A.G.G. ENTERPRISES, INC. V. WASHINGTON COUNTY, OREGON
AMICUS CURIAE BRIEF SUPPORTING, IN PART, APPELLEE A.G.G. ENTERPRISES, INC.
ISSUES PRESENTED
These amici, comprising all of the major California recycling industry trade associations and advocacy groups will amplify and supplement the brief submitted by AGG Inc., on the following two issues:
1. Material that is, in fact, recycled, is, in fact, property, as that term is used in Section 601 of the FAAAA. (49 U.S.C. Section 14501(c)(1)) These amici do not assert that solid waste deposited in a landfill is "property".
2. Local regulation of the collection of property by a federally permitted motor carrier is preempted by federal law.
The federal law and constitutional principles to be applied in this case to the recycling and garbage industries did not evolve in a vacuum. An additional purpose of this amicus brief is to advise the court of the historical genesis of the recycling and garbage industries and how flow control of solid waste collection (but not material that is recycled) was originally used to combat a health and safety problem.
The FAAAA explicitly permits local regulation of health and safety matters while preempting local legislation which bars competitive collection of property. Today’s primary health threat is from landfills and incineration, so public policy now mandates that a competitive recycling industry divert recyclables from the waste stream, without disturbing local government’s traditional need to regulate solid waste collection. This brief harmonizes these policies in the context of the FAAAA definition of "property".
INTEREST OF THE AMICI AND SUMMARY OF ARGUMENT
Most of the briefing by appellants and their amici focuses on the legal and practical problems with interpreting the FAAAA to preempt local regulation of solid waste collection. Appellants and their amici take an unnecessary further step and argue that recycled materials are the same as solid waste, which these amici vigorously oppose.
AGG collects both recyclables (material that in fact is recycled) and solid waste (landfilled material). Sometimes both materials are mixed in one load which must be sorted. The main issue before this court is which material is "property" under the FAAAA.
But there is no state law uniformity for defining "solid waste". Oregon and Washington generally exempt source separated loads of recyclables from their "solid waste" definitions. Oregon’s definition also factors in the cost of collection. The California legislature defines solid waste, for franchising purposes, as a leftover residual category of material not recycled or reused and leaves to local government whether or not to have exclusive franchises for solid waste collection. California’s Supreme Court added a negative value test to the definition to solid waste, not found in the statute. The federal definition of solid waste under RCRA is unclear but the policy behind RCRA’s solid waste component is landfill avoidance. Something cannot be part of a solid waste problem if it is recycled first.
Attempting to apply these mixed legal definitions to mixed loads, like AGG collects, yields practical and legal problems which must be solved by preserving both property rights and government obligations to regulate sanitation.
This brief, like no other submitted to this Court, attempts to balance these interests.
These amici are the leaders of California’s recycling industry whose members include independent recycling businesses, government employees, employees of solid waste management companies, and persons concerned for the environment. The independent businesses’ annual revenue is billions of dollars. They are very interested stakeholders in the outcome of this case.
B. If something is recycled, it’s property
This Court must determine when and where recyclable material become solid waste for the purpose of defining "property" under federal transportation law.
The principle that material that is recycled is not solid waste is consistent with:
a. Federal law: 42 U.S.C. Section 6900 et seq. and cases interpreting these statutes; 49 U.S.C. Section 14501(c)(1) (Section 601 of FAAAA);
b. Supreme Court precedent: C&A Carbone v. Town of Clarkstown, 511 U.S. 383 (1994); Fort Gratiot Sanitary Landfill, Inc. v. Michigan Dept. of Natural Resources, 504 U.S. 353 (1992); Buck v. Kuykendall, 267 U.S. 307 (1924);
c. Ninth Circuit precedent: Kleenwell Biohazard Waste et al. v. Nelson, 48 F.3d 391 (9 Cir. 1995);
d. Interstate Commerce Commission precedent: Transportation of Waste Products for Reuse and Recycling, 144 M.C.C. 92 (1971);
incineration, and depletion of virgin resources. 42 U.S.C.
Section 6900; Calif. Public Res. Code Section 40000; O.R.S. 459.015.
This brief discusses each in detail.
While appellants and their amici pose the hypothetical problem of the solid waste load with a single sheet of recyclable paper being viewed as "property", the opposite hypothetical also occurs. Is a mixed load of office paper going to a paper mill "solid waste" if someone throws a banana peel into the bin.
The dividing line between "recyclables" and "solid waste" is not obvious. When eyeballing any particular bin, you can only tell in hindsight whether a load was recycled in fact or not. A load of discarded food is "recyclable" in theory by composting unless it's dumped at a landfill -- then it's waste. A load of valuable computer white ledger paper is "solid waste" if landfilled and not recycled. A mixed material load is wholly or partly recyclable or solid waste only after it's collected, sorted and processed.
Some local governments within the Ninth Circuit have dealt with the three practical problems of mixed load collection consistent with the dividing line that recycled materials in mixed loads are property, not solid waste:
Today, all constituent materials of solid waste (excluding biomedical, chemical and nuclear waste) are safely recyclable in theory. Whether these materials are recycled in fact is a function of economics, not safety.
Missing from the briefing of appellant and its amici is a full historical perspective of local governments’ traditional duty to insure sanitation which illustrates that government-sponsored monopoly of valuable recyclable commodities is no longer appropriate.
THE HISTORY OF THE RECYCLING AND SOLID WASTE INDUSTRIES IN THE WEST
The evolution of waste handling practices illustrates today’s decreasing need for government intervention in material collection.
