Cibolo Waste, Incorporated v. City of San A

Case: 12-50153 Document: 00512243139 Page: 1 Date Filed: 05/15/2013

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
May 15, 2013

No. 12-50153 Lyle W. Cayce
Clerk

CIBOLO WASTE, INCORPORATED; C-6 DISPOSAL SYSTEMS,
INCORPORATED; AMERICAN DISPOSAL COMPANY; ANACONDA
DISPOSAL, L.L.C.; APACHE DISPOSAL, INCORPORATED; ABSOLUTE
WASTE; GRANDE DISPOSAL COMPANY; FELIX MALDONADO TRUCKING,
INCORPORATED; PRO STAR ROLL OFF DUMPSTERS; OTIS SPENCER,
doing business as River City Disposal; RIVER CITY WASTE, INCORPORATED;
SOUTHTEXAS REFUSE, INCORPORATED; TEXAS WASTE SYSTEMS,
INCORPORATED; BRENDA MALDONADO TRUCKING; CLARK
CONTRACTING SERVICES, INCORPORATED; DRC MATERIALS; TIGER
SANITATION, INCORPORATED,

Plaintiffs-Appellants
v.

CITY OF SAN ANTONIO,

Defendant-Appellee

Appeal from the United States District Court
for the Western District of Texas

Before STEWART, Chief Judge, DAVIS, and CLEMENT, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
Appellants Cibolo Waste et al. are waste haulers that operate throughout
the City of San Antonio and its surrounding counties. In 2006, the City of San
Antonio passed an ordinance imposing a permit fee for the collection or disposal
of waste within city limits. In response, Appellants filed suit against the City,
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No. 12-50153

claiming that the permit fee violates the dormant Commerce Clause by imposing
an excessive burden on interstate waste haulers. The district court dismissed
their claims and they appealed. As Appellants have failed to show that their
alleged injuries fall within the zone of interests protected by the dormant
Commerce Clause, we decline to address Appellants’ arguments because they
lack prudential standing, and we AFFIRM the district court’s dismissal of their
claims.

FACTS AND PROCEEDINGS
Appellee City of San Antonio (the “City”), by and through its Solid Waste
Management Department, oversees the collection and disposal of solid waste
within the City’s limits. Both the City and private waste hauler companies
(collectively “haulers”) offer collection and disposal services to residents and
commercial businesses. There are three landfills within city limits, one that is
a privatized City facility and two that are privately owned. Appellants Cibolo
Waste et al. (“Appellants”) are thirteen haulers that collect and dispose of waste
within the City and its surrounding communities. Appellants are all Texas
companies with their principal places of business in Bexar County, Texas. The
record does not indicate that Appellants currently do business or seek to do
business outside Bexar County.1
For over two decades, the City has regulated the waste management
industry through the issuance of permits for collecting or disposing of solid
waste. In 2006, the City adopted an ordinance that imposes a permit fee of
$2,250 for each vehicle weighing over 7,000 pounds that is used to collect or

1
In their complaint and at oral argument, Appellants acknowledged that they only do
business in the state of Texas. Additionally, at oral argument, Appellants conceded that they
could offer no evidence that they have expanded or seek to expand their business across state
lines.

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No. 12-50153

dispose of solid waste within the City. The permit fee is neither tied to the
volume of solid waste collected or disposed of by each hauler, nor based on the
number of times that a hauler uses a City landfill. Haulers that collect or
dispose of solid waste within the City are thus required to pay an annual flat fee,
regardless of whether they use a City landfill one time or one thousand times
that year. Under the ordinance, haulers that fail to acquire a permit before
collecting or disposing of waste are subject to financial penalties. Additionally,
the ordinance applies only to haulers that collect or dispose of waste within the
City’s corporate limits, not those that collect or dispose of waste in other
contiguous counties.
The permit fee is designed to cover the costs directly associated with the
monitoring of permit holders as well as the costs associated with the City’s
regulation of the waste management industry. Such costs include, but are not
limited to, environmental cleanup, code enforcement, infrastructure
maintenance, police and fire services, staffing, and overhead. Moreover, in order
to enforce the ordinance, the City must undertake a number of tasks, such as
providing and evaluating insurance paperwork that haulers are required to
submit with each permit application and assigning city officials to check haulers’
permits at dump sites and to conduct vehicle inspections.
According to Rose Ryan, Assistant Director of the City’s Solid Waste
Department, at the time of its passage, the ordinance was expected to generate
between $900,000 and $1.2 million in permit fee payments per year. While Ryan
was not able to identify the precise amount of money that the City needs to
enforce the ordinance, she noted that the overall cost of regulating the waste
management industry is approximately $3 million per year. The $3 million
estimate includes the costs of regulation and of providing other waste
management services to the City’s residents.

