City's Reponse in Opposition to Flow Control Injuncition

7/31/2019 City's Reponse in Opposition to Flow Control Injuncition

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IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

NATIONAL SOLID WASTESMANAGEMENT ASSOCIATION, et al.,

Plaintiffs,v.

THE CITY OF DALLAS, et al.,

Defendants.

CIVIL ACTION NO. 3:11-cv-03200-O ECF

DEFENDANTS RESPONSE IN OPPOSITION TO PERMANENT INJUNCTION

Respectfully submitted,

THOMAS P. PERKINS, JR., CITY ATTORNEY OFTHE CITY OF DALLAS, TEXAS

Peter B. HaskelExecutive Assistant City Attorney

Texas Bar No. 09198900James B. McGuireAssistant City Attorney

Texas Bar No. 24055939Christopher J. Caso

Senior Assistant City AttorneyTexas Bar No. 03969230

City Hall 7BN1500 Marilla StreetDallas, TX 75201Tel.: (214) 670-3519Fax: (214) [email protected]@[email protected]

ATTORNEYS FOR DEFENDANTS

Case 3:11-cv-03200-O Document 73 Filed 06/05/12 Page 1 of 59 PageID 1632


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TABLE OF CONTENTS

I. INTRODUCTION ...............................................................................................................1

II. STATEMENT OF FACTS ..................................................................................................4

A. The History and Future of the Citys Waste Management. .....................................4

1. The Franchise Ordinances Granted by the City in 2007. .............................6

2. The Flow Control Ordinance. ......................................................................8

B. Citys Meeting with Stakeholders on Ordinance and PlaintiffsInterference of Same. .............................................................................................12

C. Administrative Directive Regarding the Ordinance. .............................................12

III.

PROCEDURAL HISTORY...............................................................................................13

IV. APPLICABLE LEGAL AND EQUITY STANDARDS ...................................................15

A. Pleading and Proof Elements for Claims. ..............................................................15

1. Business Entity Plaintiffs Must Plead and Prove Standing for EachClaim. .........................................................................................................15

2. The Association Plaintiffs Must Plead and Prove That They HaveStanding. ....................................................................................................15

B. Jurisdictional and Equity Principles Elements for Enjoining Enforcementof the Entire Severable Ordinance. ........................................................................16

C. Traditional Equity Standards for Issuance of Permanent Injunction. ....................17

D. Official Immunity Elements. .................................................................................17

V. ARGUMENT .....................................................................................................................18

A. The Associational Plaintiffs Neither Plead nor Prove the Elements forAssociational Standing And They Had to Do Both. ...........................................18

B. Lack of Standing Recurs Throughout the Claims as to the Business EntityPlaintiffs. ................................................................................................................19

1. Non-Franchisee Plaintiffs Lack Standing Under The ContractsClause, the Due Course of Law Clause, and the ProceduralProvisions of the City Charter and Code and the FranchiseePlaintiffs have Failed to Prove any Injury that Would Give ThemStanding. ....................................................................................................20



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2. The Requested Injunction Improperly Ignores Severability ofOrdinance. ..................................................................................................20

C. Plaintiffs Request For a Permanent Injunction Should Be Denied BecausePlaintiffs Cannot Prevail on the Merits of their Remaining Claims. .....................21

1. Plaintiffs Claim Under the Contract Clause of the U.S.Constitution Fails Because Plaintiffs Have No Right of Disposal,And Even if Such a Right Did Exist, the Ordinance Does NotViolate the Contracts Clause. .....................................................................21

2. The Ordinance Does Not Violate the Texas Constitutions DueCourse Of Law Provision Because the Ordinance is a Reasonableand Legitimate Exercise of the Citys Police Power. ................................29

3. Plaintiffs Are Incorrect That There Is Any Conflict, Much Less ADirect Conflict, Between State Law And The Ordinance..........................31

4. An Ordinary Delegation Asking An Expert Administrator ToDefine A Narrow Term In A Complex Statute Is A Wholly ProperDelegation As A Matter Of Law. ...............................................................37

5. The Ordinances Use Of Intelligible LanguageAs FurtherClarified By Agency DirectiveIs Not At All Vague As AppliedHere. ...........................................................................................................39

6. The City Charter Did Not Require Notice Or Hearings BeforeAdopting This PolicyBut Notice And Hearings Were ProvidedAnyway. .....................................................................................................40

D. Because Plaintiffs Purely Economic Harm Is Readily Quantifiable, ThereIs No Threat Of Any Irreparable Injury, Much Less A Substantial One. ..............42

E. Because the Citys Anticipated Injury Trumps Plaintiffs Purported Harm,the Balance of Interests Tips Sharply in the Citys Favor. ....................................44

F. The Public Interest Is Already Reflected By An Ordinance Enacted ByThe Entity Tasked With Protecting The PublicEnjoining ThatEnactment To Further Plaintiffs Narrow Self-Interest Will Not Serve ThePublic Interest. .......................................................................................................45

VI. TRADITIONAL EQUITY FACTORS REQUIRE DENIAL OF PERMANENTINJUNCTION ....................................................................................................................46

A. Penal Ordinance Provides Adequate Remedy At Law By AllowingFranchisees To Defend Against Criminal Prosecution. .........................................46

B. Plaintiffs Are Not Entitled to Equitable Relief Enjoining Every Portion ofthe Ordinance for Anyone and Everyone...............................................................47



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1. Future Franchisees and Consenting Franchisees Will Have NoGrounds For Complaint About The Ordinance. ........................................48

2. Portions of Ordinance not Subject to Specific Claims...............................48

3. Only Two Plaintiffs Are Franchisees. ........................................................48

4. Plaintiffs fail to request equitable relief in reasonably specificterms. ..........................................................................................................48

C. The Court Must Respect The Democratic Process And Not Enjoin TheEnforcement Of Ordinances Because Doing So Is Not Necessary And NotIn The Public Interest. ............................................................................................49

D. Individual Defendants are Immune. .......................................................................50

VII. CONCLUSION ..................................................................................................................50

TABLE OF AUTHORITIES

Cases

Allen v. Wright, 468 U.S. 737 (1984) ........................................................................................... 15Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978) ............................................... 21, 25

Am. Power & Light Co. v. S.E.C., 329 U.S. 90 (1946) ................................................................. 37

Ass'n of Am. Physicians & Surgeons, Inc. v. Tex. Med. Bd., 627 F.3d 547 (5th Cir.2010) ......................................................................................................................................... 16

Boyle v. Landry, 401 U.S. 77 (1971) ............................................................................................ 47

Burch v. City of San Antonio, 518 S.W.2d 540 (Tex. 1975) ......................................................... 32

C&A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383 (1994) ............................................... 23

Cent. Ambulance Serv., Inc. v. City of Dallas, 631 F. Supp. 366 (N.D. Tex. 1986) .................... 32

Chevron U.S.A. Inc. v. Natural Res. Def. Council, 467 U.S. 837 (1984) ..................................... 37

City of Beaumont v. Fall, 291 S.W. 202 (Tex. 1927) ................................................................... 34

City of Brookside Village v. Comeau, 633 S.W.2d 790 (Tex. 1982) ............................................ 34