A. First there was garbage
The best known book on the subject of the history of waste collection and recycling is Martin V. Melosi’s "Garbage in the Cities" (Texas A & M Univ. Press 1981), which is the source of much of this discussion.
Almost 150 years ago scientists made a discovery which still holds true today -- mishandled garbage causes disease.
In the mid-1800s, scientists discovered a relationship between putrefying garbage and diseases then rampant, such as cholera and typhoid fever. At that point, garbage collection was rarely a governmental function and was typically the responsibility of individuals. People dumped indiscriminately, sometimes into the streets, adding to the manure that horses dropped, or into open dumps that cities designated. These dumps were often in wetlands or in or next to waterways. For example large areas of the San Francisco Bay shoreline were used as dumps. The waste on the street and in dumps usually went uncovered, so it attracted various vectors that, in turn, transmitted disease.
After the connection between waste and disease was made, municipalities around the nation passed public health laws and established health commissions to work on the problem. The commissions worked with newly established public works departments and people in the emerging engineering profession to set up municipal programs that swept the streets of both garbage and manure and emptied garbage cans behind people's houses. Generally the waste was taken to the same open dump as before, but at least it moved the health hazard reliably off the streets. Occasionally the material in the dump was burned to conserve space.
This is the genesis of the still-close association between street cleaning, water, engineering, and public works departments.
By the end of the nineteenth century, many municipalities had such "municipal housekeeping" programs. They were popularly supported by active community members, especially by the women's movement.
This social visibility and popularity was accompanied by technological competition for the resources. There was a thriving trade in the acquisition and resale of unwanted food, which was collected separately and fed to hogs. Collection methods and frequencies varied from place to place, with some cities preferring combined and others separated collection for different materials.
The underlying rationale of municipal collection of solid waste was to protect public health and safety, and municipalities called on their police powers to ensure their capability to provide the protection. They administered the collection and disposal system using either city staff of franchises. One type of franchise provided exclusive access to the materials.
Professor Melosi presciently cites an 1891 issue of Harper’s Weekly relating to local government’s resolve to regulate waste disposal in the face of irrefutable evidence of the public health hazards which rings true on the issue presented to this court: (pg. 21)
"As the world grows older it becomes not only
conscious of the new problems which it has
to solve, but it becomes more keenly conscious of the
importance of old ones which it has only imperfectly met."
Truer words could not be spoken of today’s legislatively mandated need to evolve from a 1950’s-type wasting society of dwindling resources devoted to landfilling, to a reduce, reuse and recycling society that conserves resources.
B. Then there was conservation of resources
The solid waste industries declined in the Great Depression, when discards diminished. Then in World War II, it became a patriotic duty and public obsession to avoid wasting any useful materials. People cooked from their victory gardens, composted at home, and saved string to be used again, bottles to be refilled, cans to be detinned, and even soap chips to be melded together. Men who collected garbage on weekdays spent weekends collecting separated materials for what today we would call recycling.
C. Then there was wasting and technological ease to waste
In the late 1940s and 1950s, a war-weary public embraced the consumer production system that emphasized convenience and consumption. By then, the two technologies of modern solid waste collection and disposal had been developed; the compactor truck and the sanitary landfill. The compactor truck permitted cities and their franchisees to discharge their public health responsibilities with a collection system that minimized labor, and the landfills received all materials without regard for recovery.
But the mechanisms of the compactor truck made it too dangerous to continue the collectors' traditional practice of scavenging salable materials from what they collected. The landfills filled up very quickly.
Between the 1950s and 1970 there was little popular interest in recycling or reclaiming discarded materials, and the population at large was happy to keep garbage out of sight and out of mind. Virgin resources were considered abundant and the toxicity of landfills and incineration was relatively unquantified and unrevealed.
D. A call to recycle
Beginning with Earth Day in 1970, however -- three decades ago -- the slogan "Reduce, Reuse, Recycle" marked a public reawakening. Sanitation was no longer enough. Public activism opposed mixed-waste incineration and landfills, and promoted recycling.
This was the cultural mandate that led to legislative initiatives such as California's AB 939, which established a goal of reducing the waste stream by 50%, and Oregon's Recycling Opportunity Act. Century-old industries formerly called the rag trade and scrap metals salvagers gained new identities as recyclers and new businesses found new niches and segments of the materials flow to develop.
E. Today, everything is recyclable and public policy requires reduction, reuse and recycling
Today, three things are beyond dispute:
1. Landfills and incinerators cause disease, which is partly why Congress and states such as Oregon and California have mandated reduction in landfill disposal. See 42 USC §6901, Calif. Public Resources Code Section 40000; O.R.S. 459.015.
2. Using recycled feedstock reduces depletion of virgin resources, which is the other reason for mandated waste reduction.
3. All discarded material is "recyclable" in theory. Whether or not material is recycled, in fact, depends upon reclamation cost and end use market. The recycling industry typically is not publicly subsidized, like the garbage industry.
Today, garbage haulers know that current technology provides a recycling option and a profit for a wide variety of material. Today’s garbage haulers use the traditional health and safety justification for franchising the collection of garbage as an excuse to monopolize the collection of valuable commodities that are inert, benign, and pose little or no health and safety risk.
It is in this light that this Court must scrutinize whether recyclables are property under federal law and whether the traditional police power purpose to protect the public health and safety has any present application to the collection of recyclable material.
RECYCLABLES ARE NOT SOLID WASTE
A. What is a "recyclable"?
In today's technology, all discarded material in theory is "recyclable". That is, practically every single type of material is amenable to some reclamation process. The three reclamation processes are generally described as:
Reuse: which accepts an object as-is (as is done by Salvation Army or Goodwill) and may clean or repair it before finding another user who will accept the object in its manufactured form. This process conserves both the natural resource and the economic value that was added by manufacturing.
