Court Opinion

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Opinions of the United
1995 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

10-20-1995

Harvey & Harvey v Chester
Precedential or Non-Precedential:

Docket 94-1924

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Recommended Citation
"Harvey & Harvey v Chester" (1995). 1995 Decisions. Paper 275.
http://digitalcommons.law.villanova.edu/thirdcircuit_1995/275

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        UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT

                 No. 94-1924

            HARVEY & HARVEY, INC.,
                              Appellant

                      v.

  COUNTY OF CHESTER; PENNSYLVANIA DEPARTMENT
  OF ENVIRONMENTAL RESOURCES; CHESTER COUNTY
 SOLID WASTE AUTHORITY; SOUTHEASTERN CHESTER
           COUNTY REFUSE AUTHORITY

On Appeal from the United States District Court
   For the Eastern District of Pennsylvania
          (D.C. Civ. No. 94-cv-03615)

                 No. 94-3622

          TRI-COUNTY INDUSTRIES, INC.

                      v.

        COUNTY OF MERCER PENNSYLVANIA;
     MERCER COUNTY SOLID WASTE AUTHORITY;
         COMMONWEALTH OF PENNSYLVANIA,
     DEPARTMENT OF ENVIRONMENTAL RESOURCES

     THE COUNTY OF MERCER, PENNSYLVANIA;
     THE MERCER COUNTY SOLID WASTE AUTHORITY;
     and COMMONWEALTH OF PENNSYLVANIA,
     DEPARTMENT OF ENVIRONMENTAL RESOURCES,
                              Appellants

On Appeal from the United States District Court
   For the Western District of Pennsylvania

                      1
    (D.C. Civ. No. 93-cv-00592)

      Argued:   June 6, 1995

Before: BECKER, NYGAARD, and ALITO,
          Circuit Judges.

     (Filed   October 20, l995)

          JAMES McC. GEDDES, ESQUIRE (ARGUED)
          PHILIP TRAINER, JR., ESQUIRE
          STEVEN T. MARGOLIN, ESQUIRE
          Ashby & Geddes
          One Rodney Square
          P. O. Box 1150
          Wilmington, DE    19899

          Counsel for Harvey & Harvey, Inc.,
          Appellant in No. 94-1924

          JOHN S. HALSTED, ESQUIRE
          THOMAS L. WHITEMAN, ESQUIRE
          Office of County Solicitor
          2 North High Street
          Courthouse, Suite 7
          West Chester, PA    19380

          Counsel for County of Chester,
          Appellee in No. 94-1924

          DENNIS W. STRAIN, ESQUIRE (ARGUED)
          MARK L. FREED, ESQUIRE
          Commonwealth of Pennsylvania
          Department of Environmental Resources
          555 North Lane
          Suite 6015, Lee Park
          Conshohocken, PA   19482-2233

          Counsel for Pennsylvania Department
          Environmental Resources,
          Appellee in No. 94-1924

          JAMES E. McERLANE, ESQUIRE (ARGUED)
          Lamb, Windle & McErlane, P.C.
          24 East Market Street
          P. O. Box 565
          West Chester, PA   19381-0565

          Counsel for Chester County Solid

                 2
Waste Authority,
Appellee in No. 94-1924

JOSEPH C. CRAWFORD, ESQUIRE
Wolf, Block, Schorr & Solis-Cohen
S.E. Corner 15th & Chestnut Streets
Packard Building, 12th Floor
Philadelphia, PA   19102

Counsel for Delaware County Solid
Waste Authority,
Amicus-Appellee in No. 94-1924

THOMAS J. MAY, ESQUIRE (ARGUED)
THOMAS W. KING, III, ESQUIRE
Dillon McCandless & King
128 West Cunningham Street
Butler, PA   16001

Counsel Tri-County Industries, Inc.,
Appellee in No. 94-3622

RONALD D. AMRHEIN, JR., ESQUIRE
William J. Madden, P.C.
165 Euclid Avenue
P. O. Box 981
Sharon, PA    16146

Counsel for Mercer County Solid Waste
Authority and the County of Mercer,
Appellant in No. 94-3622

MICHAEL D. BUCHWACH, ESQUIRE
Pennsylvania Department of
 Environmental Resources
Office of General Counsel
RR#2, Mosiertown Road
P. O. Box 614
Meadville, PA   16335-8311

DENNIS W. STRAIN, ESQUIRE (ARGUED)
KRISTEN M. CAMPFIELD, ESQUIRE
GAIL B. PHELPS, ESQUIRE
Pennsylvania Department of
 Environmental Resources
Office of Chief Counsel
9th Floor, MSSOB
400 Market Street
Harrisburg, PA    17105-8464

      3
                          Counsel for Commonwealth of
                          Pennsylvania, Department of
                          Environmental Resources,
                          Appellant in No. 94-3622

                   ___________________________

                      OPINION OF THE COURT
                   ___________________________

BECKER, Circuit Judge.

          These appeals, briefed separately but listed together

for oral argument, both present Commerce Clause challenges to

municipal "flow control" ordinances.   These ordinances require

waste haulers, like the plaintiffs in each case here, to bring

solid waste picked up within the municipal boundaries to

designated landfill sites located within a state.   These

designated sites, in turn, usually charge "tipping fees"

considerably higher than other, non-designated sites located

nearby in other states.   In each case we must determine whether

these ordinances, which threaten haulers taking waste to

nondesignated sites with fines and suspension, impermissibly

discriminate against interstate commerce.

          In one case Harvey & Harvey ("Harvey"), an interstate

collector, hauler and processor of municipal solid waste, brought

suit against Chester County, the Chester County Solid Waste

Authority ("the Authority")0 the Southeastern Chester County

0
The authority is a Pennsylvania municipal corporation
established by the County Commissioners in 1984 for the purpose
of operating the Lanchester Landfill.

                                4
Refuse Authority ("SECCRA")0 and the Pennsylvania Department of

Environmental Resources (the "DER").   It seeks to have the

County's flow control plan declared unconstitutional under the

dormant Commerce Clause.   The district court denied Harvey's

motion for a preliminary injunction.   Concluding that the plan

does not discriminate against interstate commerce, it held that

the Pike balancing test, see Pike v. Bruce Church, Inc., 397 U.S.
137, 90 S. Ct. 844 (1970), which Harvey acknowledged that it

could not meet, would apply.   (Sept. 8, 1994 Order.)   Because the

district court did not consider whether the Chester County flow

control scheme offered out-of-state landfill operators an equal

opportunity to compete for the county's waste disposal business,

we vacate and remand for further proceedings.

          In the other case Tri-County Industries, Inc. ("Tri-

County"), a hauler of residential and commercial solid waste

throughout Mercer County and in other Western Pennsylvania and

Ohio counties, brought suit against the County of Mercer and the

Mercer County Solid Waste Authority ("MCSWA").   It sought both a

declaratory judgment that the county's flow control plan violated

the dormant Commerce Clause and a permanent injunction enjoining

its enforcement.   The district court, concluding that the plan

improperly impeded interstate commerce, granted final judgment on

stipulated facts in favor of Tri-County.   We hold that the

district court erred in concentrating on the operation of the

ordinance and concomitantly in failing to consider whether out-

0
SECCRA owns the SECCRA landfill.

                                5
of-state interests competed on a level playing field.        Therefore,

the order in Tri-County must also be vacated and remanded.

I.   FACTS AND PROCEDURAL HISTORY

           A.    THE SOLID WASTE CRISIS

           During the 1970s and '80s, national environmental

concerns fostered stricter state regulation of waste disposal.

This regulation led to a large number of landfill closures

throughout the United States, creating shortages in many places

and driving up landfill pricing.        See Eric S. Petersen & David N.

Abramowitz, Municipal Solid Waste Flow in the Post-Carbone World,

22 FORDHAM URB. L.J. 361 n.33 (1995); see also Harvey SA 382

(Kerns); James C. Vago, Comment, The Uncertain Future of Flow

Control Ordinances: The Last Trash to Clarkstown?, 22 N. KY. L.

REV. 93, 98 (1995).    Pennsylvania was no exception.      It too

experienced inadequate and rapidly diminishing disposal capacity

for municipal waste.     See 53 P.S. §4000.102(a)(2) (legislative

findings).

           Waste disposal methods, ranked in descending order of

environmental impact, include: source reduction and reuse, waste

combustion, and landfilling.     See Vago, 22 N. KY. L. REV. at 106.
Environmentally advanced, innovative waste disposal facilities

can cost "in the tens to hundreds of millions of dollars to

construct."     See Vago, 22 N. KY. L. REV. at 108.    State and

federal environmental mandates often require the use of these

new, more expensive facilities.        Petersen & Abramowitz, 22 FORDHAM

URB. L.J. at *7 [n.66].    Securing long term access to disposal

facilities necessary to protect the citizens' health and safety

                                   6
"requires long-term commitments, debt and security." Id. [n.66].

Methods less protective of the environment generally have lower

capital and operating costs, and thus can charge a lower tipping

fee.

           B.   THE RESPONSE

           Until the Tax Reform Act of 1986 repealed many of the

tax incentives, most waste disposal facilities were privately

owned and operated.   ID. at *4 [n.36].   In response to the tax

changes and increased costs caused by environmental regulation,

increased public ownership became necessary, shifting the

financing burden to the local governments.    With this burden came

risk.   Even where the municipal government contracts with a

private operator to construct or upgrade the disposal facility,

the municipality often continues to bear the risk of an

inadequate waste supply through municipal guarantees.

Consequently, "it is the ability of local governments to control

these haulers and where they transport the collected waste that

often determines the feasibility of the solid waste processing

disposal programs."   See Petersen & Abramowitz, 22 FORDHAM URB.

L.J. at *2 [n.31].

           Flow control ordinances, enacted by a number of states

attempting to deal with these waste disposal crises, create a

system in which waste haulers are licensed by the municipality

and are directed to take the waste collected to landfills that

have been designated by the county.   By conditioning the haulers'

licenses on their compliance, local governments can assure a

certain minimum revenue at the designated sites.    Flow control

                                 7
both guarantees that a certain volume will be deposited and

enables the operators of the designated landfill to collect a

"tipping fee"0   high enough to cover the cost of processing.

