The Second Circuit Court of Appeals has issued a controversial decision upholding a flow control system in two New York counties. Reversing a prior federal district decision, the appeals court ruled that Oneida and Herkimer counties' flow control rules are exempt from the Commerce Clause because the counties designated a publicly owned waste facility for disposal (United Haulers Association Inc. v. Oneida-Herkimer Solid Waste Authority, 2d Cir. July 27, 2001).
In 1988, the two counties created the Oneida-Herkimer Solid Waste Management Authority to coordinate the management of solid waste. Each county subsequently passed a flow control ordinance, requiring haulers in each county to use designated facilities to dispose of solid waste. By 1995, the tipping fee at the counties' transfer station was $86 per ton, although competing facilities in Pennsylvania offered tip fees of less than $30 per ton. A group of local waste haulers sued in federal court in April 1995, alleging the counties' flow control policy violated the Commerce Clause. In March 2000, the court agreed, and the Authority appealed that decision to the Second Circuit Court of Appeals.
The appeals court ruled that the prohibition against flow control established in the 1994 U.S. Supreme Court decision, C&A Carbone v. Town of Clarkstown, only applies to privately owned facilities. The appeals court noted that the Carbone court “repeatedly referenced the private nature of the favored facility and repeatedly alluded to the dangers of allowing local government to favor local industry or a single local business over out-of-state competition.” In the Carbone case, the designated facility was privately owned, whereas in the United Haulers case, the public Authority owns the transfer station.
The appeals court returned the case to the federal district court, whose job now is to balance the legitimate local public interest against the potential impact on interstate commerce, says Barry Shanoff, an attorney for Knopf and Brown and general counsel for the Solid Waste Association of North America (SWANA), Silver Spring, Md.
Although the appeals court did not rule on this issue, it noted that local governments have “compelling” interests in their waste management programs, which, under other decisions, outweigh “any arguable burdens placed on interstate commerce,” according to a court report.
“This case really has the potential to change the rules of engagement between local governments and the private sector,” Shanoff says.
Kevin Young, the plaintiff's attorney, said he was “deeply disappointed by the decision.” Young added that the decision misinterprets the Carbone decision and that he plans on appealing to the U.S. Supreme Court.
According to some industry attorneys, the appeals court decision limits the Supreme Court's Carbone decision in a new way. Although only applicable in the three states covered by the Second Circuit (New York, Connecticut and Vermont), if endorsed by other courts, flow control could be re-established in other parts of the country if the local government owns the favored disposal facility. The National Solid Wastes Management Association (NSWMA), Washington, D.C., and others are evaluating the decision and are deciding whether to appeal to the U.S. Supreme Court. Such a filing would be due in late October.