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GOOD AFTERNOON!

Scott M. DuBoffWright & Talisman, P.C.

• Flow Control Litigation Update -- United Haulers v. Oneida-Herkimer

• Overview of Other Environmental Cases Pending Before the Supreme Court

March 14, 2007

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Legal context: the “Dormant Commerce Clause” limits the authority of state and local government to enact laws that affect interstate commerce:

If the subject matter requires uniform national regulation, it is off limits to state and local regulation

Assuming that uniform nationwide standards are not required, state and local laws and regulations cannot (i) discriminate against (ii) or unduly burden interstate commerce

If discrimination is present, a per se rule of invalidity applies, unless no other means to advance a legitimate local interest

Carbone case: flow control ordinance discriminated against interstate commerce

“Undue burden” test: Pike v. Bruce Church

Flow Control

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United Haulers v. Oneida Herkimer I (2d Cir. July 2001)

The dominant feature of the Second Circuit’s decision:

“A municipal flow control law does not discriminate against out-of-state interests in violation of the Commerce Clause when it directs all waste to publicly owned facilities”

The court distinguished the private facility at issue in Carbone on that basis, emphasizing that the “distinction is determinative”

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United Haulers v. Oneida Herkimer II (2d Cir. Feb. 16, 2006)

Threshold issue: do the flow control ordinances at issue “impose a burden on interstate commerce that is qualitatively or quantitatively different from that imposed on intrastate commerce”

The Second Circuit found no such disparate burden

The court added that such a burden, if shown, would be permissible because flow control benefits the two counties by “substantially facilitat[ing] the[ir] . . . comprehensive waste management system [which] encourages waste volume reduction, recycling, and reuse and ensures the proper disposal of hazardous wastes”

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Supreme Court Review: United Haulers v. Oneida-Herkimer

Principal Themes – Brief of Parties and Amici Curiae The role of local government in solid waste management

Waste haulers: local governments are in “the business of selling waste disposal services to private haulers” and use flow control “to shield [their] market activities from interstate competition”

Counterpoint: In implementing their core governmental responsibility for solid waste management, local governments are not engaging in “market activities”

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Discrimination and the purpose of the Commerce Clause Communities that rely on flow control provide considerably

more comprehensive waste management services in comparison to waste hauling companies

“Conceptually, of course, any notion of discrimination assumes a comparison of substantially similar entities”- General Motors v. Tracy

Alternatives to flow control would have the same effect on commerce

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Overview of January 8 Oral Argument

Traditional recognition of local government monopolies

JUSTICE BREYER: Well, the fact is there is a difference between public ownership and giving an exclusive franchise to a [private] company. And the public ownership means that the people of the State have decided to have their own little nationalized industry, which again people don’t like, many. But I never knew there was anything in the Constitution that forbid it.

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Tax-subsidized alternatives to flow controls The effect on commerce is the same Why is one discrimination and the other is not?

JUSTICE SCALIA: You know, as far as the impact on out of state competitors are concerned, it’s exactly the same. The state or the municipality runs its own waste disposal facility. There is no charge for dumping the waste there. The cost of it is entirely covered by taxes. . . .Now, why isn’t that a restraint on interstate commerce, discrimination against interstate commence?

EVAN TAGER: The impact on the interstate market is the same. . . .

JUSTICE SCALIA: Oh, it is indeed. . . I didn’t think you’d be willing to go that far. . . .

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Did the Carbone majority treat the facility at issue as private?

The public vs. private distinction as “formalistic”

If local government can preempt the waste processing-disposal market entirely, as the waste companies concede, why is a narrower measure like flow control a Commerce Clause violation?

Other means to achieve Oneida-Herkimer’s waste reduction and recycling goals

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Variations on 100 percent public ownership Applying the Public vs. Private distinction in other contexts –

where to draw the line Chief Justice Roberts: Waste management services are not

unique to local government But flow control-reliant communities, which rely on a system fee

to support their Integrated Waste Management Systems, are unique to local government

Longstanding recognition of waste management as an essential government service

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Why are “hamburgers and milk” different: The local electoral-political process and the likely impact on

significant local interests that vote and pay taxes The ability of the courts to examine whether the ostensible

“public purpose” of such monopolies is really a mask for protectionism

Post-argument briefs

Awaiting decision

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Overview of Other Environmental Cases Pending

Before the Supreme Court

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Commonwealth of Mass. v. EPA

Issue: Global Climate Change

Does EPA have authority to regulate greenhouse gases (GHG) under section 202(a)(1) of the Clean Air Act?

Section 202(a)(1) directs EPA to prescribe standards to control motor vehicle emissions “which in [EPA’s] judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare”

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Assuming that EPA has such authority, was its decision in 2003 not to regulate GHG unreasonable

Another issue: “standing to sue” – amicus brief by USCM and others addresses “standing” in considerable detail

Federalism – the lack of federal regulation of GHG poses significant risk of injury to state and local governments and impairs their ability to meet governmental obligations

Context of the case Argued November 29, 2006 Global climate change issues obviously transcend this case On a parallel track: Congressional consideration of GHG

regulation

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Atlantic Research v. EPA

Context: An important (and arcane) equitable cost sharing in Superfund (CERCLA) cases

Cooper Industries v. Aviall Services, 543 U.S. 157 (2004): A PRP that “voluntarily” cleans-up a contaminated site without being sued by the government cannot seek contribution – from others that share responsibility for the contamination – under section 113(f) of CERCLA

But Cooper Industries declined to rule on whether section 107(a) of CERCLA provides an implied right to contribution where a PRP voluntarily cleans-up a contaminated site

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Some pre-Cooper Industries cases: “Cost recovery” under section 107(a) is limited to “innocent” parties that had no role in causing the contamination

Atlantic Research (Eighth Circuit) allowed recovery under section 107(a)

A similar recent case involving a local government party – Metropolitan Water Reclamation District of Greater Chicago v. North American Galvanizing

Other recent U.S. Court of Appeals decisions conflict on this issue

Importance of the issue could diminish in the future

Case will be argued April 23, 2007

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Environmental Defense v. Duke Energy

Issue: Challenge to Fourth Circuit ruling that Clean Air Act requires the same definition for “modification” under PSD (Prevention of Significant Deterioration) and NSPS (New Source Performance Standards) regulations

Past significance: Basing PSD applicability on physical changes that cause an increase in overall annual emissions broadened scope of the PSD program

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EPA’s reluctant involvement: Relates to changes in the agency’s regulatory position – EPA now favors the narrower “hourly rate” definition for both NSPS and PSD programs

Implications for ongoing enforcement cases involving various industrial categories (general lack of direct impact for local government)

Case was argued November 1, 2006