CHEMICAL WASTE MANAGEMENT, INC. v. HUNT, GOVERNOR OF ALABAMA
Legal provision: Article 1, Section 8, Paragraph 3: Interstate Commerce Clause
Argument of Andrew J. Pincus
Chief Justice Rehnquist: We'll hear argument now in No. 91-471, Chemical Waste Management, Inc. v. Guy Hunt, Governor of Alabama.
Mr. Pincus: Thank you, Chief Justice Rehnquist, and may it please the Court:
The question in this case is whether Alabama's waste disposal tax, which is levied only on waste generated outside that state, discriminates against interstate commerce in violation of the Commerce Clause.
Petitioner Chemical Waste Management operates, owns and operates a hazardous waste disposal facility near Emelle, Alabama.
This facility is authorized to operate under both Federal and state law, and virtually every aspect of its operations are closely regulated by both the Federal Environmental Protection Agency and the Alabama Department of Environmental Management.
That regulation is designed to minimize to the greatest degree possible any threat to public health and the environment.
The statute challenged in this case levies a $72 per ton tax on waste disposed of at the Emelle facility that is generated outside Alabama.
Waste generated within Alabama is not subject to the tax.
The trial court declared this statute invalid under the Commerce Clause on the ground that it impermissibly discriminates against interstate commerce.
The Alabama Supreme Court disagreed, holding that because the overall purpose of the tax was to protect public health and the environment, the Commerce Clause's antidiscrimination principle did not apply.
We submit that the unconstitutionality of this provision is clear under long-settled Commerce Clause principles.
A law that discriminates on its face against interstate commerce violates the Commerce Clause unless it advances a legitimate local purpose that cannot be adequately served by reasonable non-discriminatory alternatives.
The Court has never found this test satisfied by a discrimination tax, save in one circumstance where the tax in fact is not economically discriminatory because it precisely compensates for an identical levy that is limited to in-state commerce.
Unknown Speaker: Mr. Pincus, if there were no Federal legislation governing this area do you suppose the State of Alabama could just ban any importation of hazardous waste into the state?
Mr. Pincus: If there were no Federal legislation--
Unknown Speaker: Right.
Mr. Pincus: --at all, then that would come very close to resembling the kinds of statutes that this Court upheld in the quarantine cases.
Unknown Speaker: Exactly.
Mr. Pincus: Of course, as your question points out, there are two distinctions here.
One, this is not a quarantine.
It's a tax.
And two, there is the Federal legislation.
Unknown Speaker: Well, do you suppose instead of a ban they could just knowingly impose a tax at such a level that it would discourage the importation?
Mr. Pincus: We think not, Justice O'Connor, because we think the local purposes underlying those two types of statutes are very different.
In the quarantine cases the local interest that the Court identified was an interest in preventing any additional items of the particular good into the state at all.
The state's interest was in reducing it to the minimum degree possible.
Here that is not Alabama's interest.
That's not what the statute does, and in fact that's not the interest that respondents assert in their brief.
Here they assert that Alabama's health and safety interest is in reducing volumes, keeping volume to some, what they regard as an acceptable level.
And if volume is the question, then there is no, the out-of, the state of origin makes no difference.
If they're willing to have 600,000 tons, or whatever the volume is, then that volume, wherever it comes from, the risk will be the same and they have no interest in discriminating.
Unknown Speaker: Well, I don't know that that follows.
It seems to me rather cruel to say that the less solicitous of her sister states Alabama is, the more we're going to punish her.
I mean, instead of saying we're not going to allow any states to dump anything here, they're saying well, you know, there may be some of our sister states that have real problems, and if they're really, you know, if it's that serious that they're willing to pay this amount per ton we'll let them do it.
Why isn't that a reasonable solution?
And it could be based on the same desire not to have any of this noxious material within Alabama.
Mr. Pincus: But again, Justice Scalia, that's not the interest that's underlying their statute.
I mean, that's really two interests.
One is an interest in reducing volumes, and the other is an interest in insuring that Alabama generators are completely taken care of and then leaving something over for the rest of the generators in the country.
Unknown Speaker: Oh, but they do want Alabama generators totally taken care of.
Mr. Pincus: I know they do.
Unknown Speaker: Of course, because they're a responsible state.
They don't want to dump this on other states.
The same solicitude for their sister states that causes them to set a high fee for stuff from other states but not to ban it entirely, causes them to say we'll take care of our own waste.
That's the kind of state we are.
Why isn't that thoroughly admirable?
Mr. Pincus: Well, Your Honor, the problem is they're not taking care of it.
Chemical Waste Management is.
If they decided to make the investments and construct and own and operate a hazardous waste disposal facility, make the technological investments, hire the people, the market participant doctrine that this Court has recognized would allow them to discriminate.
But that's not what they're doing here.
They're saying even though you're a private entity we want you to take care of Alabama's problem and we don't want you to be accessible, except to some very limited degree, to the rest of the national economy.
And that they can't do.
Unknown Speaker: Mr. Pincus, where abouts in Alabama is Emelle?
Mr. Pincus: Emelle is located on the border with Mississippi, sort of toward the middle of the state.
Unknown Speaker: Thank you.
Mr. Pincus: We think that the question whether this, the interest that Alabama asserts here are sufficient to justify upholding the first discriminatory tax outside of the compensating tax area is answered by this Court's decision in City of Philadelphia, and the answer is no.
The Court held in City of Philadelphia that New Jersey could not ban the disposal of out-of-state waste because there was no--
Unknown Speaker: But there you didn't have the hazardous waste problem, Mr. Pincus.
Mr. Pincus: --Well, Your Honor, New Jersey's, the rationale that New Jersey relied upon was precisely the same protection of the public health and the environment that Alabama is relying on here, and the Court expressly said we're not saying that New Jersey is wrong about the fact that the statute will protect that interest.
We're just saying that there's no reason, that interest doesn't justify the discrimination.
And in fact that statute, excuse me, did cover all kinds of solid waste.
And the Court's opinion--
Unknown Speaker: But the, what was actually being transported was simply garbage, which I suppose has some dangers inherent, but I don't believe it's the same as the hazardous waste.