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City of Chicago v. Morales, 527 U.S. 41 (1999) .................................................................... 40, 47

City of Dallas v. FCC, 118 F.3d 393 (5th Cir. 1997) ..................................................................... 6

City of La Marque v. Braskey, 216 S.W.3d 861 (Tex.App.-Houston [1st Dist.] 2007,pet. denied) ............................................................................................................................... 47

City of Univ. Park v. Benners, 485 S.W.2d 773 (Tex. 1972) ..................................................... 1, 8City of Wichita Falls v. Abell, 566 S.W.2d 336 (Tex. 1978) ........................................................ 31

Coffee City v. Thompson, 535 S.W.2d 758 (Tex. Civ. App.Tyler 1976, writ refdn.r.e.)......................................................................................................................................... 38

Council 31 of the Am. Fed'n of State, Cnty. & Mun. Employee v. Quinn , No. 113111,2012 WL 1758807 (7th Cir. May 17, 2012)............................................................................. 29

Dallas Merchants & Concessionaires Association v. City of Dallas, 852 S.W.2d 489(Tex. 1993) ............................................................................................................................... 31

Deerfield Med. Ctr. v. City of Deerfield Beach, 661 F.2d 328 (5th Cir. Nov. 1981) ................... 44

Dombrowski v. Pfister, 380 U.S. 479 (1965) .......................................................................... 46, 47

Doran v. Salem Inn, Inc., 422 U.S. 922 (1975) ............................................................................ 43

Douglas v. City of Jeannette, 319 U.S. 157 .................................................................................. 47

eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006)............................................................ 17

Energy Reserves Grp., Inc. v. Kan. Power & Light Co., 459 U.S. 400 (1983) ...................... 25, 26

FCC v. Beach Commcns, Inc., 508 U.S. 307 (1993) ................................................................... 30

Fernandes v. Limmer, 663 F.2d 619 (5th Cir. Dec. 1981) ............................................................ 40

Gen. Motors Corp. v. Romein, 503 U.S. 181 (1992) .................................................................... 22

Goldblatt v. Town of Hempstead, 369 U.S. 590 (1962) ................................................................ 49

Grupo Mexicano de Desarrollo S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999) ....... 17, 47

Hamilton v. Bank of Blue Valley, 746 F. Supp. 2d 1160 (E.D. Cal. 2010) ................................... 16

Harrington v. Colquitt Cnty. Bd. of Educ., 449 F.2d 161 (5th Cir. 1971) .................................... 18

Holland v. City of Houston, 41 F. Supp. 2d 678 (S.D. Tex. 1999) ............................................... 18

Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398 (1934) ....................................................... 21

House the Homeless, Inc. v. Widnall, 94 F.3d 176 (5th Cir. 1996) .............................................. 21

Humana, Inc. v. Jacobson,804 F.2d 1390 (5th Cir. 1986) ........................................................... 43

Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333 (1977) ................................................ 16

In re Sanchez, 81 S.W.3d 794 (Tex. 2002) ............................................................................. 31, 33



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John Doe #1 v. Veneman, 380 F.3d 807 (5th Cir. 2004) ........................................................ 20, 49

JWJ Indus., Inc. v. Oswego Cnty., 795 F. Supp. 2d 211 (N.D.N.Y. 2011) ................................... 38

Kentucky v. Graham, 473 U.S. 159 (1985) ................................................................................... 18

Kolender v. Lawson, 461 U.S. 352 (1983) .................................................................................... 40

Leibowitz v. City of Mineola, Tex., 660 F. Supp. 2d 775 (E.D. Tex. 2009) .................................. 34

Lipscomb v. Columbus Mun. Separate Sch. Dist., 269 F.3d 494 (5th Cir. 2001) ......................... 28

Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ................................................................... 15

Mid-Am. Waste Sys., Inc. v. City of Gary, Ind., 49 F.3d 286 (7th Cir. 1995) ............................... 27

Miss. Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 618 (5th Cir. 1985) ................ 42

MJRs Fare of Dallas, Inc. v. City of Dallas, 792 S.W.2d 569 (Tex. App.Dallas1990, writ denied)..................................................................................................................... 31

Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992)........................................................ 42

Murray v. Charleston, 96 U.S. 432 (1877) ................................................................................... 26

Natl Solid Waste Mgmt. Assn., et al. v. Pine Belt Reg'l Solid Waste Mgmt. Auth.,389 F.3d 491 (5th Cir. 2004) .................................................................................................... 27

Ne. Fla. Chapter of Assn of Gen. Contractors of Am. v. City of Jacksonville, 896F.2d 1283 (11th Cir. 1990) ....................................................................................................... 49

PCI Transp. Inc. v. Fort Worth & W. R.R. Co., 418 F.3d 535 (5th Cir. 2005) ............................. 44

Price v. City of Junction, Tex., 711 F.2d 582 (5th Cir. 1983). ..................................................... 41

R.R. Commn of Tex. v. Tex. Citizens for a Safe Future & Clean Water, 336 S.W.3d619 (Tex. 2011) ........................................................................................................................ 37

Rizzo v. Goode, 423 U.S. 362 (1976) ............................................................................................ 15

Roark & Hardee LP v. City of Austin, 522 F.3d 533 (5th Cir. 2008) ........................................... 39

Sal Tinnerello & Sons, Inc.v. Town of Stonington, 1997 U.S. Dist. LEXIS 21351 (D.Conn. Aug. 26, 1997) ............................................................................................................... 42

State v. Morales, 869 S.W.2d 941 (Tex. 1994)............................................................................. 47

Stefanelli v. Minard, 342 U.S. 117 (1951) .................................................................................... 47

Sw. Airlines Co. v. Tex. Int'l Airlines, Inc., 546 F.2d 84 (5th Cir. 1977) ...................................... 18

Tenn. Valley Auth. v. Hill, 437 U.S. 153 (1978) ........................................................................... 17

Tex. Boll Weevil Eradication Found., Inc. v. Lewellen, 952 S.W.2d 454 (Tex. 1997) ................ 37

Tex. Power & Light Co. v. City of Garland, 431 S.W.2d 511 (Tex. 1968) .................................. 30



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U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1 (1977) ........................................................ 22, 25

United Haulers Assn, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S.330 (2007) ......................................................................................................................... passim

United Healthcare Ins. Co. v. Davis, 602 F.3d 618 (5th Cir. 2010) ............................................. 25

United States v. Mazurie, 419 U.S. 544 (1975) ............................................................................ 39United States v. State of Tex., 523 F. Supp. 703 (E.D. Tex. 1981) ............................................... 17

Univ. of Tex. v. Camenisch, 451 U.S. 390 (1981)........................................................................... 3

Univ. of Texas Med. Sch. At Houston v. Than, 901 S.W.2d 926 (Tex. 1995) .............................. 29

Vill. of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489 (1982) ................. 39, 40

VRC LLC v. City of Dallas, 460 F.3d 607 (5th Cir. 2006) ............................................................ 17

W.B. Worthen Co. v. Kavanaugh, 295 U.S. 56 (1935) ................................................................. 26

Warth v. Seldin, 422 U.S. 511 (1975) ..................................................................................... 15, 16

