New York C & A Carbone v. Town of Clarkstown

The regulatory powers of state and local governments cannot be used to favor local firms by generating business for them or obstructing the business activities of outside companies.

Officials of Clarkstown, New York near the New Jersey border thought they had come up with a foolproof way of obtaining a $1.4 million waste recycling and transfer station for only $1, until a tractor-trailer ran into an overpass on the Palisades Interstate Highway. When police discovered the truck was hauling 23 bales of solid waste from C & A Carbone's Clarkstown plant to a land fill in Indiana, the plant was placed under surveillance.

Over the next six days, Clarkstown police seized six other Carbone tractor trailers loaded with waste destined for disposal sites in Illinois, Florida and West Virginia, as well as Indiana. The town asked the New York Supreme Court for an injunction requiring Carbone to ship all its waste to a transfer station on Route 303 in Clarkstown at a cost of $81 a ton. Local waste haulers were mandated to do so under a Clarkstown "flow control" ordinance that guaranteed the private owners of the station 120,000 tons annually at the $81 rate over five years in return for the deed.

The Clarkstown injunction was granted and New York courts upheld the town ordinance as constitutional, but the U.S. District Court differed. The Supreme Court granted a writ of certiorari, and in the majority decision that followed, found that "the flow control ordinance does regulate interstate commerce, despite the town's position to the contrary."

The town argued before the Supreme Court that the ordinance was "in practical effect a quarantine" preventing "garbage from entering the mainstream of interstate commerce until it was made safe." However, the majority disagreed and the decision, written by Justice Kennedy, concluded that the ordinance:

. . . drives up the cost of out-of-state interests . . . and prevents everyone except the favored local operator from performing the initial processing step . . . These effects are more than enough to bring the Clarkstown ordinance within the purview of the Commerce Clause.

Consequently, Justice Kennedy concluded, the ordinance "in practical effect" was a "hoarding" rather than a quarantine measure. It was designed to favor "a single local processor" rather than promote public health. As a precedent, an earlier decision striking down a "local processing requirement that at least (milk) pasteurizers within five miles of the city" was cited.

Justice O'Connor agreed the ordinance was unconstitutional, but not because of "discrimination in interstate commerce" but rather by placing an "undue burden" on commerce. Furthermore, Clarkstown had erred in giving "a waste processing monopoly to the transfer station," Justice O'Connor noted. However, she was more concerned that the decision could also overturn similar laws in 20 other states allowing "flow control." The result could be the "type of balkanization the clause is primarily intended to prevent," she wrote. The Court was interfering unnecessarily in traditional local government concerns, according to O'Connor.

The three dissenting justices worried that the majority was unnecessarily creating new law. The majority had alluded to "well settled principles" in its decision, Justice Souter wrote in the dissent joined by Chief Justice Rehnquist and Justice Blackmun. The majority did " . . . strike down an ordinance unlike anything this Court has ever invalidated," adding that previous decisions had only struck down laws which discriminated against all out-of-town providers of service. Clarkstown, however, had only differentiated "between the one entity responsible for getting the job done and all other enterprises (local as well as out-of-town), regardless of their location." That entity, he further noted, was "directly aiding the government in satisfying a traditional government responsibility."

The ordinance had been passed as part of the town's efforts to comply with a 1989 consent decree with the state Department of Environmental Conservation. The decree required Clarkstown to close the town landfill, clean up the damage caused by years of dumping, and build the transfer station. Consequently, Justice Souter argued that the transfer station operator was:

essentially an agent of the municipal government . . . a municipal facility, built and operated under a contract with the municipality and soon to revert entirely to municipal ownership.

The majority's equation of the ordinance's effect with "hoarding" ignored "this distinction between public and private enterprise."

When legislation does not come into "conflict with the Commerce Clause's overriding requirement of a national `common market,'" Souter concluded, the court is faced with "a balancing test . . . an accommodation of conflicting national and local interests." The Clarkstown ordinance met that accommodation test, Souter declared. The ordinance:

confers a privilege on the municipal government alone . . . that does not discriminate between local and out-of-town participants in the private market . . . and that is not protectionist in its purpose or effects.