Medigen of Ky. v. PUBLIC SERV. COM'N OF W. VA., Civ. A. No. 2:90-0761.

Decision Date09 August 1991
Docket NumberCiv. A. No. 2:90-0761.
Citation787 F. Supp. 590
CourtU.S. District Court — Southern District of West Virginia
PartiesMEDIGEN OF KENTUCKY, INC., Medigen of Pennsylvania, Inc., Plaintiffs, v. PUBLIC SERVICE COMMISSION OF WEST VIRGINIA; Boyce Griffith, Chairman; Otis D. Casto, Commissioner; and Richard D. Frum, Commissioner, Defendants, West Virginia Solid Waste Association, Inc., Intervenor.

COPYRIGHT MATERIAL OMITTED

Mark E. Kauffelt, Charleston, W.Va., for plaintiffs.

Franklin G. Crabtree, Richard E. Hitt, Public Service Com'n of W.Va., Charleston, W.Va., for defendants.

Albert F. Good, Charleston, W.Va., for intervenor.

MEMORANDUM ORDER

COPENHAVER, District Judge.

This matter is before the court on plaintiffs' complaint and the stipulations of the parties. Plaintiffs' complaint seeks a permanent injunction and declaratory relief prohibiting defendants from interfering, through the use of criminal warrants or otherwise, with their interstate transportation of medical waste from West Virginia to other states and for a declaration of the rights, duties and obligations of the parties. By order entered on November 1, 1990, the West Virginia Solid Waste Association, Inc., was granted leave to intervene in this action.

I. Background

Plaintiffs are affiliated Delaware corporations engaged in the transportation of medical waste from various customers in West Virginia to disposal facilities in other states. Medigen of Kentucky transports medical waste from West Virginia to a disposal facility in Kentucky. Medigen of Pennsylvania transports medical waste from West Virginia to a waste processing facility in Pennsylvania. After processing, the waste is transported to disposal facilities owned by affiliated corporations in Kentucky and New York. Neither company engages in the intrastate transportation of medical waste from one point in West Virginia to another point in West Virginia.

The individual defendants, Boyce Griffith, Otis D. Casto, and Richard D. Frua, are the current members of the Public Service Commission of West Virginia (hereinafter, PSC). The PSC is a statutory body having jurisdiction over all public utilities in West Virginia. W.Va.Code § 24-2-1 (1991 Cum.Supp.).

After the briefing in this matter was completed, West Virginia enacted a Medical Waste Act, W.Va.Code §§ 20-5J-1 through 20-5J-10 (1991 Cum.Supp.). The parties agree that the merits of this action are to be decided with respect to the specific provisions of that Act and, further, that the Act does not substantively change the position of the parties. The Act provides that effective July 1, 1991, transporters of infectious medical waste shall be regulated by the PSC under the Common Carriers of Motor Vehicles Act, W.Va.Code §§ 24A-2-1 through 24A-2-5 (1986 Repl.Vol. & 1991 Cum.Supp.). The Common Carriers Act requires a prospective common carrier transporter to first obtain a certificate of convenience and necessity from the PSC before commencing operations in the state. § 24A-2-5. Upon application for the certificate, a legal notice of the application is published in the proposed area of operation and existing transporters are given the opportunity to oppose the application. If no protest is made, the certificate may be granted without hearing. If protest is received, the applicant must appear at a hearing and demonstrate that the public convenience and necessity require the proposed service. Id. Existing transporters may present contradictory evidence.

In considering the application, the PSC must consider the existing transportation services in the area to be served and if the existing services are "reasonably efficient and adequate," the certificate will not be granted. Id. In addition to the required showing of convenience and necessity, applicants must show financial ability, experience and fitness. All contested applications are judged by the same legal standards. Once issued, certificates of convenience and necessity have no expiration date. The PSC has authority to require a certificate holder to provide service to all members of the public within its certificate area. In addition, the PSC regulates other aspects of the transporter's operations, including rates charged to customers. Certificates of convenience and necessity are not required of motor carriers transporting medical waste through the state of West Virginia where points of origin and final disposal are both outside the state.

