Case Title: Hunt v. Chemical Waste Management

Citation: 584 So. 2d 1367

Docket Number: 1901043, 1901044, 1901106

State: alabama

Court: Alabama Supreme Court

Date: 1991-07-11T00:00:00Z

Document:
584 So. 2d 1367 (1991)
Guy HUNT, as Governor of the State of Alabama
v.
CHEMICAL WASTE MANAGEMENT, INC.
James M. SIZEMORE, Jr., as Commissioner of the Alabama Department of Revenue; and the Alabama Department of Revenue
v.
CHEMICAL WASTE MANAGEMENT, INC.
CHEMICAL WASTE MANAGEMENT, INC.
v.
The ALABAMA DEPARTMENT OF REVENUE, et al.
1901043, 1901044 and 1901106.

Supreme Court of Alabama.
July 11, 1991.
*1369 Bert S. Nettles, Alton B. Parker, Jr. and Kenneth O. Simon of Spain, Gillon, Grooms, Blan & Nettles, Birmingham, and H. William Wasden, Legal Advisor to the Governor, Montgomery, for appellant Governor Guy Hunt.
William D. Coleman and Jim B. Grant, Jr., of Capell, Howard, Knabe & Cobbs, Montgomery, for appellant James M. Sizemore, Jr., Com'r of Revenue.
J. Wade Hope, Montgomery, for appellant Alabama Dept. of Revenue.
Fournier J. Gale III, H. Thomas Wells, Jr. and J. Alan Truitt of Maynard, Cooper, Frierson & Gale, Birmingham, and Oakley Melton of Melton, Espy, Williams and Hayes, Montgomery, for appellee/cross-appellant Chemical Waste Management, Inc.
SHORES, Justice.
In April 1990, the Alabama Legislature enacted Act No. 90-326 (the "Act"), effective July 15, 1990, Code of Ala. 1975, § 22-30B-1 et seq. (Supp.1990), which was signed into law by the Governor. The Act imposes two fees on the disposal of hazardous waste at commercial facilities in Alabama. A "Base Fee" of $25.60 per ton was imposed on all waste and substances disposed of at commercial facilities, regardless of the state of origin. An "Additional Fee" of $72.00 per ton was imposed on all waste and substances generated outside the State of Alabama and disposed of at Alabama facilities.
The Act also included a "Cap" provision, limiting the amount of hazardous waste that can be disposed of at any affected facility in any one-year period. Under the Cap provision, the amount of hazardous waste disposed of during the first year that the Act's new fees are in effect (the "benchmark period"), becomes the permanent ceiling in subsequent years. The Cap provision applies only to commercial facilities that dispose of over 100,000 tons of waste per year. The facility at Emelle, Alabama, is the only facility in this category.
On June 5, 1990, Chemical Waste Management, Inc. ("CWM"), filed suit for declaratory relief against the Alabama Department of Revenue, James M. Sizemore, Jr., as Commissioner, and Guy Hunt as Governor ("the State"). The suit challenged the constitutionality of Act No. 90-326, *1370 Code of Alabama 1975, § 22-30B-1 et seq. CWM alleged that the provisions of the Act violate the Commerce Clause of the United States Constitution; the Equal Protection Clause of the United States Constitution and its equivalents under the State Constitution; and the Due Process Clause of the State Constitution. CWM further contends that the Act is a "revenue bill" enacted during the last five days of the legislative session in violation of Article IV, § 70, of the Alabama Constitution. CWM further contends that the Cap provision violates the Commerce, Due Process, and Equal Protection Clauses of the United States Constitution and is preempted by various federal statutes.[1]
CWM also sought a preliminary and permanent injunction enjoining the State from enforcing, applying, or attempting to enforce the Act. Dr. Claude Earl Fox, state health officer, was allowed to intervene on behalf of the State Board of Health.
Governor Hunt filed a counterclaim for declaratory relief, asking that the trial court find and declare the Act constitutional. On February 28, 1991, the trial judge, the Honorable Joseph D. Phelps, declared the Base Fee and Cap provisions of the Act to be valid and constitutional. However, he declared the Additional Fee imposed on out-of-state generated waste to be impermissible and invalid as a violation of the Commerce Clause of the United States Constitution.
The State appeals only that aspect of the trial judge's order pertaining to the Additional Fee. CWM appeals from the trial judge's holding that the Base Fee and Cap are constitutional. We affirm the trial judge's holdings that the Base Fee and Cap provisions of the Act are valid and constitutional. We reverse the holding of the trial judge that the Additional Fee violates the Commerce Clause.
