### I N THE UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 12-50153

C I B O L O W A S T E , I N C O R P O R A T E D ; C

- 6 D I S P O S A L S Y S T E M S , INCORPORATED; AMERICAN DIS P O S A L C O M P A N Y ; ANACONDA DISPOSAL, L.L.C.; APACHE DISPOSA L , INCORPORATED; ABSOLUTE W A S T E ; G RA N D E D I S P O S A L C O M PA NY ; F E L I X MA L D O NA D O T R U C K I N G , I N CORPORATED; PRO S TAR ROLL OFF DUMPSTERS; OTIS S PENCER, doing b usiness as River City Di s p o s a l ; R I V E R C I TY W A S T E , I NCORPORATED; SOUTHTEXAS REFUSE, INCORPORATED; TEXAS W ASTE SYSTEMS, I N C O R P O R A T E D ; B R E N D A M A L D O N A D O T R U C K I N G ; C L A R K CONTRACTING S ERVICES, INCORPORATED; DRC MATERIALS; TIGER SANITATION, INCORPORATED, Plaintiffs-Appellants
v. CITY OF SAN ANTONIO, Defendant-Appellee

Appeal from the United States District Court for the Western District of Texas

Before STEWART, Chief Judge, DAVIS, and CLEMENT, Circuit Judges. EDITH BROWN CLEMENT, Circuit Judge: Appellants Cibolo Waste et al. a re waste haulers t hat operate throughout the City of San Antonio and i ts surrounding counties. In 2006, t he City of San Antonio passed an ordinance imposing a permit fee for the collection or disposal of waste within city limits. In response, Appellants filed suit against the City, U n i t e d S t a te s C o u rt o f A p p e al s

F i f t h C i rc u i t 

### F I L E D May15, 2013 Ly l e W . Cay ce Clerk Case: 12-50153 Document: 00512243139 Page: 1 Date Filed: 05/15/2013No. 12-50153

claiming that t he permit fee violates the dormant Commerce Clause by imposing

an excessive burden on interstate was t e h aulers. T he district court dismissed their claims and th ey appealed. As Appellants have failed to show that their alleged injuries fall within th e z o n e of i nterests protected by the dormant Commerce Clause, we d ecline to address Appellants’ argum e n t s b ecause they lack prudential standing, and we AFFIRM the district c ourt’s dismissal of their claims.

FACTS AND PROCEEDINGS Appellee City of San Antonio (the “City”), by a nd t hrough i ts Solid Waste Manag e ment Department, oversees the collection and disposal of solid waste with i n the City’s limits. Both the City and private waste h auler companies (collectively “haulers”) offer c ollection and d i s p o s a l services to residents and commercial businesses. There are three landfills within city limits, one that is

a priv a t i z e d City facility and two that are privately owned. Appellants Cibolo Waste et al. (“Appellants”) are thirteen haulers that collect and dispose of waste within the City a nd its surrounding communities. Appell a n t s a r e all Texas companies with their principal places of business in Bexar County, T exas. The record does not indic a t e that Appellants c urrently do business or seek to d o business outside Bexar County. 1 For over two decades, the City has regulated the waste management i n d u s t r y through the issuance of permits for collecting or disposing of soli d waste. In 2006, the City adopted a n o r d i n a n ce that imposes a permit fee of $2,250 for each vehicle weighing over 7 ,000 pounds that is used to collect or

1 In their com plaint and at oral argum ent, Ap pellants ack now led ged that they only d o bus ines s in the state of T exas
. Ad d itionally, at oral argum ent, A p p ellants conced ed that they could of f er no evid ence that they have exp and ed or s eek to exp and their bus ines s acros s s tate lines

