Warren E. Burger: We will hear arguments next in 75-1150, City of Philadelphia against the State of New Jersey. Mr. Moore.
Herbert F. Moore: Mr. Chief Justice, and may it please the court. My name is Herbert F. Moore and the appellants that we represent are two municipal corporations. The name of the City is Philadelphia and Glen Cove Long Island, three rather large solid waste disposers located in the State of New Jersey, and one very large solid waste collector, also operating out of the State of New Jersey. The purpose of our being here, of course, is to test the constitutionality against the Commerce Clause of a statute enacted in New Jersey, which is entitled an act to prohibit any person from bringing into the state any solid and liquid waste, which originated or was collected outside of the state. I feel compelled to explain, before I proceed into the legal arguments, some peculiarities of the present posture of the case that lands at a certain uniqueness. That is that we started this out in the Superior Court Law Division in New Jersey with the complaint that had, I think close to 20 counts, all of which were constitutional questions. But in the interest of efficiency and I am keeping a court clawed under reasonably unclawed, we proceeded through the summary judgment procedure on an issue which did not contain any disputed facts of material significance. It was on that basis that Judge Schad (ph) ruled in our favor that the statute was unconstitutional on the grounds that are discriminated against interstate commerce. And, it was on that basis that the appeal was taken by the State of New Jersey to the Appellant Division.
Warren E. Burger: Under his view what was the commerce, the substance or the service?
Herbert F. Moore: I believe, Your Honor, it was both the substance and the service. He relied somewhat on the cases in the Third Circuit which was the United States versus the Pennsylvania Refuse Haulers Association, which was a case under the Sherman Antitrust Act in which the Third Circuit held that the service and the disposal should be looked at together as a unit and they clearly were an item of interstate commerce. Then I believe he also considered the substance itself as an item called commerce because, as we know there are many, many items of solid waste that are traded, sold, and used. Recently, this court decided the case of Hughes versus Alexandria which dealt with automobile hulk. This court clearly accepted the fact that automobile hulks were legitimate items of commerce. Does that answer your question, sir?
Warren E. Burger: Well, I hear you.
Herbert F. Moore: Okay. I think your question was, did the lower court consider this to be --
Warren E. Burger: I wondered where you thought he rested in his wage.
Herbert F. Moore: He decided that on the basis, it was my understanding that the statute in New Jersey discriminated against interstate commerce, and that was it. The other court in the companion case, which was decided by Justice Souter and who is now on the New Jersey Supreme Court, he decided that on the same basis, that it was a discrimination against interstate commerce and, therefore must full. That is a little different case and of course, we were not involved in that case. That was a totally different factual situation. Now, I feel it is extremely important that we keep in the forth most of our mind the statute of New Jersey, fortunately, it is a very short statute. I do not intend to read it, but I would like to point out some aspects of it. The first section of the statute is a legislative finding in which the legislature determines that there has been a large volume of solid waste that has to be disposed of, both in New Jersey and out of state. That it presents a threat to the environment and appropriate landfill sites are being rapidly diminished and that the treatment and disposal of waste collected out of the state creates a public health safety and welfare nuisance. Also, it is against it and it absolutely prohibits the treatment and disposal within New Jersey of all waste generated out of the state. We have in the fining clause an absolute prohibition. Now, when we get to the actual statute itself for the legislative determination, very interestingly, it starts off with “no person shall bring into this state any solid or liquid waste which originated or was collected outside of the state except garbage to be fed to swine,” which, of course is a solid waste as we all know. “Until a commissioner shall determine that such action,” and the action obviously has to go back to the bringing in. That is what the statute is talking about, “can be permitted without endangering the public health.” Now, we have approached this with the understanding that this statute paints with a very, very broad brush. This statute is not directed against any particular type of disposal. Incidentally, disposal in New Jersey includes treatment and processing and storage of solid or liquid waste. This statute deals with prohibiting the entry into the state any item that travels into a moment, legitimately, in commerce. That is designated to solid or liquid waste. Now, the first question of course and when any statute that is tested against the Commerce Clause is to determine whether or not it is in fact commerce. Because, if it is not commerce, we are not in the ball game at all. Now, in this particular incidence, solid and liquid waste, as I have mentioned just a moment ago in answer to the Chief Justice’s question, I pointed out that automobile hulks are obviously a solid waste, traditionally and historically all the byproducts of industry, many of them have commercial value. You have your scrap metals, your scrap glass, and demolition material, and many, many other items that are used by various people in various concerns that are processed and treated, all of which are prohibited by the statute. In the case of United States versus Pennsylvania Refuse, which was went to the Third Circuit, and I believe the certiorari was denied that case dealt specifically with, actually, what we are dealing with here. It was the movement of solid waste collected in Pennsylvania into New Jersey to be disposed of in New Jersey. The question came up because the refuse haulers were being charged with criminal conspiracy. The question came up that you do not have jurisdiction under the Sherman Antitrust Act to prosecute these collectors because we are engaged in dealing with a worthless commodity, a worthless item and therefore, it is not of any commercial value, it is not commerce. Of course, as we all realize that the jurisdiction of the Sherman Antitrust Act depends upon the Commerce Clause.
Speaker: The Supreme Court of New Jersey that case Distinguish that case,did they not say that their congress affirmatively exercised his power, whereas, here you are relying simply on the negative implications of the constitutional provision?
