Cibolo Waste, Inc. v. City of San Antonio

• Decision Date: 15 May 2013
• Docket Number: No. 12–50153.,12–50153.
• Citation: 718 F.3d 469
• Parties: CIBOLO WASTE, INCORPORATED; C–6 Disposal Systems, Incorporated; American Disposal Company; Anaconda Disposal, L.L.C.; Apache Disposal, Incorporated; Absolute Waste; Grande Disposal Company; Felix Maldonado Trucking, Incorporated; Pro Star Roll Off Dumpsters; Otis Spencer, doing business as River City Disposal; River City Waste, Incorporated; Southtexas Refuse, Incorporated; Texas Waste Systems, Incorporated; Brenda Maldonado Trucking; Clark Contracting Services, Incorporated; DRC Materials; Tiger Sanitation, Incorporated, Plaintiffs–Appellants v. CITY OF SAN ANTONIO, Defendant–Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

718 F.3d 469

CIBOLO WASTE, INCORPORATED; C–6 Disposal Systems, Incorporated; American Disposal Company; Anaconda Disposal, L.L.C.; Apache Disposal, Incorporated; Absolute Waste; Grande Disposal Company; Felix Maldonado Trucking, Incorporated; Pro Star Roll Off Dumpsters; Otis Spencer, doing business as River City Disposal; River City Waste, Incorporated; Southtexas Refuse, Incorporated; Texas Waste Systems, Incorporated; Brenda Maldonado Trucking; Clark Contracting Services, Incorporated; DRC Materials; Tiger Sanitation, Incorporated, Plaintiffs–Appellants

v.CITY OF SAN ANTONIO, Defendant–Appellee.

No. 12–50153.

United States Court of Appeals,Fifth Circuit.

May 15, 2013.

Jaay D. Neal, San Antonio, TX, for Plaintiffs–Appellants.

Jacqueline Marie Stroh, Esq., Deborah Lynne Klein, San Antonio, TX, for Defendant–Appellee.

Appeal from the United States District Court for the Western District of Texas.

Before STEWART, Chief Judge, DAVIS, and CLEMENT, Circuit Judges.

EDITH BROWN CLEMENT, Circuit Judge:

Appellants Cibolo Waste et al. are waste haulers that operate throughout the City of San Antonio and its surrounding counties. In 2006, the City of San Antonio passed an ordinance imposing a permit fee for the collection or disposal of waste within city limits. In response, Appellants filed suit against the City, claiming that the permit fee violates the dormant Commerce Clause by imposing an excessive burden on interstate waste haulers. The district court dismissed their claims and they appealed. As Appellants have failed to show that their alleged injuries fall within the zone of interests protected by the dormant Commerce Clause, we decline to address Appellants' arguments because they lack prudential standing, and we AFFIRM the district court's dismissal of their claims.

FACTS AND PROCEEDINGS

Appellee City of San Antonio (the “City”), by and through its Solid Waste Management Department, oversees the collection and disposal of solid waste within the City's limits. Both the City and private waste hauler companies (collectively “haulers”) offer collection and disposal services to residents and commercial businesses. There are three landfills within city limits, one that is a privatized City facility and two that are privately owned. Appellants Cibolo Waste et al. (“Appellants”) are thirteen haulers that collect and dispose of waste within the City and its surrounding communities. Appellants are all Texas companies with their principal places of business in Bexar County, Texas. The record does not indicate that Appellants currently do business or seek to do business outside Bexar County.¹

For over two decades, the City has regulated the waste management industry through the issuance of permits for collecting or disposing of solid waste. In 2006, the City adopted an ordinance that imposes a permit fee of $2,250 for each vehicle weighing over 7,000 pounds that is used to collect or dispose of solid waste within the City. The permit fee is neither tied to the volume of solid waste collected or disposed of by each hauler, nor based on the number of times that a hauler uses a City landfill. Haulers that collect or dispose of solid waste within the City are thus required to pay an annual flat fee, regardless of whether they use a City landfill one time or one thousand times that year. Under the ordinance, haulers that fail to acquire a permit before collecting or disposing of waste are subject to financial penalties. Additionally, the ordinance applies only to haulers that collect or dispose of waste within the City's corporate limits, not those that collect or dispose of waste in other contiguous counties.

The permit fee is designed to cover the costs directly associated with the monitoring of permit holders as well as the costs associated with the City's regulation of the waste management industry. Such costs include, but are not limited to, environmental cleanup, code enforcement, infrastructure maintenance, police and fire services, staffing, and overhead. Moreover, in order to enforce the ordinance, the City must undertake a number of tasks, such as providing and evaluating insurance paperwork that haulers are required to submit with each permit application and assigning city officials to check haulers' permits at dump sites and to conduct vehicle inspections.

