Editing Dormant Commerce Clause (section)

==Local processing requirements==
Discrimination in the flow of interstate commerce has arisen in a variety of contexts. A line of important cases has dealt with local processing requirements. Under the local processing requirement, a municipality seeks to force the local processing of raw materials before they are shipped in interstate commerce.

===No local processing preference===
The basic idea of the local processing ordinance was to provide favored access to local processors of locally produced raw materials.  Examples of Supreme Court decisions in this vein are set out in its ''Carbone'' decision. They include ''Minnesota v. Barber'', 136 U.S. 313, (1890) (striking down a Minnesota statute that required any meat sold within the State, whether originating within or without the State, to be examined by an inspector within the State);  ''Foster-Fountain Packing Co. v. Haydel'', 278 U.S. 1 (1928) (striking down a Louisiana statute that forbade shrimp to be exported unless the heads and hulls had first been removed within the State);  ''Johnson v. Haydel'', 278 U.S. 16 (1928) (striking down analogous Louisiana statute for oysters);  ''Toomer v. Witsell'', 334 U.S. 385 (1948) (striking down South Carolina statute that required shrimp fishermen to unload, pack, and stamp their catch before shipping it to another State);  ''[[Pike v. Bruce Church, Inc.]]'', supra  (striking down Arizona statute that required all Arizona-grown cantaloupes to be packaged within the State prior to export);  ''[[South-Central Timber Development, Inc. v. Wunnicke]]'', 467 U.S. 82 (1984) (striking down an Alaska regulation that required all Alaska timber to be processed within the State prior to export). The Court has defined "protectionist" state legislation as "regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors". ''New Energy Co. of Indiana v. Limbach'', 486 U.S. 269, 273&ndash;274 (1988).

===''Carbone'': local processing law benefiting private entity===
{{Main|C&A Carbone, Inc. v. Town of Clarkstown, New York}}

In the 1980s, spurred by [[RCRA]]'s emphasis on comprehensive local planning, many states and municipalities sought to promote investment in more costly disposal technologies, such as [[waste-to-energy]] incinerators, state-of-the-art landfills, composting and recycling. Some states and localities sought to promote private investment in these costly technologies by guaranteeing a longterm supply of customers.<ref>Phillip Weinberg, Congress, the Courts, and Solid Waste Transport:  Good Fences Don't Always Make Good Neighbors, 25 Envtl. L. 57 (1995)</ref><ref>Atlantic Coast Demolition & Recycling, Inc., 112 F.3d 652, 657 (3d Cir. 1997)</ref> For about a decade, the use of regulation to channel private commerce to designated private disposal sites was greatly restricted as the result of the Carbone decision discussed below.

Flow control laws typically came in various designs. One common theme was the decision to fund local infrastructure by guaranteeing a minimum volume of business for privately constructed landfills, incinerators, composters or other costly disposal sites. In some locales, choice of the flow control device was driven by state bonding laws, or municipal finance concerns. If a county or other municipality issued general obligation bonds for construction of a costly incinerator, for example, state laws might require a special approval process. If approval could be obtained, the bonds themselves would be counted against governmental credit limitations, or might impact the governmental body's credit rating: in either instance the ability to bond for other purposes might be impaired. But by guaranteeing customers for a privately constructed and financed facility, a private entity could issue its own bonds, privately, on the strength of the public's waste assurance.

The private character of flow control regimens can thus be explained in part by the desire to utilize particular kinds of public financing devices. It can also be explained by significant encouragement at the national level, in national legislation as well as in federal executive policy to achieve environmental objectives utilizing private resources. Ironically, these public-private efforts often took the form of local processing requirements which ultimately ran afoul of the commerce clause.

The Town of Clarkstown had decided that it wanted to promote waste assurance through a local private transfer station.  The transfer station would process waste and then forward the waste to the disposal site designated by the town. The ordinance had the following features:

Waste hauling in the Town of Clarkstown was accomplished by private haulers, subject to local regulation. The scheme had the following aspects:
# The town promoted the financing of a privately owned transfer station through a waste assurance agreement with the private company. Thus the designated facility was a private company.
# The Town of Clarkstown forced private haulers to bring their solid waste for local processing at the designated transfer station, even if the ultimate destination of solid waste was an out-of-state disposal site.
# The primary rationale for forcing in-state waste into the designated private transfer station was financial; it was seen as a device to raise revenue to finance the transfer station.

