City Regulation of a Scrap Metal recycling facility with testing requirements “more extensive [and] more expensive” than state standards is neither preempted by state law nor unconstitutional, according to a ruling by the Maine Supreme Judicial Court.

For decades, E. Perry Iron & Metal Co. (Perry) has operated a scrap metal recycling facility in Portland, Maine. Since the 1980s, it has held an annual license issued by the city under the state junkyard statute, which sets minimum requirements for these facilities and allows municipalities to regulate aspects of their operations.

In the fall of 2004, following a breakdown in negotiations between Perry and the city regarding redevelopment of the neighborhood where Perry operates and relocation of the facility outside the city, the city adopted a strict scrap metal recycling facilities (SMRF) ordinance. Unflapped, Perry submitted a renewal application for its venerable junkyard permit, but the city ignored it.

In December 2004, Perry filed a complaint in state court challenging the city's failure to act on the application. The trial court initially ruled in favor of Perry, ordering the city to issue a renewal permit effective through September 2006, and the state Supreme Court dismissed the city's appeal of the ruling as premature.

The parties were ordered to return to the trial court, where the judge found — indeed, the parties stipulated — that Perry recycles scrap metal. Perry argued that the SMRF ordinance is preempted by the state solid waste law and, if it is not preempted, then it unconstitutionally denies Perry due process and equal protection of the law, takes property without compensation, and interferes with interstate commerce.

The trial judge ruled that the ordinance is not preempted by the state waste law and is not unconstitutional.

On appeal, the state high court unanimously affirmed the lower court judgment. The court characterized the SMRF ordinance as “far more circumscribed” than local actions previously struck down after the justices concluded that they were preempted by state law.

In particular, “there is no evidence that the SMRF ordinance frustrates the purposes of the [state solid waste law],” the opinion stated. “[T]he scope of the SMRF ordinance … does not challenge the role of the State … in making the ultimate decision in licensing facilities; … and, in regulating scrap metal facilities, it only focuses on a small subset of solid waste facilities.”

As for Perry's constitutional arguments, the high court found that the ordinance has a “rational relationship to a legitimate government end — controlling a source of pollution within the city” and that Perry failed to prove that the city acted in bad faith when it adopted the measure.

In addition, the justices found no denial of due process, nor any deprivation of all practical value or beneficial use of the property. Finally, the court found that Perry failed to prove that the local benefit of the ordinance was outweighed by any burden on interstate commerce.

[E. Perry Iron & Metal Co., Inc. v. City of Portland, 2008 ME 10, Cum-07-176, Jan. 15, 2008]

The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: [email protected].

The columnist is a Rockville, Md., attorney and serves as general counsel of the Solid Waste Association of North America.