Herbert F. Moore: Yes, Justice Rehnquist. They came up with that type of reasoning which we do not agree with. I do not quite fully understand it because, if it is not commerce for the purpose of enforcing anything under the Sherman Antitrust Act, then it is not commerce for any purpose. If it is commerce for under that Act and at least it is recognized as an item in commerce. Now, I think where the confusion developed perhaps is that there is a general body of law and understanding that when you are dealing with police powers of states and they are dealing with public health questions, this court and the constitution has gone to a great length to support police power actions in the public domain and as long as certain tests and standards are met, but, to say that automobile hulks, for example, was not commerce is just not a truism. You have another aspect of this which is also very interesting and very important and that the people who are disposing in New Jersey at the present time of solid and liquid waste, some or all of it coming from out of state are private enterprise, they are public utilities as legislated by the State of New Jersey. The collectors and the disposers are public utilities. They are dealing in a legitimate enterprise and they are depending for the source of their material to keep them in a commercial business items that flow in interstate commerce.
Speaker: Mr. Moore.
Herbert F. Moore: Yes, sir.
Speaker: Did congress passed a statute prohibiting the states from enacting this kind of legislation?
Herbert F. Moore: You said, did they or could they?
Speaker: Could they?
Herbert F. Moore: Absolutely.
Speaker: Would it be constitutional?
Herbert F. Moore: I believe it absolutely would, sir.
Warren E. Burger: You mean if the state when I personally processes of inquiry, the usual legislative inquiry determine that in a given number of years, all of their available space for the disposal of solid wastes would be used up and that at the rate, the state itself produce that waste, that they could not say we are going to save the New Jersey space for New Jersey waste and no other state may deposit waste here. What is what you are telling us?
Herbert F. Moore: In effect, I am, Your Honor, because, the New Jersey Supreme Court in its handling of the case, classified landfills as natural resources. They did that on three separate occasions in their opinion. When we look at the Oklahoma gas cases and the Pennsylvania-West Virginia gas cases where the states are saying we are going to run out of this natural resource and our people are not going to have (Inaudible) for their homes and the other purpose of natural gases put to. We are going to curtail the exportation of this natural resource to protect ourselves. This court, very clearly, upheld that that was an imposition upon interstate commerce and the famous the law (ph) and that have been awfully quoted that we sink or swim together in this country and the Northeast would keep this timber and etcetera.
Warren E. Burger: Do you equate the export and the import as being the same for purposes of the Commerce Clause?
Herbert F. Moore: I think it is because of what is happening here. Yes, I think, very differently, it is. For example if RCA, which is a manufacturer in New Jersey, if New Jersey in order to increase its labor market and increase employment rather said that RCA can only use transistors that are manufactured in New Jersey and nobody else can come in, now obviously it would be unconstitutional in interference of the interstate commerce. That is what is happening here. But, if we have to keep going back to the statute and this statute goes way beyond landfills.
Speaker: Mr. Moore, let me come back this way, could Philadelphia and the City of New York make a deal with your people to accept untreated sewage from those cities?
Herbert F. Moore: No.The states unquestionably have the right to regulate items that are inherently dangerous to them. New Jersey has adapted, in this instance, the DEP regulations, which are among the strictest in the United States just to avoid a public health hazards.
Speaker: Those regulations, you say, are valid?
Herbert F. Moore: Very valid and in our appendix, we quote from an affidavit of Mr. Darnay who was one of the Head Administrators of the DEP in Washington and he recognizes that. As a matter of fact, if I can call the court’s attention to the solid waste management plan, which the New Jersey Supreme Court took judicial notice of in its opinion, that solid waste management plan which was adapted by the DEP in New Jersey says on page 2, “There is no technological reason why we cannot dispose of solid waste with minimal environmental harm.” On page 78, it said, “The Bureau of Solid Waste Management still has Chapter 8 of the State Sanitary Code with which to regulate and assure nuisance-free operation of disposal sites in conformance with good practice and health standards.
Speaker: One last question and I will stop. You would not read the New Jersey statute as, in effect being a state regulation of land use?
Herbert F. Moore: No, sir. The regulations have overtones of that because the regulations require a keeping of data as to how these landfills have been used up. In talking about landfills and to get back to commercial whether it is an item of commerce, any landfill that I have ever heard of have been connected with, and I have been representing these people, this industry for good 18 or 20 years, involves land that has no real market value which really marginal and sub-marginal land and as being reclaimed by landfill operations. You can just look around and I assume that judicial notice of the sport complex in New Jersey, which they had announced was built on a landfill.
Warren E. Burger: Assuming that you are right on the commerce point, Mr. Moore, is there any economic benefit that is conferred on this special group in New Jersey as a result of what you claim is discrimination?
Herbert F. Moore: Very definitely, sir. In our society today, solid waste well, not being an exciting subject to conversation is a very essential one. No industry can exist, or commercial enterprise, can exist without creating solid waste. It has to be disposed of some way, either burning it or burying it or putting it in the air, those are the only three places you can dispose of anything.
Warren E. Burger: Some of them carry it out to sea, do they not?
Herbert F. Moore: You are right. Well, that is the ocean, I am sorry. I have left one item out. You are absolutely right, Chief Justice. It is to a distinct economic advantage to industry not to have to haul too far their waste to dispose it.
Warren E. Burger: You say then that it is New Jersey industrial disposers who are the economic beneficiaries of the New Jersey law?
