Hunt v. Chemical Waste Management, Inc.

• Decision Date: 11 July 1991
• Citation: 584 So.2d 1367
• Parties: , 60 USLW 2066, 22 Envtl. L. Rep. 20,171 Guy HUNT, as Governor of the State of Alabama v. CHEMICAL WASTE MANAGEMENT, INC. James M. SIZEMORE, Jr., as Commissioner of the Alabama Department of Revenue; and the Alabama Department of Revenue v. CHEMICAL WASTE MANAGEMENT, INC. CHEMICAL WASTE MANAGEMENT, INC. v. The ALABAMA DEPARTMENT OF REVENUE, et al. 1901043, 1901044 and 1901106.
• Court: Alabama Supreme Court

Page 1367

584 So.2d 1367

33 ERC 1433, 60 USLW 2066, 22 Envtl. L. Rep. 20,171

Guy HUNT, as Governor of the State of Alabama v. CHEMICAL WASTE MANAGEMENT, INC.

James M. SIZEMORE, Jr., as Commissioner of the Alabama Department of Revenue; and the Alabama Department of Revenue v. CHEMICAL WASTE MANAGEMENT, INC.

CHEMICAL WASTE MANAGEMENT, INC. v. The ALABAMA DEPARTMENT OF REVENUE, et al.

1901043, 1901044 and 1901106.

Supreme Court of Alabama.

July 11, 1991.

Bert S. Nettles, Alton B. Parker, Jr. and Kenneth O. Simon of Spain, Gillon, Grooms, Blan & Nettles, Birmingham, and H. William Wasden, Legal Advisor to the Governor, Montgomery, for appellant Governor Guy Hunt.

William D. Coleman and Jim B. Grant, Jr., of Capell, Howard, Knabe & Cobbs, Montgomery, for appellant James M. Sizemore, Jr., Com'r of Revenue.

J. Wade Hope, Montgomery, for appellant Alabama Dept. of Revenue.

Fournier J. Gale III, H. Thomas Wells, Jr. and J. Alan Truitt of Maynard, Cooper, Frierson & Gale, Birmingham, and Oakley Melton of Melton, Espy, Williams and Hayes, Montgomery, for appellee/cross-appellant Chemical Waste Management, Inc.

SHORES, Justice.

In April 1990, the Alabama Legislature enacted Act No. 90-326 (the "Act"), effective July 15, 1990, Code of Ala. 1975, § 22-30B-1 et seq. (Supp.1990), which was signed into law by the Governor. The Act imposes two fees on the disposal of hazardous waste at commercial facilities in Alabama. A "Base Fee" of $25.60 per ton was imposed on all waste and substances disposed of at commercial facilities, regardless of the state of origin. An "Additional Fee" of $72.00 per ton was imposed on all waste and substances generated outside the State of Alabama and disposed of at Alabama facilities.

The Act also included a "Cap" provision, limiting the amount of hazardous waste that can be disposed of at any affected facility in any one-year period. Under the Cap provision, the amount of hazardous waste disposed of during the first year that the Act's new fees are in effect (the "benchmark period"), becomes the permanent ceiling in subsequent years. The Cap provision applies only to commercial facilities that dispose of over 100,000 tons of waste per year. The facility at Emelle, Alabama, is the only facility in this category.

On June 5, 1990, Chemical Waste Management, Inc. ("CWM"), filed suit for declaratory relief against the Alabama Department of Revenue, James M. Sizemore, Jr., as Commissioner, and Guy Hunt as Governor ("the State"). The suit challenged the constitutionality of Act No. 90- 326, Code of Alabama 1975, § 22-30B-1 et seq. CWM alleged that the provisions of the Act violate the Commerce Clause of the United States Constitution; the Equal Protection Clause of the United States Constitution and its equivalents under the State Constitution; and the Due Process Clause of the State Constitution. CWM further contends that the Act is a "revenue bill" enacted during the last five days of the legislative session in violation of Article IV, § 70, of the Alabama Constitution. CWM further contends that the Cap provision violates the Commerce, Due Process, and Equal Protection Clauses of the United States Constitution and is preempted by various federal statutes. ¹

CWM also sought a preliminary and permanent injunction enjoining the State from enforcing, applying, or attempting to enforce the Act. Dr. Claude Earl Fox, state health officer, was allowed to intervene on behalf of the State Board of Health.

Governor Hunt filed a counterclaim for declaratory relief, asking that the trial court find and declare the Act constitutional. On February 28, 1991, the trial judge, the Honorable Joseph D. Phelps, declared the Base Fee and Cap provisions of the Act to be valid and constitutional. However, he declared the Additional Fee imposed on out-of-state generated waste to be impermissible and invalid as a violation of the Commerce Clause of the United States Constitution.