Weinberger v. Romero-Barcelo, 456 U.S. 305 (1982) ................................................................. 49

Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001) ............................................................... 39

Wis. Cent. v. Pub. Serv. Commn of Wis., 95 F.3d 1359 (7th Cir. 1996) ...................................... 42

Constitutional Provisions

Tex. Const. art. I, 19 .................................................................................................................. 29

U.S. Const. Amend. X .................................................................................................................. 45

U.S. Const. art. I, 10, cl. 1 .......................................................................................................... 21

Statutes

42 U.S.C. 6901(a)(4) .................................................................................................................. 26

Tex. Health & Safety Code 363.003 ............................................................................................ 6

Tex. Health & Safety Code 363.004(19) ................................................................................... 32

Tex. Health & Safety Code 363.111(a) ........................................................................... 4, 31, 32

Tex. Health & Safety Code 363.117 ...................................................................................... 4, 32

Regulations

30 Tex. Admin. Code 328.2 ................................................................................................. 33, 36



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30 Tex. Admin. Code 328.2(2) .................................................................................................. 33

30 Tex. Admin. Code 328.2(3) ............................................................................................ 13, 35

30 Tex. Admin. Code 328.8(e) .................................................................................................. 13

30 Tex. Admin. Code. 328.4(d) ................................................................................................. 33

Other Authorities

27 Tex. Reg. 8569-70 (September 12, 2002) ................................................................................ 36

City of Dallas, Texas, Charter, Ch. XIV, 7 ................................................................................ 41

City of Dallas, Texas, Code 18-10(a)(1)(B)(ii) ........................................................................... 9

City of Dallas, Texas, Code 18-10(b) ........................................................................................ 36

City of Dallas, Texas, Code 18-40 ............................................................................................. 48

City of Dallas, Texas, Code 1-4 ................................................................................................. 48

Fed. R. Civ. P. 65(d)(2)(B) and (C) .............................................................................................. 18

Eric Peterson & David Abramowitz,Municipal Solid Waste Flow Control in the Post-Carbone World, 22 Fordham Urb. L.J. 361 (1995) .................................................................... 6

U.S. EPAs Report to Congress: Flow Controls and Municipal Solid Waste, EPADoc. No. 530-R-95-008 ............................................................................................................ 32

U.S. EPAs Report to Congress: Flow Controls and Municipal Solid Waste, EPADoc. No. 530-R-95-008, dated March 1995 ............................................................................. 46



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DEFENDANTS RESPONSE IN OPPOSITION TO PERMANENT INJUNCTION Page 3

Finally, by failing to include in their Permanent Injunction Brief any support for several

claims that they asserted in their First Amended Complaint (ECF No. 36) (Complaint or

Compl.), Plaintiffs have abandoned their claims for permanent injunction based on theories of

(1) violation of the Contracts Clause of the Texas Constitution (Compl. 44-47 Count 2); (2)

improper tax (Compl. 52-56 Count 4); and (3) federal Sherman Act antitrust violation

(Count 10, Compl. 77-85 Count 10). Therefore Defendants will only respond to the claims

for permanent injunction that Plaintiffs have not abandoned. Furthermore, Plaintiffs attempt

(Pls. Brief Part II.A.1.b through A.1.d at 5-7) to rely on findings or conclusions stated in the

Order Granting Preliminary Injunction (ECF No. 53) is unavailing. The provisions of the Order

are merely interlocutory and cannot substitute for evidence on consideration of the merits. See

Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981) (findings of fact and conclusions of law

made by a court granting a preliminary injunction are not binding at trial on the merits.)

The stakes here are high: Plaintiffs are asking the Court to presume that the City assigned

away its sovereign power to decide the location of waste disposal in the City for the twenty-year

duration of the franchise agreements, and to conclude that the Constitution precludes the City

from enacting ordinary social and economic legislation. Plaintiffs further make an unsupported

and overly broad request to this Court for a permanent injunction making the Ordinance void as

to all, not just those with franchise agreements. There is nothing, however, in the franchise

agreements or the Constitution that supports Plaintiffs request. This is precisely the kind of

issue properly left to the political process, and the federal judiciary has no obvious role in

declaring the proper waste-management policies of a Texas municipality. Plaintiffs are

profoundly wrong to insist that the federal judiciary inject itself in the middle of this local policy

issue.



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II. STATEMENT OF FACTS

A. The History and Future of the Citys Waste Management.

A city cannot function without a place to safely and effectively store and manage its

waste. Because waste management is central to public health and welfare, it is unsurprising that

[w]aste disposal is both typically and traditionally a local government function. United

Haulers, 550 U.S. at 344 (internal quotation marks omitted). Effective waste management

requires public coordination, collective action, administrative oversight, predictability, and

sufficient resources, from a secure and reliable waste stream, to invest in transformative

technologiesthose which now offer the promise of recovering and reusing the vast majority of

waste. Home-rule cities, such as Dallas, are authorized under the Texas Constitution to regulate

the disposal of waste in their localities. The Texas Legislature has also explicitly authorized

municipalities to tackle waste management: cities are permitted to adopt rules for regulating

solid waste collection, handling, transportation, storage, processing, and disposal, Tex. Health

& Safety Code 363.111(a), and to operate a solid waste management system, id. 363.117.

In 1980, the City of Dallas recognized the necessity of long-range planning to ensure its

ability to provide adequate capacity for residential and commercial waste. The keystone of that

planning was the construction and operation of the McCommas Bluff Landfill. The City

envisioned that the use of that landfill, together with the operation of private landfills, would

protect residents and satisfy the Citys existing waste-management needs. Currently, the City

operates McCommas Bluff and accepts nonhazardous solid waste loads from a variety of

customer bases, including residences and commercial businesses. Solid waste is processed for

diversion or ultimate disposal. The City diverts scrap tires, metals, plastics, glass, electronics,



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and yard waste from the waste stream at McCommas Bluff for reuse or recycling. Nix Depo.

10:18-14:21; Nix Aff. (ECF Doc. 22) 17-20.2 The City similarly diverts recyclable and

reusable materials at its waste transfer stations. Nix Depo. 15:10-22. In fiscal year 2010 alone,

the City diverted 136,250 tons of material for reuse. Nix Aff. 17.

Today, however, the Citys long-term waste management goals extend beyond simply

landfills; the City aims to make landfills obsolete by using emerging technologies to reuse the

Citys solid waste in the form of energy, fuels, and reusable products. See, e.g., Nix Aff. Ex. D.

The City has been studying options for achieving this goal for years (see Nix Depo. 62:3-22,

67:10-68:19, 73:7-22, 77:6-13; Nix Aff. 22-26), and the Citys regulatory program, at issue in

this lawsuit, is necessary for the City to implement green technology and to promote the most

efficient use of City resources. Cutting-edge biotechnology and resource recovery requires a

high-volume and predictable stream of waste to operate in a practical and economical matter.

With the growing use of recycling, and fluctuations in the volume of waste, the City cannot

implement these crucial new initiatives without confidence that its waste flow will continue at

sufficiently high levels to support the new technology. Flow control is an appropriate means of

securing sufficient volume of waste to achieve requisite economies of scale. Nix Depo. 30:8-14.

