C & A Carbone, Inc. v. Town of Clarkstown

• Citation: 770 F. Supp. 848
• Decision Date: 11 July 1991
• Docket Number: No. 91 Civ. 2105 (CLB).,91 Civ. 2105 (CLB).
• Parties: C & A CARBONE, INC., Recycling Products of Rockland, Inc. and C & C Realty, Inc., Plaintiffs, v. The TOWN OF CLARKSTOWN and Clarkstown Recycling Center, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

770 F. Supp. 848

C & A CARBONE, INC., Recycling Products of Rockland, Inc. and C & C Realty, Inc., Plaintiffs, v. The TOWN OF CLARKSTOWN and Clarkstown Recycling Center, Inc., Defendants.

No. 91 Civ. 2105 (CLB).

United States District Court, S.D. New York.

July 11, 1991.

David Silverman and Ricki Berger, Granik, Silverman, Sandberg, Campbell, Nowicki & Resnick, New City, N.Y., for plaintiffs.

Edward Costikyan and Theodore Haas, Paul, Weiss, Rifkand, Wharton & Garrison, New York City, for defendants.

MEMORANDUM AND ORDER

BRIEANT, Chief Judge.

On March 27, 1991 plaintiffs commenced this action alleging violations of Sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. 1, et seq., Section 4 of the Clayton Act, 15 U.S.C. § 15, et seq., and Section 1983 of the Civil Rights Act of 1964, 42 U.S.C. § 1983. Plaintiffs seek injunctive relief and damages for injury to their business.

This Court has subject matter jurisdiction over the claims set forth in the complaint pursuant to Sections 1331, 1337 and 1343 of Title 28 of the United States Code. Since plaintiffs and defendants have their office and principal place of business in Clarkstown, New York, venue in this district is appropriate 28 U.S.C. § 1391(c).

On June 5, 1991, the Court heard oral argument on (1) plaintiffs' motion for an Order of this Court granting a preliminary injunction against the enforcement of Local Law No. 9 of 1990 as adopted by the Town of Clarkstown and (2) defendant Town of Clarkstown's motion to dismiss the complaint pursuant to Rule 12(b)(6) and/or for summary judgment pursuant to Rule 56 or, in the alternative, to dismiss or stay this case on abstention grounds. Both motions were marked fully submitted decision reserved on the same date.

The underlying facts are not in dispute. Plaintiffs are engaged in the business of recycling and solid waste disposal. Solid waste is brought to their facility in Clarkstown from both within and without New York state. This solid waste is processed for $70 per ton and that which is recyclable is baled or otherwise packaged and sold to facilities outside New York state. The remaining solid waste is baled and sold to "resource recovery centers" (or facilities which burn the solid waste to create power) or placed in landfills outside Clarkstown.

On August 7, 1989, Clarkstown entered into a consent order with the New York Department of Environmental Conservation which required the town to cease operations at its own landfill and establish a transfer station as an alternative method of managing the solid waste in the town. See Doc. No. 8, Ex. A. Thereafter, the town entered into an agreement with defendant Clarkstown Recycling whereby Clarkstown Recycling would build a transfer station facility and the town, in turn, would guarantee a certain amount of tonnage or suffer a penalty. See Doc. No. 9, Ex. A. Pursuant to the terms of this exclusive arrangement, Clarkstown Recycling is permitted to charge haulers $81 per ton to dispose of any and all solid waste that enters the territorial limits of Clarkstown, without regard to whether that solid waste is generated within or without Clarkstown. The agreement also provides that when the arrangement expires in five years, the Town can acquire the facility for $1.00.

In December of 1990, in aid of the arrangement, the town adopted Local Law No. 9 of 1990. Section 5(A) of Local Law No. 9 provides in relevant part:

It shall be unlawful, within the Town, to dispose of or attempt to dispose of acceptable or unacceptable waste of any kind generated or collected outside the territorial limits of the Town of Clarkstown, except for acceptable waste disposed of at a Town operated facility, pursuant to agreement with the Town of Clarkstown and recyclables, as defined in Chapter 82 of the Clarkstown Town Code, brought to a recycling center established by special permit pursuant to Chapter 106 of the Clarkstown Town Code.

On March 9, 1991, town police officers responded to a motor vehicle accident that had occurred on the Palisades Interstate Parkway when a tractor trailer struck the Route 59 overpass and spilled solid waste onto the parkway. See Doc. 11, Exs. C, D. The trailer was hauling solid waste from plaintiffs' facility to a landfill in Indiana. On March 13, 1991, the town police obtained a search warrant that directed them to search the plaintiffs' premises for books and records maintained in the business of solid waste disposal. On March 14, 1991, the town produced the property seized to an FBI agent pursuant to a grand jury subpoena signed by the U.S. Attorney for the Southern District of New York.

