FILED 

U.S. COURT OF APPEALS

 ELEVENTH CIRCUIT 

 August 16, 2005 

 THOMAS K. KAHN 

 CLERK

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

_____________

No. 04-13035

_____________

D.C. Docket No. 03-80003-CV-KLR

SOUTHERN WASTE SYSTEMS, LLC.,

 Plaintiff-Appellee,

versus 

CITY OF DELRAY BEACH, FLORIDA,

WASTE MANAGEMENT INC. OF FLORIDA,

 Defendants-Appellants,

BFI WASTE SYSTEMS OF NORTH AMERICA, INC.,

Defendant.

____________

Appeal from the United States District Court

for the Southern District of Florida

____________

(August 16, 2005)

Before BIRCH, CARNES and HILL, Circuit Judges.
2

HILL, Circuit Judge:

Southern Waste Systems, LLC sued the City of Delray Beach , Florida and 

Waste Management Inc. of Florida seeking both a declaratory judgment that a

contractual agreement between the defendants was unconstitutional and an

injunction against its enforcement. The district court entered summary judgment

for plaintiff and this appeal followed.

I.

In 2001, the City of Delray Beach, Florida (the “City”) issued a request for

proposals, seeking a single contractor to provide comprehensive waste collection

services within the City. The request provided that the successful bidder would

become the exclusive provider of residential waste collection services, residential

waste recycling services, and commercial waste collection services throughout the

City. The agreement was to have an initial term of five years.

Southern Waste Systems, LLC (“SWS”), which is in the business of

collecting and disposing of construction and demolition debris (“C&D”) in

Florida, lacked the capacity to provide the full range of services specified in the

proposal and did not submit a bid. Five waste companies, including BFI Waste

Systems of North America, Inc. (“BFI”) – a non-Florida corporation – did submit

bids. Following a public hearing, the City awarded the contract to BFI, the lowest
SWS also asked for declaratory and injunctive relief for violation of the Equal Protection 1

Clause and sought damages under 42 U.S.C. § 1983.

At oral argument, SWS disavowed any intention to argue that the purchase of BFI by 2

WM, an in-state waste hauler, transformed the initial selection of an out-of-state bidder into a

selection of a local bidder.

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bidder, and, as previously noted, an out-of-state corporation. SWS concedes that

local firms enjoyed no preference or advantage in the bidding and selection

process.

The City and BFI entered into a contract that provided that BFI would be

the exclusive waste hauler in the City. The contract further provided that, while

the City would set the rates for waste collection, BFI would directly bill and

collect payment from the City’s residents, and then transmit a 5% franchise fee to

the City. The City codified the contract by municipal ordinance.

Sometime later, a customer to whom SWS supplied C&D removal services

was cited for violating the ordinance, and SWS filed this action against the City

and BFI challenging the ordinance and the underlying agreement between the City

and BFI. SWS asked the court to declare that the exclusive franchise violated the

Commerce Clause of the United States Constitution and to enjoin its enforcement

as to C & D. After Waste Management Inc. of Florida (“WM”) purchased various 1

assets of BFI and assumed BFI’s rights and obligations under the contract and

ordinance, it was substituted as a defendant.2
4

The district court granted partial summary judgment to SWS on its claim for

injunctive and declaratory relief, holding that the exclusive franchise agreement

violated the Commerce Clause. After a stipulated dismissal of SWS’s remaining

claims and the City’s counterclaim, the court entered final judgment and enjoined

enforcement of the portions of the agreement and ordinance pertaining to C&D. 

We review this grant of summary judgment de novo. Pennington v. City of

Huntsville, 261 F.3d 1262, 1265 (11 Cir. 2001). th

II.

