County ordinances that force haulers to transport locally generated waste to designated publicly owned facilities do not discriminate against interstate commerce, according to a federal appeals court decision. [United Haulers Association Inc., et al. v. Oneida-Herkimer Solid Waste Management Authority, et al., No. 00-7593, 2d Cir., July 27, 2001] Nevertheless, such restrictions cannot be upheld if the burdens on interstate commerce outweigh the legitimate local benefits, the court added.

Two neighboring counties in New York jointly developed and implemented a comprehensive waste management system that includes recycling and composting facilities, a transfer station, a waste-to-energy plant and landfills. For its part, the state created a bi-county waste authority, which contracted with the counties to manage solid waste within their areas.

As part of the arrangement, the counties passed laws requiring solid waste to be delivered to authority-designated facilities. Private haulers cannot operate in the counties unless they have a permit from the authority. Under the authority's rules, haulers face permit revocation and fines if they fail to deliver all waste and recyclables to designated facilities. The authority owns and operates all waste facilities in the counties, except for the transfer station, which is privately operated by a contractor.

Several hauling companies and their trade association filed suit against the counties and the authority in federal district court. The plaintiffs claimed that the flow control laws discriminated against interstate commerce by preventing the haulers from transporting and disposing of waste at less costly, in- or out-of-state facilities. The district court agreed with the haulers, declaring the flow control laws unconstitutional and prohibiting their enforcement.

A three-judge appellate panel ruled that the district court wrongly concluded that flow control laws are automatically illegal and failed to “recognize the distinction between private and public ownership of the favored facility.”

As the appeals court saw it, the U.S. Supreme Court's decision outlawing flow control [C&A Carbone Inc. v. Town of Clarkstown, 511 U.S. 363 (1994)] was based on favoritism toward local private interests at the expense of out-of-state private interests. By comparison, the county ordinances do not discriminate because they benefit public facilities, but treat all private businesses equally, no matter where they are located.

The appeals court sent the case back to the district court with instructions to conduct a “fact intensive” hearing on whether the ordinances impose burdens on commerce that substantially outweigh valid local objectives.

Without prejudging evidence that the parties might present, the appellate panel cited a 1995 ruling that waste management programs serve “legitimate — indeed, compelling — [local] interests.”

Moreover, “the fact that a municipality is acting within its traditional purview must factor into the district court's determination,” the court added.

While the decision by no means resurrects full frontal flow control, it nevertheless creates a climate that some public entities may find devilishly attractive.

The columnist is a Washington, D.C., attorney and serves as general counsel of the Solid Waste Association of North America.

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