Indeed, tipping fees are typically based on both the system's

construction cost and the estimated amount of waste that will be

deposited there annually.   In some cases, the municipalities

actually set the tipping fee contractually.

          Given the municipalities' reliance on the higher rates

in effect when the municipalities were constructing and financing

these facilities, flow control ordinances have been crucial to

the financial viability of these facilities in the wake of the

precipitous decline of tipping fees.0   Indeed, flow control has

"been a vital economic element in supporting dozens of major

waste-to-energy and landfill-based waste disposal programs

involving billions of dollars in capital investment."   Petersen &

Abramowitz, 22 FORDHAM URB. L.J. at *2 [n.25].0

0
 The tipping fee is the price charged haulers to dump a ton of
waste at a landfill.
0
 Although the waste disposal crisis had evidenced an acute
shortage of environmentally sound landfill capacity, the market
eventually responded to the increased price; in fact, there were
so many entrants into the waste disposal market, constructing so
many new facilities, that tipping fees collapsed. Thus, while
landfills could contract for tipping fees between $35.00 per ton
(Mercer County) and $52.00 per ton (Chester County) approximately
five years ago, current spot rate tipping fees are approximately
$17.50 - $30.00 per ton.
0
 Until C & A Carbone, Inc. v. Town of Clarkstown, 114 S. Ct. 1677
(1994), discussed infra, these ordinances had withstood a variety
of constitutional challenges, including due process, antitrust,
and Commerce Clause challenges. Petersen & Abramowitz, 22 FORDHAM
URB. L.J. at *8-9 [nn.67-110]. Indeed, through the late 1980s,
federal courts entertaining Commerce Clause challenges to flow
control found that even flow control schemes involving export

                                  8
          C.    PENNSYLVANIA'S MUNICIPAL WASTE ACT

          In responding to its own solid waste crisis, the

Pennsylvania legislature enacted the Municipal Waste Act (the

"Act") to protect the public health, safety and welfare from the

short- and long-term dangers of the transportation, processing,

treatment, storage and disposal of municipal waste.    See 53 P.S.

§4000.102(b)(3).    The Act establishes a system requiring each

county to plan for the long-term processing and ultimate disposal

of its waste.    In authorizing each county to adopt flow control

ordinances, the Act explicitly set forth the policy goal of such

flow control legislation:
          Authorizing counties to control the flow of
          municipal waste is necessary, among other
          reasons, to guarantee the long-term economic
          viability of resource recovery facilities and
          municipal waste landfills, to ensure that
          such facilities and landfills can be
          financed, to moderate the cost of such
          facilities and landfills over the long term,
          to protect existing capacity and to assist in
          the development of markets for recyclable
          materials by guaranteeing a steady flow of
          such materials. §102(a)(10).

          Under the Act, counties may designate for a ten-year

period the facilities at which waste generated within the county

will be processed or disposed.   See 53 P.S. § 4000.303(e).   Such

facilities do not have to be located within the county, although

one provision of the Act states that "[p]roper and adequate

processing and disposal of municipal waste generated within a

county requires the generating county to give first choice to new

bans had only an incidental burden on commerce, and therefore did
not discriminate against interstate commerce. ID. at *9 [n.100].

                                 9
processing and disposal sites located within that county."    53

P.S. §4000.102(6).    Each county must consider alternative

facilities and programs, and "provide reasonable assurances that

the county utilized a fair, open and competitive process for

selecting such facilities or programs from among the alternatives

which were suggested to the county."     53 P.S. §4000.502(f)(2). In

addition, if a county proposes to own or operate a municipal

waste processing or disposal facility, it must explain the basis

for such a proposal, giving consideration to the comprehensive

costs and benefits of private ownership and operation of such

facilities.   53 P.S. §4000.502(m).

          The facilities designated by a county, and the process

by which they are chosen, must be set out in a municipal waste

management plan. 53 P.S. §4000.502(f).     During its preparation,

the plan is reviewed by a county advisory committee made up of

representatives from the county's municipalities, civic groups,

and industry.   The committee makes suggestions and proposes any

changes it believes are appropriate. 53 P.S. §4000.503(a).    At

least thirty days before submitting any proposed plan revisions

to the Department of Environmental Resources ("DER"), the county

must submit a copy of the proposed revision to the County

Advisory Committee.   53 P.S. § 4000.503(d).    The county must also

make the plan available for a ninety-day public review and

comment period, and hold at least one public hearing on the

proposed plan during this period.     53 P.S. §4000.503(c).

          After adoption by the county, a plan must undergo a

municipal ratification process requiring approval by fifty

                                10
percent of the municipalities in the county, representing at

least fifty percent of the population.    53 P.S. §§4000.503(d);

504(c).   The plan must then be submitted to the DER for approval,

after which any party objecting to the plan may appeal to the

Pennsylvania Environmental Hearing Board.       If a county chooses to

require that municipal waste be processed or disposed of at

designated facilities by means other than contract (e.g., by

ordinance), the plan must explain the basis for such a proposal

and include a copy of the proposed flow control ordinance or

other legal instrument.     53 P.S. § 4000.502(1).

           The plan, and the list of facilities designated by the

county for processing and disposal, may be revised by the county

at any time but must be revised at least three years prior to the

time that the remaining capacity for a county is exhausted.      25

Pa. Code § 272.251(b); 25 Pa. Code § 272.251(a)(1).

           D.   THE HARVEY CASE

                 1.   The Chester County Plan

           Harvey is a Delaware corporation operating in

Pennsylvania, Maryland and Delaware as an interstate collector,

hauler and processor, inter alia, of municipal solid waste.

Harvey is a licensed hauler of municipal solid waste in Chester

County, Pennsylvania.

          On May 30, 1989, the Chester County Board of

Commissioners appointed the Chester County Act 101 Municipal

Waste Advisory Committee.    The Committee evaluated six potential

waste management methods in order to select the components that

                                  11
would constitute the Chester County solid waste management

system:   waste reduction, recycling, waste-to-energy technology,

a trash-for-ash exchange, transfer stations and landfilling.      In

addition, the Committee participated in four day-long site

inspections of existing waste disposal and processing facilities

located in Baltimore, Maryland and Chester County, Montgomery

County, Philadelphia, and York, Pennsylvania.    The Committee also

attended a presentation on the Westinghouse resource recovery

facility located in the City of Chester, Pennsylvania.

           The Committee held 13 meetings between July 11, 1989,

and March 20, 1990, to discuss the elements of the County's waste

management plan.    Although these meetings were open to the

public, they were advertised only in the Daily Local News, a

Westchester paper with a circulation of approximately 45,000.

The Committee then prepared a draft plan, and on May 29 and May

31, 1990, conducted public hearings to entertain public comment

on the draft plan.    The record does not reveal how these public

meetings were advertised or how many people attended.    The

Committee approved revisions based on that public comment. Harvey

did not participate in the process, either as an advocate of an

alternative site or as a commenter.    The record does not contain

any explanation for Harvey's absence, but it appears that Harvey

did not have significant business in the County prior to 1990.

           The County Commissioners adopted the updated Plan on

September 25, 1990, and the DER granted its final approval on

April 11, 1991.    The Plan contained key components of the

committee's draft plan, including the decision to designate the

                                 12
Southeastern Chester County Refuse Authority Sanitary Landfill

(the "SECCRA Landfill") and the Chester County Solid Waste

Authority Lanchester Sanitary Landfill ("Lanchester Landfill") as

the primary disposal sites for the County.     The County selected

these two sites from among those considered because "the haulers

of trash in the County had established a historical pattern of

disposal at these landfills."     County Br. at 11.   In fact, the

County had played a role in financing the Lanchester landfill. In

1984, the County purchased it and turned its operation over to

the Authority.     The County financed the purchase with $42.55

million in Authority revenue bonds which carry a County

guarantee.    After the purchase, the County guaranteed an

additional $41.5 million in Authority debt, secured a $9.2

million letter of credit, and agreed to provide the Authority

with an additional $9.5 million for landfill projects.

             In response to concerns voiced by Committee members

that the "northern tier" of the County might be adversely

affected by the system proposed by the Committee (i.e.,

designating only the SECCRA and Lanchester landfills), the

Committee voted to recommend that the Pottstown Landfill, a

privately owned facility located in adjacent Montgomery County,

be included in the Plan as a disposal option.0

          Initially, the 1990 Plan did not mandate the adoption

of flow control.    The DER informed Chester County during its

0
The Pottstown facility was approved to receive waste only from
certain areas within the county, and the amount of waste it could
receive was capped at the amount deposited by the county at the
facility in 1989.

                                  13
review process, however, that it would not approve the Plan

unless the County flow controlled its waste.     DER letters of

3/12/91; 4/11/91; committee notes.     Consequently, the County

commissioners enacted a flow control ordinance on April 2, 1992.

The ordinance divides the County into two service areas: the

SECCRA Landfill service area and the Lanchester Landfill Service

Area.   Municipal waste generated in these service areas must be

disposed of at the facility designated by the County to receive

the waste.    A certain amount of waste may also be taken to the

Pottstown landfill.     The terms of the ordinance permit amendment

to designate other facilities and do not prohibit out-of-state

facilities from applying.0    However, the indentures of the

revenue bonds and administrative agreements between the County

and the Authority stipulate that the County will oppose the

construction, acquisition, operation or designation of any

facility that might divert revenue from Lanchester.     (Committee

letters to DER seeking permission not to consider additional

sites for designation).

                 2.   Procedural History

0
The Ordinance defines a Designated facility as follows:

             the Lanchester Sanitary Landfill owned and operated by
             the Chester County Solid Waste Authority, located in
             Honeybrook Township, Chester County and Caernarvon and
             Salisbury Townships, Lancaster County; the Southeastern
             Chester County Refuse Authority Sanitary Landfill,
             located in London Grove Township, Chester County; the
             Pottstown Landfill owned and operated by SCA Services
             of Pennsylvania, Inc., located in West Pottsgrove
             Township, Montgomery County; or any other County
             designated Municipal Waste processing or disposal
             facility.