The Medical Waste Act requires the PSC to provide for "a separate and distinct category of special certificates of convenience and necessity for infectious medical waste" transporters.1 § 20-5J-10(b). Within the six months following the Act's effective date, the PSC is allowed to grant the special certificates to existing transporters of solid waste holding certificates of convenience and necessity who are currently transporting infectious medical waste and who demonstrate that they are otherwise in compliance with the Act. Id. Existing transporters are not required to make any additional demonstration of public convenience and necessity. Id. Under the Act, the Department of Health and Human Resources has primary responsibility for the health and safety aspects of medical waste management. § 20-5J-6. Rules and regulations promulgated by the PSC with respect to the transportation of infectious medical waste must not conflict or take precedence over rules promulgated by the Department of Health and Human Resources. § 20-5J-10(a).

Approximately 145 entities presently have authority to transport solid waste in West Virginia, some operating under authority granted as long as forty years ago. The majority of those entities operate exclusively within the state. About thirty-two of those carriers are members of the West Virginia Solid Waste Association, a voluntary association of motor carriers engaged in the transportation of solid waste. Approximately twelve of the Association's members transport medical waste. All members of the Association, and all nonmembers engaged in the transportation of medical waste, have PSC authority to operate in the state.

Medigen of Kentucky commenced business in West Virginia in December 1989 but neither plaintiff applied for a certificate of convenience and necessity until April 23, 1990, after a competitor filed a complaint with the PSC alleging that plaintiff was operating without PSC authority. Following publication of the required legal notice, the PSC received protests to the application and a hearing on the application was scheduled for August 13, 1990. In the interim, on July 27, 1990, a member of the PSC staff contacted Medigen of Kentucky and advised it to cease transporting medical waste from West Virginia customers until it had obtained the necessary certificate. The staff member also stated that if operations continued without the certificate, the PSC would seek criminal prosecution. In addition, the staff member contacted a customer served by Medigen of Kentucky and told it that Medigen was operating illegally and that an authorized transporter should be used. Upon learning of the conduct of the PSC staff, plaintiffs filed this suit on August 3, 1990, and by agreement of the parties, an order was entered on August 20, 1990, restraining defendants from interfering with plaintiffs' interstate transportation of medical waste from West Virginia to other states pending a final decision on the merits of this action. The hearing before the PSC on plaintiffs' application for a certificate of convenience and necessity was continued and has not been rescheduled.

Defendants do not assert that plaintiffs are transporting medical waste in an unsafe manner and plaintiffs do not claim that state health and safety regulations are not applicable to them. The sole issue before the court is whether defendants can require plaintiffs to obtain a certificate of convenience and necessity prior to transporting medical waste from West Virginia to another state for disposal. Plaintiffs contend that requiring a certificate of convenience and necessity is unconstitutional and violates the Commerce Clause of the United States Constitution because it is a direct regulation of interstate commerce and because its purpose is economic protectionism designed to prevent free competition. Plaintiffs also maintain that the requirement violates the Supremacy Clause of the United States Constitution because Congress has preempted the field of market or economic regulation of motor carriers operating in interstate commerce.

II. Discussion
A. Abstention

Defendants, in their brief, seek to have this court abstain from deciding the issues raised in this lawsuit under the abstention doctrine first recognized in Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943). Defendants contend that a decision by this court would be an unwarranted interference with the state's comprehensive regulatory scheme for the management of medical waste. They claim that the issues presented are primarily unsettled questions of state law, best left to decision in the first instance by the state court. In support of their position, defendants assert that plaintiffs' real motive in initiating this action is to obtain federal judicial review of a decision rendered by the PSC in Bio-Environmental Services, Inc. In that case, the PSC held that entities currently holding certificates of convenience and necessity for general garbage transportation services could transport medical waste without the necessity of recertification. A motion for reconsideration was filed and remains pending before the PSC on administrative appeal. After disposition of the motion, de novo review of the decision may be had in the West Virginia Supreme Court of Appeals. The decision is now substantively codified in the new Medical Waste Act, W.Va.Code § 20-5J-10, and is the portion of the statute under attack here. See supra, p. 593.

Abstention under Burford is...

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