Mr. Pincus: --Well, as I say, Your Honor, the Court did not, did not go off on some kind of level of hazard.
It assumed for the purpose of its decision that New Jersey had a legitimate public health interest and just said it could not promote that interest in this discriminatory way because there were less discriminatory means available to it.
And we think that's precisely true of the situation here.
Alabama has less discriminatory means.
It can impose a reasonable even-handed cap.
It can say you can only dispose of X hundred thousand tons, whatever level they are comfortable with, providing it means other, whatever other applicable constitutional and statutory requirements there are, or they can impose an even-handed tax.
Unknown Speaker: Could Alabama impose a requirement that provided for the least possible transportation of that stuff within Alabama?
Mr. Pincus: --Alabama could try and enact an entirely different statute that did regulate transportation, and then we'd have to see precisely what it did, whether--
Unknown Speaker: What if it said only hazardous waste generated within 100 miles of the Emelle facility can be brought there?
Mr. Pincus: --May be disposed of there?
Unknown Speaker: May be disposed of there.
Mr. Pincus: Well, we think that that statute would be unconstitutional for the very reasons we are urging here.
That statute doesn't regulate transportation.
Waste could be transported anywhere, into, out of, through Alabama.
That would just regulate, that would be a disposal regulation.
Unknown Speaker: Yes, but you could lose that case and still win this one.
Mr. Pincus: We could certainly lose that case, Justice White, and still win this one because Alabama has not done that, and it hasn't purported to do anything about transportation.
Unknown Speaker: Well, Mr.--
--You... I'm sorry.
Mr. Pincus, do you suppose Congress has indicated its affirmative consent to this kind of a scheme in Alabama?
Mr. Pincus: We don't think so, Justice O'Connor.
First of all I should say preliminarily that Alabama does not rely on any congressional authorization here.
It didn't preserve those arguments below.
They were never raised in the Alabama Supreme Court.
Unknown Speaker: The EPA has approved a similar state tax scheme for South Carolina.
Is that right?
Mr. Pincus: Well, we... let me just, I'm sorry... in addition to the procedural problem, we don't think Congress has authorized discrimination here.
This Court's precedents make clear that congressional authorization must be unambiguous, and there's just nothing in these statutes that are pointed to by the amici that constitutes unambiguous authorization.
One provision is a savings clause similar to the one that the Court found insufficient in Wyoming against Oklahoma and a number of other cases.
The other is a statute that authorizes EPA to review state programs, and if it finds them consistent with the Federal program, authorize the states to, EPA will withdraw and essentially the states will be the hazardous waste regulator in the state.
Now, that says, that's a limitation on state authority because what that statute says is that state regulation must be consistent with the Federal scheme.
And it's in implementing that statutory mandate that EPA reviewed the South Carolina discriminatory tax and found that it did not violate the consistency requirement.
Now, EPA, as I say the statutory scheme and the regulation don't give South Carolina the authority to discriminate.
Second of all, EPA did not purport to be applying the Commerce Clause.
It purported to be applying a completely different requirement that may or may not be overlapping.
We think that the way the schemes fit together is clear.
The Commerce Clause exists as a free-standing limit on state authority, and EPA has apparently determined, or at least in that case determined that something that might, that whether or not something violated the Commerce Clause was irrelevant for its decision whether the state program was consistent.
But we don't think that has anything to do with the Commerce Clause challenge we have brought in this case.
Unknown Speaker: Mr. Pincus, suppose it could be shown that what Alabama had in mind was it wanted to be sure that there were private facilities available within Alabama to dispose of dangerous materials in Alabama, which is certainly a substantial state interest.
So it allowed Alabama residents to dispose of them at private facilities.
It also found that these facilities would not be cost efficient, could not be supported without accepting some out-of-state waste.
So they put, they adopted the statute they have here.
You can bring it from out-of-state but you have to pay a lot more.
Why wouldn't that be a reasonable, thoroughly reasonable state scheme based upon the state's interest in disposing of dangerous materials and keeping out as much dangerous material as possible, consistent with managing their own wastes?
Mr. Pincus: Well, Your Honor, I think the problem with the hypothetical is that it's focusing on the state as the market.
And what the Commerce Clause, what the framers decided is that the Nation is the economic market, and Alabama can't set up--
Unknown Speaker: Not for dangerous goods.
The states can be the markets for dangerous goods.
Haven't, don't our cases say that, that they can keep out dangerous materials from other states?
Mr. Pincus: --In think your cases say that if there was a quarantine statute, a flat ban on any importation, and if the state proves the kind of danger that was established in those cases, that those kinds of statutes will be upheld.
Not because there is some dangerous items exception to the Commerce Clause, but because in that particular situation that's the least discriminatory means effectuating a particular state interest.
Unknown Speaker: All or nothing at all.
You have to keep it out entirely or else you can't take any account of the dangerousness.
Mr. Pincus: Well, you cannot take account of it in... if the state doesn't have that interest, then it's not entitled to discriminate because it's interest is by definition less.
I mean, we're just looking at what's the state's interest here.
Alabama has said we're willing to tolerate X tons.
Now, it also says we'd really like, we want this facility to take care of all Alabama people first, to put them first in line essentially.
But that kind of argument would sweep much too broadly, as we set out some hypotheticals in our brief, if that were true.
This Court's decision in the New England Power case that there could be discrimination because it would be nice for the low cost energy that was generated by hydroelectric plants within the state to be accessible to the state residents should have come out differently.
The state held that wasn't a legitimate state interest because the state doesn't have an interest in discriminating, essentially, and that's the interest that Alabama is asserting here.
It sort of, the very interest is inconsistent with what underlies the Commerce Clause.
Unknown Speaker: Of course if Alabama could prove that there was no safe way to dispose of this stuff you would lose, wouldn't you?
Mr. Pincus: If Alabama--
Unknown Speaker: Because then you'd be in the same, you'd be in the same category as the quarantine cases.
Mr. Pincus: --If Alabama had enacted a quarantine statute which indicated that that was its interest, and if it showed that in fact allowing additional items such as this into the state, yes, then I think we'd lose.