Recycling: which entails some level of sorting and processing objects for the value of their commodities, for the purpose of recovering the resource and using it to produce a new product (such as recycling an aluminum can into a new aluminum can).
Composting: which is a type of recycling process for carbon-based materials such as plant debris, soiled paper, or putrescibles that processes commodities under controlled conditions of biological or chemical decomposition to produce a soil product.
In California, recycling is defined by statute as a process which takes material before the material ever becomes solid waste. "Solid waste" results from the failure of these reclamation processes.
California Public Resource Code Section 40190, defines "recycling" as the process of:
". . . collecting, sorting, cleansing, treating, and reconstituting materials that would otherwise become solid waste, and returning them to the economic mainstream in the form of raw material for new, reused, or reconstituted products which meet the quality standards necessary to be used in the marketplace . . .".
In Oregon, "recyclable material" means:
". . . any material or group of materials that can be collected and sold for recycling at a net cost equal to or less than the cost of collection and disposal of the same material." O.R.S. 449.005(19). See also OAR §340-090-0010(30).
Additionally, material that is source-separated is exempt from Oregon’s solid waste collection laws. O.R.S. 459A.075.
Under Oregon regulations, savings to the generator because of lower collection costs for recycling is equal to selling the material for recycling for purposes of defining materials as recycled. OAR Section 340-090-0140(2)
In California, local agencies are required to implement a priority of first, source reduction, second, recycling and composting, and last, transformation (incineration) and landfill disposal. Public Resources Code Section 40051.
B. What is Recycled, in Fact
In both California and Oregon, local agencies are required to prepare and implement integrated waste management plans that include, as a component, a characterization of the constituent materials discarded within the City or County. Calif. Public Resource Code Section 41030; O.R.S. Section 459.015.
The following reflects a typical list of constituent materials, together with some of the many recycling processes and end-use markets currently in use and available.
Paper & Cardboard: By weight this is the largest component of the discard stream. There are at least 83 grades of recycled paper determined by the fiber length and quality of the collected paper (computer paper the most desirable and newspaper and mixed paper the least), and the amount, if any, of contaminants (ink, food, etc.). High grade paper is sold to paper mills as a pulp substitute, lesser grades are used for newsprint, tissue, napkins, boxboard, containerboard and liners, building products and wallboard, roofing paper and spray-on insulation.
Glass: Almost all recycled glass is used to produce new glass containers and bottles. Low grade material (mixed clear, green, and amber cullet) is used in paving material and other building and masonry materials.
Aluminum cans: With the prevalence of community recycling programs, very few aluminum cans go to landfill. Since the U.S. must import all aluminum, aluminum manufacturers have actively promoted recycling aluminum cans to develop a domestic supply of feedstock.
Plastics: In contrast, plastics recycling suffers by comparatively low cost of virgin material, political defeat of recycled content legislation for plastic food and cosmetic packaging, and technical difficulties in sorting plastic objects that fall within a single polymer category but require different processing. Yet many types of plastic (especially PET, HDPE, LDPE) are recycled and processed for carpet backing and fiber, polyester fiber, molded products, detergent bottles, motor oil containers, and film products such as trash bags.
Metals: Virtually all metals collected are in fact recycled. Steel and tin scrap and copper wire are recycled to extract the tin, steel, and copper components. The uses of recycled copper, lead, nickel, zinc, tin, and steel is extensive and includes building material, automobile parts, outdoor furniture, electronics, solder, corrosion-resistant alloys, coatings, plating, and galvanized products.
White goods: This term refers generally to appliances. If not reused, appliances are dismantled by first removing the motors and compressors and then shredding the bodies for recycling as scrap metal.
Food & yard debris: These materials are easily composted, used for mulch, or landfill cover or made into biomass fuel. Recyclers consider using yard debris as landfill cover or biomass fuel as far less conserving recovery methods than composting, although they may use them if no composting or better facility has been constructed in an area. They reason that when the compost system becomes available, the clean resource flow will be ready. Until then, burning homogeneous biomass is far preferable to burning mixed garbage because emissions are relatively easy to control and are less hazardous. As one example of a far preferable recovery method, many supermarkets consign their organic discards to a company that composts it and then packages the compost for retail sale by the grocer.
Used wood: Nails and other metals are removed and the prepared wood is used for framing or form lumber, particleboard, insulation, or biomass fuel depending on the amount of contaminants such as lead, asbestos, paint and wallpaper.
Asphalt & concrete: These ceramics are crushed and recycled as roadbase, mixed with fresh asphalt to make new paving material, or used as a substitute for gravel aggregate in new concrete. A good asphalt and concrete recycler/processor will recycle and resell 99% of all material collected.
Gypsum/wallboard: Emerging technology provides the means to separate the paper and other contaminants from the gypsum which is crushed and recycled as new drywall or for agricultural uses.
Rubber/tires: Rubber and especially tires have traditionally been considered difficult to recycle, but new processes permit them to be combined with asphalt for playgrounds and other paving products, ground to produce crumb rubber for new tires, gaskets, belts, and floor mats, or burned as separated high-BTU fuel.
Oil: Used oil is highly regulated and over 60% of what is collected is recovered as fuel.
C. According to the ICC, recyclables have value
Since today’s recycling technology is dramatically different from technology available in 1965, the primary ICC case cited by appellant and their amici is outdated and irrelevant. Joray Trucking Corp., 99 M.C.C. 109 (1965).
In contrast, the 1971 Commission decision in Transportation of Waste Products for Reuse and Recycling, 144 M.C.C. 92 (1971) begins the modern trend to recognize recyclables as valuable property.
