Opinion ID: 2966492
Heading Depth: 3
Heading Rank: 2

Heading: Application of Dormant Commerce Clause

Text: We apply a two-tiered analysis to state actions allegedly violating the dormant Commerce Clause. The first tier, a virtually per se rule of invalidity, applies where a state law discriminates facially, in its practical effect, or in its purpose. Wyoming v. Oklahoma, 502 U.S. 437, 454-55 (1992) (quoting City of Philadelphia , 437 U.S. at 624). In order for a law to survive such scrutiny, the state must prove that the discriminatory law is demonstrably justified by a valid factor unrelated to economic protectionism, New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 274 (1988), and that there are no nondiscriminatory alternatives adequate to preserve the local interests at stake, Hunt, 504 U.S. at 342 (quoting Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 353 (1977)). To date, the Supreme Court has upheld such discriminatory laws only where the discrimination was justified by the threat of death or disease. See, e.g., Maine v. Taylor, 477 U.S. 131 (1986) (upholding Maine's prohibition on importing live baitfish because of the potential for destruction of Maine's fisheries); Clason v. Indiana, 306 U.S. 439 (1939) (upholding Indiana's restrictions on transporting dead animals without a license because of the potential for disease). The second tier applies if a statute regulates evenhandedly and only indirectly affects interstate commerce. In that case, the law is valid unless the burdens on commerce are clearly excessive in relation to the putative local benefits. Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970). The line between the per se rule and the Pike balancing test is not clear. Nonetheless, most of the provisions at issue here are not close calls--they clearly discriminate against out-of-state waste either facially, in effect, or in purpose. The blacklisting provision, floor for in-state wastes, ceiling for out-of-state wastes, and quotas for out-of state and in-state wastes facially discriminate against out-of-state wastes by refusing admittance into South Carolina of certain wastes 18 and giving express preference over South Carolina capacity to in-state wastes. Their effect, if implemented, would also clearly discriminate against out-of-state wastes. As for purpose, we have no reason to reverse the district court's finding that the laws in question constitute an integrated and interconnected discriminatory program, ETC, 901 F. Supp. at 1029, whereby South Carolina hasattempted `to isolate itself from a problem common to [the nation] by erecting a barrier against the movement of interstate trade', HWTC, 945 F.2d at 791 (quoting City of Philadelphia, 437 U.S. at 628).18 A state cannot achieve a legitimate economic goal through the illegitimate means of isolating the State from the national economy. Wyoming, 502 U.S. at 456-57 (quoting City of Philadelphia, 437 U.S. at 627). The relevant economic unit is the nation, and the Commerce Clause prohibits states from balkanizing into separate economic units. H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 537-38 (1949). Thus, South Carolina faces a heavy burden in justifying its discriminatory practices. To survive summary judgment, South Carolina must demonstrate issues of fact regarding whether the laws are justified by a valid factor unrelated to economic protectionism and, if so, that there are no neutral alternatives available. While South Carolina failed to articulate precisely its purpose in discriminating against out-of-state waste, the district court found several motivating concerns. The district court first found that South Carolina was motivated by the state's concern for thehealth, safety, and welfare of its citizens. ETC, 901 F. Supp. at 1033-34. There is no basis to distinguish out-of-state waste from domestic waste over concern for citizens' health, safety, and welfare, however. Hazardous waste is equally dangerous whether generated within South Carolina or out-of-state. See Chemical Waste Management , 504 U.S. at 344-45 (holding that hazardous waste's danger to the health and safety of Alabama's citizens does not vary with the point of origin of the waste); HWTC, 945 F.2d at 792 (citing City of Philadelphia, 437 U.S. at 629). _________________________________________________________________ 18 For example, the stated purpose of Act No. 196 (blacklisting provision) is to give preference to hazardous waste generators within South Carolina. Act No. 590 gives the same preference to hazardous waste generators within the state. 