Solid Waste Management after Carbone: Challenges, Dissent, Advice
(from Maine Townsman, July 1997)
by Jo Josephson, Staff Writer

Given the highly competitive nature of the solid waste disposal industry, it is not surprising that the authority of local government, in its efforts to effectively manage the increasingly complex mandate to dispose of solid waste, is being subjected to a growing number of challenges by the private sector.

The first major and successful challenge from industry resulted in the U.S. Supreme Court’s 1994 decision in C & A Carbone Inc. v. Town of Clarkstown, New York. In a 6 to 3 decision, the Court found that Clarkstown’s flow control ordinance violated the so-called "dormant" Commerce Clause of the U. S. Constitution. Clarkstown’s ordinance required all non-hazardous, non-recyclable waste generated in the city be taken to a transfer station built, owned, and operated by a private contractor, who had been given an exclusive franchise by the city to receive the waste.

As a result of the case, everyone with a flow control ordinance on the books and everyone requiring haulers to truck wastes (residential or commercials) to a specific site is now walking on eggshells, "waiting for Carbone", waiting for the successful challenge to its ordinance.

Municipal officials in Houlton "heard" from Carbone in March of this year, when U.S. District Court Justice Morton A. Brody granted a preliminary injunction against the town and Andino Inc., the company which the town had granted an exclusive franchise to dispose of its residential solid waste. In ordering the injunction, Justice Brody noted that "..the Court (found) that Houlton’s ordinance (was) substantively similar to the flow control ordinance held unconstitutional by the Supreme Court in C & A Carbone Inc. v. Town of Clarkstown, N.Y."

This article looks at the situation leading up to and following Justice Brody’s ruling in light of the Carbone ruling. It also looks at the dissenting or minority opinion in the Carbone ruling. And last but not least, drawing from an article written by one of Maine’s leading municipal attorneys, James Katsiaficas, it offers some suggestions for dealing with the fall-out from the Carbone decision.


As this article was being written, the Houlton Town Council had just voted to amend its solid waste ordinance in response to Justice Brody’s ruling.

Justice Brody ruled that in its ordinance Houlton, like Clarkstown, had violated the dormant Commerce Clause of the U.S. Constitution by requiring waste producers and collectors to dispose of their waste at Andino’s transfer station. The Court found that the town was not a market participant, which is allowed, but was instead a market regulator. As such, its regulations were subject to review under the Commerce Clause. The Commerce Clause prevents state and local governments from unduly burdening or interfering with commerce among or between states.

In amending its ordinance late last month, Houlton essentially reverted back to its original agreement between the Town and Andino whereby Andino, among other things, regained the exclusive right to collect residential wastes, either curbside or at his transfer station. When Andino was originally awarded the exclusive franchise (under Houlton’s charter the town by means of an ordinance has the ability to grant, renew or extend a franchise), the company agreed to allow other commercial haulers to continue to collect residential trash so they would not be put out of business, or their employees out of work. That arrangement also satisfied Houlton residents who argued if they were going to pay for pick up and disposal, they should be given the right to stay with the haulers who had served them before the landfill was closed; in other words, to select their own haulers.

The town complied and amended the ordinance with the stipulation that the other haulers had to bring their residential trash to Andino’s transfer station. It was that stipulation that the Court objected to, when one of the haulers challenged the constitutionality of the ordinance.

Whether or not this latest amendment to the town’s ordinance will satisfy the Court remains to be seen. It hasn’t satisfied some of the town’s residents, who, following the recent amendment, circulated a petition calling for the council to reverse its decision and keep curbside collection open to all haulers.

Town officials maintain that it was the effort to accommodate everyone, haulers and residents, that made the ordinance unconstitutional. Now they are caught in a dilemma. If they abide by the wishes of the petitioners, they will violate the Constitution; if they go along with the Court, they will violate the wishes of the petitioners. And last but not least, if they do not attempt "to fix" the ordinance they will be in violation of the contract with Andino. Under the terms of the contract, there is a requirement that should some portion of the ordinance be found unenforceable, the town is required to renegotiate its obligations. Hence, the latest amendment.

Town Manager Allan Bean points out that the town chose the current method for a variety of economic reasons and notes that having residents pay-by-the-bag not only encourages recycling, it spreads the costs more evenly throughout the community and includes the many non-profit organizations in Houlton that otherwise do not pay tax dollars to support municipal services, such as trash disposal. He also points out that by having a private entity bear the cost of constructing the transfer station, the town saved many thousands of tax dollars.

The town’s attorney, Daniel Nelson, notes that despite the preliminary injunction, "the town is still mandated by state statute (38 MRSA {1305 (1)) to provide a method of solid waste disposal for its citizens." The town has maintained all along that residential refuse collection is a governmental function and that it has a right to privatize that function be it through contract or exclusive franchise. And it points out that the recent U.S. District Court ruling did not invalidate its exclusive franchise method of residential solid waste disposal.


