Boone/Stein v. Alameda County Waste Management Authority

What Happened and Why
By John D. Moore, NCRA Vice President and Legal Counsel, and Alameda County Source Reduction and Recycling Board Environmental Organization Member

Editors note: The opinions expressed in this article are the author’s own and do not reflect the view of NCRA or the Recycling Board.

In 2011, Waste Management (WM) obtained a permit from the City of San Leandro for expanded composting and anaerobic digestion at its Davis Street Transfer Station (DSTS). For California Environmental Quality Act (CEQA) compliance in 2011, San Leandro issued a negative declaration. As part of the 2011 permitting process WM obtained an amendment to the County Integrated Waste Management Plan (CoIWMP) that describes its 2011 plans. In 2017, WM decided it wanted to perform mixed waste composting at DSTS instead of what was approved in 2011. WM needed another amendment to the CoIWMP that described its 2017 plans and needed the Alameda County Waste Management Authority (ACWMA and StopWaste) to approve that amendment. In conjunction with this proposed CoIWMP amendment, the ACWMA was required to consider CEQA again and decide whether or not to require environmental review resulting from the project changes since 2011 and whether these changes posed significant potential adverse environmental impact. Stopwaste found that there had been no changes to the project since 2011 so that no further CEQA review was required. Arthur Boone and Dr. Toni Stein objected to the CEQA determination before the ACWMA, hired private counsel at their own expense and filed suit under CEQA for the ACWMA’s refusal to perform further environmental review.

First, the Court tentatively ruled in favor of Boone and Stein although its tentative ruling did not read like much of an endorsement of their suit. After oral argument the Court changed its mind and ruled in favor of the County and WM. Then, Boone/Stein asked Judge Ronni McLaren to reconsider her ruling, which she did. In Judge McLaren’s reconsidered ruling she again tentatively ruled in favor of Boone/Stein; this time in a more committed fashion. But, after oral argument, Judge McLaren changed her mind yet again and ruled in favor of the County and WM.

Why did Judge McLaren change her mind so much? There is no way to know for sure. At the start of the first hearing Judge McLaren announced that this was the first CEQA case that she had ever decided. That said, it appeared that Judge McLaren spent a lot of time and effort reviewing and considering the law. CEQA has two competing underlying policies: one is for full public transparency and disclosure of potential significant environmental impacts of proposed projects; the other is finality of public agency decisions about the project. CEQA requires the Court to give a lot of deference to public agency fact finding concerning CEQA evaluations. Stopwaste found that there had been no change in the project since 2011. I think Judge McLaren realized that this was just untrue and that the current proposed project never had a full CEQA review, but could not see what potential environmental impacts would result from the project changes that had been raised before the ACWMA. Judge McLaren had to follow the law requiring deference to Stopwaste’s determination of no project changes. The Court’s review was also limited to objections actually made at the agency hearing which focused more on air emissions than zero waste issues. .

Boone and Stein could appeal and argue that Judge McLaren applied the wrong legal standard in her decision. Courts of Appeal likewise give much deference to a trial court’s factual finding, i.e. that the administrative record before the ACWMA did not show potential significant environmental impacts from the changes in the project. Statistically, I think that the odds are very high that Boone/Stein would lose in a court of appeal.

Any other ways to challenge the WM project? WM has a 2011 permit from the City of San Leandro. The DSTS is also bound by a master plan including the site, which was approved by the City of San Leandro in 1998. If the current project violates either of these approvals, a possible challenge exists but a very quick statute of limitations is running on such a challenge.

What sort of further environmental review should have occurred? Recognizing that the project did change from 2011 and that mixed waste composting had not yet been tried in the US, potential environmental impacts of poor quality of output compost and the possible negative impact on source separation are things I think should have been studied. After the ACWMA hearing there was media coverage of the dissatisfaction of several European countries with mixed waste composting because of claimed poor quality of the output. A press release in connection with these reports coined the phrase “Compost-like output” or CLOs when discussing compost made from mixed waste.