Flow control will also secure necessary revenue for covering the expenses associated

with the Citys solid waste regulatory program including: operation of McCommas Bluff; the

planned construction and operation of City resource recovery facilities; the planned construction

and operation of a compost facility at McCommas Bluff; and a sinking fund for closure and post-

closure care at McCommas Bluff. Nix Aff. 26. The upshot is that the added cost to waste

2During the hearing on the application for temporary injunction, Defendants submitted into the record by hand two

binders with designations from the depositions of Mary Nix (Nix Depo.), James Lattimore (Lattimore Depo.),Lynn Lantrip (Lantrip Depo.), Nicholas Stefkovich (Stefkovich Depo.), and Jody McCord (McCord Depo.).



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haulers, including some of the Plaintiffs, is likely to be nil. City technical staff, including

McCommas Bluff manager Rick White, performed a detailed analysis of waste hauling routes

and determined that the cost to haulers will not increase under the Ordinance. White Aff. (ECF

Doc. 21) 8-9; Nix Depo. 90:4-91:1; 96:23-97:18.

In sum, in order for the City to achieve its waste program goals, the City must be able to

establish a reliable and steady stream of waste flow. See, e.g., Nix Aff., Ex. D; Tex. Health &

Safety Code 363.003 (containing a legislative finding that the opportunity for resource

recovery is diminished unless local governments can exercise control over solid waste . . . to

supply solid waste to resource recovery systems or to operate those systems). Waste

management experts have similarly recognized that [w]ithout flow control of some form,

governments ability to plan and provide for the most environmentally sound and economically

acceptable solutions will wane, leaving the public vulnerable to the vagaries of a private market

that does not have a duty to protect the public health and safety. Eric Peterson & David

Abramowitz,Municipal Solid Waste Flow Control in the Post-Carbone World, 22 Fordham Urb.

L.J. 361 (1995) (abstract). As described below, in order to secure this waste stream and its long-

term waste management goals, the City enacted flow control through its democratic processes

and consideration of various alternatives. SeeNix Depo. 221:15-222:12.

1. The Franchise Ordinances Granted by the City in 2007.

Starting in 2007, some of the Plaintiffs entered into franchise agreements to haul

commercial waste on City streets. Pls. Brief at 1 (failing to identify which, if any, Plaintiffs are

Franchisee Plaintiffs). The franchise agreements grant waste hauling companies the non-

exclusive permission and privilege to use Public Ways in order to collect and deliver for

disposal. See Pls. Ex. 10 at 3, 6; see also City of Dallas v. FCC, 118 F.3d 393, 397 (5th Cir.

1997) (Franchise fees are . . . the price paid to rent use of public right-of-ways.), but do not



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grant any right to disposal as to volume of waste or disposal location. At the time these

franchise agreements were executed, franchisees knew that the franchises were subject to further

regulation by the City. Moore Aff. (ECF Do. 20) 5-6.

Citing provisions of the franchise agreement regarding the definition of solid waste

collection services (see, e.g., ECF Doc. 6 at 2-3), Plaintiffs have nevertheless maintained that

the franchise agreement includes an absolute right, a vital contractual right, a vested right,

and an essential franchise right[] to choose the location for disposing the Citys solid waste.

Plaintiffs are wrong. The franchise agreement does not grant any such right to disposal. To

the contrary, it explicitly reserves the Citys right, in three separate places, to regulate in areas

touching the franchise, and thus Plaintiffs expressly assumed the risk that the City would amend

its regulation of waste management, including where waste haulers must deposit their loads:

(1) in a section titled Compliance with Law and Standards of Operation:franchisees shall be subject to and comply with all applicable local, state, andfederal laws, including the rules and regulations of any and all agencies thereof,whether presently in force or whether enacted or adopted at any time in thefuture, (see Pls. Ex. 10 at 5) (emphasis added);

(2) in a section titled City Retained Powers: the City reserves all rights andpowers conferred by federal law, the Texas Constitution, Texas statutes anddecisions, the City Charter, City Code, and City ordinances which City is allowedto exercise, (see Pls. Ex. 10 at 34); and

(3) in a section titled Police Powers: [i]n accepting [the franchises], theFranchisee[s] acknowledge[] that [their] rights under [the franchises] are subjectto the police power of the City to adopt and enforce general ordinances necessary

to the health, safety, and welfare of the public. . . . Any conflict between theprovisions of [these franchises] and any other present or future lawful exercise ofthe Citys police powers shall be resolved in favor of the latter, (see Pls. Ex. 10at 36) (emphasis added).

The police power is the customary and historic source of the Citys authority to

regulate in the area of waste disposal, a typical and traditional concern of local government.

United Haulers, 550 U.S. at 347. Moreover, Texas law expressly endows municipalities such as

the City with authority to adopt rules for regulating solid waste collection, handling,



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of an explicit defense to enforcement: persons are categorically protected from prosecution if

the particular waste was . . . composed solely of recyclable material. Ordinance 18-

10(a)(1)(B)(ii).

[F]low control ordinances enable Counties to pursue particular policies with respect to

the handling and treatment of waste generated in the Counties, while allocating the costs of those

policies on citizens and businesses according to the volume of waste they generate. United

Haulers, 550 U.S. at 343. Flow control, however, is not simply a financing tool[]. Id. at 346.

On the contrary, it directly advances the Citys fundamental aim to operate in an environmentally

sustainable manner as a leader and innovator in green management. In briefing presented to City

Council on June 15, 2011, the City outlined the goals of the proposed Ordinance, which emulates

similar regulations in other major cities and counties.3 In the short term, the City determined that

it could create new jobs, secure the control of the resource stream, generate additional green

energy at McCommas Bluff, and undertake additional resource recovery. Over the next several

years, the City saw the Ordinance aiding its goal of eliminating the need for landfills entirely

by converting all waste into energy used by the City to fuel its waste services and fund its

management of solid waste; these advancements would create up to 500 new jobs. SeeNix. Aff.

12 & Ex. C; Nix Depo. 25:12-18. Flow control also would help cover the expense associated

with the Citys solid-waste services, including the planned construction of state-of-the-art

resource recovery facilities, a core component of the Citys green initiatives.

3Other local governments with flow control include: Jacksonville, FL; Seattle, WA; Palm Beach County, Fl;

Snohomish County, WA (includes Seattle suburbs); San Jose, CA; Portland, OR; Lancaster County, PA; FranklinCounty, OH (includes Columbus, OH); Arlington, TX; Grand Prairie, TX; and College Station, TX. Nix Aff. 9-10.



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Unlike for wastes that are currently being hauled outside City limits for disposal, the City is able

to ensure that wastes brought to McCommas Bluff are disposed in an environmentally sound

manner. Also, as briefly mentioned above, McCommas Bluff currently generates enough green

energy from landfill gas to heat 25,000 homes. The City has obtained a special permit

modification from the Texas Commission on Environmental Quality to apply the

biotechnological practice of Enhanced Leachate Recovery (ELR)5 which accelerates waste

material degradation, creates additional waste space, and enhances the production of landfill gas

which is, in turn, used to produce more green energy. Flow control will increase the waste mass

contributing to this green energy source and improve North Texas air quality. Nix Depo. 25:12-

18; 26; Stefkovich Depo. 82:16-24, 84:4-13. In addition, reusable and recyclable materials are

diverted for beneficial reuse at McCommas Bluff, meaning additional resource recovery will

take place there. Nix. Aff. 14-7; Nix Depo. 10:18-14:21; 26:22-27:10.

