Flow Controls' Finer Points

A local government unlawfully discriminates against interstate commerce when it restricts the flow of solid waste to out-of-state facilities, according to a ruling by a federal appeals court. However, the court added, controlling the disposition of waste destined for instate disposal does not necessarily burden commerce (Ben Oehrleins and Sons and Daughter. Inc., et al., v. Hennepin County, No. 96-2120, and Robinson Rubber Products Co. Inc. v. Hennepin County, No. 96-2170, 8th Cir., June 9, 1997).

An ordinance in Hennepin County, Minn., requires that locally generated waste be delivered to county-designated transfer stations or processing facilities. The county adopted the ordinance to implement its solid waste management master plan, which called for reduced reliance on landfilled waste in favor of waste-to-energy facilities. Indeed, the county issued some $150 million in bonds to finance the construction of an incinerator.

The ordinance, which took effect in 1989, was meant to assure that a sufficient quantity of waste would be delivered to the incinerator either directly or via designated transfer stations. Haulers that deliver waste to non-designated facilities face fines, costs and assessments, and risk suspension or revocation of their hauling permits. In 1993, the county suspended enforcement of the ordinance in cases where haulers delivered waste to facilities outside the state. However, the county continued to forbid the delivery of waste to non-designated facilities within Minnesota.

The plaintiffs, consisting of waste haulers, a Minnesota landfill, an Iowa landfill and residential and commercial waste generators, filed suit in federal district court in 1994. They alleged that the ordinance violates the Commerce Clause of the U.S. Constitution, and asked the court for an injunction against the ordinance's enforcement and for damages. The district court ruled that the ordinance discriminates against interstate commerce, and permanently enjoined its enforcement. On appeal, the county argued that the plaintiffs lack standing to bring the lawsuit and that the ordinance does not violate the Commerce Clause.

The U.S. Constitution requires that one who seeks relief in a federal court must allege an actual or imminent injury resulting from the defendant's conduct. In addition, a federal court usually will not permit plaintiffs to assert rights or legal interests belonging to others in order to obtain relief from injury to themselves. Moreover, a plaintiff who alleges a constitutional right must show that its concerns are within the "zone of interests" protected by such constitutional guarantee.

The appeals court held that the waste hauler plaintiffs (who faced sanctions and other penalties) and the landfill plaintiffs (who could not compete for Hennepin County waste) have standing to sue. Their injuries are traceable to the county's enforcement of the ordinance. However, the appeals court denied standing to the generator plaintiffs ("consumers of waste disposal services") because no precedent existed for a suit by a consumer who suffered passed-on costs of an economic regulation.

"[I]f ultimate cost of economic regulation to consumers were within the zone of interests of the Commerce Clause, then every consumer could properly challenge such regulations," the opinion said.

County restrictions on waste destined for out-of-state shipment unlawfully discriminate against interstate commerce, the appeals court ruled. However, the appellate panel disagreed with the district court about the effect of the county's moratorium on enforcement against haulers taking waste to out-of-state facilities.

Although the instate designated facilities receive a preference over other instate operators, "as long as waste is allowed to flow freely ... out of the state, this does not constitute discrimination against interstate commerce," the court said. "[S]urely local monopolies or market controls that ... benefit ... out-of-state concerns simply do not constitute 'discrimination' under the Commerce Clause," it added.

Nevertheless, the court continued, "even a non-discriminatory law may unconstitutionally burden interstate commerce ... because [the] regulation fails [a] less rigorous balancing test." As the appeals court saw it, the restriction on solid waste destined for instate disposal does not discriminate against interstate commerce. An intrastate designation runs afoul of the Commerce Clause only if it fails the balancing test, the appeals court ruled.

The case will go back to the district court for a determination of whether the county's interests outweigh the ordinance's burden on interstate commerce. Significantly, the appeals court directed the lower court to consider "all of the interests advanced by the ordinance in the entire context of the county's master plan and designation plan," and in a footnote added: "[W]e have no authority to instruct the county that those stated interests are not really interests."