Atlantic Coast Demo. v. Bd. of Chosen Freeholders

• Decision Date: 09 June 1995
• Docket Number: 94-3244 (JEI).,Civ. A. No. 93-2669 (JEI)
• Citation: 893 F. Supp. 301
• Court: U.S. District Court — District of New Jersey
• Parties: ATLANTIC COAST DEMOLITION & RECYCLING, INC., et al., Plaintiffs, v. BOARD OF CHOSEN FREEHOLDERS OF ATLANTIC COUNTY, et al., Defendants.

893 F. Supp. 301

ATLANTIC COAST DEMOLITION & RECYCLING, INC., et al., Plaintiffs, v. BOARD OF CHOSEN FREEHOLDERS OF ATLANTIC COUNTY, et al., Defendants.

Civ. A. Nos. 93-2669 (JEI), 94-3244 (JEI).

United States District Court, D. New Jersey.

June 9, 1995.

COPYRIGHT MATERIAL OMITTED

Mesirov Gelman Jaffe Cramer & Jamieson by Mitchell Feigenbaum, Haddonfield, NJ, for plaintiff Atlantic Coast Demolition & Recycling, Inc.

Steptoe & Johnson by William T. Hassler, Washington, DC, for plaintiffs Nat. Solid Waste Management Ass'n, Waste Management Ass'n of New Jersey, Bret Schundler, the Mayor of the City of Jersey City, NJ, John Rooney, the Mayor of the Borough of Northvale, NJ, the City of Passaic, NJ, and the City of Patterson, NJ.

Deborah T. Poritz, Atty. Gen. by Gail M. Lambert, Stefanie A. Brand, Deputy Atty. Gen., Dept. of Law and Public Safety, Div. of Law, Newark, NJ, for defendant Scott A. Weiner.

DeCotiis, Fitzpatrick & Gluck by J.S. Lee Cohen, Hackensack, NJ, for intervenor-defendants Hudson County Improvement Authority, Mercer County Improvement Authority, Essex County Utilities Authority, and Passaic County Utilities Authority.

Wolff & Samson, P.C. by David Samson, Roseland, NJ, for intervenor-defendant Camden County Energy Recovery Associates, L.P.

Sinisi, Van Dam & Sproviero by Stephen P. Sinisi, Paramus, NJ, for defendant Bergen County Utilities Authority.

OPINION

IRENAS, District Judge:

Plaintiffs in these consolidated cases have brought challenges under the dormant Commerce Clause¹ to portions of the New Jersey Solid Waste Management Act, N.J.S.A. 13:1E-1 to -207 ("SWMA"), the Solid Waste Utility Control Act ("SWUCA"), and regulations promulgated thereunder, N.J.A.C. 7:26, a group of statutes and regulations that the Court shall refer to collectively as the "waste flow regulations." Certain plaintiffs have now moved for a preliminary injunction.

The Court finds that plaintiff Atlantic Coast Demolition and Recycling, Inc. ("Atlantic Coast") has shown a likelihood of success on the merits and irreparable injury, and that on the basis of the current record these factors outweigh the irreparable injury that the narrow preliminary relief requested could cause to defendants and the public. However, because of the Court's concerns that the requested relief might cause serious irreparable harm to the defendants and the public, and because of important issues of comity, the Court will condition the grant of the requested relief upon the consideration of further submissions by defendants regarding potential alternatives to the current regulations and the impact of these regulations on defendants and the public.

As to plaintiffs National Solid Waste Management Association ("NSWMA") and Waste Management Association of New Jersey ("WMANJ," and along with NSWMA, the "association plaintiffs"), the Court finds that their likelihood of success and the irreparable injury that they suffer due to the waste flow regulations are outweighed by the irreparable harm that their request for preliminary relief would cause defendants and the public. The motion of the association plaintiffs will therefore be denied. Finally, as to plaintiffs Bret Schundler, the Mayor of the City of Jersey City, New Jersey, John Rooney, the Mayor of the Borough of Northvale; New Jersey, the City of Passaic, New Jersey, and the City of Patterson, New Jersey (collectively the "municipal plaintiffs"), the Court finds that these plaintiffs have no claim against defendants and they will be dismissed from the case.

PROCEDURAL HISTORY

Plaintiffs in this case come from two consolidated cases, Atlantic Coast Demolition & Recycling, Inc., v. Board of Chosen Freeholders, et al., Civ. No. 93-2669 (JEI), and C & A Carbone, et al. v. Shinn, et al., Civ. No. 94-3244 (JEI). The Atlantic Coast case was filed on June 23, 1993, and Atlantic Coast, the sole plaintiff in that matter, moved for a temporary restraining order. On September 2, 1993 after a period of intensive discovery, the Court held a hearing, and on September 8, 1993, rendered its oral findings of fact and conclusions of law. Following the Third Circuit's decision in J. Filiberto Sanitation, Inc. v. New Jersey Dep't of Envtl. Protection, 857 F.2d 913 (3d Cir.1988), the Court concluded that the waste flow regulations should be analyzed under the balancing test articulated in Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970), and that the state interest served by the waste flow regulations outweighed any burden on interstate commerce. The Court therefore denied Atlantic Coast's application for a temporary restraining order, and on February 28, 1994, with the consent of the parties, entered final judgment in defendants' favor on the basis of its prior findings of fact and conclusions of law.