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Appellants filed suit in Texas state court, claiming that the permit fee
violates the dormant Commerce Clause and the Equal Protection Clause and
constitutes an illegal occupation tax.2 The City removed the case to federal
court. Appellants then filed an application for a preliminary injunction, which
the district court denied. The parties filed cross-motions for summary judgment,
and the district court granted summary judgment in favor of the City,
concluding that the ordinance does not interfere with interstate commerce.
Appellants filed a Federal Rule of Civil Procedure 59(e) motion to alter or amend
the judgment, and, upon its denial by the district court, Appellants timely
appeal.

STANDARD OF REVIEW
We review de novo a grant or denial of summary judgment, applying the
same standards as the district court. Holt v. State Farm Fire & Cas. Co., 627
F.3d 188, 191 (5th Cir. 2010). Viewing all evidence in the light most favorable
to the nonmoving party, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986), we will affirm a grant of summary judgment only if the evidence shows
that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law, FED. R. CIV. P. 56(a).

ANALYSIS
Every party that comes before a federal court must establish that it has
standing to pursue its claims. The doctrine of standing asks “whether the

2
In their response to the City’s motion for summary judgment, Appellants abandoned
their equal protection claim. Although they raise this claim again in their appellate brief, it
is waived. See Williams v. Time Warner Operation, Inc., 98 F.3d 179, 183 (5th Cir. 1996) (“We
refuse to review an argument that a party has failed to raise in response to a summary
judgment motion.”).

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litigant is entitled to have the court decide the merits of the dispute or of
particular issues.” Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11
(2004). The Supreme Court has described standing as “contain[ing] two
strands: Article III standing, which enforces the Constitution’s
case-or-controversy requirement; and prudential standing, which embodies
judicially self-imposed limits on the exercise of federal jurisdiction.” Id.
(citations and internal quotation marks omitted). Because Article III standing
is a threshold issue, we must address it before considering questions of
prudential standing. See Ford v. NYLCare Health Plans of Gulf Coast, Inc., 301
F.3d 329, 332 (5th Cir. 2002).
Article III standing requires a plaintiff to show: “(1) an injury in fact (2)
that is fairly traceable to the actions of the defendant and (3) that likely will be
redressed by a favorable decision.” Procter & Gamble Co. v. Amway Corp., 242
F.3d 539, 560 (5th Cir. 2001) (citations omitted). An injury in fact is “an
invasion of a legally protected interest which is (a) concrete and particularized
and (b) actual or imminent, not conjectural or hypothetical.” Lujan v. Defenders
of Wildlife, 504 U.S. 555, 560 (1992) (citations and internal quotation marks
omitted). The City contends that Appellants lack Article III standing because
they do not allege an injury that would be remedied by declaring the ordinance
unconstitutional.
Under our precedent, however, it appears that Appellants have made their
showing of injury in fact because the permit fee increases their cost of doing
business. In National Solid Waste Management Ass’n v. Pine Belt Regional Solid
Waste Management Authority, the waste hauler plaintiffs were injured by an
ordinance imposing a “tipping” fee for using the city’s landfill that ultimately
resulted in higher operating costs to haulers. 389 F.3d 491, 498 (5th Cir. 2004)
(“[P]laintiffs’ cost to dispose of waste [under the ordinance], including the tipping
fee and the transportation cost, would be higher than their current cost.”).

