Interloper Interdicted

A federal law, enacted in 1994 to deregulate the motor carrier industry, does not pre-empt local authority over solid waste collection, particularly the power to grant an exclusive franchise, according to a California appeals court. [Pleasant Hill Bayshore Disposal Inc. v. Chip-It Recycling Inc., No. A092831, Cal. Ct. App. Dist. 1, Aug. 14, 2001]

Pleasant Hill has an exclusive franchise for the collection and disposal of “solid waste” within the boundaries of the Central Contra Costa Solid Waste Authority, and it has a similar franchise for collection and disposal of “garbage, rubbish and recyclable/salvageable materials” within the city of Antioch. Chip-It collects recyclable C&D debris from construction sites and other commercial sites, and hauls both source-separated and mixed loads of recyclable materials from its customers to processors.

Pleasant Hill filed suit to halt interference by Chip-It with its franchises. The Contra Costa County Superior Court handed down an injunction, which blocked the defendant from soliciting waste collection and disposal jobs within the boundaries of the city and the authority. The order also prevented Chip-It from hauling or disposing of solid waste, but allowed it to collect source-separated recyclable material, including C&D debris, if at least 80 percent of such material were actually recycled and reused.

Chip-It appealed, arguing that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) pre-empts local regulation of its recycling activity and nullifies the plaintiff's franchises. Section 601(c) of the FAAAA bans state and local laws and regulations affecting the transportation of “property.” Chip-It insisted that the material it hauls has value and thus qualifies as property. While acknowledging that a federal district court had agreed in a similar case [A.G.G. Enterprises Inc. v. Washington County, et al., No. CIV99-1097-KI, D.Or., Apr. 6, 2000], which currently is on appeal, the California appellate panel refused to follow the reasoning in the federal decision. [See related article, Waste Age, July 2000, page 168]

Principally, the appeals court could not find in the FAAAA a clear intent by Congress to displace local control over garbage and refuse collection, which is, as the court put it, “a field where [such] authority has been traditionally accepted as pre-eminent.” As a secondary matter, the justices were skeptical of Chip-It's claim that the materials it transports constitute “property,” which the FAAAA does not define but purports to exempt from local control. C&D debris “has a negative value as a commodity … [and] does not have the attributes commonly associated with the word property,” the opinion said, citing a decision from the Interstate Commerce Commission.

Moreover, the court noted, the C&D debris generators pay Chip-It to remove the material from jobsites, which, under the state waste management law, “makes the materials discarded ‘waste’ and therefore subject to Pleasant Hill's exclusive franchises.”

The appeals court opinion refutes the notion of FAAAA pre-emption of local control in waste management matters, but, of course, does not represent the last word from the courts — in California or elsewhere.

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].