In a move hailed by local governments, the U.S. Supreme Court decided last week to let stand a lower court ruling that gives the town of Smithtown, N.Y. the authority to contractually control the flow of garbage collected within its boundaries.
The court declined to review a ruling by the Second Circuit Court of Appeals that Smithtown could enter into contracts designating the disposal location, in effect enforcing flow control through a contract with a waste hauler.
In letting the Second Circuit decision stand, the court apparently approved the lower court’s analysis of Smithtown’s contractual arrangement as merely the action of a “market participant” when it negotiated its waste hauling contracts. The market participant doctrine is an exception to the constitutional prohibition on regulation of interstate commerce by states or local governments.
Under the doctrine, the town argued that it had used its police powers to eliminate the private market for solid waste disposal services and then provided those services itself through its contractors. As a “participant” in the solid waste industry market, the town was allowed to act like a private company and enter into contracts with other entities to provide trash collection. The cost of the contract is paid for through local taxes and fees.
This case is the first of many that are testing the parameters of the court’s 1994 flow control decision in Carbone vs. Town of Clarkstown. Dozens of counties, cities and towns throughout the country are involved in litigation that, if appealed all the way to the Supreme Court, will determine the degree authority remaining for local governments in managing their trash under the limits of the Carbone case.
At stake are millions of dollars in disposal fees that local governments rely on to pay off debt or recover their investments for solid waste systems.
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