Herbert F. Moore: They are economic beneficiaries. I am not saying they are the exclusive economic beneficiaries of New Jersey, but they certainly are the economic beneficiaries, as a matter of fact, the very high percentage of all solid waste is not the waste that you and I think of when we think of garbage, which we associate with because we have homes and we see what is put out. That is the putrescible type of waste, but that is the waste that they are feeding to swine. There is a clear economic discrimination practically there, I suppose.
Warren E. Burger: The discrimination is between New Jersey disposers and disposers from other states.
Herbert F. Moore: Yes.
Warren E. Burger: The former being able to use New Jersey fills and the latter not being able to use them?
Herbert F. Moore: That is right. When I say Philadelphia, I am obviously not confining it to the municipal government because all the commercial activities in Philadelphia, industrial activities, many of them use the Philadelphia collection system, and so there is some of them have their own trucks. The question is it is very, very costly to move refuse and if you have to move it more than 20 miles, the cost escalate very, very dramatically. As a matter of fact, the New Jersey Supreme Court made a comment in trying to belittle that type of point saying that, we would only cost the Yonkers I think it was, $5/ton to go to the Krypton Landfill site, which is in New York State someplace. But, when you think of $5 a ton and multiply that against the tonnage we are talking about, we are talking about very large sums of money.
Warren E. Burger: Frequently, in some of these commerce cases like the Madison Milk Case of public health glosses put on the statute, when you get behind it, you see exactly the local producers they have got behind the legislature and the common council to enact it. Is there any suggestion here that New Jersey industrial disposers played an active part in getting this thing in --
Herbert F. Moore: No unfortunately, I do no think, to be honest with you, I do not think they knew anything about it. I know how the statute originated. It did not originate that way, it was a political situation. New Jersey shall be a garden state and not a garbage state became a political cry of some politicians.
Warren E. Burger: If that were literally true, you still say that the Commerce Clause control this?
Herbert F. Moore: Absolutely, sir. I think the controls for these reasons, whether that it is commerce and an item in commerce and it fits within that definition so that we can apply the Commerce Clause, I assume, or have we got beyond that point? I think we have gotten beyond that point. I think I have satisfied everyone that it is an item in commerce.
Warren E. Burger: But that does not --
Herbert F. Moore: That does not finish the argument at all.
Warren E. Burger: You do not prevail by that?
Herbert F. Moore: No way. Absolutely right.
Speaker: I suppose you would agree that certainly on the 21st Amendment, a state could exclude from its boarders entirely any or various kinds of alcoholic beverages even though they are, of course, items of commerce?
Herbert F. Moore: Yes, though I guess that one case, was it Bowman versus the Railroad where they stopped it, but I think that was before that amendment.
Speaker: Well part of the 21st Amendment that a state exclude the importation into its territory of slot machines, for example.
Herbert F. Moore: Yes. Once you define and make a determination that the item is intrinsically evil, which, was never done here.
Speaker: How free is the state to declare by legislative fiat that an item is intrinsically evil?
Herbert F. Moore: They have done it many times.
Speaker: How free is a state to do it? You would agree that they could do it with respect to slot machines? Could they do it with respective onions or potatoes?
Herbert F. Moore: They can do it, but it can always be contested because it has got to be reasonable. They cannot make an arbitrary determination. Absolutely. Sure, in a lot of the states that is why we have been having these cases over the years, have made those kind of determinations to protect their milk and their shrimp and the antique case that has been recently decided by this court in which Justice Brennan wrote the opinion on. That was the type of situation.
Speaker: The law excluding from importation has to be linked with a law that prohibits the existence in the state as a product or as a possession of its own citizens of the same item. Is that it?
Herbert F. Moore: I do not quite follow your question.
Speaker: It was suggested by my brother Mike’s question. A state can lawfully exclude from importation into the state slot machines if and only if it prohibits its own citizens from possessing or manufacturing or operating slot machines. Is that it?
Herbert F. Moore: You are getting into dealing with a matter evenhandedly, I think, which is the Uron-type Case.
Speaker: Is that not part of your case if this discriminates?
Herbert F. Moore: My part of the case is very clearly discriminates. Yes, I have not got to develop those points yet, but that was what I was going to get into next. Next, we have to consider the tests that have been developed. I guess Pike versus Bruce Church and Madison are the cases where it is best synthesized and brought together and the test I should not say very simply because it is not that, but the test says, of course, that when a statute regulates evenhandedly to effectuate a legitimate local purpose and the effects have appointed in interstate commerce are incidental to the statute will be upheld, unless the burden is excessive. If that goes on to, that quotes you are on and the sites you are on at that point in the opinion, that goes on to say that if the legitimate local purpose is found, then the extent of the burden is going to be waived and then after that, we are going to look into a couple of items. One is, is there a reasonable alternative available that would have a lesser effect upon interstate commerce. Then, we come to the Madison Doctrine which, frankly, I am not exactly too sure in my mind how it fits into this because that doctrine says, unless there is a non-discriminatory alternative available, I take the position that, in this case that we are dealing with the legislature of New Jersey clearly has not treated in an evenhanded fashion an item of commerce. It has said that this item of commerce is going to be discriminated against because of its source of origination, for example, whether it be Pennsylvania, New York, or Delaware. In other words if people in Delaware want to ship an automobile hulks into New Jersey, they cannot do it. That is a point of discrimination of an item legitimately in commerce as to its source. Then, they said to the people part of the enterprise in New Jersey that are recognized as public utilities, they said to them, you can only get the material to use in your business from New Jersey. You cannot import it from out of state. That is what like what they are saying. As the affidavits fulfill two of these appellants, virtually their entire business depends upon the disposal of solid waste from Philadelphia, which incidentally is not putrescible waste, the putrescible waste from Philadelphia goes under the exception to the pig farms.