Finally, waste disposal at McCommas Bluff also represents one of the best values in the

State of Texas. As part of the implementation of flow control, the cost to dispose waste at City

facilities will be lowered or stay the same. For waste brought to the Citys Bachman Transfer

Station, the tipping fee6 will be lowered from $47 to $36 per ton under the Ordinance. For

disposal at McCommas Bluff, the tipping fee will remain at its current rate of $21.50 per ton.

Nix Aff. 27. The City surveyed 31 permitted landfills across the State of Texas, including the

Dallas-Fort Worth region, prior to adoption of the Ordinance. The tipping fee at McCommas

Bluff is the lowest posted tipping fee. Nix Aff. 28, Ex. E; Nix Depo. 105:7-15.

5McCommas Bluff was the first landfill in Texas to be permitted to use ELR, and is one of very few landfills in

Texas applying the technology. Moreover, application of biotechnology and new permitted landfill space couldextend the life of McCommas Bluff from 47 years to 92 years. However, expansion of McCommas Bluff would bean additional, significant expenditure for the City that is expected to be funded, at least in part, through revenue gen-

erated by flow control. Nix. Aff. 16, 22.6

This refers to the amount charged to dispose of a quantity of waste at a landfill.



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68. In their brief, Plaintiffs have abandoned some of the claims asserted in the Complaint,

including (1) violation of the Contracts Clause of the Texas Constitution (Compl. 44-47

Count 2); (2) improper tax (Compl. 52-56 Count 4); and (3) federal Sherman Act antitrust

violation (Compl. 77-85 Count 10).

As demonstrated above, of all the Plaintiffs, only IESI and RWST are City franchisees

with rights under franchise agreements. The other haulers who claim to be hauling commercial

waste within the City appear to be operating without valid franchises. Two of the Plaintiffs,

National Solid Wastes Management Association (Association) and Businesses Against Flow

Control (Businesses) (together the Association Plaintiffs), are organizations. They do not

allege their specific organizational purpose or identify their member lists. Association alleges as

its theory of damages only that its Dallas members rely heavily on the free flow of solid waste

and recyclables and . . . will be harmed by the Ordinance. Am. Compl. 7. There is no

allegation regarding why any members who are not franchisees might have standing to complain

about the Citys flow control policies. Businesses alleges only that its members include

unspecified organizations in Texas including Generators, Franchisees, and Owners/Operators

doing business in the City who will be harmed by the ordinance. Id. 16. Neither of the

Association Plaintiffs allege any specifics about how any of their members will be injured,

whether their members injuries would be similar to those of other Plaintiffs, or which of their

members may have standing to complain about any specific Ordinance provision.

In addition to suing the City, Plaintiffs have sued Mayor Mike Rawlings and City

Councilmembers Pauline Medrano, Tennell Atkins, Dwaine Caraway, Monica Alonzo, Carolyn

Davis, Jerry Allen, Linda Koop, and Angela Hunt, each only in their respective official

capacities, Am. Compl. 19, 20, and for Count 6. Count 6 alleges that franchisees were denied



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notice and hearing under the City Charter and the franchise agreements, and that the Individual

Defendants violated the Charter and the franchise ordinances with the Ordinance. Id. 59-62.

IV. APPLICABLE LEGAL AND EQUITY STANDARDS

A. Pleading and Proof Elements for Claims.

1. Business Entity Plaintiffs Must Plead and Prove Standing for Each Claim.

Plaintiffs other than Association Plaintiffs (hereinafter the Business Entity Plaintiffs)

must each plead and prove that they each have standing for each claim, and standing to obtain

the extraordinarily broad relief sought by the Complaint:

The irreducible constitutional minimum of standing contains three elements. First,. . . an injury in fact -- an invasion of a legally protected interest which is (a)

concrete and particularized and (b) actual or imminent, not conjectural orhypothetical. Second, there must be a causal connection between the injury andthe conduct complained of - the injury has to be fairly traceable to the challengedaction of the defendant, and not the result of the independent action of some thirdparty not before the court. Third, it must be likely, as opposed to merelyspeculative, that the injury will be redressed by a favorable decision.

See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-1 (1992) (internal quotation marks,

brackets, ellipses, and citations omitted). Each plaintiff generally must assert his own legal

rights and interests, and cannot rest his claim to relief on the legal rights or interests of third

parties. Warth v. Seldin, 422 U.S. 490, 499 (1975); see alsoAllen v. Wright, 468 U.S. 737, 752

(1984) (each plaintiff carries the burden of pleading (and later proving) standing as to each claim

asserted). When a plaintiff seeks to enjoin the activity of a government agency, even within a

unitary court system, his case must contend with the well-established rule that the Government

has traditionally been granted the widest latitude in the dispatch of its own internal affairs.

Rizzo v. Goode, 423 U.S. 362, 378-79 (1976) (citations and internal quotation marks omitted).

2. The Association Plaintiffs Must Plead and Prove That They Have Standing.

Representative organizations that do not claim injury to the association can sometimes

obtain standing to assert their members claims, but to do so the organization must both plead



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and prove that (1) the interests it seeks to protect are germane to the organizations purpose,

Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 343 (1977); (2) at least one of their

members is suffering immediate and or threatened injury as a result of the defendants actions,

Warth, 422 U.S. at 511 , and (3) so long as the nature of the claim and of the relief sought does

not make the individual participation of each injured party indispensable to proper resolution of

the cause, the association may be an appropriate representative of its members, entitled to invoke

the court's jurisdiction. Id. (emphasis added). Where specific facts would be necessary to prove

the claims of specific members, associational standing should be rejected. See Ass'n of Am.

Physicians & Surgeons, Inc. v. Texas Med. Bd., 627 F.3d 547, 552 (5th Cir. 2010). Here, for

example, an Association Defendant whose organizational purpose was to enhance service to

customers or to serve the public interest could not have standing. For Plaintiffs claim under the

Contract Clause, individual franchisee members participation would be necessary to prove that

such member subjectively relied on a supposed right to dispose of solid waste.

B. Jurisdictional and Equity Principles Elements for Enjoining Enforcement of the

Entire Severable Ordinance.7

Intertwined considerations of standing, ripeness, and the case or controversy mandate

for subject-matter jurisdiction are all closely related to the customary equity doctrine that

injunctions must be neither broader nor narrower than necessary to prevent actionable wrongs.

See Hamilton v. Bank of Blue Valley, 746 F. Supp. 2d 1160, 1182 (E.D. Cal. 2010) (Injunctive

relief is a remedy and not, in itself, a cause of action, and a cause of action must exist before

injunctive relief may be granted) (citation omitted); United States v. State of Tex., 523 F. Supp.

