Flow Control Ruled Discriminatory

A town ordinance violates the Commerce Clause of the U.S. Constitution if it requires all local solid waste and recycling residue, as well as non-recyclable wastes brought into the town, to be processed at a designated transfer station before leaving town, according to a ruling by the U.S. Supreme Court (C&A Carbone Inc. v. Town of Clarkstown, Docket No. 92-1402).

After closing the town's landfill, officials in Clarkstown, N.Y., contracted with a private company to build and operate a transfer station. Under the arrangement, the town would take over the facility after five years in exchange for a nominal payment. To assure the company a return on its investment, the town guaranteed a minimum waste flow to the transfer station and approved an $81-per-ton tipping fee at the facility, which was higher than the disposal cost of unsorted waste on the private market. If the transfer station received less than the guaranteed tonnage, the town promised to cover the tipping fee deficit. To minimize the chances of a waste shortage, the town adopted a flow control ordinance.

The high court found that this or-dinance regulated interstate commerce by driving up the cost for out-of-state interests to dispose of their wastes and by preventing out-of-state businesses from competing with the operator in the local market.

Writing for a five-member majority, Justice Anthony Kennedy said, "The flow control ordinance discriminates [against interstate commerce], for it allows only the favored operator to process waste that is within the limits of the town." Citing earlier cases where the court had invalidated local processing requirements, Justice Ken-nedy noted that "the essential vice in laws of this sort is that they bar the import of the processing service."

As the court saw it, Clarkstown had nondiscriminatory alternatives to assure the safe handling and proper treatment of solid waste, such as uniform safety regulations to ensure that lowball competitors would not cut corners on environmental matters. However, the town could not use a flow control ordinance to steer solid waste away from out-of-town disposal sites that might be environmentally substandard. Such a restriction would unlawfully extend the town's police power, the court stated.

The majority suggested that if the town needed special financing measures to ensure the long-term survival of the facility, it could subsidize the facility through general taxes or municipal bonds.

In a separate opinion, Justice Sandra Day O'Connor gave different reasons for agreeing that the ordinance violated the Commerce Clause. Unlike her colleagues who sided with Justice Kennedy, she did not think the ordinance discriminated a-gainst interstate commerce.

"[The ordinance] does not give more favorable treatment to local interests as a group as compared to out-of-state or out-of-town economic interests," she wrote. Nevertheless, she believed that the local law's burden on interstate commerce outweighed the town's interest in a guaranteed supply of waste for its project.

Justice David Souter wrote a dissenting opinion, joined by Justices Harry Blackmun and William Rehn-quist. "There is no indication in the record that any out-of-state trash processor has been harmed or that the interstate movement or disposition of trash will be affected one whit," he said.

The Commerce Clause does not prevent Clarkstown residents "from attacking their local garbage problems with an ordinance that does not discriminate between local and out-of-town participants in the private market for trash disposal services and that is not protectionist in its purpose or effect," he added. In-deed, the ordinance "conveys a privilege on the municipal government alone, the only market participant that bears responsibility for assuring that adequate trash processing services continue to be available to Clarkstown residents," Justice Souter concluded.

In striking down the ordinance for its allegedly exclusionary effect on out-of-state businesses, the court seemingly ignored the fact that the town had widely publicized its invitation for transfer station proposals. In fact, the town received bids on the project from companies of all sizes, including Browning-Ferris Industries and Waste Management Inc., and even from an out-of-state firm owned by a high-ranking individual in the Carbone group, according to town attorney Richard Glickel.

Ironically the town may not suffer too badly from the ruling. For one thing, town officials hope to renegotiate the put-or-pay arrangements with the contractor. For a-nother, some New Jersey trash haulers, who face in-state tipping fees significantly higher than $81 per ton, may decide to snub the state's now-questionable comprehensive trash flow system and instead head straight for the Clarkstown facility.