                                  14
            Harvey filed its complaint in the district court on

June 15, 1994, challenging Chester County's flow control plan

under the Federal Constitution's Commerce Clause, Art. I, § 8,

Cl. 3.    Harvey alleged that the regulations isolate the County

from the interstate solid waste market by prohibiting the export

of locally generated waste to out-of-state disposal and by

similarly prohibiting the import of waste processing and disposal

services from out of state.       On June 27, 1994, Harvey moved for a

preliminary injunction to enjoin enforcement of the relevant

regulations adopted pursuant to the ordinance.       After a hearing,

the district court denied the motion on the grounds that Harvey

had made an insufficient showing of immediate and irreparable

harm.    A trial date was set for September 12, 1994.

            Prior to trial, the parties filed cross motions to

determine the standard of review and, thus, who would bear the

burden of proof.       The district court granted the defendants'

motion to apply the Pike v. Bruce Church, Inc., 397 U.S. 137, 90
S. Ct. 844 (1970) balancing test since it found that the Chester

County Ordinance did not discriminate on its face or in purpose

or effect against interstate commerce.       September 8, 1994 Order.

Harvey conceded that it could not prove its case under the Pike
standard and therefore stipulated to an order of final judgment

Harvey appealed.

            E.   THE TRI-COUNTY CASE

                  1.    The Mercer County Plan

           Plaintiff/appellant, Tri-County Industries, Inc., is a

Pennsylvania corporation doing business in Mercer County,

                                    15
Pennsylvania.     In late 1989, the Mercer County Commissioners

formed the Mercer County Solid Waste Authority ("MCSWA") to

implement the County's duties under the Act.     Mercer County

generates approximately 5,000 tons of municipal waste each month.

             After retaining the services of an independent

consultant, Mercer County decided that the best solution for this

fairly small county would be to contract with a single disposal

facility.     The County prepared detailed bid specifications for

the needed municipal waste capacity.     The Request for Proposals

("RFP") was advertised nationwide and was obtained by twenty-

three companies around the country.     Although many of these

companies were located in Pennsylvania, others were located in

Ohio, New York, Maryland, New Jersey, Minnesota and Louisiana.

Only four companies, including the appellee, Tri-County,

submitted a bid in response to the RFP, and none of these was

from outside Pennsylvania.     The successful bidder was Waste

Management of Pennsylvania, the owner of a landfill in Butler

County.

             By its terms the process outlined by Mercer County in

its RFPs does not discriminate against in- or out-of-state

interests.     The RFP requirements apply equally to all disposal

facilities, irrespective of their location.     Id, see also RFP

1.4(g).     The plan was submitted to DER in the fall of 1990 and

approved in March, 1991.     After DER approved the Plan, MCSWA

contracted with the successful bidder, and Mercer County adopted

the now contested Ordinance, No. 6-1991.     The ordinance requires

each hauler in the county to obtain a license and to haul

                                  16
municipal waste generated in the county to the landfill

designated in the county plan "as it may be revised from time to

time."   Section 3, 6-1991.

           Although the Plan required Tri-County to haul the waste

to the Butler facility and pay the $35 per ton tipping fee, Tri-

County in fact took some of its waste to two other facilities in

Ohio which charged tipping fees of only $17.20 and $27.95 per

ton.   Of the approximately 600 to 900 tons of waste Tri-county

hauled monthly, it took 500 tons per month to the non-designated,

Ohio facilities.     The MCSWA notified Tri-County by letter dated

March 19, 1993, that it would hold a hearing on April 15, 1993,

to determine whether Tri-county's waste hauling license should be

revoked for its failure to deliver all of its waste to the

designated facility.

                2.    Procedural History

           In response to this notice of hearing, Tri-County filed

this declaratory judgment action in the district court seeking a

declaration that the ordinance violated the Commerce Clause, and

a permanent injunction enjoining its enforcement.     It also moved

for a preliminary injunction, and the district court held

hearings on that motion, which the court then denied.     After some

discovery, the parties filed a joint stipulation of fact and a

joint motion to enter judgment on the basis of the evidence

before the district court.

           In October 1994, the district court entered judgment

for Tri-County on the grounds that the ordinance, by requiring

that all waste generated within the county be taken to the

                                  17
designated landfill in Butler County, operated to impermissibly

burden interstate commerce.    This appeal followed.

           Both of these appeals involve the district courts'

choice of the applicable legal standard.    Since this involves the

selection, interpretation and application of legal precepts, our

review is plenary.   See Doe v. American Red Cross, 14 F.3d 196

(3d Cir. 1993).

II.   THE LEGAL FRAMEWORK

           A.   THE GENERAL COMMERCE CLAUSE JURISPRUDENCE

           The Commerce Clause provides that "[t]he Congress shall

have Power . . . to regulate Commerce . . . among the several

States." U.S. Const. Art. I, § 8, cl. 3.    "Although the Clause

speaks in terms of powers bestowed upon Congress, the Court has

long recognized that it also limits the power of the States to

erect barriers against interstate trade."    Lewis v. B.T.

Investment Managers, Inc., 447 U.S. 27, 35, 100 S. Ct. 2009, 2015

(1980).   That is, the Commerce Clause has a negative or dormant

aspect which limits state authority to regulate areas where

"Congress has not affirmatively acted to either authorize or

forbid the challenged state activity."    Atlantic Coast Demolition
& Recycling, Inc. v. Board of Chosen Freeholders of Atlantic

County, 48 F.3d 701, 710 (3d Cir. 1995) (quoting Norfolk Southern

Corp. v. Oberly, 822 F.2d 388, 392 (3d Cir. 1987)).    None of the

parties has argued that Congress has either prohibited or

authorized the flow control ordinances at issue here.0

0
As with any dormant commerce clause issue, "[i]t is well
established that Congress may authorize the States to engage in

                                 18
Consequently, we must consider whether these ordinances violate

the dormant Commerce Clause.

          In considering Commerce Clause challenges, courts

should "'determine whether action taken by state or local

authorities unduly threatens the values the Commerce Clause was

intended to serve.'"   Norfolk Southern Corp. v. Oberly, 822 F.2d
388, 399 (3d Cir. 1987) (quoting Wardair Canada, Inc. v. Florida

Dept. of Revenue, 477 U.S. 1, 106 S. Ct. 2369, 2372-73 (1986)).

"[T]he Commerce Clause is designed to eliminate protectionist

restrictions on interstate trade which typically characterize

international trade, such as embargoes, quotas, and tariffs."

Oberly, 822 F.2d at 399; see also New Energy Co. v. Limbach, 486
U.S. 269, 273 (1988) (explaining purpose of the clause as

prohibiting "economic protectionism -- that is, regulatory

regulation that the Commerce Clause would otherwise forbid." See
Maine v. Taylor, 477 U.S. 131, 138, 106 S. Ct. 2440, 2447 (1986).
Congress can in effect overturn a Supreme Court decision simply
by explicitly giving the states the authority to regulate. In
her concurrence in Carbone, Justice O'Connor considered whether
Congress' passage of the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. § 6941 et seq., constituted such an
authorization. Although she conceded that the statute (in
conjunction with its legislative history) could be read to
empower states to adopt flow control ordinances, she maintained
that, in order to authorize potentially discriminatory state
regulation, Congress must speak explicitly and unmistakably.
Carbone, 114 S. Ct. at 1691-92. Because RCRA did not constitute
such an explicit pronouncement, she concluded that RCRA could not
serve as the necessary enactment. In the wake of Carbone,
Congress has considered legislation providing for such explicit
authorization of flow control schemes. Although the Senate
passed the bill known as the Interstate Transportation of
Municipal Solid Waste Act of 1995, S.534, see 141 Cong. Rec.
S.6728, which would have grandfathered many of the flow control
ordinances enacted to finance existing facilities, the bill has
not passed the House. Thus, we must consider whether the
ordinances involve here survive the Carbone test.

                                19
measures designed to benefit in-state economic interests by

burdening out-of-state competitors").      Because of that animating

purpose, the Court has applied a two-step inquiry to determine

whether a challenged ordinance or regulation violates the

Commerce Clause.

          The first step involves determining whether the

ordinance discriminates against interstate commerce;

discrimination is defined as the       "differential treatment of in-

state and out-of-state economic interests that benefits the

former and burdens the latter."    Oregon Waste Syst. Inc. v. Dept.

of Environmental Quality of Oregon, 114 S. Ct. 1360 (1994).      If "a

state law is shown to discriminate against interstate commerce

'either on its face or in practical effect,' the burden falls on

the State to demonstrate both that the statute 'serves a

legitimate local purpose,' and that this purpose could not be

served as well by available nondiscriminatory means."      Maine v.

Taylor, 106 S. Ct 2440, 2447 (citing Hughes v. Oklahoma, 441 U.S.

at 336, 99 S. Ct. at 1736); Foster-Fountain Packing Co. v.

Haydel, 278 U.S. 1, 10 (1928).

          But if the ordinance does not discriminate against

interstate commerce either in purpose or effect, it is subjected

to a balancing test whereby the statute will be upheld unless

"the burden imposed on such commerce is clearly excessive in

relation to the putative local benefits."       Pike v. Bruce Church
Inc., 397 U.S. 137, 142 (1970).    For instance, in Minnesota v.
Clover Leaf Creamery Co., 449 U.S. 456, 101 S. Ct. 715 (1981),

the Court upheld a Minnesota statute that banned the retail sale

                                  20
of milk in plastic jugs.   Because the statute imposed burdens on

both in-state and out-of-state dairies, it was subjected only to

the Pike balancing test.   After determining which standard to

apply, courts must then determine whether the statute can meet

the test enunciated under the appropriate standards.
               1.   Triggering Strict Scrutiny: Discriminatory
               Purpose or Effect

          A regulation serving a protectionist purpose is

obviously invalid since a discriminatory purpose is a fortiori

illegitimate.   See Philadelphia v. New Jersey, 437 U.S. at 624,

98 S. Ct. at 2535 (characterizing a statute with a protectionist

purpose as virtually per se invalid).   More benign purposes,

however, do not immunize the statute from the challenge since

"the evil of protectionism can reside in legislative means as

well as legislative ends." Id. at 626, 2536; see also Fort

Gratiot Landfill v. Michigan Department of Natural Resources, 112
S. Ct. 2019, 2024 (1992) (invalidating legislation with

legitimate goals since even valid purposes may not be
accomplished "by the illegitimate means of isolating [the county]

from the national economy").

