Petition for Writ of Certiorari — Eastern Kentucky Resources v. Fiscal Court of Magoffin County

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54 119 4 JAN <9 1998

No.

In the Supreme Court of the United States

OCTOBER TERM, 1997

EASTERN KENTUCKY RESOURCES, ET AL., PETITIONERS,

THE FISCAL COURT OF MAGOFFIN COUNTY, ET AL.,

RESPONDENTS.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

WALKER P. MAYO III

Counsel of Record

C. THOMAS EZZELL

BOWLES RICE MCDAVID

GRAFF LOVE & GETTY, PLLC

1200 Vine Center Tower

333 West Vine Street

Lexington, Kentucky 40507

COUNSEL FOR PETITIONERS

EASTERN KENTUCKY RESOURCES,

INC., ET AL

Whether Kentucky’s municipal-solid-waste statutory

scheme, which allows a county to prohibit the construction of all

landfill facilities within the county, is unconstitutional under the

Commerce Clause of the United States Constitution.

PARTIES TO THE PROCEEDING

AND RULE 29.6 STATEMENT

The parties to this proceeding include the Petitioners,

Eastern Kentucky Resources, Blue Ash Development, Inc., and

Royalton Resources, Inc. These parties are neither subsidiaries

nor affiliates of a publicly-owned corporation. The Respondents

to this Petition include the Fiscal Court of Magoffin County,

Kentucky, Paul E. Patton, in his capacity as Governor of the

Commonwealth of Kentucky, and James E. Bickford, in his

capacity as Secretary of the Natural Resources and

Environmental Protection Cabinet of the Commonwealth of

Kentucky.

TABLE OF CONTENTS

Page

8S eRe OB oo sb SEAR C t re Caner i

PARTIES TO THE PROCEEDING AND RULE 29.6

ENA RSet Ces ON UU Cas dee li

Se CIE GE REE Cs ESE UT is oc ene ili

TE A IM io chee can cede e ewes Vv

TABLE OF AUTHORITIES D5 Po Oe OR Ore Vi

NS ae RERSRINER Se I et gaa ee ]

SEE Sg oo ee SV dees ok ok Bk eles ns 8 o's 2

CONSTITUTIONAL PROVISIONS

AND STATUTES INVOLVED ................ 2

<9P EE ee ue yk a! Ss See 3

REASONS FOR GRANTING THE PETITION .......... 5

I. THE OPINION BELOW CONFLICTS

WITH THE DECISIONS OF THE SUPREME

COURT AND RAISES SUBSTANTIAL

QUESTIONS OF CONSTITUTIONAL

LAW WHICH SHOULD BE ADDRESSED BY

BRUNE EE AFT og ove ces sasccncvees 5

A. The Passage Of Statutes And Regulations

With An Intent To Prohibit Interstate Movement

Of Goods Violates The Commerce Clause .. 7

ili

The Passage Of Statutes And Regulations

With The Effect Of Prohibiting

Interstate Movement Of Goods

Violates The Commerce Clause-.......... 11

The Opinion Below Is In Conflict With

Both The Precedent Of The Supreme Court

And Of The Eleventh Circuit ........... 16

CONGCLAUIGIIN S650 5 Be ey ees 18

TABLE OF APPENDICES

Page

APPENDIX A Opinion of the United States

Court of Appeals for the Sixth

Circuit in Eastern Kentucky

Resources v. Fiscal Court of

Magoffin County, Kentucky,

127 F.3d 532 (6th Cir. 1997) ...... la

APPENDIX B Findings of Fact, Conclusions

Of Law And Partial Summary

Judgment of the Federal District

Court for the Eastern District of

Kentucky in Eastern Kentucky

Resources v. Fiscal Court of

Magoffin County, Kentucky

(Civil Action No. 94-62) ........ 28a

TABLE OF AUTHORITIES

CASES: Page

Baldwin v. G.A.F. Seelig, 294 U.S.

S11 (1935)... c cece cece eee eee eee ence eens 15

Brimmer v. Rebman, 138 U.S.

FO CI Eek AA Gin on 9 FFs 0 8s 8-5 RRS 13

C & A Carbone v. Town of Clarkstown, N.Y.,

Sik RE: SER Cera ba Che 6 se RN a 6,7

Chemical Waste Management, Inc. v. Hunt,

SOG TER ee os FE Sees ecco eens 7,11

City of Philadelphia v. New Jersey,

GST Ur ea RENE ec eccudess 6, 17

Crutcher v. Kentucky, 141 U.S. 47 (1891)... ........... 16

Dean Milk Co. v. Madison,

DU Sc CRED 0 ch kas cacéeuce) 13, 14, 18, 19

Fort Gratiot Sanitary Landfill v. Michigan

Department of Natural Resources,

FOR UB ae LEI 6k a vi ce aeeas 7, 11, 16, 17, 18

GSW v. Long County, Georgia, 999 F.2d

Se RNS ENED 4. oie go We ue we Sere 15, 16, 18

Hughes v. Oklahoma, 441 ~

Ri PETE aca 605.85 s da oe eb noe een 6, 12

Lewis v. B.T. Inv. Managers, 447 U.S. 27 (1980) ......... 7

Maine v. Taylor, 477 U.S. 131 (1986) ............000ee 12

Oregon Waste Systems v. Department of

Environmental Quality,

a eo ho oS 6 65 5-4 5 08 8 5'6 bis oes 4 0's 7

Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) 4, 5, 6, 12, 14

STATUTES

Kentucky Revised Statute, § 224.40-315(1) ............. 2

Kentucky Revised Statute, § 224.40-315(2) ........... 2-3

UNITED STATES CONSTITUTION

PRE OE Sah Nha AT ines Oieescwnreeacaces 2

OTHER

Stanley E. Cox, What May States Do About Out-of-State Waste

In Light of Recent Supreme Court Decisions Applying The

Dormant Commerce Clause? Kentucky As Case Study In The

Waste Wars, 83 Ky. L.J. 551, 604 (1994-95). ........ 10-11

Vii

In the Supreme Court of the United States

OCTOBER TERM, 1997

EASTERN KENTUCKY RESOURCES, ET AL., PETITIONERS

Vv.

THE FISCAL COURT OF MAGOFFIN COUNTY, ET AL..,

RESPONDENTS

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

The Petitioners respectfully request the issuance of a Writ

of Certiorari to review the Opinion of the United States Court of

Appeals for the Sixth Circuit in this case filed on October 15,

1997.

OPINIONS BELOW

The opinion of the United States Court of Appeals for the

Sixth Circuit (1a)' affirming the decision of the United States

District Court for the Eastern District of Kentucky is reported at

127 F.3d 532. The Findings of Fact, Conclusions of Law and

Partial Summary Judgment of the United States District Court

for the Eastern District of Kentucky (28a) is unreported.

Citations herein to material printed in the Appendices appear as

“ gg

JURISDICTION

The United States Court of Appeals for the Sixth Circuit

decided and filed its Opinion on October 15, 1997. The

jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

Article I, Section 8 of the Constitution of the United

States provides in pertinent part as follows:

The Congress shall have Power...To Regulate Commerce

with foreign Nations, and among the several States...

Ky. Rev. Stat. Section 224.40-315(1) states:

No permit to construct or expand a municipal

solid waste disposal facility shall be accepted for

processing by the Cabinet unless the application

contains a determination from the Governing

Body for the solid waste management area in

which the facility is or will be located concerning

the consistency of the application with the Area

Solid Waste Management Plan...

Ky. Rev. Stat. Section 224.40-315(2) states:

No permit to construct or expand a solid waste

disposal facility shall be approved unless the

applicant demonstrates and the Cabinet makes a

written finding in the preliminary determination

that the application conforms to and is consistent

with all of the following: (a) the capacity needs

identified in the Area Solid Waste Management

Plan; (b) Other elements of the Area Solid Waste

Management Plan, for permit applications filed

after approval of those elements...

STATEMENT OF THE CASE

In 1991, the Kentucky General Assembly enacted Senate

Bill 2 in an Extraordinary Session called by then-Governor

Wallace Wilkinson. Senate Bill 2 substantially rewrote the

Kentucky laws governing solid waste. The Extraordinary

Session occurred, and Senate Bill 2 was enacted, largely because

of public opposition within Kentucky to the acceptance of out-of-

state waste. The challenged provisions allowed local

governments and the Commonwealth to work together to exclude

the disposal of out-of-state waste in Kentucky.

In 1991, Eastern Kentucky Resources, Blue Ash

Development, Inc., and Royalton Resources, Inc., (collectively

“EKR”) purchased property in Magoffin County to develop a

landfill which would accept 4,000 to 10,000 tons of solid waste

per day. Most of this waste would come from outside of

Kentucky. The EKR proposed landfill was originally included

in the Magoffin County Area Solid Waste Management Plan

which was approved by the Kentucky Natural Resources and

Environmental Protection Cabinet (the “Cabinet’”). Sub-

sequently, the Cabinet withdrew its approval of the Magoffin

County Area Plan and refused to process EKR’s permit

application. Later, Magoffin County revised its Area Plan to

exclude the EKR proposed landfill. This revised Area Plan was

approved by the Cabinet. EKR brought this action because it

was excluded from the Magoffin County Area Plan and could not

get its permit application processed because it proposed to accept

out-of-state waste.

The parties to this action filed Cross Motions for Partial

Summary Judgment in the District Court. The Defendants also

filed Motions to Dismiss. EKR’s Motion for Partial Summary

Judgment asserted that the capacity assurance and capacity

authorization provisions of KRS Chapter 224 were

unconstitutional, on their face, in their purpose, and in their

direct practical effect. Defendants’ Cross Motions for Partial

Summary Judgment addressed the same challenged provisions

and actions. On September 21, 1996, the District Court granted

Defendants’ Motions for Partial Summary Judgment and denied

EKR’s motion. The Court also granted Defendants’ Motions To

Dismiss, ruling that EKR had failed to exhaust available

administrative remedies and also dismissed EKR’s other claims

for relief. The District Court noted that an analysis of state laws

requires a Court to, “distinguish between outright economic

protectionism and more indirect burdens on the free flow of

trade.” Findings of Fact, Conclusions of Law and Partial

Summary Judgment at 24 (47a). The District Court also

recognized that a statute may be facially discriminatory,

discriminatory in practical effect, or discriminatory in purpose.

Id. (47a.) However, the District Court held that Senate Bill 2

does not discriminate in practical effect nor was it the product of

discriminatory purpose. Jd. at 28, 32 (52a, 54a). EKR filed a

timely Notice of Appeal on October 5, 1995.

The District Court concluded that the Commonwealth

had carried its burden of establishing that Senate Bill 2 furthers

legitimate local goals in, “an evenhanded manner.” /d. at 35

(55a). Considering the legislation in relation to the Pike test, the

Court held, “the burden for a landfill developer of being

considered in a local plan and getting a local determination is

outweighed by the undisputed benefits from derived [sic] the

Commonwealth’s implementation of SB 2.” Jd. at 36 (56a)

(citing Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970)).

On appeal, the Court of Appeals rejected EKR’s

contention that Senate Bill 2 was enacted with the purpose of

protecting local economic actors. 127 F.3d 532, 542 (21a). The

Court of Appeals noted with approval the District Court’s

determination that the legislation had no discriminatory effect on

interstate commerce. Id. at 544 (25a). The Court of Appeals

also considered the effect of the legislation under the Pike test.

Agreeing with the District Court, the Court of Appeals held, “the

Commonwealth’s clearly legitimate goals outweigh the burdens,

if any, that are placed upon interstate commerce.” IJd. at 545

(27a). The Court of Appeals concluded that because the

legislation lacked discriminatory effect and because the

Commonwealth’s goals outweighed any burdens on interstate

commerce the decision of the District Court should be affirmed.

Id. (27a).

REASONS FOR GRANTING THE PETITION

L. The Opinion Below Conflicts With The Decisions Of

The Supreme Court And Raises Substantial

pyro est ne age tana ara

The legal framework to determine whether a state statute

which burdens interstate commerce violates the Commerce

Clause is well established, and the parties to this dispute do not

disagree on this point. The Supreme Court has clearly

established a two-pronged analysis to determine the validity of

a State law in the face of a Commerce Clause challenge.

The first method of analysis is applied where the statute

discriminates against interstate commerce either on its face or in

practical effect. Recognizing solid waste and solid waste

services are articles of commerce under the Commerce Clause,

City of Philadelphia v. New Jersey, 437 U.S. 617, 622-623

(1978); and C & A Carbone, Inc. v. Town of Clarkstown, N.Y.,

511 U.S. 383, 391 (1994), the Supreme Court has established a

virtual per se rule invalidating any regulation which

discriminates against interstate commerce. City of Philadelphia,

437 U.S. at 624. The rationale for invalidating state and local

regulations which discriminate against interstate commerce, “is

to prohibit state or municipal laws whose object is local

economic protectionism, laws which would excite those

jealousies and retaliatory measures the Constitution was designed

to prevent.” Carbone, 511 U.S. at 390.

The second method of analysis considers apparently

neutral regulations. This method of analysis was described in

Pike v. Bruce Church, Inc. as follows:

Where the statute regulates even handedly to

effectuate a legitimate local public interest, and

its effects on interstate commerce are only

incidental, it will be upheld unless the burden

imposed on such commerce is clearly excessive

in relation to the putative local benefits.

397 U.S. 137, 142 (1970).

In Hughes v. Oklahoma, 441 U.S. 322, 336 (1979), the

Supreme Court explained how these two tests are to be applied:

[W]e must inquire (1) whether the challenged

Statute regulates even handedly with only

“incidental” effects on interstate commerce or

discriminates against interstate commerce either

on its face or in practical effect; (2) whether the

Statute serves a legitimate local purpose; and if

so, (3) whether alternative means could promote

this local purpose as well without discriminating

against interstate commerce.

As the Supreme Court explained in Fort Gratiot Sanitary

Landfill v. Michigan Department of Natural Resources, 504 U.S.

353, 359 (1992), legislation that discriminates against interstate

commerce will be strictly scrutinized and is invalid unless the

State or local government can show that the discrimination is

justified by a valid factor unrelated to economic protectionism.

Carbone, supra; Oregon Waste Systems v. Department of

Environmental Quality, 511 U.S. 9? (1994). In addition, a

finding that state legislation constitutes economic protectionism

and is therefore invalid may be made on the basis of a

discriminatory purpose. See, e.g., Chemical Waste Management,

Inc. v. Hunt, 504 U.S. 334, 344 (1992); Lewis v. B.T. Inv.

Managers, 447 U.S. 27, 39 (1980).

In this action, the challenged provisions of KRS Chapter

224, both directly and by incorporating the Magoffin County

Area Plan, were enacted to and have had the effect of preventing

the continued flow of out-of-state waste into the Commonwealth

of Kentucky generally and into Magoffin County specifically.

A. The Passage Of Statutes And Regulations With An

Intent To Prohibit Interstate Movement Of Goods

Violates The Commerce Clause.

In September 1990 then-Governor Wilkinson requested

that the University of Kentucky prepare a comprehensive report

on solid waste and present options for dealing with solid waste.

