Valley Vista v. City of Monterey Park

• Decision Date: 17 May 2004
• Docket Number: No. B168056.,B168056.
• Court: California Court of Appeals Court of Appeals
• Parties: VALLEY VISTA SERVICES, INC., Plaintiff and Appellant, v. CITY OF MONTEREY PARK et al., Defendants and Respondents.

13 Cal.Rptr.3d 433

118 Cal.App.4th 881

VALLEY VISTA SERVICES, INC., Plaintiff and Appellant, v. CITY OF MONTEREY PARK et al., Defendants and Respondents.

No. B168056.

Court of Appeal, Second District, Division 8.

May 17, 2004.

Law Offices of Michael B. Montgomery, Michael B. Montgomery, El Monte, CA, and Charles R. Martin, Sierra Madre, CA, for Plaintiff and Appellant.

Gibson, Dunn & Crutcher, Robert E. Palmer, Christopher L. Pitet, Irvine, CA, and Joshua A. Jessen, Denver, CO; Brown, Winfield & Canzoneri, Mark W. Steres and Jennifer A. Vargas, Los Angeles, CA, for Defendants and Respondents.

RUBIN, J.

INTRODUCTION

Under the California Integrated Waste Management Act of 1989 (Pub. Res.Code, § 40000, et seq.), local agencies are allowed to grant exclusive operating rights to solid waste disposal companies. (Pub.Res.Code, § 40059, subd. (a)(1).)¹ If other disposal companies have been authorized by the agency to operate within the municipality's boundaries for more than three years, the agency may notify them that as a result of the exclusive franchise, their operating rights will expire within five years. (§ 49520.)² At issue here is whether a city ordinance which prevents a waste disposal company that has received the five-year termination notice from soliciting new business during that five-year period conflicts with the Act. We conclude it does not.

FACTS AND PROCEDURAL HISTORY

The Act requires local agencies to divert from landfills half of the trash they produce, either by recycling or other means. By early 2002, the City of Monterey Park (the city) had not complied with those requirements and faced the prospect of a compliance order and daily $10,000 fines. In order to meet its obligations under the Act, the city decided to grant an exclusive franchise for residential, commercial and industrial waste disposal services to Athens Services (Athens). Athens already had an exclusive franchise over residential waste disposal within the city and handled roughly 99 percent of all waste disposal accounts. The new 15-year exclusive contract offered several advantages, including use of a materials recovery facility, automated collection containers, higher customer service standards, and a reduced number of trash collection vehicles.

On May 23, 2002, the city notified Valley Vista that it was planning to award an exclusive waste disposal franchise.³ At that time, Valley Vista serviced just 15 commercial waste disposal accounts. Valley Vista was notified that it could continue to operate under section 49520 for up to another five years, but only as to its then-current accounts. Valley Vista ignored that directive and added several new customers. After being warned by the city, Valley Vista's lawyer challenged the new business restriction, contending that because section 49520 said nothing about taking on new accounts, Valley Vista was allowed to do so during the five-year termination period. In response, the city amended its waste disposal ordinance to state that waste disposal companies which received the May 23 termination notice were limited to servicing their then-existing accounts.

After the ordinance was amended, Valley Vista sued the city, filing a mandate petition which alleged that the state had preempted any local waste disposal ordinances, making the amendment unconstitutional. Valley Vista's petition also named Athens as a real party in interest. After a bench trial, based on the parties' briefs and exhibits, the court denied the petition, finding that the city's amended ordinance was not preempted by, and did not conflict with, state law. Valley Vista appeals.

STANDARD OF REVIEW

Because the issues raised on appeal call for the interpretation of statutes and ordinances, we exercise our independent review. (Big Creek Lumber Co. v. County of Santa Cruz (2004) 115 Cal.App.4th 952, 966, 10 Cal.Rptr.3d 356 (Big Creek Lumber).)

DISCUSSION

1. The Act is Silent About Soliciting New Customers During the Phase-Out Period

By 1988, landfills throughout the state were nearly filled, and we were figuratively awash in our own trash. To meet this crisis, the Legislature passed the Waste Management Act. Its goals were to reduce, recycle and reuse solid waste to the extent possible. Local agencies such as cities which were responsible for waste disposal within their boundaries were obliged to enact comprehensive waste management plans that would eventually divert half of their trash from landfills. (City of Alhambra v. P.J.B. Disposal Co. (1998) 61 Cal.App.4th 136, 138, 71 Cal.Rptr.2d 364 (City of Alhambra).) The Act is designed to protect the environment, improve regulation of existing landfills, ensure that new landfills are environmentally sound, improve permitting procedures for solid waste management facilities, and specify the responsibilities of local governments to develop and implement integrated waste management plans. (Ibid.)

