Opinion ID: 1230049
Heading Depth: 1
Heading Rank: 6

Heading: The owner's right to sell recyclables

Text: (5) If one accepts the general proposition that an owner has a right to sell his property for value, the question then becomes whether a different rule should apply to a particular type of property  property defined as recyclable materials in the Recycling Agreement between the City and Waste Management. Under plaintiffs' view, a special rule should apply to recyclables in light of the statutory definitions of solid waste handling and recycling. We read these provisions differently. Solid waste handling is defined as the collection, transportation, storage, transfer, or processing of solid wastes.  (§ 40195, italics added.) Processing is, in turn, defined as the reduction, separation, recovery, conversion, or recycling of solid waste.  (§ 40172, italics added.) Put simply, solid waste handling includes recycling  of solid waste. If, as explained above, the owner does not discard his property, it does not become waste in the first instance. Thus, even if the property might be viewed as a feasibly recyclable material, it is not necessarily a recyclable waste. The distinction is significant because only the recycling of waste is included within the Act's definition of solid waste handling and, in turn, the provision allowing exclusive franchises. Plaintiffs also point to section 40180's definition of recycling as the process of collecting, sorting, cleansing, treating, and reconstituting materials that would otherwise become solid waste, and returning to the economic mainstream in the form of raw material for new, reused, or reconstituted products.... (Italics added.) Perhaps plaintiffs are relying primarily on the word material and concluding that all recyclable materials are subject to an exclusive franchise even if they do not become waste. If so, we disagree. Section 40180's reference to materials is merely an acknowledgment of the reality that, as a technological matter, materials are capable of being recycled. The provisions, however, that define solid waste handling refer only to recycling of solid waste,  not to the recycling of solid materials. (§§ 40172 & 40195, italics added.) If the statutes were worded otherwise, the mere fact that something is capable of being recycled would render it subject to an exclusive franchise, thereby prohibiting the owner from selling it. Moreover, section 40180 is itself consistent with the view that only waste is subject to the Act. The section refers to materials that would otherwise become solid waste.  (§ 40180, italics added.) If an owner discards property, it enters into the waste stream if not recycled. But, if a material is sold, it is not a material that would otherwise become solid waste. As explained above, it becomes waste only when discarded. Thus, if an owner sells an item, it does not enter the solid waste stream, the reduction of which is the fundamental purpose of the Act. (1e) The injunction in this case is directed at a commercial recycling activity, but the logic of plaintiffs' view would extend inexorably to noncommercial activity as well, for example, a school newspaper drive, a youth group's gathering of empty soda pop containers, or clothing donations to the Salvation Army. (Indeed, even gifts from one individual to another would be suspect, for example, a person who gives scrap metal to a sculptor of welded art.) The items collected in such activities are often recyclable materials. Nothing, however, in the language or legislative history of the Act suggests the Legislature intended to eliminate gifts to charity or gifts between friends. As with items that are sold, gifts cannot be fairly said to have entered the solid waste stream. Moreover, a gift of valuable property, like a sale of such property, is a transfer of value and thus cannot properly be characterized as discarding under the Act. In short, if the owner of recyclable materials discards them into the solid waste stream, they become solid waste subject to the Act, and an exclusive franchisee would have the right to collect that waste in accordance with its franchise agreement. If, however, the owner disposes of the recyclables for compensation  in common parlance, sells them  the recyclables are not discarded and do not become waste. We therefore hold that the owner of undiscarded recyclables is not required to transfer them to the holder of an exclusive franchise under the Act. The Recycling Agreement between plaintiffs City and Waste Management is unenforceable under the Act to the extent the franchise purports to include recyclable materials that have not become waste, as we have construed the term. Plaintiffs contend Palm Springs Recycling is seeking to skim the cream of the recycling business by collecting only the more commercially valuable materials and that a comprehensive recycling program cannot be economically sustainable absent an exclusive franchise that includes recyclable materials. This misses the mark in two respects. First, it suggests that Palm Springs Recycling is somehow taking something of value from Waste Management. Not so. The cream belongs to the owner of the recyclable material. Second, the contention is better addressed to the Legislature. Our holding is based on the Act as it is written, not on a different, perhaps broader, version that could have been, or still may be, enacted. Finally, we address plaintiffs' additional argument that the City's award of the exclusive franchise was a valid exercise of the police power. This argument is not clearly presented, but it seems to have two, perhaps three, aspects. First, the focus of the argument is the state's police power. In light of our conclusion that the Act does not support the exclusive franchise in this case, whether the state constitutionally could have framed the Act to allow the franchise is beside the point. Second, plaintiffs also assert, albeit cryptically and only in passing, that the exclusive franchise is a valid exercise of the City's own police power. Plaintiffs seem to suggest the City properly exercised that power under the Act. The argument necessarily fails because, as we have explained, the Act does not itself authorize the franchise to extend to nondiscarded recyclables. Third, plaintiffs also suggest the City had the police power independent of the Act to award an exclusive franchise for the collection of undiscarded recyclables. We decline to decide the correctness of the Court of Appeal's determination of that issue. (Cal. Rules of Court, rule 29.2(a).) The primary focus in this court has been the scope of the City's power under the Act. And, the question of the City's own police power raises the important issue of whether the comprehensive Act has preempted any power the City might otherwise have had. Under our construction of the Act, we need not address Palm Springs Recycling's other arguments.