The University of Kentucky prepared Kentucky Solid Waste

Management Study: Issues and Options, September 17, 1990

(the “Solid Waste Study”) (R.72)*. One of the principal concerns

of the Solid Waste Study was how to slow down or prevent the

entry of out-of-state waste into Kentucky. The introduction to

the Solid Waste Study at page i states “the Commonwealth’s

existing solid waste management strategies must be expanded in

the near future to more fully address problems associated with

capacity management and assurances and with disposal of waste,

especially from sources outside of the Commonwealth.”

(Emphasis added). The goal of stopping out-of-state solid waste

was a central theme of the Solid Waste Study. The Solid Waste

Study provided a blue-print for the Governor and the General

Assembly on how to attempt the exclusion of out-of-state waste.’

In justifying the Kentucky statutory provisions challenged

by EKR, the Sixth Circuit stated that EKR had failed to present

any evidence showing that the study “impacted” the legislature.

127 F.3d 532, 543 (21a). It is important to note that Kentucky

has no recorded legislative history for the General Assembly.

Examination of the study itself, however, indicates the

Commonwealth’s obvious intent to prevent the continued flow

of out-of-state waste.

2 Citations herein to rterial in the Joint Appendix before the Sixth

Circuit appear as “R._..”

> In order to best deal with out-of-state waste, the Solid Waste Study

recommended the following:

The experience of numerous other states that have

attempted to ban or control importation of solid

waste suggests that the most feasible and effective

long-term option for dealing with the problem of

disposal of solid waste is comprehensive solid

waste planning accompanied by integrated

management of the comprehensive plan.

Solid Waste Study, pgs. 144-145.

The study was conducted by the University of Kentucky,

a state agency. Dr. Charles T. Wethington, Jr., then Interim

President of the University of Kentucky, prepared the study at the

request of Governor Wilkinson. Governor Wilkinson was

responsible for Dr. Wethington’s appointment. In addition, the

Commonwealth’s role in the study is highlighted by the fact that

Dr. John D. Kiefer, the Assistant State Geologist for the

Kentucky Geological Survey, served as the Project Coordinator

for the study. Finally, the authors of the study acknowledged the

support of Governor Wilkinson and numerous other state agents

for assistance with the project. From this, it becomes clear that

the study and the interests of the Commonwealth were singular.

The Solid Waste Study was completed in September

1990, and in February 1991, the General Assembly enacted

Senate Bill 2. The challenged provisions of Senate Bill 2 are

those which implement the capacity assurance and capacity

authorization provisions recommended by the Solid Waste

Study.

The intent to prevent the flow of out-of-state waste was

also reflected by the actions of Magoffin County. In November

1993, elections were held for the Magoffin County Fiscal Court.

A central theme of the campaign was the vigorous and outspoken

opposition to EKR’s proposed landfill because it would have

accepted out-of-state waste. Then-Governor Jones appeared at

a rally for landfill opponents, which was televised on the evening

news. The Governor stated, “you know when I took office there

was a strong move to try to develop a dump here in Magoffin

County, and I just felt that it was wrong to be bringing out-of-

state garbage and stink up a beautiful wonderful place like

Magoffin County.” (R.72). Similarly, then-candidate for Judge-

Executive of the Fiscal Court, Charles Hardin, ran a paid

advertisement in the local newspaper during his 1993 campaign

Stating in part, “say ‘No!’ to EKR...Charles Hardin [has taken]

a leadership role in the fight against Eastern Kentucky Resources

and out-of-state garbage. The fact is if Dr. Hardin and many

other citizens had not taken the initiative to fight EKR’s

proposed mega-dump we’d be dodging garbage trucks from New

Jersey today.” Salyersville Independent, February 6, 1992.

(R.72) (Emphasis added). This view was shared by other

Magoffin County politicians. David Patrick, the County

Magistrate for the Fiscal Court of Magoffin County from January

1, 1990 until December 31, 1993, stated in his Affidavit in

support of the Defendants’ Motion for Summary Judgment, “the

principal reason for this opposition is that EK Resources intends

to accept out-of-state solid waste at its proposed landfill.”

(R.72). Nonetheless, both the District Court and the Court of

Appeals determined that EKR had, “failed to present any

evidence which demonstrates that the challenged provisions have

a discriminatory purpose.” Eastern Kentucky Resources, 127

F.3d at 543 (22a).

In considering the purpose behind the passage of Senate

Bill 2, one well-informed commentator has observed:

One working premise of the 1991 Special Session

was that the number of disposal facilities to be

allowed to operate in Kentucky was to be driven

by capacity needs identified in local Kentucky

government plans. The additional assumption

was that private in-state facilities could be

captured primarily for in-state use. Such capture

is Clearly unconstitutional under Fort Gratiot.

Stanley E. Cox*, What May States Do About Out-of-State Waste

In Light of Recent Supreme Court Decisions Applying The

Dormant Commerce Clause? Kentucky As Case Study In The

Waste Wars, 83 Ky. L.J. 551, 604 (1994-95).

From this, it is clear that the General Assembly’s intent

to prevent the flow of out-of-state waste into the Commonwealth

manifested itself in Senate Bill 2. Moreover, it is clear that

Magoffin County’s actions were motivated by the intent to

prevent the importation of out-of-state waste into Magoffin

County.

B. The Passage Of Statutes And Regulations With The

Effect Of Prohibiting Interstate Movement Of Goods

Violates The Commerce Clause.

The District Court and the Court of Appeals also rejected

the argument that the challenged statutes discriminated against

out-of-state waste in practical effect. Since the passage of Senate

Bill 2, of the 118 designated solid waste management areas in the

Commonwealth, at least 85 areas provide 0 capacity whatsoever

for out-of-area (and thus out-of-state) © »ste in their Cabinet-

approved Area Plans, thereby precluding hoth the disposal of any

Mr. Cox is an Assistant Professor of Law at the New England School

of Law. During his work for the Kentucky Office of Attorney

General in 1990-92, Mr. Cox advised on the constitutionality of

legislation proposed for the 1991 special session of the General

Assembly; co-authored Amicus Briefs In Fort Gratiot Sanitary

Landfill, Inc. v. Michigan Department of Natural Resources, 112

S.Ct. 2019 (1992), and Chemical Waste Management, Inc. v. Hunt,

112 S.Ct. 2009 (1992); and issued numerous informal opinion letters

on waste issues. Mr. Cox explains his bias in the article as belonging

to the author, “but they are, of course, partly colored by these earlier

experiences and by his previous work on behalf of citizen-group

plaintiffs opposed to expansion of landfills designed to receive

primarily out-of-state trash.” Cox, note a., at 629.

out-of-state waste within their boundaries and the siting of any

new landfills for the disposal of out-of-state waste. The thirty or

so Areas that have allowed some out-of-area capacity have Gone

so only on a limited basis or with additional restrictions.”

Despite the additional restrictions on out-of-state waste, and

Magoffin County’s refusal to approve EKR’s landfill, the

Appeals Court stated, “EKR does not demonstrate how local

economic actors are favored at the expense of out-of-state

economic actors.” Jd., at 544 (24a).

Both the District Court and the Sixth Circuit applied the

balancing test of Pike v. Bruce Church, Inc. to determine the

constitutionality of the challenged provisions of KRS Chapter

224, instead of subjecting such act to the “more demanding

scrutiny”, See, Maine v. Taylor, 477 U.S. 131, 138, which would

have been required under Hughes v. Oklahoma, 441 U.S. 322

(1979), if the Courts had determined that such act discriminates

against interstate transactions. Significantly, the Court of

Appeals did not address the issue of whether the Commonwealth

For example, Logan County’s host agreement with Southern

Sanitation Company, Inc. limits the acceptance of solid waste at its

landfill to 475 tons per day from areas outside Logan County listed

in the host agreement, none of which are outside Kentucky. Franklin

County’s host agreement with Browning-Ferris Industries of

Kentucky, Inc. (“BFT’”), requires the BFI landfill to reserve sufficient

capacity for that area’s disposal needs for ten years and allows the

BFI landfill to use its remaining capacity only “for disposal of waste

generated in Kentucky.” R.32.

A number of areas have submitted, and the Cabinet has approved,

citing procedures for landfills which refuse to site any proposed

landfill with capacity for waste outside of the area. In addition a

number of areas in the Commonwealth discriminate against out-of-

area waste by imposing differential fees. For example, Franklin

County and Rowan County have host agreements with landfills

which impose fees of 5% of the landfills gross receipts from out-of-

area waste. R.32.

had sustained the burden of demonstrating that its purported

purpose in enacting the Senate Bill 2, “could not be served as

well by available nondiscriminatory means.” /d., at 138. By

determining that the challenged provisions of KRS 224 do not

discriminate against interstate commerce, because they also

discriminate against some in-state commerce, the decisions

below directly conflict with the Supreme Court’s decision in

Dean Milk v. Madison, 340 U.S. 349 (1951), and other decisions

of the Supreme Court which stand for the principle that “‘it is

immaterial,” for purposes of determining whether the legislation

discriminates against interstate commerce, “that [other instate

commerce] is subjected to the same prescription as that moving

in interstate commerce.” I/d., at 354.

In Dean Milk the Supreme Court invalidated a Madison,

Wisconsin ordinance which prohibited the sale of pasteurized

milk within the City of Madison unless such milk had been

processed at an approved pasteurization plant within a radius of

five miles from the central square of Madison. In a fashion

similar to the challenged provisions of KRS Chapter 224, the

Madison ordinance subjected most Wisconsin milk to the same

prescription as out-of-state milk. Nonetheless, the Supreme

Court held that the ordinance “plainly discriminates against

interstate commerce”, Jd., at 354, noting that “it is immaterial

that Wisconsin milk from outside the Madison area is subjected

to the same prescription as that moving in interstate commerce.

Cf. Brimmer v. Reban, 138 U.S. 78, 82-83 (1891)” 340 U.S. at

354 n.4. The Court continued on to hold that the Madison

ordinance violated the Commerce Clause because reasonable

non-discriminatory alternatives, adequate to serve legitimate

local interest, were available. By ignoring the teachings of Dean

Milk, and holding that state legislation which excludes interstate

commerce from local areas will not be deemed to discriminate

against interstate commerce, so long as other nonlocal in-state

commerce is subject to the same prohibitions, the Court of

Appeals has espoused a new principle which will have

pernicious effects on the application of the Commerce Clause to

future protectionist state legislation. If the opinion of the Court

of Appeals is correct, a state would hereafter be permitted to

enact legislation which authorizes local governments or districts

to prohibit the importation of or impose discriminatory taxes

upon numerous articles of commerce such as milk, meat, and

ethanol as well as waste which are produced outside the

boundaries of such government or districts unless those who

were adversely affected by such burdens could show that the

burdens imposed on such commerce were not, “clearly excessive

in relation to the putative local benefits” sought to be achieved

by such legislation. See, Pike v. Bruce Church, Inc., 397 U.S. at

142.

For example, if it were true, as the Court of Appeals

States in its opinion, that it is permissible under the Commerce

Clause to establish a framework of legislation which, while not

facially discriminating against out-of-state waste, allows local

governments or regional areas to enact legislation that has the

same effect so long as the Pike test can be satisfied, then

notwithstanding the Supreme Court’s decision in Dean Milk, the

City of Madison could now adopt an ordinance which restricted

the importation of milk pasteurized outside the city limits

provided that it could persuade a court that the ordinance,

because it only affected milk sold in Madison, did not impose a

burden on interstate commerce which was clearly excessive in

relation to the putative local benefits sought to be achieved by

such ordinance. As a consequence, it is inevitable that the

decisions below, if allowed to stand will, as Justice Clark warned

in Dean Milk, “invite a multiplication of preferential trade areas

destructive of the very pufpose of the Commerce Clause” 340

U.S. at 356, and will effectively subvert the principle which was

reiterated in Dean Milk that “one state in its dealings with

another may not place itself in a position of economic isolation.

Baldwin v. Seelig, Inc., [294 U.S. 511] at 527.” Id., at 356.

In GSW v. Long County, Georgia, 999 F.2d 1508 (11th

Cir. 1993), the Eleventh Circuit considered the effect of banning

all waste disposal within a geographic zone of a state. GSW

entered into an agreement with Long County, Georgia to

construct a private landfill in Long County, to charge a tipping

fee to all users, and to give a percentage of the revenues to the

County. The contract did not contain any geographic restrictions

on the origins of the waste, and specifically authorized the

facility to accept waste from outside of Long County. Several

months after entering the contract, Long County passed a

resolution limiting the origin of waste to be disposed at the

proposed facility to a 150 mile radius of Long County. After

GSW refused to give certain assurances requested by Long

County, Long County wrote a letter rescinding the contract with

GSW. GSW filed suit on the ground that the county’s recision

of the contract was an attempt to discriminate against interstate

commerce. The Court of Appeals at pages 1517-1518 ruled as

follows:

The County further argues that its actions do not

violate the Commerce Clause because the

recision of the contract prevents the facility from

being built and has the effect of banning of all

waste disposal, not just waste from outside the

county. Thus the County distinguishes its actions

from the statutes at issue in City of Philadelphia,

Hunt and Fort Gratiot, all of which had a

discriminatory effect. However, this Court cannot

ignore the recision. Long County could have

decided not to contract for waste disposal

services and not to license a potential provider of

such services without violating the Commerce

Clause; but once it decided to contract for

services and then to place a restriction, it cannot

escape constitutional scrutiny.

The Court’s ruling in GSW is directly on point. Magoffin

County entered into an agreement with EKR, included the

proposed EKR landfill in the area plan, and later adopted a new

area plan excluding all landfills in order to prevent out-of-state

waste from entering Magoffin County. As stated by this Court:

To carry on imterstate commerce is not a

franchise or a privilege granted by the State; it is

a right which every citizen of the United States is

entitled to exercise under the constitution and

laws of the United States.

Crutcher v. Kentucky, 141 U.S. 47, 57 (1891).

Cc. The Opinion Below Is In Conflict With Both The

Precedent Of The Supreme Court And Of The

Eleventh Circuit.

Finally, it is important to note that the provisions of

Senate Bill 2 are not significantly different from the similar

Michigan provision held unconstitutional by the Supreme Court

in 1992 in the Fort Gratiot case. In Fort Gratiot, the Supreme

Court considered the constitutionality of a 1988 Michigan solid

waste flow control scheme that was identical in all relevant

respects to the scheme enacted in Kentucky under Senate Bill 2.

Michigan’s Solid Waste Management Act required each

Michigan county to estimate the amount of solid waste that

would be generated in the county over the next twenty years and

to adopt a plan to provide for its disposal at solid waste facilities

which complied with the state’s health standards. Fort Gratiot,

504 U.S. at 355-56. In 1988, the Michigan Legislature amended

the state’s Solid Waste Management Act by adopting provisions

which prohibited the acceptance of solid waste generated outside

the county at the disposal facility unless explicitly authorized in

the approved county plan. /d., at 357. In Fort Gratiot, the

Supreme Court held that the 1988 amendment to Michigan’s

Solid Waste Management Act “unambiguously discriminated

against interstate commerce and are appropriately characterized

as protectionist measures that cannot withstand scrutiny under

the Commerce Clause.” Jd., at 367-368. This Court also noted

that Michigan’s restricted flow control provisions authorized

“each of its 83 counties to isolate itself from the national

economy.” Jd., at 361. Adhering to its holding in City of

Philadelphia, the Supreme Court concluded that the Michigan

Statute was unconstitutional. Fort Gratiot, U.S. at 367-68.

Under this analysis, the same result must be reached as to

Magoffin County’s attempt to exclude out-of-state waste.

