Rock n Roll-Off

Court OKs exclusive franchise to haul construction waste.

Exercising its police powers, a county may regulate construction waste by granting an exclusive franchise for its collection and disposal without any unlawful impact on interstate commerce, according to a ruling by the Nevada Supreme Court.

Douglas County, Nev., signed a franchise agreement with Douglas Disposal Inc., giving the company the sole right to collect and dispose of all solid waste within a designated area of the county. At the same time, Wee Haul LLC and NJ Enterprises Inc., without county authorization, began providing roll-off boxes at construction sites within the franchise area and hauling the waste to landfills in Nevada and California.

Douglas Disposal filed suit in state court against Wee Haul and NJ asking for an injunction and damages based on its exclusive rights. Wee Haul and NJ responded by claiming that the agreement was vague and did not cover construction debris. Moreover, they argued, the county had no legal authority to grant an exclusive franchise, and, even if it had the power, the agreement violated the Commerce Clause.

The trial judge refused to grant an injunction or award damages, finding that “construction debris is not injurious to the public health and therefore falls outside the County's police power.” In addition, he ruled that the exclusive franchise, although it does not discriminate against interstate commerce, nevertheless “places an excessive burden on interstate commerce.”

However, the state Supreme Court, which directly considers all appeals from decisions by trial courts, unanimously reversed the lower court's ruling. The justices sent the case back to the lower court judge, directing him to grant an injunction banning the defendants from collecting and transporting construction waste within the franchise area.

“We reject the district court's determination that construction waste does not pose public health and safety concerns,” the opinion stated. “[S]uch waste could contain materials adverse to human health … or may create other safety hazards … [and] can create a public nuisance.”

Besides, the opinion continued, state law authorizes counties to manage all kinds of solid waste, including construction waste, by exclusive franchises if they chose to do so. Thus, Douglas County, whose solid waste management plan specifically includes an exclusive franchise for construction waste, has the right to engage Douglas Disposal as it did.

On the interstate commerce issue, the high court agreed with the lower court that the franchise was not discriminatory, but found no appreciable burden on commerce and considerable local benefits.

Citing precedents from California and New York and noting that government is “afforded great deference when it legislates matters regarding the protection of its citizens' health and well-being,” the justices concluded that the county has “a legitimate, if not compelling interest in regulating construction waste through an exclusive franchise.”

Oddly, the court introduced a new factor in assessing burden — whether an available, less burdensome alternative existed — but then declined to address it as the defendants had not raised the issue.

[Douglas Disposal, Inc. v. Wee Haul, LLC, No. 44862, 123 Nev. Adv. Op. No. 51, Nov. 8, 2007.]

The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: [email protected].

The columnist is aRockville, Md., attorney and serves as general counsel of the Solid Waste Association of North America.