WASTE CONNECTIONS v. City of Lincoln, S-03-1356.
| Decision Date | 27 May 2005 |
| Docket Number | No. S-03-1356.,S-03-1356. |
| Citation | 697 N.W.2d 256,269 Neb. 855 |
| Parties | WASTE CONNECTIONS OF NEBRASKA, INC., a Delaware corporation, doing business as Midwest Refuse and Recycling Service, Inc., and Butler County Landfill, Inc., a Nebraska corporation, appellants, v. CITY OF LINCOLN, Nebraska, a city of the primary class of the State of Nebraska, appellee. |
| Court | Nebraska Supreme Court |
Stephen D. Mossman and J.L. Spray, of Mattson, Ricketts, Davies, Stewart & Calkins, Lincoln, for appellants.
Dana W. Roper, Lincoln City Attorney, Margaret Blatchford, and William F. Austin, of Erickson & Sederstrom, P.C., for appellee.
Waste Connections of Nebraska, Inc. (Waste Connections), and Butler County Landfill, Inc. (collectively the appellants), sought declaratory judgment and injunctive relief and challenged the constitutionality of an occupation tax imposed by the City of Lincoln on licensed haulers of solid waste. The district court denied the appellants' motion for injunction. Thereafter, the appellants filed an amended verified petition, which set forth an additional allegation that the city had judicially admitted that the occupation tax did not apply to the appellants under an exception to the tax because a portion of their waste was destined for interstate commerce. The appellants then filed a second motion for injunction, which was denied by the district court. The district court dismissed with prejudice all of the appellants' theories of recovery. The appellants filed an appeal, and we granted their motion to bypass the Nebraska Court of Appeals.
Waste Connections is a Delaware corporation authorized to do business in the State of Nebraska. Waste Connections does business in the city as Midwest Refuse and Recycling Service, Inc., a licensed solid waste hauler which controls an estimated 20 percent of Lincoln's solid waste. Waste Connections also operates two solid waste landfills in Nebraska: Butler County Landfill, which is located outside David City, and G & P Landfill, which is located outside Milford. The appellants allege that of the approximately 39 licensed solid waste haulers servicing Lincoln, Waste Connections is the only one not owned by residents of Lincoln or Lancaster County. The appellants claim that Waste Connections is also the only licensed hauler in the Lincoln solid waste market that does not regularly take Lincoln-generated waste to the Lincoln-operated public landfill, commonly referred to as the "Bluff Road Landfill." Instead, Waste Connections hauls Lincoln-generated waste to the Butler County Landfill and to the G & P Landfill. According to the appellants, these facilities charge less than the $17-per-ton disposal fee charged at the Bluff Road Landfill.
In 1992, the Nebraska Legislature enacted the Integrated Solid Waste Management Act (the Act). See Neb.Rev.Stat. § 13-2001 et seq. (Reissue 1997 & Cum.Supp.2004). The Act set waste reduction and recycling goals, banned selected materials from landfills, and required local jurisdictions to prepare comprehensive solid waste management plans. In response to the Act, the city, through its comprehensive solid waste management plan, established programs for the collection and processing of banned materials. The city also initiated a countywide recycling program and a household hazardous waste collection program. Historically, these programs have been funded in part by the gate fees from the Bluff Road Landfill.
The city acknowledges that Waste Connections' deportation of waste outside the city negatively affected the revenues collected by the Bluff Road Landfill and, therefore, revenue used to fund the city's comprehensive solid waste management program. In response, the city sought a mechanism to ensure that its waste management programs continued to be offered in the city. The city states that it contemplated the adoption of a flow control ordinance, which would have ensured that all waste generated within the jurisdiction would be directed to the Bluff Road Landfill, but recognized that such ordinances had not been received favorably by the U.S. Supreme Court. Therefore, the city instead adopted an occupation tax, which would fund the city's various waste collection programs, and reduced the tipping fee at the Bluff Road Landfill from $17 to $10. According to the city, the purpose of the tipping fee reduction was so that the tipping fee would reflect the actual cost of the landfill operation and not the subsidies for the various collection programs.