As stated above, Kentucky’s flow control scheme allows

individual Areas to authorize capacity for out-of-area waste in

their approved area plans. In Fort Gratiot, the Supreme Court

determined that such controls are unconstitutional. As the

Supreme Court stated, “St. Clair county’s total ban on out-of-

State waste is unaffected by the fact that some other county’s

have adopted a different policy.” Jd. at 363. “In short,” the Court

stated, “neither the fact that the Michigan statute purports to

regulate intercounty commerce in waste nor the fact that some

Michigan counties accept out-of-state waste provides an

adequate basis for distinguishing this case from Philadelphia v.

New Jersey.” Id., at 363. The challenged Kentucky provisions

are virtually identical and have absolutely the same effect on

interstate commerce.

Not only is there a conflict between the precedent of the

Supreme Court and the Sixth Circuit’s Opinion, but there also

exists a conflict between the Sixth Circuit’s Opinion and the

precedent of the Eleventh Circuit. As noted above, GSW held the

actions of a county to prevent the importation of out-of-state

waste were in violation of the Commerce Clause.

Pursuant to the challenged statutes in KRS Chapter 224,

a county in Kentucky now has the right to completely exclude the

interstate flow of waste by refusing to allow the expansion and

Siting of any new landfills. By doing so, each individual county

in the Commonwealth can follow the same course as Magoffin

County and halt all flow of out-of-state waste into the

Commonwealth of Kentucky. If every state were to adopt similar

legislation, the flow of waste throughout the nation could be

halted. Each county would be able to restrict all waste from

flowing into and out of its perimeters. For this reason, review by

this Court of the decision below is necessary.

CONCLUSION

This case presents the question of whether Kentucky or

any other state may authorize, or require compliance with, county

legislation or regulations which allow local governing bodies to

interfere with the free flow of out-of-state, as well as out-of-

county, waste. This case thus raises the question of whether Fort

Gratiot Sanitary Landfill v. Michigan Department of Natural

Resources should remain the law of the land. However, if Fort

Gratiot is to be overruled, then only this Court should do so. On

the other hand, if Fort Gratiot is not to be overruled, then this

Court should not permit it to be subverted by the adoption of a

pernicious new principle, espoused by the Court of Appeals that,

notwithstanding Dean Milk, the erection of local barriers to

interstate commerce does not constitute discrimination against

interstate commerce so long as other in-state commerce is

subjected to the same proscription. Such a principle cannot be

permitted to stand because it invites localities throughout the

country to enact legislation which discriminates against articles

of commerce generated outside of such localities, including

articles of interstate commerce, and to create thereby a

“multiplication of preferential trade areas destructive of the very

purpose of the commerce clause.” Dean Milk, 340 U.S. at 356.

Accordingly, a Writ of Certiorari should issue to review the

decision below.

Respectfully submitted,

WALKER P. Mayo III

Counsel of Record

C. THOMAS EZZELL

BOWLES RICE MCDAVID

GRAFF LOVE & GETTY, PLLC

1200 Vine Center Tower

333 West Vine Street

Lexington, Kentucky 40507

(606) 225-8700

COUNSEL FOR PETITIONERS

EASTERN KENTUCKY RESOURCES,

INC., ET AL.

APPENDIX A

EASTERN KENTUCKY RESOURCES, ET AL.,

Plaintiffs/Appellants,

THE FISCAL COURT OF MAGOFFIN COUNTY,

KENTUCKY, ET AL.,

Defendants/Appellees

No. 95-6360

UNITED STATES COURT OF APPEALS,

6TH CIRCUIT

Argued March 21, 1997 Decided October 15, 1997

Before: KEITH, MERRITT AND COLE, Circuit Judges

COUNSEL

ARGUED: Richard A. Getty, BOWLES, RICE, MCDAVID,

GRAFF, LOVE & GETTY, Lexington, Kentucky, for Appellant.

Kathryn M. Hargraves, NATIONAL RESOURCES AND

ENVIRONMENTAL PROTECTION CABINET, OFFICE OF

LEGAL SERVICES, Frankfort, Kentucky, for Appellee. ON

BRIEF: Richard A. Getty, Walker P. Mayo, BOWLES, RICE,

MCDAVID, GRAFF, LOVE & GETTY, Lexington, Kentucky,

Leonard Knee, BOWLES, RICE, MCDAVID, GRAFF, LOVE

& GETTY, Charleston, West Virginia, for Appellant. Kathryn

M. Hargraves, Kathryn R. Matheny, Karen H. Rippy,

NATURAL RESOURCES AND ENVIRONMENTAL

PROTECTION CABINET, OFFICE OF LEGAL SERVICES,

Frankfort, Kentucky, for Appellee.

OPINION

DAMON J. KEITH, Circuit Judge. The Plaintiffs, Eastern

Kentucky Resources, Blue Ash Development, Inc., and Royalton

Resources, Inc. (collectively “EKR”) sought a declaratory

judgment and injunctive relief in this action challenging the

constitutionality of Kentucky’s solid waste disposal program.

The Defendants are various state officials of the Commonwealth

of Kentucky (collectively “the Commonwealth”). EKR appeals

the order of the district court dismissing its claims and granting

summary judgment to the Commonwealth. For the reasons

discussed below, we AFFIRM.

I. STATEMENT OF FACTS

A. BACKGROUND

In 1990, Wallace G. Wilkinson, then-Governor of Kentucky

convened a special legislative session, the 1991 Extraordinary

Session, on garbage. The district court found that there were

many events that led to this legislative session. These included

poor collection practices, which had resulted in continued open

dumping, the existence of environmental hazards, concerns for

the amount of garbage generated per person in the

Commonwealth, the fear that the Commonwealth was running

out of garbage space as a result of the rapid rate at which existing

landfills were filling up, and concern with the amount of refuse

imported outside of the Commonwealth’s borders. At the time

that the session was convened, the Commonwealth had declared

an environmental sate of emergency because of the deplorable

effects caused by the ineffectiveness of its then-current waste

disposal program. EKR, however, maintains that the

Extraordinary Session was convened, almost exclusively,

because of the Commonwealth’s opposition to the importation

of out-of-state waste.

B. THE COMMONWEALTH’S WASTE MANAGEMENT

PROGRAM

On February 21, 1991, at the 1991 Extraordinary Session, the

Kentucky General Assembly enacted Senate Bill 2 (“SB 2”). SB

2 establishes a comprehensive and integrated waste management

program designed to reduce the amount of solid waste disposal

facilities in the Commonwealth, and to encourage a regional

approach to solid waste management. SB 2 contains sixty-three

parts addressing a variety of solid waste-related subjects,

including garbage reduction strategies, issuance of landfill

permits, state and local solid waste planning, garbage collection,

tax incentives for recycling, and public participation in local

solid waste planning.

SB 2 has three primary elements. First, local planning areas

are required to offer universal refuse collection as part of the

Commonwealth’s goal to reduce--if not eliminate--illegal

dumping, and to provide Kentuckians with maximum access to

collection services. It is the duty of the local planning area to

dispose of garbage generated within its area. This can be done

by hosting a landfill, or by marketing local garbage outside of the

area. Second, the plan contains a prospective element. SB 2

mandates the implementation of various recycling programs in

order to reduce the amount of refuse generated per person, as

well as to stem the flow of refuse streaming into the

Commonwealth’s landfills. One of the bill’s goals is to reduce

by 25% the amount of municipal solid waste generated by

Kentuckians by 1997. Third, the legislature imposed upon local

governments the duty to plan ahead to assure that adequeie

disposal capacity exists for waste generated within the

Commonwealth, and to account for all available landfill capacity

in the Commonwealth.

To accomplish these tasks, local governments were instructed

to collaborate and to establish local solid waste planning areas.

The purpose of these planning areas are to develop and

implement area-wide solid waste management plans. The plans

are to include among other requirements: a description of the

solid waste disposal site; the recycling and composting facilities

available in the area; projections on the area’s population growth

and waste disposal needs for five, ten and twenty years,

respectively; specific provisions to assure that adequate capacity

exists for municipal solid waste generated in the are for a ten

year period; and a plan to clean up open dumps in the local

planning area. The bill also included a deadline by which plans

were to be submitted to the Natural Resources and

Environmental Protection Cabinet (“the Cabinet”). A local

planning area’s failure to submit a plan authorizes the Cabinet to

prepare a plan for that area or to place that area in an established

planning area. If a local planning area fails to execute a plan,

Kentucky agencies are not allowed to endorse any solid waste

projects in that area.

The Cabinet is the official planning and management agency

of the Commonwealth’s solid waste program. It is the duty of

the Cabinet to develop a statewide solid waste reduction and

management plan. It is primarily responsible for coordinating

the solid waste planning and management activities of waste

management areas, and for approving waste management

facilities. It is the responsibility of the Cabinet to review

applications for permits to construct or substantially expand

existing municipal solid waste facilities. The Cabinet reviews

applications for those permits for consistency with area solid

waste management plans. The Cabinet is also authorized to

establish standards for the disposal of solid waste in landfills and

incinerators, and to require compliance with those standards

when issuing permits.

SB 2's distinctive feature is that it conditions the issuance of

landfill permits on local solid waste planning rather than design

standards as was customarily the practice. Before a would-be

landfill developer submits an application for a new landfill or a

substantial expansion of an existing landfill to the Cabinet, the

governing body of the local planning area must review the

request to ascertain its consistency with local solid waste

management plans. SB 2 links the issuance of landfill permits to

local solid waste management plans with the goal of requiring

government officials, local citizens, and landfill developers to

work together on waste-related issues. Once the local planning

agency has reviewed the application, the applicant may then

submit it to the Cabinet for its approval. The Cabinet is free to

accept or reject the local planning agency’s determination.

However, if it disagrees with the agency’s determination, it must

make written and detailed findings explicating its reasoning.

C. THE CONTESTED PROVISIONS

Two parts of SB 2 are at issue in this case: Kentucky Revised

Statute Chapter 224 subchapter 40 section 315 (“KRS 224.40-

315"), and Kentucky Revised Statute Chapter 224 subchapter 43

section [345] (“KRS 224.43-345") (collectively “the challenged

provisions”). KRS 224.40-315 states:

(1) No permit to construct or expand a municipal solid

waste disposal facility shall be accepted for processing by

the cabinet unless the application. contains a

determination from the governing body for the solid

waste management area in which the facility is or will be

located concerning the consistency of the application

with the area solid waste management plan submitted

under KRS 224.43-345(1)(a) to (d) and (1) until January

1, 1993, and the entire plan after January 1, 1993. The

governing body for the area shall, within sixty (60) days

of receipt of a written request, make the determination

after public notice and opportunity for public comment

and public hearing. For applications with a notice of

intent filed prior to February 26, 1991, the cabinet shall

continue to process the application but no permit shall be

approved until the governing body for the solid waste

management area in which the facility is or will be

located has made a determination in accordance with this

section.

(2) No permit to construct or expand a municipal solid

waste disposal facility shall be approved unless the

applicant affirmatively demonstrates and the cabinet

makes a written finding in the preliminary determination

made pursuant to KRS 224.40-310(2)' that the

application conforms to and is consistent with all of the

following:

(a) The capacity needs identified in the area solid waste

management plan;

'KRS 224.40-310(2) states:

(2) No permit to construct or expand, when the

expansion results in substantial additional capacity, a

waste disposal facility shall be issued until a complete

application has been submitted to and approved by the

cabinet and notice of the application has been published,

as provided for in subsections (4) and (5) of this section,

at the expense of the applicant in a manner reasonably

calculated to inform that portion of the public which is

most likely to be affected by the operation of the

proposed waste disposal facility. The publication shall

take place after the cabinet has determined the

3 application to be technically complete and issued a draft

permit.

Gig My eer cites cone PLL BAe FETT CCE ES

(b) Other elements of the area solid waste management

plan, for permit applications filed after approval of those

elements;

plan, for permit applications filed after completion of the

plan; and

(d) Applicable zoning regulations adopted pursuant to

KRS Chapter 100.

(3) If the cabinet approves a permit to construct or

expand a municipal solid waste management facility after

the governing body for the area has determined the

application to be inconsistent with the area solid waste

management plan, as part of the written finding the

cabinet shall state in detail the reasons why it did not

accept the determination of the governing body for the

area.

(4) For the purposes of this section, the term municipal

solid waste disposal facility includes, in addition to those

facilities defined in KRS 224.01-010(15), any residual or

contained landfill or incinerator disposing of industrial

solid waste for a fee, but does not include a waste site or

facility which is operated exclusively by a solid waste

generator on property owned by the solid waste generator

which accepts only industrial solid waste from the solid

waste generator or industrial solid waste generated at

another facility owned and operated by the generator or

wholly-owned subsidiary.

KRS 224.43-345 states:

(1) Each area solid waste management plan shall be

prepared in accordance with administrative regulations to

be adopted by the cabinet and shall be required to include

the following:

(a) Identification of the area that will be included in the

plan;

(b) A demographic study of the planning area of current

and projected populations five (5), ten (10) and twenty

(20) years in the future. A projection of the amount and

source of solid waste generated and requiring disposal at

municipal solid waste disposal facilities for each of these

time periods shall be provided;

waste management facilities and activities. The

description shall include their identity, location, life

expectancies, ownership, cost to the users, and level of

compliance with state and federal laws. The description

is not required to include any solid waste management

facility which is operated exclusively by a solid waste

generator on property owned by the solid waste generator

for the purpose of accepting solid waste from the solid

waste generator or waste generated at another facility

owned and operated by the generator or wholly-owned

subsidiary. After commencement of operation by a solid

waste generator of a solid waste disposal facility which

is permitted but not included in a solid waste

management plan, an amendment to a solid waste

management plan shall be required for any solid waste

which is to be no longer disposed by the solid waste

generator in its own solid waste disposal facility;

(d) An estimate of the area’s long-range needs for solid

waste management and facilities for five (5), ten (10),

and twenty (20) years into the future;

(e) Identification and assessment of current and future

solid waste management problems faced by the area. List

any deficiencies with existing solid waste management

facilities in meeting current and future area needs, and

identify opportunities for improvement;

(f) Outline short-term, mid-term, and long-term goals and

objectives of the solid waste management area. The

goals and objectives shall be consistent with state

policies;

(g) Based on the problems, needs, goals, and objectives

previously identified, identify alternative approaches to

solid waste management and select the optimal

alternatives. Solid waste management activities and

facilities to be addressed include:

1. Identification of those regulations and

ordinances which provide for proper, safe, and sanitary

management of solid waste;

2. A description of proposed improvements to

existing solid waste collection and transportation

systems;

3. Establishment of a siting procedure and

development program to assure the orderly location,

development, and financing of new or expanded

municipal solid waste management facilities. The plan

shall demonstrate how all persons in the planning area

will within the near future have reasonable opportunity

to dispose of their waste in a manner that complies with

State and federal laws;

4. Identification of planned programs for the

control and cleanup of litter and open dumps. The

programs shall include: a schedule for the cleanup of

illegal open dump sites which will result in the cleanup

of those sites within one (1) year of cabinet approval of

the plan; an annual survey of the county to discover new

sites which shall then be scheduled for cleanup within

one (1) year; and measures to prevent the recurrence of

dumping at sites which are cleaned up;

