National Solid Wastes Management v. Daviess County

• Decision Date: 24 January 2006
• Docket Number: No. 04-6498.,04-6498.
• Citation: 434 F.3d 898
• Parties: NATIONAL SOLID WASTES MANAGEMENT ASSOCIATION, Plaintiff-Appellee, v. DAVIESS COUNTY, KENTUCKY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

434 F.3d 898

NATIONAL SOLID WASTES MANAGEMENT ASSOCIATION, Plaintiff-Appellee, v. DAVIESS COUNTY, KENTUCKY, Defendant-Appellant.

No. 04-6498.

United States Court of Appeals, Sixth Circuit.

Argued: November 29, 2005.

Decided and Filed: January 24, 2006.

COPYRIGHT MATERIAL OMITTED

ARGUED: Allen W. Holbrook, Sullivan, Mountjoy, Stainback & Miller, Owensboro, Kentucky, for Appellant. Dennis J. Conniff, Frost Brown Todd, Louisville, Kentucky, for Appellee. ON BRIEF: Allen W. Holbrook, Sullivan, Mountjoy, Stainback & Miller, Owensboro, Kentucky, for Appellant. Dennis J. Conniff, Amy D. Cubbage, Sheryl G. Snyder, Frost Brown Todd, Louisville, Kentucky, for Appellee. Michael J. Cahill, Germano & Cahill, Holbrook, New York, for Amici Curiae.

Before: CLAY and COOK, Circuit Judges; COOK, District Judge.^*

OPINION

CLAY, Circuit Judge.

Defendant Daviess County, Kentucky appeals the November 19, 2004 order of the United States District Court for the Western District of Kentucky granting summary judgment for Plaintiff National Solid Wastes Management Association ("NSWMA"), declaring proposed Daviess County Ordinance 830.5 ("Ordinance") unconstitutional, and enjoining the County from enforcing the terms of the Ordinance. For the reasons set forth below, this Court AFFIRMS the district court order.

I. BACKGROUND

A. PROCEDURAL HISTORY

On March 25, 2004, Plaintiff filed a complaint against Defendant that sought a declaratory judgment that the Ordinance was unconstitutional because it violated the dormant Commerce Clause and a permanent injunction barring Defendant from enforcing the Ordinance against Plaintiff's members.

Both parties filed motions for summary judgment.

On November 19, 2004, the district court granted Plaintiffs motion for summary judgment, denied Defendant's motion for summary judgment, issued a declaratory judgment that the Ordinance was unconstitutional, and issued a permanent injunction barring Defendant from enforcing the terms of the Ordinance.

On December 17, 2004, Defendant timely filed a notice of appeal.

B. FACTS

The facts are not in dispute. Defendant is a county located in Kentucky. Under Kentucky law, Defendant is responsible for developing and implementing solid waste management plans for the county. Ky. Rev.Stat. Ann. § 109.011(9) (West 2005). Pursuant to this responsibility, Defendant enacted the Ordinance on February 19, 2004. The Ordinance states, in relevant part:

1. Daviess County Fiscal Court shall provide universal municipal solid waste collection within its jurisdiction through the grant of nonexclusive franchises.

2. All franchise agreements entered into under this ordinance shall require the party providing municipal solid waste collection service to dispose of the waste they collect at the Daviess County Landfill or Transfer Station.

3. Nonexclusive franchises shall be granted to all haulers that are properly registered in accordance with KRS 224.43-315(2), have properly filed an annual report as required by KRS 224.43-315(3), and are in compliance with all other applicable laws and regulations.

4. No hauler shall be allowed to collect municipal solid waste in Daviess County unless granted a franchise by Daviess County Fiscal Court.

Plaintiff is a trade association whose members are "engaged in various aspects of solid waste management, including the collection, transportation and disposal of municipal solid waste generated in Daviess County." (J.A. at 8.) One of these members is Republic Services of Kentucky, LLC ("Republic"). Republic currently conducts business in Daviess County as a waste collector, and it disposes of this waste either at Plaintiffs transfer station or at a Kentucky landfill owned by Republic. Plaintiff claims that its members operating within Daviess County as waste collectors may need to dispose of waste in the future at out-of-state disposal sites. Plaintiff also claims that its members who operate out-of-state waste disposal sites will be unable to participate in the waste disposal market for Daviess County.

II. DISCUSSION

A. STANDING

This Court has an independent obligation to determine whether it has subject matter jurisdiction over a case, including whether Plaintiff meets the requirements of constitutional and prudential standing. In re Cannon, 277 F.3d 838, 852 (6th Cir.2002). This Court reviews these standing issues de novo. Id. (citing Johnson v. Econ. Dev. Corp. of County of Oakland, 241 F.3d 501, 507 (6th Cir.2001)).