          If a statute's purpose is not manifestly

discriminatory, the court must determine "how directly [the

statute] burdens interstate commerce and how evenhandedly it

impacts interstate and intrastate commerce."   Stephen D. DeVito,

Jr. Trucking v. RISWMC, 770 F. Supp. 775, 781 (D.R.I. 1991); see
also Carbone, 104 S. Ct. at 1684 (courts look beyond explicit

terms of statute to examine its practical purpose or effect);

                                21
Hughes, 441 U.S. at 336, 99 S. Ct. at 1736; Taylor, 477 U.S. at

138, 106 S. Ct. at 2447; Fort Gratiot, 112 S. Ct. at 2023-25

(either purpose or effect can trigger strict scrutiny); Norfolk

S. Corp. v. Oberly, 822 F.2d 388, 406 (3d Cir. 1987).     This court

has expressed some doubt whether a showing of discriminatory

effect alone could suffice.   See Oberly, 822 F.2d at 400-01 n.18.

But Carbone and the entire line of recent Supreme Court cases

have clarified that either purpose or effect will trigger strict

scrutiny analysis.   We also note that where the showing of effect

is weak, demonstrating discriminatory purpose buttresses the

case.

          As we explained, the purpose of the dormant Commerce

Clause is to prevent "[s]tate and local governments [from using]

their regulatory power to favor local enterprise by prohibiting

patronage of out-of-state competitors or their facilities."

Carbone, 114 S. Ct. at 1684; see also H.P. Hood & Sons, Inc. v.

Du Mond, 336 U.S. at 537-38 ("What is ultimate is the principle

that one state in its dealings with another may not place itself

in a position of economic isolation.").   The purpose of the

dormant Commerce Clause is not to protect individual firms.     In

Exxon Corp. v. Maryland, 437 U.S. 117, 126, 98 S. Ct. 2207, 2214
(1978), the Supreme Court upheld a statute prohibiting a

petroleum producer or refiner from operating retail service

stations within the state. The Court explained:
          While the refiners will no longer enjoy their
          same status in the Maryland market, in-state
          independent dealers will have no competitive
          advantage over out-of-state dealers. The fact
          that the burden of a state regulation falls

                                22
          on some interstate companies does not, by
          itself, establish a claim of discrimination
          against interstate commerce.

Id. at 2214.   Conversely, the one-time selection of an in-state

interest does not by itself establish a discriminatory effect

unless the selection confers an unreasonably long-term benefit.

          This Court has recently rejected attempts to

characterize all legislative schemes which award business to a

successful bidder as Commerce Clause violations.     Atlantic Coast,
48 F.3d at 714-15.   Although we recognized that regulations of

public utilities (including those that require the utility to

secure its capacity within the state) are now subject to the same

Commerce Clause scrutiny as non-utility statutes, we found

significant precedent for local government authorities to select

a single service provider in the public utility context:
          A gas or electric utility granted a franchise
          to serve the needs of all residents within a
          local area is not ordinarily required to
          commit to producing its electricity or
          securing its natural gas supply within that
          area as well. Normally, both in-state and
          out-of-state interests may, therefore,
          compete equally for the franchise award and
          the creation of a captive consumer base does
          not, under these circumstances, discriminate
          against electricity and gas generated or
          produced out of state.
48 F.3d at 715.

          Carbone explicitly rejected the argument that a

disputed statute would have to favor all in-state businesses as a

group -- a statute may be invalid if it favors only a single or

finite set of businesses. 114 S. Ct. at 1682-83.   Consequently,

                                23
where a challenge is based on the alleged favoritism of a finite

set of in-state interests (rather than all in-state businesses),

it must be demonstrated that the ordinance actually favors the

chosen in-state providers.    That the ordinance requires the use

of the selected facility, thus prohibiting the use of non-

designated facilities (which may be out of state), does not

itself establish a Commerce Clause violation.

          B.    THE SOLID WASTE COMMERCE CLAUSE JURISPRUDENCE

The Early Cases

          The Supreme Court first recognized that the interstate

hauling of solid waste was commerce for the purposes of Commerce

Clause analysis in City of Philadelphia v. New Jersey, 437 U.S.
617 (1978).    In that case, the Court struck down a New Jersey

ordinance that prohibited the importation of solid or liquid

waste that originated out-of-state.    While New Jersey could

pursue its goal of restricting access to its diminishing waste

disposal facilities, it could not do so by blocking only out-of-

state waste. Id. at 626-27.    The Court explained that such a

clear example of purposeful economic protectionism -- a virtual

import ban -- is subject to a per se rule of invalidity.     Id. at

625.

          Despite the solid waste disposal crisis of the 1980s,

the Supreme Court has invalidated each of the ordinances that

attempted to ban or to levy differential surcharges on waste

generated out-of-state.    See, e.g., Fort Gratiot, 112 S. Ct. at

2019 (1992) (invalidating regulation prohibiting out-of state

waste in the landfill unless authorized by Congress); Oregon

                                 24
Waste Sys. Inc. v. Dept. of Environmental Quality of Oregon, 114
S. Ct. 1346 (1994) (voiding differential charge); Chemical Waste

Management Inc. v. Hunt, 112 S. Ct. 2009 (1992) (same).

           In response to these successful constitutional

challenges, municipalities sought other means of managing solid

waste disposal.   Instead of attempting to limit the quantity of

waste by banning or discouraging the importation of out-of-state

waste, local governments opted to expand the capacity of their

waste disposal facilities.   They obtained the financing for these

expansions by adopting flow control ordinances, which were

necessary to reassure the bondholders (and the underwriters).

Dormant Commerce Clause challenges to these statutes ensued.

           C. CARBONE

           In C & A Carbone, Inc. v. Town of Clarkstown, 114 S.

Ct. 1677 (1994), the Supreme Court transposed its skepticism of

waste control initiatives to flow control ordinances.   Reversing

the decision of an intermediate appellate court, the Court struck

down Clarkstown's law requiring all nonhazardous solid waste

within the town, whether or not generated in the town, to be

deposited at a town-designated transfer station.    The town had

arranged with a private contractor to construct the designated

site (which was within the town, and perforce in-state) in return

for the town's commitment to deliver and pay for the processing

of at least 120,000 tons of solid waste annually.   At the end of

a five year period, the town could purchase the facility for one

dollar.   Because the town's guaranteed tipping fee was higher

than the cost on the private market, the town needed to adopt the

                                25
flow control ordinance to obtain the fee from the haulers and to

minimize its own obligations under the guarantee agreement.

           The Court found that Clarkstown's ordinance

discriminated against interstate commerce by bestowing a favored

status on the single waste processor within the town and by

"depriving competitors, including out-of-state firms, of access

to a local market," 114 S. Ct. at 1680.    The Court was

unpersuaded by the argument that the ordinance did not

discriminate because it applied equally to in-state and out-of-

state haulers.   Id. at 1682 (citing Dean Milk Co. v. Madison, 71
S. Ct. 295 (1951); Fort Gratiot Sanitary Landfill, Inc. v.

Michigan Dept. of Natural Resources, 112 S. Ct. 2019, 2024

(1992)).   Instead, the Court regarded Clarkstown's ordinance as

"just one more instance of local processing requirements" that

the Court has long held invalid.     Id. at 1682-83 (citing cases

involving statutes that required various articles of commerce to

be processed within their state of origin).    The Clarkstown

statute fit this mold since its terms explicitly required "all

solid waste within or generated within the Town of Clarkstown . .

. [to be] delivered to the Town of Clarkstown solid waste

facility at Route 303, West Nyack, New York and such other sites,

situated in the Town."   Carbone, 114 S. Ct. at 1685 app.   The

statute did not mention any possibility of adding additional or

alternative sites.

           Because the single site designated by the ordinance was

in state, the Court presumed that Clarkstown's ordinance had the

"design and effect" of hoarding a local resource.    Id. at 1683.

                                26
That Clarkstown intended the scheme to serve as a financing

measure imparted it with a discriminatory purpose, according to

the Court. 114 S. Ct. at 1684.     Although the majority rejected

Justice O'Connor's view that, to be discriminatory, a law must

discriminate against out-of-state interests as a group, the Court

still required that the law discriminate in favor of an in-state

interest. 114 S. Ct. at 1682-83.      Moreover, the Clarkstown

ordinance did not provide for amendment to add other, perhaps

out-of-state sites, and did not limit the period of the

designation. Indeed, the town's likely ownership of the transfer

station after five years seems to render the station's monopoly

permanent.

             Since Carbone, flow control ordinances have been

subjected to searching Commerce Clause scrutiny.        Some

commentators have characterized the language of the Carbone

opinion as exceptionally broad, and acknowledged that the

decision places the "painstakingly privatized waste disposal

systems" in jeopardy by denying the municipalities the principal

means of support they have used to finance such facilities.

Petersen & Abramowitz, 22 FORDHAM URB. L.J. at *15 [n.170]; see
also Vago, The Uncertain Future of Flow Control Ordinances, 22 N.

KY. L. REV. at 105, 107 (citing examples of endangered

facilities); and 109 (describing impracticality of Court's

municipal bond suggestion).    While Carbone undisputedly sweeps

quite broadly, we do not read it to establish a per se rule

subjecting all flow control ordinances to strict scrutiny.

                                    27
Whether strict scrutiny applies is crucial because its

application is usually fatal to a challenged regulation.