5. An assessment of opportunities to reduce the

need for land disposal by banning grass clippings, leaves,

and other yard wastes from municipal solid waste

disposal facilities and the institution of composting

operations for grass clippings, leaves, and other yard

wastes;

6. Establishment of a plan to reduce the need for

land disposal through waste reduction and recycling,

materials recovery, and energy recovery and the

provision of opportunities for recycling that may include,

but are not limited to, drop-off centers or door-to-door

collection. Where recycling or material recovery is not

deemed feasible, specific factual analysis shall be

provided to support the conclusion; and

7. A description of any proposed recycling,

materials recovery, or energy recovery plan or facility;

(h) A five (5) year schedule and description of activities

to be undertaken to implement the proposed plan;

(i) A description of short-term costs of the plan including

Capital and operational costs on a per ton and per capita

basis for each element of the plan, and the identification

of the means of financing plan implementation;

(j) Designation of the governing body for implementation

of the solid waste management plan or components of the

plan. A description of its responsibilities and authority

shall be provided;

(k) A description of proposed surveillance and

enforcement procedures to assure that solid waste in the

planning area is properly managed. Identification of

modifications to local laws and regulations necessary to

implement the area plan;

(1) Specific provisions to assure that adequate capacity

for a ten (10) year period shall be available for municipal

solid waste generated in the solid waste management

area, and identification of any additional capacity

10a

authorized for disposal of out-of-area municipal solid

waste;

(m) Contractual agreements for use of waste disposal

capacity at any municipal solid waste disposal facility

inside or outside the waste management area identified

and relied upon in the plan;

(n) Provisions to assure achievement of reductions in

municipal solid waste requiring disposal, consistent with

the goals of KRS 224.43-010;

(0) Establishment of a public information and

participation process including the following

components;

1. Formation of an advisory committee comprised of

local residents, and business and industry representatives;

2. Preparation of a draft plan for public notice and

comment;

3. Convening of a public hearing upon request; and

4. Publication of a response to public comments.

(2) The solid waste management plan shall consist of two

(2) parts. The first part shall contain the information

described in subsection (1)(a) through (1)(d) and (1)(1)

of this section and shall be submitted to the cabinet by

October 1, 1991. The second part shall contain the

information described in subsection (1)(a) through (1)(o)

of this section and shall be submitted to the cabinet by

January 1, 1993. The cabinet shall approve or

disapprove the first part of the plan within thirty (30)

days of receipt, and the second part of the plan within

one hundred twenty (120) days of receipt.

D. THE PROPOSED LANDFILL

In 1991, EKR purchased property in Magoffin County

to develop a landfill that would accept 4,000 to 10,000

lla

tons of solid waste per day. In December, 1991, EKR

successfully negotiated a contract with the former

magistrates of the Magoffin County Fiscal Court for the

construction of the landfill, the disposal of Magoffin

County’s garbage in that landfill, and the disposal of

solid waste generated outside of Kentucky. As an

inducement, EKR offered to close the County's old

substandard landfill, provide royalties to the County, as

well as free residential garbage collection and disposal

for residents of the County. A modified agreement,

which excluded residential garbage collection, was later

approved by the magistrates.

In August, 1991, the Magoffin Fiscal Court submitted

a solid waste management plan to the Cabinet which

contemplated the use of EKR’s proposed landfill as the

disposal site for waste generated by the County’s

residents. The Cabinet initially approved the plan, but

retraced that approval one month later and requested that

the plan be revised. The district court found that the plan

was rejected because the Cabinet had identified

irregularities in the plan’s preparation and submission,

including the County’s decision to use its existing sub-

standard landfill until 1995. EKR, however, maintains

that the plan was rejected because of opposition to out-

of-state garbage.

In January, 1992, EKR asked the Cabinet to process its

landfill application. The Cabinet declined to do so

because a local solid plan waste management plan had

not yet been approved, as was required by SB 2. The

district court found that Magoffin County had not

resubmitted a revised local solid waste management plan

because of the Fiscal Court’s inability to obtain a quorum

and because of local resistance to the contract between

12a

EKR and the County. The contract was eventually

invalidated in a decision by the Clark Circuit Court,

which held that the contract violated the

Commonwealth’s constitutional requirements of public

notice and bidding for franchise agreements.

Because Magoffin County failed to resubmit to the

Cabinet a solid waste management plan before the

statutory deadline, the Cabinet exercised its authority to

write a plan for the County. The Cabinet’s plan

advocated the use of EKR’s proposed landfill as the

disposal site for the County’s waste, but also noted that

due to the uncertainties of the then-pending landfill

contract litigation, an alternative should be identified if

EKR’s proposed landfill was not constructed. The

County was also given the choice of developing its own

plan if it deemed ihe Cabinet’s plan unacceptable.

By November, 1993, the make-up of the Fiscal Court

had changed due to resignations, elections, and the death

of the county judge-executive. In March, 1994, the new

fiscal court submitted a revised solid waste management

plan. The plan did not provide for a landfill in Magoffin

County. Instead, the County proposed to market all of its

garbage for disposal outside the county planning area. In

May, 1994, the Cabinet approved the plan.

E. PROCEEDINGS BEFORE THE DISTRICT COURT

In August of 1994, EKR brought suit in the district

court, seeking a declaratory judgment that two provisions

of the Commonwealth’s waste disposal program--KRS

224.40-315, and KRS 224.43-345--are unconstitutional.

EKR also sough to enjoin the Cabinet from enforcing and

13a

applying those provisions, and from implementing

various companion regulations.

Both parties moved for partial summary judgment. The

Commonwealth also filed a motion to dismiss. The

district court granted the Commonwealth’s motion for

partial summary judgment, and denied EKR’s motion, on

the grounds that the challenged regulations did not

violate the Commerce Clause. EKR appeals to this

Court.

II. DISCUSSION

A. STANDARD OF REVIEW

We review de novo the district court’s grant of

summary judgment. Johnson v. United States Postal

Serv., 64 F.3d 233, 235 (6th Cir. 1995). Summary

judgment is proper in the absence of genuine issues of

material fact. Matsushita Elec. Indus. Co. Ltd. v. Zenith

Radio Corp., 475 U.S. 574 (1986). We review the

district court’s findings of fact for clear error. Downs

Mapother & Mapother P.C., 103 F.3d 472, 476 (6th Cir.

1996). :

B. LEGAL FRAMEWORK

Article I, § 8 cl. 3 of the United States Constitution

States in part that “Congress shall have the Power. . . To

regulate Commerce with foreign Nations, and among the

several States.” “Although the Commerce Clause is by

its text an affirmative grant of power to Congress to

regulate interstate and foreign commerce, the Clause has

long been recognized as a self-executing limitation on the

power of the States to enact laws imposing substantial

l4a

burdens on such commerce.” South-Central Timber Dev.

Inc. v. Wunnicke, 467 U.S. 82, 82 (1984). This self-

executing limitation is often referred to as the “negative”

or “dormant” aspect to the Commerce Clause. Oklahoma

Tax Comm'n v. Jefferson Lines Inc., 115 S. Ct. 1331,

1335 (1995). Consequently, any state regulation of

interstate commerce is subject to scrutiny under the

dormant Commerce Clause, unless such regulation has

been preempted or expressly authorized by Congress.

The purpose of the Commerce Clause is to prohibit

outright economic protectionism or regulatory measures

designed to benefit in-state economic actors by burdening

out-of-state actors. New Energy Co. v. Limbach, 486

U.S. 269, 273 (1988). It forbids states from “‘advanc[ing]

their own commercial interests by curtailing the

movement of articles of commerce, either into or out of

the state.” H.P. Hood & Sons Inc. v. Du Mond, 336 U.S.

525, 535 (1949). In order to ferret out this illicit motive,

we are instructed by the Supreme Court to engage in a

two-step inquiry when reviewing state statutes for alleged

violations of the dormant Commerce Clause. The first

step involves determining whether the statute directly

burdens interstate commerce or discriminates against out-

of-state interests. Discrimination is defined as the

“differential treatment of in-state and out-of-state

economic interests that benefits the former and burdens

the latter.” Oregon Waste Sys. Inc. v. Depart’l of Envtl.

Quality of Oregon, 511 U.S. 93, 99 (1994). A statute can

be discriminate against out-of-state interests in three

different ways: (a) facially, (b) purposefully, or (c) in

practical effect. Wyoming v. Oklahoma, 502 U.S. 437,

454-55 (1992). A statute that is found to be

discriminatory, is per se invalid, id., unless the state can

demonstrate that it is “demonstrably justified by a valid

15a

factor unrelated to economic protectionism.” New

Energy Co. of Ind. v. Limbach, 486 U.S. 269, 274 (1988).

If the statute is not discriminatory, we must

nevertheless proceed to the second step. In that case, the

Statute is valid unless the burdens on interstate commerce

are “clearly excessive in relation to the putative local

benefits.” Pike v. Bruce Church, Inc., 397 U.S. 137, 142

(1970). Having established the legal framework within

which this issue must be resolved, we now determine if

the challenged provisions of SB 2 offend the

requirements of the Commerce Clause.

C. THE EKR CHALLENGE

As we mentioned supra, in order for the challenged

provisions of SB 2 to be valid, they must not be

discriminatory, and they must survive the Pike balancing

test. EKR argues that the challenged portions of SB 2 are

facially, purposefully, and effectually discriminatory,

because they were enacted as regulatory measures

designed to benefit in-state economic interests by

burdening out-of-state competitors.

1. FACIAL DISCRIMINATION

We first address the contention that KRS 224.40-315

and KRS 224.43-345 are facially discriminatory. State

laws that discriminate on their face against interstate

commerce are presumptively invalid. Oregon Waste Sys.

Inc. v. Dep’t of Evntl. Quality of Ore., 511 U.S. 93, 99-

100 (1994). This is because these laws are almost always

reflective of a state’s attempt to isolate itself from the

national economy and to protect local economic actors.

16a

Fort Gratiot Sanitary Landfill, Inc. v. Michigan Dep’t of

Natural Resources, 504 U.S. 353, 361 (1992).

In Fort Gratiot, the Supreme Court held that an

amendment to the State of Michigan solid waste

program, which facially prohibited landfill developers in

Michigan from accepting out-of-state waste, was

unconstitutional. Jd. at 356-59. The provision stated

that: “A person shall not accept for disposal solid waste

. . . that is not generated in the county in which the

disposal area is located unless the acceptance of solid

waste . . . is explicitly authorized in the approved county

solid waste management plan.” Jd. at 357. The Court

held that the distinction, which burdened out-of-state

economic interests in favor of in-state interests,

evidenced Michigan’s attempt to isolate itself from the

national economy, and to protect local waste producers

from competition from out-of-state producers of waste.

Id., at 361; see also Philadelphia v. New Jersey, 437 U.S.

617, 626-27 (1978); Oregon Waste Sys., 511 U.S. at 96

(invalidating an Oregon law on dormant Commerce

Clause grounds, which imposed a fee on “every person

who disposes of solid waste generated out-of-state”);

Chemical Waste Management v. Hunt, 504 U.S. 334, 341

(1992); Environmental Technology Council v. Sierra

Club, 98 F.3d 774, 785-86 (4th Cir. 1996) (holding a

South Carolina law which establishes different quotas for

out-of-state and in-state waste facially unconstitutional).

In the instant case, EKR argues that the following

provision is facially discriminatory. In KRS 224.43-345

(1)(1), the legislature stated:

(1) Each area solid waste management plan shall

be prepared in accordance with administrative

17a

regulations to be adopted by the cabinet and shall

be required to include the following:

(1) Specific provisions to assure that adequate

capacity for a ten (10) year period shall be

available for municipal solid waste generated in

the solid waste management area, and

identification of any additional capacity

authorized for disposal of out-of-area municipal

solid waste.

We disagree with EKR’s contention. Although it could be

argued that the requirement that local solid waste management

plans identify additional capacity for disposal of out-of-area’

municipal waste is a distinction, it is not a discriminatory

distinction. As we noted supra, discrimination, for the purpose

of the dormant Commerce Clause, is the “different treatment of

in-state and out-of-state economic interests that benefits the

former and burdens the latter.” Oregon Waste Sys. Inc. v. Dep’t

of Envtl. Quality of Oregon, 511 U.S. 93 (1994).

In Fort Gratiot, the distinction made by Michigan clearly

burdened out-of-state interests because Michigan denied out-of-

State actors access to its solid waste market. The distinction also

clearly benefitted in-state interests because it provided “local

waste producers complete protection from competition from out-

of-state waste producers.” Fort Gratiot, 504 U.S. at 361. In this

case, assuming arguendo that a distinction is being made

Although the statute uses the phrase “‘out-of-area” and not “out-of-state,”

for our purposes that is a distinction without a difference. The Supreme Court

has held that if a statute burdens interstate commerce, the state “cannot avoid

the strictures of the Commerce Clause by curtailing the movement of articles

of commerce through subdivisions of the State, rather than through the State

itself.” Fort Gratiot, 504 U.S. at 361.

18a

between in-state capacity and out-of-state capacity, it cannot be

credibly argued that the latter is being burdened. Moreover, it

certainly cannot be credibly argued that this facial distinction

evidences an attempt by the Commonwealth to isolate local

economic actors from interstate competition.? Because the

statutes are not facially discriminatory, we cannot hold that the

challenged provisions are constitutionally infirm on that ground.

2. PURPOSEFUL DISCRIMINATION

EKR also argues that the challenged provisions purposefully

discriminate against out-of-state commerce. It is axiomatic that

a State law that purposefully discriminates against out-of-state

interests is unconstitutional. Chemical Waste Management Inc.

v. Hunt, 504 U.S. 334, 344 & n.6 (1992); Minnesota v. Clover

Leaf Creamery Co., 449 U.S. 456, 471 & n.15 (1980). The party

challenging the validity of the regulation has the burden of

demonstrating that the regulation has a discriminatory purpose.

Hughes v. Oklahoma, 441 U.S. 322, 336 (1979). “There is, of

course, no more persuasive evidence of the purpose of a statute

than the words by which the legislature undertook to give

expression to its wishes. Often these words are sufficient in and

of themselves to determine the purpose of the legislation. In

such cases we have followed their plan meaning.” Perry v.

Commerce Loan Co., 383 U.S. 392, 400 (1966); see also Clover

Leaf Creamery Co., 449 U.S. at 463, 471 & nn. 7, 15 (holding

that a state statute does not violate the dormant Commerce

Clause because the articulated legislative objectives, which are

One can easily surmise at least one plausible justification for this

distinction. Given that the Commonwealth’s waste management plan permits

local planning areas to dispose of waste outside of the planning area, this

provision is most likely intended to identify areas with the.capacity to accept

solid waste. Thus, contrary to EKR’s contention, this provision, instead of

hindering commerce, may serve to better facilitate both intra- and interstate

commerce.

19a

the actual purposes of the statute, are not discriminatory). But

see Environmental Technology Council v. Sierra Club, 98 F.3d

774, 785-86 & n.18 (4th Cir. 1996) (holding unconstitutional a

State’s statute which stated as its purpose to “give preference to

hazardous waste generators within” the state); Alliance for Clean

Coal v. Miller, 44 F.3d 591, 595-96 (7th Cir. 1995) (holding

Illinois statute which required all coal utilities operating in

Illinois to acquire scrubbers “to enable them to continue to burn

Illinois coal,” as violating the Commerce Clause because stated

purpose of statute is “to maintain and preserve. . . the mining of

coal in Illinois”).

