Fanciful Fees Fizzle

SOLID WASTE DISPOSAL FEES based on container size and frequency of pickup are discriminatory and unenforceable where notable inconsistencies exist among rates payable by generators with comparable bins and service schedules, according to a ruling by the Virginia Supreme Court.

In 2001, the Wise County Board of Supervisors decided to confront the increasing volume of waste and the rising costs of disposal by updating the county's disposal fee schedule. The board decided that linking price and waste generation quantities was the only fair approach.

Using a list of businesses provided by county tax officials, the board categorized the commercial establishments. Then, it set a range of waste disposal fees for the different classes purportedly based on the size of the containers available to businesses and the number of times per week the containers were emptied. The “contents” of a container did not affect the classification or the fee, a county official said. Institutional and small retail and service businesses would pay flat fees. The charge to households, which had been $30 per year since 1993, would remain unchanged regardless of container size or pickup frequency.

After the board adopted the new fee schedule by ordinance, several businesses sued the county. The companies alleged that the fees were arbitrary and discriminatory, and therefore they had “no obligation to make payment.” The county responded by arguing that the levies were made using “a uniform methodology based on documentation of container size, number of collections … and comparisons of similar businesses.” The trial judge dismissed the lawsuit, finding that the county's methodology was reasonable and that the ordinance was “valid and constitutional.”

On appeal, the plaintiffs argued that the classifications in the fee schedule were not based on “real differences.” In particular, they contended, the fee schedule created unreasonable variations for businesses with similar containers and weekly collection. For example, fast food restaurants were charged $400, convenience stores paid $600 and households, regardless of container size and pickups, paid a mere $30 per year.

The state supreme court began its analysis by presuming the ordinance was valid, but looked for “evidence of unreasonableness.” If the evidence supporting and challenging the reasonableness of the ordinance were a toss-up, making the issue “fairly debatable,” then the court would uphold the measure. A classification will be upheld if it furthers the purpose of the law and is based on real differences between the classes, the court said.

An equitable fee on all users based on waste generation factors is a “legitimate” governmental objective, the opinion stated. However, the county failed to explain how a flat fee for households and certain businesses, and a range of fees for other businesses, relates to a fee schedule supposedly based on container size and pickup frequency, the opinion concluded.

The high court reversed the lower court ruling and entered a judgment in favor of the plaintiffs.

[Estes Funeral Home v. Adkins, 586 S.E.2d 162 (Va. 2003)]

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

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