Would that have made any difference, if known by the ACWMA? To me that seems unlikely. The ACWMA is a joint powers agency made up of all of the cities within the county plus two sanitary districts that provide for solid waste and recyclables collection. As a political body, its decisions are sometimes made for political reasons and it is possible under CEQA for a public agency to approve a project no matter how bad the disclosed environmental impacts would be. That said, one member of the ACWMA, the City of Oakland, was heavily invested in the approval of the mixed waste composting facility at DSTS because it is part of its franchise agreement with WM. Do I think that a majority of the ACWMA members would have voted to deny approval of a project so important to the largest city within the County? I think that is unlikely. The realistic best outcome would have been to impose some quality requirements in the compost output. WM told the ACWMA that its compost would meet certification requirements of one of the NGOs that certify compost. But this promise is not stated in any of the permits.

In hindsight, NCRA should have appeared at the ACWMA CoIWMP amendment hearing and raised concerns about source separation and compost quality, if only to ask the ACWMA to impose permit conditions relating to these concerns. I feel like in hindsight I should have pushed more in that direction. These concerns might ultimately have convinced Judge McLaren to insist upon more environmental review of the mixed waste processing component. But in the end I think the ACWMA would have approved the project anyway.

# # #

Burn Them, Burn Them All

Burn Them, Burn Them All [1]

By John D. Moore, NCRA Vice President and Legal Counsel, Henn, Etzel & Moore, Inc.

CA Department Of Public Health Enjoined From Enforcing Restriction On Medical Waste Crossing State Lines. Does new ruling impact Al Co drug take back ordinance?

The Commerce Clause of the US Constitution (Art. I, Sec. 8) has an odd relationship to the field of solid waste. In 1978 the US Supreme Court issued its first decision since 1905 that related to garbage and found that solid waste was an “article of commerce” covered by the Commerce Clause [2] .

The Commerce Clause reserves to Congress the right to regulate interstate commerce; the purpose being to preserve a “Union” and guard against state “protectionist” laws. The 1979 case involved a state (New Jersey) passing a law forbidding the importation of solid waste into that state; a law passed because of dwindling landfill space there, a situation then existing in many East Coast states. The Supreme Court struck down the New Jersey law finding that “solid waste” is an “article of commerce” that New Jersey improperly regulated. The Court did not say exactly what about the nature of solid waste makes it an “article of commerce”. [3]

By labeling “solid waste” an article of commerce, the Court later struck down laws where local government commanded that solid waste be disposed of only at a facility directed by the local government. [4] The Court later modified its holding to allow local government to direct solid waste to facilities owned and operated by the local government. [5]

The Commerce Clause was applied to Alameda County’s pharmaceutical take back ordinance, and held constitutional by the Ninth Circuit Court of Appeals. [6] An intrastate limitation on the import of solid waste was held constitutional by the Solano County Superior Court. [7] A state case found that the Commerce Clause did not preclude an exclusive solid waste franchise arrangement in Pleasant Hill, CA. [8]

Last week the Ninth Circuit Court of Appeals struck down a portion of the state of California’s laws, as applied by Cal DPH, regulating the disposal of medical waste, on Commerce Clause grounds. Again, the Court did not examine why medical waste is an “article of commerce” and both it and the parties assumed that it was.

Under California law, medical waste collected within the state must be incinerated, and, if transported out of state, must be “consigned to a permitted medical waste facility in the receiving state. [9]

The plaintiff in the case operated a permitted medical waste transfer station in Fresno, where it received medical waste collected by an affiliated company. Because there was not a permitted medical waste incinerator in California, the plaintiff transported the medical waste first to an incinerator in Maryland. Then, to reduce disposal expenses, the plaintiff began transporting the medical waste to facilities in Kentucky and Indiana for “autoclave” and “thermal deactivation” treatment permitted in those states. Both of these processes involve heating the medical waste; it does not appear that anyone argued that these processes are de facto incineration under state law.

