on writ of certiorari to the united states court ofappeals for the second circuit

April 30, 2007


Chief Justice Roberts delivered the opinion of the Court, except as to Part II–D.

    “Flow control” ordinances require trash haulers to deliver solid waste to a particular waste processing facility. In C & A Carbone, Inc. v. Clarkstown (1994) , this Court struck down under the Commerce Clause a flow control ordinance that forced haulers to deliver waste to a particular private processing facility. In this case, we face flow control ordinances quite similar to the one invalidated in Carbone. The only salient difference is that the laws at issue here require haulers to bring waste to facilities owned and operated by a state-created public benefit corporation. We find this difference constitutionally significant. Disposing of trash has been a traditional government activity for years, and laws that favor the government in such areas—but treat every private business, whether in-state or out-of-state, exactly the same—do not discriminate against interstate commerce for purposes of the Commerce Clause. Applying the Commerce Clause test reserved for regulations that do not discriminate against interstate commerce, we uphold these ordinances because any incidental burden they may have on interstate commerce does not outweigh the benefits they confer on the citizens of Oneida and Herkimer Counties.


    Located in central New York, Oneida and Herkimer Counties span over 2,600 square miles and are home to about 306,000 residents. Traditionally, each city, town, or village within the Counties has been responsible for disposing of its own waste. Many had relied on local landfills, some in a more environmentally responsible fashion than others.

    By the 1980’s, the Counties confronted what they could credibly call a solid waste “ ‘crisis.’ ” Many local landfills were operating without permits and in violation of state regulations. Sixteen were ordered to close and remediate the surrounding environment, costing the public tens of millions of dollars. These environmental problems culminated in a federal clean-up action against a landfill in Oneida County; the defendants in that case named over 600 local businesses and several municipalities and school districts as third-party defendants.

    The “crisis” extended beyond health and safety concerns. The Counties had an uneasy relationship with local waste management companies, enduring price fixing, pervasive overcharging, and the influence of organized crime. Dramatic price hikes were not uncommon: In 1986, for example, a county contractor doubled its waste disposal rate on six weeks’ notice.

    Responding to these problems, the Counties requested and New York’s Legislature and Governor created the Oneida-Herkimer Solid Waste Management Authority (Authority), a public benefit corporation. The Authority is empowered to collect, process, and dispose of solid waste generated in the Counties. To further the Authority’s governmental and public purposes, the Counties may impose “appropriate and reasonable limitations on competition” by, for instance, adopting “local laws requiring that all solid waste … be delivered to a specified solid waste management-resource recovery facility.”

    In 1989, the Authority and the Counties entered into a Solid Waste Management Agreement, under which the Authority agreed to manage all solid waste within the Counties. Private haulers would remain free to pick up citizens’ trash from the curb, but the Authority would take over the job of processing the trash, sorting it, and sending it off for disposal. To fulfill its part of the bargain, the Authority agreed to purchase and develop facilities for the processing and disposal of solid waste and recyclables generated in the Counties.

    The Authority collected “tipping fees” to cover its operating and maintenance costs for these facilities. The tipping fees significantly exceeded those charged for waste removal on the open market, but they allowed the Authority to do more than the average private waste disposer. In addition to landfill transportation and solid waste disposal, the fees enabled the Authority to provide recycling of 33 kinds of materials, as well as composting, household hazardous waste disposal, and a number of other services. If the Authority’s operating costs and debt service were not recouped through tipping fees and other charges, the agreement provided that the Counties would make up the difference.

    As described, the agreement had a flaw: Citizens might opt to have their waste hauled to facilities with lower tipping fees. To avoid being stuck with the bill for facilities that citizens voted for but then chose not to use, the Counties enacted “flow control” ordinances requiringthat all solid waste generated within the Counties be delivered to the Authority’s processing sites. Private haulers must obtain a permit from the Authority to collect waste in the Counties. Penalties for noncompliance with the ordinances include permit revocation, fines, and imprisonment.

    Petitioners are United Haulers Association, Inc., a trade association made up of solid waste management companies, and six haulers that operated in Oneida and Herkimer Counties when this action was filed. In 1995, they sued the Counties and the Authority, alleging that the flow control laws violate the Commerce Clause by discriminating against interstate commerce. They submitted evidence that without the flow control laws and the associated $86-per-ton tipping fees, they could dispose of solid waste at out-of-state facilities for between $37 and $55 per ton, including transportation.

    The District Court read our decision in Carbone as categorically rejecting nearly all flow control laws. The court ruled in the haulers’ favor, enjoining enforcement of the Counties’ laws....