          D. ATLANTIC COAST

          We applied Carbone in Atlantic Coast Demolition &

Recycling, Inc. v. Board of Chosen Freeholders of Atlantic

County, 48 F.3d 701 (3d Cir. 1995).    Atlantic Coast involved a

challenge to New Jersey's solid waste management regime, which

was adopted in response to that state's especially severe solid

waste crisis during the 1970s and '80s.   Provisions of the Solid

Waste Management Act, N.J. Stat. Ann. §13:1E-1 to -207 (West 1991

& supp. 1994), and the Solid Waste Utility Control Act, N.J.

Stat. Ann. § 48:13A-1 to 13 (West Supp. 1994), authorized the

local waste districts to adopt flow control ordinances mandating

the delivery of certain wastes to designated facilities that

charge higher tipping fees in order to cover operating expenses

and repay revenue bonds used to finance the capital expenditures

of constructing these facilities.

          In addressing the challenge, we rejected the attempt to

frame the issue as one of the constitutionality of the statute

after the designation was made, thus refuting the contention that

the challenged ordinance, which required waste to be deposited at

the designated facility (which was in-state), amounted to an

export ban.   We found significant precedent allowing local

government authorities to select a single service provider in the

public utility context:
          A gas or electric utility granted a franchise
          to serve the needs of all residents within a
          local area is not ordinarily required to

                                28
          commit to producing its electricity or
          securing its natural gas supply within that
          area as well. Normally, both in-state and
          out-of-state interests may, therefore,
          compete equally for the franchise award and
          the creation of a captive consumer base does
          not, under these circumstances, discriminate
          against electricity and gas generated or
          produced out of state.
48 F.3d at 715.

          Nevertheless, in Atlantic Coast there were strong
indications that in-state and out-of-state businesses did not

compete equally.   The designation process set forth in the

state's regulations under SWUCA and SWMA, N.J. Admin. Cod tit. 7,

§26-6.6, allowed for the designation of facilities in the waste

district, in another waste district or out-of-state.    The state's

Department of Environmental Protection and Energy ("D.E.P.E.")

admitted, however, that its goal was to secure the state's self

sufficiency in non-recyclable waste disposal.   Moreover, a

district wishing to designate an out-of-state facility had to

certify to the Department that there were no suitable

alternatives within the state, either in their waste district or

in another waste district.   See N.J. Stat Ann. §13:1E-21 (1991).

Accordingly, the district court found that it was "clear that the

D.E.P.E. administers the law with the specific goal that all

waste generated New Jersey be disposed of within the borders of

the state."   (Civ. No. 93-cv-02669) (JEI).

          Rather than representing a truly open and competitive

process, we found that New Jersey "designation process is

intended to favor operators that have facilities already located

                                29
within, or those that are willing to construct a facility within,

the state." 48 F.3d at 708.     Indeed, in rejecting the argument

that out-of-state businesses could compete for designation, we

explained that the New Jersey regime, with its "core" goal of New

Jersey's waste self-sufficiency in five years, assured that "out

of state facilities do not compete on anything approaching a

level playing field." 48 F.3d at 713.     In interpreting Carbone,

therefore, Atlantic Coast did not consider all flow control

ordinances to be per se discriminatory (and consequently subject

to strict scrutiny analysis).     Instead, we focused on the

process, and invalidated a scheme in which the process

discriminated against out-of-state facilities.

          E.   OTHER CIRCUITS

          Other circuits applying Carbone have upheld flow

control ordinances. The Tenth Circuit held that an Oklahoma

county's scheme requiring operators of industrial waste disposal

sites to obtain conditional use permits did not discriminate

against interstate commerce.     See Blue Circle Cement v. Board of

County Comm'rs, 27 F.3d 1499, 1512 (10th Cir. 1994) (remanding

for the application of the Pike test).    The ordinance did not

discriminate against the out-of-state plaintiff seeking to

operate a hazardous waste fuel (HWF) conversion facility since

"[i]ts site conditions apply equally, regardless of the origin of

the HWF's being burned and it confers no advantages on in-state

                                  30
entities seeking to store, treat, recycle, or dispose of HWFs as

against out-of-state firms."    Id. at 1512.0

                F.   SUMMARY OF APPLICABLE PRINCIPLES

          From our review of the caselaw, we derive the following

relevant principles.   Local government acts that categorically

favor all in-state providers clearly violate the dormant Commerce

Clause.   Acts that concentrate waste hauling or processing

business in the hands of a single or finite set of in-state

providers are also suspect from a dormant Commerce Clause

perspective.   Although such regulations ultimately prohibit the

transport of solid waste to nondesignated sites -- which, in

these cases, amounts to a prohibition on the export of waste to

other states -- the fact that the designated sites happened to be

in-state does not, standing alone, establish that the flow

control schemes discriminate against interstate commerce.     To

determine whether these flow control schemes actually

discriminate against interstate commerce (triggering strict

scrutiny analysis) the court must closely examine: (1) the

designation process; (2) the duration of the designation; and (3)

the likelihood of an amendment to add alternative sites, for

signs that out-of-state bidders do not in practice enjoy equal

access to the local market.

0
In Kleenwell Biohazard Waste v. Nelson, 48 F.3d 391, 398 (9th
Cir. 1995), the Ninth Circuit held that Washington's scheme
requiring solid waste haulers to obtain certification from a
state commission did not discriminate against out-of-state
interests. The Washington scheme did not, however, designate a
landfill or require that certified haulers use a particular
facility and thus did not present the same issue we confront
today.

                                 31
           These precepts are fully consistent with the precedents

in this area.   While Carbone clearly has broad application, it

did not establish a per se rule subjecting all flow control

ordinances to strict scrutiny.   The Court's discussion reveals

that its decision was not based on the fact that waste was

required to be processed at a single plant.   Instead, the Court

regarded Clarkstown's ordinance as "just one more instance of

local processing requirements" that the Court has long held

invalid.   Id. at 1682-83 (citing cases involving statutes that

required various articles of commerce to be processed within

their state of origin).   And in interpreting Carbone, this Court

has focused on the process of selecting waste service providers

rather than on the effect of the regulation once a provider or

providers have been chosen.   See Atlantic Coast, 48 F.3d at 713.

That a flow control ordinance requires all waste to be processed

or deposited in state for some fixed period of time, therefore,

does not necessarily violate the dormant Commerce Clause unless

out-of-state businesses did not compete on an even playing field

for the designation.   If it were the designation of a single site

that offended the Commerce Clause, then a scheme "hoarding

business" for an out-of-state interest would be invalid even

though the scheme in no way advanced a protectionist purpose or

effect.

           While the process in Atantic Coast clearly favored in
state bidders, not every process used to select a single provider

is necessarily infected with this same parochialism.   We believe,

in fact, that a local authority could choose a single provider --

                                 32
without impermissibly discriminating against inter-state commerce

-- so long as the selection process was open and competitive and

offered truly equal opportunities to in- and out-of-state

businesses.    See discussion of Exxon and Atlantic Coast, supra at

24 & 30-31.

          The burden of showing that the statute discriminates

rests on the party challenging the statute.     See, e.g., Hughes v.

Oklahoma, 441 U.S. 322, 336 (1979) ("The burden to show

discrimination rests on the party challenging the validity of the

statute . . . ."); J. Filiberto Sanitation, Inc. v. Dept. of

Environmental Protection, 857 F.2d 913, 919 (3d Cir. 1988) ("As

the party attacking the statute, Filiberto bears the burden of

showing discrimination").    To make this showing, a plaintiff

challenging a designation scheme like the one at issue here must

show that the designation process favors, either purposely or in

effect, in-state sites.     We recognize the difficulties of

ascertaining whether long-term designations are really necessary,

and whether the selection criteria are truly objective.        Courts

considering flow control schemes where only in-state facilities

are designated must therefore keep this difficulty in mind when

scrutinizing the allegedly discriminatory criteria proffered by

challengers.   Admittedly, we cannot cite any authority for the

sort of inquiry we will describe, but this area of law is

nascent, and we are constrained to draw upon notions of

reasonableness to effectuate the relevant policies.

          As discrimination may reside in either purpose or

effect, a number of things can demonstrate that the designation

                                  33
process impermissibly favored in-state interests/bidders.

Certainly, there could be direct evidence of favoritism, as there

was in Atlantic Coast, or corrupt payments.   Or a seemingly

neutral bid specification with an entirely legitimate purpose,

such as a specified proximity requirement, may have the effect of

giving in-state interests an advantage.   For instance, the

incentive to protect a municipal investment, exemplified by the

attempt in Carbone to minimize the town's exposure under the

guarantee agreement, would impermissibly skew the process against

a new -- potentially out-of-state -- provider attempting to gain

designation in order to compete with an existing in-state

facility.

            Moreover, there may be aspects of a flow control regime

that appear to be so unnecessarily restrictive that a factfinder

reasonably could conclude that their real purpose was to entrench

the local interest once selected by a neutral designation

process.    Examples of such regulations are excessively long

periods of exclusive service rights under the designation, or an

absence of any allowance or the absence of any real possibility

for the designation of additional, potentially out-of-state

sites.0

0
There are, of course, others. While we are reluctant to pass on
the reasonableness of the long-term tipping fees contracted for
by some municipalities implementing flow control, there may be
cases where the contractual fee is so much higher than both the
spot rate and the rates prevailing at the time of contract that
one could conclude that the designation was being used as a
vehicle to deliver an extraordinary profit to a favored facility.

                                 34
          The governmental defendants can rebut a putative

showing of discrimination by presenting evidence demonstrating

that the designation process was open, fair, and competitive,

i.e., determined by objective criteria which do not have the

effect of favoring in-state interests.   Courts should require

that government defendants produce substantial evidence in order

to rebut the plaintiff's showing.   Such evidence might include

bid solicitation, selection criteria, evaluation of bidders, et

alia, but such evidence alone may be insufficient to prove the

flow control scheme's neutrality.   The government defendants in

these cases might also present additional evidence, such as

statistical evidence or expert testimony, demonstrating that

different aspects of the designation process are as neutral to

out-of-state interests in practice as they appear on their face.