19 The State's second concern was with preserving existing disposal capacity for waste generated within South Carolina. ETC, 901 F. Supp. at 1034. Natural resources, however, may not be hoarded under the Commerce Clause. [A] State may not accord its own inhabitants a preferred right of access over consumers in other States to natural resources located within its borders. City of Philadelphia, 437 U.S. at 627; see also New England Power Co. v. New Hampshire, 455 U.S. 331, 338 (1982). Thus, [t]he burden. . . of conserving the State's remaining landfill space should not fall disproportionately on out-of-state interests. HWTC, 945 F.2d at 792 (citing City of Philadelphia, 437 U.S. at 628). The third concern the district court found was South Carolina's worries about transportation risks. ETC , 901 F. Supp. at 1034. Just as with the State's concern with health and safety, there is little to distinguish out-of-state waste from in-state waste in this regard. Furthermore, neutral alternatives exist for regulating transportation of all hazardous waste regardless of origin. Chemical Waste Management, 504 U.S. at 345-46. Finally, there was South Carolina's concern that it is shouldering an unfair burden of the nation's hazardous wastes. ETC, 901 F. Supp. at 1034. The Commerce Clause does not purport to require fairness among the states in interstate commerce. The apparent Congressional intent of RCRA and SARA would seem to be that hazardous waste be treated and disposed of somewhere, even if spread disproportionately among the states. HWTC, 945 F.2d at 792. On appeal, South Carolina reframes its purposes as: (1) complying with the CAP by guaranteeing capacity; and (2) addressing orphan wastes--hazardous waste from a state which prohibits its disposal and has failed to enter into a CAP for its disposal. As previously explained, the CAP requirement does not require or contemplate that a state discriminate against out-of-state waste in order to comply. Nor does the Commerce Clause allow states to punish other states for not disposing of their wastes through a CAP or otherwise. That task is left exclusively to Congress. In briefing its appeal, South Carolina pointed to no specific issue of fact as to any potential purpose for discriminating against out-of20 state waste. Rather, the State merely argued that it is entitled to present evidence that it has no alternative but to differentiate among outof-state wastes to protect its citizens' health and safety and to comply with CERCLA. At the summary judgment stage, South Carolina has a burden to demonstrate disputed issues of material fact. South Carolina has failed to meet its burden. None of the affidavits South Carolina submitted even purport to justify South Carolina's discriminatory treatment of out-of-state wastes. ETC, 901 F. Supp. at 1030.19 Nor do any of the affidavits purport to demonstrate that no neutral alternatives exist to discrimination. C. Limit on Waste Buried In-State and Needs Requirement As for two portions of the South Carolina laws, it is not so obvious, however, that they discriminate either facially, in effect, or in purpose, such that the per se test applies. South Carolina therefore argues that even if we find that the dormant Commerce Clause applies and that the laws are invalid, portions of the laws--the overall limit imposed by Act No. 590 and the needs requirement imposed by DHEC regulation 61-99--do not discriminate against interstate commerce. Therefore, South Carolina contends, the valid portions should be severed from the invalid portions and remain in effect. We disagree.
An evenhanded cap or limit uniformly burdens both in-state and out-of-state interests. See, e.g., Chambers Medical Technologies of S.C. v. Bryant, 52 F.3d 1252, 1258 (4th Cir. 1995). Thus, the Supreme Court has held that the dormant Commerce Clause allows a state to impose an evenhanded cap on the total tonnage landfilled with hazardous waste when it curtail[s] volume from all sources. Chemical Waste Management, 504 U.S. at 345. South Carolina contends that its reduction of the statutory authorization of 135,000 tons per year to _________________________________________________________________ 19 South Carolina merely presents a series of affidavits that describe its hazardous waste program; the amount of wastes buried in state, broken down by in-state and out-of-state wastes; and similar statistics. 21 120,000 tons and then 110,000 tons is an evenhanded neutral limit that does not burden interstate commerce any more than intrastate commerce.20 The limit South Carolina seeks to have upheld, however, is not as evenhanded and neutral as the state would have the court believe. The limit does not have the same effect on in-state as out-of-state wastes because the limit can be lifted upon certification that it is necessary to protect South Carolina's citizens, S.C. Code Ann.§ 44-5660(a)(3)(A) (Law Co-op Supp. 1995), or that the entire statutory authorization of buried waste during the relevant 12-month period was generated in South Carolina, S.C. Code Ann.