But as I said earlier, we think that they haven't done either.
They haven't enacted a quarantine statute.
They haven't said that that's their interest.
They have said their interest is in limiting volumes.
They said that would take care of the public health risks that they see.
And we think that if that's their interest there is a non-discriminatory way to do it.
Unknown Speaker: So in effect you're saying, as I guess you did to Justice Scalia, that it's got to be an all or nothing rule?
Mr. Pincus: I think that's right.
And I should say in this context I'm not sure that even if they adopted the all, the quarantine, that they could meet the standard for establishing that there is the threat of imminent massive danger that was present in the quarantine cases because there is a very, very comprehensive Federal and state regulatory scheme here.
The Federal statute defines these substances as hazardous if they are not properly managed.
But they are properly managed.
There is a management scheme in place.
In the quarantine cases what the states were saying is there was no intermediate regulatory scheme that limited the hazards that were posed by the weevils or the infected cows.
The question was can we keep them out.
Here we have a regulatory scheme--
Unknown Speaker: Well, it seems to me that you're conceding that noxious wastes of this kind cannot be distinguished from quarantine if a quarantine law is passed.
Mr. Pincus: --No, Your Honor, that's what I was just saying is I think this case is different because these regulatory schemes are in place, and I think Alabama would have difficulty making a showing of uncontrollable danger that was, that the states had to make in those cases to justify their quarantines precisely because there is here a regulatory scheme that covers transportation, every facet of these wastes' handling and disposal is covered in a way that very, very significantly lessens the danger.
Unknown Speaker: --Is one way to characterize that circumstance of the law to say that there is a commerce in waste, but that there was not a commerce in the noxious products that were the subject of the quarantine cases?
That's something of a legal conclusion, but--
Mr. Pincus: I think many of the quarantine cases do state that those items are not items of commerce because they are so objectionable, because they threaten the state, the very existence of life and the environment within the state, and we don't think... and therefore the legal conclusion was they are not commerce, and because of the state of the court's jurisprudence at the time the state can regulate them.
Here we think we fit within that paradigm, although the court's jurisprudence has moved away so it's not necessary to hold that these things, whether... the court has concluded that everything is commerce because it hasn't found the states--
Unknown Speaker: --And it seems to me the quarantine cases might be distinguishable on that basis.
Mr. Pincus: --Well, I think that's right.
I think that those items were found to be noxious and poses uncontrollable risk, and the Federal scheme eliminates to a large part that risk.
We don't... maybe not entirely, maybe there's some risk, just as there's a risk of flying, when you get into a plane Federal regulation--
Unknown Speaker: But I'm not sure that the existence of state regulation is what controls whether there is a commerce in waste or not.
That's where I don't follow you.
Mr. Pincus: --Well, there is, there certainly is a business in waste and in the transportation and disposal--
Unknown Speaker: And there was not that finding in the quarantine cases?
Mr. Pincus: --There certainly was not, Your Honor, and that is an important distinction also.
Unknown Speaker: So if someone wants to go into the business of shipping diseased cattle from one state to another, does that diseased cow become an item of commerce?
Mr. Pincus: The diseased cattle would be an item of commerce, and I think that follows exactly from what the Court said in City of Philadelphia where it says everything is an item of commerce.
It would not necessarily... the ability of the state to regulate would turn on whether it could show that its regulation advanced the legitimate local purpose that could not be satisfied by reasonable non-discriminatory means.
And it may be for diseased cows the state could show that the only way for it to protect itself was to impose an import ban, and so therefore the ban could be upheld.
Here there is no import--
Unknown Speaker: So it's the same test in any event as--
Mr. Pincus: --It's exactly the same test.
That's what I'm saying.
If the Court has no further questions I'll reserve the remainder of my time for rebuttal.
Unknown Speaker: --Thank you, Mr. Pincus.
Mr. Kneedler, we'll hear from you.
Argument of Edwin S. Kneedler
Mr. Kneedler: Thank you, Mr. Chief Justice, and may it please the Court:
The very purpose of the Commerce Clause was to establish an area of free trade among the states and not to permit a multiplication of isolated trade zones within each of the separate states.
And the Commerce Clause has been consistently construed by this Court to, of its own force in a self-executing manner to prohibit barriers imposed by the states to the free movement of commerce among the states.
In particular where a statute discriminates against interstate commerce, that statute can be sustained only if it serves a legitimate local purpose and if there is no available, excuse me, non-discriminatory means to accomplish it.
Beyond that in the special area of taxation, which we have here, the only discriminatory taxes that have been sustained have been ones that are in fact not discriminatory because they are designed to equalize a tax burden, excuse me, to compensate for a tax imposed on in-state interest.
Now those purposes are present entirely in this current situation.
Hazardous wastes are generated as the by-product of essential industries in interstate commerce, petrochemicals, petroleum refining, others.
To exempt an in-state industry from, generator of hazardous wastes, from the payment of a fee that out-of-state waste generators have to pay is exactly the sort of discrimination in favor of local industries against out-of-state industries that the Commerce Clause was designed to prohibit.
Unknown Speaker: You could say the same thing about diseased cattle.
To allow in-state ranches to have diseased cattle, but not to allow any out-of-state ranches to ship diseased cattle into the state is, you know... it's the same thing.
It does discriminate in favor of in-state people in a way.
Mr. Kneedler: --It does, but there are several ways to look at the quarantine cases.
One of them is that, as the response to the Chief Justice illustrated a short time ago, in fact the quarantine cases are a subset of the category in which the state interest could not be served by any non-discriminatory manner.
But there's another element of the quarantine cases which simply is not present here but I think is an essential element, and that is the element of imminence of the risk, urgency of the risk.
A quarantine is an emphatic and swift remedy for a perceived urgent problem.
In fact in the Hannibal and St. Joseph Railroad case on which Alabama relies, the Court described the quarantine cases as essentially grounded in self-defense.
And one of the essential elements of self-defense is imminence.
You are only entitled to take that action if there is an imminent harm.
And in Clason, for example, one of the cases cited, it was pointed out that the animals would begin to decay and cause harm within 24 hours.