The Commission distinguished Joray by the fact that in Joray, garbage was transported to landfill and used as fill whereas in Waste Products, material was recycled. The Commission held that the fact that a manufacturer was willing to pay for recycled feedstock made the material "property" and subject to Commission regulation:
"It is therefore plain, we think, that waste materials purchased for use in recycling programs, such as those conducted by manufacturers of glass containers and cans, assume all of the characteristics of "property", . . . and, as such, their transportation is subject to full economic regulation by us." (citation omitted)
Nothing in this decision suggests that "source-separated" loads of recyclables should be treated differently than mixed loads. A mixed load is a load that requires sorting. If mixed material like construction debris in the Waste Products case is separated at a facility into the metal, wood, drywall, and concrete constituents – each of these is or can be recycled in fact, making them "property".
All material that is recycled, in fact, is sold or donated somewhere in the recycling process. Even material that is collected for a fee from the generator is either sold or donated as feedstock after it has been processed by the recycler or sold or donated in a retail market after manufacture of the feedstock (i.e. compost). The Commission's determination that sale determines regulatory control of "property" doesn't require that sale be by the generator, only that a sale occur somewhere in the process of reclaiming the material.
This Commission decision is consistent with the position of these amici and the District Court's determination that "property" under the FAAAA is what has value somewhere in the process. Order at pp. 11-13.
D. Who Recycles, In Fact
It is indisputable that independent recyclers, in fact, recycle a much higher percentage of material they collect than do exclusively franchised garbage haulers. The reasons are likewise indisputable:
1. Franchised garbage collectors are subsidized. Their disposal costs and other expenses are already passed through to the ratepayers. The franchisee typically receives guaranteed profit and return on investment. Thus, garbage companies have less incentive to reduce expenses by recycling and thereby avoid landfill or other disposal costs which is cheaper, because of landfill space abundance, in many places in the Ninth Circuit. Independent recyclers do not enjoy this subsidy. A failure to recover material collected by a recycler results in residue that must be disposed of at landfill and every dime spent to dispose of waste at landfill is a dime less profit to recyclers.
2. Garbage companies largely collect and compact mixed material (using the packer trucks) that contain putrescibles. When other types of recyclables, such as glass, paper, plastic, and cans are mixed and compacted with putrescibles it is much more difficult and expensive to reclaim the recyclables. The material recovered is generally of poorer quality so that it is less marketable. In other words, "garbage in, garbage out".
E. So, How Do You Define "Recyclable" in Contrast to "Solid Waste"
There are currently at least six places to mark the dividing line between recyclables and solid waste exist which are discussed below. Only the first three are practical.
1. A recyclable must be identified in hindsight by the result of the reclamation process. If the material is, in fact, recycled then, the material must have been "recyclable". If the material went to a landfill it became solid waste. Using this approach also makes the application of preemption easy -- something that in fact is recycled is property under Section 601 of the FAAAA.
2. A recyclable results from a handling decision usually made by the generator.
A. If the generator places its discards in a solid waste receptacle, the material becomes part of the solid waste stream and are handled by the solid waste handling service, the garbage company. The garbage company may elect to reverse the generator’s decision by recovering and recycling some materials.
B. If the generator places its discards in a designated collection location in a container segregated from the solid waste stream and designated for the authorized recycling agent, it is handled by the authorized recycling agent of the city and county. (Calif. Public Resources Code Section 41950).
C. If the generator does not place the discards in the solid waste receptacle or in the segregated collection location for the authorized recycling agent, he, she, or it may affirmatively contract with anyone else for the collection and recovery of such valuable commodities. (O.R.S. Section 459A.080; Calif. Public Resources Code Section 41952)
3. Use of the term "refuse" to define solid waste.
During the evolution of franchised garbage collection, the terms "garbage", "waste", and "refuse" were used interchangeably. Today's "solid waste" is the gentrified term.
Nevada, as an example, still defines "solid waste" as "refuse". N.R.S. Section 444.490.
"Refuse" according to Webster's New Collegiate Dictionary (1976) is "the worthless or useless part of something: leavings, trash, garbage." As an adjective, "refuse" is "thrown aside or left as worthless".
Materials that are recycled are not worthless or thrown aside. An end use market pays money to a processor who paid someone who collected the material. Recyclables are not "leavings".
4.The Oregon Rule
As stated supra at p. 12, Oregon defines a "recyclable material" by economics. If the cost of collecting material that is sold for recycling is equal to or less than the cost of collecting and landfilling the same material, the material is "recyclable". O.R.S. 449.005(19).
This definition installs economic terms to define a technological process. Sometimes the two harmonize and other times they do not.
The two are made harmonious by Oregon regulations which define recycling to include cost avoidance to the generator by a lower collection and disposal charge for recyclables than for landfill. OAR Section 340-090-0140(2).
But the disharmony and flaw in this definition is also illustrated by the options available to collectors in Appellant Washington County, Oregon.
The record reveals that collectors of recyclable material had disposal choices of (1) a materials recovery facility which recycles 50-60% of all loads delivered but charges a tipping fee of $62.50/ton, and a (2) landfill that charges a tipping fee of $40/ton. Order pp. 3-4.
If processing costs for a particular recyclable are high or the end use market resale price is low (or both) and there are multiple competing landfills in one locality, then it may cost less for a collector to dump than to recycle.
The generator who wants to recycle and the collector who wants to recycle this low value material can agree to pay a higher collection fee that offsets the higher recycling cost a practice currently hindered in California. (See infra p. 39)
Permitting this practice of paying more to recycle promotes recycling for these low value materials, which otherwise and unnecessarily go to landfill.
