Flow Has No Mo'

THERE IS NO SAFE HARBOR for flow control to publicly owned facilities, says a federal appeals court, rejecting an unconventional interpretation of the U.S. Supreme Court's historic Carbone decision.

Under Kentucky law, counties are responsible for developing and implementing solid waste management plans for their jurisdictions. In 2004, Daviess County decided that it would meet its obligations by passing an ordinance providing for municipal solid waste collection through nonexclusive franchises. According to the ordinance, which the county decided not to enforce until it had been approved by a federal court, no hauler can collect waste without signing a franchise agreement that requires, among other things, that all collected waste be disposed of at county-operated facilities.

Republic Services of Kentucky is a duly registered, licensed and operating waste collection business in the county. The company has disposed of waste at the county transfer station or at its own landfill in Kentucky, and wants to continue to do so. It also anticipates disposing of waste out-of-state.

The National Solid Wastes Management Association, on behalf of Republic, sued the county in federal district court alleging that the ordinance discriminates against interstate commerce. The county apparently hoped the district judge would adopt the rationale of the United Haulers case from the U.S. Court of Appeals for the Second Circuit, which upheld an overt flow control measure enacted by two New York counties. The court ruled that the 1994 Carbone decision (finding flow control discriminates against interstate commerce) only applies when the designated facility is privately owned.

Alas, the district judge was unsympathetic to Daviess County's plea. The district court rejected the public/private distinction in the United Haulers case, and instead ruled that the Daviess County provision resembles similar requirements that the federal appeals court serving Kentucky has consistently invalidated. In addition, the court declined to exempt the county's solid waste program from the Commerce Clause by viewing it as “market participation.” As the court saw it, the county was using its regulatory power to force haulers to buy disposal services from it rather than from another disposal service provider in-state or out-of-state.

Inexplicably, the county sought a change of fortune by appealing the ruling to the U.S. Court of Appeals for the Sixth Circuit — the same appeals court that had already twice struck down overt flow control measures. For its effort, the county enabled the appellate court (a) to notch a record-setting third repudiation of in-your-face facility designation and (b) to provide a compelling counterpoint to the United Haulers rationale.

How weak was the county's case? A good indication are the words the appeals court used to describe the county's arguments: “strange,” “lack[ing] merit,” “unconvincing and merit[ing] only a brief response” and “absurd.”

The appellate panel refused to overturn its prior decisions by adopting the public/private distinction. “[P]ublic ownership does not change the … Commerce Clause inquiry,” the court said.

“[T]he crux of the inquiry is whether the local ordinance burdens interstate commerce, not whether the local entity benefited … is publicly owned.”

[National Solid Waste Management Association v. Daviess County, 434 F.3d 898 (6th Cir. 2006)]

The columnist is a Rockville, Md., attorney and serves as 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.