Wisconsin Flow Control Overruled

It's back to the drawing board for Wisconsin's solid waste recycling program, thanks to a ruling by a federal appeals court.

In 1989 Wisconsin lawmakers passed a bill to manage the flow of solid waste into the state's landfills. A key provision banned disposal of enumerated recyclable materials. The prohibition, however, did not apply to solid waste generated in a county or municipality with an "effective recycling program," which the law defined as a mandatory recycling program for all entities and enforceable by local ordinance.

The state's Department of Natural Resources (DNR) was authorized to review proposed county and municipal recycling programs to determine whether they are "effective." For out-of-state localities, the DNR could approve such programs only after formal rule making and additional procedural requirements.

The state law also prohibited the disposal of out-of-state waste at Wisconsin landfills unless such state had an "effective siting program" for new solid waste disposal capacity.

Last December, a federal district court struck down the formal rule making requirements for out-of-state municipalities and the ban on in-state disposal of wastes from states without an effective landfill siting program. U.S. District Judge John C. Shabaz ruled that the law's two provisions illegally discriminated against out-of-state interests in violation of the Commerce Clause of the U.S. Constitution.

The court, however, refused to summarily invalidate the state's ban on landfill disposal of recyclable materials from communities without a DNR-approved recycling program. As Judge Shabaz saw it, requiring localities to establish recycling programs that satisfied Wisconsin standards did not automatically benefit in-state over out-of-state interests.

Waste industry representatives and several service providers had argued that the prohibition blatantly discriminated against interstate commerce. Rejecting this claim, the district judge ruled that a formal trial would be necessary to compare the burdens of the mandatory recycling program on out-of-state communities with the program's alleged benefits to Wisconsin. The waste industry and service firms promptly appealed.

In August, the U.S. Court of Appeals for the Seventh Circuit overturned the lower court decision, ruling that no trial was needed because the state's mandatory recycling requirement overtly and unlawfully discriminated against interstate commerce.

The appellate court seemed most troubled by the requirement that all generators in the place-of-origin observe the DNR recycling rules "whether or not they actually dump waste in Wisconsin." This condition created an unfair burden on generators whose waste will never be dumped in Wisconsin but who still must comply so that others in the community can landfill there, the court said.

"The Wisconsin statute reaches across ... the state line and regulates commerce occurring wholly outside Wisconsin," wrote Judge Kenneth Ripple in the unanimous opinion.

"Wisconsin could realize its goals ... by mandating that all waste entering the state first be treated at a materials recovery facility with the capacity to effect the separation of recyclables," the ruling said. "Given the existence of such a nondiscriminating alternative that serves adequately Wisconsin's legitimate concerns, the discriminatory legislation cannot be justified."

While conceding that Wisconsin has a legitimate and substantial interest in protecting its landfills, the court said the state has no right to insist that out-of-state entities abide by Wisconsin rules regardless of whether they plan to send waste into the state for disposal.

(National Solid Wastes Management Association v. Meyer, No. 94-4006, 7th Cir., Aug. 23, 1995).

Legislative Limbo. Small business expected help from a Republican-dominated Congress. So far, however, key legislation seems to be stalled. Take, for example, the Regulatory Flexibility Act.

The act requires federal agencies to consider how proposed regulations will affect small businesses. These businesses now want Congress to amend the law so that small companies can sue federal agencies that ignore the act.

Despite support from the Small Business Administration, the White House and both parties, the measure is in legislative limbo. The amendment was linked to the comprehensive Republican regulatory reform package, which the Senate defeated in July.

Some small-business supporters will try to convince the Senate to consider the proposed amendment on its own merits. However, most small-business groups staunchly support the reform package as a whole.

Sham recycling. A landlord who fails to keep tabs on the activities of a tenant can be held liable for environmental problems that the tenant causes, according to a ruling by an Illinois judge.

In the late 1980s, Asphalt Recovery Systems began piling asphalt debris on a seven-acre site in Chicago owned by D. Raymond Shane who had leased the property to Asphalt Recovery. The company claimed it was stockpiling the material to recycle for road patching work, according to an attorney for the city. In 1989, the city sued Asphalt Recovery for operating a landfill on the site without a permit and won a $4.8 million judgment for cleanup costs. The decision was upheld on appeal.

After Asphalt Recovery went out of business in 1993 leaving no usable assets, the city sued Shane. The city contended that Shane had a duty to check up on his tenant and, having failed to do so, he was responsible for any environmental damage. The city code contains a provision that saddles landlords with financial responsibility for environmental cleanups.

In August ,a Cook County circuit court judge ruled that, under the city code, Shane was responsible for cleaning up the 300,000 tons of debris on his property.

Chicago's environmental commissioner Henry Henderson hailed the decision as a new weapon for the city against sham recycling. "Unscrupulous operators who masquerade as recyclers think they can dump their trash in Chicago and let the taxpayers clean it up," he said. "This ruling makes it clear that Chicago is enemy territory for dumpers and their business partners."

Shane's attorney promises an appeal.