The legislative findings underlying Act No. 90-326, as quoted by the trial judge in his order of February 28, 1991, are as follows:
The pertinent provisions of Act No. 90-326 are as follows:
The trial judge made findings of fact in his order of February 28, 1991, which we quote below and approve:
We first consider whether the trial court erred in holding that the Base Fee of Act No. 90-326 is constitutional. CWM contends the trial court erred in finding the Base Fee constitutional and argues that it clearly discriminates against interstate commerce in violation of the Commerce Clause. CWM argues further that the Base Fee violates the Equal Protection Clause, because, it claims, the classifications are not rationally related to a legitimate state interest. CWM finally argues that the Base Fee violates the Due Process Clause.
We do not find CWM's arguments as to this issue to be persuasive. We adopt the conclusions of law stated by Judge Phelps in his order of February 28, 1991, as the decision of this Court as to this issue:
Next we must consider whether the trial court erred in holding that the Cap provision of Act No. 90-326 is constitutional and is not preempted by federal statutes.[5] We find the reasoning and the conclusions of law by the trial judge to be persuasive on this issue. We therefore adopt Judge Phelps's order of February 28, 1991, as to the issue of the Cap provision, as the decision of this Court:
We next consider whether Act No. 90-326 is a "revenue bill" enacted in violation of Article IV, § 70, of the Alabama Constitution. We again adopt the trial court's order as the decision of this Court as to this issue:
We next consider whether the trial court erred in holding that the Additional Fee of Act No. 90-326 discriminates against interstate commerce in violation of the Commerce Clause.
The Commerce Clause does not invalidate all state restrictions on commerce. "It has long been recognized that `in the absence of conflicting legislation by Congress, there is a residuum of power in the state to make laws governing matters of local concern which nevertheless in some measure affect interstate commerce or even, to some extent, regulate it.' Southern Pacific Co. v. Arizona, 325 U.S. 761, 767, 65 S. Ct. 1515, 1519, 89 L. Ed. 1915 (1945)." Kassel v. Consolidated Freightways Corp., 450 U.S. 662, 670, 101 S. Ct. 1309, 1316, 67 L. Ed. 2d 580, 586 (1981). The constitutionality of a state regulation depends upon "a sensitive consideration of the weight and nature of the state regulatory concern in light of the extent of the burden imposed on the course of interstate commerce." Id., quoting Raymond Motor Transp., Inc. v. Rice, 434 U.S. 429 at 441, 98 S. Ct. 787, at 794, 54 L. Ed. 2d 664, at 673 (1978).
In New Energy Co. v. Limbach, 486 U.S. 269, at 278, 108 S. Ct. 1803, at 1810, 100 L. Ed. 2d 302 (1988), the United States Supreme Court stated the test in which a facially discriminatory statute may be found to be valid under the Commerce Clause:
In holding that the Additional Fee violates the Commerce Clause, the trial judge relied upon City of Philadelphia v. New Jersey, 437 U.S. 617, 98 S. Ct. 2531, 57 L. Ed. 2d 475 (1978), and National Solid Wastes Management Ass'n v. Alabama Dep't of Environmental Management, 910 F.2d 713 (11th Cir.1990), modified and reh'g denied, 924 F.2d 1001 (11th Cir.1991), reh'g en banc denied, 932 F.2d 979 (1991); cert. denied, ___ U.S. ___, 111 S. Ct. 2800, 115 L. Ed. 2d 973 (1991).
In National Solid Wastes Management Ass'n the 11th Circuit Court of Appeals held the "Holley Bill," Act No. 89-788, Code of Ala.1975, § 22-30-11 (Supp.1990), invalid under the Commerce Clause. The Holley Bill banned disposal of hazardous waste in Alabama from a number of states. The Court of Appeals stated:
Id., 910 F.2d  at 721. Unlike the Holley bill, the Additional Fee provision of Act No. 90-326 has specifically been found by the legislature to be an effective way to deal with health and environmental hazards to Alabamians created by hazardous waste imported here from other states. We believe that Alabama has a legitimate local interest which this Act legitimately serves, and is one that is permissible under the Commerce Clause.
The Supreme Court of the United States has not said that hazardous waste is an article of commerce. Assuming that it is an article of commerce, as the 11th Circuit Court of Appeals assumed, we believe that a statute such as the one before us, which advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives, can be valid under the Commerce Clause.