None of that is present here in particular.
The hazardous wastes, as Mr. Pincus described, are subject to a comprehensive cradle to grave Federal regulatory scheme.
From the time of generation through storage through transportation through treatment and disposal they are subject to a uniform minimum set of standards which can be supplemented by the states precisely to guard against those sorts of imminent risks.
Unknown Speaker: Mr. Kneedler, what if the state decided to start all over again from scratch and it could prove that in fact there was no safe way to handle the stuff, that in-state, out-of-state, it was all a health hazard regardless of what the Federal Government was saying.
Does the fact that the Federal Government has enacted this comprehensive scheme for regulating transportation and treatment, or would that fact in effect bar us from considering the state's proof?
In other words, has the congressional action in effect said this material is going to be treated, must be treated for Commerce Clause purposes as an article of commerce which is not subject to the quarantine rules.
Mr. Kneedler: I don't know whether it would be an absolute bar.
I think Alabama's burden would be weighty indeed, because Congress has, by taking this problem firmly in hand and by treating what might otherwise be a local activity such as the generation of waste in the same way that raising cattle might ordinarily be local, but by taking it entirely in hand in this Federal regulatory scheme and including the transportation of waste, Congress has really treated it as a national problem.
And as a consequence of that there has been a national interstate industry growing up around the various aspects of hazardous waste.
As we point out in our briefs there are, as a consequence of the Federal statute and amendments to it there are important incentives to adopt treatment of hazardous waste before they can be disposed in land disposal sites.
And those treatment requirements are often capital intensive, and it would be duplicative at best and counter-productive at worst to require a landfill in every state in fact to require the various types of disposals of hazardous wastes in all of the 50 states.
As we point out in our brief, every state in the Union exports some hazardous waste, and the average state exports to 19 other states to take advantage of at least 12 disposal or treatment sorts of technologies.
So what has grown up partly under the impetus of the regulatory scheme which has become much more complex since the time this Court considered RCRA in the background of Philadelphia v. New Jersey has been one that treats this problem as a national problem.
And so we would, the Federal Government and EPA would be quite concerned about the reintroduction of attempts by the states to as it were try to improve on that system.
If the states believe that additional incentives are required, if certain states now sited with land disposal facilities believed that certain incentives are required for other states to develop additional sites that would not be redundant, then the proper course is to take that to Congress, which can authorize through authorizing taxes, even discriminatory taxes, or other incentives, can take steps that are necessary to make sure the adequate capacity is present.
But that has not happened here, and Alabama instead has tried to take matters into its own hands by adopting what it thinks is a proper regulation of what is after all interstate commerce, by imposing a tax at a level it thinks is appropriate to regulate, as it were, the movement of goods from one state to another.
That's a function that's assigned to Congress under the Commerce Clause, not to the states.
And I think that gets to the reason why a tax rather than a ban, even though it may seem lesser included, doesn't survive on the quarantine theory.
It's because the state, the state's interest is much more indirect.
The point that was pointed out in the Baldwin case, Baldwin v. Seelig, that said if there is a, if there is the sort of state interest that requires that kind of immediate action it calls for an immediate response, not the kind of indirect regulation that a tax will do.
Unknown Speaker: You wouldn't allow a total ban either, I gather from what you said before.
Mr. Kneedler: Well, it would be subject to separate standards.
First of all there may be a question as to whether RCRA would allow a total ban.
But if there was a total ban there would be a question to what extent that was consistent with the state's interest.
If the total ban was premised on the kind of imminent danger, clear and present danger that the quarantine cases have been premised on, if the state could make that factual showing, then it might bring itself within the quarantine cases.
The difference here is that Alabama is not trying to regulate against imminent harm.
Quite the contrary.
Most of the harms that Alabama cites in here are ones that are 20, 30, 40 years down the road and speculative at that.
And in trying to regulate to serve those purposes the State is essentially second guessing RCRA and the surplus scheme that have been set up by Congress to do the best that Congress can on the basis of current knowledge in the area to guard against and impose financial requirements to insure against long-term damage to local economies and the local environment.
So I think that the, Alabama's effort to bring this case within the quarantine rationale is fundamentally misguided.
In fact it's Philadelphia v. New Jersey which answers this case.
There the Court did not disturb the New Jersey Supreme Court's conclusion that the statute there furthered important environmental concerns and in fact hazardous wastes were embraced by the New Jersey statute.
But the Court said that the ultimate purpose of the New Jersey statute was irrelevant if in furthering that purpose the state engaged in the sort of discrimination that the Commerce Clause would otherwise prohibit.
And that's exactly what New Jersey did in that case by discriminating against out-of-state commerce.
And that is not some new fangled notion that came up in Philadelphia v. New Jersey.
It goes back as far as Guy v. Baltimore, which we quote on page 25 of our brief.
There the Court acknowledged the--
Unknown Speaker: You don't agree with Mr. Pincus then that the Commerce Clause jurisprudence has changed?
Mr. Kneedler: --I think the labels or the categories in which the Court has described Commerce Clause analysis has changed, but I think that the essential truth of what the Court has been driving at in the cases has really not changed.
That in the quarantine cases, in saying that a state can impose a quarantine the Court used to say that those are not legitimate items of commerce.
I think now the analysis would be that a quarantine is valid if it's the only measure that can be taken to advance the state interest.
Unknown Speaker: Thank you, Mr. Kneedler.
Mr. Kneedler: Thank you, Mr. Chief Justice.
Unknown Speaker: Mr. Nettles, we'll hear from you.
Argument of Bert S. Nettles
Mr. Nettles: Thank you, Mr. Chief Justice, and may it please the Court:
Modern Commerce Clause concepts have never been previously confronted in this Court with a hazardous waste police power control case, and as we consider that I would suggest there are three key factors in this case to consider.
One, that hazardous wastes are inherently dangerous to human safety and to the environment and to the health.
There is just simply no safe way to permanently landfill hazardous waste, and the record in this case is full of documentation on that issue.