Cal DPH then threatened the plaintiff with fines, taking the position that medical waste shipped out of state still must be incinerated. The only statutory support for this position is when the “receiving state” does not have a permitted facility, in which case the medical waste must be incinerated. (Where that could be is an unresolved question.) But the plaintiff’s medical waste was taken to permitted facilities in Kentucky and Indiana.

Plaintiff filed suit in US District Court and obtained a preliminary injunction against the state, forbidding imposition of penalties or other regulatory action by Cal DPH. The Ninth Circuit affirmed the preliminary injunction stating

“Were it otherwise, California could purport to regulate the use or disposal of any item—product or refuse—everywhere in the country if it had its origin in California. The district court did not abuse its discretion when it determined that Daniels was likely to succeed on the merits and enjoined the Department officials from “enforcing the MWMA against Daniels’s out-of-state waste disposal.”

The Ninth Circuit treated this as a clear case of violating the Commerce Clause, as it considered Alameda County’s pharma ordinance to not impair interstate commerce. The Ninth Circuit did not comment on the difference between the statute requiring out of state treatment of medical waste at a permitted facility and Cal DPH’s interpretation of this statute. From experience I can relate that there often are facts in a case on appeal that the parties deem pertinent, where the Court does not share this view.

Hopefully the technology for safe disposal of medical waste will provide a solution besides incineration, possibly by the field of fungi-based  mycoremediation. Please continue looking to this column to report on new applications of the Commerce Clause to solid waste and recyclable material.

And if you have read all the way to the end, please send me an email at jmoore@recyclelaw so I can tell if these legal articles are worth publishing in the NCRA News.

[1] Game of Thrones quoting the last words of Aegon Targaryen, King of Westeros

[2] Philadelphia v. New Jersey (1978) 437 US 617, 622-623

[3] Indeed, if the California Supreme Court was right in saying that “solid waste” was something valueless that an owner paid to dispose, how could something valueless, like solid waste, be an “article of commerce”. See Waste Management of the Desert v. Palm Springs Recycling Center (1994) 7 Cal.4th 478

[4].C & A Carbone v. Town of Clarkstown (1994),511 U.S. 383

[5] United Haulers Ass’n v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 344 (2007)

[6] Pharm. Research & Mfrs. of Am. v. County of Alameda (9 Cir. 2014) 768 F.3d 1037

[7] NCRA v. County of Solano case no. FCS03687 Judgment entered May 30, 2009

[8] Waste Mgmt. of Alameda Cty. Inc. v. Biagini Waste Reduction Sys., Inc. (1988) 63 Cal. App. 4th 1488

[9] Health and Safety Code Section 118000(c)

 

Should This Genie Be Let Out Of The Bottle?

Should electronic signatures be allowed to count to place initiatives on the statwide ballot?

By John Douglas Moore, co-chair NCRA Zero Waste Advocacy Committee

Feedback invited: jmoore@recyclelaw.com

California has a citizen form of government. Its citizens may pass laws (initiatives), strike down laws that have been passed (referenda), and remove from office those lawmakers passing offensive laws. (recall). California also has a recycling-friendly electorate- witness the defeat of the plastic bag business on the two referenda against bag bans in 2016. Closer to home, Alameda County Measure D with its 75% diversion mandate, landfill surcharge, and agency creation (Stopwaste) passed with over 60 % of the vote in 1990.

There is big catch to the idea of placing a statewide initiative on the ballot: To place a statewide initiative on the ballot one must collect 365,880 (5% of the total votes cast in the last gubernatorial election) signatures “personally affixed” by registered voters and witnessed by a “circulator” of the petition collecting the signatures.

Big business can place initiatives and referenda on the ballot because they can pay signature gatherers the market rate per signature, a cost in millions of dollars. Plastic bag makers, waste haulers and landfill owners, and beverage manufacturers and distributors all have the resources to put laws before the voters. In many situations it is all the opponents can do to fight against initiative and referenda, leaving those opponents so tapped of energy and resources that they cannot fight to pass laws they support. Last year’s Proposition 67 battle is a good example. Outspent by many millions of dollars, the recycling community including NCRA and CAW mounted an effective campaign to keep California’s plastic bag ban. But proposing a statewide law itself- say banning disposal of organic material at landfill, or constructing a new bottle bill that works- is too much to contemplate, mainly the required 365,880 signatures. (585,045 signatures to pass a Constitutional amendment).

