City Ordinance Vetoed

A municipal ordinance does not discriminate against interstate commerce by requiring haulers to use an in-state facility unless haulers take their loads out-of-state for disposal, according to a federal appeals court ruling. Nevertheless, such a restriction can unlawfully burden the interstate market in recyclables. [U&I Sanitation v. City of Columbus, No. 98-1893, 8th Cir., Feb. 22, 2000]

The city of Columbus and other municipalities built a landfill for their common use. U&I is a private hauler that handles about 20 percent of the locally generated waste. Haulers deliver unseparated loads to the city's transfer station where hazardous materials are removed before the waste is landfilled. No recyclable items are sorted. Besides helping the city pay its share of the landfill's operating costs, the $49 tipping fee supports a community drop-off recycling center, yard waste composting and the transfer station itself.

After U&I started using a private landfill where the tipping fee was only $23, the transfer station's revenue noticeably plunged. Alarmed by the diversion of waste, the city passed an ordinance directing all waste collected within the city to its transfer station, except for loads sent out-of-state for disposal. When U&I continued to use the private landfill, the city suspended the company's license.

U&I responded by filing suit in federal district court, alleging unlawful interference with interstate commerce. After a full trial, the district judge ruled in favor of the city.

A three-judge panel of the U.S. Court of Appeals for the Eighth Circuit reversed the lower court ruling, and directed the district court to block enforcement of the ordinance. The panel agreed with the district judge that the ordinance did not overtly discriminate against interstate commerce. Local waste processors were not favored over out-of-state facilities. As the appeals court saw it, the ordinance failed a second constitutional test: Do the local interests that the ordinance serves outweigh the burden on interstate commerce?

Notably, the court stressed two key concepts in balancing benefits and burdens. First, the inquiry is not limited to the parties in the case. Instead, the court adopted an "aggregate analysis ... [considering] the interstate effect on the recyclables market if several jurisdictions [passed] similar ordinances." Second, a legitimate local purpose must be promoted with an available measure that has the least affect on interstate activities.

From that perspective, the appeals court reviewed the lower court's findings and concluded that if "all [Nebraska] cities ... enacted flow control ordinances like the one at issue here, the interstate market in recyclable materials extracted from solid waste could be substantially diminished or impaired ..."

In addition, the court labeled the city's claim that the ordinance limits its risk of liability from improper disposal of hazardous waste as "sheer speculation." The opinion said, "The record [has no] such evidence."