DIVISION OF LEGISLATIVE
VIRGINIA LEGISLATIVE ISSUE BRIEF
of Out-of-State Waste:
Holdings v. Gilmore
Dennis A. Walter
a research assistant with the Division of Legislative Services,
contributed to the preparation of this Issue Brief.
On June 4, 2001,
the United States Court of Appeals for the Fourth Circuit issued a decision
in the case of Waste Management Holdings, et al. v. Gilmore,
No. 00-1185. The plaintiffs, a waste management company, the owners of
a waste transfer facility, the owners of a waste transfer company, Charles
City County, and the owners of a landfill in Brunswick County, commenced
an action in federal court seeking a declaratory judgment on the constitutionality
of a number of Virginia statutes enacted in 1999. These statutes sought
to regulate the disposal of municipal solid waste (MSW) in Virginia by
limiting the amount of waste that could be disposed of in Virginia landfills
and by imposing additional regulations on the transport of waste on Virginia's
roads and rivers. The defendants in the case were Governor James Gilmore,
Secretary of Natural Resources John Paul Woodley, and Director Dennis
Treacy of the Department of Environmental Quality (DEQ), in their official
In February 2000,
United States District Judge James Spencer issued a decision declaring
the statutory provisions unconstitutional. The Commonwealth appealed Judge
Spencer's decision, and in June 2001, the Fourth Circuit Court of
Appeals issued a decision affirming Judge Spencer's decision with
respect to the statutory provisions (i) creating a cap on the amount of
waste that can be disposed of in Virginia landfills, (ii) banning the
transport of waste by barge on the Rappahannock, James, and York Rivers,
and (iii) creating additional regulations on the transport of waste by
truck. The court returned the case to Judge Spencer for further proceedings
with respect to the statutory provisions creating additional regulations
for the transport of waste by barge on Virginia rivers.
Since the issuance
of the June 4, 2001, decision, the Commonwealth has requested that the
Fourth Circuit Court of Appeals reconsider its decision. This request
is currently pending. Should the request be denied, the Commonwealth may
still appeal the decision to the United States Supreme Court. At the time
this issue brief was written the Attorney General had not indicated whether
such an appeal will be pursued.
Management case arose from the enactment of a number of statutes
in 1999 that sought to regulate the transportation and disposal of MSW
in Virginia landfills. MSW generally includes solid waste generated by
residential, commercial, and certain industrial uses. DEQ has reported
that, as of November 1998, there were 70 active landfills in Virginia
accepting MSW, many of which accepted out-of-state MSW. While the exact
number of landfills in Virginia that have accepted out-of-state MSW has
remained in dispute, seven "regional" landfills were responsible
for the disposal of 97 percent of the out-of-state MSW in Virginia. These
regional landfills are privately operated under "host agreements"
with the localities in which they are located. Pursuant to these agreements,
the regional landfill pays the host county a fee based on the volume of
waste deposited at the landfill. These agreements also require that the
operators provide certain services to the locality, including free waste
disposal and recycling services for the locality and funding the closure
of any local landfills that do not comply with federal and state regulations.
In order to meet
the financial requirements to operate these landfill facilities and perform
the other obligations contained in the host agreements, the operators
of these regional landfills rely heavily on the disposal of MSW generated
outside of Virginia. During the course of the Waste Management
litigation, information was presented by the parties that 75 percent of
the MSW accepted at landfills operated by Waste Management was generated
outside Virginia. For the Brunswick regional landfill, it was estimated
that almost 100 percent of the MSW deposited there originated outside
Pursuant to the
host agreements it has signed, Waste Management is authorized to dispose
of more than 2,000 tons of MSW per day at four of the five regional landfills
it operates. Waste Management expected that for the year 1999 it would
exceed that daily amount at these facilities, in some cases by a substantial
amount. For example, in 1998, the Charles City County Landfill accepted
less than 2,000 tons per day; in 1999, the landfill accepted more than
2,800 tons per day. The Brunswick landfill, which is owned and operated
by plaintiff Brunswick Waste Management Facility, LLC, accepted approximately
2,800 tons per day in 1999, as compared with 2,400 tons per day in 1998.