But what if the signature gathering process was made easier? In the Twitter age is it too arcane to require “wet” signatures witnessed by a circulator. Can’t the internet be used to equalize the strength of opponents as it does it many ways already?

In 2011 a California Court of Appeals held in Ni v. Slocum that an e-signature drawn on a smartphone could not be counted towards the requisite number of votes in a county-wide (San Mateo County) initiative campaign to legalize marijuana. No California appellate court has taken up the issue since. One Utah court decision before Ni and one West Virginia court decision following Ni have held electronic signatures to be adequate for electoral purposes. Each Court examined the Uniform Electronic Transaction Act that was adopted by both states and California that gives e-signatures the same binding effect as wet signatures.

The Court in Ni found that the UETA did not supplant a more specific provision of the state Elections Code that does not provide for e-signatures. The Court also held that the state statutory requirement of a circulator to witness the signature of the registered voter negated the validity of e-signatures obtained on the internet and not through circulators. The Court further pointed out that a law to permit e-signatures to be used on electoral documents was passed by the state Legislature in 1997-98 only to be vetoed by then Governor Pete Wilson. Perhaps it will be technically possible in the future to satisfy the need for a “circulator” of petitions collecting signatures. Since the Ni decision is hostile to the very idea of sanctioning judicially the collection of signatures on the internet, it seems doubtful that a technology change rather than a law change would change the result in Ni. A non-profit, Electronic Signature Records Association and a for-profit technology vendor, Verafirma, are active in this field.

So Zero Waste advocates frustrated with the mills of the Legislature grinding slowly (if ever they grind at all)[1] could focus on legalizing the use of e-signatures to place statewide initiatives. The Legislature could again be convinced to pass such a law with the idea that Governor Brown would not veto it. The issue of permitting e-signatures itself could be made the subject of a statewide initiative. These pathways would require massive energy and time.

Which leads to the question- would this even be a good idea? Making the process to pass new laws easier for positions that one likes also makes it easier for positions one does not like. Look how many votes our current President received. Would letting this genie out of the bottle make for not a citizen government but for a CocaCola Government or a Waste Management government?

The political commentator, Kathleen Moore, says that “Our technology is moving faster than our morality”

I solicit your views.

[1] Henry Wadsworth Longfellow

A Cautionary Tale for California

As I Walked The Streets of Laredo… [1]

By John D. Moore, NCRA Vice President and Legal Counsel, Henn, Etzel & Moore, Inc.

… I saw more plastic bags. That is, after a Texas appellate Court ruled recently that the City of Laredo, Texas, had no power to adopt a local ordinance banning “commercial establishments” from providing customers with single-use plastic bags. Unlike California, the Laredo ordinance did not provide for a ten cent payment to the commercial establishment. Maybe that is why the merchant groups sued. But the reasoning of the Texas court yields a cautionary tale for California.

Laredo, Texas is a home-rule city. In California this is called a “charter” city. Home rule cities are allowed extra latitude in using their police powers and may be limited by the state legislature only when the state intends to preempt local legislation with “unmistakable clarity”. A merchant group[2] sued the City to block enforcement of the bag ban. The City won judgment in its favor at the trial court. The Court of Appeal not only reversed the trial court judgment for the City, it also declared the merchants group to be the winner of the case. The appellate court remanded the case for the trial court only to award attorney fees to the merchants group.

The appellate court focused on whether the state law of solid waste disposal prevented the City from adopting a plastic bag ban. In Texas, a Texas Commission on Environmental Quality promotes regulation much like (in concept if not in practice) CalRecycle in California. The Texas state law has a very specific provision that local government may not adopt an ordinance that “prohibits or restricts” (for solid waste management purposes) the “sale or use of a container or package in a manner not authorized by state law.” There is no indication in the opinion that the state of Texas or its regulator/enforcers actually restricted the sale or use of single use plastic bags.

