A Flow Control Win

JENNIFER GRZESKOWIAK

THE U.S. COURT OF APPEALS for the Second Circuit has issued a decision in the United Haulers Association v. Oneida-Herkimer Solid Waste Management Authority (N.Y.) case that may lead to a U.S. Supreme Court review of flow control. While the ruling conflicts with the outcome of some previous flow control cases, it was far from unexpected, legal experts say.

“Given the findings by the magistrate and district court judge, not to mention the predisposition of the appeals court on the balancing test, the outcome of the appeal was a foregone conclusion,” says Barry Shanoff, general counsel for the Solid Waste Association of North America (SWANA), Silver Spring, Md.

In summary, the appeals court ruled that the authority's ordinances requiring haulers to take trash to a publicly owned and operated landfill did not violate the dormant Commerce Clause of the U.S. Constitution. While the court declined to decide whether the ordinances “impose a differential burden on interstate commerce,” it did decide that any burden imposed “is not clearly excessive in relation to the local benefits conferred by the ordinances.”

In determining whether an ordinance violates the Commerce Clause, courts first look at whether a government is regulating — rather than merely participating in — a market. If the government is regulating a market, the court then must decide whether the activity discriminates against interstate commerce. The ordinance, however, still is not deemed unconstitutional if the local benefits of the regulation outweigh the burden on commerce, a measure known as the Pike balancing test.

When the Second Circuit Court of Appeals originally heard the case in 2001, it said it would rule in favor of the solid waste management authority unless the United Haulers Association could prove to the district court that the burden on interstate commerce was outweighing the local benefits. After the association failed to do so, the case went back up to the appeals court, where the recent decision was issued.

From a practical perspective, the decision only affects the three states that make up the Second Circuit. “The decision reminds us that in New York, Connecticut and Vermont, local governments have a much easier standard to meet if they want to engage in flow control to government-owned facilities,” says David Biderman, general counsel for the National Solid Wastes Management Association (NSWMA), Washington.

On a larger scale, however, the decision contrasts with the rulings in other flow control cases, including the recent decision in NSWMA v. Daviess County, Ky., which could help propel the case to the Supreme Court, Biderman says. Unlike in the landmark C&A Carbone v. Clarkstown case, in which Clarkstown, N.Y., required all waste generated to be processed at a privately owned transfer station, Daviess County granted nonexclusive franchise agreements only to haulers that disposed of collected waste at the county's landfill or transfer station.

Daviess County and the Oneida-Herkimer Authority both argued in court that since their ordinances affected out-of-state and in-state business equally, they didn't violate the Commerce Clause. While the Sixth Circuit Court of Appeals ruled against Daviess County and called its defense “strange,” the Second Circuit Court upheld the Oneida-Herkimer ordinance and skirted the issue of the burden on interstate commerce by agreeing that the local benefits — such as funding for the county's waste management program, which encourages recycling and safe hazardous waste disposal — trumped all.

If the United Haulers Association appeals the case, which it likely will, the Supreme Court would decide by October whether to hear the case. “I am hopeful the court will take this opportunity to resolve the conflict between the appeals courts and provide guidance to haulers, landfills and local governments about the scope of flow control,” Biderman says.