Harvey & Harvey, Inc. v. County of Chester
| Citation | 68 F.3d 788 |
| Decision Date | 20 October 1995 |
| Docket Number | TRI-COUNTY,94-3622,Nos. 94-1924,s. 94-1924 |
| Parties | , 64 USLW 2288, 26 Envtl. L. Rep. 20,018 HARVEY & HARVEY, INC., Appellant v. COUNTY OF CHESTER; Pennsylvania Department of Environmental Resources; Chester County Solid Waste Authority; Southeastern Chester County Refuse Authority.INDUSTRIES, INC. v. COUNTY OF MERCER PENNSYLVANIA; Mercer County Solid Waste Authority; Commonwealth of Pennsylvania, Department of Environmental Resources; The County of Mercer, Pennsylvania; The Mercer County Solid Waste Authority; and Commonwealth of Pennsylvania, Department of Environmental Resources, Appellants. |
| Court | United States Courts of Appeals. United States Court of Appeals (3rd Circuit) |
James McC. Geddes, (argued), Philip Trainer, Jr., Steven T. Margolin, Ashby & Geddes, Wilmington, DE, for Harvey & Harvey, Inc.
John S. Halsted, Thomas L. Whiteman, Office of County Solicitor, West Chester, PA, for County of Chester.
Dennis W. Strain, (argued), Mark L. Freed, Commonwealth of Pennsylvania Department of Environmental Resources, Conshohocken, PA, for Pennsylvania Department of Environmental Resources, appellee in No. 94-1924.
James E. McErlane, (argued), Lamb, Windle & McErlane, P.C., West Chester, PA, for Chester County Solid Waste Authority.
Joseph C. Crawford, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, PA, for Delaware County Solid Waste Authority, Amicus-Appellee in No. 94-1924.
Thomas J. May, (argued), Thomas W. King, III, Dillon McCandless & King, Butler, PA, Tri-County Industries, Inc.
Ronald D. Amrhein, Jr., William J. Madden, P.C., Sharon, PA, for Mercer County Solid Waste Authority and the County of Mercer.
Michael D. Buchwach, Pennsylvania Department of Environmental Resources, Office of General Counsel, Meadville, PA, Dennis W. Strain, (argued), Kristen M. Campfield, Gail B. Phelps, Pennsylvania Department of Environmental Resources, Office of Chief Counsel, Harrisburg, PA, for Commonwealth of Pennsylvania, Department of Environmental Resources, Appellant in No. 94-3622.
Before: BECKER, NYGAARD, and ALITO, Circuit Judges.
These appeals, briefed separately but listed together for oral argument, both present Commerce Clause challenges to municipal "flow control" ordinances. These ordinances require waste haulers, like the plaintiffs in each case here, to bring solid waste picked up within the municipal boundaries to designated landfill sites located within a state. These designated sites, in turn, usually charge "tipping fees" considerably higher than other, nondesignated sites located nearby in other states. In each case we must determine whether these ordinances, which threaten haulers taking waste to nondesignated sites with fines and suspension, impermissibly discriminate against interstate commerce.
In one case Harvey & Harvey ("Harvey"), an interstate collector, hauler and processor of municipal solid waste, brought suit against Chester County, the Chester County Solid Waste Authority ("the Authority") 1 the Southeastern Chester County Refuse Authority ("SECCRA") 2 and the Pennsylvania Department of Environmental Resources (the "DER"). It seeks to have the County's flow control plan declared unconstitutional under the dormant Commerce Clause. The district court denied Harvey's motion for a preliminary injunction. Concluding that the plan does not discriminate against interstate commerce, it held that the Pike balancing test, see Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970), which Harvey acknowledged that it could not meet, would apply. (Sept. 8, 1994 Order.) Because the district court did not consider whether the Chester County flow control scheme offered out-of-state landfill operators an equal opportunity to compete for the county's waste disposal business, we vacate and remand for further proceedings.
In the other case Tri-County Industries, Inc. ("Tri-County"), a hauler of residential and commercial solid waste throughout Mercer County and in other Western Pennsylvania and Ohio counties, brought suit against the County of Mercer and the Mercer County Solid Waste Authority ("MCSWA"). It sought both a declaratory judgment that the county's flow control plan violated the dormant Commerce Clause and a permanent injunction enjoining its enforcement. The district court, concluding that the plan improperly impeded interstate commerce, granted final judgment on stipulated facts in favor of Tri-County. We hold that the district court erred in concentrating on the operation of the ordinance and concomitantly in failing to consider whether out-of-state interests competed on a level playing field. Therefore, the order in Tri-County must also be vacated and remanded.