The appellate court found “unmistakable clarity” that the state law blocked all local ordinances concerning containers or packages. The appellate court reasoned that single use plastic bags were containers or packages with “unmistakable clarity.” This is the opposite of the trial court’s view.

The sponsor of the state law said that the local government preemption provision was intended to be limited to local laws concerning “wasteful packaging, Styrofoam cups, and bottle caps.” The appellate court did not care what the sponsor said. That is partly why legislators should say what they mean. The appellate court’s opinion is entirely based on its reading of the “plain meaning” of the preemption statute.

The Texas preemption statute forbids local regulation of the sale or use of certain materials in a mannernot authorized by state law” i.e. the use is not authorized by the state. It seems to me that if the Laredo law governed the sale or use of the single use plastic bags (used) in a manner authorized by state law, then the strict letter of the preemption statute is not applicable. Or maybe it is open to grammatical debate what was intended.[3] No Texas statute cited detailed how its citizens are to use plastic bags, except presumably not littering them.  From the opinion it seems that this argument was not made.

HERE IS THE CAUTIONARY TALE

California’s statewide plastic bag ban being challenged by referendum presently, SB 270, also contains a preemption provision, prohibiting local governments from enacting more restrictive plastic bag laws. If SB 270 were in force, then cities, including charter cities, in CA, like Laredo, would be barred from adopting more restrictive bans. It is my experience that regulated industry groups will often trade more regulation in exchange for state preemption. I understand that this dynamic cleared the way for SB 270- plus the ten cents/bag provision that helped the grocers which the bag makers are trying to take away in Proposition 65.

[1] If you don’t know the song Streets of Laredo, check out the Johnny Cash version on YouTube. For the musically inclined, think key of G

[2] If funding for the case came from plastic bag makers, the opinion does not reveal this

[3] Like the Second Amendment

An Abbreviated Guide To Antitrust Law

MOORE’S MUSINGS
A semi-monthly feature, exclusive to NCRA News, from NCRA general counsel and board member John Moore, concerning recent legal decisions relating in some manner to Zero Waste.

AN ABBREVIATED GUIDE TO ANTITRUST LAW
By John D. Moore, NCRA Vice President and Legal Counsel, Henn, Etzel & Moore, Inc.

At the April meeting of the NCRA Board, member Gary Liss reported via phone about the G7 Alliance On Resource Efficiency Workshop he attended in Washington DC in March, partially through aid from NCRA. Mr. Liss reported that representatives of competing Japanese auto parts manufacturers expressed concern about being accused of violating antitrust laws if they worked together towards Zero Waste goals like standardization of the design, measurement, and packaging of auto parts. At the conclusion of his report, several NCRA members including some Board members expressed surprise and concern that US antitrust law could be an impediment to US Zero Waste goals. This article is meant to explain the antitrust law concerns.

I have defended businesses accused of violating antitrust law. I do not pretend to be an expert but I know the general parameters of antitrust law. One thing I know for certain is that it is expensive to defend an antitrust law claim. Besides proving that the claimed conduct violates antitrust law, the plaintiff must prove its effect on the market and that it has suffered “antitrust injury” under laws that protect competition but not competitors. The litigated fight often is about the scope of the market of the product involved and the defendants’ conduct to suppress competition in that market. The defendant wants the court to define the market broadly to dilute any claimed impact on that market. The plaintiff has the opposite vantage. One antitrust specialist advised me that the fees of the expert economist hired to answer questions about the market and impact on that market often run “into seven figures.” That is a big pill for many businesses to swallow.

