United States Disposal Systems, Inc. v. City of Northglenn

*283MR. JUSTICE ERICKSON

dissenting:

I respectfully dissent. The precise issue before this court is the propriety of the entry of summary judgment in favor of the defendant City of Northglenn. The key predicate for entry of a summary judgment is that no material issue of fact remains to be resolved by the trier of fact and that the movant is entitled to judgment in his favor as a matter of law. The majority opinion purports to resolve this question by “resolving all factual contentions of the plaintiffs in their favor.” Examination of the plaintiffs’ factual contentions and the underlying substantive issues in this case reveal, however, that summary judgment was clearly improper on the record in this case.

The substantive issues boil down to these: (1) Is the municipal ordinance in this case in conflict with state regulation of a matter of statewide concern and thus invalid? (2) Is the municipal ordinance in this case an improper exercise of the municipal police power because it is not rationally related to an area of legitimate local concern? (3) Does the municipal ordinance in this case operate as a taking or damaging of the plaintiffs’ property rights without compensation? Entry of summary judgment for the defendant was improper for each of these claims.

First, in Givigliano v. Velti, 180 Colo. 10, 501 P.2d 1044 (1972), we examined our state constitution and legislative enactments and concluded that:

“The constitution and the statutes of this state have therefore given to the business of trash hauling the status of a matter of statewide concern, subject to the jurisdiction of the Public Utilities Commission. Under such circumstances, Trinidad has no power to pass an ordinance which is, as here, in conflict with the exercise by the Commission of its statutory power.” (Emphasis added.)

See also Schlagel v. Hoelskin, 162 Colo. 142, 425 P.2d 39 (1967).

In deciding whether a municipal ordinance fatally conflicts with state regulation in an area of state-wide concern, we have adopted a general rule which looks to the substantive character of the conflict. See Lakewood Pawnbrokers v. City of Lakewood, 183 Colo. 370, 517 P.2d 834 (1974) (“The test for determining whether such a conflict exists is whether it . . . proscribes, burdens or limits that which the statute authorizes.”); Ray v. City and County of Denver, 109 Colo. 74, 121 P.2d 886 (1942) (“as the criterion of destrictive conflict ... it seems evident that in the final analysis the courts revert to the determination of what might be called the factual question of whether the ordinance forbids the doing of a thing which the statute authorizes”).

In this case, the City of Northglenn clearly attempted to do indirectly what the City of Trinidad could not do directly in Givigliano v. Velti, supra. Assuming the plaintiffs’ factual contentions are correct, then we must credit the factual allegations in the plaintiffs’ pleadings. Those *284pleadings aver that: (a) “the effect of the Defendant, City of Northglenn, providing refuse collection service without a fee, in one stroke resulted in the elimination of the [trash collection] routes each of the Plaintiffs have spent years developing,” (b) “there were no inadequacies in the service being provided by the Plaintiffs to the residents of the City of Northglenn, nor did any emergency exist to justify the injection of additional service,” (c) “the City of Northglenn has thus forced its residents to use the municipal trash services it provides,” and (d) as a result of the initiation of tax-supported trash service by the City of Northglenn, the plaintiffs immediately forfeited several thousand customers each (amounting to 99% of the affected market).

The power to provide “free” tax-supported services may operate as or more effectively than an outright prohibition in excluding state-regulated private enterprises from carrying on their business in a given municipality. This claim, based upon Givigliano v. Velti, supra, was the plaintiffs’ theory of the case, and they should have been allowed an opportunity to prove it.

Moreover, insofar as we must credit the plaintiffs’ allegations as true, it seems obvious that the regulatory scheme created by the State Legislature and the Public Utilities Commission will be completely abrogated with respect to the City of Northglenn. Given a “free” municipal trash-collection service, supported by a scheme of mandatory municipal taxation, what private, fee-charging trash service could possibly compete? To dismiss this conflict with the general proposition that the plaintiffs were never guaranteed the “right to do business without competition” ignores the plain economic reality that the city trash service is not a “competitor,” but a monopolist armed with the power of public taxation. Accordingly, operating on the factual premises adopted by the majority, the municipal ordinance clearly conflicts with the state regulation of a matter of statewide concern in this case and is indistinguishable from Givigliano v. Velti, supra. Summary judgment for the defendant was, therefore, improper because the defendant was not entitled to judgment (on the assumed facts) as a matter of law.

Finally, for three reasons the use of the artificial characterizations employed by the majority in this case will only generate future confusion over the proper bounds of state and local control in our form of state government. Under the reasoning of the majority opinion, no limits exist with respect to the power of municipalities to completely supplant state-regulated matters (even those clearly defined to be within a policy of “state-wide” concern), so long as they do it under the guise of merely “competing.” The distinct economic advantage of subsidizing the operation with tax revenues is immaterial under the majority analysis. This distinction is totally unworkable and provides no realistic framework for the allocation of authority between governmental entities.

*285Second, the plaintiffs claimed that the ordinance was not rationally related to an area of legitimate local concern. While refuse collection is clearly related to public health and other matters of legitimate municipal concern, there was a factual dispute here as to the “rationality” of the relation between the goal of public health and the means of a monopoly for trash collection in this case. The only factual basis to support the need for the municipal trash service in this case was a “finding” by the Northglenn City Council, recited in the ordinance in question, which stated: “this ordinance is necessary to the immediate preservation of the public health and public safety, in that accumulations of trash are hazardous to health and unsanitary.” This latter statement is a mere truism which cannot dispose of the plaintiffs’ countervailing factual contention that “there were no inadequacies in the service being provided by the Plaintiffs to the residents of the City of Northglenn.” If, as the ordinance states, it was based upon a finding of some deficiency in the private trash removal systems in Northglenn, plaintiffs clearly contested the validity of this factual premise. Summary judgment was, therefore, improper. See Moses v. Moses, 180 Colo. 397, 505 P.2d 1302 (1973). Moreover, there is no basis for showing that the less drastic alternative of mere police power regulation of the private trash carriers in the city would not effectively resolve any problems. See Givigliano v. Velti, supra (“but the Trinidad ordinance here does not seek to impose police or licensing regulations upon the collection of trash.”).

Third, the plaintiffs claimed that their “property,” in the form of the Public Utilities Commission authorization to conduct a trash collection service in Northglenn as state-regulated common carriers, was condemned without compensation. Our Constitution provides that:

“Private property shall not be taken or damaged for public or private use, without just compensation.”

Colo. Const. Article II, Section 15 (emphasis added). It is clear that the Public Utilities Commission authorizations in this case are a form of property right within the cognizance of this constitutional protection. See Public Utilities Commission v. Grand Valley Rural Power Lines, 167 Colo. 257, 447 P.2d 27 (1968). The question of whether the economic injury alleged in this case constitutes “damage” within the meaning of the constitutional provision is one of law. However, the legal issues cannot be resolved in a complete vacuum. The defendant in this case denied that its trash service resulted in any injury to the plaintiffs. Moreover, even assuming that the injury occurred as alleged, the creation of a monopolistic enterprise by a municipality, which immediately usurps 99% of the business of common carriers authorized by the state to operate in an area of state-wide concern, cannot be said to be outside of the constitutional protection as a matter of law. Cf. Givigliano v. Velti, supra; Game and Fish Commission v. Farmers Irrigation Co., 162 Colo. 301, 426 P.2d *286562 (1967).

Accordingly, I would reverse and remand for a trial on the merits.

MR. JUSTICE LEE and MR. JUSTICE CARRIGAN have authorized me to say that they join me in this dissent.