The Commerce Clause of the United States Constitution empowers

Congress to regulate commerce among the states in order to promote the free flow

of goods and services across state lines. U.S. Const. Art. 1, § 8, cl.3. Conversely,

the Commerce Clause also forbids a state or municipality from impeding the flow

of goods and services across state borders, or from favoring in-state economic

interests at the expense of out-of-state economic interests. Oregon Waste Sys.,

Inc. v. Department of Envtl. Quality, 511 U.S. 93, 98 (1994). This “dormant” side

of the Commerce Clause prohibits states or cities from “advancing their own

commercial interests by curtailing the movement of articles of commerce, either

into or out of the state.” H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 535

(1949). Thus, if state or municipal regulations discriminate against out-of-state
Even regulations that do not discriminate on their face against interstate commerce must

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regulate even-handedly and impose only incidental burdens on interstate commerce. Pike v.

Bruce Church, Inc., 397 U.S. 137 (1970). As the district court held that the City’s ordinance

unconstitutionally discriminates against non-selected waste haulers, it did not reach this second

step in its review of the ordinance.

A local private contractor constructed the processing facility, agreeing to operate it for 4

five years, after which the town would buy it for $1. During those five years, the contractor

received the processing fees, at a certain level guaranteed by the town.

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companies in favor of local ones, they offend this dormant side of the Commerce

Clause.3

In this case, SWS claims that the City’s ordinance violates the dormant

Commerce Clause because it awards the exclusive right to collect waste in the City

to one company, thereby excluding all other companies – both interstate and

intrastate – from waste collection. SWS relies for this claim on the Supreme

Court’s decision in C & A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383

(1994). In that case, the Court struck down a municipal ordinance that awarded

exclusive rights to process all town solid waste to a single, privately owned local

transfer station. 511 U.S. at 391. The ordinance mandated that all waste haulers 4

in the town transport their waste to the local station for processing. The Court

held that such an arrangement constituted a “forced business transaction” that

unconstitutionally favored the local processor, thereby discriminating against outof-state interests. Id. at 391-92.
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Following Carbone, waste haulers around the country challenged municipal

waste collection agreements that awarded exclusive rights to collect waste to one

hauler, arguing that their exclusivity constitutes a forced business transaction that

offends the Commerce Clause. None was successful. See Houlton Citizens’

Coalition v. Town of Houlton, 175 F.3d 178 (1 Cir. 1999); USA Recycling, Inc. v.

st

Town of Babylon, 66 F.3d 1272 (2d Cir. 1995); Barker Sanitation v. City of

Nebraska City, No. 4:02CV3330, slip op. At 14-22 (D. Neb. Nov. 4, 2003); Waste

Management of Alameda County, Inc. v. Biagini Waste Reduction Sys. Inc., 74

Cal. Rptr. 2d 676 (Ca. Ct. App. 1998). See also Harvey & Harvey, Inc. v. County

of Chester, 68 F.3d 788, 807 (3d Cir. 1995) (dormant Commerce Clause inquiry

should focus “on the designation process, on the reasonableness of the duration of

the designation and on the practical likelihood of [designation of] an out-of-state

facility”). These courts all agreed that there is nothing inherently discriminatory

in the award of an exclusive waste hauling contract. As the Second Circuit noted

in USA Recycling:

For ninety years, it has been settled law that garbage collection and

disposal is a core function of local government in the United States. 

At their option, cities may provide garbage pick-up to their citizens

directly . . . Or they may rely on a closely regulated private market to

provide those services. . . . [W]e reject the plaintiffs’ contention that
The contract did not specify where BFI was to process or dispose of the waste. 5

7

the Carbone decision fashioned from the “dormant” Commerce

clause a new, and unprecedentedly sweeping, limitation on local

government authority to provide basic sanitation services to local

residents and businesses, on an exclusive basis and financed by tax

dollars.

Id. at 1275-76.

The Commerce Clause forbids only the promotion of local economic

interests over out-of-state interests. It does not forbid exclusive franchise

agreements whereby a city selects one waste hauler to provide basic waste

collection services to its citizens, so long as the bidding process is open to all, and

there is no requirement that local interests be favored in the performance of the

contract. As the Second Circuit concluded in USA Recycling: 5

There is no reason to assume that by shifting all hiring of garbage

haulers into the hands of one buyer, the flow of interstate commerce

will be reduced, and thereby burdened. In fact, the open bidding

process used by the Town to hire a single garbage hauler could

readily result in the hiring of an out-of-state garbage hauler – which

would actually shift a portion of the garbage collection market into

interstate commerce.

