by Bob Ewing
Bob Ewing is the communications coordinator at the Institute for Justice, a public-interest law firm that litigates nationwide in defense of economic liberty.
The most important part of the case for economic freedom is not its vaunted efficiency as a system for organizing resources, not its dramatic success in promoting economic growth, but rather its consistency with certain fundamental moral principles of life itself.
–Benjamin A. Rogge
Is there a right to engage in the trash-hauling business without government restriction? In courtrooms across the country this basic question is being debated. Consider the following cases:
On December 22 a federal court in Minnesota issued a temporary restraining order against the city of Red Wing, preventing it from enacting a law that would force all private commercial trash haulers to use the City’s costly incinerator. The law was to go into effect at the beginning of the year but is now on hold until the suit filed by the Institute for Justice is reviewed in court.
On January 4 the Washington Supreme Court decided to hear a trash-hauling case out of Seattle. Four years earlier two large politically connected corporations convinced the city to change its laws so that it would be illegal for small entrepreneurs to compete with them by hauling commercial trash. In May 2003 the Institute for Justice filed suit on behalf of the entrepreneurs.
On January 8 the U.S. Supreme Court heard oral arguments in a trash-hauling case from upstate New York. Two rural counties passed legislation that forces all waste in their region to be hauled to a government-owned facility, depriving entrepreneurs and consumers of the opportunity to use the facilities of their choice.
The Constitution appears to side with the entrepreneurs. Article I, Section 8, provides Congress the authority to regulate commerce . . . among the several States. This means that individual states lack the power to restrict trade that occurs between states (which is at the heart of the Minnesota and New York cases). As Supreme Court Justice Kennedy said during oral argument on January 8, Basic Commerce Clause analysis says that a state can't regulate what happens to the goods that go into another state. . . . New York can't mandate what happens in interstate commerce.
In 1994 the Supreme Court struck down as a violation of the Commerce Clause a law forcing all solid waste in a town to be taken to one politically connected private entity.
The State of New York claims its case is different because the monopoly dump belongs to the government and not a private corporation. If the government owns the facility, the argument goes, it can turn it into a monopoly.
This distinction, if permitted, would drastically alter the Commerce Clause. Further, government ownership of the facility encourages corruption since the city has an incentive to discriminate. The issue in Minnesota, for example, is purely economic: Red Wing wants its costly incinerator to succeed — so the city is forcing everyone to do business with it.
In the January 8 arguments Justice Stephen Breyer expressed concern that if the Court rules against New York, states would lack the power to maintain any government monopolies, such as utilities. Chief Justice John Roberts seemed concerned about this as well: What do we do with utilities? Where do we draw the line?
The question, however, should be this: Is there something about trash hauling that implicates the government's inherent police power?
Governments began granting utility monopolies because it was believed utilities would not exist otherwise (this is wrong because the company that incurs the expense of building infrastructure can recover the cost by renting its wires) and — as a practical manner — multiple providers tearing up roads and laying wires all over town might be problematic. But even here competition can work.
A Hamburger Monopoly
The same kinds of considerations do not apply to competing trash haulers. If garbage is subject to monopoly regulation, where does this power end? As Justice Joseph Alito correctly asked, Should the government be the sole provider of hamburgers in New York?
Cities should not be able to forbid the exporting of waste any more than they can forbid the exporting of lamps or the importing of computers. Further, consumers should be free to choose who provides their goods and services, including trash hauling. Governments and politically connected businesses should not be able to take this freedom away.