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d i s p ose of solid waste within the C ity. The permit fee is neither t ied to t he volume of solid waste collected or disposed o f by each hauler, nor based on the number of times that a hauler uses a City l a n d fill. Haulers that collect or dispose of s olid waste within the City are t hus required to pay an annual flat fee, regardless of whether t h e y u s e a C ity landfill o ne time or one thousand times that year. U nder the ordinance, haulers that fail to acquir e a p e r m i t before collecting or disposing of waste are subject to financial penalties. Additionally, the o rdinance applies only t o haulers t hat collect o r dispose of waste within the City’s c orporate limits, not those that collect or dispose of w aste in other contiguous counties. The permit fee is designed to cover the costs directly associated with the monitoring of permit holders as we l l a s t h e costs associated with the City’s regulation of t he waste management industry. Such costs include, but are not limited to, environmen t al cleanup, code e nforcement, infrastructure maintenance, police and fire services, staffing, and overhead. Moreover, in order to enforce the ordinance, the City must undertak e a n u m b e r of tasks, such as providing and evaluating insurance paperwo r k t h a t h aulers a re required to submit w ith each permit application and assigning city officials to check haulers’ permits at dump sites and to conduct vehicle inspections. A ccording to R ose Ryan, Assistant D irector of the City’s Solid Waste Department, a t the time of its passage, t he ordinance was expected to generate between $900,000 and $ 1.2 million in p e rmit fee payments per year. While Ryan

was not able to identify the precise amount of money that the City needs to enfo r c e t he ordinance, she noted that the overall cost o f r egulating the waste management industry is approximately $3 m illion per y ear. T he $3 million est i m a te i ncludes the costs of regulation and of providing other waste management services to the City’s residents.

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Appellants filed s uit in Texas s t a te court, claiming t hat t he p ermit fee violate s the dormant Commerce Clause and t he Equal Protection Clause and constitutes an i lle g a l o ccupation tax. 2 The City removed the case t o federal court. Appellants then filed an application for a preliminary injunction, which the district court denied. The parties filed cross-motions for summary jud g ment, and the d istrict c o u rt granted summary judgment in favor of the City, concluding t hat the ordinance d oes not interf e r e with interstate commerce. Appellants filed a Federal Rule of Civil Procedure 59(e) motion to alter or amend the judgment, and, upon i t s denial b y the district c o urt, Appellants timely appeal.

STANDARD OF REVIEW We review de novo a grant or denial of summary judgment, applying the

same s tandards as the d i s t r i c t c o u r t. H olt v. State Farm Fire & Cas. Co. , 627 F.3d 188, 191 (5th Cir. 2010). Viewing all evidence in the light most favorable to t he nonmovi n g party, Anderson v. Liberty L obby, I nc. , 477 U.S. 242, 255 (1986), we will a ffirm a grant of summary judgment only if the evidence shows that there is no genuine dispute a s t o a n y material fact a nd the movant is entitled to judgment as a matter of law, F E D

. R. C I V

. P. 56(a).

ANALYSIS Every party that comes before a federal court must establish that it has standing to pursue its c laims. The d o c t r i n e of standing a sks “whether the

2 In their res p ons e to the City’s m otion f or s um m ary j ud g m ent, Ap p ellants aband oned their equal p rotection claim

. Although they rais e this claim again in their ap p ellate brief , it is w aived

. See Wi l l i a m s v
. Ti m e Wa rner Op era ti on, I nc
. , 98 F. 3d 179, 183 ( 5th Cir. 1996) ( “We ref us e to review an argum ent t hat a p arty has f ailed to rais e in res pons e to a s um m ary jud gm ent m otion. ”)

.