Speaker: The economic beneficiaries and these are the professional landfill people, the people who specialize in disposing of waste? They are among the beneficiaries.
Herbert F. Moore: They are among the beneficiaries. They are benefit plus extensively, at least New Jersey tries to say, “We want to save the landfill spaces.”
Speaker: Although professionals do not benefit, do they? They are prevented from handling as much business as they want.
Herbert F. Moore: I might misunderstood the question, I am very sorry.
Speaker: The available places in New Jersey are reserved for them.
Herbert F. Moore: This is private enterprise. They can go out as long as it is zoned properly. I am sorry, I do not -- .
Speaker: Basically out of state companies cannot take advantage of the New Jersey landfill.
Herbert F. Moore: Well these are kind of New Jersey company that collects out of state, one of this does.
Speaker: What if you have a Pennsylvania company?
Speaker: I know, but if it is the New Jersey landfill company, if it is dealing in New Jersey solid waste, can it use a New Jersey landfill?
Herbert F. Moore: Well, that is true, but it cannot go into Pennsylvania.
Speaker: I understand.
Speaker: Suppose you have a Pennsylvania disposal company that wants to come over and contract with a New Jersey industrialist to dispose of waste in New Jersey. The Pennsylvania Company can do that, can it?
Herbert F. Moore: Absolutely. It is not directed at that. It is directed at the entry of an item in commerce. It does not make any difference whether it is disposed in a landfill. It cannot be put into an incinerator. The state has admitted there is no qualitative difference between refuse in Pennsylvania and refuse in New Jersey, no qualitative difference whatsoever. Yet, does it make sense to say that you cannot bring waste from Pennsylvania into New Jersey and put it into an incinerator?
Speaker: Is there any question interacted about the non-availability of this land? For example, if the only places that could have a landfill would be serviced by New Jersey, could New Jersey say, well that is it, we cannot let anybody else into it we do not have woes in it?
Herbert F. Moore: No, unfortunately, this case did not come up with a record because it came up in the summary fashion on those points. Those questions which should have been developed if it went back to a lower court, why would be developed by proper testimony.
Speaker: Mr. Moore, is there any question about the finality of the judgment from which you are appealing? Because, this case does go back for trial?
Herbert F. Moore: Yes. Well, we were forced into the situation which I explained in our brief. The way it happened, we argued the matter on this summary judgment position. The Supreme Court of New Jersey, as you know from the opinion, created a record for itself by taking judicial notice of certain things. I immediately, when the opinion came out, went to see the Chief Justice of New Jersey and Mr. Schillman came with me and pointed out that there were many other matters in this complaint that had not been dealt with and frankly, they were a little surprised, to be honest with you. So, they gave us additional time to develop memorandum on those points. Then I think it was three weeks and we both did. Then, they came out with three different orders which are in the appendix. The orders has said that you can go back without any restraints and we would not retain jurisdiction, but you can go back to the lower court to see if there is any other appropriate relief available. Well, after the way the Supreme Court has wrote this opinion, there is no lower court judge who is going to be able to do much. An order was entered dismissing all the other counts under those circumstances and this was the final judgment.
Speaker: Did you agree with that?
Herbert F. Moore: I think I am running out of time.
Speaker: You are.
Speaker: That is your order, you are talking about?
Herbert F. Moore: I beg your pardon?
Speaker: Was that your order, the one that dismissed all the other counts?
Herbert F. Moore: It was an order that was entered into by consent by the State of New Jersey.
Speaker: Did you thereby agree to deny this court jurisdiction?
Herbert F. Moore: We agreed to --
Speaker: Did you?
Herbert F. Moore: We agreed to do what, sir?
Speaker: To deny this court jurisdiction.
Herbert F. Moore: No, because we dismissed all the other counts. All the other counts have been dismissed. The only count left was the one that the New Jersey Supreme Court decided on and that is the interstate Commerce Clause.
Speaker: That is the one that has to go back?
Herbert F. Moore: No, nothing has to go back.
Speaker: Now nothing goes back.
Herbert F. Moore: Well, we have asked for alternate relief on the interstate Commerce Clause. We have barred ourselves by dismissing all the other counts. The only count that we are here on is the interstate Commerce Clause question.
Warren E. Burger: You are out of time.
Herbert F. Moore: Alright. Thank you very much.
Warren E. Burger: Mr. Skillman.
