Rancho Mirage Revisited

RANCHO MIRAGE SUPREME COURT RECYCLING CASE REVISITED
By John D. Moore, NCRA Vice President and Legal Counsel
28 years ago, the cities of Rancho Mirage and Palm Springs, and their franchise hauler, Waste Management of the Desert, sued to enjoin Palm Springs Recycling Center from collecting bottles, cans, and paper in those cities. The local court granted the injunction, the Court of Appeal reversed the trial court , and then in 1994 the California Supreme Court reversed the Court of Appeals in what became the landmark California case interpreting what materials may lawfully be within a public entity grant of an exclusive solid waste franchise. The industry knows this as the “Rancho Mirage case” establishing the “fee for service” test of whether material is solid waste or not. The validity of the Rancho Mirage ruling has been called into question by a case now pending before the United States Circuit Court of Appeals for the Ninth Circuit.

In 1989, the California legislature passed the landmark AB 939 (the Act) which reworked the regulatory structure of garbage collection and established the infrastructure for California’s recycling industry that exists today. This Act stated as a matter of policy that landfilling materials was environmentally harmful because of the toxicity of landfills and the exhaustion of finite virgin resources. The Act created an express hierarchy with the 3 Rs, stating that post-consumer material should be reduced, reused, and recycled so that only the residue should be considered solid waste, the gentrified term for garbage. The Act imposed a mandate for 50% diversion of materials from landfill by 2000 and authorized $10,000/day penalties for noncompliant public entities. The Act carried over from former law the right of public entities to comply with their health and safety mandates by entering into garbage collection franchises. The Act granted discretion to public entities to grant exclusive solid waste collection requirements only if “the public health and welfare so require.”
Although the Act contains a definition of “solid waste” that may (not shall as some cities argue) be part of an exclusive franchise, disputes immediately arose between the franchised haulers, like Waste Management of the Desert, that preferred a broad definition consistent with former law, and recyclable collectors like Palm Springs Recycling Center, that interpreted AB 939 to mean that materials that went through the 3R hierarchy and were recycled, never became solid waste. “It’s not waste until it’s wasted” was a clever way to describe this point of view. Recyclers at the time viewed the Act as critical to their ability to create an economically sustainable industry.
The Court of Appeal found that the position of the franchised haulers lead to an unconstitutional taking of property rights. The state Supreme Court agreed to hear the case. California’s recycling associations and major businesses at the time participated in this important case by submitting amicus briefs. The amicus briefs of NCRA, CRRA, and Urban Ore, among others, supported the recycler and argued that under AB 939, solid waste was a residual category of materials that were not recovered by the 3Rs- in other words, if it went to the landfill it was waste; if it was recovered and did not go to landfill, it was not solid waste. CRRC, supporting the franchised haulers argued that if someone paid to have post-consumer material taken away, it was solid waste. The cities of Rancho Mirage and Palm Springs, and WMD, did not make this fee for service argument.
The logic of the fee for service test, adopted by the Court, perplexed many in NCRA. Although seemingly absurd, a competing garbage hauler theoretically could pay $1 for anyone’s discards and undercut the franchise hauler. Metals, which had enough value to be purchased by collectors, immediately became immune from franchises, to the pleasure of ISRI, that also filed an amicus brief. On the other hand, materials like wood and cardboard, with fluctuating markets, would be recycled by the collector, but were not valuable enough to offset the collection cost of driver and vehicle. These so-called negative material materials, often in mixed C&D became the friction point of the last 25 years between franchised haulers and non-franchised mixed C&D collectors.
The state Supreme Court decision was not a model of jurisprudence. Although the Court was purporting to interpret a state statute defining “solid waste” which the litigating parties argued was ambiguous, it did not follow state law in its method to resolve statutory ambiguity. State law precedent requires that a court interpreting a statute first look at its “plain meaning”, and if that was ambiguous, to be guided by the legislative purpose. But the Court did not cite any of the stated legislative purposes of AB 939. The Court did not cite the public policy of landfill avoidance. The Court did not cite the mandated hierarchy of resource recovery that put landfilling last in line. The Court did not cite the legislative command to develop markets for recovered material. State law is also clear that if the plain meaning of the statute is ambiguous and the legislative intent does not clarify the meaning, only then may the court resort to dictionary definitions. The Court used dictionary definitions of “discard” and “dispose” to justify its reasoning, but it selected one of many definitions found in the dictionary for these terms that helped its argument, ignoring others, and the definitions used by the court can no longer be found in published dictionaries today. The Court cited a District of Columbia case to support its conclusion but that case actually held the opposite. The Court did not address the Court of Appeal finding that the position of the cities and WMD was unconstitutional.
So while some recyclers were glad that the Court recognized that exclusive franchises could not cover all material, the recyclers that had to charge a collection service fee were faced with seemingly insurmountable legal problems in jurisdictions where the broadest possible franchise was granted.
An aggrieved recycler could file a state court case, but a trial court and a Court of Appeal were required to respect the Supreme Court precedent. A recycler could file a case and be resigned to losing in the trial court and court of appeal, in an effort to reach the Supreme Court again and request reconsideration. But the state Supreme Court is not required to hear all cases and in fact accepts less than 4% of those state cases that it is asked to review. One recycler in San Marcos tried this route and the Court would not hear the case.