The trial court concluded that City of Philadelphia v. New Jersey, supra, compelled the conclusion that the legislation involved here was foreclosed by the Commerce Clause. We believe that that case is distinguishable under the facts here. That case involved a New Jersey statute that banned the movement of liquid or solid waste (but not hazardous waste) into the state. The purpose of that legislation was found to be economic protectionism, which was in violation of the Commerce Clause. CWM argues that the holding in City of Philadelphia v. New Jersey precludes state and local governments from responding to real and substantial public health and environmental dangers by controlling the importation of wastes. However, the United States Supreme Court cases make a distinction between state measures that discriminate arbitrarily against out-of-state commerce in order to give in-state interests a commercial advantage, i.e., simple economic protectionism, and state measures that seek to protect public health or safety or the environment. Maine v. Taylor, 477 U.S. 131, 148 n. 19, 106 S. Ct. 2440, 2453 n. 19, 91 L. Ed. 2d 110 (1986).
In City of Philadelphia v. New Jersey, the Supreme Court made this distinction and decided that the New Jersey statute constituted economic protectionism, rather than a measure to protect the citizens of the state from menaces to their health or safety. City of Philadelphia v. New Jersey does not hold that a state may not limit importation of wastes to protect health and the environment; it holds that a state may not do so for "simple economic protectionism." The Supreme Court has characterized City of Philadelphia v. New Jersey as involving "a state law purporting to promote environmental purposes" but is "in reality `simple economic protectionism.'" Minnesota v. Clover Leaf Creamery Co., *1388 449 U.S. 456, 471, 101 S. Ct. 715, 727, 66 L. Ed. 2d 659 (1981).
Mr. Justice Rehnquist, in his dissent in City of Philadelphia v. New Jersey, discussed the growing problem in our nation in the disposal of solid waste and the health and safety hazards associated with its disposal. There, in speaking not of hazardous waste, as in the present case, but of garbage, he noted that the United States Supreme Court has recognized that the States can enact quarantine laws, which "have not been considered forbidden protectionist measures, even though they were directed against out-of-state commerce." Id., 437 U.S.  at 631, 98 S. Ct.  at 2539 (quoting the majority opinion, 437 U.S.  at 628, 98 S.Ct. at 2537). Justice Rehnquist stated:
437 U.S.  at 631, 98 S. Ct.  at 2539. (Citations omitted.) Justice Rehnquist considered the quarantine law cases dispositive of the issue, and would have allowed a state to regulate solid wastes from out-of-state.
In Maine v. Taylor, 477 U.S. 131, 106 S. Ct. 2440, 91 L. Ed. 2d 110 (1986), the United States Supreme Court made it clear that environmental measures are entitled to greater deference than ordinary legislative acts. The Court upheld a facially discriminatory state statute that banned all importation of live baitfish. The Court stated:
477 U.S.  at 151-52, 106 S. Ct.  at 2454.
The Supreme Court in Maine v. Taylor cited City of Philadelphia v. New Jersey for the proposition that "[s]hielding in-state industries from out-of-state competition is almost never a legitimate local purpose, and state laws that amount to `simple economic protectionism' consequently have been subject to a `virtually per se rule of invalidity,'" while stating that, in contrast to City of Philadelphia v. New Jersey, "there is little reason in this case to believe that the legitimate justifications the State has put forward for its statute are merely a sham or a `post hoc rationalization.'" Maine v. Taylor, 477 U.S.  at 148-49, 106 S. Ct.  at 2453.
The Additional Fee provision in the Act advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives. It has not been enacted for the purpose of economic protectionism. In enacting the Additional Fee, the Alabama legislature was not banning the collection and acceptance of hazardous waste; it was merely asking the states that are using Alabama as a dumping ground for their hazardous wastes to bear some of the costs for the increased risk they bring to the environment and the health and safety of the people of Alabama. As in Maine v. Taylor, the problem is already with us. Millions of tons of hazardous wastes have been buried at Emelle. The State of Alabama has a legitimate justification, apart from their origin, *1389 for treating the out-of-state wastes differently.
Because this waste is permanently stored in Alabama, the risk to the health and safety of the people of Alabama will continue in perpetuity. The costs to the state of regulation and monitoring of the facility will continue in perpetuity. A disproportionate share of these costs will be borne by the taxpayers of the State of Alabama for the wastes dumped by other states.