The State appeals only that aspect of the trial judge's order pertaining to the Additional Fee. CWM appeals from the trial judge's holding that the Base Fee and Cap are constitutional. We affirm the trial judge's holdings that the Base Fee and Cap provisions of the Act are valid and constitutional. We reverse the holding of the trial judge that the Additional Fee violates the Commerce Clause.

The legislative findings underlying Act No. 90-326, as quoted by the trial judge in his order of February 28, 1991, are as follows:

"Act § 1, Code § 22-30B-1.1 Legislative findings.

"The Legislature finds that:

"(1) The state is increasingly becoming the nation's final burial ground for the disposal of hazardous wastes and materials;

"(2) The volumes of hazardous wastes and substances disposed in the state have increased dramatically for the past several years;

"(3) The existence of hazardous waste disposal activities in the state poses unique and continuing problems for the state;

"(4) As the site for the ultimate burial of hazardous wastes and substances, the state incurs a permanent risk to the health of its people and the maintenance of its natural resources that is avoided by other states which ship their wastes to Alabama for disposal;

"(5) The state also incurs other substantial costs related to hazardous waste management including the costs of regulation of transportation, spill cleanup and disposal of ever increasing volumes of hazardous wastes and substances;

"(6) Because all waste and substances disposed at commercial sites for the disposal of hazardous waste and hazardous substances, whether or not such waste and substances are herein defined as hazardous, contribute to the continuing problems created for the state, and because state and federal definitions of 'hazardous wastes' have regularly changed and are likely to change in the future to include waste not previously defined as hazardous, it is necessary that all waste and substances disposed of at a commercial site for the disposal of hazardous waste or hazardous substances be included within the requirements of this act;

"(7) The legislature finds that the public policy of the state is to encourage business and industry to develop technology that will eliminate the generation of hazardous waste and substances....

"(8) Since hazardous wastes and substances generated in the state compose a small proportion of those materials disposed of at commercial disposal sites located in the state, present circumstances result in the state's citizens paying a disproportionate share of the costs of regulation of hazardous waste transportation, spill cleanup and commercial disposal facilities. Persons, firms or corporation which generate and dispose of such waste and substances in Alabama presently are among the taxpaying citizens of this state who must bear the burden of regulation, inspection, control and clean-up of hazardous waste sites; addressing the public health problems created by the presence of such facilities in the state; and, preserving this state's environment while those generating this waste in other states and shipping it to Alabama for disposal presently are not. This act attempts to resolve that inequity by requiring all generators of waste being disposed of in Alabama to share in that financial burden.

"(9) The operators of commercial sites for the disposal of hazardous wastes or hazardous substances have the ability to control the flow of said wastes or substances into said sites. Further, said operators, by exercise of said ability to control the flow of wastes or substances disposed at sites during a twelve-month period [need] only to enlarge the amount of wastes disposed during the next twelve-month period by a proportionate amount. The health of the population of this state and the soundness of the environment are and would be threatened by such an exercise of control. Said exercise of control could cause an artificial decrease in fees during the twelve-month period beginning July 15, 1990, and ending July 14, 1991. To prevent threats to the health of the population of this state and to the soundness of the environment of this state and to prevent an artificial decrease in fees during the twelve-month period beginning July 15, 1990, and ending July 14, 1991, this act provides a cap on the amount of hazardous waste and hazardous substances disposed during the twelve-month period beginning October 1, 1991, said cap being a function of the amount of hazardous waste and hazardous substances disposed during the twelve-month period beginning July 15, 1990, and ending July 14, 1991."

The pertinent provisions of Act No. 90-326 are as follows:

Act § 3(a), Code § 22-30B-2(a) (the Base Fee):

"In addition to other fees levied, there is hereby levied a fee to be paid by the operators of each commercial site for the disposal of hazardous waste, or hazardous substances in the amount of $25.60 per ton for all waste or substances disposed of at such site."

Act § 3(b), Code § 22-30B-2(b) (The Additional Fee):

"For waste and substances which are generated outside of Alabama and disposed of at commercial sites for the disposal of hazardous waste or hazardous substances in Alabama, an additional fee shall be levied at the rate of $72.00 per ton."

Act § 9, Code § 22-30B-2.3 (the Cap Provision):

"Any commercial site for the disposal of hazardous waste or hazardous substances that disposes of in excess of 100,000 tons of hazardous waste or hazardous substances during the twelve-month period beginning July 15, 1990, and ending July 14, 1991, (hereinafter referred to as the benchmark period) shall not, during any twelve-month period beginning October 1, 1991, and any twelve-month period thereafter, dispose of more than the tonnage received during said benchmark period. Such restriction shall be in addition to any other ban or restrictions on disposal imposed by any regulatory authority. Provided, however, that the Governor or the Governor's designee may allow disposal of hazardous wastes...