Stephen Skillman: Mr. Chief Justice, and may it please the court. The subject matter of this appeal is the disposal of solid waste in New Jersey and elsewhere. Government, in the discharge of its responsibilities to provide for the health, welfare, and safety of its people, makes provision for the disposal of waste, either by performing the service itself or by supervising and regulating private contractors who perform the service. The case thus, involves the performance of a necessary public service. It is also clear though the state and its people pay a social cost for providing this public service. At the present time, the only viable method of solid waste disposal, with a few exceptions, is through landfills. This means that landfills are necessary. However, they are at best a necessary evil. In New Jersey, virtually all landfills will produce a caliche, which is a highly noxious and polluted liquid that pollutes both ground and surface waters. Landfills also generate methane gas such as used for cooking. Thus, fires at landfills may occur even decades after a landfill has been closed out. Therefore, the disposal of waste is like crime. If we could wish away the problem or legislate away the problem, we would. But, we cannot. We cannot simply say, no more waste in New Jersey. We have to take care of the problem somehow. Provision is made by the state for the disposal of waste. It allows the use of its land for this purpose, even though substantial and serious harm is caused to the land and to the environment from this particular form of land use. The question presented by this appeal is whether when a state, such as New Jersey authorizes this use of its land it must also, under the Commerce Clause, make available the use of its land to other states and their political subdivisions for this same purpose. I think it should be made clear at the outset because the point was perhaps somewhat blurred in the presentation of the appellant that the New Jersey statute being considered in this case, taken in tandem with the implementing regulations adapted pursuant thereto, prohibits solely the entry into New Jersey of solid waste intended for disposal in sanitary landfills. I would direct the court’s particular attention to page 96A of the Appendix, which is a regulation adapted by the State Commissioner of Environmental Protection to become effective prior to the effective date of the statute which excludes from the purview of the prohibition upon entry into New Jersey, solid waste which is intended for any productive use. It excludes garbage to be fed to swines. It excludes solid waste to be processed into secondary materials. It would exclude, for example, there has been a lot of talk about the automobile hulks and the analogy between this case and the Hughes Case decided by the court last term. Under subsection C, automobiles hulks are reprocessed and as were the facts in the Hughes case, then assuming that 70% of the material in the car is reprocessed, which is I understand is a matter of industry practice is the fact, then that reprocessing would fall within exception C. It also should be noted that the parties involved in this case, the City of Philadelphia and the sanitary landfill operators are the appellants, are engaged solely in disposal in landfills so that any mention of recycling or automobile hulks and so forth, (a) is not within this case, not within the facts of this case, not within the method of business operation of the appellants and (b) is especially excluded from the ban by the implementing regulation adapted by the New Jersey Commissioner of Environmental Protection.
Warren E. Burger: In the Alexandria Scrap Case, the very movement of the hulks was to take them off the road and deliver them to a compressing plant which compressed them and sold them for scrap steels, was it not?
Stephen Skillman: That is my recollection of the facts, Your Honor.
Warren E. Burger: So it was not something that was to be disposed of by burying it or burning it or otherwise getting rid of it?
Stephen Skillman: That is correct and I think that that is also the practice in New Jersey. For example, I understand that there is a very large automobile reprocessing plant in Jersey City, which is close by to New York City. That facility receives automobile hulks not only from the State of New Jersey, but also from New York City and that reprocessing operation does not fall within the statutory ban which is the subject of this case. This statutory ban taken in tandem with the implementing regulations has to do solely with disposal in landfills putting garbage into the ground with all the intended environmental problems.
Speaker: It has to do with the importation of waste whose destiny is that.
Stephen Skillman: That is correct, Your Honor.
Speaker: Would all New Jersey produce wastes? These disposers may use landfills in New Jersey, or all New Jersey-produced wastes?
Stephen Skillman: All wastes originating within the state. Yes, Your Honor. That is correct.
Speaker: To that extent, I gather the New Jersey produces the waste benefit by this statute, do they not? If they had difficulty because of the part of these being imported in from Philadelphia in disposing of theirs they now have less difficulties it is only their waste may be picked up by New Jersey disposers. Is that right?
Stephen Skillman: I think that is a theoretical possibility.
Speaker: Only theoretical?
Stephen Skillman: Well, as a practical matter, in the northern part of the state, we are fast running out of landfill capacity. Until we reach the point of running out of landfill capacity, I do not think it makes too much difference in terms of what it costs, for example, to put garbage into the ground whether there is additional garbage coming from New York City or not. The rates charged by a landfill are regulated by the State Public Utility Commission on a public utility rate-based rate of return, and so forth. Where the additional cost comes in is when we reach the point and then not too distant future where our landfill capacity, particularly in that part of the state, is simply exhausted. It means that the municipalities and others producing solid waste in other parts --
Speaker: Are the rates that disposers have to pay to the producers regulated?
Stephen Skillman: The rates that are charged by the landfills to the collectors are regulated by the State Public Utility Commission since 1970, Your Honor, on a rate-based, rate of return same as any other public utility. So that the only way that the additional cost would come in is when we reach the point where all landfill capacity in the northern part of the state is exhausted, which seem to be a real genuine likelihood at this point. Then, if the people in the northern part of the State have to transport their waste to the further extremes of the state, out of the Western New Jersey, Sussex County or in southern New Jersey, Burlington County, then that additional distance of transportation to that limited extent there would be an additional cost at that point.
Speaker: Unless it is closely have taken over to Pennsylvania.
Stephen Skillman: As a practical matter, we cannot do that because of the laws of Pennsylvania.
Speaker: Pennsylvania is keeping you out too?
Stephen Skillman: Pennsylvania is keeping out Philadelphia. Pennsylvania has very restrictive legislation. They do not recognize landfills as being public utilities, and any municipality in Pennsylvania, which wants to keep out waste originating in another municipality can do that. Apparently, the great majority of municipalities immediately surrounding Philadelphia have done just that and that is what has caused Philadelphia to come over to New Jersey which has, since 1970, legislation which prohibits municipalities from having these kinds of restrictive policy. So in sense, we are the victim of our own forward looking legislation within the state.
