U&I Sanitation v. City of Columbus, 98-1893

• Citation: 205 F.3d 1063
• Decision Date: 12 February 1999
• Docket Number: No. 98-1893,98-1893
• Parties: (8th Cir. 2000) U & I Sanitation, Plaintiff-Appellant, v. City of Columbus, Defendant-Appellee. Submitted:
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 1063

205 F.3d 1063 (8th Cir. 2000)

U & I Sanitation, Plaintiff-Appellant, v. City of Columbus, Defendant-Appellee.

No. 98-1893

United States Court of Appeals FOR THE EIGHTH CIRCUIT

Submitted: February 12, 1999

Filed: February 22, 2000

Rehearing and Rehearing En Banc

Denied March 24, 2000.^*

Appeal from the United States District Court for the District of Nebraska. [Copyrighted Material Omitted] Before MURPHY, LAY, and JOHN R. GIBSON, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

U & I Sanitation initiated this suit under 42 U.S.C. § 1983, seeking an injunction against a Columbus, Nebraska, ordinance requiring that all garbage collected within the city limits, except garbage destined for out-of-state disposal, be processed at the city-owned transfer station. The district court conducted a bench trial and held that the ordinance does not violate the dormant Commerce Clause. See U & I Sanitation v. City of Columbus, 998 F. Supp. 1092 (D. Neb. 1998). U & I appeals, and we now reverse.

The facts underlying U & I's claim are not disputed. U & I is one of several private haulers that picks up garbage in Columbus, a city of about 20,000 residents located in eastern Nebraska. In response to various obligations imposed by state law, the City entered into a coalition in 1996 with other nearby municipalities to construct and operate a common landfill. Garbage collected in Columbus by private haulers is "processed" at the city's transfer station before it is sent to the common landfill. This processing consists of looking at each load that is dumped and removing any hazardous materials from the solid waste that is destined for the coalition landfill. No other items are removed, however, and there is no sorting of recyclables. All of the solid waste brought to the transfer station is taken to the landfill for burying.

In order to fund its share of expenses stemming from the coalition landfill as well as various other aspects of its garbage disposal system (including a drop-off recycling center, a yard waste composting program, a wood waste disposal site, and the transfer station itself), the City charges haulers a "tipping fee" of $49 per ton for garbage that is dumped at its transfer station. This tipping fee is used primarily to reduce the City's obligation on the bond that was issued to build and develop the landfill.

U & I discovered that it could dispose of waste more economically by bypassing the Columbus transfer station. The Butler County Landfill, Inc., a facility less than 30 miles from the City,¹ charged U & I a tipping fee of only $23.25 per ton, so U & I began taking the solid waste it collected to the Butler County facility in June 1997. U & I collects some 20 percent of the solid waste generated in Columbus, and City officials noticed a corresponding reduction in revenues generated by the transfer station.

The City became concerned about U & I's diversion of solid waste from the coalition landfill. Only after it learned that it was collecting less in tipping fees at the transfer station because U & I was using the Butler County facility, the City enacted the following ordinance in August 1997 to protect Columbus's investment in its waste management program:

It shall be unlawful, except as set forth herein, to unload or deposit any garbage, refuse, yard waste and the contents of privy vaults and cesspools hauled from any premises within the corporate limits of the City, and destined for disposal within the State of Nebraska, at any place other than the approved disposal site designated by the Mayor and Council.

Ordinance No. 97-21, amending Columbus City Code, § 8-2-7-(a), Chapter 2, Garbage and Refuse. The "approved disposal site designated by the Mayor and Council" is, of course, the city-owned transfer station. The ordinance therefore requires that solid waste collected within the city be deposited at the local transfer station, unless the waste is to be sent out-of-state.

Following passage of the ordinance, U & I continued to haul solid waste collected in Columbus to the Butler County facility. Concomitantly, the City continued to experience a 20 percent reduction in the transfer station's revenues. Primarily concerned that it would be unable to meet its financial obligations relating to the coalition landfill, the City passed a resolution to suspend U & I's hauler's license. Although the City voiced concern that U & I's ability to bypass the transfer station might increase the City's liability for hazardous waste accidents, the record presents no evidence of any health or safety risk associated with U & I taking its solid waste to Butler County rather than the City's transfer station, and the undisputed evidence shows that the Butler County facility is in compliance with all relevant state and federal environmental standards.

