Red River Service Corp. v. City of Minot, N.D., 97-2979

• Citation: 146 F.3d 583
• Decision Date: 10 June 1998
• Docket Number: No. 97-2979,97-2979
• Parties: , 28 Envtl. L. Rep. 21,337 RED RIVER SERVICE CORP., Appellant, v. CITY OF MINOT, NORTH DAKOTA, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 583

146 F.3d 583

46 ERC 1902, 28 Envtl. L. Rep. 21,337

RED RIVER SERVICE CORP., Appellant, v. CITY OF MINOT, NORTH DAKOTA, Appellee.

No. 97-2979.

United States Court of Appeals,

Eighth Circuit.

Submitted March 9, 1998.

Decided June 10, 1998.

Robert S. Rau, Minot, ND, argued, for Appellant.

Nevin Charles Van de Streek, Minot, ND, argued, for Appellee.

Before WOLLMAN and LOKEN, Circuit Judges, and BATAILLON, ¹ District Judge.

BATAILLON, District Judge.

When the City of Minot, North Dakota refused to allow Red River Service Corporation (Red River), an Oklahoma waste transport business, to dispose of solid waste from the Minot Air Force Base (MAFB) in the city's landfill, Red River filed suit against the city in the District Court for the District of North Dakota seeking damages, injunctive relief, and attorney's fees. In its complaint, Red River alleged that the city's refusal to allow Red River access to the landfill violated the Commerce Clause, U.S. Const. art. I, § 8, cl. 3; violated the Equal Protection Clause, U.S. Const. amend. XI; violated 42 U.S.C. § 1983; and breached an oral contract.

I.

Red River appeals from the district court's denial of its motion for partial summary judgment and the granting of the City of Minot's motion for summary judgment.

The district court held that Minot was not subject to the constraints of the Commerce Clause because it operated the landfill just as any private operator would. Hence, the city was a "market participant" rather than a "market regulator" and, as such, it had the right to sell space in the landfill to whomever it chose.

On Red River's equal protection claim, the district court noted that Red River never asserted membership in a suspect class nor claimed that Minot was violating its fundamental rights. Minot's denial of access was, therefore, subject only to rational basis scrutiny. The court held that preserving space in the landfill for citizens of Minot was a rational reason for the city to deny Red River access.

The district court also ruled that any oral contract between Red River and Minot was barred by the North Dakota statute of frauds requiring that contracts that cannot be performed in a year must evidenced by a writing. Since the alleged oral contract was apparently co-terminous with Red River's five-year contract with MAFB, the court held that it could not have been performed within a year.

Finally, the district court noted that while the doctrine of estoppel could be applied against the government under North Dakota case law, it was to be applied only after a careful weighing of the equities involved. The district court declined to apply the doctrine in this case because Red River had failed to obtain solid assurances from Minot that it could use the city's landfill before it bid the five-year contract with MAFB.

We review a grant of summary judgment de novo, applying the same standards as the district court. See Rabushka ex rel. United States v. Crane Co., 122 F.3d 559, 562 (8th Cir.1997), cert. denied, --- U.S. ----, 118 S.Ct. 1336, 140 L.Ed.2d 498 (1998). Summary judgment is appropriately granted if the evidence, viewed in the light most favorable to the nonmoving party, demonstrates that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. State Farm Mut. Auto. Ins. Co. v. Shahan, 141 F.3d 819 (8th Cir.1998).

Red River contends that the district court erred: 1) in finding that Minot is a "market participant" rather than a "market regulator"; 2) in finding that Minot did not violate Red River's equal protection rights under the United States Constitution by allowing other waste transport businesses from outside of the city to use the landfill; 3) in finding that Minot breached an oral contract with Red River which allowed Red River access to the landfill; and 4) in failing to apply the doctrine of estoppel with respect to the Red River's contract claim.

We affirm.

II.

The City of Minot owns and operates a municipal landfill. Beginning in 1993, Minot began to grapple with serious policy considerations involving the landfill. J.A. at 162. Both the Public Works and Safety Committee of the Minot City Council and the Yard Waste Ad Hoc Committee debated over the course of several years what types of waste and how much should be allowed into the landfill, which waste haulers should be allowed to dump into the landfill, and what charges should be imposed on those using the landfill. By early 1994, both groups had questioned whether Minot could continue to take waste from outside the city. J.A. at 87, 96, 113, 114. Much of the debate concerned disposal of municipal (also called domestic or household) solid waste, putrescible matter such as the remnants of meals, and yard waste, grass clippings and other organic materials collected from domestic residences. Municipal solid waste is expensive to handle since, unlike inert waste, it requires leachate collection systems and ground water monitoring. ² See Minot Code § 14-1, "Inert waste."

