Harvey & Harvey, Inc. v. Delaware Solid Waste Authority

• Citation: 600 F. Supp. 1369
• Decision Date: 07 January 1985
• Docket Number: Civ. A. No. 84-292-WKS.
• Court: U.S. District Court — District of Delaware
• Parties: HARVEY & HARVEY, INC., and Delaware Transfer Corp., Plaintiffs, v. DELAWARE SOLID WASTE AUTHORITY, a Delaware State Agency, and N.C. Vasuki, General Manager of the Delaware Solid Waste Authority, Defendants.

600 F. Supp. 1369

HARVEY & HARVEY, INC., and Delaware Transfer Corp., Plaintiffs, v. DELAWARE SOLID WASTE AUTHORITY, a Delaware State Agency, and N.C. Vasuki, General Manager of the Delaware Solid Waste Authority, Defendants.

Civ. A. No. 84-292-WKS.

United States District Court, D. Delaware.

January 7, 1985.

James McC. Geddes, Alicia B. Howard, Ashby, McKelvie & Geddes, Wilmington, Del., for plaintiffs.

F. Michael Parkowski, John W. Noble, Parkowski, Noble & Guerke, Dover, Del., for defendants.

OPINION

STAPLETON, Chief Judge:

On May 23, 1984, Harvey & Harvey, Inc. ("Harvey & Harvey") and Delaware Transfer Corporation ("Transfer") initiated this declaratory judgment action against the Delaware Solid Waste Authority ("Authority") seeking to permanently enjoin the enforcement of certain portions of the proposed Delaware Solid Waste Authority Solid Waste Licensing and Disposal Regulations ("Regulations") governing solid waste disposal in the State of Delaware. Plaintiffs claim that the Regulations¹ violate both the Commerce Clause and the Equal Protection Clause of the United States Constitution. The Authority² has moved to dismiss on grounds that (1) the Eleventh Amendment insulates the Authority from suit, (2) this action is barred by the Tax Injunction Act, 28 U.S.C. § 1341, and (3) the complaint fails to state a claim upon which relief can be granted. In addition, the Authority has applied for a stay of this case pending resolution of parallel state proceedings.

I. THE FACTS

A. The Parties

Harvey & Harvey and Transfer are both Delaware corporations engaged in the business of transporting solid waste. Harvey & Harvey hauls commercial and industrial solid waste from various sites in New Castle County to disposal sites located both inside and outside the State of Delaware, as well as to a transfer station³ located at Newport, Delaware, which it has owned and operated since May, 1982. The transfer station allows Harvey & Harvey to consolidate solid waste which it has collected for transportation to disposal sites, primarily out-of-state. Harvey and Harvey claims that additional benefits from utilizing the transfer station are that (1) it can take advantage of the longer operating hours at out-of-state disposal sites thereby increasing the volume of solid waste and the number of customers that it handles, and (2) it is better able to take advantage of the lower dumping fees at out-of-state disposal sites.

Transfer owns and operates a group of vehicles which are used to transport solid waste from the transfer station to both in-state and out-of-state disposal sites. Plaintiffs indicate that approximately 50% of Transfer's revenues come from fees charged to Harvey & Harvey for the transportation of solid waste, 95% of which is disposed of out-of-state. In addition, Transfer directly leases a large portion of its equipment to Harvey & Harvey.

The Authority is an agency created by the State of Delaware. It was established in 1975 pursuant to the adoption of the Delaware Solid Waste Authority Act ("Act"), 7 Del.C. §§ 6401, et seq. (1983). The Delaware General Assembly adopted the Act in response to growing concern over environmental degradation resulting from prevailing solid waste disposal practices and in recognition of the need for state-wide planning and coordination to aid in the resolution of this solid waste disposal problem. 7 Del.C. § 6401(a) (1983).

The Act directs that the Authority shall develop a statewide solid waste management plan. In addition, it is charged with responsibility for the planning, design, management, ownership, and operation of solid waste disposal and resource recovery facilities and for the provision of solid waste management services. Since 1982, the Authority has had the power to control the flow of industrial and commercial solid waste. 7 Del.C. § 6406(a)(31) (1983) (as amended by 63 Del.Laws, c. 372 (1982)).⁴ Section 6422(b) of the Act provides that the Authority "may by regulation require the owners or occupants of all lands, buildings and premises therein to use the services and facilities of the Authority under such rules and regulations as the Authority shall fix and establish."

N.C. Vasuki is the general manager of the Authority having responsibility for the execution and enforcement of the Regulations which are in question in this action.