Municipalities that have adopted flow control schemes would also

be wise to demonstrate that the goals of the designation process

included capacity assurance and the protection of the public

health and safety.

          If the government defendant cannot satisfactorily

demonstrate that the ordinance does not have the purpose or

effect of discriminating against interstate commerce, it must

then prove that the ordinance survives strict scrutiny analysis

(in order to have the ordinance upheld).   This comports with

other dormant Commerce Clause contexts where, once a plaintiff

has shown that a law or regulation discriminates against

interstate commerce, "the burden falls on the State to

demonstrate both that the statute 'serves a legitimate local

                               35
purpose,' and that this purpose could not be served as well by

available nondiscriminatory means."    Maine v. Taylor, 477 U.S. at

138, 106 S. Ct. at 2447 (quoting Hughes v. Oklahoma, 441 U.S.
322, 336, 99 S. Ct. 1727, 1736 (1979).    Of course, if the

defendants succeed in the first showing, then the ordinance would

be subject only to the Pike balancing test under which the

plaintiff must prove that "the burden imposed on such commerce is

clearly excessive in relation to the putative local benefits."

See Pike, 397 U.S. at 142, 90 S. Ct. at 847.0

V.   APPLICATION TO THESE CASES

            A.   HARVEY
            In granting judgment for Chester County, the district

court determined that the Ordinance "does not discriminate on its

face nor is the primary purpose or effect" to discriminate.     The

court, however, demanded too much, for in order to find a dormant

Commerce Clause violation there is no requirement that

discrimination must be the "primary" purpose or effect.    This

erroneous legal conclusion would alone mandate that we set aside

the judgment and remand for consideration under the proper legal

standard.   Moreover, the current record creates the strong

impression that the Chester County process was not sufficiently

open, and that there was no real potential for amendment that

0
We assume that these flow control ordinances will always have a
sufficient effect on interstate commerce to warrant at least some
Commerce Clause scrutiny.

                                  36
could offer out-of-state bidders a fair chance at Chester

County's business.0

           In combination, Pennsylvania's Act 101 and the Chester

County ordinance require that waste from within Chester County be

disposed of at one of the County's designated sites, all of which

are located within the Commonwealth.    Harvey contends that,

because the County's Plan, adopted pursuant to the flow control

ordinance, specifies only the Lanchester, SECCRA, and Pottstown

facilities, the entire flow control scheme facially discriminates

against inter-state commerce.   We disagree.   As in the public

utility context described supra, local governments have the

capacity, in the practical exercise of their police powers, which

are at their strongest in the health and safety area, to contract

with specific businesses to provide certain services.

Furthermore, to accept Harvey's contention that a plan

designating in-state sites facially discriminates against

interstate commerce would require a local government to select

out-of-state sites, irrespective of their merits, in order to

withstand Commerce Clause scrutiny.    This result plainly cannot

prevail.

0
We have considered the joint motion of defendants (Chester
County, the Authority, the Commonwealth of Pennsylvania, and the
DER) to strike portions of appellant's opening brief and
appendix. Essentially, the defendants argue that Harvey has
relied on different excerpts from various depositions, agreements
and exhibits than it did in the district court. But because the
parts, albeit different parts, of the disputed materials were
submitted to the district court, the materials were incorporated
by reference into the record in their entirety. Thus, the Motion
will be denied.

                                37
          Also contrary to Harvey's assertions, this case does

not resemble those cases involving export or import bans (we will

refer to the alleged violation here as a ban on the importation

of waste disposal site services) since those cases explicitly

banned out-of-state interests from participating in the local

market because they were from outside the state.   See, e.g.,

Philadelphia, 437 U.S. at 624; Fort Gratiot, 112 S. Ct. at 2024.

We do not mean to suggest that the ordinance must have the

purpose of discriminating against inter-state commerce, for it is

well settled that ordinances which have the effect of

discriminating also violate the Commerce Clause.   See Carbone,

114 S.Ct at 1684; Fort Gratiot, 112 S. Ct. at 2023-25.    But if

effects are the purported basis for unconstitutionality, the

statute must have the consistent effect or the inherent bias of

favoring one or more in-state interests.

          Harvey might still prevail if it can demonstrate that

the Act or the Ordinance discriminates through some aspect of the

selection process which favors in-state bidders for the

designation because they are local facilities.   Although Act 101

does not require flow control ordinances, it does offer

guidelines to those localities which adopt them.   We will

therefore examine both the Act and Chester's Plan, as implemented

by its ordinances.

               1.    Act 101

          The Act does not mandate flow control ordinances; it

only authorizes counties to adopt them. SA 385; §303(a)-(e). One

of the County's witnesses claimed that Pennsylvania's Act 101

                               38
directs the county to use a fair, open and competitive process to

select its providers, see 53 P.S. §4000.502(f)(2) (requiring plan

to describe alternative facilities considered and "provide

reasonable assurances that the county utilized a fair, open and

competitive process for selecting such facilities or programs

from among alternatives"); 53 P.S. §4000.503(c) (requiring the

county to make the plan available for a 90-day public review

period and hold at least one public hearing on the proposed

plan); 53 P.S. §4000.502(d) (providing that when additional

disposal capacity is needed, "the county shall give public notice

of such a determination and solicit proposals and recommendations

regarding facilities and programs to provide such capacity").

           While these provisions of the Act suggest an open

process, other provisions do not seem so neutral.   One provision,

for example, provides that "[p]roper and adequate processing and

disposal of municipal waste generated within a county requires

the generating county to give first choice to new processing and

disposal sites located within that county."   53 P.S.

§4000.102(6).   Another provision states that County waste

management plans "shall identify the general location within a

county where each municipal waste processing or disposal facility

. . . will be located and . . . explain how the site will be

chosen.   For any facility that is proposed to be located outside

the county, the plan shall explain in detail the reasons for

selecting such a facility."   53 P.S. §4000.502(g) (emphasis

added).   By imposing an incremental administrative burden on

counties attempting to designate a facility outside its borders,

                                39
these provisions clearly express a preference that counties use

sites within their borders.     While not as strong an expression of

favoritism, the Act's preference for in-county sites resembles

the policies we found offensive in Atlantic Coast.

           Although Pennsylvania's policy preferences evidence

some intent to favor in-state sites, Harvey did not attack the

Act directly and did not rely upon any of these passages of the

Act.   With the provisions nonetheless in mind, we will therefore

proceed to examine the County's implementation of the waste

disposal planning mandate to determine whether Chester County

officials in fact favored sites within the county.

                2.   The Plan

           We do not doubt that the county's legitimate intention

to comply with the Act0 motivated its adoption of flow control.

But legitimacy of purpose generally does not end our inquiry.      If

the manner in which the county implemented its flow control

system, particularly the process used to designate the ten year

providers, favored in-county interests, then the flow control

ordinance has the effect of discriminating against interstate

commerce and must be subject to the strict scrutiny test

enunciated in Taylor and Philadelphia.

           Chester County does indeed appear to have favored in-

county interests.    It is true that one cannot draw any inferences

about the equity of the designation process from its description

0
There are indications that the state authority, the DER, was
going to withhold approval of the plan unless it included flow
control. SA331.

                                  40
in the Chester ordinance.    Section 2 of the ordinance originally

defined "designated facilities" as "those processing or disposal

facilities designated by resolution of the Chester County Board

of Commissioners adopted in accordance with the Plan." (SA 252).

The lateear whether the Committee actually considered designating

those sites or whether it was simply investigating an alternative

method of waste disposal.    If the Committee never considered

designating those sitesy."

          Other provisions of the Plan, however, do reveal a bias

for designating in-county sites.      For instance, the Plan provides

that "The County will consider developing an in-County resource

recovery facility" (emphasis added), if in-County landfill

capacity becomes unavailable, or if the County cannot secure

sufficient capacity outside the county.     These particular

provisions of the Plan reveal that the Committee intended to keep

the waste disposal business within the County.

          Although the county was not favoring all in-County

sites simply because they were in state (thus not favoring in-

County sites as a group), this does not preclude a finding of

impermissible discrimination.    Establishing discrimination

requires only a demonstration that out-of-state interests did not

compete for designation on a level playing field.       We believe

that the County's economic interest in keeping the business at

home and the Plan's legislative history, see, e.g., A135, suggest
that the designation process did not offer a level playing

                                 41
field.0   That the county sought only to provide environmentally

safe waste disposal capacity, a legitimate exercise of its police

powers, would not save the Plan: as we have explained, "the evil

of protectionism can reside in legislative means as well as

legislative ends."   Philadelphia, 437 U.S. at 627.

                       a. Designation

           Harvey claims that, in preparing the Plan, "the County

never considered any out-of-state landfill for designation or

allowed any such facility to submit a bid to accept County

waste."   If supported, these allegations would establish that

out-of-state sites did not compete on a "level playing field" and

that the process had the effect of discriminating against

interstate commerce.    At least some of these accusations are not

borne out by the record, however.       The County included a

description of the Waste Advisory Committee's consideration of

alternative sites, one of which was in Baltimore, Maryland, and

one in Philadelphia.0

0
 Although the county's pre-existing economic interest in the
designated landfill creates the incentive for the county to favor
these in-state sites in violation of the dormant commerce clause,
not every case where the county has an economic stake in the
designated site will result in such a violation. The county
could, for example, have selected the designated sites in an
open, fair and competitive process, and then made investments in
improving those sites. The length of the period of designation
would, of course, have to be related to the amount of the
investment.
0
 It is not clear whether the Committee actually considered
designating those sites or whether it was simply investigating an
alternative method of waste disposal. If the Committee never
considered designating those sites, that would increase the
impression that the process favored the in-state facilities.