The better test and the more enforceable test is whether the material is or is not, in fact, recycled.
5. A recyclable cannot operably be identified by whether the generator pays someone to take away the material (the so-called "fee for service" distinction).
This was the test used by the California Supreme Court in Waste Management of the Desert v. Palm Springs Recycling Center, 7 Cal. 4th 478, 490 (1994), and is offered by appellant and its amici for its persuasive authority. The California Supreme Court's approach was not the focus of any of the briefing before that court. The Court's approach fails to account for the large volume of material that can and will be collected and recycled by independent recyclers, but which lack inherent value sufficient enough to cover the processing costs so that the recycler can’t collect it without charge.
Whether material is recycled, in fact, depends upon the cost to acquire and process the material (or to haul the material to a processor) and the resale price of the feedstock. Materials such as yard debris or low grade mixed residential paper, or most plastics don't command a high enough end use price to justify paying money to acquire the material. In these cases, the material would have a negative value to any collector whose costs are higher than the revenues from selling the materials. Yet independent recyclers who are not subsidized and are cost-conscious will collect negative-value material, providing their work is justified by revenue from collection fees and from resale combining to offset costs. This practice permits a recycler to adapt to fluctuating markets for recycled materials.
Differentiating recyclables from solid waste by using a "fee for service" test artificially shifts material that would otherwise be recyclable into the solid waste category so that only the monopoly exclusive franchisee may process it and reap the profit. This approach would define an independent recycler out of business in a low market.
6. Washington County defines a recyclable contrary to current policy and technology
Appellant defines "waste" (the scope of its ordinance) as "material that is no longer usable or wanted by the source of the material, which material is to be utilized or disposed by another person". WCC Section 8.04.020(Q).
To apply the California Supreme Court’s terminology to this ordinance, all material, whether "discarded" or "disposed" by the generator, is waste. This is completely contrary to current public policy and technology.
Washington County’s ordinance is at variance with Oregon state law and regulations defining recyclable materials.
These amici urge this Court to adopt a dividing line between "recyclable" and "waste" that furthers the legislative mandates to promote recycling, is consistent with federal law and constitutional principles, and is capable of enforcement without subjective analysis or reference to market fluctuations.
The simple definition intellectually and practically is: if something is recycled, it must have been recyclable.
FEDERAL LAW SUPPORTS THIS DEFINITION OF "PROPERTY"
Although there is no Commerce Clause issue before this Court, the reasoning found in the numerous Commerce Clause cases involving solid waste has application to the FAAAA preemption issue in this case.
"Waste" is an article of commerce which receives constitutional protection because of the competition for waste among the operators of different landfills or incinerators. Fort Gratiot Sanitary Landfill, Inc. v. Michigan Dept. of National Resources, 504 U.S. 353, 359 (1992). Local regulation cannot discriminate against out of state "waste". Fort Gratiot at p. 359. Even hazardous waste is an article of commerce enjoying constitutional protection from interstate interference by local government. National Solid Waste Management Association v. Alabama Dept. of Environmental Management, 910 F.2d 713 (11 Cir. 1990) cert den. 501 U.S. 1206; Chemical Waste Management, Inc. v. Templet, 967 F.2d 1058 (5 Cir. 1992) cert den. 506 U.S. 1080.
Both recyclables and waste are processed first by collection and then by disposal, either through reuse, recycling or landfilling. If local regulation commanding that all material be disposed of at one location to one receiving company is unconstitutional (C&A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383 (1994)), then so too must local regulation that requires in fact or in practice that there is only one lawful collector.
A. Ninth Circuit authority and dicta
In conducting a Commerce Clause analysis, this Court determined in Kleenwell at 48 F.3d p. 398, that Congress found that the field of solid waste collection is primarily the function of state regulation (42 U.S.C. Section 6901(a)(4)) and that a state's power to regulate commerce is at its zenith in areas traditionally of local concern.
Because of the historical role of government in regulating unsanitary disposal of waste, solid waste collection long has been considered traditionally a local concern. California Reduction Co. v. Sanitary Reduction Work, 199 U.S. 306 (1905).
In Kleenwell, Kleenwell was a Washington corporation with facilities only in Washington that operated a medical waste collection and disposal service. In California and Oregon, medical waste is highly regulated separately from solid waste (O.R.S. Section 459.386 et seq.; Calif. Public Resources Code Section 40191(c)) and almost invariably is not recycled. This Court's opinion in Kleenwell does not reveal the ultimate disposition of the medical waste Kleenwell collected except to note that Kleenwell transported this "waste" to California for disposal. (op. at p. 393)
Kleenwell was denied a "certificate of public convenience" by the Washington Utilities and Transportation Commission under a statute requiring all carriers that collect, haul, and transport solid waste to obtain such a certificate. Kleenwell contended that the WUTC could not constitutionally require Kleenwell to obtain such a certificate because "the transportation in question is interstate in nature".
This Court's rejection of this broad assertion is consistent with Section 601 of the FAAAA, which permits local agencies to adopt health and safety regulations governing interstate carriers while it preempts outright collection bans.
This Court noted that Kleenwell did not contend that the state's refusal to grant it a permit was improper or that the regulation was invalid. Instead, Kleenwell argued entirely upon its belief that a state may not impose a certification requirement upon a waste disposal firm engaged in interstate commerce. The Court's opinion is explicitly limited to the general structure and purpose of the state's regulatory scheme and not whether the specifics of its operation would withstand constitutional scrutiny. (op. p. 399)
In Kleenwell, this Court did not have before it a local regulation commanding in application that material either be collected by one company or disposed of by one company, the twin prongs of flow control.
