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ATLANTIC COAST DEMOLITION v. BOARD OF CHOSEN FREEH

November 28, 1995

ATLANTIC COAST DEMOLITION & RECYCLING, INC., et al., Plaintiffs,
v.
BOARD OF CHOSEN FREEHOLDERS OF ATLANTIC COUNTY, et al., Defendants.



The opinion of the court was delivered by: IRENAS

 IRENAS, District Judge:

 The Court finds that the defendants have not established that a preliminary injunction would cause irreparable harm either to themselves or to the public if an alternative regulatory scheme is implemented. A preliminary injunction will be granted to restrain enforcement of the current flow control regulations of construction and demolition ("C&D") materials in accordance with the alternative regulatory plan ("Plan") submitted by the New Jersey Department of Environmental Protection ("NJDEP" or "the State") on August 8, 1995. The Court interprets the Plan as eliminating flow control of all mixed loads of C&D waste so that in-state interests are not unfairly injured, accepts the Plan as being in compliance with the Court's Opinion and Order of June 9, 1995, and grants the State sixty days to implement the Plan with appropriate regulatory action. If no regulations are in place at that time, haulers of C&D waste will be permitted to (i) take mixed loads of C&D waste to any properly licensed recycling facility, whether in New Jersey or elsewhere, and (ii) dispose of the unrecycled residue at any lawfully operated site, whether in New Jersey or elsewhere.

 I. PROCEDURAL HISTORY1

 On June 6, 1995, this Court held a hearing in regard to plaintiffs' request for a preliminary injunction against flow control of construction and demolition waste in New Jersey. In its Order of June 9, 1995, the Court granted an injunction conditional upon further submissions by the defendants regarding potential alternatives to the current regulations and the possibility of serious irreparable harm to the defendants or the public because of the injunction.

 The State submitted its Plan on August 8, 1995. Co-defendants Camden County Energy Recovery Associates ("CCERA"), Bergen County Utilities Authority ("BCUA"), *fn2" and Cape May County Municipal Utilities Authority ("CMCMUA") responded to the Plan on September 8, 1995, as did defendants/intervenors Essex County Utilities Authority ("ECUA"), Hudson Improvement Authority ("HCIA"), Mercer County Improvement Authority ("MCIA"), and the Passaic County Utilities Authority ("PCUA"). Responses to all of these submissions were filed on October 13, 1995, by plaintiff Atlantic Coast Demolition & Recycling, Inc. ("Atlantic Coast") and the Carbone plaintiffs. *fn3" The State and the co-defendants replied to these responses on October 20, 1995.

 The plaintiffs filed a motion for summary judgment on October 27, 1995, requesting that defendants be forestalled from presenting any evidence at the trial on the merits of the need for revenue generation as a justification for flow control. This motion was denied after oral argument on November 6, 1995. Oral argument regarding the preliminary injunction was also heard on November 6, 1995.

 II. STATEMENT OF FACTS

 A. Flow Control of C&D Waste -- The Current Regulatory Scheme

 Over the last twenty-five years, New Jersey has developed a regulatory structure under which it monitors the flow of waste produced in the state. Twenty-two solid waste management districts were established in 1991, N.J.S.A. 13:1E-19, and each is responsible for developing and implementing a waste plan to treat and accommodate all solid waste generated within its boundaries. A key aspect of the district plans is waste flow control, through which the districts direct haulers to dispose of waste in designated facilities. If a district does not have sufficient capacity to dispose of or recycle its own waste, it can make arrangements with in-state or out-of-state facilities to handle all or a portion of the waste. New Jersey divides its waste into categories, one of which is Type 13 bulky materials. N.J.A.C. 7:26-2.13(g)(1)(iii)(1995). Approximately 64.3% of Type 13 bulky waste is C&D waste from the construction, demolition, or renovation of residential and commercial buildings. *fn4" Plan, at 11. C&D waste makes up about 23% of all solid waste material generated annually in New Jersey and 12% of the total waste disposed in the state. Plan, at 15.

 There are essentially two categories of C&D waste: recyclables and non-recyclables. If a load of C&D waste has been sorted at the site of its creation, such that the load is composed only of C&D recyclables, it is not subject to waste flow control and it can be transported to any in-state or out-of-state facility. N.J.A.C. 7:26-1.1(a)(1) (1995).

 Non-recyclable C&D waste must be disposed of at a district's designated facility in accordance with flow control regulations. If a C&D load has not been source separated, it is a mixed load *fn5" that contains both recyclable and non-recyclable waste. There are two types of C&D mixed loads: (i) those composed of waste from only one solid waste management district; and 2) those composed of waste from more than one district. These latter mixed loads of nonhazardous solid waste (Types 10, 13, 23, 25 and 27), which the Court will refer to as multi-district loads, are subject to additional state regulations. N.J.A.C. 7:26-2B.9 and 26-6.9 (1995); Sondermeyer Deposition, at 162. Multi-district mixed loads are delivered to in-state materials recovery facilities ("MRF"s) or transfer stations for sorting of recyclables. The remaining waste is returned to an appropriate facility for disposal in accordance with state regulations.