    The Commerce Clause provides that “Congress shall have Power … [t]o regulate Commerce with foreign Nations, and among the several States.” Although the Constitution does not in terms limit the power of States to regulate commerce, we have long interpreted the Commerce Clause as an implicit restraint on state authority, even in the absence of a conflicting federal statute.

    To determine whether a law violates this so-called “dormant” aspect of the Commerce Clause, we first ask whether it discriminates on its face against interstate commerce. In this context, “ ‘discrimination’ simply means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.” Discriminatory laws motivated by “simple economic protectionism” are subject to a “virtually per se rule of invalidity,”  which can only be overcome by a showing that the State has no other means to advance a legitimate local purpose....


    The flow control ordinances in this case benefit a clearly public facility, while treating all private companies exactly the same. Because the question is now squarely presented on the facts of the case before us, we decide that such flow control ordinances do not discriminate against interstate commerce for purposes of the dormant Commerce Clause.

    Compelling reasons justify treating these laws differently from laws favoring particular private businesses over their competitors. “Conceptually, of course, any notion of discrimination assumes a comparison of substantially similar entities.” But States and municipalities are not private businesses—far from it. Unlike private enterprise, government is vested with the responsibility of protecting the health, safety, and welfare of its citizens. These important responsibilities set state and local government apart from a typical private business.

    Given these differences, it does not make sense to regard laws favoring local government and laws favoring private industry with equal skepticism. As our local processing cases demonstrate, when a law favors in-state business over out-of-state competition, rigorous scrutiny is appropriate because the law is often the product of “simple economic protectionism.” Laws favoring local government, by contrast, may be directed toward any number of legitimate goals unrelated to protectionism. Here the flow control ordinances enable the Counties to pursue particular policies with respect to the handling and treatment of waste generated in the Counties, while allocating the costs of those policies on citizens and businesses according to the volume of waste they generate.

    The contrary approach of treating public and private entities the same under the dormant Commerce Clause would lead to unprecedented and unbounded interference by the courts with state and local government. The dormant Commerce Clause is not a roving license for federal courts to decide what activities are appropriate for state and local government to undertake, and what activities must be the province of private market competition. In this case, the citizens of Oneida and Herkimer Counties have chosen the government to provide waste management services, with a limited role for the private sector in arranging for transport of waste from the curb to the public facilities. The citizens could have left the entire matter for the private sector, in which case any regulation they undertook could not discriminate against interstate commerce. But it was also open to them to vest responsibility for the matter with their government, and to adopt flow control ordinances to support the government effort. It is not the office of the Commerce Clause to control the decision of the voters on whether government or the private sector should provide waste management services. “The Commerce Clause significantly limits the ability of States and localities to regulate or otherwise burden the flow of interstate commerce, but it does not elevate free trade above all other values.” 

    We should be particularly hesitant to interfere with the Counties’ efforts under the guise of the Commerce Clause because “[w]aste disposal is both typically and traditionally a local government function.” The policy of the State of New York favors “displac[ing] competition with regulation or monopoly control” in this area. We may or may not agree with that approach, but nothing in the Commerce Clause vests the responsibility for that policy judgment with the Federal Judiciary.

    Finally, it bears mentioning that the most palpable harm imposed by the ordinances—more expensive trash removal—is likely to fall upon the very people who voted for the laws. Our dormant Commerce Clause cases often find discrimination when a State shifts the costs of regulation to other States, because when “the burden of state regulation falls on interests outside the state, it is unlikely to be alleviated by the operation of those political restraints normally exerted when interests within the state are affected.” Here, the citizens and businesses of the Counties bear the costs of the ordinances. There is no reason to step in and hand local businesses a victory they could not obtain through the political process.

    We hold that the Counties’ flow control ordinances, which treat in-state private business interests exactly the same as out-of-state ones, do not “discriminate against interstate commerce” for purposes of the dormant Commerce Clause.


    The Counties’ flow control ordinances are properly analyzed under the test set forth in Pike v. Bruce Church, Inc. (1970) , which is reserved for laws “directed to legitimate local concerns, with effects upon interstate commerce that are only incidental.” Under the Pike test, we will uphold a nondiscriminatory statute like this one “unless the burden imposed on [interstate] commerce is clearly excessive in relation to the putative local benefits.”

    After years of discovery, both the Magistrate Judge and the District Court could not detect any disparate impact on out-of-state as opposed to in-state businesses. The Second Circuit alluded to, but did not endorse, a “rather abstract harm” that may exist because “the Counties’ flow control ordinances have removed the waste generated in Oneida and Herkimer Counties from the national marketplace for waste processing services.” We find it unnecessary to decide whether the ordinances impose any incidental burden on interstate commerce because any arguable burden does not exceed the public benefits of the ordinances.