§ 44-56-60(a)(3)(B) (Law Co-op Supp. 1995). The same exceptions are not granted to outof-state interests. The Supreme Court has declared that [t]he commerce clause forbids discrimination, whether forthright or ingenious. In each case it is our duty to determine whether the statute under attack, whatever its name may be, will in its practical operation work discrimination against interstate commerce. West Lynn Creamery, Inc. v. Healy, 511 U.S. ___, ___, 114 S. Ct. 2205, 2215-16 (1994) (citing Best & Co. v. Maxwell, 311 U.S. 454, 455-56 (1940); Maryland v. Louisiana, 451 U.S. 725, 756 (1981); Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 147 (1978)). Here, the exception favors in-state interests over out-of-state interests. Thus, the overall limit is not facially neutral, but rather discriminatory and, therefore, subject to the same per se test applied to the other discriminatory provisions of Act 590. The limit fails to survive such scrutiny for the same reasons that the floors and ceilings in Act 590 failed.21 _________________________________________________________________ 20 South Carolina also contends that we expressly excluded the overall limit as one of the items properly enjoined in our previous opinion addressing the preliminary injunction. HWTC, 945 F.2d at 787 n.9. While we referenced the statutory section containing the limit in our list of sections to be enjoined, we specifically referred to another subsection. Today, however, for the reasons set forth below, we clarify that the limit is included as one of the items that violates the Commerce Clause. 21 Even if the limit were nondiscriminatory, it would not be severable. State law governs the severability of a state statute. Muller v. Curran, 889 F.2d 54, 57 (4th Cir. 1989), cert. denied , 493 U.S. 1074 (1990). Thus, in determining whether the overall limit can be severed, we turn to South Carolina law. Under South Carolina law,[t]he test for sever22
The needs regulation requires that a permit application for new or expanded hazardous waste facilities demonstrate need by reference to the level of waste generated in South Carolina only. South Carolina contends that the needs requirement is neutral, functioning similarly to an evenhanded cap and therefore valid. In our earlier opinion, we found that [o]n its face [the needs requirement] appears not to regulate evenhandedly. It permits South Carolina to refuse to allow new construction if all of its waste can be disposed of by exportation. The `practical effect' . . . of the regulation may be to favor in-state interests over out-of-state interests. HWTC, 945 F.2d at 791 n.14 (citation omitted). Indeed, currently, the practical effect may be to establish a ban on building new capacity. We find that the needs requirement is not similar to an evenhanded cap with the same effect on both in-state and out-of-state interests. The effect on out-of-state interests is to prohibit facilities from expanding to meet out-of-state needs, but to allow expansion to meet in-state needs. Thus, just as with the overall limit in question, the needs requirement contains an exception for in-state needs allowing expansion or a raise in the limit where in-state needs dictate such a _________________________________________________________________ ability is whether the constitutional portion of the statute remains `complete in itself, wholly independent of that which is rejected, and is of such a character as that it may fairly be presumed that the Legislature would have passed it independent of that which is in conflict with the Constitution.' Thayer v. South Carolina Tax Comm'n, 413 S.E.2d 810, 814-15 (S.C. 1992) (citing Shumpert v. South Carolina Dep't of Highways & Public Transp., 409 S.E.2d 771 (1991)) (footnote omitted). We cannot fairly presume that the South Carolina legislature would have passed the overall limit without the provision allowing the limit's increase if South Carolina wastes exceeded the cap. Nor can we assume that the limit would have been passed without the remaining provisions of the statute, which include floors for in-state-wastes and ceilings for out-of-state wastes. By protecting capacity for in-state interests, the legislature may have quelched in-state political interests that might otherwise have lobbied against the overall limit. Thus, we conclude that the limit provision is not severable. 