Atlantic Coast appealed. In an opinion filed February 16, 1995, the Third Circuit reversed this Court's decision and remanded the case for further proceedings. Atlantic Coast Demolition & Recycling, Inc. v. Board of Chosen Freeholders, 48 F.3d 701 (3d Cir. 1995). The court concluded that in light of the Supreme Court's recent decision in C & A Carbone, Inc. v. Clarkstown, ___ U.S. ___, 114 S.Ct. 1677, 128 L.Ed.2d 399 (1994), which was decided after this Court's entry of final judgment, New Jersey's waste flow regulations discriminate against interstate commerce and are subject to heightened scrutiny under the dormant Commerce Clause rather than the less strict Pike balancing test. 48 F.3d at 713. However, the court also held that it would leave the district court to determine whether the regulations could be upheld under strict scrutiny. Id. at 718. In doing so, the court specifically stated that "Atlantic Coast is free at any time to apply again for pendente lite relief." Id.

On April 12, 1995, this Court granted the motions of Hudson County Improvement Authority, Mercer County Improvement Authority, Essex County Utilities Authority, Passaic County Utilities Authority (the "county authorities") and Camden County Energy Recovery Associates, L.P., ("CCERA") to intervene as defendants. On that date, Atlantic Coast filed the instant request for pendente lite relief.

The C & A Carbone case was filed on July 11, 1994, and assigned to the Newark vicinage. The case raises essentially the same challenges to the New Jersey waste flow regulations as those brought in Atlantic Coast. The case was stayed pending the Third Circuit's decision in Atlantic Coast, and when that case was remanded, C & A Carbone was transferred to this Court. On April 12, 1995, this Court granted defendants' motion to consolidate the case with Atlantic Coast. On April 17, 1995, the association plaintiffs and the municipal plaintiffs in C & A Carbone moved for pendente lite relief.

Since the filing of the preliminary injunction motions, the parties have engaged in extensive discovery that delayed the preliminary injunction hearing. The Court set June 6, 1995, as the date for the hearing, and in accordance with the Third Circuit' opinion, indicated that it would exercise its discretion "to reopen the record for supplementary evidence." 48 F.3d at 718 n. 21. The parties, however, elected not to offer further oral testimony, but rather elected to proceed on the basis of the previous record before this Court and the briefs, exhibits, and affidavits submitted in connection with the preliminary injunction motions and defendants' responses thereto. The Court held oral argument on the motions on June 6, 1995, and now renders its findings of fact and conclusions of law in accordance with Fed.R.Civ.P. 52(a).

FINDINGS OF FACT

The Court hereby adopts its Findings of Fact Numbers One through Twenty-Six of its oral opinion rendered September 8, 1993. These findings relate primarily to the waste disposal problems in New Jersey, the flow control regulations, and Atlantic Coast's efforts to be included in the flow control scheme. The Third Circuit specifically upheld these findings. Atlantic Coast, 48 F.3d at 704 n. 2. The Court also adopts the Third Circuit's detailed discussion of the New Jersey solid waste management system and Atlantic Coast's activities. 48 F.3d at 704-09. The following additional findings of fact are based on the exhibits and affidavits submitted by the parties in conjunction with the preliminary injunction motions.

1. Between February and September of 1993, Atlantic Coast received approximately 15,800 tons of construction and demolition ("C & D") waste from New Jersey, resulting in approximately $90,000 in monthly revenue. (Dengler Decl. at ¶ 3.) From 1993 to February 1995, when Atlantic Coast was not receiving New Jersey waste, its average monthly net loss increased from $27,237 to $80,607. (Durkin Decl. at ¶¶ 2-4.) Atlantic Coast's exclusion from New Jersey has also resulted in many of its New Jersey waste haulers refusing to pay outstanding bills, because Atlantic Coast could no longer process this waste and therefore had little leverage to collect this money. Atlantic Coast now shows $233,000 in bad debt on total New Jersey sales of $630,000, for a bad debt ratio of approximately 27% as compared to an overall bad debt ratio of 6%. (Id. at ¶ 6.)

2. Despite Atlantic Coast's poor financial performance, its parent corporation, United Waste Systems, Inc., has continued to finance Atlantic Coast, primarily in the hope that Atlantic Coast's entry into the New Jersey market will increase its profitability. (Sheehan Decl. at ¶¶ 9-11.)² On the other hand, if New Jersey's waste flow scheme is finally declared constitutional, United Waste intends to either shut down or sell the Atlantic Coast facility (Id. at ¶¶ 12-13.) However, United Waste will continue to support Atlantic Coast pending the final resolution of this case.

3. NSWMA and WMANJ are both trade associations made up of private companies in the solid waste disposal industry. NSWMA members include transporters of solid waste, operators of...