Now, as such, considering the imminent and the inherent dangers and also the fact there is no safe way to permanently landfill hazardous waste, do the Commerce Clause, the typical Commerce Clause protections inure to toxic items of this type?
Second factor, at the very least the unique problems of hazardous waste and the landfilling of hazardous waste should be considered if the Alabama statute is subjected to the usual balancing test or the strict scrutiny test.
And the third factor we would submit is that the national interest would be better served by upholding Alabama's differential fee.
Unknown Speaker: Do you think anything you have said has suggested anything else than that Alabama could keep out all out-of-state hazardous waste?
Mr. Nettles: --Your Honor, that would be a more serious test.
I think a ban under these facts--
Unknown Speaker: I don't know.
I would think it would be easier.
I think it would be easier under your rationale.
If there's all this hazard that can never be cured, why wouldn't you just keep them all out?
Mr. Nettles: --Your Honor, this is a modified type Commerce Clause case.
It's the volumes.
It's the volumes of the hazardous waste that present the problem.
One barrel of outside hazardous waste doesn't contain germs that are going to set off an epidemic, but when you get to 40,000 truck loads in one year, as in 1989, 85 to 90 percent of that from out-of-state, being permanently buried--
Unknown Speaker: Well, why don't you just, why don't you just limit the amount of outside waste that can come in?
Mr. Nettles: --Well, that is one of the purposes of the statute.
The primary purpose was to reduce this.
Unknown Speaker: One of the purposes is also to make some money off of outside waste.
Mr. Nettles: Your Honor, we would--
Unknown Speaker: Isn't that right?
Mr. Nettles: --That's one of the factors.
Reduce the volumes, control under Alabama's inherent police power tradition, and number two, compensation for the burdens that are being transferred from North Carolina, from other exporting states, most of the states in the country, some 48 other states, that transfer of risk that they are sending into Alabama, to ask them to share in the burden.
Unknown Speaker: --You don't think the same thing would apply to just plain trash?
Mr. Nettles: --No, sir.
That's the difference in this and the City of Philadelphia case.
I would cite one instance, the question has been raised as to possible preemption and the City of Philadelphia case did hold that they, the Court agreed with the New Jersey court that the state law had not been preempted by the Federal law, which in that case was RCRA.
That state law, the traditional police power concept, still has room to operate.
To give an illustration as to the volume problem we have in Alabama, consider the Chicago flooding.
The question would be would the Chicago River have burst through the retaining wall had only 11 percent of the volume been in the Chicago River rather than the full 100 percent.
See, this is the problem that Alabama has.
It does have an imminent and present threat, whether we have a tornado that may swoop down in these open trenches tomorrow or an earthquake.
We have there these millions of tons of hazardous waste already in place and they're going to be there forever, and that's the very nature of the problem that differs from the typical quarantine case.
And that's why Alabama has approached this in a way of trying to be a responsible market player, but trying to address the tremendously increasing volumes that may in themselves have changed the very nature of the risk, as in the Chicago flooding case, because--
Unknown Speaker: Well, I guess Alabama could impose a uniform tax on all waste, in-state and out.
Mr. Nettles: --And that is done under a base fee.
And it's interesting and reflective of Alabama's problem to address this across the board, that the same statute now under attack raised the base fee that applies to all in-state interest and the results of that in the 18 months of operation, 17.5 months, is that the ratio of out-of-state waste to in-state waste has actually slightly increased, going from an average of 85 to 90 percent to 89 percent hazardous waste still coming in from out-of-state.
We're still dealing with tremendous volumes.
Unknown Speaker: So you're defending a scheme that's ineffective?
Mr. Nettles: No, sir.
The effect of it has been to reduce the volumes, to reduce the volumes of hazardous waste coming in at a staggering proportion, almost 800,000 tons that had been increased over 200 percent in the years, immediate years preceding this.
And the second is to compensate Alabama for the total problems that would result from both the short range, financial problems, of health, safety concerns, and regulating, and in monitoring, and in the eventual remediation, clean up, and abatement that will be involved.
Unknown Speaker: But if the fee is so successful it seems to me that then everyone should have to pay it.
Then you have simply a blatant discrimination with no purpose.
Mr. Nettles: Well, the purpose we have--
Unknown Speaker: Well, your purpose could be precisely served, as you have just demonstrated it seems to me, by having a fee that's the same for in-state and out-of-state.
Mr. Nettles: --Well, the purpose there--
Unknown Speaker: Now we have a simple Commerce Clause case.
Mr. Nettles: --But, Your Honor, we would submit that this is a police power case in the sense that Alabama is one of a handful of states that happen to have a hazardous waste landfill in operation at the time of RCRA, and that since RCRA was adopted and since the amendments to RCRA in 1980 there have been no further hazardous waste facilities with one exception permitted.
The difficulty is because the national scheme has failed, and we are told simply do, sit back and do nothing, because EPA has done nothing and they talk about, the EPA problems have been addressed and of course the General Accounting Office Manual of June 1980, the report to Congress on the hazardous waste long-term problems that EPA had not addressed.
And the record itself contains complete documented findings of the trial court as affirmed by the Alabama Supreme Court that these problems are already very real, not just the threats, but there is the imminent danger already resulting from leakage.
The facility there is already leaking into the settlement chalk.
And this was a finding of the trial judge in stating that that was the apparent weight of the evidence, and found that to be the case.
And in this--
Unknown Speaker: So you're going to cure that just by raising the price of out-of-state waste?
Mr. Nettles: --By reducing the volumes.
What we're doing there is addressing what we fear to be the change in the very nature of the risk, and that's what distinguishes out-of-state waste from in-state waste, the tremendous volumes coming in from outside.
Because this could be, we fear, a synergistic or compounding effect.
Unknown Speaker: Well, your in-state wastes are contributing to the whole problem too, aren't they?
Mr. Nettles: But to a much lesser extent, and this, Alabama's--
Unknown Speaker: Well, I don't know.
I don't know.
That still doesn't explain why you're charging somebody from outside twice what you're charging inside.
Mr. Nettles: --What we're doing is attempting to approach--
Unknown Speaker: Does it?
Mr. Nettles: --approach this on a balancing bit.
