Harper v. Public Service Commission Of West Virginia

396 F.3d 348, 2005 U.S. App. LEXIS 1157
CourtCourt of Appeals for the Fourth Circuit
DecidedJanuary 24, 2005
Docket04-1444
StatusPublished
Cited by3 cases

This text of 396 F.3d 348 (Harper v. Public Service Commission Of West Virginia) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harper v. Public Service Commission Of West Virginia, 396 F.3d 348, 2005 U.S. App. LEXIS 1157 (4th Cir. 2005).

Opinion

396 F.3d 348

James Allen HARPER, a resident and citizen of Ohio previously doing business as Southern Ohio Disposal; Southern Ohio Disposal LLC, an Ohio limited liability company, Plaintiffs-Appellants,
v.
PUBLIC SERVICE COMMISSION OF WEST VIRGINIA; Edward H. Staats, in his official capacity as Chairman of the Public Service Commission of West Virginia; R. Michael Shaw, in his official capacity as Commissioner of the Public Service Commission of West Virginia; Martha Y. Walker, in her official capacity as Commissioner of the Public Service Commission of West Virginia, Defendants-Appellees,
Stewart's Sanitation; Sunrise Sanitation Services, Incorporated; Tygarts Valley Sanitation, Incorporated; United Disposal Services, Incorporated; West Virginia Association Of Solid Waste Haulers And Recyclers; Bfi Waste Systems Of North America, Incorporated, Intervenors/Defendants-Appellees, and
James D. Williams, in his official capacity as Chairman of the Public Service Commission of West Virginia; Charlotte R. Lane, in her official capacity as Commissioner of the Public Service Commission of West Virginia, Defendants.

No. 04-1444.

United States Court of Appeals, Fourth Circuit.

Argued: October 28, 2004.

Decided: January 24, 2005.

ARGUED: John Philip Melick, Jackson Kelly, P.L.L.C., Charleston, West Virginia, for Appellants. Webster J. Arceneaux, III, Lewis, Glasser, Casey & Rollins, P.L.L.C., Charleston, West Virginia, for Appellees. ON BRIEF: Brian C. Helmick, Jackson Kelly, P.L.L.C., Charleston, West Virginia, for Appellants. Martin J. Glasser, Lewis, Glasser, Casey & Rollins, P.L.L.C., Charleston, West Virginia; Leonard B. Knee, Eric Calvert, Bowles, Rice, Mcdavid, Graff & Love, P.L.L.C., Charleston, West Virginia; Richard E. Hitt, Franklin G. Crabtree, Public Service Commission, Charleston, West Virginia; Samuel F. Hanna, Charleston, West Virginia, for Appellees.

Before WILKINSON and WILLIAMS, Circuit Judges, and Glen E. CONRAD, United States District Judge for the Western District of Virginia, sitting by designation.

Reversed and remanded by published opinion. Judge WILKINSON wrote the opinion, in which Judge WILLIAMS and Judge Conrad joined.

OPINION

WILKINSON, Circuit Judge:

In this case we consider the effect of the commerce power on a federal court's discretion to abstain under Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). Southern Ohio Disposal LLC ("SOD"), an Ohio-based solid waste disposal service, contracted with customers in West Virginia to collect their garbage and dispose of it in Ohio. The Public Service Commission of West Virginia ("PSC") barred SOD from competing with waste removers whom the PSC effectively had licensed with an exclusive franchise. After the agency ruling, SOD brought suit in federal district court to enjoin the PSC from enforcing its order. SOD argued that the PSC order violated the Commerce Clause. The district court abstained under Younger.

We reverse. The values of comity and federalism protected by Younger are undeniably important. But the state interests at stake here do not fall among those the federal courts have repeatedly recognized as deserving of special respect and solicitude. Moreover, the federal interest asserted under the commerce power lies at the core of the commercial values protected by that clause, namely the promotion of robust trade and enterprise among the several states. This interest has been reaffirmed in this specific context by a panel of this court. See Medigen of Ky., Inc. v. Pub. Serv. Comm'n, 985 F.2d 164 (4th Cir.1993). We hold that the district court erred in abstaining from ruling on the significant Commerce Clause challenge raised in SOD's complaint, and we remand the case for a determination on the merits.

I.

Southern Ohio Disposal, an Ohio company owned by James Harper, removes solid waste from its customers in West Virginia. SOD's base is in Pomeroy, Ohio; trucks start there and, after collecting the refuse, return to Ohio to dispose of it.

West Virginia requires common carriers engaged in businesses like SOD's to obtain a "certificate of convenience and necessity" from the PSC. W. Va.Code Ann. § 24A-2-5(a) (Michie 2004). Without the certificate, it is "unlawful for any contract carrier by motor vehicle to operate" in West Virginia. Id. § 24A-3-3(a). But obtaining the certificate requires demonstrating that those who already are certified to provide service for a given geographic area are not "adequately serving the same territory." Id. In the absence of such a showing, the PSC "shall not grant such certificate" to any applicant. Id. § 24A-2-5(a).

It is undisputed by SOD's competitors that this arrangement gives those pre-existing waste haulers a monopoly over a given geographic area. And indeed West Virginia law states that one purpose of the regulation of common carriers is "prevent[ing] unnecessary multiplication of service" among them. Id. § 24A-2-3. This regulatory system applies to in-state competitors, but more importantly here, SOD — an out-of-state competitor — alleges that it erects barriers to interstate trade in solid waste hauling. It is this interstate effect that makes relevant the Commerce Clause.

SOD had no certificate and was therefore not in compliance with state law and PSC regulations.1 One of SOD's competitors filed a complaint with the PSC against the Town of Mason, West Virginia, because the town had contracted with SOD. The competitor had been awarded the franchise for that area by the PSC. SOD was subsequently added to the complaint as a necessary party. SOD attempted to remove to federal court, but the district court found that under 28 U.S.C. § 1441(a) (2000), the PSC was not a state court and removal was therefore unavailable.

Initial proceedings before the Chief Administrative Law Judge for the PSC favored SOD. The ALJ found that the PSC's requirements violated the Commerce Clause. She recognized that the PSC had unsuccessfully defended very similar regulations in Medigen of Kentucky, Inc. v. Public Service Commission, 985 F.2d 164 (4th Cir.1993). Those regulations governed interstate transportation of medical waste; this court found them to violate the dormant Commerce Clause, even under the most deferential test of Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970). Medigen concluded that the PSC had "restrict[ed] market entry" and in so doing had wrongfully limited the available service from which customers could choose, including interstate carriers. The court held that "West Virginia's goal of providing universal service at reasonable rates may well be a legitimate state purpose, but restricting market entry does not serve that purpose." Medigen, 985 F.2d at 167. Finding that Medigen foreclosed the similar regulations that impeded interstate transportation of solid waste, and concluding that none of the distinctions of Medigen urged by SOD's competitor were meaningful, the ALJ recommended that the complaint be dismissed.

The PSC, however, rejected this recommendation.

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396 F.3d 348, 2005 U.S. App. LEXIS 1157, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harper-v-public-service-commission-of-west-virginia-ca4-2005.