Would-Be Landfiller Loses To Town Commerce

A local government does not interfere with interstate commerce when it prohibits the disposal of waste except at a municipally-operated transfer station or landfill, according to a federal appeals court ruling; Gary D. Peake Excavating Inc. v. Town Board of the Town of Hancock, No. 95-9280 (2d Cir. August 22, 1996).

Peake Excavating does demolition and excavating work in New York and Penn-sylvania, generating much construction and demolition (C&D) debris. Peake maintains an office and equipment facility on a 614-acre site in Hancock, N.Y.

In 1988, New York State environmental officials issued comprehensive regulations for C&D debris landfills. Until then, C&D disposal went unregulated, and Peake had disposed of such debris on company property. Peake applied for a C&D landfill permit in January 1991, intending to handle its own waste as well as material from others. The business estimated that the proposed landfill would generate at least $4 million in tipping fees.

In February 1991, the Town Board enacted Law No. 1, which, as a matter of policy, states:

"that the ... dumping of garbage and rubbish is likely to constitu[te] a hazard and menace to the health and safety of [town] residents ... it is therefore the intent of this Local Law to prohibit dumping and the operation of dumps ..." The law also prohibits the operation of a dump and the dumping of waste "except at a municipally operated transfer station or landfill."

Hancock operates a transfer station where anyone can dispose of up to 100 square feet of C&D debris. The County landfill, which does not accept out-of-county waste, is located 50 miles away.

Unable to construct a C&D landfill on its property, Peake filed suit in federal district court in 1994. The company argued that the ordinance illegally interfered with interstate commerce. In April 1995, the district court ruled that the town's ban on privately-operated landfills and transfer stations did not violate the Com-merce Clause. Peake appealed.

The U.S. Court of Appeals for the Second Circuit af-firmed the district court's ruling that the ordinance did not discriminate against out-of-state waste. As the three-judge panel saw it, the declared policy of the ordinance was to protect the health and safety of the town's residents. "[T]he discussions during Board meetings re-lated primarily to ... health and safety concerns," the opinion noted.

What's more, the court continued, the ordinance treats out-of-state waste the same as locally generated waste. The re-strictions on waste dump operations and the dumping of waste materials, except at the town-operated transfer station or landfill, "apply equally to all waste."

Differentiating "flow control" decisions by the U.S. Supreme Court in C&A Car-bone, Inc. v. Town of Clarkstown and by the Second Circuit in SSC Corp. v. Town of Smithtown, the opinion said: "The ordinances in Carbone and SSC Corp. were ... discriminatory because they required all waste within the town to be disposed of at one favored local facility, to the exclusion of out-of-state competitors, according to the court."

"Law No. 1, in contrast, does not require that all waste be disposed of at a single facility, does not prevent town residents from disposing of waste at any [non-local] facility, nor does it deny any [non-local] competitor access to the town's waste market," the opinion continued.

Therefore - finding no discrimination against interstate commerce - the appeals court applied a balancing test under which an ordinance or regulation will be upheld unless the burden on interstate commerce clearly outweighs the local benefits.

Peake contended that the ordinance burdens interstate commerce by effectively preventing it from performing demolition jobs in Pennsylvania and by depriving it of substantial revenues from tipping fees. However, the appellate panel found no evidence that the ordinance would prevent the company from performing jobs in Pennsylva-nia.

"The ordinance simply precludes Peake Excavating from disposing of all but a limited amount of C&D debris in the town," observed the court. "The ordinance imposes the same burden on other New York and Pennsylvania contractors with whom Peake Excavating competes. More importantly, the ordinance applies equally to all waste, regardless of its ... origin."

As for lost tipping fee revenue, the same burden be-falls any local or out-of-state private entity that wants to operate a landfill in Hancock, the appeals court concluded.

By comparison, the court noted, "Law No. 1 provides the town with legitimate local benefits." Prohibiting private C&D landfills and the dumping of C&D debris was based on the need to protect public health and safety, which "consistently has been recognized as an important local interest," the opinion said.