A Win/Lose Situation

Private Pennsylvania haulers sees its flow control victory evaporate on appeal.

Some 40 years ago, Frank Sinatra first crooned about “riding high in April, shot down in May.” That's life, so the song says. And like life, litigation in the waste industry has its ups and downs.

Ol' Blue Eyes was making what would be his last national tour in 1991 when Lebanon County, Pa., adopted a waste management plan utilizing flow control to assure the continued disposal of local waste at a landfill owned and operated by the Greater Lebanon Refuse Authority (GLRA). To implement the plan, the county passed an ordinance handing GLRA responsibility for the county's waste management and establishing licensing and waste flow requirements.

In 2003, Lebanon Farms Disposal, a licensed hauler, openly and defiantly transported waste to a landfill outside of the county. After GLRA fined Lebanon Farms, the company filed suit in federal district court alleging that the flow control ordinance violated various state laws and federal laws, including the Commerce Clause of the U.S. Constitution. In 2006, the district court, relying on C&A Carbone Inc. v. Clarkstown, 511 U.S. 383 (1994), held that the flow control requirements discriminated against interstate commerce and failed the then-applicable strict scrutiny standard for constitutionality. The court enjoined the county and GLRA from enforcing the ordinance.

While the county and GLRA were appealing the ruling, the U.S. Supreme Court decided United Haulers Ass'n v. Oneida-Herkimer Solid Waste Management Authority, 127 S.Ct. 1786 (2007). In that ruling, the high court determined that the strict, nearly insurmountable “per se rule of invalidity” commonly used to evaluate flow control measures favoring private entities does not apply when flow control benefits public waste facilities.

Wasting no time, the county and GLRA filed a motion asking the appeals court to immediately dissolve the injunction, send the case back to the district court and instruct the district court to decide the case in favor of the local government. Instead, the court ordered the parties to file a new set of briefs regarding the impact of the decision.

Keep in mind that the United Haulers decision did not give free rein to flow control ordinances designating public facilities. A plurality of the Supreme Court concluded that such ordinances still are subject to a balancing test.

“[W]e will uphold a nondiscriminatory statute like this one ‘unless the burden imposed on [interstate] commerce is clearly excessive in relation to the putative local benefits,’” wrote Chief Justice John Roberts. The Supreme Court did not remand the case because the record on appeal (that is, the testimony and other evidence from district court's fact-finding hearing) strongly favored Oneida and Herkimer counties.

Finding the Lebanon County case “indistinguishable from United Haulers in all material ways,” the Third Circuit vacated the district court ruling and lifted the injunction. But, unable to conduct the balancing test on the existing record, the appeals panel remanded the case to the lower court where the judge will make findings of fact and conclusions of law on the burdens and benefits and on all other remaining issues in the case.

As for the hauler, it just might heed the lyric and “pick [itself] up and get back in the race.”

[Lebanon Farms Disposal, Inc. v. County of Lebanon, No. 06-3473, 3d Cir., Aug. 6, 2008.]

BARRY SHANOFF is a Rockville, Md., attorney and general counsel of the Solid Waste Association of North America.

The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: shanoff@knopf-brown.com.