Before the enactment of the statutory provisions in 1999, Brunswick anticipated
that more than 5,000 tons per day of out-of-state MSW would be disposed
of at its landfill. In contrast to these out-of-state MSW disposal amounts,
there were no landfills that accepted only Virginia-generated MSW at a
level of more than 2,000 tons per day in 1998 or 1999, and it was anticipated
that only one or two of these might ever be expected to reach that level
in the future. During the course of the litigation, DEQ stated that most
landfills operated by local governments receive less than 100 tons of
MSW per day, and a few receive closer to 500 tons per day.
The issue of out-of-state
MSW reemerged as a story of national and local prominence during 1999
as plans to close the Fresh Kills Landfill in New York City were finalized.
As the plans provided for the Fresh Kills Landfill to stop accepting waste
in December 2001, the New York City Department of Sanitation began negotiating
interim and long-term contracts for the disposal of waste after Fresh
Kills closed. Waste Management was awarded a number of contracts for the
interim disposal of this waste, and much of the MSW handled by Waste Management
under these contracts was deposited in its regional landfills in Virginia.
In addition to the interim disposal contracts, Waste Management bid on
contracts for the long-term disposal of more than 12,000 tons per day
of New York City-generated residential MSW.
In its request
for bid proposals, the New York City Department of Sanitation indicated
that preference would be given to proposals that called for the transportation
of MSW by rail or barge over those that called for transportation by truck.
In response to New York City's preference for non-truck transportation,
Waste Management proposed to send approximately 60 percent of the New
York City-generated residential MSW to the Charles City County Landfill
by barge. Other than waste generated on Tangier Island and other Virginia
islands, no Virginia-generated MSW is transported to Virginia landfills
At the time it
was negotiating for the residential MSW contracts, Waste Management also
had contracts to dispose of commercial waste generated in New York City
and surrounding communities. Waste Management sent this commercial waste
to the Charles City County Landfill by truck; it planned to convert its
transportation operations for this commercial waste from truck-centered
to barge-centered should they receive the long-term disposal contracts
for the disposal of residential MSW.
of its plans to transport the commercial waste and residential MSW by
barge, Waste Management negotiated a contract with plaintiff Hale Intermodal
Marine Company for the lease of four barges. Each barge would be capable
of carrying 5,000 tons of MSW in containers that can be stacked five high.
In addition, Waste Management agreed to purchase 400 containers from another
company for use in transporting the waste.
and Hale expected that they would begin barging waste to Virginia in March
or April 1999. Waste Management planned to transport approximately 2,500
tons of MSW per day from New York City to a transfer facility on the James
River. This waste would then be unloaded and delivered by truck to the
Charles City County Landfill for disposal. In order to facilitate the
transfer of the waste from the barges to trucks, Waste Management invested
more than $5 million in improvements at the James River facility and more
than $5 million for cranes to be used in offloading the containers from
1999 Code of Virginia
Prior to the 1999
Session of the General Assembly, DEQ issued a report on the increasing
importation of MSW into Virginia from other states. During the 1999 Session
of the General Assembly, bills containing regulations on waste disposal
in Virginia were passed and signed into law. There are five basic provisions
of the legislation passed in 1999:
1. "The Cap Provision"
(new § 10.1-1408.3). The Cap Provision provides that the amount
of waste that any landfill in Virginia may accept cannot exceed either
2,000 tons per day or the average amount accepted by the landfill in
1998, whichever is greater. Under the statute, the Virginia Waste Management
Board may grant exceptions if, after considering the impacts on public
health, the environment, and the transportation infrastructure, the
Board determines that granting the exception would protect human health
and the environment, there is a need for the additional capacity, and
the increase is consistent with the maximum disposal limits.
2. "The Stacking Provision"
(amendments to § 10.1-1454.1). These amendments require the Waste
Management Board to promulgate regulations governing the transportation
of MSW on rivers in Virginia by ship, barge or other vessel and the
loading and unloading of such waste. Under the statute, these regulations
must prohibit the stacking of containerized waste more than two containers
high. Prior to the adoption of these regulations, no facility in Virginia
is permitted to receive waste by ship, barge, or other vessel.
3. "The Three-Rivers
Ban" (new § 10.1-1454.2). The Three-Rivers Ban prohibits the
commercial transportation of hazardous or nonhazardous solid waste by
ship, barge or other vessel upon the Rappahannock, James, and York Rivers.