An aggrieved recycler could try to file a federal law claim in federal court, but federal courts are required to defer to precedent established by a state Supreme Court deciding an issue of state law.
An aggrieved recycler could try to ask the state Legislature to change the statute to undo the state Supreme Court holding. Right after the Rancho Mirage case was decided, a waste hauler sponsored bill, SB 450, was introduced that would have allowed for exclusive franchising of all materials. NCRA and others mobilized to fight this bill and narrowly succeeded to defeat it. It was out of the question to think the Legislature would pass a recycler-supported bill to undo the Rancho Mirage case.
So mixed C&D recyclers were stuck. They could lobby local government politically to grant non-exclusive franchises that included C&D, like cities such as Oakland had. Local waste haulers often wielded a lot of local political clout. Political efforts to keep mixed C&D collection nonexclusive in Sonoma, San Mateo, and Contra Costa Counties failed.
Creative litigation strategies were tried. Since the legislature had declared landfilling harmful to the environment, the grant of a franchise inclusive of mixed C&D could be said to result in more landfilling and therefore environmental review under CEQA was required. This approach worked in Mendocino County. The threat of it worked in Napa County.
A Portland, Oregon, attorney specializing in transportation law argued successfully in the local federal court that a federal transportation statute, the FAAAA, preempted local exclusive franchises that included C&D (asbestos shingles in that case). But the Ninth Circuit reversed that case on procedural grounds. A California court of appeal case considered the same issue but the Court found that there was no preemption. The recycler in that case testified at deposition under oath with minimal preparation that what he hauled was “solid waste”, not recyclables, and that was enough for the Court.
An Alameda County fee for service paper collector defeated a challenge by a franchised hauler on the basis that the paper collector provided service – shredding- in addition to collection. Other C&D haulers looked at this possible way around the Rancho Mirage decision and found that the litigation cost and the uncertainty of success was not worth the fight. Deconstruction companies were not challenged to the best of the author’s knowledge. 1-800-Got-Junk franchises did not get targeted. The bait to get targeted by an exclusive franchisee was a roll off or debris box with signage listing the owner.
And so hope dimmed for C&D recyclers. Then, in 2010, the United States Supreme Court opened a door. In a plurality decision where there was a majority vote for the outcome but less than a majority approved any of the several grounds for the outcome, stated that a state Supreme Court, like any other government entity, could be found to act unconstitutionally where it impinged established property rights. This part of the decision was written by the late Justice Antonin Scalia, respected as a scholar even by his political opponents, and was joined by 3 other justices. If this was theoretically possible, then a federal court might be able to judge the constitutionality of a state Supreme Court action without being required to defer to it, if the decision impaired property rights that had been established previously. However no federal court so far has ever found that a state Supreme Court acted unconstitutionally in this manner.
Premier Recycling is a mixed C&D collector that has a fully permitted C&D recycling facility in San Jose. San Jose allows open competition for C&D while many of the smaller surrounding cities like Sunnyvale and Mountain View have exclusive franchises that cover C&D. It is difficult for a business to grow where it is limited geographically. It is like a plant in a planter box. Sonrise Consolidated was an early C&D collector in Alameda County that helped promote the mandatory C&D recycling laws passed in that County only to be forced out of business by a checkerboard of cities within the County where it was blocked from doing business by an exclusive franchise. Licensed contractors required by their building permit to document diversion could be tempted by a service provider that understood diversion to document it. Franchised haulers were not always as flexible about box delivery and pickup times as desired by the contractors.
Premier began to be targeted by cities within Santa Clara County for administrative fines where the city, acting for the franchised hauler, presented its case to a hearing officer employed by the City. Sunnyvale, whose SMART recovery center is a direct competitor of Premier’s C&D facility in San Jose, brought some of these actions.
Sunnyvale’s ordinance requires a permit to collect certain materials, C&D probably, but not clearly, among them. The ordinance speaks in terms of multiple licensees. Premier applied for a permit and was denied on the basis that Sunnyvale has an exclusive permitee. AB 939 allows exclusivity only where public health and welfare so require. The Sunnyvale City Council never made a public decision that the public health and welfare in Sunnyvale require exclusivity.
Premier filed suit in federal court asserting that its constitutional rights were deprived by Sunnyvale’s refusal to issue it a permit. Premier argued that Sunnyvale never made the finding required by law to grant exclusivity and that any action to grant exclusivity was void in light of the unconstitutionality of the Rancho Mirage decision as applied to a C&D fee for service collector in 2017. The District Court dismissed the case finding that Premier had not properly alleged a cognizable claim. Premier appealed. Squarely before the Ninth Circuit is whether or not the Court in Rancho Mirage ignored clearly established law and impinged on established property rights. While it is hard to predict that the Ninth Circuit will void a 25 year old state Supreme Court decision, Premier, never a party in the original Rancho Mirage case, at least will get its say about the jurisprudence of the case. Premier could also prevail on the issue that Sunnyvale never made the required finding before it granted an exclusive. Review of documents as part of a Public Records Act request makes clear that the exclusivity decision was made by staff working with the local hauler, not made by the City Council as required by the Brown Act.
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Member Interview – Kerry Parker, 2/2019