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Similarly, Appellants have incurred higher operating costs as a result of the
City’s ordinance, which imposes an increased cost per vehicle for obtaining a
permit to collect and dispose of waste in San Antonio.3 This injury to
Appellants—in the form of higher operating costs— is directly traceable to the
City’s ordinance, see id., and would be remedied, even if only temporarily, by a
holding that the ordinance is unconstitutional. The requirements for Article III
standing are thereby satisfied.
Even if a plaintiff establishes Article III standing, we may consider
whether prudential standing principles nonetheless counsel against hearing the
plaintiff’s claims.4 See Knutson, 699 F.2d at 236. The doctrine of prudential
standing embodies “judicially self-imposed limits on the exercise of federal
jurisdiction.” Elk Grove, 542 U.S. at 11. Moreover, as the Supreme Court has
observed, prudential standing:
[E]ncompasses “the general prohibition on a litigant’s raising
another person’s legal rights, the rule barring adjudication of
generalized grievances more appropriately addressed in the
representative branches, and the requirement that a

3
While the City has attempted to regulate the waste hauler industry through a
permitting process since the early 1990s, the City acknowledged that the permit requirement
was not enforced until the passage of this ordinance in 2006. Because Appellants were not de
facto required to obtain permits prior to 2006, the passage of the ordinance and its
corresponding increased enforcement procedures have raised the price of doing business for
haulers in the City.
4
Although the City raises the issue of prudential standing for the first time on appeal,
we retain discretion to consider its arguments because prudential standing, while not
jurisdictional, nonetheless affects justiciability. See Lewis v. Knutson, 699 F.2d 230, 236 (5th
Cir. 1983) (“[T]he constitutional limitation requiring an injury to satisfy the case or
controversy requisite goes to the court’s jurisdictional power to hear the case, while the
prudential limitation goes to the court’s administrative discretion to hear the case.”). Thus,
we are not required to address a party’s prudential standing arguments when they were not
raised below, see Ensley v. Cody Res., Inc., 171 F.3d 315, 320 (5th Cir. 1999) (refusing to
consider prudential standing where the defendant failed to object in the trial court); Bd. of
Miss. Levee Comm’rs v. EPA, 674 F.3d 409, 417–18 (5th Cir. 2012) (same), but have previously
exercised our discretion to do so, see, e.g., Pine Belt, 389 F.3d at 498–501.

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plaintiff’s complaint fall within the zone of interests protected
by the law invoked.”
Id. at 12 (quoting Allen v. Wright, 468 U.S. 737, 751 (1984)).
At issue here is whether Appellants’ claims fall within the “zone of
interests” protected by the dormant Commerce Clause. See Wyoming v.
Oklahoma, 502 U.S. 437, 469 (1992) (noting that the zone-of-interests test
“governs claims . . . under the negative Commerce Clause”); see also Pine Belt,
389 F.3d at 499 (“The key inquiry for prudential standing in this case is whether
the injury of which plaintiffs complain is ‘arguably within the zone of interests
to be protected’ by the dormant Commerce Clause, the ‘constitutional guarantee
in question’ here.”) (quoting Ass’n of Data Processing Serv. Orgs., Inc. v. Camp,
397 U.S. 150, 153 (1970)). Since the dormant Commerce Clause “is driven by
concern about economic protectionism—that is, regulatory measures designed
to benefit in-state economic interests by burdening out-of-state competitors,”
Dep’t of Revenue v. Davis, 553 U.S. 328, 337–38 (2008) (citation and internal
quotation marks omitted), an evaluation of the ordinance’s allegedly
protectionist features is critical to our consideration of Appellants’ dormant
Commerce Clause argument.
As such, we look to see if a claim under the dormant Commerce Clause
falls within the zone of interests by asking: (1) whether Appellants “have
standing to challenge the [ordinance] as facially discriminatory against out-of-
state economic interests,” or (2) whether Appellants “can merely challenge the
ordinance[] as being excessively burdensome to interstate commerce.” Pine Belt,
389 F.3d at 499. In other words, this test requires us to “ask whether the
ordinance[] ‘reflect[s] a discriminatory purpose or merely a discriminatory
effect.’” Id. at 497 (quoting Dickerson v. Bailey, 336 F.3d 388, 396 (5th Cir.
2003)). The test is disjunctive, allowing Appellants to show either that the

