SOME LAWYERS SEEM TO THINK the Commerce Clause of the U.S. Constitution is the legal system's answer to OxiClean. Local law soiling your business? Simply daub your lawsuit with interstate jargon and — just like that — your legal problems are solved!
Sorry, not this time, says the Nebraska Supreme Court, upholding a tonnage-based city levy.
Folsom, Calif.-based Waste Connections (WC) controls about 20 percent of the collection business in the city of Lincoln, Neb., and operates two landfills in the state located within 35 miles of the city.
Reportedly, only WC, among some 39 licensed waste haulers serving Lincoln, is not locally owned, and only WC does not regularly take the waste it collects within the city to the municipal Bluff Road Landfill. Instead, WC takes waste to its own landfills, where the disposal fee is lower than the per ton fee at Bluff Road.
Under the state's integrated solid waste management law, which requires local governments to prepare comprehensive solid waste plans, the city established programs for recycling, household hazardous waste collection and handling materials banned from landfills. Historically, the initiatives have been funded partially from tipping fees at the city landfill.
Faced with less than optimal revenue at Bluff Road, mostly due to WC's preference for its own landfills, the city considered measures to assure adequate support for its waste management programs. The city enacted an ordinance eliminating the previous occupation tax of $100 per refuse vehicle and substituting a tax of $7 per ton on all refuse collected within the city or any refuse collected outside the city limits and deposited at Bluff Road.
Notably, the tax is not imposed on any waste destined for disposal outside the state. By resolution, the city reduced the tipping fee at Bluff Road from $17 per ton to $10 per ton, reflecting the actual cost of the landfill operation and not the subsidies for the other programs.
WC promptly filed suit against the city, alleging that the ordinance violates the Commerce Clause and other provisions of the U.S. and Nebraska constitutions. The firm sought to enjoin the city from enforcing the measure.
The trial court held that the lawsuit had no legal merit and that WC had not shown irreparable injury justifying an injunction. Specifically, the court found that the ordinance does not violate the Commerce Clause — the ordinance's purpose is to raise revenue, not regulate flow — nor does it discriminate against or unlawfully burden interstate commerce.
The Nebraska Supreme Court granted WC's request for a direct appeal and considered the company's contentions that the lower court had ruled incorrectly. The justices grilled the city's attorney, Bill Austin, extensively at oral argument.
Ultimately, though, the state high court upheld the lower court's denial of injunctive relief. “The ordinance imposes [a tax] on all haulers operating within the city limits,” the opinion stated. “The equal treatment of in-state and out-of-state haulers under an ordinance is not a burden on interstate commerce; rather, it is a burden on intrastate commerce, which is not protected under the Commerce Clause.”
[Waste Connections of Nebraska Inc. v. City of Lincoln, 697 N.W.2d 256 (May 27, 2005)]
The columnist is a Rockville, Md., 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].