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J. Filiberto Sanitation Inc. v. New Jersey

argued: July 11, 1988.


On Appeal from the United States District Court for the District of New Jersey, D.C. Civil No. 87-3802

Sloviter, Scirica and Weis, Circuit Judges.

Author: Sloviter


SLOVITER, Circuit Judge.

Appellant J. Filiberto Sanitation is a New Jersey Corporation engaged in the collection and disposal of solid wastes, registered and licensed as a public utility. See N.J. Stat. Ann. § 48:2-13 (West Supp. 1988). Appellees the New Jersey Department of Environmental Protection (DEP) and the New Jersey Board of Public Utilities (BPU) are state agencies with regulatory authority over aspects of the collection and disposal of solid waste. Appellee Hunterdon County Municipal Utilities Authority (Authority) is a public body created by the Hunterdon County Board of Freeholders pursuant to the New Jersey Municipal and County Utilities Authorities Law, N.J. Stat. Ann. § § 40:14B-1 et seq. (West 1967 & Supp. 1988), to participate in the implementation of the county's Solid Waste Management Plan.

Under a regulation promulgated pursuant to the New Jersey Solid Waste Management Act, all trash collected in Hunterdon County must be deposited at the Authority's transfer station for processing and subsequent disposal. Filiberto, which wishes to continue to transport the waste it collects in Hunterdon County directly to out-of-state landfills for final disposal, challenges the regulation under the dormant Commerce Clause.




The Regulatory Scheme

New Jersey's Solid Waste Management Act, N.J. Stat. Ann. § § 13:1E-1 to 1E-198 (West 1979 and Supp. 1988) (the Act), sets forth a comprehensive waste management program founded on the determination that "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." Id. § 13:1E-2(a).

The Act gives the DEP responsibility for promulgating and updating a statewide solid waste management plan. Id. § 13:1E-6a(3). Each county in New Jersey is designated as a solid waste management district with the responsibility of developing a district solid waste management plan based on state guidelines. Id. § 13:1E-19 to -21, -23. No plan may be adopted without a public hearing and the opportunity for written comment. Id. § 13:1E-23. Upon adoption, a district plan must be reviewed and approved by the DEP. Id.

The BPU's role is to "assess and regulate the economic aspects of the solid waste disposal industry." A.A. Mastrangelo, Inc. v. Commissioner of Dep't Envtl. Protection, 90 N.J. 666, 681, 449 A.2d 516, 524 (1982). Under the Act, it must review the "economic aspects" of a district's plan. N.J. Stat. Ann. § 13:1E-24. Only the BPU has the power to establish franchises for solid waste collection and disposal and to set the rates haulers may charge their customers for such services. Solid Waste Utility and Control Act, N.J. Stat. Ann. § § 48:13A-4 to -5 (West Supp. 1988); see Mastrangelo, 90 N.J. at 681-82, 449 A.2d at 524. To some extent, the roles of each of the two agencies verge upon the other. As the New Jersey Supreme Court has explained, the DEP has the general authority to assess solid waste flow needs and to direct one district to dispose of its waste in another, but only the BPU has the power to "direct individual solid waste collectors to collect and transport waste to specific disposal sites and require or designate specific disposal facilities as the ultimate destination of particular waste streams." Id. at 686, 449 A.2d at 526-27.


The Hunterdon County Plan

Hunterdon County has the obligation under the Act to plan disposal of the approximately 80,000 tons of solid waste it generates each year. The affidavit filed in this case by the Director of Solid Waste for the County of Hunterdon explains the problem facing the Authority in implementing its statutory obligation. At the time the Plan was developed, there was no facility at which solid waste could be disposed of in Hunterdon County. In addition, "there are few available landfills left in the State. Only a few counties are developing new ones. Resource recovery facilities . . . [e.g. trash to steam] have been talked about but only a couple of counties have developed them. "App. at 24. She further explained that "disposal opportunities in the Northeastern United States are scarce. More and more landfill operators are selective about what waste they accept and upon what terms." App. at 31.

Hunterdon County's Plan was adopted and approved by the DEP in 1979, as modified in 1981. The Plan mandated construction of a transfer station and originally provided that county trash could be deposited there for compacting and subsequent transport by the transfer station's operator to the Warren County site for ultimate disposal. The "key ingredient" of the Plan was an Interdistrict Waste Agreement with Warren County, approved by the DEP, under which Warren would, until at least 2005, accept all of Hunterdon's trash for processing at its planned trash-to-steam plant. App. at 27. As an interim measure, Warren County also agreed to accept all of Hunterdon County's trash at its landfill pending completion of the plant.

The Hunterdon County Plan was amended in 1984, following the required public hearing and the approval of the DEP and the BPU, by adoption of a Rule requiring most types of solid waste generated in Hunterdon County to be deposited only at the transfer station.*fn1 This Rule, codified at N.J. Admin. Code tit. 7, § 7.26-6.5(k)(3), became effective on October 7, 1985, and is the regulation attacked in this case.

The County entered into a contract with Browning-Ferris Industries to operate the transfer station, which opened in August 1985. The operation, including the cost of final disposal elsewhere, was to be financed by "tipping fees", the rates charged haulers who deposit waste at the station. The tipping fees were to be set by the Authority, to which the County had delegated general responsibility for the complete operation and administration of all financial aspects of the station.

In 1983, before the transfer station was completed, the Warren County landfill was closed by the DEP. The DEP authorized Hunterdon haulers to haul their waste for disposal to a facility in Ocean County, and also allowed them the option of arranging disposal with private landfills in Pennsylvania. Although the transfer station had been constructed in anticipation of the disposal of all of Hunterdon County's trash at the planned Warren County trash-to-steam plant, DEP announced in 1985 that Warren's trash production was such that Warren would not be able to accommodate all of Hunterdon's trash. A new Interdistrict Waste Agreement was negotiated under which Warren would accept 30,000 tons per year from Hunterdon for ten years once the trash-to-steam ...

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