The stated purpose of the Commonwealth’s waste disposal

program is “to provide for the management of solid waste,

including reduction, collection, transportation, and disposal in a

manner that will protect the public health and welfare, prevent

the spread of disease and creation of nuisances, conserve our

natural resources, and enhance the beauty and quality of our

environment.” KRS 224.43-010. As can be readily observed,

the purpose of the Commonwealth’s waste management program

is not to protect local economic actors or to economically isolate

the Commonwealth from the rest of the nation.

Admittedly, where other sources, other than the state’s own

self-serving statement of it legislative intent, indicate the

presence of actual and discriminatory purposes, a state’s

discriminatory purpose can be ascertained from sources.

Chambers Medical Technologies of South Carolina, Inc. v.

Bryant, 52 F.3d 1252, 1259 & n.10 (4th Cir. 1995). However,

“(where discrimination is not patent on the fact of a statute, the

party challenging its constitutionality has a more difficult task.”

C & A Carbone, Inc. v. Town of Clarkstown, New York, 511 U.S.

383, 423 & n.12 (1994) (Souter, J., dissenting). An apt

illustration is provided by SDDS Inc., v. State of South Dakota,

47 F.3d 263 (8th Cir. 1994).

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In SDDS, the Eighth Circuit held unconstitutional a South

Dakota initiative and referendum on the grounds that they

evidenced a discriminatory purpose. There were three pieces of

evidence that led that court to its conclusion. First, the court

noted that South Dakota changed its political process to make it

more difficult for the solid waste disposer to acquire the

necessary permit to operate a solid waste disposal facility. Jd. at

268. Second, in a pamphlet, which served as a voter guide and

accompanied the referendum, South Dakota “exhorted voters to

vote against the out-of-state dump because South Dakota is not

the nation’s dumping grounds.” /d. (internal quotation marks

omitted). Third, the court remarked that the fact that the means

chosen by South Dakota to effectuate its stated goals were

ineffectual, provided further evidence of that State’s

discriminatory purpose. Jd. at 268-69.

Unfortunately, EKR does not present any such evidence to

support its contention that KRS 224.40-315 and KRS 224.43-345

were enacted by the Commonwealth with the purpose of

protecting local economic actors from interstate competition.

EKR, however, contends that a study on solid waste conducted

by the University of Kentucky, which was allegedly requested by

then-Governor Wilkinson, is indicative of the Commonwealth’s

discriminatory motives. Assuming we agree with EKR’s

assertion that one of the study’s principal concerns was how to

slow down or prevent the entry of out-of-state garbage into the

Commonwealth, EKR still fails to demonstrate that the

challenged provisions were purposefully discriminatory. EKR

does not present any evidence to show that the study impacted

the legislature, how the study impacted the legislature, or how

the study led to the passage of -- or even influenced -- the

challenged provisions. When a party seeks to present

circumstantial evidence of discriminatory purpose pursuant to a

dormant Commerce Clause challenge, it is the duty of that party

to show the effect of that evidence on the challenged statute.

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See, e.g., Hunt v. Washington State Apple Advertising Comm’n,

432 U.S. 333, 351-53 (1977). In this case, EKR has failed to

carry its burden. It has failed to present any evidence which

demonstrates that the challenged provisions have a

discriminatory purpose. See Gary D. Peake Excavating, Inc. v.

Town Bad. of the Town of Hancock, 93 F.3d 68, 74 (2nd Cir.

1996) (accord). Consequently, we cannot rule in favor of EKR

on that ground.

3. DISCRIMINATORY EFFECT

Even though we do not find that the challenged provisions are

either facially or purposefully discriminatory, EKR can

nevertheless prevail if it can prove that the challenged provisions

have a discriminatory effect. Brown-Forman Distillers Corp. v.

New York State Liquor Auth., 476 U.S. 573, 578-579 (1986). A

statute which has a discriminatory effect, for Commerce Clause

purposes, is a statute which favors in-state economic interests

while burdening out-of-state interests. See id. at 579 (holding

that a statute is discriminatory when its “effect is to favor in-state

economic interests over out-of-state interests”). Thus, there are

two complementary components to a claim that a statute has a

discriminatory effect on interstate commerce: the claimant must

show both how local economic actors are favored by the

legislation, and how out-of-state actors are burdened by the

legislation.

For example, in Hunt v. Washington State Apple Advertising

Comm'n, 432 U.S. 333 (1977), the Supreme Court struck down

a North Carolina statute which required, inter alia, “all closed

containers of apples sold, offered for sale, or shipped into the

State to bear no grade other than the applicable U.S. grade or

standard.” Jd. at 335. The statute was challenged by an

association composed of apple growers from Washington state

whose purpose it was to advertised Washington-produced apples.

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Id. at 336-37. The plaintiffs argued that the statute was

unconstitutional because of its discriminatory impact on

Washington State’s apple producers. They maintained that

because Washington State-graded apples are recognized by the

industry as superior to all other grades, including those of the

United States Department of Agriculture, Washington State

apple growers will lose the competitive edge that a Washington

State grade confers, while at the same time North Carolina’s

apple growers will be protected from an extremely powerful

competitor. They also argued that complying with the North

Carolina statute would be extremely costly and inefficient.

The Court agreed. First, the Court explained how the statute

burdened out-of-state economic actors. The Court stated that the

“first, and most obvious [effect] is the statute’s consequence of

raising the costs of doing business in the North Carolina market

for Washington apple growers and dealers, while leaving those

of their North Carolina counterparts unaffected.” Jd. at 351.

Second, the Court demonstrated how the statute benefitted the

local economic actors. The Court noted that

the statute also had the effect of stripping away

from the Washington apple industry the

competitive and economic advantages it

has earned for itself through its expensive

inspection and grading system [which]. . . has

gained nationwide acceptance in the apple trade

. .. .[B]y prohibiting Washington growers and

dealers from marketing apples under their State’s

grades, the statute has a leveling effect which

insidiously operates to the advantage of local

apple producers. . . . Such ‘downgrading’ offers

the North Carolina apple industry the very sort of

protection against competing out-of-state

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products that the Commerce Clause was designed

to prohibit.

Id. at 351-52

In the instant case, EKR does not demonstrate how local

economic actors are favored at the expense of out-of-state

economic actors. It maintains that because local planning areas

are not required to provide for a landfill in their areas, a “local

Area can forever impede[] the development of a landfill

proposing to accept out-of-state waste.” At oral argument, EKR

maintained that the County violated the Commerce Clause

because it did not provide for a landfill in Magoffin a in its

area plan.

Inasmuch as EKR argues that the Commerce Clause required

Magoffin County to build a landfill within the County, we

emphatically reject that argument.* The Commerce Clause is not

a safety valve for those who are simply political process losers.

As we fully explained, supra, unless there is evidence that a state

law treats in-state economic interests differently than out-of-state

economic interests, that law is valid under the Commerce Clause.

Because EKR has failed to make such a showing, we cannot find

in their favor.

Additionally, the facts in this case belie EKR’s contention that

Magoffin County’s reason for not adopting EKR’s proposed

landfill into its area plan is because EKR planned to accept out-

‘EKR’s reliance on GSW Inc., v. Long County, Georgia, 999 F.2d 1508

(11th Cir. 1993) is unavailing. In GSW, the defendant-county admitted that

it sought to restrict out-of county waste. /d. at 1517. The issue in that case

was whether the county’s discriminatory actions were justified for reasons

other than economic protectionism. This case is clearly distinguishable from

GSW because we have not found that the Commonwealth discriminated

against out-of-state waste.

24a

of-state garbage at the proposed landfill. As EKR itself admits,

in 1991 the Magoffin County Fiscal Court negotiated a contract

with EKR in which EKR agreed to construct a landfill that would

dispose of the County’s waste, as well as accept out-of-state

waste. Thus, even though the County knew that EKR planned to

accept out-of-state waste, the County nevertheless agreed to

EKR’s proposed landfill. Moreover, when the first area plan was

submitted to the Cabinet, EKR’s proposed landfill was included

in the plan. When the Cabinet rejected the County’s area plan

and rewrote a plan for the County, the Cabinet itself suggested

that the County use EKR’s proposed landfill. However, the

contract between EKR and the County was later declared invalid,

the composition of the Fiscal Court changed, and the new

members decided to do the expedient and not build a landfill at

all in Magoffin County. These events were most likely the

predominant, if not only reasons, why EKR did not succeed.

Consequently, EKR has failed to show that the County or the

Commonwealth acted in a manner that evidences economic

protectionism, or that the actions of the State benefitted local

economic actors at EKR’s expense, or that of other of out-of-

State economic actors.

Further evidence which undermines EKR’s contention were

noted by the district court. The district court found that the

amount of out-of-state garbage imported into the Commonwealth

nearly doubled from July 1, 1993 to July 1, 1994, rising from

approximately 97,000 tons to approximately 193,000 tons, while

the number of landfills in the Commonwealth decreased from 70

in 1991, to 30 on June 30, 1992. Additionally, over the next ten

years, the Commonwealth is projecting a total waste disposal

capacity of 99 million tons. The Commonwealth is expecting to

generate 49 million tons of waste over that same period of time.

Thus, over 49 million tons are reserved for out-of-sate waste,

which will flow into the Commonwealth over the next ten years.

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Thus, we are unable to find that the challenged provisions have

a discriminatory effect on interstate commerce.

4. THE PIKE BALANCING TEST

Even though we do not find that the challenged provisions

directly burden interstate commerce or discriminate against out-

of-state interests, we must nevertheless determine whether their

potential benefits outweigh the burdens that they place on

interstate commerce. Pike v. Bruce Church, Inc., 397 U.S. 137,

142 (1970). As the Court stated in Pike, “Where [a] statute

regulates even-handedly to effectuate a legitimate local public

interest, and its effects on interstate commerce are only

incidental, it vill be upheld unless the burden imposed on such

commerce is clearly excessive in relation to the putative local

benefits.” Jd. at 142. The party challenging the statute bears the

burden of proving that the burdens placed on interstate

commerce outweigh the benefits that accrue to intrastate

commerce. USA Recycling, Inc., v. Town of Babylon 66 F.3d

1272, 1282 (2nd Cir. 1995). Having determined that the

challenged provisions regulate evenhandedly--that is, that they

are not discriminatory--we must now determine if the

Commonwealth’s interests are legitimate, and if the benefits of

the challenged provisions outweigh the burdens, if any, that are

placed on interstate commerce.

The Commonwealth’s stated interests in promulgating this

waste disposal program are to “provide for the management of

solid waste, including reduction, collection, transportation, and

disposal in a manner that will protect the public health and

welfare, prevent the spread of disease and creation of nuisances,

conserve our natural resources, and enhance the beauty and

quality of [the] environment.” KRS 224.43-010. The interests

asserted by the Commonwealth are clearly related to the health

and welfare of its residents. Legislation which pertains to the

26a

public health and welfare has been consistently recognized as

being important and legitimate. Fort Gratiot Sanitary Landfill,

Inc. v. Michigan Dep’t of Natural Resources, 504 U.S. 353, 360

(1992); Pike, 397 U.S. at 143.

From the facts presented in this case, it is not clear if the

challenged provisions place any incidental burdens on interstate

commerce. As noted supra, both the County and the Cabinet

proposed to use the services of a landfill developer--e.g., EKR--

which clearly stated ex ante, that it planned to accept out-of-state

waste at its proposed landfill. The Cabinet did not appear to

believe that the challenged provisions prohibited the acceptance

of out-of-state waste into the Commonwealth. There is no

evidence in the record that the Cabinet objected to the fact that

EKR planned to accept out-of-state waste. EKR does not state

what, if any, incidental burdens the Commonwealth’s waste

disposal program places on interstate commerce. Consequently,

based upon the record before us, we find that the

Commonwealth’s clearly legitimate goals outweigh the burdens,

if any, that are placed upon interstate commerce.

Ill. CONCLUSION

Because the challenged statutes are not facially or purposefully

discriminatory, because they do not have a discriminatory effect

and because we find that the Commonwealth’s stated goals

outweigh any burdens on interstate commerce, we AFFIRM the

decision of the District Court Judge Joseph M. Hood granting the

Commonwealth’s motion for summary judgment.

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APPENDIX B

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF KENTUCKY

FRANKFORT DIVISION

CIVIL ACTION NO. 94-62

EASTERN KENTUCKY RESOURCES, PLAINTIFFS

et al.

v. FINDINGS OF FACT, CONCLUSIONS OF LAW

AND PARTIAL SUMMARY JUDGMENT

THE FISCAL COURT OF DEFENDANTS

MAGOFFIN COUNTY, KENTUCKY,

et al.

Having heard the arguments of counsel and considered

the written submissions, the Court makes the following findings

of fact and conclusions of law in support of its announced

decision to grant the defendants’ motion for summary judgment

on Count I of the plaintiffs’ complaint.

ISSUE PRESENTED

1. The issue presented in this action is whether

Kentucky’s solid waste management program violates the

Commerce Clause of the United States Constitution, Art. 1, § 8,

cl. 3 (“the Commerce Clause”), by linking municipal solid waste

disposal permits to local planning efforts. The plaintiff Eastern

Kentucky Resources (EK Resources) maintains that this program

constitutes economic protectionism favoring local municipal

solid waste (garbage) by discriminating against garbage

generated butside [sic] the planning area. The defendants

28a

maintain that the program constitutes the evenhanded treatment

of garbage regardless of its origin, furthering the legitimate local

goal of reducing the amount of garbage generated per person and

thereby slowing the flow of all garbage into landfills.

PARTIES TO THIS ACTION

» A The plaintiff EK Resources is a Florida

partnership comprised of two Kentucky corporations, Blue Ash

Development, Inc. and Royalton Resources, Inc. (collectively

“EK Resources”). EK Resources seeks to construct a new

landfill in Magoffin County, Kentucky for the disposal of

garbage.

3. The defendant Fiscal Court of Magoffin County

is the governing body for Magoffin County, Kentucky. EK

Resources also names as defendants the judge executive and the

magistrates of the Magoffin County Fiscal Court. They are

named in their official capacities. The Magoffin County Fiscal

Court and its magistrates (collectively “the Magoffin County

Fiscal Court”) are charged with certain solid waste planning

responsibilities, including the collection and disposal of garbage.

4. The defendant Brereton C. Jones is Governor of

Kentucky, and the defendant Phillip J. Shepherd is Secretary of

the Natural Resources and Environmental Protection Cabinet

(together “the Commonwealth”). They are charged with the duty

to administer Kentucky’s solid waste management program as

enacted by the Kentucky General Assembly. They are named in

their official capacities.

5. The defendant Chris Gorman is Attorney General

of Kentucky (“the Attorney General”), charged with the duty to

defend the constitutionality of Kentucky’s duly enacted statutes.

He is named in his official capacity.

29a

JURISDICTION AND VENUE

6. The Court has jurisdiction over this action

pursuant to 28 U.S.C. § 1331 and U.S.C. §§ 2201, et seg. Venue

exists in this judicial district pursuant to 28 U.S.C. § 1391.

STANDARD FOR ENTERING SUMMARY JUDGMENT

7. All parties to this action have moved for summary

judgment.

