Opinion ID: 2276751
Heading Depth: 1
Heading Rank: 8

Heading: Substantial Likelihood of Success on the Merits

Text: Both Judges Mitchell-Rankin and Eilperin concluded that the Solid Waste Permit Act presented constitutional problems under the commerce clause. Judge Mitchell-Rankin found a substantial likelihood that a violation of the [c]ommerce [c]lause exist[s] by the enactment and enforcement of the [Solid Waste Facility Permit Act]. In his analysis of the solid waste facility charge, Judge Eilperin stated, in part, that: Section 8(b) of the [Solid Waste Permit Act] imposes a $4 per ton fee for solid waste deposited at a solid waste facility. Yet, the Solid Waste Permit Act specifies that the charge is imposed for operating a solid waste facility in the District. D.C.Code § 6-3457(a). In reaching his conclusion that the charge is unconstitutional regarding waste originating outside the District, Judge Eilperin also emphasized the solid waste rather than the operations of ETW, citing Champlain Realty v. Brattleboro, 260 U.S. 366, 372, 43 S.Ct. 146, 67 L.Ed. 309 (1922), which focused on logs as objects of interstate commerce. Judge Eilperin concluded in relevant part: Here, the solid waste originates outside the District, is processed in the District for less than 24 hours to facilitate interstate shipment by compacting it and transferring it to long haul trucks and is shipped out of the District.... Thus, the solid waste deposited at ETW is already in interstate commerce and not subject to local taxation. The $4 per ton tax of Section 8(b) impermissibly burdens interstate commerce and is unconstitutional as applied. Rather than placing emphasis on the solid waste, the analysis of the constitutionality of the solid waste facility charge requires a focus on the statutory language, for operating a solid waste facility in the District. Thus, the focus is on the operation of the solid waste facility, even though the solid waste facility charge is measured by the number of tons of waste processed annually. As the Supreme Court said in C & A Carbone, Inc. v. Town of Clarkstown, New York, 511 U.S. 383, 391, 114 S.Ct. 1677, 128 L.Ed.2d 399 (1994) in determining the constitutionality of a flow control ordinance, the article of commerce is not so much the solid waste itself, but rather the service of processing and disposing of it. We now turn to the governing law and the applicable legal principles for determining the constitutionality of the solid waste facility charge. Article 1, section 8, clause 3 of the Constitution of the United States gives Congress the power to regulate commerce among the states. The commerce clause also has long been understood to have a `negative' [or dormant] aspect that denies the States the power unjustifiably to discriminate against or burden the free flow of commerce. Oregon Waste Sys., Inc. v. Department of Envtl. Quality, 511 U.S. 93, 98, 114 S.Ct. 1345, 128 L.Ed.2d 13 (1994). Generally, in conducting analyses of the constitutionality of statutes under the commerce clause, the Supreme Court has recognized two possible approaches. The first approach asks, whether the [statute] discriminates against interstate commerce. C & A Carbone, Inc., supra, 511 U.S. at 390, 114 S.Ct. 1677; see also Philadelphia v. New Jersey, 437 U.S. 617, 624, 98 S.Ct. 2531, 57 L.Ed.2d 475 (1978); Chemical Waste Management, Inc. v. Hunt, 504 U.S. 334, 342, 112 S.Ct. 2009, 119 L.Ed.2d 121 (1992); or overtly discriminates against interstate commerce, see U & I Sanitation v. City of Columbus, 205 F.3d 1063, 1067 (8th Cir. 2000) ([I]f the law in question overtly discriminates against interstate commerce, then we will strike the law unless the state or locality can demonstrate, `under rigorous scrutiny, that it has no other means to advance a legitimate local interest.'). The second approach focuses on, whether the [statute] imposes a burden on interstate commerce that is `clearly excessive in relation to the putative local benefits', C & A Carbone, Inc., 511 U.S. at 390, 114 S.Ct. 1677 (quoting Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970)). Specifically, in cases involving taxes on interstate activities, the Supreme Court has adopted an analytical framework outlined in Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 97 S.Ct. 1076, 51 L.Ed.2d 326 (1977), a case involving a tax on the privilege of conducting business within the state: State taxes on interstate activities [are] to be upheld if four specific criteria [are] satisfied: (1) the taxed activity must have a substantial nexus with the taxing jurisdiction, [ see Quill Corp. v. North Dakota, 504 U.S. 298, 315, 112 S.Ct. 1904, 119 L.Ed.2d 91 (1992); National Geographic Soc'y v. California Bd. of Equalization, 430 U.S. 551, 97 S.Ct. 1386, 51 L.Ed.2d 631 (1977)]; (2) the tax must be fairly apportioned, [ see Oklahoma Tax Comm'n v. Jefferson Lines, Inc., 514 U.S. 175, 184-191, 115 S.Ct. 1331, 131 L.Ed.2d 261 (1995)]; (3) the taxing legislation must not discriminate against interstate commerce, [ see Amerada Hess Corp. v. Director, Div. of Taxation, 490 U.S. 66, 75, 109 S.Ct. 1617, 104 L.Ed.2d 58 (1989)]; and (4) the amount of the tax must be fairly related to the services provided the taxing jurisdiction, [ see Goldberg v. Sweet, 488 U.S. 252, 266-67, 109 S.Ct. 582, 102 L.Ed.2d 607 (1989)]. Homier Distrib. Co., Inc. v. City of Albany, 90 N.Y.2d 153, 659 N.Y.S.2d 223, 681 N.E.2d 390, 396 (1997) (discussing Complete Auto Transit, Inc., supra ). In the context of the case before us, one related principle should be emphasized: a local regulation or tax is discriminatory without regard to its underlying purpose when it entails `differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.' Id. 659 N.Y.S.2d 223, 681 N.E.2d at 394 (quoting Oregon Waste Sys., Inc., supra, 511 U.S. at 99, 114 S.Ct. 1345). Application of the foregoing approaches and legal principles undoubtedly requires factual development which is not yet available to this court. Furthermore, the trial court has not had an opportunity to consider all facets of the District's statutory and regulatory scheme applicable to solid waste facilities and solid waste disposal. [25] Nor has the court itself had an opportunity to determine what are the pertinent underlying facts essential to a resolution of the commerce clause issues. Thus, given the necessity of additional factual development, and recognizing Judge Eilperin's preliminary conclusion that: ETW has the better of the argument that the regulatory scheme unconstitutionally forces the interstate commerce hauler to pay a double feenamely, the D.C. collection fee and any surcharge imposed by the State in which it ultimately dumps ..., we see no reason to disturb Judge Mitchell-Rankin's and Judge Eilperin's conclusions that the factor of substantial likelihood of success on the merits should be resolved in favor of ETW for purposes of preliminary injunctive relief. We are, however, constrained to remand for further consideration the ultimate partial summary judgment on the solid waste facility charge.