courtesy of Ruth Abbe
Kerry Parker, of Alameda’s Public Works Department, holds a sign as Samantha Sommer with ReThink Disposable and “Bag Monster” look on during the 2017 Art & Wine Faire.

KERRY PARKER, NCRA MEMBER SINCE 2007
Program Specialist II, City of Alameda Public Works Department, hired in 2003
In an island city with a small staff, I do a bit of everything that has to do with trash and recycling. As many are aware, I now find myself an officer of the straws and plastic foodware police (armed with reusable straws); and as the coordinator of Coastal Cleanup Day for 9 years running, this just feels like the closing of a loop. I am the designer and implementer of myriad programs that range from untwisting difficult accounts with ACI – Alameda County Industries, to C&D project monitoring, to managing used oil collection in Alameda’s marinas, to greening city offices via the Green Business Program. For several years a few of us – including NCRA VP Jessica Robinson, performed “The Lunch Monitors” to assemblies of Alameda students to show them how to recycle their lunches properly.

I have a BA from UC Santa Cruz in Sociology and Women’s Studies, which I received while working full time as a Montessori teacher. I have certificates in Zero Waste Principles and Practices, and Managing Recycling Systems from SWANA, I took a whole bunch of trash 101 courses from CRRA eons ago and am a USGBC LEED Green Associate.

My earliest defining moment was my personal tour of Davis Street Transfer Station 12 years ago with Rebecca Jewell. That day of looking at how people tend to sort their stuff, I learned they don’t – much – and that made a huge impression on me. Also, RJ’s use of f-bombs was eye-opening.

More recently, I realized that the impossible can happen as I followed a group of 3 brilliant Alameda High School students into the bubble tea shops of Alameda, and watched them influence the shop owners to use less single-use plastic by incentivizing reusable bottles and steel boba straws. The students pointed at me when they said, “if you remain out of compliance, your business could receive fines.” I nodded authoritatively.

I am an Oakland native and have tons of friends and family all over the area. I love the beach, playing with my dog Butternut, and I can crochet anything. I’m currently trying to figure out how to crochet a curbside cart. Those edges, tho.

What would people be surprised to know about you? I was a Montessori pre-school teacher for 10 years.

What inspires you? Kids. Example: The kids that wrote letters to the city council to ask that plastic straws be restricted are my heroes.