    The ordinances give the Counties a convenient and effective way to finance their integrated package of waste-disposal services. While “revenue generation is not a local interest that can justify discrimination against interstate commerce,” we think it is a cognizable benefit for purposes of the Pike test.

    At the same time, the ordinances are more than financing tools. They increase recycling in at least two ways, conferring significant health and environmental benefits upon the citizens of the Counties. First, they create enhanced incentives for recycling and proper disposal of other kinds of waste. Solid waste disposal is expensive in Oneida-Herkimer, but the Counties accept recyclables and many forms of hazardous waste for free, effectively encouraging their citizens to sort their own trash. Second, by requiring all waste to be deposited at Authority facilities, the Counties have markedly increased their ability to enforce recycling laws. If the haulers could take waste to any disposal site, achieving an equal level of enforcement would be much more costly, if not impossible. For these reasons, any arguable burden the ordinances impose on interstate commerce does not exceed their public benefits.

*  *  *

    The Counties’ ordinances are exercises of the police power in an effort to address waste disposal, a typical and traditional concern of local government. The haulers nevertheless ask us to hold that laws favoring public entities while treating all private businesses the same are subject to an almost per se rule of invalidity, because of asserted discrimination. In the alternative, they maintain that the Counties’ laws cannot survive the more permissive Pike test, because of asserted burdens on commerce. There is a common thread to these arguments: They are invitations to rigorously scrutinize economic legislation passed under the auspices of the police power. There was a time when this Court presumed to make such binding judgments for society, under the guise of interpreting the Due Process Clause. See Lochner v. New York, 198 U. S. 45 (1905) . We should not seek to reclaim that ground for judicial supremacy under the banner of the dormant Commerce Clause.

Justice Alito, with whom Justice Stevens and Justice Kennedy join, dissenting.

    In C & A Carbone, Inc. v. Clarkstown (1994) , we held that “a so-called flow control ordinance, which require[d] all solid waste to be processed at a designated transfer station before leaving the municipality,” discriminated against interstate commerce and was invalid under the Commerce Clause because it “depriv[ed] competitors, including out-of-state firms, of access to a local market.” Because the provisions challenged in this case are essentially identical to the ordinance invalidated in Carbone, I respectfully dissent....

    This case cannot be meaningfully distinguished from Carbone. As the Court itself acknowledges, “[t]he only salient difference” between the cases is that the ordinance invalidated in Carbone discriminated in favor of a privately owned facility, whereas the laws at issue here discriminate in favor of “facilities owned and operated by a state-created public benefit corporation.” The Court relies on the distinction between public and private ownership to uphold the flow-control laws, even though a straightforward application of Carbone would lead to the opposite result. The public-private distinction drawn by the Court is both illusory and without precedent....

    In any event, we have never treated discriminatory legislation with greater deference simply because the entity favored by that legislation was a government-owned enterprise....

    This Court long ago recognized that the Commerce Clause can be violated by a law that discriminates in favor of a state-owned monopoly. In the 1890’s, South Carolina enacted laws giving a state agency the exclusive right to operate facilities selling alcoholic beverages within that State, and these laws were challenged under the Commerce Clause in Scott v. Donald (1897).... 

    Thus, were it not for the Twenty-first Amendment, laws creating state-owned liquor monopolies—which many States maintain today—would be deemed discriminatory under the dormant Commerce Clause.  There is, of course, no comparable provision in the Constitution authorizing States to discriminate against out-of-state providers of waste processing and disposal services, either by means of a government-owned monopoly or otherwise.

    Nor has this Court ever suggested that discriminatory legislation favoring a state-owned enterprise is entitled to favorable treatment. To be sure, state-owned entities are accorded special status under the market-participant doctrine. But that doctrine is not applicable here.

    Under the market-participant doctrine, a State is permitted to exercise “ ‘independent discretion as to parties with whom [it] will deal.’ ” The doctrine thus allows States to engage in certain otherwise-discriminatory practices (e.g., selling exclusively to, or buying exclusively from, the State’s own residents), so long as the State is “acting as a market participant, rather than as a market regulator.” 

    Respondents are doing exactly what the market-participant doctrine says they cannot: While acting as market participants by operating a fee-for-service business enterprise in an area in which there is an established interstate market, respondents are also regulating that market in a discriminatory manner and claiming that their special governmental status somehow insulates them from a dormant Commerce Clause challenge....

    The dormant Commerce Clause has long been understood to prohibit the kind of discriminatory legislation upheld by the Court in this case....

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