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litigant is entit l e d to have the court decide the merits of t he dispute or of particular issues.” E l k G r o v e Unified Sch. Dist. v. N ewdow , 542 U.S. 1, 11 (2004). T h e S u p reme Court has described standing as “ contain[ing] two

s t r a n d s : A r t i c l e I I I s t a n d i n g , w h i c h e n f o r c e s t h e C o n s t i t u t i o n ’ s case-or-controversy requirement; a nd prudential standing, which embodies judicially self-imposed l imits on t he e xercise of f ederal juris d i c tion.” I d. (citations and internal quotation marks o mitted). Because Article III standing is a t hreshold i ssu e , we must address it before considering questions of prudential standing. S ee Ford v. NYLCare Health P lans of Gulf Coast, I nc. , 301 F.3d 329, 332 (5th Cir. 2002). Article I II standing requires a p l a i n t i ff to show: “(1) an injury in fact (2) that is fairly traceable to the actions of t he d efendant and (3) that l i kely will be redressed by a f

avorable decision.” Procter & Gamble Co. v. Amway Corp. , 242 F.3d 539, 560 (5th Cir. 2001) (citations omitted). An injury in fact is “an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or h ypothetical.” L ujan v. Defenders of Wildlife , 504 U.S. 555, 5 60 (1992) (ci t a t i ons and internal quotation marks omitted). The City contends that Appellants lack Article I II standing because they do not allege an injury that would be r emedied by declaring the ordinance unconstitutional. Under our precedent, h o w e v e r , i t a p p e ars that Appellants have made their showing of injur y in fact because the permit fee increases their c ost of doing business. I n National Solid Waste Management Ass’n v. Pine Bel t R e g i onal Solid Waste Management Authority , the waste hauler plaintiffs were injured by an ordinance imposing a “tipping” fee for using the city’s landfi l l t hat u ltimately resulted in higher operating costs to haulers. 389 F .3d 491, 498 (5th Cir. 2004) ( “ [ P ] laintiffs’ cost to d ispose of waste [under the ordinance], including the t i p p i n g fee and the transportation c o st, would be higher than t heir current cost.”).

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Similarly, Appell a n t s h ave incurred h igher o perating costs as a result of the City’s ordinance, which i mposes an increased cost per ve h i c l e f o r o btaining a permit to c o l l e c t a n d dispose of waste in San Antonio. 3 This injury to Appellants—in the form of higher operating costs— is directly traceable to the City’s ordinance, see id. , and would be remedied, e ven if only temporarily, by a holding that the ordinance is unconstitutional. The requirements for Article III standing are thereby satisfied. Even if a plaintiff establishes Article III standing, we may consider whether prudential standing principles nonetheless counsel against hearing the plaintiff’s claims. 4 See Knutson , 699 F.2d a t 236. T he doctrine of p r u dential standing embodies “judicially self-imposed limits on the exercise of fed e r al jurisdiction.” Elk Grove , 542 U.S. a t 11. Moreover, as the Supreme Court has observed, prudential standing:

[E]ncompasses “the general prohibition on a litigant’s raising another person’s legal rights, the r ule barring a djudication of generalized grievances more ap p ropriately addressed i n t h e representative branches, and the requireme n t that a

3 While the City has attem p ted to r e g u l a t e t h e was te hauler ind us try through a p erm itting p roces s since the early 1990s , the City ack now led g ed that the perm it requirem ent
w as not enf

orced until the p as s age of this ord inance in 2006. Becaus e Ap p ellants were not de f a c t o r e q u ired to obtain p erm its p rior to 2006, the p as s age of the ord inance and i t s corres p ond ing increas ed enf orcem ent p roced ures have rais ed the p rice of d oing bus ines s f or haulers in the City.

4 Although the City rais es the is s ue of prud ential s tand ing f or the f irs t tim e on ap p eal,
w e retain d is cretion to cons id er its argum ents becaus e pr u d e n t ial s tand ing, w hile not juris d ictional, nonetheles s af f ects jus ticiability. See Lew i s v
. Knutson , 699 F. 2d 230, 236 ( 5th Cir. 1983) ( “[ T] he cons titutional lim itation requiring an injury t o s atis f y the cas e or controvers y requis ite goes to the court’s juris d ictional p ow er to hear the cas e, while the p rud ential lim itation goes to the court’s ad m inis trative di screti on to hear the cas e. ”)