The Act gives local agencies discretion to grant exclusive waste disposal franchises. (§ 40059, subd. (a)(2).) Section 49520 provides: "If a local agency has authorized, by franchise, contract, license, or permit, a solid waste enterprise to provide solid waste handling services and those services have been lawfully provided for more than three previous years, the solid waste enterprise may continue to provide those services up to five years after mailed notification ... by the local agency having jurisdiction that exclusive solid waste handling services are to be provided or authorized, unless the solid waste enterprise has an exclusive franchise or contract. [¶] If the solid waste enterprise has an exclusive franchise or contract, the solid waste enterprise shall continue to provide those services and shall be limited to the unexpired term of the contract or franchise or five years, whichever is less." (Italics added.)⁴

As Valley Vista points out, section 49520 does not state that a trash hauler which receives a termination notice may not solicit new business during the allowed termination period. According to Valley Vista, its right to do so is implicit in the Legislature's statement that it "may continue to provide those [waste disposal] services" during that time. Valley Vista contends the city's amended ordinance restricting its right to seek new customers conflicts with section 49520. (See Cal. Const., art. XI, § 7 [cities may make and enforce all local police, sanitary, and other ordinances that do not conflict with general laws].) In short, Valley Vista contends that because it was lawfully entitled to augment its customer base as part of providing services before receiving the statutory phase-out notice, section 40059, subdivision (a)(2) grants it the right to keep doing so during the phase-out period.

The problem with that argument is that it has no support in either the legislative history or the plain meaning of the statute. The term "those services" is equally susceptible of meaning the serving of those clients the hauler had as of the notification date. Valley Vista argues that if that is what the Legislature meant, it would have used the phrase "continue to serve existing accounts." The easy rejoinder to that contention, however, is that the Legislature could equally have said "provide or expand such service," or "nothing contained herein shall restrict a waste hauler's right to expand its business during the phase out period." We therefore agree with Judge Yaffe, who in denying the mandate petition in the trial court, wrote that the Act "is silent as to whether or not the nonexclusive haulers can solicit or accept new business during the five year period."

2. The Ordinance Does Not Conflict With State Law

Even though the Act is silent on the solicitation of new business, the city's ordinance might be unlawful if it conflicts with state law. A local ordinance conflicts with state law if it enters an area that has been preempted by state law, or if it otherwise duplicates or contradicts the general law. (Sherwin-Williams Co. v. City of Los Angeles (1993) 4 Cal.4th 893, 897, 16 Cal.Rptr.2d 215, 844 P.2d 534 (Sherwin-Williams.))

Preemption may be express or implied. Express preemption requires an express statement by the Legislature that it intends a state law to fully occupy the area. (Big Creek Lumber, supra, 115 Cal.App.4th at p. 983, 10 Cal.Rptr.3d 356.) Implied preemption may take many forms, but it cannot exist if the Legislature has expressed its intent to permit local regulations or where the statutory scheme recognizes local regulations. (People ex rel. Deukmejian v. County of Mendocino (1984) 36 Cal.3d 476, 485, 204 Cal.Rptr. 897, 683 P.2d 1150.) The Waste Management Act does not include an express preemption clause. On the contrary, it specifically allows for continued local waste disposal regulations, vesting local agencies with considerable discretion in that area. (§§ 40001, subd. (a) [state and local agencies share responsibility for waste disposal]; 40059, subds. (a)(1), (2) [local agencies may determine aspects of solid waste handling of local concern, including but not limited to the nature, location, and extent of providing disposal services and whether the services shall be provided by exclusive contract]; 40703 [local government responsibilities are integral to the successful implementation of the Act].) Given these provisions and the fact that local agencies through their traditional police power have played the dominant role in local sanitation matters, the Act does not impliedly preempt the field of waste disposal. (Waste Resource Technologies v. Department of Public Health (1994) 23 Cal.App.4th 299, 305-309, 28 Cal.Rptr.2d 422.)

That leaves duplication and contradiction of state law as the only remaining bases for determining whether the city's ordinance conflicts with the Waste Management Act. An ordinance that is coextensive with a state law is duplicative. (Sherwin-Williams, supra, 4 Cal.4th at p. 897, 16 Cal.Rptr.2d 215, 844...