We are not saying we are going to isolate ourselves from the national problem.
We're not attempting a total ban.
What we have done is saying we want to be a responsible player, but one thing we want to take less of this short and long-term risk by controlling the volumes, and we have substantially reduced the volumes although they are still coming in at over 250,000 tons a year.
And the second is to compensate us.
Unknown Speaker: --Well, I can't think of an interstate Commerce Clause case where the out-of-state burden was greater than the in-state burden just by share of numbers.
Mr. Nettles: Your Honor--
Unknown Speaker: You'd have to talk about trucking, traffic, whatever it is.
It's always the out-of-state that causes the problem.
But the point is you can't discriminate.
Mr. Nettles: --That's the uniqueness of this case, we submit.
This is a police power case.
This is a modified quarantine case.
It's an extension of Maine v. Taylor in the sense that a total ban Alabama felt was not appropriate or possibly not necessary, possibly Alabama felt could not be as well defended as addressing a more balanced reasonable approach not removing us from the market.
Now, the City of Philadelphia situation was quite different.
Not only do we have hazardous waste here and the inherent nature and problem of the problem of hazardous waste, we also did not have a total ban.
There is, we submit, the record shows that this is not an economic protection case in the sense that we are still allowing hazardous waste to come in.
What we have, too, is the fact that there can be, we fear, a distinguishing factor with respect to the amounts that, the volumes that Alabama in its findings of fact in the legislative pronouncement, the trial court having held that these legislative findings of fact were substantiated by the evidence, that these findings substantiate the concern of volumes changing the very nature of the risk.
And you have this intersection of police power with Commerce Clause cases.
Unknown Speaker: Mr. Nettles--
Mr. Nettles: Yes, sir.
Unknown Speaker: --It's a very sensible way to allocate the limited portion of your landfill that you want to go to out-of-state hazardous waste to use the rationing mechanism of price.
It has been found to be very efficient, and indeed the out-of-state people who most need it would use it if you use a high price.
Unfortunately that rationing mechanism runs a real risk of being abused, and maybe we should adopt a Commerce Clause principle that if you wanted to exclude it entirely, that's okay, or even if you wanted to place a certain tonnage limit on out-of-state, that might be okay.
But here you've used price, and as far as we know you may just be doing this just to milk out-of-staters, just as has been done in other Commerce Clause cases.
Mr. Nettles: But no hazardous waste situation, Your Honor, no record in any of those tax cases or highway transportation cases, any that approach the concern or even talk about police power considerations that are involved here with the protection of health and safety and the environment.
And that this--
Unknown Speaker: All we know for sure is that you're making a lot of money on it and imposing substantial costs on out-of-state industries which your own industries don't have to bear.
We know that for sure.
Whether it's going to reduce volume or not, you know, it may a little bit.
Mr. Nettles: --But Alabama industries are there.
They're going to be there for the eventual abatement, remediation, and clean up.
They'll be there if the disaster strikes in the interim, if there is a further earthquake, if there is a tornado.
And the Justice Department says well, these are threats.
Well, threats alone can be sufficient to and are held to be sufficient to warrant police power protection of state law as evidenced in Maine v. Taylor and also in Reid v. Colorado, the case cited by the petitioner.
And that's what we have here, not only the threat but also the very real present problems.
We've got a national situation that hasn't worked.
There is no effort being made by EPA to get other facilities to be brought on-line.
There has been talk in the brief about the NIMBY syndrome, the not in my backyard syndrome.
That's what Alabama has been fighting.
And the problem here is the fact that under the present plan that if this type of situation, the position of the Justice Department and EPA and petitioner are upheld, then any state looking at the problem rather than going forward and trying to take a responsible position and permitting, allowing the citing of a hazardous waste facility within their own state would think again, because to do so you would lose control.
You would have again the threat of out-of-state swamping wherever it's located, whether in Maine or North Carolina or any of these other states.
But to approve the concept, and that's all we're talking about here, the amount of the fee has never been challenged in the courts below.
It's just the concept that we can't do anything differently with respect to out-of-state waste.
And because of that we have the very real problem that there is no relief in sight, and if we did nothing, no matter what we did whether it was a ban or--
Unknown Speaker: But Mr. Nettles, isn't it true that you do have a cap on the amount of waste that, altogether?
Mr. Nettles: --Yes, sir.
And that has helped bring down the volumes, but it still doesn't--
Unknown Speaker: Well, why do you need an additional means to bring it down?
Mr. Nettles: --Because of the fact that we still have the volume of over 250,000 tons of out-of-state hazardous waste coming in.
Unknown Speaker: Is that your limit, the 250,000 tons?
Mr. Nettles: --No.
Yes, sir, it's closer to 300,000 tons across the board.
It's interesting again that the--
Unknown Speaker: But the cap doesn't differentiate between in-state and out-of-state waste?
Mr. Nettles: --No, sir, it does not.
Unknown Speaker: So if you've got a cap that apparently you can handle, why then do you have to charge some waste more than others?
Mr. Nettles: Because the problem is still there.
Eventually it's going to leave.
Now, that has been the finding of all the--
Unknown Speaker: Yeah, but does the cap keep it from, I mean, does the additional, the $72 tax make it less than the cap, or just another way is making sure nobody violates the cap?
Mr. Nettles: --The more waste you put into that river of toxins there at Emelle--
Unknown Speaker: But you can't put in more than the cap, can you?
Mr. Nettles: --No, sir, but you still have, even with the cap in place, that's left us with 250, more than 250,000 tons of out-of-state waste coming in.
Unknown Speaker: But you're going to have that 250,000 tons no matter whether you've got this tax or not.
Mr. Nettles: And the point is then you look at the compensatory nature of it, the fact that this is a transfer of risk, of actual risk from out-of-state into Alabama of very dangerous toxins that are involved in this, unlike anything else.
It's a very unique situation.
Unknown Speaker: Do you ship any hazardous waste out of the state yourselves?
Mr. Nettles: Yes, sir.
And we would have no problem with the concept--
Unknown Speaker: If they prohibited that, that Texas wouldn't take that.