The Additional Fee serves these legitimate local purposes that cannot be adequately served by reasonable nondiscriminatory alternatives: (1) protection of the health and safety of the citizens of Alabama from toxic substances; (2) conservation of the environment and the state's natural resources; (3) provision for compensatory revenue for the costs and burdens that out-of-state waste generators impose by dumping their hazardous waste in Alabama; (4) reduction of the overall flow of wastes traveling on the state's highways, which flow creates a great risk to the health and safety of the state's citizens.
The testimony before the trial court showed that in 1985 some 341,000 tons of hazardous waste were buried in the Emelle facility. By 1989 the tonnage had grown to 788,000 tons per year. While CWM estimates that there is capacity for storage at Emelle for 100 years, the increase in tonnage has more than doubled in four years.
As the trial judge noted in his findings of fact:
Unlike the situation in City of Philadelphia v. New Jersey, where there was questionable environmental concern, there is legitimate concern here in Alabama. There is no dispute that the wastes dumped at Emelle include known carcinogens and materials that are extremely hazardous and can cause birth defects, genetic damage, blindness, crippling, and death. These wastes are far more dangerous to the people of Alabama than rags infected with small-pox or yellow fever.
This Court takes judicial notice of the fact that there is a finite capacity for storage of hazardous waste at the Emelle facility and that the capacity is rapidly being reached. The record reflects that 85% to 90% of the tonnage that is permanently buried at Emelle is from out-ofstate. There is nothing in the Commerce Clause that compels the State of Alabama to yield its total capacity for hazardous waste disposal to other states. To tax Alabama-generated hazardous waste at the same rate as out-of-state waste is not an available non-discriminatory alternative, because Alabama is bearing a grossly disproportionate share of the burdens of hazardous waste disposal for the entire country. Here, the statute that creates the Additional Fee does not needlessly obstruct interstate trade, nor does it constitute economic protectionism. It is a responsible exercise by the State of Alabama of its broad regulatory authority to protect the health and safety of its citizens and the integrity of its natural resources.
The Commerce Clause is designed to promote national unity and discourage economic protectionism. However, as previously stated, statutes that are facially discriminatory can survive the strict scrutiny of Commerce Clause analysis. In Northeast Bancorp, Inc. v. Board of Governors of the Federal Reserve System, 472 U.S. 159, 105 S. Ct. 2545, 86 L. Ed. 2d 112 (1985), the Supreme Court examined Massachusetts and Connecticut statutes forbidding *1390 banks outside the New England region from taking over in-state banks, while allowing New England banks to do so. The Court held that this was a legitimate state purpose.
For the reasons stated above, we hold that the Additional Fee provision of Act No. 90-326 is not invalid under the Commerce Clause of the United States Constitution. The Additional Fee does not needlessly obstruct interstate trade or attempt to place Alabama in a position of economic isolation. It merely retains Alabama's broad regulatory authority to protect the health and safety of its citizens and the integrity of its natural resources. The evidence in this case amply supports the conclusion that the Additional Fee serves legitimate local purposes that could not adequately be served by available nondiscriminatory alternatives. This is not a case of arbitrary discrimination against interstate commerce; the record suggests that Alabama has legitimate reasons, apart from their origin, to treat out-of-state wastes differently. The judgment of the trial court is therefore reversed as to this issue.
The final issue before the Court is whether the trial court erred in holding that Governor Hunt had standing to raise the issue of the constitutionality of the Cap provision. CWM contends that the complaint it filed challenged the constitutionality of the Base Fee and the Additional Fee. Governor Hunt filed a counterclaim, seeking to have the trial court declare the Cap provision constitutional. CWM argues that the Governor lacked standing to raise that issue and cites Casey v. Travelers Ins. Co., 531 So. 2d 846, 849 (Ala.1988), wherein this Court stated: "`Where a particular litigant is not within the group of persons affected by the statute or portion thereof which is allegedly unconstitutional, such litigant lacks standing to raise such constitutional issue.'" (Quoting Fletcher v. Tuscaloosa Federal Savings & Loan Ass'n, 294 Ala. 173, 178, 314 So. 2d 51, 56 (1975).)
We find CWM's challenge to Governor Hunt's standing to be without merit. The Governor's counterclaim was filed only after CWM had sued him in a United States District Court, alleging that the Cap provision violated CWM's federally protected rights. Further, the trial court's jurisdiction over the question of the validity of the Cap provision was expressly invoked in CWM's original complaint alleging the invalidity of the entire Act. Thus, there existed a justiciable controversy that Governor Hunt, as a state official, had standing to raise in a counterclaim for a declaratory judgment. Curry v. Woodstock Slag Corp., 242 Ala. 379, 6 So. 2d 479 (1942).