7The Courts preliminary injunction (ECF No. 53) at 33, actually enjoins enacting the Ordinance, not enforce-

ment. Because the Ordinance was already enacted prior to Plaintiffs lawsuit, this error rendered the entire injunc-tion technically moot and unenforceable. However, out of respect for the Court, the City has not attempted to en-force any provisions of the Ordinance.



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703, 735 (E.D. Tex. 1981) (primary requirement for equitable relief is that it will be effective in

accomplishing its remedial purpose) (citation omitted). Plaintiffs Amended Complaint and

Brief ignore these principles. None of Plaintiffs filings justify such a broad injunction.

C. Traditional Equity Standards for Issuance of Permanent Injunction.

A party seeking a permanent injunction must demonstrate: (1) success on the merits; (2)

that a failure to grant the injunction will result in irreparable injury; (3) that said injury outweighs

any damage that the injunction will cause the opposing party; and (4) that the injunction will not

disserve the public interest. VRC LLC v. City of Dallas, 460 F.3d 607, 611 (5th Cir. 2006)

(upholding district courts refusal to issue permanent injunction against City of Dallas) (citations

omitted). The success on the merits requirement includes the need for Plaintiffs to

demonstrate irreparable injury. See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391

(2006) (patent case discussing four equity requirements for permanent injunction).

In considering injunctive and other equitable relief, federal courts must be governed by

traditional equity principles. Grupo Mexicano de Desarrollo S.A. v. Alliance Bond Fund, Inc.,

527 U.S. 308, 318-9 (1999). The substantive prerequisites for obtaining an equitable remedy as

well as the general availability of injunctive relief are not altered by [Federal Civil Procedure]

Rule 65 and depend on traditional principles of equity jurisdiction. Id. (quotation omitted).

Congress has sometimes altered the standards for enjoining specific statutes (see, e.g., Tenn.

Valley Auth. v. Hill, 437 U.S. 153, 172 (1978)), but no such congressional intrusion on traditional

equity standards applies to the claims addressed in Plaintiffs Brief.

D. Official Immunity Elements.

Official-capacity suits . . . generally represent only another way of pleading anaction against an entity of which an officer is an agent. As long as thegovernment entity receives notice and an opportunity to respond, an official-capacity suit is, in all respects other than name, to be treated as a suit against theentity. It is not a suit against the official personally, for the real party in interest isthe entity. Thus, while an award of damages against an official in his personal



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capacity can be executed only against the official's personal assets, a plaintiffseeking to recover on a damages judgment in an official-capacity suit must lookto the government entity itself.

Kentucky v. Graham, 473 U.S. 159, 165-6 (1985) (citations omitted).

Suits against city officials for injunctive relief are redundant when the city is also a party,

and of no . . . legal significance. Holland v. City of Houston, 41 F. Supp. 2d 678, 689 (S.D.

Tex. 1999) (civil rights case). No relief sought by the Amended Complaint requires the

participation of any Individual Defendant in the litigation as a party. Any declaration against the

City would bind City officials including the Individual Defendants even if they were not parties,

under privity principles, see Sw. Airlines Co. v. Tex. Int'l Airlines, Inc., 546 F.2d 84, 94-5 (5th

Cir. 1977), and any injunction would bind them once they received notice of the injunction even

if they were not parties. Fed. R. Civ. P. 65(d)(2)(B) and (C);see Harrington v. Colquitt Cnty.

Bd. of Educ., 449 F.2d 161 (5th Cir. 1971) (injunction).

V. ARGUMENT

A. The Associational Plaintiffs Neither Plead nor Prove the Elements for Associational

Standing And They Had to Do Both.

The Amended Complaint fails to allege specific injuries to specific Plaintiffs, and the

elements of the claims require specific pleading and proof: What franchisees supposedly relied

on guaranteed flow volumes or on license to dump solid waste from the City anywhere they

chose? What franchisees did or did not have notice and an opportunity to be heard respecting the

Ordinance? The Amended Complaint provides no indication whether participation of individual

Association Plaintiffs members is necessary, and therefore is fatally defective. It is unclear

which, if any, of those Business Entity Plaintiffs were members of either Associational Plaintiff.

Clearly the Association Plaintiffs have failed to plead or to prove that the participation of their

members is unnecessary.



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B. Lack of Standing Recurs Throughout the Claims as to the Business Entity Plaintiffs.

Plaintiffs failure to allege or to prove imminence of specific injury to specific plantiffs is

fatal to all claims of all Plaintiffs except for the sole claim against the Individual Defendants,

who are immune. The Amended Complaint blithely ignores Plaintiffs pervasive and fatal lack

of standing to obtain the relief requested. Plaintiffs fail to plead or to prove which, if any, of

them may be entitled to raise any specific claim. Plaintiffs fail to specify which, if any, of the

Ordinance provisions could be subject to invalidation if any specific claim in the Complaint were

valid. Without differentiation as to which Plaintiffs have standing or as to which specific

provisions of the Ordinance could be unenforceable, they repeatedly couch their claims for

injunctive relief in terms of the ordinance violates [or is inconsistent with] [selected

constitutional, statutory, regulatory, charter, or ordinance provisions] . . . and is void and

unenforceable.8 Elsewhere, again without even attempting to limit injunctive relief to those

entitled to Plaintiffs with standing to complain of the alleged error, the Amended Complaint

alleges that because Individual Defendants violated procedural requirement assertedly applicable

to franchisees the ordinance should be declared void and unenforceable Am. Compl. 62.

Neither the Court nor Defendants have any burden of demonstrating the basis for Plaintiff

standing. Neither the Court nor Defendants have any burden to match Ordinance provisions to

Plaintiffs allegations. See Allen, 468 U.S. at 752. The Court can only grant injunctive relief, if

at all, in favor of specific Plaintiffs who allege and prove irreparable injury to themselves, and

8See Am. Compl. at 43 (Count 1, U.S. Const. Contracts Clause), 47 (Count 2, Tex. Const. Contracts Clause

(waived by Brief)); 51 (Count 3, Tex. Const. Due Course of Law), 56 (Count 4, improper tax (waived by Brief)), 58(Count 5 U.S. & Tex. Consts. ambiguous Ordinance), 68 (Count 7 (state occupy the field preemption)), 72 (Count8, inconsistent with state law preemption), 76 (Count 9, improper delegation to Sanitation Director), and 85 (Count10, Sherman Act, waived by Brief).



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then only as to the specific provisions of the severable Ordinance that those Plaintiffs plead and

prove caused such injury. John Doe #1 v. Veneman, 380 F.3d 807, 818 (5th Cir. 2004).

1. Non-Franchisee Plaintiffs Lack Standing Under The Contracts Clause, the

Due Course of Law Clause, and the Procedural Provisions of the City Char-

ter and Code and the Franchisee Plaintiffs have Failed to Prove any Injurythat Would Give Them Standing.