4. "The Trucking Certification
Provision" (amendments to § 10.1-1408.1). This provision prohibits
landfill operators from accepting MSW from vehicles with four or more
axles unless the transporter can certify that the waste in the vehicle
is free of any substances that are not authorized to be disposed at
5. "The Four or More
Axle Provision" (new § 10.1-1454.3). This provision requires
the Board to adopt regulations concerning the commercial transport of
MSW by "any tractor truck semitrailer combination with four or
more axles." Included within these regulations is the requirement
that owners of such trucks must make certain financial assurances; owners
of trucks with less than four axles and owners of trucks carrying other
cargo are not required to make such financial assurances.
Language was placed
in the Stacking Provision, the Three-Rivers Ban and the Four or More Axle
Provision that these regulations are to be enforced to the fullest extent
permissible under the United States Constitution.
Following the enactment
of these provisions, the plaintiffs commenced an action in federal court
challenging the constitutionality of the provisions.
In defense of
the statutory provisions, the Attorney General first argued that the lawsuit
was barred by the doctrine of sovereign immunity under the Eleventh Amendment
to the U.S. Constitution. The Eleventh Amendment provides that the "judicial
power of the United States shall not be construed to extend to any suit
in law or equity, commenced or prosecuted against one of the United States
by citizens of another state[.]" The court rejected the defendants'
argument, however, as the Eleventh Amendment does not prohibit lawsuits
in federal court against state officers who are enforcing an unconstitutional
statute. Accordingly, the court found that the lawsuit could proceed against
Secretary Woodley and Director Treacy. The court held that the action
must be dismissed as against Governor Gilmore, however, as his enforcement
responsibilities with respect to the statutes in question were too remote.
next argued that localities in Virginia do not have the authority to enter
into host agreements and, therefore, any agreements between the waste
disposal companies and localities are invalid and unenforceable. Specifically,
the defendants argued that under the Dillon Rule, which provides that
localities possess only those powers that are (i) expressly granted to
them by the General Assembly, (ii) necessarily or fairly implied in or
incidental to any powers expressly granted, or (iii) essential and indispensable,
the authority granted to localities for the disposal of waste could not
be read as authorizing the making of host agreements. The court rejected
this argument and held that § 15.2-932 of the Code of Virginia expressly
authorizes localities to enter into contracts for the disposal of waste
within the locality, regardless of whether the waste was generated within
or outside the locality.
also argued that the statutes should be upheld because of the presence
of savings clauses in the Stacking Provision, the Three-Rivers Ban, and
the Four or More Axle Provision that provide that these provisions will
be implemented only to the extent permissible under federal law. The court
rejected this argument because it found that the savings clauses were
completely inconsistent with the other language in the statutes and the
savings clauses were, therefore, of no effect.
The court then
examined the plaintiffs' arguments that the statutory provisions
were unconstitutional because they violated the Commerce Clause and the
Supremacy Clause found in the U.S. Constitution.
The Commerce Clause,
located at Article I, § 8, clause 2 of the U.S. Constitution, reserves
to Congress the power to "regulate commerce . . . among the several
states[.]" From this express Congressional power, courts have recognized
that the Commerce Clause also restricts the powers of states to regulate
or impose burdens on interstate commerce. See, e.g., Fort Gratiot
Sanitary Landfill, Inc. v. Michigan Department of Natural Resources,
504 U.S. 353 (1992). This limitation, known as the "dormant"
or "negative" Commerce Clause, provides that, in the absence
of Congressional approval, regulatory measures designed to benefit in-state
interests at the expense of out-of-state interests are invalid. To determine
whether state legislation violates the "dormant" Commerce Clause,
a court must determine whether the state measure is basically a protectionist
measure or whether it can reasonably be viewed as a law directed to legitimate
local concerns that only incidentally affects interstate commerce.
Under the "dormant"
Commerce Clause analysis, state laws that discriminate against out-of-state
interests on their face will be held invalid unless the state can prove
that (i) there is a justification for the law unrelated to economic protectionism,
and (ii) there are no nondiscriminatory alternatives adequate to preserve
the local interests at stake. See, e.g., Envtl. Tech. Council v.
