Legal Lode: State Your Case

Before spending time debating the pros and cons of flow control, local officials would be wise to make sure state law gives a green light.

In 2009, Horry County, S.C., adopted an ordinance requiring locally gener- ated waste to be deposited at a county waste authority landfill or some other publicly owned facility designated by the authority. Only two landfills exist in the county — one for municipal solid waste, the other for construction and demolition debris — and the authority owns both.

Sandlands C&D, LLC (Sandlands) owns and operates a construction and demolition (C&D) landfill in nearby Marion County. Before 2009, Horry County C&D waste accounted for a significant portion of the waste delivered to the Sandlands facility. Attempting to salvage the situation, Sandlands got approval from the state to process “recovered materials” at its site. When the company then sought an understanding with the county on handling in-county recovered materials, the county took the position that unseparated materials from a construction site is still solid waste and is subject to the ordinance.

Claiming that its facility is now a money-loser, Sandlands and an affiliated hauler, Express Disposal Service, LLC, sued in state court to invalidate the ordinance and recover $25 million in damages. The complaint alleged federal constitutional violations: ignoring due process, denying equal protection, impairing contracts, and unlawfully blocking interstate commerce. The plaintiffs also raised state law issues, including preemption by state law, interference with current and prospective contract relations, and taking property without just compensation.

Where a civil action is filed in a state court but could have been brought in a federal court — for example, where the complaint asserts a claim under federal law or the U.S. Constitution — the defendant may have the case “removed” (that is, transferred) to a federal court. After the plaintiffs filed a motion for an injunction to block the implementation and enforcement of the ordinance, the county had the case removed to U.S. District Court for the District of South Carolina. After hearing testimony and legal arguments, the federal district judge denied the injunction.

A key issue in the case was whether the state’s comprehensive solid waste management law preempts the flow control ordinance by denying the county power to enact the ordinance. If state law overrides this local initiative, the other legal claims would be moot. When a state law issue looms large, federal judges often defer to state courts for a resolution. Indeed, U.S. District Judge Terry L. Wooten referred the preemption question to the South Carolina Supreme Court. After hearing arguments from both sides, the state justices ruled that county flow control was compatible with state law.

Following the ruling, proceedings in federal court came to a halt while the plaintiffs switched to a new legal team. With the facts mostly undisputed, both sides then sought an accelerated decision on the legal merits.

Ruling for the county, Judge Wooten noted that, while neither side presented controlling case law on what constitutes a “clearly public facility,” the arguments and evidence presented by the county showed that the authority was a public entity. In addition, the court found that the ordinance, “even if . . . passed as a revenue-generating mechanism,” effectuated a “legitimate local public interest — management of solid waste to protect the health, safety, and general well-being of citizens of Horry County.”

“[T]he Flow Control Ordinance regulates even-handedly in that the defendants do not discriminate with respect to which private entities can process waste generated in Horry County, provided the waste is processed inside the County and the residual waste goes to the [authority] landfill,” the court concluded. As for the other legal challenges, the district judge threw out all of them.

Local officials in Horry County and throughout South Carolina still face renewed vigorous lobbying by the waste industry to end flow control.

[Sandlands C&D, LLC, et al. v. County of Horry, S.C., No. 4:09-cv-1363-TLW, D.S.C., Dec. 20, 2012]

Barry Shanoff is a Rockville, Md., attorney and general counsel of the Solid Waste Association of North America.

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