Solid waste hauling franchisees are the only Plaintiffs who could even allege concrete

injury caused by the Amended Complaints allegations associated with purported rights under

franchise agreements, but the Amended Complaint fails to identify them and evidence

affirmatively establishes that all but two Business Plaintiffs lack franchises. Landfill operators

have no such rights. The Association Plaintiffs have no such rights. At most, any injunction

could only enjoin enforcement of the Ordinance against any current franchisees who have

alleged and proved both standing and imminent injury. Neither of the two franchisee Plaintiffs

have alleged or proved specific belief that their franchises guaranteed them solid waste volume

or the right to dispose of waste anywhere outside the City. To the contrary, Franchisee Plaintiff

RWNT had knowledge that flow control could impact waste volumes as early as the mid-1990s

through the time it executed its franchise agreement, and further that the City could itself pick up

those wastes from commercial customers instead of franchisees. Stefkovich Depo. 11:11-4;

15:8-15; 43:12-22. Thus, there is no expectation of solid waste volumes or a right to dispose,

and, furthermore, no Plaintiffs have standing under any Count addressed by the Brief.

2. The Requested Injunction Improperly Ignores Severability of Ordinance.

The Court can only enjoin enforcement of specific terms of the severable ordinance, and

then only to the extent justified by pleading and proof. Plaintiffs pleading and evidence is too

overbroad and ambiguous to allow the Court to exercise equity powers to enjoin enforcement of

any provisions of the Ordinance.



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C. Plaintiffs Request For a Permanent Injunction Should Be Denied Because Plaintiffs

Cannot Prevail on the Merits of their Remaining Claims.

Because these Plaintiffs cannot satisfy any legal element required for issuance of a

permanent injunction, much less all of them, their request for permanent injunctive relief must be

denied. See VRC LLC, 460 F.3d at 611.

1. Plaintiffs Claim Under the Contract Clause of the U.S. Constitution Fails

Because Plaintiffs Have No Right of Disposal, And Even if Such a Right

Did Exist, the Ordinance Does Not Violate the Contracts Clause.

The Contract Clause restricts a States ability to impair[] the Obligation of Contracts,

U.S. Const. art. I, 10, cl. 1, but case law limits the absolutist language of the clause, so as not

to depriv[e] the State of its prerogative of self-protection. Allied Structural Steel Co. v.

Spannaus, 438 U.S. 234, 240 (1978). Therefore, the Clause does not trump the police power of a

state to protect the general welfare of its citizens, a power which is paramount to any rights

under contracts between individuals. Id. at 241. Accordingly, courts must accommodate the

Contract Clause with the inherent regulatory authority of the state to safeguard the vital interests

of its people. Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398, 434 (1934) In short, except

under very limited circumstances, the Contracts Clause is not a basis for a determination that a

state or local government has contracted away its police powers.9

Plaintiffs lead claim easily fails for four separate reasons: (a) Plaintiffs assert a claim

under the Contract Clause based on a right that does not exist in a contractand without a right

there can be no impairment; (b) Plaintiffs cannot raise a Contract Clause claim even with an

impairment, because the City here is exercising its core regulatory authority to advance public

health, safety, and welfare; (c) even if heightened scrutiny applies (which it plainly does not), the

9 The Brief asserts only the Contracts Clause claim under the U.S. Constitution and waives the state constitutionalclaim. Accordingly, Defendants brief only the federal issue.



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City can satisfy itthe legislative record reflects any number of legitimate public interests

directly advanced by the Ordinance, as the Supreme Court itself has recognized in a related

context, see United Haulers, 550 U.S. at 344; and (d) Plaintiffs Contracts Clause claim is

improper because the Ordinance does not set up a defense that prevents any Plaintiff from

obtaining damages, or some equivalent remedy, for the breach alleged by Plaintiffs. This claim

represents nothing more than Plaintiffs improper attempt to inject the judiciary in the middle of

a policy debate over economic and social legislation, and their efforts accordingly should be

denied.

a. There is no such thing as a Contract Clause claim supporting a right

found nowhere in the contract.

There can be no Contract Clause impairment of a right not found in the contract. Gen.

Motors Corp. v. Romein, 503 U.S. 181, 186 (1992); U.S. Trust Co. of N.Y. v. New Jersey, 431

U.S. 1, 17 (1977) (asking whether the challenged law even impair[s] a contractual obligation

in the first place). The parties agree that the franchise agreement issilenton the so-called right

to disposal that Plaintiffs say was central to the agreement. 10 There can be no doubt that flow

control was a consideration for Plaintiffs dating back many years. See Lattimore Decl. (ECF

Doc. 23) 5-6, 41-2 (considered and evaluated flow control as far back as early 1990s as part of

negotiation and execution of numerous franchise agreements with municipalities for Waste

Management and Republic Waste). Indeed, Mr. Nicholas Stefkovich of RWNT stated that local

flow control ordinances have been a topic in the industry for some time, dating back

approximately 18 years to a highly-publicized U.S. Supreme Court flow control case (C&A

10Lantrip Depo. 10:5-18; 31:6-22 (the franchise agreement is silent on the issue and the City did not orally grant

any right to dispose); Stefkovich Depo. 15:8-24 (stating that at least two Plaintiffs knew flow control was an issuewhen executing their franchise agreements with the City);see also Lattimore Aff. 41-3.



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Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383 (1994)). See Stefkovich Depo. 6:2-10;

10:19-11:14.

If this entitlement were truly so fundamental to Plaintiffs business operations, one would

expect sophisticated actors, such as Plaintiffs, to insert the clause, explicitly, in the actual text of

a 42-page agreement. To the contrary, no right to disposal can be found anywhere in the

agreementnot in a single section, paragraph, provision, or clause. Plaintiffs admit that there is

nothing stopping the City from stepping into the shoes of a hauler of commercial waste and

undercutting all of the franchised waste haulers, taking away their customers by underpricing

them. Stefkovich Depo. 43:7-45:1. This underscores the obvious: the City did not delegate its

fundamental sovereign power to decide, for a period of two decades (i.e., the duration of the

agreement), all matters pertaining to waste management, including where self-interested

economic actors locate and deposit waste. SeeNix Depo. 213:19-22 (Ordinance changes no rule

or regulation of the franchises).

Nor, for that matter, can Plaintiffs account for the explicit text, in three separate places,

emphasizing the contingent nature of the franchise rights, and reiterating the Citys ability to

pass new laws in the future that might materially alter the regulatory scheme when the franchise

was granted. In fact, representatives of Plaintiffs testified that the City had a right to make

regulatory changes impacting the hauling of waste under the franchise agreement. Stefkovich

Depo. at 89:2-7; Lantrip Depo. 98:8-22; see also Am. Compl. 45 (franchise agreement states

that the franchisee may only use an authorized landfill). Plaintiffs may now prefer not to read

the contract to mean what it says, but its actual(not hidden) language stands for the unsurprising

proposition that the City retained the customary and traditional governmental function (United

Haulers, 550 U.S. at 345 n.7) of electing the location where trash from the municipality would

be deposited and processed, and that Plaintiffs and other haulers knowingly assumed the risk that



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the location might change. See Moore Aff. 6 (franchised waste hauler testifying that he knew

in 2007 that franchise agreement was subject to change in City regulation such as flow control).