. Thus , w e are not required to ad d res s a p arty’s p rud ential s tand ing argum ents w hen they w ere not rais ed below , see Ensl ey v
. Cody Res. , I nc. , 171 F. 3d 315, 320 ( 5th C ir. 1999) ( ref us ing to cons id er p rud ential s tand ing w here the d ef end ant f a i l e d t o object in the trial court) ; Bd. of M i ss. Lev ee Com m ’rs v. EPA , 674 F. 3d 409, 417–18 ( 5th Cir. 2012) ( s am e) , but have p revious ly exercis ed our d is cretion to d o s o, see, e. g. , Pi ne B el t , 389 F. 3d at 498–501.

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plaintiff’s complaint fall w ithin the zone of interests protected by the law invoked.” Id. at 12 (quoting Allen v. Wright , 468 U.S. 737, 751 (1984)). At issu e h e re is whether Appellants’ c l aims fall w ithin the “zone of i n t e rests” protected by the dormant Commerce Clause. See Wyoming v
. Oklahoma , 502 U

. S

. 4 37, 469 (1992) ( noting that the zone-of-interests test “governs claims

. . . under the negative Commerce Clause”); see also Pine Belt , 389 F.3d at 4 99 (“The key inquiry for p rudential s t anding i n this case i s whether the injury of which plaintiffs complain is ‘arguably w ithin the zone of interests to be protected’ by the dormant Commerce Clause, the ‘constitutional guarantee in question’ here.”) ( quoting A ss’n of Data Processing Serv. Orgs., Inc. v. Camp , 397 U.S. 150, 153 (197 0 ) )

. S i n c e the dormant Commerce C lause “ is driven by

concern about economic protectionism—that is, regulatory measures designed to benefit in-state economic i nterests by b urdening out-of-state competitors,” Dep’t of R evenue v. Davis , 553 U.S. 328, 3 37–38 (2008) (citation and internal quotation marks omitted), an evaluation of t he ordinance’s a llegedly
p r o tectionist f

eatures i s critical t o our consideration of Appellants’ dorma n t Commerce Clause argument. As such, w e look to see if a claim u nder the dormant Commerce Clause falls within the zone of interests by asking: (1) w hether Appellants “have standing to challenge the [ordinance] as facially discriminatory against out-ofstate economic interests,” or (2) whether Appellants “can merely challenge the ordinance[] as being excessively burdensome to i nterstate commerce.” Pine Belt , 389 F.3d at 499. In o t h e r w o r ds, this test requires u s to “ask whether the ordinance[] ‘reflect[s] a discriminatory purpose or merely a discr i m i n a tory effect.’” Id

. at 497 (quot i n g Dickerson v. Bailey , 336 F.3d 388, 396 (5th Cir. 2003)). The test is d isjunctive, allowing Appellants to show e i t h e r t h a t the

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ordinance discriminates against out-of-state interests o n i t s face or that the ordinance as applied unduly burdens their out-of-state interests. The ordinance a t issue does not facially discriminate a gainst out-of-state economic interests. A facially discriminatory ordinance is one t hat b y its terms authorizes “differential treatment of in-state and o u t -of-state e conomic interests tha t b e n e f

i t s t he former and burdens the l atter.” Id. (quoting O r. Waste Sys., Inc. v. D ep’t of Envtl. Quality , 511 U.S. 93, 99 (1994)); see, e.g., P i azza’s Seafood World, L LC v. Odom , 448 F

. 3 d 7 4 4 , 750 (5th Cir. 2006) (“Th[e] discrimination
appears on t he face of the s tatute : t he C a tfish Statute treats domestic catfish differently from foreign c atfish to the b enefit of the former and the detriment of the l a tter.”). Here, howev e r, the ordinance i s applicable to a ny c o mmercial or industrial hauler, regardles s o f where t he hauler o riginated or p lanned to end its trip. 5 It i s a type of blanket p rohibitio n t h a t favors n either interstate nor intrastate commerce. See, e.g., Empacadora de Carnes d e Fresnillo, S.A. de C .V.