8. In support of its motion, EK Resources relies

upon the affirmins of its Verified Complaint and upon exhibits

appended to its Complaint and to its Motion for Summary

Judment and support Memorandum. Those exhibits include

selected local solid waste management plans and contracts. A

1990 University of Kentucky study of solid waste problems, and

documents relating to EK Resources’ efforts and constructing the

new landfill in Magoffin County. See Exhibits A-F to the

Verified Complaint (hereinafter EKR’s Complaint); Exhibits

1-33 of EK Resources’ Motion for Partial Summary Judgment

(hereinafter EKR’s Motion); and Exhibits 1-7 of their Joint

Response To The Motions For Summary Judgment filed by the

Defendants (hereinafter EKR’s Joint Response).

9. The Commonwealth relies upon 8 exhibits

appended to its Motion for Summary Judgment and supporting

Memorandum:

a. Exhibit 1, Affidavit if Vicki Pettus,

Manager of the Resource Conservation and Local Assistance

Branch, Division of Waste Management, Natural Resources and

Environmental Protection Cabinet;

30a

b. Exhibit 2, Affidavirt of Joy Morgan,

Supervisor of the Local Planning and Assistance Section,

Resource Conservation and Local Assistance Branch Division of

Waste Management, Natural Resources and Environmental

Protection Cabinet;

S Exhibit 3, Affidavit of George Gilbert,

Manager of the Solid Waste Branch, Division of Waste

Management, Natural Resources and Environmental Protection

Cabinet;

d. Exhibit 4, Affidavit of Caroline P. Haight,

Director of the Division of Waste Management, Natural

Resources and Environmental Protection Cabinet;

e. Exhibit 5, Ky. Acts 1991 Chapter 12

(Senate Bill 2);

f. Exhibit 6, Document incorporated by

reference in 401 KAR 49:011 and entitled “Guidelines for

Preparation of Area Solid Waste Management Plan”;

g. Exhibit 7, Landfill contract between EK

Resources and Magoffin County Fiscal Court; entitled

“Operating Permit Agreement”; and

h. Exhibit 8, KRS 224.40-315 and 224.43-

345.

10... The Magoffin County Fiscal County and the

Attorney General do not offer additional evidence into the

record. ;

3la

11. The parties agree that this action is ripe for

summary judgment on the issue presented, and that no genuine

issues of material fact exist.

12. Summary judgment under Fed.R.Civ.P. 56 may

be entered despite the existence of complex facts, as long as

there are no genuine issues of material fact; materiality is

governed by the substantive law of the case, which in this case

is the authority interpreting the Commerce Clause. Matsushita

Electric Industrial Co., Ltd. et al. v. Zenith Radio Corp. et al.,

475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Celotex

Corp. et al. v. Catrett et al., 477 U.S. 317, 106 S.Ct. 2548, 91

L.Ed.2d 265 (1986); Anderson et al. v. Liberty Lobby, Inc. et al.,

477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

FACTS PRESENTED IN THIS ACTION

Kentucky’s Solid Waste Program

13. The Commonwealth submits’ with its

memorandum in support of its motion for summary judgment the

affidavits of four waste management officials employed by the

Natural Resources and Environmental Protection Cabinet

(hereinafter the Cabinet). Affiant Caroline P. Haight is director

of the Cabinet’s Division of Waste Management and is a

professional engineer with 22 years experience in the field of

waste management. Commonwealth’s Exhibit 4. The Division

of Waste Management administers the waste management

responsibilities of the Cabinet, including issuance of landfill

permits, publication of a state solid waste management plan, and

review of local solid waste management plans. See generally,

KRS Chapter 224.40, 224.43. Affiant George Gilbert is also a

professional engineer and manager of the Division of Waste

Management’s solid waste permits branch. Commonwealth’s

Exhibit 3. The permits branch issues landfill permits. Affiant

Vicki Pettus is manager of the division’s planning branch, which

32a

coordinates state and local solid waste planning activities.

Commonwealth’s Exhibit 1. Affiant Joy Morgan is the

supervisor in charge of assisting local government in preparing

their local plans and reviewing the local plans. Commonwealth’s

Exhibit 2. These affidavits, and the other exhibits submitted by

the Commonwealth establish the following facts, which are not

rebutted by EK Resources.

14. Kentucky has had a solid waste program since the

1960's. The early emphasis was on the control of open dumps

and disease vectors present at disposal sites. Collection of

garbage remained a local responsibility, and poor collection

practices had resulted in continued open dumping, with the

accompanying environmental hazards. There was no emphasis

on collecting the garbage, or on reducing the amount of garbage

generated per person in order to slow the flow of garbage into

disposal sites. Kentucky’s program did include local planning as

a component but planning was not emphasized, had not proven

effective, and was not linked to the issuance of landfill permits.

Commonwealth’s Exhibit 4.

15. In the course of administering Kentucky’s solid

waste program, the Cabinet found that solid waste has hazardous

substances in it and that Superfund sites are often old local

garbage dumps requiring clean-up from responsible persons,

including local communities using those old disposal sites.

Commonwealth’s Exhibit 4.

16[.] In 1988 the Cabinet conducted a comprehensive

evaluation of groundwater monitoring results at solid waste

landfills. Those tests showed that the landfills were leaking

hazardous substances into groundwater. At the same time, the

U. S. Environmental Protection Agency was proposing new

national design standards for solid waste landfills. 53 Fed. Reg.

33314 (August 30, 1988). The Cabinet adopted new regulations

33a

in May 1990 consistent with those proposed federal regulations

and incorporating more stringent design standards for solid waste

landfills, with the stated purpose of improving groundwater

protection. See, 401 KAR Chapters 47, 48 (1990);

Commonwealth’s Exhibits 3, 4.

17. The new design standards were phased in; this

was necessary to assure that existing landfills could continue

operating until new landfills meeting the more stringent 1990

design standards could be permitted and constructed. However,

it also meant that landfill operators started filling up the existing

landfills to beat the deadline for their phase-out (June 1992), and

the Cabinet feared there would be no landfill space left for

Kentucky garbage, with the resulting possibility that garbage

would be generated without a place to dispose of it. See, 401

KAR 47:080 Section 4; Commonwealth’s Exhibits 3, 4.

18. At the same time the landfill design issues were

under public discussion, citizens were also complaining to state

and local elected officials about the rapid rate at which landfills

were filling up, and about the importation of out-of-state

garbage. Commonwealth’s Exhibit 4.

19. These events led to the convening of the 1991

Extraordinary Session of the Kentucky General Assembly, and

the enactment of Senate Bill 2 (“SB 2"), Ky. Acts 1991, Chapter

12, on February 21, 1991. Commonwealth’s Exhibit 5.

20. In anticipation of the special legislative session,

the Cabinet adopted temporary emergency regulations to hold the

Status quo. Those regulations imposed a moratorium on permits

for all new and expanding landfills, capped increases in amounts

of garbage disposed, with in-state and out-of-state garbage

treated identically, and authorized the diversion of garbage from

landfills phasing out their operation to other landfills through a

34a

minor permit modification. See, 401 KAR 47:132E, 47:134E,

47:136E (October, 1990); Commonwealth’s Exhibit 4.

21. SB 2 contained sixty-three sections addressing a

variety of solid waste-related subjects, including garbage

reduction strategies, issuance of landfill permits, state and local

solid waste planning, garbage collection, tax incentives for

recycling, and public participation in local solid waste planning.

Commonwealth of Kentucky’s Exhibit 5. There are three basic

components to SB 2:

a. KRS 224.43-315 (formerly KRS 224.837)

requires local governments to offer “universal” garbage

collection to reduce illegal dumping;

b. KRS 224.43-010 (formerly KRS 224.857)

establishes a 25% per capita reduction goal, to minimize the

amount of garbage generated per person and thereby to slow the

flow of garbage into landfills; and

S. KRS 224.43-345(1) (formerly KRS

224.888(1)) imposes on local governments fifteen planning

duties, including the duty to project local garbage disposal needs

and to plan for those needs by finding present and future

“homes” for garbage, by a date certain and with supporting

documentation.

22. To implement the goals of SB 2, local

governments were charged with the duty to collaborate and to

establish local solid waste planning areas. KRS 224.43-340

(formerly KRS 224.887). This type of comprehensive local

planning, including projections on garbage generation and

disposal needs, are mandated by the federal Resource

Conservation and Recovery Act, 42 U.S.C.A. §§ 6942-6948.

35a

23[.] Once the local planning areas were established,

the governing body of each planning area was to develop a solid

waste management plan for the area under its jurisdiction. The

plans were to, inter alia, identify current garbage disposal needs,

make arrangements for universal garbage collection, provide for

clean-up of old dumps, begin garbage reduction strategies,

project future disposal needs, and locate a disposal site or

“home” for garbage generated within the planning area. KRS

224.43-345(1)(1) (formerly KRS 224 888(1)(10)). Failure to

submit a plan authorized the Cabinet to prepare a plan for that

planning area. KRS 224.340(10) (formerly KRS 224.887(1)).

24. The local plans were to be submitted to the

Cabinet for approval in two parts, the first due in October, 1991,

eight months after enactment of SB 2, and second due January 1,

1993. KRS 224.43-345(2) (formerly KRS 224.888(2)). Because

of the short deadline for the first part of the local plans, the

Cabinet did not adopt regulations offering guidance on

complying with the statute. The Cabinet was working on

regulations for Part 2 of the local plans when the Fort Gratiot

case was decided by the U. S. Supreme Court. See, Fort Gratiot

Sanitary Landfill, Inc. v. Michigan Department of Natural

Resources, 112 S.Ct. 2019, 119 L.Ed.2d 139 (1992). The

Cabinet decided to adopt a regulation stating that local plans

under Section (1)(1) of KRS 224.43-345 could only identify a

total cap on the capacity for garbage offered in “host” landfills

(landfills located within the planning area).' Planning areas were

not to distinguish between garbage generated locally, and that

generated outside the planning area and disposed within it. 401

KAR 49:011; Commonwealth’s Exhibits 4, 6[.]

The total cap on garbage established under KRS 224.43-

345(1){1) and the 401 KAR 49:011, Section 1 guidelines only

applies to municipal solid waste. Industrial waste disposal is not

included in the disposal cap.

36a

25. Thus, local planning areas had a duty to assure

adequate disposal capacity for local garbage; that is, to find a

home for the garbage generated within the planning area. That

duty could be discharged by hosting a landfill within the

planning area or by marketing local garbage for disposal outside

the planning area. The Michigan program stuck down by Fort

Gratiot, supra allowed local planning areas to ban garbage from

outside the planning area unless expressly approved in the local

plan, thus assuring capacity for local needs. By contrast, the

Kentucky program contains no ban on garbage from outside local

planning areas. Under the Kentucky program, local governments

must assure capacity for the garbage generated within their

jurisdiction, but unlike the Michigan program the Kentucky

program does not authorize local governments to reserve

capacity for local garbage in a local landfill by restricting

opportunities for garbage outside the planning area. In

Kentucky, planning areas hosting landfills may only establish a

source-neutral cap on the total amount of garbage to be accepted.

The Kentucky program requires planning areas to market their

garbage, either by offering to host a landfill, in which case

garbage from outside the planning area is accepted, or by

offering to “sell” their garbage for disposal elsewhere.

Commonwealth’s Exhibit 4 and Exhibit 1.

26. SB 2 also established a new condition for

issuance of landfill permits, related to‘local solid waste planning

and not to design standards. Before submitting an application for

a new landfill or a substantial expansion of an existing landfill to

the Cabinet, a landfill developer must request the governing body

of the local planning area to review the request to determine if it

is consistent with the local solid waste management plan. KRS

224.40-315 (formerly KRS 224.856). This requirement, unlike

the Michigan statute, applies to all applications for new and

substantial expansion of existing landfills, regardless of the

origin of the garbage to be disposed.

37a

27. | SB 2 links the issuance of landfill permits to local

solid waste management plans with the goal of requiring

government officials, local citizens and landfill developers to

work together on garbage-related issues, with the long range goal

of reducing the amount of garbage generated per capita and thus

slowing the flow of garbage into landfills. See, KRS 224.43-010.

28. The exhibits of the Commonwealth demonstrate

that SB 2 is designed to further the following legitimate local

interests:

a. Requiring local governments to provide

comprehensive garbage collection, which will protect the

environment from open dumping;

b. Achieving the local long-term responsible

management of garbage by requiring local governments to

project local disposal needs and to “find a home” for locally-

generated garbage;

c. Requiring identification of how much garbage is

generated and where it is going, so that the Cabinet can assure

that homes have been found for Kentucky garbage, either within

or outside Kentucky;

d. Allowing the Cabinet to match types and sources

of garbage to locations identified in issued permits, to be sure

that the homes planned are actually permitted, and to develop

waste reduction strategies based on the types of garbage

generated in specific locations;

e. Allowing the Cabinet to work with iocal planning

areas on “source separation”, in which recyclable wastes must be

removed from the stream of garbage and sent for recycling; and

38a

f. Fostering an economic climate which promotes

the development of new technologies designed to provide

markets for materials separated from garbage cans, and to

establish new markets for other recyclable materials.

Allowing the Cabinet to identify how to slow the

flow ean into landfills by using locally-generated planning

data to start designing reduction strategies; and

h. Promoting public participation in developing

waste management strategies. See generally, Commonwealth’s

Exhibits 1-4; SB 2; 401 KAR 49:011.

29. SB 2 has had the following practical effects from

its enactment in February 1991 to the submission of the exhibits

in October 1994;

a. The Cabinet has proviced informational and

technical assistance to local governments during development of

the local plans, met with local officials and interested citizens

in every county, and worked with them on correcting

deficiencies;

b. Kentucky has 118 local plans; every local

- planning area submitted to the Cabinet an approvable plan by the

Statutory deadline but Magoffin County;

C. Thirty-six local solid waste management plans

provide for hosting a landfill or landfills; 34 have total capacity

authorization for the next ten years greater than in-area needs,

with the exceptions of Scott County, which owns its landfill and

operates as a market participant, and Graves County, in which

the landfill is closed due to the environmental crime conviction

of its operator;

39a

d. The remaining 82 solid waste planning areas will

not host a landfill and instead will market their garbage for sale

outside the planning area;

e. Five counties have amended their plans to

increase Capacity at an existing landfill or to add new landfills;

f. The amount of garbage imported to Kentucky

from out-of-state nearly doubled from July 1, 1993 to July 1,

1994, from approximately 97,000 tons to approximately 193,000

tons, while the number of landfills in Kentucky dropped from

about 70 in 1991 to 30 on June 30, 1992;

g. The total disposal capacity authorized in local

solid waste plans is approximately 99 million tons over the next

ten years, with Kentucky projected to generate 50% of this and

the remainder of the authorized capacity going to out-of-state

garbage;

h. Sixty local determinations have been made; only

two applications were rejected as inconsistent, and one of those

was returned by the Cabinet for more work;

i. Counties must close out old dumps under SB 2 as

part o f their plans; 1/3 of those approximately 3700 identified

have been closed;

j. In 1990, 104 of 120 counties reported no

recycling programs existed within the planning area; in 1993 the

local plans showed that only 26 of 120 counties do not have

recycling programs;

k. In 1990 only 32 counties had documentation on

garbage collection rates; today 97 counties have that data, and all

120 counties are implementing a form of universal collection;

and

1. SB 2 significantly strengthened public

involvement; 120 counties have citizen advisory committees and

75 have solid waste coordinators. Commonwealth’s Exhibits |

and 2.