Id.

Indeed, in the instant case, the waste collection franchise was not only open

to out-of-state competitors, but it was, in fact, awarded to one. There is nothing in

the record to support the claim that the City’s actions constituted the sort of “local
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economic protectionism” that the Commerce Clause forbids. Carbone, 511 U.S. at

390. We agree with the First Circuit that “to the extent that in-state and out-ofstate bidders are allowed to compete freely on a level playing filed, there is no

cause for constitutional concern.” Houlton, 175 F.3d at 189. The award of an

exclusive waste hauling contract to the low bidder after a fair and open bidding

process that has the effect of excluding all others for the term of the agreement

does not, for this reason, offend the Commerce Clause. 

Apparently recognizing this, SWS asserts that it is not just the selection of

an exclusive waste hauler, but the failure to pay for those exclusive waste hauling

services with tax dollars that is the City’s constitutional error. SWS argues that

the City may not constitutionally require its residents to use a single waste hauler

unless it eliminates the waste hauling market entirely by providing those services

to its residents using public funds. SWS reasons that because the City’s ordinance

provides that the contractor bill and collect payment from City residents, the City

has not eliminated the market by using public funds to pay for waste collection. 

Thus, SWS concludes, the City’s franchise arrangement constitutes a “forced

business transaction” between its residents and BFI/WM that excludes all other

waste haulers, thereby violating the Commerce Clause. Therefore, the real

question in this case is whether the City’s decision to allow BFI/WM to bill its
9

customers directly and rebate a fee to the City transforms an otherwise

constitutional exclusive waste hauling contract into an unconstitutional forced

business transaction.

We think not. We do not believe that the answer to the question whether the

City’s exclusive waste hauling agreement violates the Commerce Clause lies in its

choice of billing method.

The First Circuit has reached the same conclusion in rejecting a similar

challenge to an exclusive municipal waste hauling agreement that requires its

residents to contract individually with the designated waste hauler. Houlton, 175

F.3d at 189. In Houlton, the First Circuit recognized that the town’s decision to

require its residents to individually contract for waste disposal added an element

of the forced business transaction present in Carbone. The court, however,

completely rejected the idea that Carbone requires the invalidation of such

arrangements. To so suggest, according to the court, stretches the logic of the

dormant Commerce Clause to the breaking point. Id. at 188. Instead, the court

reasoned that the core purpose of the clause is to prevent economic protectionist

policies, and that the relevant inquiry is whether the plan for their provision

discriminates against non-local interests. In that inquiry, the critical question is 

not how waste hauling services are paid for, but how they are selected. Id. at 188-
10

89. See also Barker, No. 4:02CV3330, slip op. at 14-22; Biagini, 74 Cal. Rptr. 2d

at 682. 

We agree that the critical issue is not whether direct billing by BFI/WM

constitutes a forced business transaction, but whether the award of the contract

discriminated in any way against non-local interests. This means:

[T]hat when the Commerce Clause inquiry focuses on a state or local

plan that culminates in an award of an exclusive contract to one of

several aspirants (actual or potential), the process by which the

contractor is chosen assumes great importance in determining the

plan’s constitutionality vel non. After all, in-state interests are not

unduly pampered, nor out-of-state competitors unduly burdened,

when a municipality awards an exclusive contract to a low bidder

(from whatever state or region) after a fair and open bidding process.

Id. at 188. Inasmuch as we have previously determined that the selection process

in this case did not favor local interests, and in fact awarded the contract to an outof-state company, we hold that it did not offend the dormant Commerce Clause. 

 III.

Finding no discrimination forbidden by the Commerce Clause in the award

or performance of the City’s exclusive waste hauling agreement with BFI/WM, we

shall reverse the judgment of the district court, vacate the injunction, and remand

for further proceedings not inconsistent with this opinion.

REVERSED, VACATED, and REMANDED.