Speaker: Do you rely at all in the federal statute in answering the commerce argument or in any other federal statutes as expressed they leaving them out of the state?
Stephen Skillman: Your Honor, it is not mentioned anywhere in the briefs and it just came to my attention on Monday and was confirmed today that the President signed only 12 days ago a new statute dealing with solid waste, which I think for the first time substantially, I do not know how substantially, but I think substantially federalizes the subject matter of solid waste. That statute is entitled the Resource Conservation and Recovery Act of 1976 and it is public law 94-580.
Speaker: Does that have any bearing on the question we have here?
Speaker: I mean, were it in effect when all this happen, would it make a difference?
Stephen Skillman: I think we still have this case, Your Honor, and I think it only comes in very indirectly in the sense that there had been parenthetical references at least in the briefs to federal statutes that remotely bear on the matter --
Speaker: As my brother White suggested say anything about what states may do with these wastes?
Stephen Skillman: Let me just briefly summarize what I think the statute does and I must say that I am at a disadvantage of having only come across the, having the statute brought to my attention the first time on Monday and having read through it once. What it does is confer a substantial power on the federal environmental protection administrator to set guidelines for the states in formulation of regional plans for solid waste recovery and/or disposal and it imposes an obligation on the states to formulate regional plans. Those plans may, after appropriate consultation and cooperation and so forth between the governors involved, have interstate components to them. Now, the teeth in the legislation, I should not say that it compels the states to do anything because this is a carrot rather than a stick type of piece of legislation. The carrot is if the states want federal money for purposes of resource recovery capital projects and other solid waste activities, they must have plans which conform with the federal guidelines, but I think that the --
Speaker: What is the negative say a state has awfully said, we do not want any of your money, what is the negative implication from the federal statute that is up to the state?
Stephen Skillman: On a first reading, I do not see the stick in the legislation. I think it is strictly voluntary --
Speaker: Is the negative implication, if the state does not want federal money that Congress intends to leave the matter entirely up to the state?
Stephen Skillman: Yes, I think the answer is yes.
Speaker: Well then it has some relevance here, is that so?
Stephen Skillman: I think it does have some relevance.
Speaker: Real relevance on the interstate commerce --
Stephen Skillman: Certainly, it has relevance in the sense that we have sought throughout this litigation to draw a very sharp distinction between what the Commerce Clause standing alone and without congressional legislation, automatically prohibits and what Congress can do under the Commerce Clause if it perceives a social problem, which it impacts in some fashion --
Speaker: Certainly. Your rather answer to question by my brother Blackmun, during the course of his argument, to the effect that he thought that congress could not legitimately, under its commerce power, enact legislation that would affirmatively prohibit the states from doing what the State of New Jersey has done in this case. But conversely, it suggested I think that in its recent legislation Congress has, under its commerce power enacted legislation, which would seem to permit the States to do what New Jersey has done. Certainly, Congress could explicitly enact that kind of legislation could it not?
Stephen Skillman: I have built out that the congress could enact such legislation.
Speaker: Do you have any doubt?
Stephen Skillman: I do not have any doubt. I also am very reluctant to make too many representations as to what this new legislation provides having just the benefit, having read through it once.
Speaker: There is an acted one so that was signed by the President 12 days ago?
Stephen Skillman: October 21 was the date it was signed by the President.
Speaker: Do you take issue, since I have already interrupted you with the appellant’s basic question, basic question, basic proposition that the liquid and solid waste is an article of commerce?
Stephen Skillman: I take very sharp issue with that, Your Honor. I think that the problem is that the old problem of one word having many meanings, depending upon what the context is. I have no doubt that solid waste or the service of providing for disposal of solid waste is interstate commerce to support congressional action, Antitrust laws in the Pennsylvania refuse case that they have cited, however, that does not mean that it is commerce in the sense that it falls within the zone of free trade protected by the Commerce Clause even in the absence of congressional action.
Speaker: Are you familiar with the case that came from Los Angeles, the meat driver’s case involving commerce in Greece that was discarded by restaurants in Los Angeles? It was governed Antitrust case brought to breakup an alleged conspiracy in restraint of trade in Greece discarded by restaurants.
Stephen Skillman: I am not familiar with that case, Your Honor. It sounds like it maybe similar to the Pennsylvania refuse case that has been relied upon.
Speaker: Assumed in that case that item was now commerce, it was then sent overseas, I remember after having been reprocessed.
Stephen Skillman: In drawing the distinction between what commerce means in the context of authorizing congressional action and what it means in the context of what it prohibits the states from doing even in absent of congressional action. The court has developed a doctrine of what they call illegitimate items of commerce. These are items such as diseased animals. Other items that are --
Speaker: They are all contraband, I suppose would fall in that category?
Stephen Skillman: I would think that it would.
Speaker: See as a state, do define contraband can it define potatoes as contraband?
Stephen Skillman: Absolutely, not. I think that there must be, certainly a party who wishes to challenge such a characterization by a state legislature has the right to do so.
Speaker: And what would the criteria be to measure the state’s power?
Stephen Skillman: Well, we start off I think with a presumption that the legislative characterization is an accurate one.
