ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY -- NEWARK, (D.C. Civil No. 85-0458)
Before GIBBONS, SLOVITER and STAPLETON, Circuit Judges
The Commissioner of the New Jersey Department of Environmental Protection and the New Jersey Attorney General appeal from a final judgment declaring Pub. L. 1983, ch. 392, N.J.S.A. 13:1E-126 to 13:1E-135 (Supp. 1984-1985) (hereinafter referred to as Pub. L. 1983, ch. 392), to be null and void as a violation of the United States Constitution, and enjoining them from enforcing it. That statute amended and supplemented the comprehensive statutory scheme under which New Jersey regulates the disposal of solid and hazardous waste. after a final hearing the district court held that some provisions of the statute violated federally guaranteed rights of association and privacy and that those provisions were not severable from the rest of the statute. Consequently, the district court concluded that the entire statute was void. We reverse.
The Legislative Background
New Jersey has a long, and almost unique, history of regulating the solid and hazardous waste industries as public utilities. As early as 1958 the New Jersey Attorney General's Office and several grand juries investigated the relationship between an organization called the Municipal Contractors Association and a labor organization representing employees in the garbage collection industry. These organizations were alleged to be limiting access to the business of collecting and disposing of solid waste. A report reflecting the investigation by the Attorney General's Office, dated May 12, 1959, was made public on May 17, 1959. Presentments on the subject were handed down by a Bergen County grand jury on March 21, 1958 and by a Union County grand jury on May 28, 1958. Although a New Jersey Senate committee investigated the allegations in the report and presentments, no legislation resulted at that time. A decade later the State Commission of Investigation conducted on inquiry entitled "In the Matter of the Investigation of Waste Disposal and the Garbage Industry in New Jersey." That inquiry was prompted by allegations of various forms of intimidation of garbage collectors to enforce anticompetitive practices, allegations that landfill owners who were also in the collection business were using their ownership of the landfill sites to gain competitive advantage over other collectors, and allegations that multiple municipal licensing requirements put some collectors at a competitive disadvantage. The Report of the State Commission on Investigation, dated October 7, 1969, made several recommendations to the legislature that resulted in a regulatory scheme enacted in 1970. See Pub. L. 1970, chs. 39, 40 (codified as amended N.J.S.A. 13:1E-1 to 13:1E-135 (Supp. 1984-1985) and N.J.S.A. 48:13A-1 to 48:13A-13 (Supp. 1984-1985)).
In October 1980 an indictment was returned by a state grand jury against New Jersey Trade Waste Association,*fn1 charging that unlawful efforts were made to insulate particular commercial, industrial, or residential scavenger accounts from competition in violation of the New Jersey Antitrust Act. N.J.S.A. 56:9-1 to 56:9-19 (Supp. 1984-1985).*fn2 Before the trial on that indictment took place, a joint task force of the Department of Law and Public Safety (headed by the Attorney General), the Department of Environmental Protection, and the Board of Public Utilities studied the waste disposal industry and filed a report. That report described the structure of the industry, the increasing complexity of environmental regulations applicable to it, the decreasing availability of landfill sites, and the deficiencies in the existing regulatory structure. The report noted proposed legislation that would prevent organized crime from having ownership interests in the industry -- a recurring concern in New Jersey for almost a quarter century. The report recommended legislative changes, and those recommendations provided the general framework for the legislation challenged in this action.
The New Jersey Statutory Scheme
In the Solid Waste Management Act of 1970, Pub. L. 1970, ch. 39 (codified as amended N.J.S.A. 13:1E-1 to 13:1E-135 (Supp. 1984-1985)), New Jersey undertook to regulate the disposition of solid waste in that state. A central feature of that Act is the requirement that solid waste collection and disposal facilities and operations be registered with the Department of Environmental Protection. See N.J.S.A. 13:1E-4. Registrations may be revoked by the Department if such facilities or operations are not in compliance with state environmental protection laws and regulations. See N.J.S.A. 13:1E-12. Simultaneously, in the solid Waste Utility Control Act of 1970, N.J.S.A. 48:13A-1 to 48:13A-13 (Supp. 1984-1985), New Jersey determined that "the collection, disposal and utilization of solid waste is a matter of grave concern to all citizens and is an activity thoroughly affected with the public interest," the economic aspects of which should be regulated as a public utility by the New Jersey Public Utility Commission. See N.J.S.A. 48:13A-2. A central feature of the Solid Waste Utility Control Act is that no person may engage in the business of solid waste collection or disposal until found by the Board of Public Utility Commissioners to be "qualified by experience, training or education to engage in such business, is able to furnish proof of financial responsibility, and holds a certificate of convenience and necessity. . . ." N.J.S.A. 48:13A-6. Thus, the New Jersey statutory scheme, since 1970, has treated solid waste collection and disposal as an environmentally sensitive public utility, the environmental aspects of which are regulated by the Department of Environmental Protection and the economic aspects of which are regulated by the Public Utility Commission. Both the Solid Waste Management Act of 1970 and the Solid Waste Utility Control Act of 1970 were amended in 1975 to increase the regulatory authority of the Department of Environmental Protection and the Public Utility Commission, in manners not challenged in the instant case. See Pub. L. 1975, ch. 326. In 1981 the Solid Waste Management Act of 1970 was further amended and supplemented. See Pub. L. 1981, chs. 278, 279. Chapter 278 of the 1981 amendment imposed a recycling tax for every cubic yard of solid waste accepted for disposal at a facility to fund the State Recycling Fund. See N.J.S.A. 13:1E-95, 13:1E-96. Chapter 279, entitled the "Major Hazardous Waste Facilities Siting Act," contains a legislative finding that hazardous waste disposal has been made "on an indiscriminate and illegal basis. . . ." N.J.S.A. 13A:1E-50. To monitor the disposal of hazardous waste, Chapter 279 requires special registration and approval for hazardous waste facilities. See N.J.S.A. 13:1E-60. The Department of Environmental Protection was required to review all applications, and that review included consideration of a disclosure statement as well as an investigation report by the Attorney General based on that disclosure statement. See N.J.S.A. 13:1E-60(b). Approval of such a registration could not be granted unless
the applicant, in its prior performance record in the treatment, storage or disposal of hazardous waste, exhibits sufficient reliability, expertise, and competency to operate a major hazardous waste facility given the potential harm to human health and the environment which would result from the irresponsible operation of the proposed facility. In no case may approval be granted to the applicant if any person shown to be a party to the application by the disclosure statement [required by the Act] has been convicted of a crime for any act or omission related to the collection, treatment, storage or disposal of hazardous waste in this or any other jurisdiction within 10 years of the date on which the application was filed.