1. Constitutional Standing

Under Article III, Plaintiff must demonstrate three components to establish standing: "(1) an injury in fact that is actual or threatened; (2) a causal connection between the defendants' conduct and the alleged injury; and (3) a substantial likelihood that the injury will be redressed by a favorable decision." Huish Detergents, Inc. v. Warren County, 214 F.3d 707, 710 (6th Cir.2000) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)).

We find that Plaintiff has established constitutional standing. With respect to the first element, NSWMA members who are waste collectors in Daviess County would be prohibited from contracting with less expensive waste disposal sites under the Ordinance; in fact, member Republic, a waste collector in the county, also owns a waste disposal facility that it would be unable to use. Moreover, NSWMA members who own waste disposal sites cannot contract with waste collectors for disposal of solid waste that is generated within Daviess County. Thus, the Ordinance would work an actual injury on NSWMA members. With respect to the second element, a causal connection exists between Defendant's conduct and the injury; without the Ordinance, NSWMA members would be free to contract to dispose of waste at sites other than the County-owned disposal site or transfer station. With respect to the third element, a favorable decision would redress Plaintiffs injury, as an injunction against the enforcement of the Ordinance would allow NSWMA members to freely contract for waste disposal services.

2. Prudential Standing

In addition to the Article III requirements, Plaintiff must prove prudential standing; specifically, Plaintiff must demonstrate that the interest that it seeks to protect is "'within the zone of interests protected or regulated by the statutory provision or constitutional guarantee invoked in the suit."' Id. (quoting Bennett v. Spear, 520 U.S. 154, 162, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997)). Here, Plaintiff claims Defendant's Ordinance is in violation of the dormant Commerce Clause. The Supreme Court has explained that "[t]he central rationale for the rule against discrimination [under the dormant Commerce Clause] is to prohibit state or municipal laws whose object is local economic protectionism, laws that would excite those jealousies and retaliatory measures the Constitution was designed to prevent." C & A Carbone, Inc. v. Clarkstown, 511 U.S. 383, 390, 114 S.Ct. 1677, 128 L.Ed.2d 399 (1994).

We find that Plaintiff has met the prudential standing requirement. This Court has specifically held that the Commerce Clause protects a party's right to contract with an out-of-state waste disposal provider.¹ Huish Detergents, 214 F.3d at 711 ("In making this claim, [the plaintiff] is asserting its individual right ... to purchase waste processing and disposal services across State boundaries, an interest that falls squarely within the zone of interests protected by the Commerce Clause.")

B. THE DISTRICT COURT DID NOT ERR WHEN IT FOUND THAT THE ORDINANCE WAS FACIALLY DISCRIMINATORY AGAINST INTERSTATE COMMERCE

1. Standard of Review

This Court reviews the district court's grant of summary judgment de novo. Odle v. Decatur County, 421 F.3d 386, 389 (6th Cir.2005) (citation omitted). The moving party must show "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). The Court "must view all the facts and the inferences drawn therefrom in the light most favorable to the nonmoving party." Cummings v. City of Akron, 418 F.3d 676, 682 (6th Cir.2005) (internal quotations and citation omitted).

2. Analysis

The district court did not err when it found that the Ordinance was facially discriminatory against interstate commerce. The Ordinance, in practical terms, is no different than other local laws struck down by the Supreme Court and this Court as unconstitutional.

a. Legal Framework

The United States Constitution gives Congress the power to "regulate Commerce ... among the several States." U.S. Const. art. 1, § 8, cl. 3. While the Constitution does not directly speak to the states' power to regulate commerce amongst themselves, the Supreme Court has long interpreted the Constitution as not only granting power to Congress to regulate interstate commerce, but also denying that same power to the states. See generally Gibbons v. Ogden, 22 U.S. (9 Wheat) 1, 6 L.Ed. 23 (1824); H.P. Hood & Sons v. Du Mond, 336 U.S. 525, 69 S.Ct. 657, 93 L.Ed. 865 (1949). As a result, this "dormant" Commerce Clause "limits the actions of municipalities ... where such actions `burden interstate commerce or impede its free flow.'"² Waste Mgmt., Inc. v. Metro. Gov't, 130 F.3d 731, 735 (6th Cir.1997) (quoting Carbone, 511 U.S. at 389, 114 S.Ct. 1677).

By its nature, the dormant Commerce Clause only disallows local regulation of interstate commerce. If a local government action is market participation, as opposed to market regulation, then the action is not barred by the dormant Commerce Clause. Huish Detergents, 214 F.3d at 714. We agree with the Second Circuit that the proper inquiry to determine if a local government is engaged in market regulation is if "it exercises governmental powers that are unavailable to private parties.... Classic hallmarks of government regulation include the threatened imposition of fines and/or jail terms to compel behavior."...