Mr. Nettles: --We would have no problem with the fact that other states who accommodate our waste water situation, we have an agreement set up that they charge a differential fee to accommodate Alabama in that respect, just as we are accommodating other states who are transferring their problems to us.
Unknown Speaker: I thought we overruled such reciprocal arrangements in the Katrell case.
Mr. Nettles: But that, Your Honor, we submit was not a police power hazardous waste case.
Again, this is a very--
Unknown Speaker: You say police power.
I can't think of anything that isn't the police power.
Everything is the police power.
Mr. Nettles: --Not where the health and safety and welfare of the people are involved and environmental concerns.
Unknown Speaker: I can't think of any law that's not for the health, safety, and welfare of the people.
It's a question of degree.
Mr. Nettles: Well, the degree here is certainly accentuated and it is set out in the record that we have here the documentation not only of the trial in Alabama, 4-day trial and the depositions that went on before then, but we have the General Accounting Office's own report that shows that there is just no long range planning by EPA, has been none to plan beyond 30 years.
And yet everybody concedes that landfilling is totally undesirable.
It's the least desirable form of disposing of hazardous wastes because it's going to be with us forever and there is just no way to keep it from leaking.
The problem again is the volumes, where you have these large volumes of out-of-state hazardous waste coming in and have been coming in and are continuing to come in.
Then the threat is that that changes the very nature of the risk, just as again the Chicago River situation.
Unknown Speaker: What do they mean by sanitary waste disposals?
Mr. Nettles: Your Honor--
Unknown Speaker: Do you think that's an oxymoron or something?
Mr. Nettles: --Yes.
There's just no way you can do it, and that's the finding of the General Accounting Office.
That's the testimony.
This stuff is already out there.
The debate in the trial court was how long will it take before it leaks out into the groundwater, before it leaks out into the surface water, and the debate, during that debate it was brought out that there are unmapped faults and fractures in the settlement chalk.
Unknown Speaker: You've asked about the Chicago River, do you suppose it would have helped if they had tried to keep the Wisconsin water out of the river and the Michigan water and just let Illinois water up the river?
I don't understand the analogy.
I really don't.
Mr. Nettles: The volumes there.
Unknown Speaker: Sure, but you've got a control on the volume here.
Mr. Nettles: But it's not sufficient in and of itself to say that those volume controls of the cap will cure the problems.
We have the facility there for, obviously it was there before.
We have Alabama waste being generated, but a very, very small proportion of it.
What is significant is the threat of the synergistic effect, the compounding effect of these tremendously large volumes coming in from out-of-state.
Unknown Speaker: But those findings that detail, and they are detailed in the legislature and in the trial court, do not indicate, unlike the Maine against, the Maine case with the fish inspection, that there's any difference at all between the out-of-state waste and the locally generated waste in terms of the hazard.
Mr. Nettles: --Well, again, the volumes, the findings, the first two or three specific findings of the legislature address the volumes coming in from out-of-state.
Unknown Speaker: Right.
Mr. Nettles: Secondly, there was testimony in the trial court from Tom Joiner, a former state geologist and also from Sue Robinson, official with the Alabama Department of Environmental Management, that the volumes were the problem.
And the inference to be drawn from that is the synergistic problem of compounding that we face here, just as the Maine case was a threat that some of these power sites may cause some kind of harm to the Maine fishing industry.
Unknown Speaker: But Mr. Nettles, I think Justice Stevens asked you wasn't there a finding that there was no difference in toxicity as between local waste and... or did the court not find any difference in toxicity between local waste and out-of-state waste.
That's a question that could be answered yes or no.
Mr. Nettles: The trial court found there was no difference in the, to distinguish in-state waste from out-of-state waste.
The difficulty that the trial court did not address was the fact of the compounding effect of all of the volumes of hazardous waste coming in from the outside.
And to go further with the distinctions we have here as opposed from the City of Philadelphia case is the fact that we have unlimited, practically unlimited capacity there at the Emelle facility.
Further, there are facilities under the restrictions, under these oxymoron restrictions or whatever that are promulgated by the Government, there is this testimony in the court below from the petitioner's own expert witness was that every state could come up with a facility, a hazardous waste facility to take care of its own waste.
The difficulty is no other states have done so.
No other states have stepped forward in this situation other than the one facility appropriately named at Last Chance, Colorado.
The situation here is such that unless, unless there is an effort by Alabama to do, to protect its health, safety of its citizens and the environment, then, and to receive compensation for the transfer of the risks that are coming in.
Unlike City of Philadelphia there was, that was an outright ban case with no transfer of risk.
Here we have the transfer of risk of the problems from these other states into Alabama.
And we submit Alabama, through its police power, has a right to control the volumes through the additional fee and also to receive compensation.
Unknown Speaker: Just as long as you get paid enough you can increase the risk to your people?
Mr. Nettles: No, sir, because--
Unknown Speaker: Well, what is it then?
You're getting paid for transferring the risk, and the risk is being transferred, you say in large volume.
Mr. Nettles: --The threat is the large volumes.
It's the threat.
Unknown Speaker: Well, all right.
But here you keep letting in the, you keep accepting this out-of-state waste and all, and the reason is, apparently, is that you, that they're willing to pay the price you charge.
Mr. Nettles: But, Your Honor, this is the thing that has brought the volumes down, that has reduced the threat of the compounding--
Unknown Speaker: Well, that still means that as long as they pay enough you'll let them transfer the risk.
Mr. Nettles: --Well, sir, because we have--
Unknown Speaker: Is that right?
Mr. Nettles: --Again, we submit that that is the appropriate way to address this, the reasonable way, and still remain a player in the national marketplace, not to isolate ourselves from the problem.
And that's what happened with New Jersey in the City of Philadelphia case.
That was the--
Unknown Speaker: So suppose you charge what the traffic will bear?
Mr. Nettles: --Again, Your Honor, the question was--
Unknown Speaker: From outside.
You will charge what the market will bear and what people from outside the state are willing to charge, willing to pay.
Mr. Nettles: --In this instance it's established that the ratio has remained constant.
But again, the reasonableness of the difference has not been challenged in this case.
