudson County; Passaic County
Utilities Authority; Anthony Ross, Individu-
ally and in his capacity as Executive Director;
Nicola R. Didonna, Individually and in his
capacity as County Executive for the County of
Passaic.
National Solid Wastes Management Associa-
tion; Waste Management Association of New
Jersey; and C & A Carbone, Appellants in
96-5567.
New Jersey Department of Environmental Pro-
tection; Scott A. Weiner; and Robert C. Shinn,
Jr., Commissioner, Appellants in 96-5568.
Cape May County Municipal Utilities Author-
ity (“CMCMUA”), Appellants in 96-5569.
Essex County Utilities Authority; Hudson
County Improvement Authority; Mercer
App. 104
County Improvement Authority; Mercer
County Improvement Authority; and Passaic
County Utilities Authority, Appellants in
96-5570.
Nos. 96-5567 to 96-5570.
United States Court of Appeals,
Third Circuit.
Argued Dec. 17, 1996.
Decided May 1, 1997.
Out-of-state waste processing facilities and busi-
nesses engaged in collection and disposal of solid waste
in New Jersey and surrounding states brought action
against New Jersey Department of Environmental Protec-
tion (NJDEP) and various county authorities, challenging
constitutionality of New Jersey’s waste flow control laws
under dormant commerce clause. The United States Dis-
trict Court, District of New Jersey, Joseph E. Irenas, J., 931
F.Supp. 341, held that waste flow control laws violated
commerce clause, thus warranting injunction against
enforcement, but stayed injunction to allow time to
devise nondiscriminatory alternative. On cross-appeals,
the Court of Appeals, Roth, Circuit Judge, held that: (1)
district court properly applied heightened scrutiny test;
(2) NJDEP failed to show that New Jersey lacked alterna-
tive nondiscriminatory means of achieving state interests;
(3) injunction would not bar enforcement of portions of
New Jersey’s Solid Waste Management Act (SWMA) or
Solid Waste Utility Control Act (GSWUCA) other than reg-
ulatory codification of designated facilities for waste dis-
posal and implementation of self-sufficiency policy
precluding designation of out-of-state waste disposal
App. 105
facilities; but (4) district court exceeded its equitable dis-
cretion in imposing two-year post-appeal stay of injunc-
tion.
Affirmed in part, injunction issued, and reversed in
part.
Mark R. Rosen (argued), Mesirov, Gelman, Jaffe,
Cramer & Jamieson, Haddonfield, New Jersey, for Appel-
lee Atlantic Coast Demolition & Recycling, Inc.
Betty J. Christian (argued), Paul J. Ondrasik, Jr., Wil-
liam T. Hassler, David A. Stein, Steptoe & Johnson, L.L.P.,
Washington, D.C., and Joseph Torre, Torre & Torre, Has-
brouck Heights, New Jersey, for Appellants National
Solid Wastes Management Association; C & A Carbone,
Inc; and Waste Management Association of New Jersey.
Peter Verniero, Attorney General of New Jersey, Divi-
sion of Law, Trenton, New Jersey, Andrea M. Silkowitz,
Assistant Attorney General, Gail M. Lambert (argued),
and Stefanie A. Brand, Deputy Attorneys General of New
Jersey, Newark, New Jersey, for Appellees Robert C.
‘Shinn, Jr.; Scott Weiner, Individually and in his capacity
as Commissioner of iNew Jersey Department of Environ-
mental Protection and Energy, and New Jersey Depart-
ment of Environmental Protection.
Barbara H. Parker, Office of County Counsel, Hack-
ensack, New Jersey, for Appellees Mark Guarino, Individ-
ually and in his official capacity as Director of the Bergen
County Health Department, and William P. Schuber, Indi-
vidually and in his official capacity as County Executive
for Bergen County.
App. 106
Thomas S. Higgins, Higgins, Long & Bonfiglio, Lau-
rel Springs, New Jersey, for Appellee Cape May County
Municipal Utilities Authority.
J. Sheldon Cohen (argued), DeCotiis, Fitzpatrick &
Gluck, Teaneck, New Jersey, for Appellants Essex County
Utilities Authority; Hudson County Improvement
Authority; Mercer County Improvement Authority and
Passaic County Utilities Authority.