Speaker: Right, it is the basic presumption of constitutionality, I suppose.
Stephen Skillman: That is the basic presumption. Then, it is a matter of the attacking party developing a record to show that the factual premises of the legislation are not valid premises.
Speaker: Let us say you had a majority of a state legislature, who are vegetarians and they just prohibited the importation of any meat into the state. It would be very reasonable for the party of the majority of the legislature, they declared all meat contraband, would they have a power constitutionally to do that?
Stephen Skillman: And also prohibit any meat from within the state?
Speaker: Yes.
Stephen Skillman: Perhaps. I think it is a very difficult, very philosophical question. I think that the issues in that case would be much more than simply Commerce Clause issues.
Speaker: Due process is another issue.
Stephen Skillman: Certainly people who wish to eat meat would have some arguments I am sure, but I do not think they would be issues under the Commerce Clause.
Speaker: When you were discussing administrative order #40, you cited us to appendix 96. I took it that you were telling the court that all legitimate commerce is protected by the exceptions that are listed here. Is that substantially what you were saying?
Stephen Skillman: Absolutely.
Speaker: If there are any other, that has any value like the hulk of an automobile, like garbage that can be fed or used for certain fertilizer or whatever, then it is not covered. There is no prohibition of that kind of interstate commerce.
Stephen Skillman: That is correct. If anyone were in the position to show us that those four exceptions listed in the regulation are not exhausted of the types of things one can do with waste that are legitimate and productive, we could certainly, at that point, adapt further exceptions to the ban, first the object of the statute is disposal in landfills and only that. I can see that if other showings could be made that for example some recycling process was helping us get rid of waste and was producing an article of commerce, but at the same time was blowing off tremendous amounts of air pollution, we might have an argument there also. But, that is just not what the present state regulators need.
Speaker: Are you saying that the landfill has no value?
Stephen Skillman: Excuse me?
Speaker: The landfill has no value?
Stephen Skillman: Certainly a landfill has value.
Speaker: With everything that you got up there and know that it has a little value?
Stephen Skillman: No question about that, Your Honor. A landfill is valuable for its intended purpose, which is the disposal of waste, valuable for that part.
Speaker: Is it not also to fill in land?
Stephen Skillman: In some instances, that all depends on what the other alternatives are and what you plan to do with the land.
Speaker: That part of the city is filled with land as I understand.
Speaker: Half the State of Florida.
Stephen Skillman: Well, It maybe filled, but it is not necessarily filled with garbage. If you want to construct something --
Speaker: This is garbage.
Stephen Skillman: Yes, it is, Your Honor.
Speaker: I thought some of it at least, you feed it to pigs.
Stephen Skillman: Some of the garbage, yes.
Speaker: Is there any other kind of refuse?
Stephen Skillman: Most of what we are talking about is garbage.
Speaker: Is it?
Stephen Skillman: It is garbage.
Speaker: What are the mechanics of this? Who pays what to whom and why, in this landfill? Does the land owner make the payment or does he receive a payment? How does this work?
Stephen Skillman: The land owner receives a payment, in this case, from the City of Philadelphia. They have entered into long-term contracts.
Speaker: For permitting Philadelphia to dump its refuse on the land.
Stephen Skillman: For ‘X’ number of tons per day.
Speaker: Rather than the land owner who owns a swamp paying the dealer and refuse to Phili’s swamp land.
Stephen Skillman: It does as a practical matter because of the fact that you cannot just dump garbage in a swamp. The whole area of landfill is very tightly regulated as to location, for example, swamps get horrible water.
Speaker: So the payment in this case goes from the person who wants to dispose, in this case Philadelphia who wants to dispose of its refuse. It pays the land owner for the privilege of dumping its refuse on the land owner’s land. Is that it?
Stephen Skillman: That is correct, so that there is no question but there is a financial transaction, but I think it is clear under the Clayson Case and the quarantine, diseased animal quarantine cases that the mere fact that you find somebody selling is somebody a service can actually disposal waste or something does not mean that you have “legitimate commerce” that falls within the free market principles of the Commerce Clause.
Speaker: Getting at upstate New Jersey when you were dealing between this garbage for swine, do you remember up there we had a trouble with the swine and now we got rid of that And We got a sports stadium. What was the difference? We are allowed to have the garbage for swine.
Stephen Skillman: Well, the sport stadium, this is an interesting point and I think comes up as to what the uses of the garbage in terms of land reclamation. When you want to build something as heavy as a stadium, what they had to do was come in and take all the garbage off that land and move it elsewhere, because if they try to build that sports stadium on top of a landfill, it would have been sagging and swaying. In other words, garbage is not good for land reclamation unless you are talking about a light use such as a golf course, it is the classic use.
Speaker: Ordinarily, when you drive by, it smells bad.
Stephen Skillman: It smells better.
Speaker: Mr. Schillman, could I just get a very simple point that is straight in my mind? The City of Philadelphia may have a contract with a large land owner within New Jersey to dump tons and tons of waste on that land. The statute of it required cancellation of that contract. But, it would permit the owner of that land to enter into an identical contract the next day with the city.
Stephen Skillman: That is correct.
Speaker: What is the environmental interest being served in?
Stephen Skillman: The environmental interest is that any landfill within the State of New Jersey brings about environmental harm causes caliche to develop methane gas, fires.
Speaker: Is that not the same environmental harm from Trenton waste as there is from Philadelphia waste?