In the Carbone Case

There is a lot to be said for Houlton’s claims. If you doubt it, you should read the minority opinion in the Carbone decision. The three dissenting Justices - Souter, Blackmun and Rehnquist - noted, among other things, that " . . . the terms of Clarkstown’s ordinance favored one single processor, not the class of all such businesses located in Clarkstown. Second, that the one proprietor so favored is essentially an agent of the municipal government, which (unlike Carbone or other private trash processors) must ensure the removal of waste according to acceptable standards of public health."

The three dissenting Justices therefore argued that economic protectionism as defined by the Commerce Clause was not in effect in Clarkstown. "Thus, while these differences may underscore the ordinance’s anticompetitive effect, they substantially mitigate any protectionist effect, for by subjecting out-of-town investors and facilities to the same constraints as local ones is not economic protectionism."

They also argued that Clarkstown’s transfer station was essentially a municipal facility built and operated under a contract with the municipality. "This, of course, is no mere coincidence, since the facility performs a municipal function that tradition as well as state and federal law recognize as the domain of local government."


Writing in this month’s (July/August 1997) issue of Public Administration Review, Rosemary O’Leary, Professor of Public and Environmental Affairs at Indiana University, referring to the Commerce Clause in the U.S Constitution, argued "..what is considered good law by the courts is not good public policy."

She argues that in an era of limited landfill space, increased incineration of trash, and increased public demands for prudent environmental regulation, it makes sense to give state and local governments greater power and discretion concerning what to do with their waste, and says the Court (in the Carbone case) had it "exactly backward". And, by tying the hands of local government, the Court is exacerbating what is already a waste crisis in some areas of the country.

O’Leary proposes that the Supreme Court adopt a "Darwinian view of the Constitution, and realize that since our current trash problems could not have been foreseen by our founding fathers, the Court’s interpretation of the Constitution in this area needs to evolve, as our society has evolved, to give state and local governments greater authority to deal proactively with the waste disposal challenge."


Evolution aside, , in an article entitled "Solid Waste Management in a Post-Carbone World" that appeared in the Nov/Dec 1996 issue of Municipal Lawyer, James N. Katsiaficas, a director of the Portland, Maine law firm Jensen, Baird, Gardner & Henry where he practices in the areas of municipal and environmental law, proposes four alternatives to flow control in the wake of the Carbone ruling.

Municipal Collection

Create or expand municipal public works departments to conduct the solid waste collection, transportation and disposal service.

Katsiaficas notes that if under Carbone local governments cannot direct commercial haulers to transport waste to locally owned or contracted facilities, then local governments should transport it themselves. This is just the type of solution that prompted waste haulers in Maine during the last legislative session to introduce LD 1705, "An Act Regarding Just Compensation for Private Waste Companies".

Had it passed, the bill would have limited municipal flexibility in the disposal of municipal solid waste by requiring compensation and inordinately long lead times should a municipality decide to take over the business of solid waste. Had it passed, it would have in the words of Portland Corporation Counsel Gary Wood ". . . taken off the table every possible tool for dealing with the loss of flow control except turning it over to the private sector."

Municipal Contract

Contract out the collection to a third party so long as the contracted hauler does not have to bear the expense of the tipping fee.

Katsiaficas notes, among other things, that in SSC Corp. v. Town of Smithtown, the Second Circuit Court of Appeals ruled that Smithtown’s flow control ordinance was exempt from the dormant Commerce Clause doctrine because in enforcing the ordinance, it was acting as a "market participant" and not as a regulator since it was a buyer of services; that is, the town reimbursed the contractors for the tipping fee that was charged if the waste was brought to the facility with which the town had a long-term put-or-pay agreement.

Municipal Franchise

Franchise out the collection to a third party.

Katsiaficas admits that "the developing case law has not yet established the ability of local government to franchise solid waste collection and transportation services." But he argues that "if a local government has the authority to contract out solid waste service it could otherwise provide through its own public works department, then it should also have the authority to award exclusive or non-exclusive franchises to waste haulers to perform those same services."

If one does so, Katsiaficas suggests that the town pay or reimburse the tipping fee. But, if a town were to implement Katsiaficas’s suggestion and pay or reimburse the tipping fee would one still have a franchise? And, if the town were to pay the tipping fee, what incentive would there be for residents to recycle? A recent study by the Margaret Chase Smith Center noted, municipalities that required residents to pay by the bag for waste disposal generated less than half the residential solid waste generated by those without such a program.

Economic Flow Control

Provide an economic incentive for disposing waste at a certain facility.

Katsiaficas notes that a tipping fee at or below the market rate will ensure that solid waste is delivered to the desired facility and adds that contracts or franchises under which the local government pays the entire tipping fee actually are "extreme examples of economic flow control".


Katsiaficas admits that "all of the above even though they have been expressly or impliedly approved by the courts, likely will result in an increased cost to local governments." Which is why local governments have been trying to privatize the job in the first place. Katsiaficas suggests that one way around the "politically unpalatable " property tax increase solution to the flow control issue is to levy a user fee. (See "Pay-By-The Bag", MAINE TOWNSMAN, June 1996.)