According to Rose Ryan, Assistant Director of the City's Solid Waste Department, at the time of its passage, the ordinance was expected to generate between $900,000 and $1.2 million in permit fee payments per year. While Ryan was not able to identify the precise amount of money that the City needs to enforce the ordinance, she noted that the overall cost of regulating the waste management industry is approximately $3 million per year. The $3 million estimate includes the costs of regulation and of providing other waste management services to the City's residents.

Appellants filed suit in Texas state court, claiming that the permit fee violates the dormant Commerce Clause and the Equal Protection Clause and constitutes an illegal occupation tax.² The City removed the case to federal court. Appellantsthen filed an application for a preliminary injunction, which the district court denied. The parties filed cross-motions for summary judgment, and the district court granted summary judgment in favor of the City, concluding that the ordinance does not interfere with interstate commerce. Appellants filed a Federal Rule of Civil Procedure 59(e) motion to alter or amend the judgment, and, upon its denial by the district court, Appellants timely appeal.

STANDARD OF REVIEW

We review de novo a grant or denial of summary judgment, applying the same standards as the district court. Holt v. State Farm Fire & Cas. Co., 627 F.3d 188, 191 (5th Cir.2010). Viewing all evidence in the light most favorable to the nonmoving party, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), we will affirm a grant of summary judgment only if the evidence shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law, Fed.R.Civ.P. 56(a).

ANALYSIS

Every party that comes before a federal court must establish that it has standing to pursue its claims. The doctrine of standing asks “whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues.” Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11, 124 S.Ct. 2301, 159 L.Ed.2d 98 (2004). The Supreme Court has described standing as “contain[ing] two strands: Article III standing, which enforces the Constitution's case-or-controversy requirement; and prudential standing, which embodies judicially self-imposed limits on the exercise of federal jurisdiction.” Id. (citations and internal quotation marks omitted). Because Article III standing is a threshold issue, we must address it before considering questions of prudential standing. See Ford v. NYLCare Health Plans of Gulf Coast, Inc., 301 F.3d 329, 332 (5th Cir.2002).

Article III standing requires a plaintiff to show: “(1) an injury in fact (2) that is fairly traceable to the actions of the defendant and (3) that likely will be redressed by a favorable decision.” Procter & Gamble Co. v. Amway Corp., 242 F.3d 539, 560 (5th Cir.2001) (citations omitted). An injury in fact is “an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (citations and internal quotation marks omitted). The City contends that Appellants lack Article III standing because they do not allege an injury that would be remedied by declaring the ordinance unconstitutional.

Under our precedent, however, it appears that Appellants have made their showing of injury in fact because the permit fee increases their cost of doing business. In National Solid Waste Management Ass'n v. Pine Belt Regional Solid Waste Management Authority, the waste hauler plaintiffs were injured by an ordinance imposing a “tipping” fee for using the city's landfill that ultimately resulted in higher operating costs to haulers. 389 F.3d 491, 498 (5th Cir.2004) (“[P]laintiffs' cost to dispose of waste [under the ordinance], including the tipping fee and the transportation cost, would be higher than their current cost.”). Similarly, Appellants have incurred higher operating costs as a result of the City's ordinance, which imposes an increased cost per vehicle for obtaining a permit to collect and dispose of waste in San Antonio.³ This injury to Appellants—in the form of higher operating costs—is directly traceable to the City's ordinance, see id., and would be remedied, even if only temporarily, by a holding that the ordinance is unconstitutional. The requirements for Article III standing are thereby satisfied.

Even if a plaintiff establishes Article III standing, we may consider whether prudential standing principles nonetheless counsel against hearing the plaintiff's claims.⁴See Knutson, 699 F.2d at 236. The doctrine of prudential standing embodies “judicially self-imposed limits on the exercise of federal jurisdiction.” Elk Grove, 542 U.S. at 11, 124 S.Ct. 2301. Moreover, as the Supreme Court has observed, prudential standing:

[E]ncompasses “the general prohibition on a litigant's raising another person's legal rights, the rule barring adjudication of generalized grievances more appropriately addressed in the representative branches, and the requirement that a plaintiff's complaint fall within the zone of interests protected by the law invoked.”

Id. at 12, 124 S.Ct. 2301 (quoting Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984)).

At issue here is whether Appellants' claims fall within the “zone of interests” protected by the dormant Commerce Clause. See Wyoming v. Oklahoma, 502 U.S. 437, 469, 112 S.Ct....