B. The Regulations

As provided for by Section 6403(l) of the Act, after notice and a public hearing, the Authority may adopt "rules and regulations to effectuate the powers, policies, purposes and functions" set forth in the Act. Pursuant to this power, the Authority has adopted solid waste licensing and disposal regulations. Although the Regulations are quite extensive, plaintiffs' challenges are limited to two narrow areas. Specifically, the portions of the Regulations under attack are Sections 4.01, 5.03, 9.01, 9.02, and 9.03.⁵

Sections 4.01, 5.03, 9.02, and 9.03 generally require that all solid waste generated within the State of Delaware be disposed of at a "solid waste facility." That term is defined by the Regulations as "any landfill, recycling project, collection station, transfer station, or other solid waste processing or disposal facility or project operated by, on behalf of, or under contract with the Authority." The impact of this requirement is to force solid waste originating in Delaware to be disposed of in Delaware. These sections of the Regulations are the target of plaintiffs' Commerce Clause arguments. Section 9.01 requires a transfer station operator to document the source and final disposition of all solid waste processed by the transfer station. Plaintiffs challenge this provision as a violation of the Equal Protection Clause.

II. ELEVENTH AMENDMENT IMMUNITY

The Authority contends that plaintiffs' claims for declaratory and injunctive relief must be dismissed as to the Authority since the Eleventh Amendment⁶ prohibits the federal courts from entertaining suits by private parties against states and their agencies absent consent.⁷ Plaintiffs do not dispute this general proposition but rather argue that the Delaware General Assembly has clearly waived any immunity which the Eleventh Amendment might have conferred on the Authority and, in the alternative, that the Authority is not the alter ego of the State of Delaware for purposes of Eleventh Amendment immunity.

It is clear that a state may waive its immunity under the Eleventh Amendment. See, e.g., Pennhurst State School & Hosp. v. Halderman, ___ U.S. ___, 104 S.Ct. 900, 907 (1984); Petty v. Tennessee-Missouri Bridge Commission, 359 U.S. 275, 276, 79 S.Ct. 785, 787, 3 L.Ed.2d 804 (1959); Clark v. Barnard, 108 U.S. 436, 447, 2 S.Ct. 878, 882-83, 27 L.Ed. 780 (1883). However, "the conclusion that there has been a waiver of immunity will not be lightly inferred." Petty v. Tennessee-Missouri Bridge Commission, supra, 359 U.S. at 276, 79 S.Ct. at 787. Stated differently, "in deciding whether a State has waived its constitutional protection under the Eleventh Amendment, a court will find waiver only where stated `by the most express language or by such overwhelming implications from the text as will leave no room for any other reasonable construction.'" Edelman v. Jordan, 415 U.S. 651, 673, 94 S.Ct. 1347, 1360, 39 L.Ed.2d 662 (1974) (quoting Murray v. Wilson Distilling Co., 213 U.S. 151, 171, 29 S.Ct. 458, 464, 53 L.Ed. 742 (1909)). See also Pennhurst State School & Hosp. v. Halderman, supra, ___ U.S. ___ at ___, 104 S.Ct. at 907 (a state's consent to suit against it in federal court must be "unequivocally expressed").

Here, plaintiffs assert that Section 6406(a)(5) of the Act constitutes Delaware's consent to the filing of suits in federal court against the Authority. That section states that "the Authority shall have the power to sue and be sued."

In Florida Dept. of Health v. Florida Nursing Home Assn., 450 U.S. 147, 150, 101 S.Ct. 1032, 1034, 67 L.Ed.2d 132 (1981) (per curiam), the Court held that a Florida statute providing that the Florida Department of Health and Rehabilitative Services had the capacity "to sue and be sued" was insufficient to constitute a waiver of Eleventh Amendment immunity. In discussing the rationale underlying this decision, the Supreme Court recently commented:

Our reluctance to infer that a State's immunity from suit in the federal courts has been negated stems from recognition of the vital role of the doctrine of sovereign immunity in our federal system. A State's constitutional interest in immunity encompasses not merely whether it may be sued, but where it may be sued.9

9 —For this reason, the Court consistently has held that a State's waiver of sovereign immunity in its own courts is not a waiver of the Eleventh Amendment immunity in the federal courts.

Pennhurst State Hosp. v. Halderman, supra, ___ U.S. at ___, 104 S.Ct. at 907.

Similarly, since Section 6406(a)(5) of the Act can be read as consent to state court suits only, it does not provide the required unequivocal indicia of a legislative intent to waive Eleventh Amendment immunity.⁸ Consequently, if the Authority is found to be an arm or alter ego of the State of Delaware, it may not be sued in this Court.

The ultimate issue in deciding if a public instrumentality, such as the Authority, is an arm or alter ego of the state for Eleventh Amendment purposes is whether the state is the real party in interest. Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 464, 65 S.Ct. 347, 350, 89 L.Ed. 389 (1945); Blake v. Kline, 612 F.2d 718, 721 (3d Cir.1979), cert. denied, 447 U.S. 921, 100 S.Ct. 3011, 65 L.Ed.2d 1112 (1980); Urbano v. Board of Managers of New Jersey State Prison, 415 F.2d 247, 250 (3d Cir.1969), cert. denied, 397 U.S. 948, 90 S.Ct. 967, 25 L.Ed.2d 129 (1970); Gann v. Delaware State Hospital, 543 F.Supp. 268, 270 (D.Del.1982). Resolution of this issue⁹ requires an examination of a number of factors including:

state law defining the relationship

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