N.J.S.A. 13:1E-60(1) (deleted by amendment Pub. L. 1983, ch. 392). The disclosure statement required of an applicant for a hazardous waste treatment registration by Chapter 279 was to include:
(1) The names and addresses of all officers, directors, or partners of the business concern seeking a registration and engineering design approval and all persons or business concerns holding more than 10% of the equity in or debt liability of that business concern;
(2) The names and addresses of all officers, directors, or partners of any business concern disclosed in the statement and the names and addresses of all persons holding more than 10% of the equity in or the debt liability of any business concern so disclosed;
(3) The name and address of any company which collects, treats, stores or disposes of hazardous waste in which the business concern seeking a registration and engineering design approval holds an equity interest;
(4) A description of the experience and credentials in, including any past or present licenses for, the collection, treatment, storage or disposal of hazardous waste possessed by the key employees, officers, directors, or partners of the business concern seeking a registration and engineering design approval;
(5) A listing and explanation of any notices, administrative orders or license revocations issued by any state or federal authority since January 1, 1976 which indicate a violation of any law or rule and regulation relating to the collection, treatment, storage or disposal of hazardous waste by the business concern seeking a registration and engineering design approval or by any key employee, officer, director, or partner thereof;
(6) A listing and explanation of any judgment of liability or conviction which was rendered, pursuant to any state or federal statute or local ordinance concerning the collection, treatment, storage or disposal of hazardous waste, against the business concern seeking a registration and engineering design approval or against any key employee, officer, director, or partner thereof; and
(7) Any other information the Department may require that relates to the competency or reliability of the applicant.
N.J.S.A. 13:1E-51h (deleted by amendment Pub. L. 1983, ch. 392)
While the quoted 1981 disclosure amendments dealt only with registration of facilities for disposal of hazardous waste, the 1983 legislation challenged in this lawsuit deals comprehensively with disclosure requirements both for hazardous waste facilities applications and for solid waste collection and disposal facilities. In addition, it differs from the 1981 amendment in several other significant respects.
A. Disqualifying Criteria
First, while the 1981 amendment prohibited approval of registration if a person listed in the disclosure statement had been convicted of a crime relating to storage or disposal of hazardous waste within 10 years, the disqualification criteria for criminal convictions in the 1983 amendment are far broader:
The provisions of any law to the contrary notwithstanding, no license shall be approved by the department:
b. If any person required to be listed in the disclosure statement, or shown to have a beneficial interest in the business of the applicant or the licensee other than an equity interest or debt liability by the investigation thereof, has been convicted of any of the following crimes under the laws of New Jersey or the equivalent thereof under the laws of any other jurisdiction:
(10) Theft and related crimes;
(11) Forgery and fraudulent practices;
(12) Fraud in the offering, sale or purchase of Controlled Dangerous Substances Act," P. L. 1970, c. 226 (C.24:21:19), except possession of 84 grams or less of marijuana;
(18) Violation of criminal provisions of the "New Jersey Antitrust Act," P.L. 1970, c. 73 (C. 56:9-1 et seq.);
(19) Any purposeful or reckless violation of the criminal provisions of any federal or state environmental protection laws, rules, or regulations;
(20) Violation of N.J.S. 2C-17-2;
(21) Any offense specified in chapter 28 of
(22) Violation of the "Solid Waste Utility Control Act," P.L. 1970, c. 40 and P.L. 1981, c. 211 (C. 48:13A-1 et seq.)
N.J.S.A. 13:1E-133(b). As can be readily seen, most of the listed offenses are unrelated to the hazardous waste or solid waste disposal business. The Act also requires the withholding of a license, if any person listed in the disclosure statement has pending charges, in any jurisdiction, of any of the crimes listed in section 133(b). N.J.S.A. 13:1E-133(d).
Moreover, in contrast with the 1981 amendment, the 1983 amendment omits the 10 year cut off on disqualifying convictions. In place of that cut off the 1983 amendment provides.
Notwithstanding the provisions of this subsection, no applicant shall be denied a license on the basis of a conviction of any individual required to be listed in the disclosure statement or shown to have a beneficial interest in the business of the applicant or the licensee other than an equity interest or debt liability by the investigation thereof for any of the offenses enumerated in this subsection as disqualification criteria, provided that the person has affirmatively demonstrated by clear and convincing evidence his rehabilitation. In determining whether an applicant has ...