Unlike AGG in this case, or Medigen in the Fourth Circuit, Kleenwell, or any in-state or out-of-state carrier, could obtain a certificate of public convenience. In this case, the District Court found that AGG could not obtain a permit from Washington County. Order pp. 4-6.
The Kleenwell Court found its ruling to be in harmony with federal law regarding solid waste collection. By application of Kleenwell, recyclable collection must be protected by the FAAAA since the material is not solid waste.
Appellant and several amici cite Woodfeathers v. Washington Co. 180 F.3d 1017 (9 Cir 1999) for its dicta that preemption by the FAAAA was not "readily apparent".
The holding in Woodfeathers entirely was that the abstention doctrine precluded the District Court from reaching the federal law issues. There is no abstention issue in this case.
Any reliance upon Woodfeathers apart from the abstention holding is based on dicta and not precedent.
In Tocher v. City of Santa Ana 219 F.3d 1040 (9 Cir 2000), this Court
upheld federal preemption of the FAAAA over local regulation of tow operators, analogous to this case.
In each of Parola v. Weinberger 848 F.2d 956 (9 Cir 1988) and Solano Garbage v. Cheney 779 F. Supp 477 (ED Cal 1991), the question presented was which of two competing governmental entities had authority over solid waste collection in a particular area.
Neither case considered or discussed the FAAAA or any need to
define recyclable material distinct from solid waste.
B. RCRA
Appellant and its amici have also referenced the provisions of the Resource Recovery Act of 1970 as they amended the Solid Waste Disposal Act, 42 U.S.C. Section 6900 et seq.
Section 6901(b) of the Act states congressional findings that land is too valuable a natural resource to be needlessly polluted by discarded materials, most of solid waste is disposed of on land in open dumps and sanitary landfills
" that disposal of solid waste . . . on the land without careful planning . . . can present a danger to human health and the environment"; that "a reliance on land disposal should be minimized"; that "alternatives to existing methods of land disposal must be developed"; and that "millions of tons of recovered material which could be used are needlessly buried each year."
In this context, Section 6903(27) defines "solid waste" as ". . . any garbage, refuse, sludge from a waste treatment plant . . . and other discarded material."
From this language, different courts have been asked to determine whether recycled material which is diverted already from landfill could be part of the "solid waste problem" addressed by Congress which was concerned about dumping, with different results.
In U.S. v. Wedzeb Ent., 844 F. Supp. 1328, 1337 (S.D. Ind. 1994) the Court found that recycling or reuse of PCB-filled capacitors was not disposal of solid waste under the Act. Similarly, in American Mining Congress v. U.S. E. P. A., 824 F.2d 1177 (D.C. Cir. 1987), the Court found that material must be abandoned as worthless (i.e. refuse or garbage) before it is solid waste.
But in both U.S. v. ILCO, Inc., 996 F.2d 1126 (11 Cir. 1993) (recycled batteries) and Owen Electric Shell Co. of S. Carolina v. Browner, 37 F.3d 146, 149 (4 Cir. 1994) (recycled slag) the Courts found that material that was disposed for recycling is solid waste under the Act. Both of these cases involved the reach of a regulator, EPA.
If this Court reaches the issue of what is solid waste under this Act, it should scrutinize whether recyclables, if they are defined as materials that are recycled, and never go to landfill, could possibly be part of a landfill disposal problem that needs regulation under the Act.
EPA regulations to some extent also define solid waste and recyclables consistently with the position of these amici. The definitions quoted below have limited application because they are part of a regulatory scheme concerning hazardous materials that are also solid waste. 42 C.F.R §261.1 This section excludes many types of recyclable material from its scope. § 261.1(b) (1) specifically excludes, "materials (such as non-hazardous scrap, paper, textiles, or rubber) that are not otherwise hazardous wastes and that are recycled." The Court in Zands v. Nelson 779 F.Supp 1254, 1261-1262 (SD Cal. 1991) used these regulations as part of its analysis of whether certain disposed material was solid waste or not.
To the extent it is useful, 42 C.F.R. §261.2 defines materials generally to be solid waste if they are abandoned and not solid waste if they are recycled. The regulation contains numerous exemptions to each definition that must be navigated. The definition of solid waste includes materials that are recycled in certain specific manners such as burning them for biomass fuel or using them by "placing them on the land" such as use for alternate daily cover (ADC) at landfills. But materials that are recycled by returning them for use as manufacturing feedstock are not solid waste under these regulations adopted pursuant to RCRA. §261.2(e). This regulation is attached hereto as Appendix A due to its length.
THE CREAM SKIMMING FALLACY AND LOCAL POLITICS
Washington County and amici claim that its franchise system prevents "cream-skimming" in the waste collection business. Unless "cream" includes recyclables, this is an oxymoron. There is no cream to be skimmed from landfilled material. There are more desirable waste accounts because of volume in some service areas, but the "cream" is the account and quantity, not the quality of the material. In this case there was no evidence either that: (1) AGG charges a different service fee than the franchised haulers or that (2) the franchised haulers profit from their competing commercial recyclable service. In sum, there was no evidence of cream-skimming.
If Washington County and other amici truly mean that government needs to give a monopoly on recyclables to franchised haulers to subsidize, for political purposes, low residential collection rates, then they have stated the precise point of tension between the recycling and garbage industries which has induced so much advocacy in this case.
Waste haulers should be compensated fairly for the waste collection service they provide. As a public service, the cost should be assessed to and subsidized by the users, the ratepayers. These amici have no quarrel that a waste hauler’s costs plus guaranteed profit and a rate of return should be borne by its subscribers, the persons who generate waste and don’t recycle.