23 rise. While the limit once imposed applies equally to out-of-state and in-state wastes, in effect, it guarantees in-state generators of waste space because the limit can always be raised in order to meet in-state needs. Therefore, we apply the per se test to Regulation 61-99.22 The needs regulation does not survive the per se test for the same reasons the remainder of the challenged South Carolina laws failed to survive. South Carolina has raised no issue of fact as to a state rationale unrelated to the origin of the waste for its needs requirement. D. Primary Jurisdiction Finally, South Carolina attempts to persuade us that the district court erred by failing to defer under the doctrine of primary jurisdiction to the EPA in the first instance as to whether South Carolina's laws are constitutional.23 No fixed formula exists for applying the _________________________________________________________________ 22 South Carolina's reliance on Chambers Medical Technologies of South Carolina v. Bryant, 52 F.3d 1252 (4th Cir. 1995), does not aid its cause. South Carolina seeks to establish that the needs regulation is similar to South Carolina's fluctuating cap for infectious waste based on the amount of waste generated in South Carolina alone. In Chambers, we held that the fluctuating cap for infectious waste might pass Commerce Clause scrutiny if it regulated in an evenhanded fashion and had only incidental effects on interstate commerce; whereas it would not be constitutional if it discriminated facially, in effect, or in purpose, thus necessitating that the per se test be applied. Id. at 1262. Here, the regulation discriminates in effect. Thus, the per se test applies. Furthermore, significantly, we noted that the fluctuating cap in Chambers did not operate as a ban on the expansion of facilities. 52 F.3d at 1262. It merely limited the amount of infectious waste any one facility could process. While the South Carolina Code required that a permit be obtained in order to build a new facility and that infectious waste generated out-of-state could only be considered in the needs calculations with DHEC approval, the Chambers court assumed that the DHEC would not deny a permit on a basis violating the Commerce Clause. Id. at 1262 n.15. Thus, in dicta, we suggested in Chambers that outright bans on expansion based on in-state needs only will most likely not survive dormant Commerce Clause scrutiny. 23 As conceded in oral argument, however, South Carolina has not requested that the EPA intervene in this case as an amicus curiae, nor has the EPA sought intervention. 24 doctrine of primary jurisdiction. United States v. Western Pac. R.R. Co., 352 U.S. 59, 64 (1956). Generally speaking, the doctrine is designed to coordinate administrative and judicial decision-making by taking advantage of agency expertise and referring issues of fact not within the conventional experience of judges or cases which require the exercise of administrative discretion. Id. ; Commonwealth of Massachusetts v. Blackstone Valley Elec. Co., 67 F.3d 981, 992 (1st Cir. 1995); Mashpee Tribe v. New Seabury Corp., 592 F.2d 575, 580 (1st Cir.), cert. denied, 444 U.S. 866 (1979), and cert. denied, 464 U.S. 866 (1983). The district judge refused to refer the instant lawsuit to the EPA under the doctrine of primary jurisdiction because he found that there were no issues of fact. Primary jurisdiction, he held, applied only to the referral of factual, not legal, issues. He further reasoned that the constitutional issues . . . [at stake were more] properly within the traditional purview of an Article III court, and are not those to which EPA could conceivably lend some degree of expertise. ETC, 901 F. Supp. at 1029. We review the district court's decision declining to refer the lawsuit to the EPA under the doctrine of primary jurisdiction for abuse of discretion. In re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d 1144, 1162 (3d Cir. 1993), cert. denied, 114 S. Ct. 921 (1994).24 The district court did not abuse its discretion. The EPA's special _________________________________________________________________ 24 South Carolina contends that the district court's refusal to apply the doctrine of primary jurisdiction was based wholly on erroneous conclusions of laws and should therefore be reviewed de novo. [D]espite what the term [primary jurisdiction] may imply,[it] does not speak to the jurisdictional power of the federal courts. It simply structures the proceedings as a matter of judicial discretion, so as to engender an orderly and sensible coordination of the work of agencies and courts. In re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d at 1162 (quoting United States v. Bessemer & Lake Erie R.R. Co., 717 F.2d 593, 599 (D.C. Cir. 1983)). Thus, the decision not to refer a lawsuit to an agency under the doctrine of primary jurisdiction is a discretionary matter which we review for abuse of discretion. Furthermore, because the matter at issue is a constitutional question which lies within this court's expertise, the district court correctly applied the law. 25 expertise is not needed to decide a question of law in a constitutional matter. Accordingly, the district court's judgment is AFFIRMED. 26