That was not raised in the court below.
Unknown Speaker: Well, maybe if you charged a higher price to your locals they would be more careful about generating solid, hazardous waste.
Mr. Nettles: And we did increase the price to the locals.
Unknown Speaker: Well, I know, but not to $72.
Mr. Nettles: No, sir.
But at the same time the locals are going to be there to be confronted with the short and long-term health hazards there within their own State of Alabama.
Unknown Speaker: Well therefore I would think they ought to... if they're going to consistently and for over the long-term contribute to this risk, they, why shouldn't they have to pay what others do?
Mr. Nettles: Because, Your Honor, it's the nature of the risk, we submit, is the compounding, the synergistic effect of the tremendous volumes, the threat of that coming in from out-of-state.
And this is the problem that we wouldn't, I think inference can be drawn that Alabama wouldn't be confronted with, and certainly not to the same extent.
Unknown Speaker: No, but isn't it perfectly clear if we just apply the laws of economics, if you raise the tax to your locals to $72 a ton, or whatever it is, you would have less waste generated in Alabama?
Wouldn't that be a desirable thing to have happen?
Mr. Nettles: But that overlooks, Your Honor, we submit, the key distinction here.
That is that the origin of the volumes, the tremendous volumes of hazardous waste, the 89 percent, continuing to come from out-of-state, and that this again represents a unique situation, a transfer of risk into Alabama.
And what is going to happen if the Court submitted the fact that if the Court... that it would be in the national interest for the Court to uphold Alabama's differential fee, because if it's not upheld, if this is struck down, then the states like Alabama are really going to have to be thinking long and hard before they subject their people to the problems that would result from their locating a hazardous waste landfill within their own, within their own district, because the difficulty, again, is something unique.
And this is a problem that can be distinguished from any of the tax cases, any of the highway cases that have been cited in petitioner's brief, that this is really not a Commerce Clause case, we submit, so much as a police power case.
And that in this instance the record, so totally different from the New Jersey case, shows an effort by Alabama to do the two things, one, to reduce the large quantities of hazardous waste coming in from out-of-state which in part has been accomplished, and then, and then to compensate for the transfer of risk.
Unknown Speaker: I take it that, from what you just said that you have some doubt about your being able to satisfy the normal Commerce Clause test where there is a discrimination.
Mr. Nettles: Your Honor--
Unknown Speaker: Do you or do you not?
Mr. Nettles: --We... no, sir, we don't, in the sense that there is, we submit, still the difference, the--
Unknown Speaker: So you think you really have to go to another rationale, namely an expansion of the quarantine cases?
Mr. Nettles: --That, Your Honor, that coupled with the difference, the threat in difference and the nature of the risk because of the fact that the volumes change them.
Unknown Speaker: So your answer is yes.
Yes, you have to go to another rationale other than--
Mr. Nettles: No, sir.
Unknown Speaker: --You just said you couldn't satisfy the normal Commerce Clause test.
Mr. Nettles: Well, because what we're showing is that on its face it may be discriminatory, but in the practical effect it is not.
Practical effect would take into consideration, and that's of course, as I understand it, the test that was applied in Wyoming v. Oklahoma.
Unknown Speaker: So you're saying that you can satisfy the normal Commerce Clause test?
Mr. Nettles: We would submit we could, Your Honor, because the practical effect of what Alabama--
Unknown Speaker: Well, why isn't there a non-discriminatory way of controlling the volume of hazardous waste that you're willing to put up with in your state?
Mr. Nettles: --We respectfully submit that this is in its practical effect not discriminatory because of the fact that the nature of the risk is different because of the tremendous volumes coming in from out-of-state, and you have a balancing test, we submit, that would be the more, that has been recognized and would be appropriate in this instance where you balance the risk and burdens to Alabama as opposed to the risk and burdens of outside.
And I would suggest this.
That the approach being taken by Alabama is something that is certainly, the credibility of it is certainly strengthened by the fact that you have the National Governors' Association, the National Council of State Governments, and the five other national, state, and municipal organizations which have joined together.
Unknown Speaker: Thank you, Mr. Nettles.
Mr. Pincus, you have 2 minutes remaining.
Rebuttal of Andrew J. Pincus
Mr. Pincus: Thank you, Mr. Chief Justice.
First of all, the reliance on volumes from out-of-state is a complete red herring.
This is a per ton tax.
If there are greater volumes from out-of-state, out-of-staters will pay more because the tax is imposed on every ton.
Second of all, respondents argue again that they're being responsible in taking care of their own.
On that theory a state should be able to restrict access to hospitals within the state to its own citizens because it would prefer to take care of its own health problem and other states should take care of all.
That argument has been consistently rejected in City of Philadelphia and all of this Court's Commerce Clause cases.
Basically the claim here is that the national solution, the national process hasn't worked.
Then Alabama can go to Congress and pass, get relief the way that the states with nuclear disposal sites did and got the Low Level Radioactive Waste Act passed.
Finally, this compensation argument that the amount of the tax can be balanced against risks is again totally baseless in this Court's jurisprudence.
If that were right, a state that had a manufacturing facility could impose an export tax on the theory that its residents bore the burdens of air and water pollution, but the out-of-staters didn't, so that it shouldn't, its residents shouldn't have to pay the tax but the out-of-staters should.
That would destroy the national union that the framers wanted and lead each state to impose these disparate economic burdens in order to achieve some rough parity, and that's not what the Commerce Clause is about.
Thank you, Your Honor.
Chief Justice Rehnquist: Thank you, Mr. Pincus.
The case is submitted.
Argument of Speaker
Mr. Kneedler: The opinion of the Court in No. 91-471, Chemical Waste Management versus Hunt will be announced by Justice White.
Argument of Justice White
Mr. White: For reasons very similar to those given by Justice Stevens in the Michigan trash case that was just announced, we hold that the Alabama statute at issue in this case which deals with hazardous waste is also an unconstitutional discrimination against interstate commerce.
Hence, we reverse the judgment of the Alabama Supreme Court and remand the case for further proceedings.
The Chief Justice has filed a dissenting opinion.