If the actual cost of providing the service is higher to the waste hauler because it cannot collect (and profit from) recyclables, the generators of waste, not the generator who wants to recycle, must absorb this cost. If the particular service area is remote, scattered, or distant from a disposal facility or transfer station, this is a cost which either is absorbed by the ratepayers or must result in a competitive bid process whereby lower overhead waste haulers assume responsibility for the remote service area. In other words, a service area with 2,000 citizens should not be forced to absorb the cost of maintaining a hundred packer truck fleet of a national garbage company. The service provider must be to scale of the service area.
Any of these are rational means to achieve the legitimate health and safety goals of Washington County, to ensure safe and adequate collection and disposal of waste. The unseen variable within Washington County’s argument is endemic to the Ninth Circuit - it is politics.
Local elected officials understand that unless they franchise the collection of recyclables, valuable commodities, to garbage haulers, the garbage haulers threaten to raise residential (i.e. voter) rates. No elected official today wants to raise taxes.
But political expediency, the real rationale for some exclusive franchising, is a meager local benefit compared to the burden it imposes upon commerce and surely it cannot withstand rigorous scrutiny, thereby failing both the Pike and strict scrutiny tests.
In City of Philadelphia v. New Jersey 437 US 617,626 (1998) the Supreme Court held that a local legislative aim to reduce waste disposal costs is no excuse for impairing interstate commerce. See also Oregon Waste Systems v. Dept. of Environmental Quality 511 US 93,100 (1994).
This Court in Kleenwell was concerned about "cream-skimming" and the adverse affects from unregulated markets. But, in Kleenwell, again, the focus was collection of biomedical waste, something that is not recycled and largely is not recyclable.
When applied to solid waste, as distinct from material which is recycled, in fact, these amici agree with the Court’s concerns in Kleenwell that local governments should form service areas for the franchise of waste collection to avoid one company skimming the cream from waste disposal accounts and from ignoring or refusing to service less attractive service areas. When applied to waste, this Court in Kleenwell was correct on this point.
THE CALIFORNIA SUPREME COURT’S DEFINITION OF "FEE FOR SERVICE" WRONGLY APPLIES CALIFORNIA LAW
None of the briefing by the parties before the California Supreme Court in Waste Management of the Desert v. Palm Springs Recycling Center 7 Cal. 4th 478 (1994) suggested that the Court define "solid waste" by whether the generator was paying someone to collect the material or not. Two amici, CRRC and the Independent Recyclers Association touched on the issue in less than a total of one page of text.
The issue before the Court was whether local government could grant an exclusive franchise for the collection of "recyclables" under state law. The California Supreme Court ruled that local government could not grant an exclusive franchise for collection of recyclables because the state legislature had commanded that the maximum permissible scope of an exclusive franchise was to collect "solid waste".
While the briefing before the Court articulated different means to distinguish "recyclables" from "solid waste" under California state law, the "fee for service" dividing line was virtually absent from the briefs or the legislative history.
For this reason, and since California's interpretation is not precedent in this case, these amici request that this Court give a fresh look at the appropriate place to draw the line and to consider the following legal reasons why the California Supreme Court's interpretation was wrong.
Calif. Public Resources Code Section 40059(a)(2) contains the power of a local agency to grant an exclusive franchise stating that such a franchise may be granted, either with or without competitive bidding if:
". . . in the opinion of its governing body, the public health, safety, and well-being so require, by partially exclusive or wholly exclusive franchise . . ."
In Palm Springs the Court held that (p. 484) this section allows a city to grant an exclusive franchise only for "solid waste handling services".
"Solid waste handling" is defined by Section 40195 to mean the collection, transportation, storage, transfer, or processing of solid wastes.
Section 40191(a) defines solid waste to mean:
"All putrescible and non-putrescible solid, semi-solid, and liquid wastes, including garbage, trash, refuse, paper, rubbish, ashes, industrial waste, demolition and construction wastes, abandoned vehicles and parts thereof, discarded home and industrial appliances, dewatered, treated, or chemically fixed sewage sludge which is not hazardous waste, manure, vegetable, or animal solid and semi-solid wastes, and other discarded solid and semi-solid waste."
The Supreme Court in Palm Springs recognized that: (1) the statutory definition of solid waste "further supports the view that valuable recyclables that have not been discarded are not waste"; (2) "the fundamental purpose of the Act is to reduce the amount of material entering the waste stream." (op. p. 485, 488)
The Palm Springs court then sought to draw the dividing line between "recyclable" and "solid waste" for purposes of establishing the maximum permissible scope of an exclusive franchise under Section 40059(a)(2).
The Court held in Palm Springs that material which is "discarded", a term used in Section 40191, is solid waste and material that is "disposed" for compensation is not solid waste and that the maximum permissible exclusive solid waste franchise covers only materials that are discarded. (op. p. 486-88)
The Court defined "discard" to mean "throw away", under the American Heritage Dictionary definition of the term, which also makes it synonymous with "reject". The Court used this term "discard" to define material that is "solid waste" and defined the line between "discarded" and "non-discarded" material as the fee for service. If the owner/generator sells or gives away the material, it is "disposing" of the material, not discarding it, and therefore the material is not solid waste, so the material cannot be the basis of an exclusive franchise. (In other words, free, open competition to collect "disposed" items is required under California state law.)
These amici agree with the Court that the terms "discard" and "value" are intrinsically related. But the Court's creative and unique usage of "discard" has left some questions open. To harmonize the intentions of the Court and the Act, this further refinement is necessary: to answer the questions "value to whom?" and "when is value established?"