On March 17, 2003, Lincoln enacted ordinance No. 18149 and resolution No. A-82000. Ordinance No. 18149 amended Lincoln Mun.Code § 8.32 (1991) relating to solid wastes. Among other things, ordinance No. 18149 eliminated the previous annual occupation tax of $100 per refuse vehicle and established in lieu thereof an occupation tax of $7 per ton on all refuse collected within corporate limits of the city or any refuse deposited at the public sanitary landfills. Under § 5(d)(1) of ordinance No. 18149, the occupation tax is not imposed on refuse destined for deposit at any location outside the state. Resolution No. A-82000, in turn, reduced the tipping fees at the Bluff Road Landfill from $17 per ton to $10 per ton. Both measures were effective June 1, 2003.
Thereafter, the appellants instituted the present action. The appellants sought declaratory judgment pursuant to Neb.Rev.Stat. § 25-21,149 et seq. (Reissue 1995 & Cum.Supp.2004) and a temporary and permanent injunction pursuant to Neb.Rev.Stat. § 25-1062 et seq. (Reissue 1995 & Cum.Supp.2004) on the bases that ordinance No. 18149 violates the dormant Commerce Clause and the 14th Amendment and that the occupation tax is not uniform, in violation of art. VIII, § 1, of the Nebraska Constitution, and is confiscatory.
Shortly following the filing of the appellants' verified complaint, the district court held a temporary injunction hearing. Following this hearing, the district court entered its first order. In this order, the district court found that the purpose of the ordinance was to raise revenue, not regulate flow; that the occupation tax did not violate the Commerce Clause; that the categories in the ordinance are "logical and reasonable"; that the occupation tax is not confiscatory; and that the ordinance is constitutional and authorized by statute.
The appellants then filed a verified amended complaint in which they set forth the additional allegation that the city had judicially admitted that waste destined for material recovery facilities is exempt from the occupation tax. Material recovery facilities are facilities which sort out garbage and place the recyclables from the garbage into the stream of commerce. As alleged by the appellants, the Butler County Landfill is a material recovery facility and, therefore, waste destined for the facility is exempt from the tax; thus, there is no basis for waste destined for that facility to be weighed prior to leaving the city limits.
The appellants then filed a second motion for temporary injunction on the verified amended complaint. A hearing was held on this motion, and the district court entered its second order. In that order, the court held that the new allegation contained in the appellants' verified amended petition was without merit and that the appellants had not sufficiently shown irreparable injury entitling them to injunctive relief. The district court also held in the second order that under the "balance test" set forth in Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970), the burden imposed on the plaintiffs is not clearly excessive in relation to the putative local benefit of raising revenue. Subsequently, the district court entered its third order in which it dismissed with prejudice all theories of recovery in the appellants' verified amended petition. The appellants timely appealed, and we granted their motion to bypass the Court of Appeals pursuant to Neb. Ct. R. of Prac. 2B (rev.2002) and Neb.Rev.Stat. § 24-1106(2) (Reissue 1995).
The appellants assign, restated and consolidated, that the district court erred in concluding that (1) ordinance No. 18149 did not violate the dormant Commerce Clause of the U.S. Constitution; (2) ordinance No. 18149 did not violate the Equal Protection Clauses of the U.S. and Nebraska Constitutions; (3) ordinance No. 18149 is statutorily authorized; (4) ordinance No. 18149 did not contain unreasonable classifications in violation of art. VIII, § 1, of the Nebraska Constitution; and (4) the occupation tax contained in ordinance No. 18149 is reasonable and not a confiscatory fee.
Standing is a jurisdictional component of a party's case because only a party who has standing may invoke the jurisdiction of a court; determination of a jurisdictional issue which does not involve a factual dispute is a matter of law which requires an appellate court to reach an independent conclusion. County of Sarpy v. City of Gretna, 267 Neb. 943, 678 N.W.2d 740 (2004).
The constitutionality of an ordinance presents a question of law, in which an appellate court is obligated to reach a conclusion independent of the decision reached by the trial court. Village of Winslow v. Sheets, 261 Neb. 203, 622 N.W.2d 595 (2001).
Relying on various federal cases, the appellants argue on appeal that the occupation tax imposed by the ordinance is actually a fee, not a tax. The appellants also argue that the district court erred in determining that ordinance No. 18149 is constitutional. They claim that the ordinance violates the dormant Commerce Clause in that it is discriminatory in both purpose and effect. Applying the twotiered analysis adopted by the U.S. Supreme Court, the appellants claim that the ordinance is subject to the "strictest scrutiny" because it discriminates...
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