                                  42
          But other aspects of the County's process are less

reassuring.   While the Committee met 13 times to discuss various

aspects of the plan and evaluate the alternative waste disposal

strategies and facilities (app 23), and while these meetings were

supposed to be open to the public, they were advertised in only

one small, local newspaper, the Daily Local News.    Public

hearings to review the draft Plan were held on May 29 and 31,

1990, but there is no reason to believe that those meetings were

any better publicized.0   In the end, the Committee selected the

two in-county sites that already served as the primary disposal

sites for the County's waste.   The Pottstown facility was

designated as an alternate only after the process was concluded

(as the result of two letters and public comment received during

the review and comment period).    Two factors in particular create

the impression that parochialism rather than competition

determined the outcome of the designation process:    (1) that

established local businesses won the designation; and (2) that

the Pottstown site was designated as an alternative after the
process had concluded -- a status that appears to have been

specially created for this situation.

                    b. Escape Valves: Amendment

0
Of course, if the County can demonstrate on remand that the
relevant out-of-state market participants knew about the
designation opportunity anyway -- and perhaps word of such
proposals travels quickly through the trade grapevine -- that
would rebut the evidence about the lack of adequate publicity and
tend to show that the process was open. Similarly, if the County
could demonstrate that the publication was a specialized trade
journal which effectively notified the relevant market
participants despite its relatively small circulation, that would
also refute evidence that the bidding process was closed.

                                  43
            The capacity to amend the Plan in order to add

additional sites does not appear sufficiently to mitigate the

effect of having chosen the established in-state interests.     If

the amendment process were open and fairly liberal, it could

conceivably save the initially discriminatory effect of "home

cooking."   But the amendment process in Chester's Plan is quite

constrained:   additional sites can only be designated if the

existing facilities have insufficient capacity, are unable to

obtain expansion permits, develop unforeseen environmental

problems which preclude continued use of those facilities, or are

subject to regulatory changes which affect their capacity or

preclude their continued use.   See Chester County Selection and

Justification of Municipal Waste Management Program § 6.3.4.     The

prospect that an out-of-state site could gain designation through

the amendment process is too remote to equalize the opportunity

for out-of-state businesses, which were initially shut out, to

participate in the local waste disposal market.

            There were, moreover, indications that the Committee

had no intention of designating additional facilities.    First,

one of the Committee members wrote to the DER specifically

requesting guidance on whether the County was "obligated to

review each request formally" since it did "not wish to designate

additional disposal facilities at this time."    Second, the

Authority had covenanted in the 1990 bond indenture not to

"construct, acquire or operate" any waste processing plants,

                                 44
structures, facilities or properties which would compete for

revenues with those already designated by the Authority.0

                    c.    Economic Interest

          It also appears that Chester County may have had an

economic motive for favoring certain in-county sites.   The County

had purchased the Lanchester landfill through the issuance of

$42.55 million in revenue bonds. (b.8).    The County has

guaranteed an additional $41.5 million in Authority debt, secured

a $9.2 million letter of credit, and committed to provide the

Authority with an additional $9.5 million for landfill projects.

That the flow control ordinance was not adopted until after the

county had financed the authority's purchase of SECRA does not

lessen its incentive to assure the Authority's revenues and

thereby shield its exposure under the guarantee agreement.

          Flow control certainly would be an effective means to

achieve this end:   designation conferred on the three selected

sites the capacity to charge 200-300% of the prevailing tipping

fees at alternative sites.    Lanchester charged $57 per ton and

SECCRA charged $52 per ton.    The Baltimore facility, by contrast,

charged only $34 per ton.    Furthermore, the legislative history

of the flow control scheme suggests that this financial pressure

did indeed play a role.   The County's Administrative Agreement

with the Authority also reflects this pressure.    In that

0
Despite this documentary evidence indicating that there was
little chance of an amendment, Chester County's counsel
represented at oral argument that the county would consider
amending the Plan to designate any facility that submitted a
suitable bid. The district court will want to probe these
conflicting indications on remand.

                                 45
agreement, the County committed "not to adopt a new Plan or to

amend the existing plan in such a manner as to reduce the

existing service area of the Authority or to narrow the

definition of municipal waste directed to the Authority, [the

owner of the SECCRA facility]." SA 373, §6(a) [Amended and

Restated Administrative Agreement].

          The need to protect the county's financial interests

thus appears to have played a role in the county's decision to

adopt flow control.   In this respect, this case closely resembles

Carbone, where the Supreme Court found discriminatory

Clarkstown's "avowed purpose . . . [of] retain[ing] the

processing fees charged at the transfer station to amortize the

cost of the facility." 104 S. Ct. at 1680.

               3.   Summary

          While the Act requires a fair, open and competitive

process, and while the Committee did consider at least one out-

of-state and several out-of-county sites, it appears that Chester

County's designation process did not afford other sites,

including out-of-state sites, a level playing field.    Because,

for the many reasons stated, the process appears to have been

biased in favor of the Lanchester, SECCRA and Pottstown

facilities, the Plan and its implementing ordinances might have

the effect of discriminating against interstate commerce.

Nevertheless, because the district court did not have the benefit

of Atlantic Coast or of the clarifications we offer today, we
will remand so that the district could may consider Chester

County's flow control scheme in light of these principles.    We

                                46
therefore reverse the judgment and remand for further proceedings

consistent with this opinion.

          B.     TRI-COUNTY INDUSTRIES, INC. V. COUNTY OF MERCER

          The district court in the Western District of

Pennsylvania found that the Mercer County flow control scheme

enacted pursuant to the Act discriminated against interstate

commerce and granted injunctive relief in favor of the

plaintiff/hauler.    The district court opined:   "It is the

designation of a single, in-state landfill, rather than the

process by which it was designated, that has resulted in the

discrimination against interstate commerce."      This conclusion is

at odds with our conclusion that the focus should be on the

designation process, on the reasonableness of the duration of the

designation and on the practical likelihood of an amendment to

designate an out-of-state facility.

          Despite the erroneous legal standard used by the

district court, we could affirm its decision if it appeared that

these aspects of Mercer County's flow control scheme

discriminated against interstate commerce.    But we are not

convinced that the facts in the record can establish either that

Mercer County's designation process was truly discriminatory,

that the contractual tipping fee was unreasonable at the time the

site was selected, or that there was insufficient likelihood of

amendment to show that the scheme discriminated against out-of-

state bidders.    For these reasons, and those explained infra, we

must reverse and remand for further development of these aspects

in order to gauge the real extent of the opportunity enjoyed by

                                  47
out-of-state providers to participate in the Mercer County waste

disposal market.

           The Mercer County scheme resulted in the designation of

a single site.    Although the designated site is not located

within Mercer County, it is in Pennsylvania.    It is possible that

the site's selection resulted from in-state prejudice.    Because

Carbone rejected the argument that a statute had to favor all in-

state interests as a group in order to be discriminatory, the

fact that Mercer's scheme allegedly favors only a single in-state

site does not preclude a Commerce Clause challenge. Nevertheless,

that only one in-state site has been selected under the county's

designation process provides less evidence that the process has a

discriminatory effect -- that is, that the process tends to

select in-state sites -- than if a greater number of in-state

sites had been selected in the designation process.

          As with Harvey, the flow cr Discriminatory Effect

           We still must directly address the question whether the

selection criteria have the effect, irrespective of the County's

intent or its economic interests, of favoring in-state interests.

We emphasize that this case does not involve facial discrimina-

tion:   the designation process set objective criteria to choose

the facility.    Moreover, the RFP requirements appmpt to open its

designation process to out-of-state sites. Unlike Atlantic Coast,
where the scheme had the explicit goal of securing in-state

disposal capacity, Mercer County officials testified that no

preference was given to in-state or out-of-state facilities.    And

unlike Chester County, the county prepared detailed bid

                                 48
specifications and advertised its RFP nationwide. Twenty three

companies purchased the RFP package, including companies from

Pennsylvania, Ohio, New York, Maryland, New Jersey, Minnesota and

Louisiana.    Only four companies submitted bids in response to the

RFP, and they all had landfills in Pennsylvania.    The appellee,

Tri-County, was among the four which submitted bids.    As the

district court acknowledged:
          "[T]he failure of the Authority to designate
          an out-of-state disposal facility was not the
          result of discrimination. Rather, it was
          attributable to the failure of any out-of-
          state disposal facility to bid on the
          contract, and the evidence clearly
          established that the procedures followed by
          the Authority in selecting a disposal site
          were "fair, open and competitive," as
          required by Act 101.

Dist. Ct. Op. at 13. (citation omitted).    These facts certainly

suggest that the process was fair, open, and competitive.

Nevertheless, on remand Tri-County may be able to identify

specifications of the bid or decisional criteria with a

discriminatory effect.

                 2.   Lack of Economic Interest

            Because the county had a relatively small economic

interest in the facilities economic performance (it received a $1

per ton surcharge on the waste dumped at the facility), the

district court concluded that the ordinance did not foster

economic protectionism.    As we have seen, and as the district

court recognized, that the ordinance serves legitimate local

purposes,    does not save Mercer County's flow control scheme if

                                  49
it has the effect of favoring in-state interests.      But the

relative lack of economic interest refutes at least one basis for

the argument that the designation process did not really offer a

level playing field to out-of-state competitors.

                 3.    Potential for Discriminatory Effect

            We still must directly address the question whether the

selection criteria have the effect, irrespective of the County's

intent or its economic interests, of favoring in-state interests.

We emphasize that this case does not involve facial discrimina-

tion:   the designation process set objective criteria to choose

the facility.    Moreover, the RFP requirements applied equally to

all disposal facilities, irrespective of their location.        While

this provision appears to rule out special dispensations for in-

state sites, it does not preclude the possibility that some of

the requirements were in practice more burdensome for out-of-

state interests.      That a number of out of state companies

requested the RFP package but that not a single out-of-state

interest submitted a bid raises the concern that some aspect of

the RFP discouraged out of state interests.

           We recognize, of course, that there was a considerable

attrition rate in this process overall, which may indicate that

Mercer County's business was not terribly attractive to any

landfill operator.      Indeed, of the twenty-three companies (in- or

out-of-state) who requested the package, only four submitted a

bid.    On this record, however, it is impossible to determine

whether the bid requirements had -- or would tend to have -- a

disparate effect on out-of-state businesses.     On remand, the

                                   50
district court might consider statistical or other evidence

regarding the differential drop out rates of firms in this

contested designation process and/or expert testimony on the

issue whether any specific RFP requirement was in fact more

costly or burdensome for an out-of-state site to comply with.