The Town of Clarkstown's ordinance was designed and written right in the teeth of the long line of Supreme Court cases which had historically struck down local processing requirements. In short, it was as if the authors of the ordinance had gone to a treatise on the commerce clause and intentionally chosen a device which had been traditionally prohibited. A long line of Supreme Court case law had struck down local processing requirements when applied to goods or services in interstate commerce. As the Court in ''Carbone'' wrote:

<blockquote>We consider a so-called flow control ordinance, which requires all solid waste to be processed at a designated transfer station before leaving the municipality. The avowed purpose of the ordinance is to retain the processing fees charged at the transfer station to amortize the cost of the facility. Because it attains this goal by depriving competitors, including out-of-state firms, of access to a local market, we hold that the flow control ordinance violates the Commerce Clause.</blockquote>

The Court plainly regarded the decision as a relatively unremarkable decision, not a bold stroke. As the Court wrote: "The case decided today, while perhaps a small new chapter in that course of decisions, rests nevertheless upon well-settled principles of our Commerce Clause jurisprudence." And, the Court made it plain, that the problem with Clarkstown's ordinance was that it created a local processing requirement protective of a local private processing company:

<blockquote>In this light, the flow control ordinance is just one more instance of local processing requirements that we long have held invalid ... The essential vice in laws of this sort is that they bar the import of the processing service. Out-of-state meat inspectors, or shrimp hullers, or milk pasteurizers, are deprived of access to local demand for their services.  Put another way, the offending local laws hoard a local resource&mdash;be it meat, shrimp, or milk&mdash;for the benefit of local businesses that treat it. 511 U.S. at 392&ndash;393.</blockquote>

===United Haulers: local processing law benefiting public entity===
{{main|United Haulers Association v. Oneida-Herkimer Solid Waste Management Authority}}

The Court's 2007 decision in ''[[United Haulers Association v. Oneida-Herkimer Solid Waste Management Authority]]'' starkly illustrates the difference in result when the Court finds that local regulation is not discriminatory.  The Court dealt with a flow control regimen quite similar to that considered in Carbone. The "only salient difference is that the laws at issue here require haulers to bring waste to facilities owned and operated by a state-created public benefit corporation." The Court decided that the balancing test should apply, because the regulatory scheme favored the government owned facility, but treated all private facilities equally.

<blockquote>Compelling reasons justify treating these laws differently from laws favoring particular private businesses over their competitors. "Conceptually, of course, any notion of discrimination assumes a comparison of substantially similar entities." ''General Motors Corp. v. Tracy'', 519 U.S. 278 (1997). But States and municipalities are not private businesses&mdash;far from it. Unlike private enterprise, government is vested with the responsibility of protecting the health, safety, and welfare of its citizens. . . . These important responsibilities set state and local government apart from a typical private business.</blockquote>

The Court's further explained:

<blockquote>By the 1980s, the Counties confronted what they could credibly call a solid waste "'crisis.'" ... Many local landfills were operating without permits and in violation of state regulations. Sixteen were ordered to close and remediate the surrounding environment, costing the public tens of millions of dollars. These environmental problems culminated in a federal clean-up action against a landfill in Oneida County; the defendants in that case named over local businesses and several municipalities and school districts as third-party defendants The "crisis" extended beyond health and safety concerns. The Counties had an uneasy relationship with local waste management companies, enduring price fixing, pervasive overcharging, and the influence of organized crime. Dramatic price hikes were not uncommon: In 1986, for example, a county contractor doubled its waste disposal rate on six weeks' notice</blockquote>

The Court would not interfere with local government's efforts to solve an important public and safety problem.

<blockquote>The contrary approach of treating public and private entities the same under the dormant Commerce Clause would lead to unprecedented and unbounded interference by the courts with state and local government. The dormant Commerce Clause is not a roving license for federal courts to decide what activities are appropriate for state and local government to undertake, and what activities must be the province of private market competition. In this case, the citizens of Oneida and Herkimer Counties have chosen the government to provide waste management services, with a limited role for the private sector in arranging for transport of waste from the curb to the public facilities. The citizens could have left the entire matter for the private sector, in which case any regulation they undertook could not discriminate against interstate commerce. But it was also open to them to vest responsibility for the matter with their government, and to adopt flow control ordinances to support the government effort. It is not the office of the Commerce Clause to control the decision of the voters on whether government or the private sector should provide waste management services. "The Commerce Clause significantly limits the ability of States and localities to regulate or otherwise burden the flow of interstate commerce, but it does not elevate free trade above all other values."</blockquote>