Plant could face legal challenges

Association: Lake County plan may violate interstate commerce laws
2010-04-11T00:10:00Z Plant could face legal challengesBy Marc Chase -, (219) 662-5330

A national trade group is considering legal action against Lake County government, claiming a plan to route all county trash to a future processing site may violate fair labor practices and skirt legal precedent.

It's a potential legal quagmire. Lake County Solid Waste Management District officials hoped to avoid legal problems by brokering a deal to own the planned trash processing facility while allowing a private company to run the plant and reap the profits.

County officials said that by assuming ownership of the facility -- which aims to transform the county's trash into the gasoline alternative ethanol -- it avoided trouble with U.S. Supreme Court precedent dictating that local government can't route trash to any one processing facility unless the government entity owns the processing operation.

Proponents of the plant believe it will consolidate trash processing in the county at a savings to taxpayers and municipal government.

But the legal counsel for the Washington, D.C.-based National Solid Wastes Management Association said because a private, for-profit company would be operating the facility, the plan would run counter to rulings by the high court.

The association's general counsel, David Biderman, said the trade group is considering its legal options regarding the Lake County plan for a trash-to-ethanol facility through which all municipal solid waste would be routed.

"We are concerned about the process by which the proposed plant is being imposed on businesses and residents," said Biderman, whose group represents trash hauling and disposing companies throughout the country. "This essentially creates a disposal monopoly, eliminating competition in the waste disposal market ...

"I think what is going on in Lake County is very vulnerable to a legal challenge."

Biderman was referring to an interlocal agreement in Lake County that would route all municipal and county trash to the proposed trash-to-ethanol facility.

In a 1993 ruling, the U.S. Supreme Court ruled that the town of Clarkstown, N.Y., violated laws governing interstate commerce by adopting an ordinance that routed all municipal trash to a private processing facility within town limits, thus depriving out-of-state trash processors access to the local market. The court sided with the trash company that brought the suit, C & A Carbone Inc.

However, Lake County Solid Waste Management District officials argue the proposed trash-to-ethanol plant would conform with the law because the district itself, a government body, would own the ethanol plant.

In another case before the U.S. Supreme Court in 2006, United Haulers Association Inc. sued a pair of counties in New York state that banded together to build a trash processing plant and adopted an ordinance to route all waste there. In that case, the high court ruled that interstate commerce laws were not violated because the governments of Oneida and Herkimer counties -- not a private business interest -- owned and operated the plant to which trash was routed.

Jeff Langbehn, executive director of the Lake County Solid Waste Management District, concedes a private company, Powers Energy One of Indiana LLC, will build the trash-to-ethanol plant in Schneider -- and will reap the profits from operating it.

That differs from the Oneida-Herkimer Solid Waste Authority, established and run by government authority and employees, said Oneida-Herkimer Executive Director William A. Rabbia.

Actual ownership of the Lake County plant will transfer -- under contract with Powers -- to the district on the first day of operation, thus making it government-owned, Langbehn said. Langbehn and Cliff Duggan, attorney for the solid waste district, said they are confident the county's contract with Powers will hold up to any legal challenges.

Biderman disagrees. He called the scenario of government ownership described in the contract between Lake County and Powers as "nominal."

"Based on the decisions, the county is only authorized to do this if it owns and operates the facility in question," Biderman said. "We are seriously considering our legal options here."

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