30. | EK Resources submits two statements attributed

to Governor Jones and to Magoffin County Judge-Executive

Charles Hardin opposing the importation of out-of-state garbage

to EK Resources’ proposed landfill, arguing that these statements

demonstrate a discriminatory motive behind SB 2. See Exhibit

6 to EKR’s Joint Response. Neither Governor Jones nor Judge

Hardin is alleged to have participated in the enactment of SB 2

or in its implementation by the Cabinet. The Commonwealth

does not dispute the statements made by these elected officials,

acknowledging that out-of-state garbage is unpopular with the

public, and therefore with elected officials. But the

Commonwealth demonstrates by its undisputed exhibits that

garbage is moving freely into and out of Kentucky, and that

Kentucky has been evenhanded in its treatment of all garbage,

regardless of origin.

31. | While EK Resources does not dispute the figures

on the importation of garbage into Kentucky established by the

Commonwealth through its affidavits, it argues that the amount

of garbage imported to Kentucky from out-of-state has dropped

significantly from the historical high of approximately 662,000

tons occurring in 1989, before adoption of the new landfill

design standards and enactment of SB 2. EK Resources relies on

the 1990 University of Kentucky solid waste study. See Exhibit

3 of EKR’s joint response. The Commonwealth does not dispute

the 1989 figure, arguing instead that the drop in importation of

out-of-state garbage may be attributed to factors other than the

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enactment of SB 2, such as the adoption of the more stringent

landfill standards in 1990 and other market conditions. EK

Resources admits the existence of a nationwide glut in landfill

space in 1993 and 1994. EKR’s joint response, p. 56, footnote

19.

32. In further opposition to the Commonwealth’s

exhibits, EK Resources submits 16 of the 118 local solid waste

management plans and host agreements (private contracts

entered between landfill developers and local planning areas)

appended to those selected plans. Exhibit E of EKR’s complaint

and Exhibits 19 through 33 of EKR’s motion. EK Resources

quotes provisions of those contracts setting caps on amounts and

sources Of garbage to be disposed, arguing that they demonstrate

the discriminatory practical effect of SB 2, since the contract

conditions are onerous and restrict the importation of garbage.

The Commonwealth does not dispute the contents of those

contracts, arguing instead that the Cabinet does not review those

contracts and that they are negotiated without the Cabinet’s

regulatory oversight. The Commonwealth cites EK Resources’

own host agreement with Magoffin County Fiscal Court

(Commonwealth’s Exhibit 7) as evidence that EK Resources was

prepared to offer the same inducements it criticizes here, and

further notes that EK Resources argues to the Kentucky Court of

Appeals that host agreements are entered by counties as a

proprietary, not governmental function, and therefore are not

subject to Ky. Const. § 164.

33. | EK Resources also appends as an exhibit a 1987

order entered by the U.S. District Court, Western District of

Kentucky holding that the Cabinet had violated the Commerce

Clause with respect to the renewal of a solid waste permit. See

Exhibit F to EKR’s complaint. The Commonwealth does not

dispute the order, acknowledging the political unpopularity of

out-of-state garbage, but argues that the practical effect of SB 2

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is unequivocally demonstrated by the figures showing the

unimpeded movement of garbage in interstate commerce.

Further, the Commonwealth notes that the regulations which

were the basis of the order were amended by the May, 1990

regulations setting out the new design standards, and that the

statutes authorizing the type of differential treatment invalidated

by the order were amended by SB 2 in 1991 to remove that

differential treatment. See, 401 KAR Chapter 47 (1987) and 401

KAR Chapters 47 and 48 (1990), KRS 224.160 (formerly KRS

224.847) and KRS 224.614 (formerly KRS 224.848), SB 2 §§

26, 17.

34. | The Court finds that the local interests identified

by the Commonwealth are legitimate, that SB 2 furthers the

legitimate local interests identified by the Commonwealth, that

the bill is narrowly tailored to further those interests, and that the

practical effect of SB 2 has been the evenhanded treatment of

garbage regardless of its origin. The undisputed facts

demonstrate that in three and one half years since its enactment,

SB 2's practical effect has accomplished the legitimate local

interests identified by the Commonwealth in its affidavits. The

local plans establish total even-handed caps on landfill’s capacity

if the area hosts a landfill. There is no local plan in Kentucky

authorizing a landfill for disposal of local garbage but banning

- garbage from outside the planning area.* Further, the undisputed

facts demonstrate the garbage is moving freely in interstate

commerce, both between planning areas and into and out of

Kentucky. Finally, the local solid waste plans together authorize

50% of Kentucky’s landfill space to the out-of-area or out-of-

State garbage market. The additional facts offered by EK

Resources are of limited probative value when weighed against

the Commonwealth’s undisputed facts.

2 See, Footnote 3, infra.

43a

The Proposed Landfill

35. In 1991, EK Resources purchased land in

Magoffin County for the expressed purpose of constructing a

new landfill for the disposal of garbage generated in Magoffin

County and elsewhere, including locations outside Kentucky. In

December, 1991 EK Resources successfully negotiated a contract

with the former magistrates of the Magoffin County Fiscal Court

for construction of the landfill, the disposal of Magoffin

County’s garbage in that landfill, and the acceptance of garbage

from outside Kentucky. EK Resources offered as an inducement

the closure of Magoffin County’s old substandard landfill,

royalties to Magoffin County, and free residential garbage

collection and disposal for residents of Magoffin County. A

second, modified agreement which excluded residential garbage

collection was approved in April, 1992. See Commonwealth’s

Exhibit 7.

36. In August 1991, the Magoffin County Fiscal

Court submitted a solid waste management plan to the Cabinet

which contemplated using EK Resources’ planned landfill as the

“home” for Magoffin County’s garbage. The Cabinet approved

the plan, but a month later identified irregularities in its

preparation and submittal, including the county’s decision to use

the existing sub-standard landfill located in Magoffin County

until 1995. The Cabinet then disapproved the plan, and

requested that it be revised. There is no evidence in the record

to suggest that the Cabinet disapproved the local plan due to EK

Resources’s proposal to accept out-of-state garbage in addition

to the Magoffin County’s garbage. EK Resources did not appeal

the Cabinet’s decision to disapprove the plan. See EKR’s

complaint, paragraphs 33 and 34.

37. In January 1992, EK Resources also asked the

Cabinet to process its landfill application. The Cabinet declined

44a

to process the application, as authorized by statute, since the

local plan had not been approved, and since the Cabinet could

not determine if a local determination had been correctly made.

EK Resources did not appeal the Cabinet’s decision not to

process the application. EKR’s motion, Exhibits 2 and 6 and

EKR’s complaint, paragraph 44.

38. | Magoffin County did not submit a revised local

solid waste management plan due to the fiscal court’s inability

to obtain a quorum and local resistance to the proposed landfill.

These events culminated in litigation over the validity of the

landfill contract and ultimately in a decision by the Clark Circuit

Court striking down the contract as violating Ky. Const. § 164,

for failing to comply with public notice and bidding requirements

for a franchise agreement. The decision of the Clark Circuit

Court is on appeal to the Kentucky Court of Appeals, which has

not rendered an opinion. Unless reversed by the appellate court,

the decision of the Clark Circuit Court means that EK Resources

does not have an enforceable contract with the Magoffin County

Fiscal Court for the construction of the landfill. EKR’s

complaint, paragraphs 52, 63 and 64.

39. | Because Magoffin County did not submit to the

Cabinet a Part 2 solid waste management plan by the statutory

deadline of January 1, 1993, in March, 1993, the Cabinet wrote

a plan for the county as it was authorized to do by statute,

directing the county to develop its own plan by a date certain or

to adopt the Cabinet’s plan. The Cabinet’s plan was in the nature

of an enforcement-based compliance schedule. It allowed

Magoffin County to use EK Resources’ proposed landfill as the

“home” for Magoffin County’s garbage, but noted that due to the

uncertainties of the pending- landfill contract litigation, an

alternative should be identified if EK Resources’ proposed

landfill was not constructed. The Cabinet’s plan did not impose

restrictions on the sources of the garbage the landfill could

45a

receive. EK Resources did not appeal the Cabinet’s decision to

write a plan for Magoffin County. EKR’s complaint, paragraphs

61 and 62 and Exhibit C.

40. By November, 1993 the make-up of the Magoffin

County Fiscal Court had changed, due to resignations, an

election and the death of the county judge-executive. In March,

1994 the new fiscal court submitted a revised solid waste

management plan. The plan did not provide for a landfill in

Magoffin County, instead proposing that Magoffin County

market all of its garbage for disposal outside the county planning

area. In May 1994 the Cabinet approved the plan. EKR’s

complaint, paragraphs 57, 65, 67 and 69 and Exhibit E.

41. EK Resources brought this action in August,

1994.

CONCLUSIONS OF LAW

The Commerce Clause

42. | The Commerce Clause grants Congress the power

to regulate commerce among the several states; this also limits

the power of the states to erect barriers against interstate

commerce, a doctrine known as the dormant Commerce Clause.

But the limit on state power is not absolute; in the absence of

conflicting federal legislation, states retain authority under their

general police powers to regulate matters of legitimate local

concern, even though interstate commerce may be affected.

Where such legitimate local interests are implicated, defining the

appropriate scope for state regulation is often a matter of delicate

adjustment. Lewis v. BT Investment Managers, Inc., 447 U.S.

27, 35-36, 100 S.Ct. 2009, 2015, 64 L.Ed.2d 702 (1980).

46a

43. Even if a state is regulating a legitimate local

interest, it must generally act in a manner consistent with the

ultimate principle that one state in its dealing with another may

not place itself in a position of economic isolation. However

important that local interest may be, it may not be accomplished

by discriminating against articles of commerce coming from

outside the state unless there is a reason apart from their origin

to treat them differently. Jd.

44. In reviewing state laws under the dormant

Commerce Clause, the courts distinguish between outright

economic protectionism and more indirect burdens on the free

flow of trade. Outright economic protectionism requires a

virtually per se rule of invalidity. City of Philadelphia v. New

Jersey, 437 U.S. 617, 624, 98 S.Ct. 2531, 2535, 57 L.Ed.2d 475

(1978). Under the per se test, a local law will be held to violate

the Commerce Clause unless the state can justify both the local

benefits flowing from the statute and the absence of any less

discriminatory alternatives adequate to preserve the local

interests at stake. Chemical Waste Management, Inc. v. Hunt,

112 S.Ct. 2009, 2014, 119 L.Ed.2d 121 (1992). The

discrimination must be demonstrably justified by a valid factor

unrelated to economic protectionism. New Energy Co. of

Indiana v. Limbach, 486 U.S. 269, 274, 108 S.Ct. 1803, 1808,

100 L.Ed.2d 302 (1988). A _ statute may be facially

discriminatory, discriminatory in practical effect, or

discriminatory in purpose. City of Philadelphia v. New Jersey,

supra; Hunt v. Washington State Apple Advertising Commission,

432 US. 333, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977).

Discrimination is differential treatment based on the origin of the

article of commerce. Oregon Waste Systems v. Oregon

Department of Environmental Quality, 114 S.Ct. 1345, 128

L.Ed.2d 13 (1994). The burden is on the challenger to

demonstrate the existence of differential treatment. Hughes v.

47a

Oklahoma, 441 U.S. 322, 336, 99 S.Ct. 1727, 60 L.Ed.2d 250

(1979).

45. | However, alaw will be upheld against Commerce

Clause challenge if it regulates evenhandedly to effectuate a

legitimate local interest, and its effects on interstate commerce

are only incidental, unless the burden imposed is clearly

excessive in relation to putative local benefits. Pike v. Bruce

Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 847 25 L.Ed.2d

174 (1970). If a legitimate local interest is found, then the

question is one of degree, and the extent of the burden that will

be tolerated will depend on the nature of the local interest and on

whether that local interest could be promoted as well with a

lesser impact on interstate commerce. Jd. Legislative objectives

need only be credibly advanced to invoke the Pike test, as long

as there is no patent discrimination against interstate commerce.

City of Philadelphia v. New Jersey, 98 S.Ct. at 2535. The

principal focus of the inquiry is the practical operation of the

statute, since the validity of state laws must be judged in terms

of their probable effects. Lewis v. BT investment Managers, 100

S.Ct. at 2016. A regulatory program may incidentally burden

interstate commerce; if there is a countervailing important state

interest and the regulation is evenhanded, the burden will be

justified unless excessive in relation to the putative local

benefits. Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456,

473, 101 S.Ct. 715, 728, 66 L.Ed.2d 659 (1981); Pike, supra.

EK R ’ Claim of Facial Discriminati

46. EK Resources’ first argument in support of its

claim that the solid waste planning requirements of SB 2 violate

the Commerce Clause is that the statutes are facially

discriminatory. EK Resources charges that KRS 224.43-

345(1)(1) is facially discriminatory because it states that local

planning areas must assure capacity for local garbage, while only

48a

authorizing disposal of garbage from outside the planning area.

KRS 224.40-315 is alleged to be facially discriminatory by

linking issuance of landfill permits to the discriminatory local

plans. EK Resources bears a heavy burden in order to establish

its claim of facial discrimination; EK Resources must establish

that no set of facts exists under which the challenged statutes

would be valid. Government Suppliers Consolidating Services,

inc: v. Bayh, 975 F.2d 1267, 1283 (7th Cir. 1992), cert. den. 113

S.Ct. 977, 122 L.Ed.2d 131 (1993), citing U.S. v. Salerno, 481

U.S. 739, 745, 107 S.Ct. 2095, 2100, 95 L.Ed.2d 697 (1987).

47. KRS 224.43-345(1)(1) does not on its face allow

the local planning areas to ban garbage from outside the planning

area or otherwise to reserve capacity in a local landfill for

locally-generated garbage. Cf, Fort Gratiot, supra. EK

Resources charges that reservation is implied by the use of the

term “assure” for local garbage and the term “authorize” for

foreign garbage. However, the difference in the words “assure”

and “authorize” is explained by the fact that local planning areas

have police powers only over garbage within their jurisdiction.

See, Government Suppliers consolidating Services, Inc. v. Bayh,

975 F.2d at 1280. That is, local governments must find a home

for their own garbage, either inside or outside the planning area;

the Commonwealth requires that assurance so that all local

planning areas plan responsibly. See also, KRS 224.43-

345(1)(m), in which the local plan is to identify contractual

agreements for garbage disposal inside or outside the planning

area, in order to verify the ultimate disposal location; this

supports the conclusion that SB 2 contemplated finding a home

for local garbage either within or without the planning area, with

no reservation of landfill capacity afforded by the statute. The

term “authorization”, by contrast, applies to the garbage outside

of its police power and allows the local area to place a total cap

on landfill capacity if the area hosts a landfill. The Court finds

49a

that KRS 224.43-345(1)(1) does not on its face afford preferential

treatment for local garbage.

28. KRS 224.40-315, requiring a developer of a new

landfill or a substantial expansion of an existing landfill to obtain

a local determination from the governing body of the local solid

waste planning area in which the landfill will be located, applies

on its face to all landfill applications of that type, regardless of

the source of garbage to be disposed. EK Resources asserts this

requirement unfairly burdens landfill developers who wish to

accept out-of-state waste. The Court finds that KRS 224.40-315

does not on its face afford preferential treatment for local

garbage, since it applies equally to all permit applications.

