Court Issues Permanent Injunction on Dallas Flow Control

This story has been updated with reaction from National Solid Wastes Industry Association officials.

A federal court has granted a permanent injunction against Dallas’ attempt to institute waste flow control, and the solid waste industry's main trade association expressed pleasure with the decision.

The U.S. District Court for the Northern District of Dallas granted the injunction request by the National Solid Wastes Management Association (NSWMA) and several haulers, determining that the city did violate the Contract Clause of the U.S. Constitution as well as Texas state law and the Dallas city charter. The court determined that the city enacted the law for economic gain “at the expense of the franchisees’ rights. This is an unreasonable exercise of its police powers,” the court said in its ruling.

“NSWMA is very gratified by the district court’s decision in this case," said Sharon Kneiss, NSWMA president and CEO, in a news release. "Our efforts – especially those of NSWMA’s Texas chapter – demonstrate NSWMA will not hesitate to protect the rights of its members and our industry and promote free enterprise.”

“This decision is a significant victory of solid waste industry in general and for our members in Texas in particular,” said David Biderman, general counsel and director, safety, in an interview.

Biderman says it was significant that Judge Reed O’Connor not only upheld the NSWMA claim on the U.S. Constitutional issue, but on two other claims as well. The law violated vested rights for franchisees under the Texas’ due course of law provision. And it violated the city’s charter by not providing haulers with an opportunity for a fair hearing.

Dallas has a month to appeal the decision. “We expect this decision to not only be upheld if an appeal is filed, but also to deter other local governments from unlawfully implementing flow control laws,” said Tom Brown, chairman of NSWMA’s Texas chapter and senior vice president and chief operating officer at Progressive Waste Solutions Ltd.

“The fact that the judge had more than one reason for ruling it invalid makes a potential appeal by the city of Dallas that much more challenging,” Biderman says. While he doesn’t know whether what the city’s intentions are, “I’m hopeful that the city officials will recognize that the path they chose was unlawful and will not continue to pursue this case. It has been going for nearly a year now; hopefully it won’t go on any further.”

In January the court had issued a preliminary injunction against Dallas September 2011 law directing Dallas waste to go to the city’s McCommas Bluff landfill. NSWMA and several other parties filed a suit to stop the law, saying it is anti-free enterprise and would discourage recycling.

“This decision demonstrates the importance of an strong trade association for the sold waste and recycling industry in these challenging economic times.” Biderman says. “Local governments are creatively seeking to increase revenue associated with solid waste and recycling activities. NSWMA and its members will continue to vigilantly oppose such efforts and will not hesitate to protect the rights of its members in court.”