updated 1/4/2008
Municipal liability for pollution
Local governments are particularly vulnerable to liability for environmental violations resulting in fines, criminal penalties, and litigation. In addition, state and federal cleanup laws (e.g., Superfund) make contractors and arrangers just as liable as owners and operators of waste facilities for the full cost of any future cleanup. For example, a recent audit of potential liability by DuPage County, Ill., shows that a $232 million fund is needed for nine closed landfills to cover expected costs over the next 40 years.
A municipality cannot avoid liability for future cleanup costs if it sells a landfill outright, if "at the time of disposal of any hazardous substance [it] owned or operated any facility at which such hazardous substances were disposed of." CERCLA Section 107, 42 U.S.C. § 9607(a)(2). Liability can also be established if the municipality "accepts or accepted any hazardous substances for transport to disposal" to a disposal facility it once owned. Id. at (a)(4).
Faced with as much potential liability for post-closure care and cleanup costs as they would be if they retained control of landfills, transfer stations and waste haulers, many municipalities are reconsidering past decisions to privatize these services. Recent federal law sharply limiting restrictions on municipal "flow control" of garbage also encourages municipalities to enter the market as owners and operators of waste management services. When they do, they may legally charge higher rates for out-of-area garbage, control licensing of the private haulers they choose to contract with, and effectively subsidize local waste management. As participants in the waste market, municipalities can avoid the application of flow congtrol restrictions. Retaining public control, in other words, promises to secure a revenue stream that can finance enhanced recycling and disposal reduction programs, and thereby extend the life of a local landfill. Localities need not become "host communities" for giant regional landfills.
The links to the left provide municipal officials and community advocates with tools they need to understand and implement local flow control and more responsible waste management.
If a municipality decides to contract out any part of its waste management responsibilities, tools from LGEAN and the U.S. EPA help determine what the "full cost" of providing local permits will be, and how to negotiate a fair host community benefit package, taking into account the continuing environmental liability of municipalities.
The waste industry has until recently trumpeted an interpretation of the U.S. Constitution's Commerce Clause that was soundly rejected by the U.S. Supreme Court's United Haulers decision in 2007, in which the high court said municipalities can dictate where all garbage haulers within its jurisdiction must take their haul.
The United Haulers ruling says discrimination against out-of-area garbage companies is permitted where "a municipality is acting within its traditional purview," to protect "compelling" local safety interests. This ends the strangle-hold of private waste companies on rural communities and cuts the ground from under predatory lawsuits to force communities to host private landfills. Local "flow control," requiring all local waste to go to publicly-owned transfer stations and landfills, ensures that these facilities will have a reliable revenue stream.
With such revenues, local government can implement responsible waste policies and ensure that service payments circulate locally instead of increasing profits at Waste Management headquarters in Houston, Texas, Casella headquarters in Rutland, Vermont, or Vivendi headquarters in Paris, France.
Local control using bad actor review. Local municipal agencies can condition their approval of waste facility proposals on their assessment of the trustworthiness of a company to comply with existing health and safety regulations. Almost all environmental compliance is based on self-monitoring and self-reporting. This puts a tremendous emphasis on the track record of a company proposing any environmentally risky project.
State and local governments already have a common law power to reject applications or even low bids from companies with a questionable track record. Subsidiaries of Waste management, Inc., the largest such company, have been repeatedly turned away on these grounds. In fact, in 2000 the company warned its stockholders that state and local laws requiring a bad actor review could affect the company's bottom line: "These laws authorize the agencies to make determinations of an applicant's fitness to be awarded a contract or to operate and to deny or revoke a contract or permit because of unfitness absent a showing that the applicant has been rehabilitated through the adoption of various operating policies and procedures put in place to assure future compliance with applicable laws and regulations." (WMI's Form 10-K, filed on 3/30/2000 with the Securities & Exchange Commission, available at: http://www.sec.gov/edaux/formlynx.htm --enter "Waste Management" for the company name, then click the link for "3-30-2000 10-K".)
One town's success in defending its ban on landfills should be a lesson to all rural New York towns. The Town of Root prevailed against the two most common arguments brought by private landfill developers, that state regulations preempt or supercede local powers to regulate waste management, and that the Commerce Clause prohibits any interference in the market in waste.
LINKS
The Local Government Environmental Assistance Network provides elected and appointed local government officials with information to better identify and manage their environmental risks.
The U.S. Environmental Protection Agency provides guidance on determining the full cost of hosting environmentally risky facilities.
Local flow control should be distinguished from federal flow control, a proposal to enact federal legislation authorizing states to restrict interstate commerce in garbage. Congress has failed to enact federal flow control legislation every year for more than a decade. However, in April 2007 municipalities were authorized by the U.S. Supreme Court to enact local laws mandating all waste generated within their jurisdiction be managed at publicly owned facilities.
Counties and towns can empower a public authority, either on their own or by means of intermuncipal partnerships, to take waste management off budget, create a separate bonding mechanism, and set prices for services that provide enough revenue to sustain local control over landfills, transfer stations and other waste-related facilities.
In New York, towns have long enjoyed the power to ban landfills. Download sample landfill ban laws here.
The Department of Environmental Conservation since 1991 has required applicants for an environmental permit to document their track record for the previous ten years. Local governments can adopt this policy too.