The primary antitrust law is the federal Sherman Antitrust Act, named for Senator John Sherman (brother of Gen. William T. Sherman) who is said to have never read the law that bears his name. When the law was passed in 1890, business cartels were referred to and organized as “trusts”. The basic command of the Sherman Act is that any combination or conspiracy (agreement) that restrains trade violates the law. The Sherman Act also prohibits monopolies. The application of this prohibition to the many anti-competitive actions a business may take has spawned additional federal statutes such as the Clayton Act and Robinson-Patman Act, and California’s Cartwright Act and Unfair Practices Act, and scores of federal and state case law precedents. The Supreme Court held that “The purpose of the Sherman Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself.”

The result of all this shaping of antitrust law starting with the Sherman Act is a pretty clear and seldom changing way to examine anti-competition claims. First, there are a species of claimed violation called “per se” violations. Per se violations are anticompetitive actions that are so evil that they can never be justified consistently with fair competition. A plaintiff need only prove that the per se conduct occurred to prove its case. The traditional per se violations are monopolization, price fixing, horizontal (all conspirators in the same channel such as wholesale, retail etc) agreements to divide customers or to boycott certain customers, and tying agreements (conditioning the purchase of one product upon the purchase of a different product or service). But even within each of these categories, Courts have carved out exceptions. For 98 years agreements to maintain resale pricing were judged on the per se rule. In 2007 the US Supreme Court changed that rule. Courts have held states to be immune from antitrust liability and courts have extended this protection to local governments that are carrying out a “clearly articulated” state policy. This is the source of antitrust immunity enjoyed by exclusive franchise agreements.

The second category of antitrust law violations is a residual category. Any anticompetitive practice that is not a per se violation is judged by how reasonable and/or pro-competitive it is for the business to use the practice. This is called a “rule of reason.” So antitrust laws fall into either the per se or rule of reason categories. A good example in applying the rule of reason is a vertical (parties in different channels) restraint for a manufacturer to set wholesale prices and conditions on a different basis between internet vendors and brick and mortar retailers. The manufacturer usually relies on the retailer to promote the products and educate customers in the target market about the product. This promotion has a cost to the retailer. Internet sellers, in contrast, do little for product promotion and instead compete on price. A person buying a television might browse and get product advice from a brick and mortar store or chain and then order the desired product from an online seller that undercuts the brick and mortar store on price. The vertical price restraint favoring brick and mortar sellers is judged by this so-called rule of reason. The manufacturer will argue that since it reaches its market through brick and mortar stores and the more that is known about a product the more competition there is for customers, applying the rule of reason to discriminatory pricing to internet vendors, results in a finding of no antitrust liability. The rule of reason also requires the plaintiff to prove that the anticompetitive conduct affect a significant percentage of the defined market. But all this happens after the defendant business pays millions of dollars to defend itself, the cost of which is, of course, passed on to product buyers via increased pricing.

One truism of antitrust law is there is seldom direct evidence of a conspiracy. It is rare to have evidence of two or more people agreeing to anticompetitive conduct. The discussion in a restaurant between co-conspirators that results in an action that violates antitrust law is not usually heard except by the co-conspirators themselves and there is unlikely to be a later confirming written record of the conversation that took place. So, unless one of the conspirators snitches on the others, courts rely upon circumstantial evidence (actions from which the existence of a fact may be inferred) to prove antitrust law violation. (Thoreau observed that “Some circumstantial evidence is very strong, as when you find a trout in the milk.”)In antitrust law courts are willing to allow circumstantial evidence that parties “acted” like there was an illegal agreement even though there was no other evidence of an agreement to violate antitrust law. This is called “conscious parallelism”.

So, circling back to the auto parts makers: If you attend a trade group meeting attended by competitors, it is common for the moderator to remind the audience that “we are not here to fix prices or violate antitrust laws.” Regardless of the caution given, any discussion between competitors could be viewed in hindsight as an agreement to restrain trade if there is later market impact. So no matter how “progressive toward a Zero Waste goal” if two competing businesses reach consensus that has a market impact they might find themselves defending an antitrust lawsuit. So I did not find it unreasonable for the competitors attending the Zero Waste Business Council to be reluctant to cooperate towards Zero Waste goals.

The opinions expressed are only of the author. This article contains general information about legal matters.  The information is not advice, and should not be treated as such.