If you could vacation anywhere in the world where would you go? I have been dreaming of a trip to Easter Island to see the Moai, or giant stone heads. I think it would be breathtaking.

FAVORITES

Book: Woman on the Edge of Time by Marge Piercy. I am an avid science fiction/dystopic novel reader, but this one is feminist utopian – and I love it. Especially significant is the discussion of colorful, fluffy and semi-transparent clothes created for party-goers called “flimsies” that you simply throw in the compost after the party. If textile recycling were only so easy…

Restaurant: I am a foodie, and am super sad to hear that Oakland’s Camino closed because it was a favorite. I heard they have another restaurant called The Kebabery, so now I have another restaurant to check out!

Person: Barack Obama

Recycled Product: I am really in love with the custom receptacles that CleanRiver makes – out of 95% post-consumer HDPE. I suppose that sounds geeky.

Song, Movie or Show: The Book of Mormon

Technology: Any software that helps me get my job done. I love tech.

Time Management Technique: I am a slave to my Outlook appointment calendar. If it’s not on the calendar, it’s not happening.

If you could invite any three people to dinner – dead or alive, who would you invite and why?;

Oh shoot, I just want my NCRA friends to come over for dinner (you know who you are!). Any celebrity alive or dead would make me too nervous and I’d clam up.

Question of Your Choice: What’s my dream job? Solid Waste Manager of [Insert City Name Here]. 😉

SB 1383 Is Moving Forward

By Arthur R. Boone, Center for Recycling Research (CRR)
On Wednesday December 18th, Cal Recycle formally ended its early regulation phase and is now drafting final regulations that must be approved by the state officer in charge before becoming final in 2022.

The Legislature has put a lot in play and the department is trying to step up its enforcement work. When you consider that CA has as much garbage now as it had when AB 939 was adopted 29 years ago, the legislature may have lost patience with the “talk-big, act small” results of AB 939 implementation.

In Europe, the EU voted about a year ago that starting in 2024, all organics shall be collected as a source-separated material and not delivered to landfills but to other beneficial end uses. This ruling came after 20 years of fooling around with various kinds of programs to keep methane out of landfills and bowing to the garbage-as-usual interests in used materials management. It’s easy to think that CA will now be repeating for ourselves what Europe has learned in the last 20 years as we try to make SB 1383 work.

Maybe we need to bring Enzo Favoino to Northern California and run him around with his stories; a wise man from Italy and ZW leader in Europe.

 

We Cannot Recycle Our Way Out Of Plastic Pollution

By John Douglas Moore, Co-Chair, NCRA Zero Waste Advocacy Committee

Please watch the 15 minute segment of Sunday, January 3’s edition of “60 Minutes” which first focused on Boyan Slat’s enterprise to clean-up large ocean plastic gyres by using a large net to collect it, and then segued to the global problem of plastic pollution, painting a pretty grim picture.

The show did not question Slat about what he intended to do with the collected plastic and gave a light brush to any current performance flaws in the technology. China’s National Sword was highlighted as impacting plastics recycling but did not address impacts on collected contaminated paper, cans, and bottles, and did not confront the big lie of single stream collection long advocated by monopolistic trash haulers.

An intelligent adult watching the show asked me “does this mean my plastic Starbucks cup does not get recycled when I put it in the store’s recycling bin?”

Lest you have any doubt that we cannot recycle our way out of plastic pollution and need to up our efforts to reduce plastic use and pollution, please watch this show segment. […]

 

2019 Board Election Results

Congratulations to the five incumbents re-elected to the NCRA Board:
Nik Balachandran, Alina Bekkerman, Doug Brooms, Hilary Near and Jessica Jane Robinson.

Thirteen members were written in for the sixth open seat – perhaps a record! The current Board of Directors selected Lori Marra for the remaining spot. Thirty-three percent of the members voted; two abstained.

Thank you to the folks who cast write-in votes as well as those that were written in. We look forward to your continued involvement. The Communications Committee will be politely contacting you!

Appreciations to the Election Committee –  Portia Sinnott and Steve Sherman, and Juliana Gerber, NCRA Administrative Coordinator, for managing the nominations.

Officers will be selected at the January 12 board retreat. Terms end in December. Click here for Candidate Statements. For bios, please visit the Board and Staff page.

 

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