Waste Reg Usurps Property Rights?

A city-county waste flow control plan discriminates against interstate commerce and may unconstitutionally usurp property rights, according to a ruling by a federal appeals court. (Waste Management Inc. of Tennessee v. Metropolitan Government of Nashville and Davidson County, No. 95-5863, 6th Cir., Nov. 5, 1997.)

The governing authority for Nashville and surrounding Davidson County, known as "Metro," enacted a batch of ordinances and regulations to control locally generated waste.

First, the system required collection companies to transport waste to Metro-approved sites. Next, it imposed a special disposal fee on waste that haulers did not bring to Metro-owned or -designated facilities. Finally, operators of disposal facilities within Metro territory were required to accept, without charge, waste transported in passenger vehicles and to charge no more than $5 per load for waste delivered in pickup trucks.

The plaintiff, Waste Management, is among several companies that are licensed to collect and dispose of waste within Metro's boundaries, but it is the only hauler that also operates a waste disposal facility inside such limits.

The company filed suit in federal district court in 1995 challenging Metro's flow control system. U.S. District Judge Thomas A. Higgins permanently enjoined enforcement of the waste disposal fee provisions, but left intact the flow control regulations and the passenger vehicle and pickup truck ordinance. Judge Higgins ruled that the regulations and ordinance were nondiscriminatory and that the burdens on interstate commerce were not excessive when compared to local benefits.

The U.S. Court of Appeals for the Sixth Circuit upheld the lower court's decision to prohibit Metro from charging the waste disposal fee. It agreed with the district court's conclusion that the fee was "facially discriminatory," citing differential treatment of Metro and non-Metro interests. "[T]he fee is not imposed upon waste disposed of at [Metro-owned facilities] and ... it is only imposed upon the plaintiff and [Browning-Ferris Industries, Houston,] both of whom dispose of waste at facilities outside of Metro's boundaries," the appeals court said.

However, the three-judge appellate panel ruled that Metro's flow control provisions discriminated against interstate commerce and that the governing authority had "other means of advancing [its] legitimate local interests."

The court sent the case back to the district court for further consideration of the plaintiff's claim that the passenger vehicle and pickup truck ordinance constituted a "taking" without just compensation in violation of the Fifth Amendment of the U.S. Constitution. Waste Management had argued that the ordinance amounted to an outright invasion and taking of its facility because the company was required to set off a portion of its property specifically to accommodate arriving cars and trucks.

The appeals court speculated that an exclusive dedication could be "tantamount to [Metro's] physical occupation of plaintiff's property," but handed the lower court the task of deciding whether the ordinance amounted to a physical taking of plaintiff's property and, if so, whether the plaintiff had an opportunity to seek compensation from Metro under Tennessee law.

Under U.S. Supreme Court rulings, a plaintiff cannot bring its "taking" claim directly to federal court unless redress procedures under state law are unavailable or inadequate.

In a separate opinion, handed down a month before the Metro Nashville decision, the same appeals court ruled that a local government does not interfere with interstate commerce by rejecting a proposed landfill that would accept out-of-area solid waste. (Eastern Kentucky Resources v. Fiscal Court of Magoffin County, No. 95-6360, 6th Cir., Oct. 15, 1997.)

In 1991, a landfill developer bought property in Magoffin County and negotiated a contract with county officials to construct a landfill for the disposal of local and out-of-state garbage. The developer agreed to close the county's old landfill and to provide host fees and free residential garbage collection.

The county, for its part, submitted a solid waste management plan to the state, noting its intention to use the private landfill. The state rejected the county's plan and declined to process the developer's landfill application. Meanwhile, a state court invalidated the contract between the county and the developer. After an election changed the make-up of county government, local officials revised the solid waste plan, eliminating any landfill within the county and sending all garbage outside the county for disposal. The state approved the plan.

The developer unsuccessfully sued in federal district court, challenging the constitutionality of the state's waste disposal program. On appeal, the Sixth Circuit ruled that the state program, as implemented by the county, neither burdened interstate commerce nor discriminated against out-of-state interests. Furthermore, the state's legitimate interest outweighed whatever burdens were placed on interstate commerce.