During the 1970s and '80s, national environmental concerns fostered stricter state regulation of waste disposal. This regulation led to a large number of landfill closures throughout the United States, creating shortages in many places and driving up landfill pricing. See Eric S. Petersen & David N. Abramowitz, Municipal Solid Waste Flow in the Post-Carbone World, 22 FORDHAM URB. L.J. 361 n. 33 (1995); see also Harvey SA 382 (Kerns); James C. Vago, Comment, The Uncertain Future of Flow Control Ordinances: The Last Trash to Clarkstown?, 22 N.KY L.REV. 93, 98 (1995). Pennsylvania was no exception. It too experienced inadequate and rapidly diminishing disposal capacity for municipal waste. See 53 P.S. Sec. 4000.102(a)(2) (legislative findings).
Waste disposal methods, ranked in descending order of environmental impact, include: source reduction and reuse, waste combustion, and landfilling. See Vago, 22 N.KY.L.REV. at 106. Environmentally advanced, innovative waste disposal facilities can cost "in the tens to hundreds of millions of dollars to construct." See Vago, 22 N.KY.L.REV. at 108. State and federal environmental mandates often require the use of these new, more expensive facilities. Petersen & Abramowitz, 22 FORDHAM URB. L.J. at * 7 [n. 66]. Securing long term access to disposal facilities necessary to protect the citizens' health and safety "requires long-term commitments, debt and security." Id. [n. 66]. Methods less protective of the environment generally have lower capital and operating costs, and thus can charge a lower tipping fee.
Until the Tax Reform Act of 1986 repealed many of the tax incentives, most waste disposal facilities were privately owned and operated. Id. at * 4 [n. 36]. In response to the tax changes and increased costs caused by environmental regulation, increased public ownership became necessary, shifting the financing burden to the local governments. With this burden came risk. Even where the municipal government contracts with a private operator to construct or upgrade the disposal facility, the municipality often continues to bear the risk of an inadequate waste supply through municipal guarantees. Consequently, "it is the ability of local governments to control these haulers and where they transport the collected waste that often determines the feasibility of the solid waste processing disposal programs." See Petersen & Abramowitz, 22 FORDHAM URB.L.J. at * 2 [n.31].
Flow control ordinances, enacted by a number of states attempting to deal with these waste disposal crises, create a system in which waste haulers are licensed by the municipality and are directed to take the waste collected to landfills that have been designated by the county. By conditioning the haulers' licenses on their compliance, local governments can assure a certain minimum revenue at the designated sites. Flow control both guarantees that a certain volume will be deposited and enables the operators of the designated landfill to collect a "tipping fee" 3 high enough to cover the cost of processing. Indeed, tipping fees are typically based on both the system's construction cost and the estimated amount of waste that will be deposited there annually. In some cases, the municipalities actually set the tipping fee contractually.
Given the municipalities' reliance on the higher rates in effect when the municipalities were constructing and financing these facilities, flow control ordinances have been crucial to the financial viability of these facilities in the wake of the precipitous decline of tipping fees. 4 Indeed, flow control has "been a vital economic element in supporting dozens of major waste-to-energy and landfill-based waste disposal programs involving billions of dollars in capital investment." Petersen & Abramowitz, 22 FORDHAM URB.L.J. at * 2 [n.25]. 5
In responding to its own solid waste crisis, the Pennsylvania legislature enacted the Municipal Waste Act (the "Act") to protect the public health, safety and welfare from the short- and long-term dangers of the transportation, processing, treatment, storage and disposal of municipal waste. See 53 P.S. Sec. 4000.102(b)(3). The Act establishes a system requiring each county to plan for the long-term processing and ultimate disposal of its waste. In authorizing each county to adopt flow control ordinances, the Act explicitly set forth the policy goal of such flow control legislation:
Authorizing counties to control the flow of municipal waste is necessary, among other reasons, to guarantee the long-term economic viability of resource recovery facilities and municipal waste landfills, to ensure that such facilities and landfills can be financed, to moderate the cost of such facilities and landfills over the long term, to protect existing capacity and to assist in the development of markets for recyclable materials by guaranteeing a steady flow of such materials. Sec. 102(a)(10).
Under the Act, counties may designate for a ten-year period the facilities at which waste generated within the county will be processed or disposed. See 53 P.S. Sec. 4000.303(e)....
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