EK R ’ Claim of Discrimination in Practical Eff

49. EK Resources next alleges that discrimination

against garbage generated outside the planning area exists in

practical effect. In support of this allegation EK Resources relies

upon selected landfill contracts entered between planning areas

hosting landfills and landfill developers and upon selected local

plans. EK Resources charges that these “host agreements”

impose undue burdens on interstate commerce insofar as they set

limits on amounts and sources of garbage to be disposed, and

because they offer preferential service to residents of the host

planning area. EK Resources also quotes certain phrases from

the contracts and the local plans, arguing that they denote a bias

against out-of-state garbage. The Commonwealth does not

dispute the existence or contents of the selected contracts or

plans, but counters that the cumulative practical effect of SB 2 on

interstate commerce is presented by its affidavits which include

a review of SB2's terms and all 118 local plans.

50. The undisputed facts demonstrate that the

practical effect of the local planning required by SB 2 has been

50a

the evenhanded treatment of garbage regardless of origin,

because all local plans either ban all landfills and require the

sale of local garbage outside the planning area, or they offer

disposal capacity for garbage outside the planning area, both

from within and outside the planning area.”

_ 51. Further, the undisputed facts show that the 118

local plans have effected evenhanded treatment of garbage

regardless of origin because Kentucky now has authorized

double the landfill capacity needed to serve Kentucky’s disposal

needs over the next ten years, and that capacity is available for

disposal of out-of-state garbage. The amount of out-of-state

garbage disposed in Kentucky doubled from 1993 to 1994.

While that amount is still lower than the historical high of 1989,

there is no evidence in the record to establish that SB 2's

planning requirements were the direct cause of the decrease; the

Court finds it equally likely that the cause of the decrease was the

adoption of the 1990 stringent landfill design standards, the glut

of national landfill capacity, or other economic changes in the

marketplace.

52. | The contracts themselves impose evenhanded

caps on landfill size, with identification of the sources of garbage

necessary to help identify persons potentially liable as generators

‘of hazardous substances requiring Superfund clean-up. While

EK Resources charges that the conditions in the appended

contracts are burdensome, it does not negate the evidence

presented by the Commonwealth of the evenhanded treatment of

garbage. Further, since contracts are negotiated in the

The two exceptions are Scott County, a participant in the market

authorized to limit its disposal service to its own constituents under

the market participant doctrine enunciated in Hughes v. Alexandria

Scrap Corp., 426 U.S. 794, 96 S.Ct. 2488, 49 L.Ed.2d 220 (1976),

and Graves County, in which the landfill has been closed due to the

operator’s conviction of an environmental crime.

S5la

marketplace without the Cabinet’s regulatory oversight their

conditions are evidence of the free market at work. While a local

planning area may not host a landfill solely for its own needs, it

is also not obligated to host a landfill at all, or to do business

with a particular landfill developer. This freedome to negotiate

is not violative of the Commerce Clause and allows competition

between landfill developers to provide services most desirable to

the local planning areas. Finally, the remarks attributed to

elected officials cited by EK Resources are simply not material

to the issue of practical effect, especially when weighed against

the undisputed evidence that garbage is treated identically under

the local plans, regardless of origin. Any burden on interstate

commerce imposed by these private contracts is indirect at best.

53. | EK Resources charges that interstate commerce

in out-of-state garbage is directly burdened, citing as evidence its

failure to site a new landfill in Magoffin County. However, EK

Resources’ example illustrates a local, personal effect on a

participant in interstate commerce, not a practical effect on

interstate commerce itself. The Commerce Clause protects the

interstate market, not particular interstate firms, from prohibitive

or burdensome regulations. Minnesota v. Clover Leaf Creamer,

101 S.Ct. at 729. Full, unrestricted access to a local market does

not establish a direct burden on interstate commerce. Kleenwell

Biohazard Waste and General Ecology Consutlants, Inc., 48

F.3d 391 (9th Cir. 1995). The Commerce Clause does not

guarantee a profit for every competitor in the marketplace, nor

does it mandate construction of a landfill in every county. The

undisputed facts establish that Magoffin County’s situtation was

unique in Kentucky, with the inability to submit an approvable

local plan, litigation over the landfill contract, and the alternating

support and lack of support of the succeeding fiscal courts.

54. | The Court finds that EK Resources has failed to

Carry it burden of showing discrimination in practical effect. Its

52a

evidence, consisting of facts personel [sic] to its unique political

and legal situation in Magoffin County is of limited probative

value when weighed against the evidence presented by the

Commonwealth, which demonstrates that the overall practical

effect of SB 2 is that garbage is moving freely in interstate

commerce.

EKR - Claim of Discrimi b

55. | EK Resources’ third argument is that SB 2's local

planning requirements violate the Commerce Clause because SB

2 has a discriminatory purpose. However, EK Resources offers

evdience not on purpose but on motive.

56. EK Resources cites the 1990 University of

Kentucky study of solid waste problems to support its claim that

Kentucky has long had the intent of discriminating against out-

of-state garbage. The 1990 solid waste study identified

approaches to solid waste management issues in place

throughout the country, and suggested various options to address

such topics as illegal disposal and universal collection, recycling,

landfill design and capacity, and local planning and public

participation. The study does not focus on out-of-state garbage,

and where the issue is discussed, the duty to comply with the

Commerce Clause is noted. The study contained a section on the

Commerce Clause, and the duty to comply with the judicial

precedents interpreting it, stating: “One key to state actions being

able towithstand challenges based on the commerce clause is the

application of the same standards to both in-state and out-of-state

waste. EKR’s joint resonse, Exhibit 3, page 150. The study does

not denote an unconstitutional motive on the part of the drafters

or upon the Commonwealth, but identifies the constitutional (and

other) constraints affecting the management of garbage.

57. EK Resources also relies on the remarks

attributed to Governor Jones and Judge-Executive Hardin

opposing EK Resources’ disposal of out-of-state garbage at the

proposed landfill. The Court finds that while out-of-state

garbage is frankly admitted by the Commonwealth to be

politically unpopular, opinions of elected officials who were not

involved in the drafting or implementation of SB 2 are not

probative of the issue of motive when weighed against the

undisputed fact that garbage is moving freely into and out of

Kentucky.

58. | EK Resources further cites the U.S. District Court

opinion invalidating an earlier permitting effort by the

Commonwealth under the Commerce Clause as evidence of

imporper motive. However, the Commonwealth amended its

regulations in response to that ruling. Further, since the statutes

authorizing differential treatment of waste based on origin were

amended in SB 2 to remove the differential treatment, the Court

finds that it is more likely the Commonwealth removed the

offending language to bring the solid waste program into

conformance with the Commerce Clause, not to subvert it.

59. The fact that the Cabinet adopted a regulation in

response to the Fort Gratiot decision construing KRS 224.43-

345(1)(1) as requiring a total source-neutral authorization on

landfill capacity, and the fact that local plans do not in fact give

preferential treatment to local garbage support a finding that the

Commonwealth’s interest was in implementing the planning

requirements in conformance withthe Commerce Clause, not in

subverting its requirements.

60. The Court finds that EK Resources did not submit

4 o a Seiiedeidieetes’ ite

or purpose. Without evidence of facial discrimination or

discrimination in practical effect, evidence of motive is of

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limited probative value. See, e.g., Hunt v. Washington State

Apple Advertising Commission, 97 S.Ct. at 2445; Government

Suppliers, 975 F.2d at 1278-9.

\ pplication of the Pike Test to EK R Chai

61. Because EK Resources does not carry its burden

of establishing the existence of discrimination against garbage

from outside local planning areas either by differential treatment

on the face of the statutes challenged, in practical effect, or in

purpose, the balancing iest identified in Pike v. Bruce Church,

supra should be used.

62. Using the Pike test, the Court finds that the

Commonwealth has carried its burden of establishing that SB 2

furthers legitimate local goals, including the goal of reducing the

amount of garbage generated per person and thereby slowing the

flow of all garbage into landfills. Slowing the flow of garbage

into landfills has specifically been upheld as a legitimate local

goal, as has solid waste planning. See, Fort Gratiot, supra; City

of Phildelphia, supra.

63. | The Court further finds that these goals are

implemented for local and foreign garbage in an evenhanded

manner. Every landfill developer must get a local determination,

regardless of the source of the garbage; local garbage is not

favored. Further, all local plans must establish a home for

garbage generated within the planning area, but local garbage is

not favored; if a local planning area hosts a landfill, it may not

reserve landfill capacity for its own needs while banning garbage

all garbage is treated identically, regardless of origin.

Establishment of evenhanded caps for waste disposal sites has

been recognized as permissible under the Commerce Clause.

See, Chemical Waste Management, Inc. 112 S.Ct. at 2015.

SSa

64. The Court also finds that any burden on interstate

commerce is indirect, given the undisputed facts demonstratining

that garbage is moving freely into and out of Kentucky. EK

Resources sought full, unrestricted access to a particular local

market, but this does not mean that interstate commerce has been

directly burdened. Minnesota v. Clover Leaf Creamery, supra;

Kleenwell, supra. The Commerce Clause requires an

examiantion of the overall effect of local law on both local and

interstate activity. Brown-Forman Distillers Corp. v. New York

State Liquor Authority, 476 U.S. 573, 579, 106 S.Ct. 2080, 2084,

90 L.Ed.2d 552 (1986). The burden for a landfill developer of

being considered in a local plan and getting a local determination

is outweighed by the undisputed benefits from derived [sic] the

Commonwealth’s implementation of SB 2.

65. The Court finds that solid waste planning is a

fundamentally local problem requring local solutions with state

oversight. SB 2 properly ties local planning to landfill permitting

because while people in the landfill business have an incentive

to build landfills they may not have an incentive to diversify into

waste reduction technologies. Connecting planning to permitting

to work together on locally-based solutions for reducing reliance

on landfills, and no less burdensome means of achieving this

legitimate state interest was identified in the record.

C ing The K ky P To Other Solid W

Programs Reviewed Under the Commerce Clause

66. The Commerce Clause cases on solid waste deal

with the following scenanos; the Court finds that Kentucky's

solid waste program preseats none of them:

a. Discrimination against foreign garbage (out-of-

state or outside the local planning area) was addressed in [City

of| Philadelphia v. New Jersey, supra; and Fort Gratiot, supra.

The Commerce Clause says that discrimination is disparate

treatment favoring a local interest over foreign ones. This means

banning or discriminating against foreign garbage while allowing

local garbage to be disposed. In the Kentucky program there is

no disparate treatment because all garbage is treated the same

way. Either a local planning area says no to all garbage,

including its own, or it accepts garbage from outside the county.

This is the evenhanded treatment the United States Supreme

Court has identified as acceptable.

b. Protection of a local natural resource such as

landfill capacity against use by others out-of-state or outside of

the local planning area was addressed in Philadelphia v. New

Jersey, supra; Fort Gratiot, supra; Chemical Waste

Management v. Hunt, supra. This is another way of saying no to

foreign garbage; the described motivation is protection of a

scarce resource for citizens of the local area. States and local

planning areas may slow the flow into their landfills and may

apply caps to landfill size as long as they do it evenhandedly. Jd.

Kentucky’s program slows the flow by the waste reduction goal.

A local planning area may market its garbage without siting a

landfill; regional landfills are cost-effective, and the Commerce

Clause does not mandate construction of a landfill in every

county. But if a local planning area hosts a landfill it cannot

reserve landfill capacity for its own use at the expense of

interstate commerce. This does not mean a planning area cannot

set limits on size (a source-neutral cap), or ask for identification

of sources. This helps with identifying parties potentially

responsible for clean-up if the landfill has environmental

violations and the local planning area has to clean it up as an

open dump under SB 2. See, KRS 224.43-345(1)(g)4 (formerly

KRS 224.888(10(g)4). Total caps and identification of sources

57a

are permissible state interests and are applied evenhandedly to

all wastestreams, regardless of origin.

é. Protection of a preferred local business against

competition from others out-of-state, outside the local area, and

others within the local area was addressed in C & A Carbone,

Inc. v. Town of Clarkstown, New York, 114 S.Ct. 1677, ___

L.Ed.2d ___ (1994). This is done by requiring everyone to use

a selected local business (essentially a local processing

requirement) and effectively shuts out both other local and

interstate competition. There is no local business in Magoffin to

be favored, since no landfill will exist.

Conclusion

67. | EK Resources alleges a Commerce Clause cause

of action by saying that the statutes at issue are facially

discriminatory by reserveing landfill space for local use, when on

plain reading they do not. EK Resources alleges discrimination

in practical effect by saying that local garbage is favored over

foreign garbage when the undisputed facts show that Kentucky

treats all garbage exactly the same regardless of origin, and that

garbage is moving freely into and out of Kentucky. The cause of

action is thus built not on a statute which on its face authorizes

discrimination, or by actions taken under the statute which cause

the practical effect of discrimination, but by a claim that

discrimination may occur, even though it hasn’t. EK Resources

would be aggrieved no matter what the state program provides,

as long as local planning is a part of it; it is the power to plan, not

the way planning is carried out, that EK Resources seeks to have

invalidated.

68. | What EK Resources has really sought is full,

unrestricted access to a local market. While EK Resources may

not have access to that local market, there is no evidence in the

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record to suggest that EK Resources is shut out of the garbage

business completely, or that interstate commerce is unduly

burdened by the Kentucky program.*

SUMMARY JUDGMENT

69. Fed.R.Civ.P. 56 allows entry of summary

judgment when there are no genuine issues of material fact and

the movant is entitled to judgment as a matter of law. Summary

judgment may be entered despite the existence of complex facts;

materiality is judged by the substantive law of the case.

Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp.,

475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Celotex

Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265

(1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct.

2505, 91 L.Ed.2d 202 (1986). The substantive law in this action

is the authority interpreting the Commerce Clause.

70. The facts presented by the parties on the

Commerce Clause claims presented by EK Resources are

undisputed. Those undisputed facts demonstrate that KRS

224.43-345 and KRS 224.40-315 do not violate the Commerce

Clause on their face, in practical effect or in purpose. The

defendants are entitled to judgment as a matter of law on the

Commerce Clause claims presented in EK Resources’ verified

complaint.

71. Accordingly, the motions for partial summary

judgment of the Commonwealth, the Attorney General, and the

: For example, there is nothing in the record to suggest that EK

Resources is hindered from approaching out-of-state generators of

garbage and offering to transport that garbage to Kentucky for

disposal, as long as the solid waste program requirements are met

and contractual conditions agreed upon among the parties.

59a

Magoffin County Fiscal Court are GRANTED. The motion for

partial summary judgment of EK Resources is DENIED.

72. | Summary judgment is hereby ENTERED in favor

of the Commonwealth, the Attorney General, and the Magoffin

County Fiscal Court for the claims set forth in Count 1 of EK

Resources’ verified complaint.

73. This action will remain on the docket for

consideration of the claims presented by EK Resources in those

portions of its verified complaint not presenting Commerce

Clause claims.

IT IS HEREBY SO ORDERED.

This [20th] day of September, 1995.

ls/

Joseph M. Hood,

United States District Judge

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF KENTUCKY

September 20, 1995

Case Number: 3:94-cv-00062

Richard A. Getty

Walker P. Mayo

Leonard Knee

William Grover Arnett

Gordon B. Long

Kathryn R. Matheny

Kathryn M. Hargraves

Karen Harpenau Rippy

John Stephenson Gillig

Certificate of Mailing by /s/

6la

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.