For the reasons stated above, the judgment of the trial court is due to be affirmed as to all issues save the Additional Fee and reversed and the cause remanded as to the issue of the Additional Fee.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
HORNSBY, C.J., and MADDOX, ALMON, ADAMS, STEAGALL and INGRAM, JJ., concur.
HOUSTON, J., concurs in the judgment.
HOUSTON, Justice (concurring in the judgment).
Until the United States Supreme Court holds that hazardous waste (waste that the trial court found contained poisonous chemicals that can cause cancer, birth defects, genetic damage, blindness, crippling, and death) is an article of commerce protected by the Commerce Clause of the United States Constitution, I refuse to declare the additional fee provision of Act No. 90-326, which was duly enacted by the Alabama Legislature and approved by the Governor of Alabama, unconstitutional as violative of the Commerce Clause of the United States Constitution.
If the United States Supreme Court holds that waste containing poisonous chemicals that can cause cancer, birth defects, genetic damage, blindness, crippling, and death is an article of commerce protected by the Commerce Clause of the Constitution, then I am bound by that ruling under the Supremacy Clause of Article VI of the United States Constitution. Alabama lost that battle over 125 years ago; however, I do not believe that such waste *1391 is an article of commerce protected by the Commerce Clause, and I do not believe that the Alabama Supreme Court is bound by the decision of any other federal court on this issue. United States ex rel. Lawrence v. Woods, 432 F.2d 1072 (7th Cir.1970), cert. denied sub nom, Lawrence v. Woods, 402 U.S. 983, 91 S. Ct. 1658, 29 L. Ed. 2d 148 (1971).
I can appreciate how Judge Phelps, a distinguished trial judge, could feel compelled to comply with a legal precedent of the 11th Circuit Court of Appeals, in the absence of an opinion on that point by this Court; however, "`there is a parallelism but not paramountcy'" between the 11th Circuit Court of Appeals and this Court, "`for both ... courts are governed by the same reviewing authority of the [United States] Supreme Court.'" United States ex rel. Lawrence v. Woods, 432 F.2d  at 1075, quoting the Supreme Court of New Jersey in State v. Coleman, 46 N.J. 16, 214 A.2d 393, 403 (1965), cert. denied, 383 U.S. 950, 86 S. Ct. 1210, 16 L. Ed. 2d 212 (1966).
[1]  (1) The Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6901 et seq.; (2) the Toxic Substances Control Act ("TSCA"), 15 U.S.C. § 2601 et seq.; (3) the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq.
[2]  "The Court deems irrelevant any evidence attributing to any state officials any motive of discriminating against interstate commerce. It is well-established that `[i]nquiries into [lawmakers'] motives or purposes are a hazardous matter.... What motivates one legislator to make a speech about a statute is not necessarily what motivates scores of others to enact it, ..." United States v. O'Brien, 391 U.S. 367, 383-84, 88 S. Ct. 1673, 1682-83, 20 L. Ed. 2d 672, 684 (1968), cited in, CECOS International, Inc. v. Jorling, 895 F.2d 66, 73 (2d Cir.1990)."
[3]  "Similarly, in the forms which the EPA submits in connection with its waste reduction program, the agency asks states to list measures they are taking to reduce the generation of waste; the EPA lists fees as one example of such measure."
[4]  "CWM's claim that the legislature was motivated by improper motivations is also irrelevant for equal protection purposes. `[N]o case in this Court has held that a legislative act may violate equal protection solely because of the motivations of those who voted for it.' Palmer v. Thompson, 403 U.S. 217, 224, 91 S. Ct. 1940, 1944, 29 L. Ed. 2d 438 (1971), cited in CECOS International v. Jorling, supra, 895 F.2d  at 73."
[5]  (1) The Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6901 et seq.; (2) the Toxic Substances Control Act ("TSCA"), 15 U.S.C. § 2601 et seq.; (3) the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq.
[6]  "The Court notes that the Cap provision contains the following language: `Provided, however, that the Governor or the Governor's designee may allow disposal of hazardous wastes or hazardous substances in excess of the tonnage disposed of during the benchmark period if such action is determined by the Governor or the Governor's designee to be necessary to protect human health or the environment in the state, or to allow the state to comply with its obligations to assure disposal capacity pursuant to applicable state or federal law as determined by the Governor or his designee.' Act 90-326, § 9."