The question "value to whom" is raised by implication in the term "discard" itself, which the American Heritage Dictionary (1981) defines as meaning "to throw away; reject; dismiss". To "throw away", in turn, means "to discard as useless" or to "fail to use". The implication of "away" is to remove a thing from the presence of the generator; no destination of destiny is specified in the common usage. Even if the generator finds a thing to be useless, the recycling industry may find otherwise. In fact, some members of the reuse and recycling industries use "discards" as a term of art to refer to materials they receive and process, even if they have purchased the materials.
Furthermore, the value may be determined not only at collection, but at other points in the materials-handling and production process.
Oregon regulations recognize that a collection fee may be charged where the material is disposed of to a recycler at less cost than landfill disposal. OAR Section 340-090-0140.
Because it was not squarely presented to the Court in Palm Springs, the Court was not fully apprised that there are a vast quantity of materials which are, in fact, "recycled" and therefore not "waste" but which, at times, cannot be sold by the owner because of the volatile fluctuation of market conditions (i.e. yard debris, plastics, mixed paper, some construction debris).
The recycling industry will divert these materials from landfill (the express goal of California's legislature) by sorting, upgrading, composting, or reconstituting these materials. The recycling industry will gladly collect these recyclable materials from the owner at a much lower cost if possible than the waste hauler because the recycler profits from sale to the end-user. The owner typically benefits economically by paying less for disposal than if it used the franchised waste hauler. Reducing costs is a value to the owner/generator.
In some cases of very low value material (i.e. tires) the owner/generator may desire to see the material recycled and will be willing to pay a higher collection fee to a recycler than a franchised hauler would charge simply because the recycling processing costs are higher than a competitive landfill disposal fee.
The express purpose of California's recycling law (AB 939) was to comprehensively "revise, recast, and update current solid waste management laws including repealing obsolete statutes and upgrading updated definitions". (Report of Assembly Committee on Natural Resources, p. 2) This legislation was designed to promote source reduction, recycling, and composting, in preference to landfill disposal and to maximize the use of all feasible source reduction, recycling, and composting options to reduce the amount of solid waste that must be disposed of by transformation (i.e. incineration) and landfill disposal. Public Resources Code Section 40051.
As part of "recasting" the legislation and eliminating "obsolete" definitions, the legislature borrowed some provisions and definitions from previous legislation, but it also enacted several new provisions and definitions to distinguish precisely between recycling and recyclables on the one hand, and solid waste on the other.
As recognized by this Court, local governments, through exercise of police power, have traditionally regulated solid waste, which, by practical definition means "valueless" materials. (Palm Springs, p. 484-85) At the same time, the legislature recognized that "recyclables" are commodities with value. (op. p. 484-85)
The new statutory scheme interpreted by Palm Springs expressly changed the object of recycling from handling wastes to handling "materials that would otherwise become solid waste". (Emphasis added.) It defined the recycling process to include collecting, sorting, cleansing, treating, and reconstituting the subject materials to return them to the economic mainstream in the form of raw materials for new, reused, or reconstituted products. (Public Resources Code Section 40180.)
Thus, after AB 939, recyclables separated from garbage, clearly were no longer a subset of solid waste. Solid waste became a last resort category of materials which could not be sorted or upgraded. Unless the owner were free to dispose of mixed materials to recyclers for a fee or otherwise this recycling process could never start.
Because the legislation distinguishes between "solid waste", which is subject to exclusive franchising to protect the public health and safety, and "recycling", which handles materials that would otherwise become solid waste, the intent is clearly to prefer source reduction and recycling as a matter of policy and priority (as stated explicitly in Public Resources Code Section 40051), and to recognize that solid waste is the last subset of the whole discard supply. Solid waste is only a derivative category composed of materials considered valueless that the preceding and preferred methods of source reduction, reuse, and recycling have been unable to recover.
In this reformulation, the collection process for materials that would otherwise become solid waste (recyclables) was made conceptually distinct under Public Resources Code Section 40195's definition of "solid waste handling," as "the collection ... or processing of solid waste."
Because recycling is preferable to and conceptually distinct from "solid waste handling", the exclusivity provision of Public Resources Code Section 40059 that applies only to "solid waste handling" does not apply to handling recyclables regardless of whether the owner pays a recycler to collect it.
California’s Integrated Waste Management Board has developed guidelines for distinguishing recyclers from solid waste handlers by focusing on the amount of handled material that winds up in a landfill - reinforcing the key concept that waste is what's in a landfill, not what is generated by the owner.
CONCLUSION
Without doubt, there must be an objective basis for a solid waste company and local government to determine what it is required contractually and legislatively to collect to meet health and safety concerns. This has to be accomplished by an objective dividing line between recyclables and solid waste which, in turn, can only be accomplished by regarding it as a handling decision of the generator or in hindsight by whether the material goes to landfill or is recycled.
In earlier days, when natural resources were abundant and landfilling and incineration were the prime and unchallenged disposal methods, there was less reason to question what types of discards should be placed in the solid waste stream and which should be excluded as recyclable.
With legislative mandates for source reduction and recycling, discards that are marketable should be handled as any valuable commodity in free enterprise. If there is any mishandling, local governments have unquestioned power to regulate, short of outright ban, as health and safety warrants. There is no evidence that Woodfeathers mishandled what it transported.
For generators unwilling to segregate materials or to recycle, there will be higher garbage rates to subsidize the solid waste system to handle discarded waste. In contrast, the generators who want lower garbage collection costs and care to recycle, there should be a free market industry of recyclables to collect, upgrade, and market these discarded resources.