Stephen Skillman: Yes, but if we add Philadelphia waste to Trenton waste, we have more of that harm. In other words, we have to do something with our own waste. We cannot --
Speaker: Does the record show that all waste which originates in New Jersey is deposited in New Jersey? Is there any possibility of cross hauling?
Stephen Skillman: There apparently is one city in western New Jersey, which has at times in the past, and we are not even sure of the present, but see it is, but apparently as time has passed it has used a disposal site in the State of Pennsylvania, but essentially, New Jersey takes care of its own waste disposal problems.
Speaker: If we should agree with the Trial Court and not the Supreme Court of New Jersey and hold the statute unconstitutional, would that also invalidate the various Pennsylvania restrictions that you say now prohibit the New Jersey cities from dumping in Pennsylvania?
Stephen Skillman: I do not know the answer to that question because the restrictions of the restrictions of the State of Pennsylvania are quite different from the statute that we are defending here. The Pennsylvania legislative scheme permits local municipalities to keep out all solid waste originating outside of the boundaries of the municipality including waste originating in other Pennsylvania municipalities.
Speaker: Including other states?
Stephen Skillman: Excuse me? And including that originating in other states and what a ruling of this court, affirming the Trial Court, what impact that would have upon such a statutory scheme, I think I would have to really think -- (Inaudible) exact rationale?
Speaker: In so far is it excluded out state material, it would be quite relevant, would it not?
Stephen Skillman: Yes, it might be relevant. I would just say that it is a different statutory scheme and that the arguments might be different.
Speaker: Do you think the price of these various contracts, price per ton that is deposited or distance hauled, would be different if there was complete freedom to go across state lines and dumping as opposed to every state having its own restriction? Do you think this could have any impact on the market price for this combination of commodity and service? Do we have a marketization problem?
Stephen Skillman: For the most part, no. I think that the most relevant factor in the cost of disposal is distance. I suppose for an individual municipality, if they can find some disposal site across a state boundary that is closer than the one that they could find within their own state, then under those particular circumstances, there might be a lesser cost in going across the state line, but as an overall general matter, I think my answer to your question is no.
Speaker: It just occurred to me that perhaps in the long run, the smallest state might be better off in greater flexibility as to where it could dispose of this material, whereas I know you mentioned New Jersey may exhaust its own landfill eventually, unlikely, Pennsylvania would do so as rapidly. I am just wondering of your position is in the best interest in the long run of your client.
Stephen Skillman: I do not have any doubt, Your Honor, but the type of position that is being urged by Pennsylvania applied Philadelphia here is one that is inconsistent with the long range best interest of the State of New Jersey. In the sense that you do not get true regional planning by a party in the position of the City of Philadelphia just going out in the marketplace and trying to find somebody and paying enough money. If there are problems where we need regional planning, they really have to come in one of two ways, either by cooperative action between the states or by regional planning under the auspices of the federal government. It is, in that sense I suppose that we come back to the recently enacted federal legislation, what we are talking about here is not the free open economy. What we are really talking about here are intergovernmental relations. Because that is the nature of the problem, if Philadelphia has a problem at all, it is a problem that is not susceptible to resolution under the Commerce Clause’s negative implications. It is a problem that has to be dealt with by governments between the two states through mutual consultation and agreement or if that proves unavailing, then pursuant to the enactment of appropriate legislation like Congress.
Speaker: I gather, Mr. Schillman that the producer of these wastes in New Jersey does not have something to sell, they have something let us get rid of. They pay somebody to haul it away for them.
Stephen Skillman: That is correct.
Speaker: It is that chapel has the arrangements with the owner of the land in which the stuff is dumped, or he maybe the owner of the land himself, I do not know.
Stephen Skillman: That is right. There is a middleman, a collector from the private home in some instances. In other instances, the municipality made the collection work directly itself and takes it to the disposal.
Speaker: What is the price that you told us is regulated?
Stephen Skillman: Excuse me?
Speaker: What is the price that you told us earlier is regulated by a utility type commission?
Stephen Skillman: The one I told you about was the price charged by the landfill site to the collector, but there is also regulation of the price charged by the collector to the people whose waste he collects.
Speaker: No one is getting rid of it
Stephen Skillman: The whole industry is regulated.
Speaker: In other words, the service or if chapel wants to get rid of the waste that costs him something, that cost is regulated by the commission.
Stephen Skillman: That is also regulated. It is regulated at both steps, at both the collection rate and the disposal rate. Thank you.
Warren E. Burger: You have a minute left council, if you have something you can tell us in a minute?
Herbert F. Moore: Yes, Just a moment. I think New Jersey is being shortsighted as the question raised in this type of legislation because it is possible that North Jersey is running out of landfill space. Upper New York State is far closer to New Jersey for disposal of solid waste, North Jersey that is, Then South Jersey, the problem in cost involved which absolutely would be economically unthinkable to haul waste from Bergen County down to Burlington County with the congestion in New Jersey. Whereas, it could be much cheaper to go into New York State and there is no problem into going into New York State. There is no New York statute that says we cannot go in.
Warren E. Burger: You are not talking about the economic and really the political realities.
Herbert F. Moore: Well, the question that was raised here and I just want to clarify that it is a great advantage and this type of statute does seriously interfere with the commercial future for New Jersey. Thank you.
Warren E. Burger: Thank you, Gentlemen. The case is submitted.