Stephen P. Sinisi (argued) and Scott G. Sproviero,
Sinisi, Van Dam, Spoviero & Sokolich, Paramus, New
Jersey, for Appellee Bergen County Utilities Authority.
Gage Andretta and David J. Sprong, Wolff & Samson,
Roseland, New Jersey, for Amicus Curiae, Camden
County Energy Recovery Associates, L.P.
Before: STAPLETON, ROTH and GARTH, Circuit
Judges
OPINION OF THE COURT
ROTH, Circuit Judge.
This case comes before us a second time for a deter-
mination whether New Jersey’s regulation of the disposal
of solid waste is constitutional under the Commerce
Clause of the Constitution. New Jersey’s “flow control”
statutes require waste management districts to contract
with designated waste facilities for the disposal of locally
generated waste. Following the Supreme Court’s decision
in C & A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383,
114 S.Ct. 1677, 128 L.Ed.2d 399 (1994), we held that these
laws discriminated against interstate commerce in pur-
pose and effect by disfavoring out-of-state facilities and
App. 107
inhibiting the export of solid waste from New Jersey.
Atlantic Coast Demolition & Recycling, Inc. v. Board of
Chosen Freeholders of Atlantic Cty., 48 F.3d 701, 712-13 (3d
Cir.1995) (“Atlantic Coast I”). We then remanded the case
to the district court to determine whether the flow control
laws could meet heightened scrutiny under the “dor-
mant” Commerce Clause.! Id. at 717-18.
After hearing extensive evidence, the district court
concluded that New Jersey had not met its burden of
demonstrating that it lacked alternate means of achieving
its legitimate interest in creating a safe and effective
system for in-state solid waste disposal. Atlantic Coast
Demolition & Recycling, Inc. v. Board of Chosen Freeholders of
Atlantic Cty., 931 F.Supp. 341, 359 (D.N.J.1996). Upon
finding New Jersey’s flow control laws unconstitutional,
the district court granted a permanent injunction both to
plaintiffs who process and dispose of construction and
1 The Commerce Clause grants Congress the power “[t]o
regulate Commerce . . . among the several states.” U.S. Const.
Art. I, § 8, cl. 3. In addition to this affirmative power, the
Commerce Clause also has a “negative” or “dormant”
component, under which states may not erect barriers to
interstate trade. See Lewis v. BT Investment Managers, Inc., 447
U.S. 27, 35, 100 S.Ct. 2009, 2015, 64 L.Ed.2d 702 (1980). The
dormant Commerce Clause applies whenever Congress “has
not affirmatively acted to either authorize or forbid the
challenged state activity.” Norfolk Southern Corp. v. Oberly, 822
F.2d 388, 392 (3d Cir.1987). The defendants in this case do not
argue that Congress has authorized the discrimination against
interstate commerce present in the New Jersey solid waste
control laws.
App. 108
demolition waste (so-called “C & D” waste), and to plain-
tiffs who process other types of solid waste.? The district
court then issued a two-year post-appeal stay on the
permanent injunction, except as it applied to processors
of C & D waste. Id.
The Carbone plaintiffs and the defendants have
appealed the district court’s decision. We will affirm the
district court’s findings that New Jersey’s flow control
laws and regulations are unconstitutional insofar as they
discriminate against out-of-state waste processing facili-
ties. We will not, however, affirm the lower court’s post-
appeal stay because the record cannot support the district
court’s exercise of “equitable discretion” to delay the
2 The plaintiffs, who brought this action challenging the
continued enforcement of New Jersey’s flow control laws, are
Atlantic Coast Demolition & Recycling, Inc., an out-of-state
facility that processes construction and demolition debris, C &
A Carbone, Inc., an out-of-state facility that processes all types
of solid waste, the Waste Management Association of New
Jersey and the National Solid Wastes Management Association.
The latter two plaintiffs are, for the most part, small, privately
held businesses engaged in the collection and disposal of solid
waste in New Jersey and surrounding states. We refer toC & A
Carbone and the two Association plaintiffs collectively as
“Carbone plaintiffs.”
The defendants are the New Jersey Department of
Environmental Protection (NJDEP), the Bergen County Utilities
Authority, the Hudson County Improvement Authority, the
Passaic County Utilities Authority, the Mercer County
Improvement Authority, the Essex County Utilities Authority,
and the Cape May County Municipal Utilities Authority. With
the exception of the Bergen County Utilities Authority, which
has filed a sepa
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