               4.   Amendment

          It is important to note that Mercer's scheme would be

less problematic if a realistic opportunity existed for an out-

of-state landfill to compete for at least some of the county's

business within a reasonable period, either because amendment to

designate an additional site was more likely or because the

contract period was not so long.     Although the County did have

the capacity to amend its Plan to designate an additional site0,

the County conceded that it probably did not have enough waste to

justify adding another facility, especially since the county had

been advised that it would be most efficient for it to use a

single site. Dist. Ct. Op., Add. 32-33.    The designation of the

site in this case, therefore, effectively amounts to the grant of

a monopoly for the period of the designation.    Because the Act

required the counties to secure ten-year access to disposal

capacity, we will not attribute a discriminatory motive to the

county's effective grant of a ten-year monopoly in this case.0

0
 Section 3 of the Ordinance No. 6-1991 provides: "All Municipal
Waste shall be transported to and delivered to the Facility
designated by MCSWA from time to time. . . ."
0
 Although we do not infer a discriminatory purpose from the
length of the contractual period, we concede that this would be
an easier case if the losers in the designation process were not
precluded from the local market for ten years. Nevertheless, we
cannot say, given the costs of constructing and operating

                                51
               5.    Economic Favoritism

          The possibility still exists, however, that the county

contracted for a tipping fee that was so high relative to the

ten-year tipping fees (the rate that the parties would be willing

to fix for the entire period) prevailing in the market at the

time of contracting that it would suggest an attempt to confer

some extraordinary, super-monopolistic profit on the chosen

landfill operator.   It is not clear whether, in addition to

securing ten-year disposal capacity, the Act required the County

to lock in a price as well.   Regardless, we would not infer any

discrimination from the County's desire to lock in the price

unless it turns out that the price was unreasonable at the time

the site was selected.   Although the County appears to have made

a "bad bet" on the price of long term waste disposal,0 the market

could just as easily have moved in the opposite direction and

made county officials look financially savvy.0   Indeed, the

differential between the contracted tipping fee and the spot

market is much smaller than it is in the Harvey case: the

contractual tipping fee was $35 per ton relative to the spot

rates of $17.20 at the American Waste Landfill or the $27.95 due

at the Carbon Limestone Landfill.

environmentally sound facilities, that the ten-year period was
unreasonable.
0
 Spot market tipping fees, fees charged to dump waste today only,
have declined precipitously since the County made its contract
with the facility in Butler County. Spot rates currently are
apparently approximately $17.50 - $30.00 per ton.
0
 County officials apparently chose to lock in the tipping fee out
of their concern that tipping fees would continue to escalate.
See dist. ct. adjudication.

                                 52
             Appellees devote considerable effort to their attempts

to demonstrate the less restrictive alternative means of ensuring

long term environmentally safe waste disposal capacity.    We do

not pass on the efficacy of these alternative strategies.    If the

district court decides on remand that the Mercer County

designation scheme has the effect of discriminating against out-

of-state interests, it must then under the strict scrutiny

standard address both the question whether the government

interest is strong enough and whether less discriminatory means

to achieve the same goal are available.

VI.   CONCLUSION

             For the foregoing reasons, we will vacate the orders of

the district courts in these two cases, and remand for further

proceedings consistent with this opinion.    Parties to bear their

own costs.

                     ____________________________

                                  53
Harvey v. County of Chester, No. 94-1924

Tri County v. County of Mercer, No. 94-3622

NYGAARD, Circuit Judge, dissenting.

            In each of the two cases before us in this appeal, the

majority reverses the district court and remands the cause for it

to further scrutinize the designation process.   I must

respectfully dissent.

            Discriminatory purpose or effect triggers heightened

scrutiny.   The outcome of a selection process, however open that

process may be, can be discriminatory in its practical effect.

Regardless of the designation process employed, in each case a

designation was made in the context of a flow control scheme; in

each case, that flow control designation constituted an

impermissible discrimination against interstate commerce and by

effect alone triggered heightened scrutiny.   I would affirm the

order in Tri-County, in which I conclude the district court
properly applied heightened scrutiny.   I would reverse the order

in Harvey & Harvey, and remand to the district court for it to

apply the heightened scrutiny standard, because it failed to do

so, despite the discriminatory effect of the designation in the

context of flow control.

                                 54
             The articles of commerce involved in these cases are

both the waste itself and the disposal services it requires.

"Solid waste, even if it has no value, is an article of

commerce."    Fort Gratiot Landfill v. Michigan Dep't of Natural

Resources, 504 U.S. 353, 359, 112 S. Ct. 2019, 2023 (1992).

Although the Supreme Court in Carbone suggested that "the article

of commerce is not so much the solid waste itself, but rather the

service of processing and disposing of it," C & A Carbone, Inc.

v. Town of Clarkstown, N.Y.,       U.S.    , 114 S. Ct. 1677, 1682

(1992) (emphasis supplied), the Court has not eliminated

consideration of waste as an article of commerce.     Whether

dealings between Pennsylvania generators of waste and out-of-

state waste disposal service companies are "viewed as 'sales' of

garbage or 'purchases' of transportation and disposal services,

the commercial transactions unquestionably have an interstate

character."     Fort Gratiot, 504 U.S. at 359, 112 S.Ct. at 2023.

             In Carbone the Supreme Court held that a flow control

ordinance coupled with a designation discriminated in its effect

because it allowed only the designated operator to provide waste

services within the geographic limits of the municipality.       In

Carbone, the town of Clarkstown designated a single, in-state
facility to provide initial processing services for waste; its

designation was part of a flow control scheme, which required all

to use the designated facility.    The court found that "[t]he

ordinance thus deprives out-of-state businesses of access to a

local market." 114 S. Ct. at 1681.   Likewise, in the cases before

us, out-of-state providers of waste services cannot accept waste

                                  55
or sell services except to the extent that waste would be

delivered to a designated facility; flow control mandates that

waste only be delivered to a designated facility.

          As in the Carbone case, "the real question is whether

the flow control ordinance is valid despite its undoubted effect

on interstate commerce."   Id. at 1682 (emphasis supplied).0 And,

again as in the Carbone case, "find[ing] that the ordinance

discriminates against interstate commerce, we need not resort to

the Pike test."   Id.

          Thus, heightened scrutiny must be applied in the cases

before us, because, regardless of the process employed in

selecting waste service providers, the effect discriminates

against interstate commerce.    The Supreme Court "interpret[s] the

Commerce Clause to invalidate local laws that impose commercial

barriers or discriminate against an article of commerce by reason

of its origin or destination out of State."    Id. (emphasis

supplied).

          Heightened scrutiny analysis dictates that

"[d]iscrimination against interstate commerce in favor of local

business or investment is per se invalid, save in a narrow class

of cases in which the municipality can demonstrate, under

rigorous scrutiny, that it has no other means to advance a

legitimate local interest."    Carbone, 114 S. Ct. at 1683 (citing

0
Significantly, the Carbone court did not engage in an analysis
of the process by which the Clarkstown facility was selected. It
looked only to effect.

                                 56
Me. v. Taylor, 477 U.S. 131, 106 S. Ct. 2440 (1986)).0       The

Carbone court specifically rejected the contentions of amici in

that case that designation coupled with a flow control scheme fit

into the narrow class of permissible discrimination.     In Carbone,

the amici "suggest[ed] that as landfill space diminishes and

environmental cleanup costs escalate, measures like flow control

become necessary to ensure the safe handling and proper treatment

of solid waste.     The teaching of our cases is that these

arguments must be rejected absent the clearest showing that the

unobstructed flow of interstate commerce itself is unable to

solve the local problem." 114 S. Ct. at 1683.

             Although assurance of ten years of disposal capacity

for county waste and of the proper disposal of waste generated in

a county are laudable goals, the designation of facilities under

a flow control scheme may not be essential for the achievement of

those goals.     For example, the county might receive assurances of

ten years of capacity from a few disposal facilities without then

requiring all county-generated waste actually to be disposed of

at those same specific facilities.     The goal of providing ten

years of disposal capacity need not require that each facility,

to accept waste, must provide an assurance of ten years of

capacity.0    Like the municipality in Carbone, the county in each

0
 Once "shown to discriminate against interstate commerce either
on its face or in practical effect, the burden falls on the State
to demonstrate both that the statute serves a legitimate local
purpose, and that this purpose could not be served as well by
available nondiscriminatory means." Maine, 477 U.S. at 138, 106
S.Ct. at 2447 (internal quotations and citation omitted).
0
 To the extent that the county might be providing an exclusive
franchise to accept waste as payment in exchange for the

                                  57
of the cases before us has open to it "any number of

nondiscriminatory alternatives for addressing the . . . problems

alleged to justify the ordinance in question."    Id.

          As the holding of the Supreme Court in Carbone compels,

the Tri-County district court applied the heightened scrutiny

test upon finding that the Mercer County ordinance was

discriminatory in its practical effect.   The district court ruled

in favor of Tri-County Industries, Inc., because the defendants

failed to meet their burden of demonstrating the unavailability

of nondiscriminatory alternatives.   I would affirm the district

court for the reasons it gave in its well-reasoned opinion.    The

Harvey & Harvey district court overlooked the discriminatory

effect of designation in a flow control scheme.   For that reason,

it failed to require heightened scrutiny.   I would reverse its

holding that Pike scrutiny applied, and remand.   Pike v. Bruce

Church, Inc., 397 U.S. 137, 142, 90 S. Ct. 844, 847 (1970).

assurance of ten years of capacity, the scheme of flow control
coupled with designation would in essence constitute a county
scheme to finance the capacity assurance received, providing as
payment the granting of a monopoly and its concomitant profits
and stability in exchange for the assurance. The permissibility
of such an arrangement is highly doubtful.

                               58