v. C urry , 476 F.3d 326, 336 (5th C ir. 2007); Int’l Truck & Engine Corp. v. Bray , 372 F .3d 717, 726 (5th C ir. 2 004). A ccordingly, Appellan t s lack standing to challen g e the ordinance on the b asis that it is facially discriminatory against out-of-state interests. See Pine Belt , 389 F.3d at 500. A p pellants also cannot satisfy the second prong o f the z one-of-inte r e s t s test since they have not shown that the ordinance i m poses an excessive burden

on i n terstate commerce. S ee id. (“An allegation that the plaintiff is involved in interstate commerce and that the plaintiff’s interstate commerce is burdened by

5 U nd er the ord inance: Any com m ercial and / or ind us trial hauler collecting, trans p orting
or d is p os ing of solid w as tes , regard les s of characterization,
w ithin the corp orate lim its of the Ci t y o f San Antonio s hall be required to p erm it each vehicle us ed f or trans p orting or hauling
s olid w as te m aterials up on p ublic s treets , p ublic alleys or highw ays w ithin the corp orate lim its of the City of San Antonio. S A N A N T ON I O C I T

Y C O DE , Ch. 14, § 14- 22( e) ( 16)

.

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the ordinance i n q u e s t i on is s ufficient to satisfy the zone of interests t est with respect to ordinances that assertedly impose an excessive burden on interstate commerce.” )

. The critical inquiry is whether Appellants are engaged in interstate commerce and, if so, whether their i nterstate commerce is b urdened by the ordinance. See id. at 500–01. B y their own admission, Appellants are not engaged in inte r s t a t e

commerce. T heir b usiness i s purely intrastate, a nd they have no contracts that

are negotiated on a national or interstate basis. Cf. id. at 501 (noting that the plaintiff had contracts that were negotiated on a national or interstate basis). A d d i t i o n a l l y , Appellants’ partic i p a t i o n i n i n t r a s t a t e c o m m e r c e t h r o u g h o u t T e x a s d o e s n ot suffice to place them within the zone o f interests p rotected by t h e dormant Commerce Clause. See id. at 500 n.16 (observing that the purpose of the dormant Comm e rce C lause is to “protect a gainst local economic protectionism at the expense of out-of-state i nterests

. . . n o t t o protect any

e c o nomic interests”). The dormant C ommerce clause protects interstate, n o t inter-city commerce. That Appellants’ alleged injury would b e r emedied by a repeal o f t h e law is similarly inapposite in this zone-of-interests analysis. See id. (“The fact that a n injury would be remedied if the ordinance w as struck down does n o t m e a n that the grievance falls w ithin the zone of interests to be protected by the dormant Commerce Clause, particu l a r ly when there was no allegation of a ny interstate burden.”). As we have emphasized p reviously, the only parties that have standing to bring a dormant Commerce Clause challenge

a r e t hose who b oth engage in interstate commerce and can show that t h e ordinance at issue ha s a d v e r sely affected t h eir commerce. A ppellants f ail entirely to satisfy these prerequsites, and a s a result, they lack standing to bring their claims in federal court. 6

6 Further, to the extent t h a t Ap p ellants rais e an ind ep end ent challenge und er the Texas Cons titution that the ord inance im p os es an illegal occup ation tax, w e af f irm the d is trict 9 Case: 12-50153 Document: 00512243139 Page: 9 Date Filed: 05/15/2013No. 12-50153 CONCLUSION As the City’s ordinance does not facially discriminate against out-of-state

commerce or place excessive burdens on Appellants’ interstate commerce, Appellants have failed to demonstrate that their a lleged injury falls within the

zone o f i nterests protected by the dormant C ommerce Clause. W e AFFIRM the district court’s dismissal of this case and hold that Appellants lack standing to pursue their claims.

court’s s um m ary jud gm ent in f avor of the City on this claim as w ell.

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