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ordinance discriminates against out-of-state interests on its face or that the
ordinance as applied unduly burdens their out-of-state interests.
The ordinance at issue does not facially discriminate against out-of-state
economic interests. A facially discriminatory ordinance is one that by its terms
authorizes “differential treatment of in-state and out-of-state economic interests
that benefits the former and burdens the latter.” Id. (quoting Or. Waste Sys.,
Inc. v. Dep’t of Envtl. Quality, 511 U.S. 93, 99 (1994)); see, e.g., Piazza’s Seafood
World, LLC v. Odom, 448 F.3d 744, 750 (5th Cir. 2006) (“Th[e] discrimination
appears on the face of the statute: the Catfish Statute treats domestic catfish
differently from foreign catfish to the benefit of the former and the detriment of
the latter.”). Here, however, the ordinance is applicable to any commercial or
industrial hauler, regardless of where the hauler originated or planned to end
its trip.5 It is a type of blanket prohibition that favors neither interstate nor
intrastate commerce. See, e.g., Empacadora de Carnes de Fresnillo, S.A. de C.V.
v. Curry, 476 F.3d 326, 336 (5th Cir. 2007); Int’l Truck & Engine Corp. v. Bray,
372 F.3d 717, 726 (5th Cir. 2004). Accordingly, Appellants lack standing to
challenge the ordinance on the basis that it is facially discriminatory against
out-of-state interests. See Pine Belt, 389 F.3d at 500.
Appellants also cannot satisfy the second prong of the zone-of-interests
test since they have not shown that the ordinance imposes an excessive burden
on interstate commerce. See id. (“An allegation that the plaintiff is involved in
interstate commerce and that the plaintiff’s interstate commerce is burdened by

5
Under the ordinance:
Any commercial and/or industrial hauler collecting, transporting
or disposing of solid wastes, regardless of characterization,
within the corporate limits of the City of San Antonio shall be
required to permit each vehicle used for transporting or hauling
solid waste materials upon public streets, public alleys or
highways within the corporate limits of the City of San Antonio.
SAN ANTONIO CITY CODE, Ch. 14, § 14-22(e)(16).

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the ordinance in question is sufficient to satisfy the zone of interests test with
respect to ordinances that assertedly impose an excessive burden on interstate
commerce.”). The critical inquiry is whether Appellants are engaged in
interstate commerce and, if so, whether their interstate commerce is burdened
by the ordinance. See id. at 500–01.
By their own admission, Appellants are not engaged in interstate
commerce. Their business is purely intrastate, and they have no contracts that
are negotiated on a national or interstate basis. Cf. id. at 501 (noting that the
plaintiff had contracts that were negotiated on a national or interstate basis).
Additionally, Appellants’ participation in intrastate commerce throughout Texas
does not suffice to place them within the zone of interests protected by the
dormant Commerce Clause. See id. at 500 n.16 (observing that the purpose of
the dormant Commerce Clause is to “protect against local economic
protectionism at the expense of out-of-state interests . . . not to protect any
economic interests”). The dormant Commerce clause protects interstate, not
inter-city commerce. That Appellants’ alleged injury would be remedied by a
repeal of the law is similarly inapposite in this zone-of-interests analysis. See
id. (“The fact that an injury would be remedied if the ordinance was struck down
does not mean that the grievance falls within the zone of interests to be
protected by the dormant Commerce Clause, particularly when there was no
allegation of any interstate burden.”). As we have emphasized previously, the
only parties that have standing to bring a dormant Commerce Clause challenge
are those who both engage in interstate commerce and can show that the
ordinance at issue has adversely affected their commerce. Appellants fail
entirely to satisfy these prerequsites, and as a result, they lack standing to bring
their claims in federal court.6

6
Further, to the extent that Appellants raise an independent challenge under the
Texas Constitution that the ordinance imposes an illegal occupation tax, we affirm the district

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CONCLUSION
As the City’s ordinance does not facially discriminate against out-of-state
commerce or place excessive burdens on Appellants’ interstate commerce,
Appellants have failed to demonstrate that their alleged injury falls within the
zone of interests protected by the dormant Commerce Clause. We AFFIRM the
district court’s dismissal of this case and hold that Appellants lack standing to
pursue their claims.

court’s summary judgment in favor of the City on this claim as well.

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