Sierra Club, 98 F.3d 774, 785 (4th Cir. 1996). If the court finds
that a statute regulates out-of-state and in-state interests evenhandedly
and only indirectly affects interstate commerce, the law will be held
valid unless the burdens on commerce are clearly excessive in relation
to the local benefits.
commerce clause analysis has been applied by courts around the country
to statutes seeking to limit or prohibit the interstate transportation
of waste. The U.S. Supreme Court has held that solid waste is an article
of commerce and that, under the "dormant" Commerce Clause, state
laws that impose burdens on waste generated outside the state and disposed
of within the state are generally invalid. See, e.g., Chemical Waste
Management, Inc. v. Hunt, 504 U.S. 334 (1992); Fort Gratiot
Sanitary Landfill, 504 U.S. 353.
the historical background leading to the introduction of the legislation
and the sequence of events leading to the enactment of the statutes, the
court found that the General Assembly and the Governor acted with a discriminatory
purpose against out-of-state waste. The court then looked to see if there
was a justification for the enactment of the statutes other than economic
protectionism and if there were any nondiscriminatory alternatives adequate
to preserve the local interests. The court found that while the laws might
be justified by a reason other than economic protectionism, such as the
potential risks to public health by the transportation and disposal of
MSW generated outside Virginia that does not meet the same restrictions
and regulations as MSW generated within Virginia, the means used in the
Cap Provision, the Trucking Certification Provision and the Four or More
Axle Provision to address this concern were not the least discriminatory
possible. The court did find, however, that the Stacking Provision and
the Three-Rivers Ban could be valid under a "dormant" Commerce
Clause analysis. The court found that there was a question of fact with
respect to whether the Stacking Provision was the least discriminatory
means of protecting the public health and safety; therefore, it sent this
portion of the lawsuit back to the District Court for further proceedings.
The court then
considered whether the remaining statutory provisions were violative of
the Supremacy Clause found in the U.S. Constitution. Article VI of the
U.S. Constitution provides that the "Constitution, and the laws of
the United States which shall be made in pursuance thereof . . . shall
be the supreme law of the land[.]" Generally, a court reviewing a
statute to determine if it violates the Supremacy Clause will consider
whether the state law impedes Congressional intent in a particular area.
In determining whether federal law supercedes an action by a state, the
courts look to (i) the pervasiveness of the federal regulatory scheme,
(ii) the need for national uniformity, and (iii) the danger of conflict
between state laws and the administration of the federal program. Pennsylvania
v. Nelson, 350 U.S. 497 (1956). Accordingly, federal legislation
that is enacted pursuant to Congress' constitutionally delegated
authority will override conflicting state or local actions. Courts have
held that even when Congress' intent in an area is unclear, any conflict
between federal and state law must be resolved in favor of the federal
the validity of the Three-Rivers Ban under the Supremacy Clause, the court
noted that Congress has enacted a licensing scheme for the use of vessels
such as barges in "coastwide trade" throughout the United States.
The U.S. Supreme Court has held that such a license gives the license
holder the right to operate freely in "state waters" subject
only to state police powers. States may impose upon federal licensees
reasonable, nondiscriminatory conservation and environmental protection
measures otherwise within their police power, but a state may not completely
exclude a federally licensed ship operating in interstate commerce
from its waterways since the federal license is supreme over state laws.
Waste Management, at 43.
the provisions of the Three-Rivers Ban, the court found that the statute
was in direct contradiction to the licensing scheme enacted by Congress
and was, therefore, invalid under the Supremacy Clause. Accordingly, it
affirmed the decision of Judge Spencer that the Three-Rivers Ban was unconstitutional.
As the Fourth Circuit
noted in the Waste Management decision, the power of states
to regulate the transport and disposal of out-of-state waste is severely
limited. Under its constitutional powers, Congress can regulate the transport
and disposal of waste, either by direct federal regulation or by authorizing
the states to adopt regulations. As courts have noted, however, in order
for a state law with respect to out-of-state waste to be valid, Congressional
intent to authorize such regulation must be "unmistakably clear"
or "expressly stated." See, e.g., Envtl. Tech Council,
98 F.3d 774. There currently are a number of bills before Congress that
would grant states additional powers to regulate the importation of out-of-state
waste. Similar bills have been introduced in previous sessions of Congress;
none have passed. Until Congress acts, states such as Virginia will be
limited in their ability to reduce or eliminate the amount of out-of-state
MSW and other waste that is disposed of within their jurisdictions.
Commonwealth of Virginia.