To extend the useful life of its landfill, the city council formally decided in late 1996 that it would accept only municipal solid waste generated by its own citizens and by certain non-citizen haulers who were grandfathered in under the new arrangement. ³ As a result of this evolving policy, the city council further decided that it would not accept in its landfill the estimated 5,000 tons a year of municipal solid waste that Red River collected from MAFB even though it had "ample room" for the waste. J.A. at 129, 142, 155. Minot allowed Red River and other haulers to dump inert waste--construction debris--from MAFB and elsewhere in the landfill. Aff. of Alan M. Walter, J.A. at 193. The volume of inert waste brought to the landfill is "minuscule" compared to the volume of municipal solid waste that might find its way to the landfill were open dumping allowed. Appellant's Br. at 17.

At the time the city council decided not to accept Red River's solid waste from MAFB, however, Red River already had bid a five-year contract to haul MAFB's solid waste, apparently based on the belief that Minot would accept the waste. J.A. at 143. Red River claims that it bid the MAFB contract only after it received quotes from the city on usage rates and written assurances from the city's director of public works that Red River could use the landfill. J.A. at 131.

III.

Red River argues that Minot's decision not to accept the solid waste from MAFB in its municipal landfill violates the Commerce Clause because Minot is a market regulator rather than a market participant. We disagree.

The Commerce Clause grants Congress the power to regulate commerce among the states. It primarily has been applied to state taxes and regulatory measures that restrict free trade by imposing burdens on out-of-state economic interests. Reeves, Inc. v. Stake, 447 U.S. 429, 440, 100 S.Ct. 2271, 65 L.Ed.2d 244 (1980). This limitation on state power, frequently called the "dormant" Commerce Clause, "prohibits economic protectionism--that is, regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors." New Energy Co. v. Limbach, 486 U.S. 269, 273, 108 S.Ct. 1803, 100 L.Ed.2d 302 (1988).

When a state or local government acts as a market participant rather than a market regulator, however, its conduct is outside the reach of the Commerce Clause. Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 809-810, 96 S.Ct. 2488, 49 L.Ed.2d 220 (1976) (applying doctrine to Maryland program paying a bounty for scrapping junk cars titled in Maryland, even though out-of-state processors faced stricter documentation requirements, since Maryland was similar to a private company bidding up the price of scrap); Reeves, 447 U.S. at 440, 100 S.Ct. 2271 (applying doctrine when, during a national shortage, South Dakota sold cement from a state-owned plant only to its residents); White v. Massachusetts Council of Constr. Employers, Inc., 460 U.S. 204, 207, 103 S.Ct. 1042, 75 L.Ed.2d 1 (1983) (allowing Boston to require firms seeking public construction contracts to have a workforce of at least fifty percent Boston residents); South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 93, 104 S.Ct. 2237, 81 L.Ed.2d 71 (1984) (plurality) (blocking Alaska from requiring that timber taken from state lands be processed within the state before export since the requirement attempted to control the market after sale of the timber). If a state or local government is a market participant in a business, it may pursue its own economic interests free from the constraints imposed by the Commerce Clause within the market in which it is a participant. Wunnicke 467 U.S. at 97, 104 S.Ct. 2237. This freedom includes the right to choose its own trading partners without regard to whether its choices discriminate against out-of-state businesses, id. at 99, 104 S.Ct. 2237, or favor its own citizens, Alexandria Scrap, 426 U.S. at 810, 96 S.Ct. 2488. In short, the Commerce Clause does not "limit the ability of the States themselves to operate freely in the free market." Reeves, 447 U.S. at 437, 100 S.Ct. 2271.

While the Supreme Court has not recently revisited the doctrine in a waste context, several lower courts have embraced it when state or local governments have engaged in proprietary activities involving waste that "burden" private economic interests. ⁴ For example, in a closely analogous case, the United States Court of Appeals for the Third Circuit held that a county acted as a market participant rather than a market regulator when, in an effort to preserve space in its landfill for local residents, it decided to charge a higher rate to receive and dispose of waste generated outside the county and five nearby counties and to limit the daily amounts that an out-of-state waste processor could dump. The volume limitations caused the out-of-state processor economic hardship because it...