Then, on March 18, 1991, the town filed suit and brought an Order to Show Cause against C & A Carbone in the Supreme Court of the State of New York, Rockland County, seeking to enjoin and restrain C & A Carbone and others from "operating a transfer station and from unlawfully disposing of solid waste within the Town of Clarkstown," in violation of Local Law No. 9. On March 20, 1991, the State Court granted a temporary restraining order which provides in pertinent part that "the defendants C & A Carbone, Inc., Recycling Products of Rockland, Inc., C & C Realty, Inc. and Angelo Carbone be and they are hereby restrained and enjoined from operating a transfer station and from unlawfully disposing of solid waste generated within the Town of Clarkstown, and the defendants shall immediately cease all illegal business operations at the premises known as 183 Western Highway, West Nyack, New York, pending the hearing of the Town of Clarkstown's motion...." See Doc. 8, Ex. H. The town's motion for a preliminary injunction in the New York Supreme Court has been marked fully submitted, decision reserved by Justice Robert J. Stolarik.

Also pending in the New York Supreme Court, Appellate Division, Second Department, is the Town's appeal of the determination of the Hon. Alfred Weiner, Acting Supreme Court Justice, in a related Article 78 proceeding. By decision dated February 27, 1991, Justice Weiner ordered the Town Board of the Town of Clarkstown to issue plaintiffs a special permit to allow the maintenance and use of a portion of plaintiffs' site on Western Highway as a "recycling facility," as defined in Section 106.3 of the Zoning Code of the Town of Clarkstown. See Doc. 11, Ex. G.

The following constitutes this Court's findings and conclusions as required by Rule 65 of the Federal Rules of Civil Procedure and is the decision of this Court.

Antitrust

In the instant case, plaintiffs' first contention is that they are entitled to damages and injunctive relief under the Sherman Act, 15 U.S.C. § 1 et seq., and the Clayton Act, 15 U.S.C. § 15 et seq. The federal law is clear, however, that neither form of relief is available to plaintiffs based on the alleged anti-competitive effect of the Local Law.

As a preliminary matter, this Court notes that local governments are immune to damage claims under the antitrust laws. See Local Government Antitrust Act, 15 U.S.C. §§ 34-36. Section 35(a) provides:

No damages, interest on damages, costs, or attorney's fees may be recovered under section 15, 15a, or 15c of this title from any local government, or official or employee thereof acting in an official capacity.

15 U.S.C. § 35(a).

Regardless of the type of relief sought, a town is immune to claims asserted under the antitrust laws, where the State has authorized the anti-competitive actions complained of. See Town of Hallie v. City of Eau Claire, 471 U.S. 34, 105 S.Ct. 1713, 85 L.Ed.2d 24 (1985). It is undisputable that there are several New York statutes which authorize local control over the disposal and dumping of local garbage. See N.Y.Town Law, §§ 130, 198(9), 221 (McKinney 1987 & Supp.1991); N.Y.Gen.Mun.Law § 120-w (McKinney 1986 & Supp.1991). In addition, Environmental Conservation Law § 27-0711, N.Y.Envtl.Conserv.Law § 27-0711 (McKinney 1984 & Supp.1991) expressly recognizes the significant role of local government in regulating solid waste management. As such, the state action exemption has been repeatedly recognized in cases dismissing antitrust claims based on local governments' actions regarding solid waste management. See e.g. Hancock Industries v. Schaeffer, 811 F.2d 225, 232-36 (3d Cir. 1987).

Our full understanding of this issue requires reference to the Supreme Court's recent decision in City of Columbia, et al. v. Omni Outdoor Advertising, Inc., ___ U.S. ___, 111 S.Ct. 1344, 113 L.Ed.2d 382 (1991), in which the Court held the Sherman Act inapplicable to anticompetitive restraints imposed by local governments implementing state policy. The issue considered in City of Columbia was whether there is a "conspiracy" exception to the rule that any action that qualifies as a state action or an authorized implementation of a state policy is automatically thereby exempt from the operation of the antitrust laws.

Citing its landmark decision in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943) and relying on the principles of federalism and state sovereignty, a majority of the Court held that a city's restriction on billboard construction is immune from federal antitrust liability where the municipalities' restriction is an authorized implementation of state policy. The Court rejected "any interpretation of the Sherman Act that would allow plaintiffs to look behind the actions of state sovereigns to base their claims on `perceived conspiracies to restrain trade,'" City of Columbia, ___ U.S. at ___, 111 S.Ct. at 1353, even if a state or its municipality acts as a conspirator with private actors in the restraint of trade.¹

Since the anti-competitive provisions of Local Law 9 are the foreseeable result of New York State enabling law concerning solid waste collection and disposal and the Town of Clarkstown's Local Law is an implementation of authorized state policy, this Court is constrained to find that the conduct of the Town complained of is exempt...