In addition to charging less than Columbus's facility, the Butler County facility offers a more comprehensive recycling program. The Butler County Landfill, Inc. operates one of the state's three "Material Recovery Facilities," which remove recyclable materials from solid waste. In such facilities, solid waste is placed onto a conveyor belt, and employees working alongside the conveyor belt remove the recyclable materials by hand. After materials such as glass, plastic, metal and various paper products are removed from the solid waste, they are sold to processors and manufacturers in Nebraska and other states, thus entering the stream of interstate commerce. Because of its Material Recovery Facility, the Butler County Landfill, Inc. is able to remove and market 16 percent by weight (or 28 percent by volume) of the solid waste that it receives. The Nebraska Department of Environmental Quality maintains oversight of the Material Recovery Facilities, including granting permits and inspecting the facilities. Only facilities that have been granted permits are allowed to separate recyclable from non-recyclable solid waste.

By contrast, the City of Columbus operates a voluntary "community-based" recycling program, in which individual citizens may themselves separate recyclable materials from the rest of the garbage they generate, and then take such materials to a city facility. Through this means, the City reduces the amount of waste that it would otherwise send to the coalition landfill by only about 2 to 3 percent. The difference between 16 percent and 2 to 3 percent represents the impact of the City's ordinance upon interstate commerce; rather than being sold, reprocessed, and sold again, the residual recyclable materials sit under six inches of dirt at the coalition landfill.

Other than taking the garbage it collects to the Butler County facility, U & I has no practicable means of sending its recyclable materials into the stream of interstate commerce. The City (and the district court) have suggested several alternatives, but the undisputed record shows that each of these alternatives offers only economic suicide to U & I. These alternatives include transporting the waste it collects to a facility in another state; taking its garbage to the Butler County facility, having the recyclable materials removed, and transporting the rest of the waste to the Columbus transfer station; removing the recyclable materials itself before taking the remainder of the garbage to the local transfer station; initiating its own curbside recycling program; or constructing its own Material Recovery Facility.

Faced with a one-year suspension of its license, U & I brought this action in the district court, alleging (among other things) that the City's ordinance violated the dormant Commerce Clause. U & I sought a temporary restraining order, which the district court denied, conditioned upon the City's agreement not to enforce U & I's license suspension and U & I's agreement to comply with the ordinance pending litigation of the underlying constitutional claim.

The district court consolidated a trial on the merits with U & I's motion for a preliminary injunction, and it ultimately denied U & I's claim. In so doing, the court first held that the ordinance did not "overtly" discriminate against interstate commerce on its face, in its purpose, or in its effects. Second, the court held that the burden imposed by the ordinance upon interstate commerce was not "clearly excessive in relation to the putative local benefits." See Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970). Specifically, the district court found the local economic benefits of the ordinance to be "significant," 998 F. Supp. at 1104, while it deemed the burdens on interstate commerce "nonexistent or minuscule." Id. The court entered judgment in the City's favor, and this appeal followed.

I.

When a state or local regulation is alleged to violate the dormant Commerce Clause, we use either of two frameworks to evaluate the claim. First, if the law in question overtly discriminates against interstate commerce, then we will strike the law unless the state or locality can demonstrate, "under rigorous scrutiny, that it has no other means to advance a legitimate local interest." C & A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 392 (1994). The discrimination may take one of three forms. The law may be discriminatory on its face or, even if it is facially neutral, the law may have a discriminatory purpose or a discriminatory effect. See SDDS, Inc. v. South Dakota, 47 F.3d 263, 267 (8th Cir. 1995). For purposes of the dormant Commerce Clause, "discrimination" means "differential treatment of in-state and out-of- state economic interests that benefits the former and burdens the latter." Oregon Waste Sys., Inc. v. Department of Envtl. Quality, 511 U.S. 93, 99 (1994).

Second, even if a law does not overtly discriminate against interstate commerce, the law will nonetheless be stricken if the burden it imposes upon interstate commerce is "clearly excessive in relation to the putative local benefits." Pike, 397 U.S. at 142....