 There is some dispute as to what type of mixed load can be taken out of the state for processing of recyclables. The Pereira Memorandum of June 7, 1983, promulgated by an employee of NJDEP, was interpreted by the State as permitting both categories of mixed loads to be taken out of New Jersey for sorting of recyclables as long as the waste remaining after the sorting, an equivalent amount of waste, or an appropriate fee was returned to the district of origin. Some districts, however, interpreted the Pereira Policy as requiring that the facility doing the recycling be included in a district plan. *fn6" In 1992, regulations were promulgated to codify the Pereira Policy. N.J.A.C. 7:26-2B.9 and 26-6.9 (1995). Gary Sondermeyer, Assistant Director of the Division of Solid and Hazardous Waste of NJDEP, and a primary author of the Plan, now interprets these regulations as not authorizing out-of-state sorting of multi-district mixed loads. Sondermeyer Deposition, at 25-26. It appears to the Court that the regulations memorializing the Pereira Policy do not prohibit out-of-state processing of mixed loads. The New Jersey Administrative Code states:

 
Transporting solid waste between solid waste districts and out-of-State
 
(a) Notwithstanding the designation of specific disposal facilities for ultimate disposal of certain waste streams, it shall not be a violation of N.J.A.C. 7:26-6 or any franchise approvals issued pursuant to N.J.S.A. 48:13A-5 for solid waste generated in a district to be transported out of that district or for out-of-district waste to enter a solid waste district for the processing or recovery of materials provided the requirements of N.J.A.C. 7:26-2.11, 2.13, and 2B.9 are met.
 
(b) Facilities designated by solid waste districts for the ultimate in-State disposal of solid waste shall accept out-of-district waste from transfer stations or materials recovery facilities provided the requirements of N.J.A.C. 7:26-2.13 are met.

 N.J.A.C. 7:26-6.9 (1995). Regardless of how the current regulations are interpreted, plaintiffs seek, and will be granted, the right to take all mixed loads of C&D waste, including multi-district mixed loads, to any in-state or out-of-state recycling facility, and to dispose of the unrecyclable residue without regard to existing flow control regulations.

 B. The State's Plan

 Although the State submitted its Plan as required by the Court's Order of June 9, 1995, it continues to maintain, and the co-defendants concur, that the current flow control system is the only means of regulating the waste flow in New Jersey and that even the limited modification embodied in the Plan will seriously harm the public. Plan, at 1. Under the Plan, a transporter of mixed loads of C&D waste wishing to take the loads to out-of-state facilities would first go to the same facility to which it is directed for disposal of non-recyclables or transfer of loads under the current waste flow scheme. Rather than dump its load, the hauler would weigh in at a monitoring point, *fn7" and the facility would have the option to untarp the truck and examine the load, or to require the hauler to dump the load for a more thorough inspection. Plan, at 17; Sondermeyer Deposition, at 28. The hauler would not be charged a tipping fee or any kind of user fee, but would be required to submit one or more forms indicating the type of waste, the municipality from which it was generated, and the ultimate disposal location which the transporter intends to use. Plan, at 17. The forms would be used for record-keeping purposes and to ensure that transporters use the facility they designate. Plan, at 17. Reporting at transfer facilities has been found to be more accurate than information reported from haulers. Sondermeyer Deposition, at 141.

 The State expects that the optional inspection would largely deter illegal diversion of the unaffected 88% of the State's waste. Sondermeyer Deposition, at 28. The Cape May County Municipal Utilities Authority suggests that at least 15% of waste delivery vehicles should be subjected to a random thorough inspection by requiring that the full load be deposited in a designated area, and that any load suspected of containing unauthorized waste could be subjected to a similar search. CMCMUA Response to the Plan, at 16.

 C. Alternative Plans

 The plaintiffs have submitted testimony describing other alternatives to waste flow control that could be used by a state or have been used by other local governments throughout the country. The Affidavit of Bruce J. Parker addresses plans employed by cities in Minnesota and Pennsylvania, while his deposition details nondiscriminatory proposals that could be employed by New Jersey. See, e.g., Parker Deposition, at 64-65. Attached to the Parker Affidavit is the Statement of Michael Shapiro, Director, Office of Solid Waste, U.S. Environmental Protection Agency, in which Mr. Shapiro concludes that flow control is not required to meet environmental and waste management goals such as those of concern to New Jersey. Also attached is the Supplemental Certification of Philip Weinberg discussing Massachusetts' waste regulation scheme. The Court's role at this point is not to evaluate these alternative plans which may be available to the State, but to decide if the Plan promulgated by the State is an acceptable nondiscriminatory alternative to the current flow control of C&D waste.

 D. Financing the State Mandated Plan

 1. Cross-Subsidization of ...


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