Moreover, Plaintiffs are keenly aware that the franchise agreements simply do not grant

any rights to franchisees outside of City limits. McCord Depo. 15:21-24 (testifying that purpose

of franchise agreements was [t]o allow haulers to operate their business in the City of Dallas,

as opposed to choosing disposal sites outside City limits) (emphasis added). The franchise

agreements by definition did not grant any right outside the City limitsthe franchise

agreements are simply irrelevant to any activities outside the City.11 Therefore, any expectations

or beliefs by any hauler or landfill owner or operator about where solid waste from the City

could be dumped had no foundation in the franchise. Moreover, those franchises could not

conceivably have granted any rights to non-parties to the agreement without further approval

from City Council.12

In sum, Plaintiffs base their Contract Clause claim on the assertion that they justifiably

relied on a crucial term of the franchise, Pls. Br. 15, which (1) appears nowhere in the text of

the agreements, (2) contravenes the City Code as it existed at the time the City granted the

franchises, and (3) is undermined by the franchises express reservation to the City of the right to

alter solid-waste-management regulations. The Ordinance did not impair any contractual

obligation because the City did not have an obligation to defer to the franchisees choice of

disposal location. In truth, the City had the right to determine the disposal location at all times

before and after the franchises were granted.

11See Pls. Ex. 10 at 2 (defining Authorized Area as the entire area from time to time within the corporate limits

of the City of Dallas) and 3 (franchise granted solely for the purpose of operating and maintaining a Solid WasteCollection service in, over, along and across the Public Ways in the Authorized Area).12

See Pls. Ex. 10 at 3 (City hereby grants Franchisee non-exclusive permission and privilege) and 30 (franchiseagreement embodies the entire agreement and can only be modified by an ordinance amendment approved byCouncil.).



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b. Even if they could identify a right between the lines of a contract,

Plaintiffs still fail to account for the limited nature of the Contract

Clauses sweep.

The Contract Clause does not preclude the exercise of police power. Allied Structural

Steel, 438 U.S. at 241. The guiding principle is that one legislature cannot assign away the

powers of a future legislature by settling a matter in a contract. United Healthcare Ins. Co. v.

Davis, 602 F.3d 618, 628 n.7 (5th Cir. 2010). On the contrary, where the subject-matter involves

the exercise of sovereign authorityas it plainly does here, in this area of typical and traditional

[government] concern (United Haulers, 550 U.S. at 347)one legislative session cannot forfeit

the governments future ability to legislate on matters affecting the public interest. See U.S.

Trust Co., 431 U.S. at 23. In fact, the waste management industry acknowledges that the risk of

change in regulation is is an assumed risk. See Stefkovich Depo. 52:13-19;see alsoid. 79:3-

16 (risk of regulatory change for landfilling also borne by industry); Lattimore Decl. 41-2.

Even if Plaintiffs could somehow divine an impaired right in the contract, the right to regulate

solid waste is squarely in the Citys purview and the risk of additional regulation is regularly

borne by waste haulers.

c. The Contract Clause does permit judicial oversight where the gov-

ernment is acting solely in a proprietary capacity and seeking to excuse

itself from financial obligations through the backdoor of legislation.

Enhanced judicial scrutiny under the Contracts Clause is limited to certain agreements

about a governments financial obligations in its proprietary capacity. See Energy Reserves

Grp., Inc. v. Kan. Power & Light Co., 459 U.S. 400, 412 n.14 (1983). But that is plainly not this

case.13 In fact, the Supreme Court recently addressed similar flow control ordinances,

13In the Order (ECF Doc. 53), the Court incorrectly suggests that a higher level of scrutiny applies to the Ordinance

because a state has impaired its own contractual obligations. Id. at 7-8;see also id. at 28. The Court further relies

[Footnote continued on next page]



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explaining that [d]isposing of trash has been a traditional government activity for years, United

Haulers, 550 U.S. at 334, 344, and noting that Congress itself has recognized local

governments vital role in waste management, making clear that collection and disposal of solid

wastes should continue to beprimarily the function of State, regional, and local agencies, id. at

344 (quoting Resource Conservation and Recovery Act of 1976, 90 Stat. 2797, 42 U.S.C.

6901(a)(4)) (emphasis added). The Court ultimately concluded that flow control ordinances

directing haulers to publicly owned landfills are legitimate exercises of police power

addressing a traditional concern of local government. Id. at 347. As described above, the

Citys implementation of flow control can achieve many worthy and environmentally friendly

goals.

Despite this, Plaintiffs incorrectly assert that [t]he ordinance does not advance any goals

that are important and of legitimate public concern under the police power, Am. Compl. 41

(emphasis added), and further that the only purpose of the Ordinance was to shift . . . revenue

into the Citys coffers. Pls. Brief 2. No evidence or logic supports this assertion. Plaintiffs

may believe that they alone are aware of the Citys true motivations. But this fails for any

number of reasons. The operative question is whether the government had thepowerto do what

[Footnote continued from previous page]

on its application of a higher level of scrutiny as its basis for overruling Defendants evidentiary objections and con-sidering extrinsic evidence apparently to the exclusion of the wording of the Ordinance itself and other supportingdocumentation. Id. fn. 2. However, the cases relied upon by the Court applied this higher level of scrutiny onlywhen a States legislative action altered the States financial obligations under an existing contract. See Energy Re-serves Grp., Inc., 459 U.S. at n.14 (refusing to apply stricterU.S. Trust Co. standard to State of Kansas, and indicat-ing it applies when State enters financial or other markets); U.S. Trust Co.,431 U.S. 1 (regarding a States repeal of

a covenant to repay certain bonds). See alsoW.B. Worthen Co. v. Kavanaugh, 295 U.S. 56 (1935) (holding that alaw authorizing the impairment of municipal bond contracts was unconstitutional); Murray v. Charleston, 96 U.S.432 (1877) (holding that a tax on municipal bonds was unconstitutional because its effect was to reduce the contrac-tual rate of interest). The present case is a distinctly different scenario. Here, the franchise agreements do not obli-gate the City to make payments or do anything else. Indeed, no party has even alleged that the City is attempting toevade any financial obligation under a contract. To the contrary, by enacting the Ordinance the City is attempting tomeet its future financial obligations to modernize the Citys waste disposal process. Accordingly, the application ofa higher level of scrutiny is improper and without support in the cited cases.



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it did, not whether it recited the correct rationale in the legislative record. See Energy Reserves

Grp., Inc., 459 U.S. at 412 ([t]he requirement of a legitimate public purpose guarantees that the

State is exercising its police power). And the Supreme Court has already determined that the

police power supports flow control as a legitimate and traditional government function.

14

Nevertheless, even a hard look at the many briefings to City Council and considerations by City

staff, as outlined above, must result in the conclusion that the actual motivations behind the

Ordinance included legitimate public purposes, and comprised much more than revenue.

It is hardly irrational, for example, for the City to aim to reduce administrative burdens

and monitoring expense by requiring all waste to be deposited in locations under City control,

rather than across multiple private landfills throughout the North Texas Metroplex. If the

haulers could take waste to any disposal site, achieving an equal level of enforcement would be

much more costly, if not impossible. United Haulers, 550 U.S. at 346-7. The experience of

local governments in United Haulers also teaches the potential for a solid waste crisis should

private landfills violate[] state regulations or fail to operate in an environmentally responsible

fashion. Id. at 334-5. Moreover, even in the absence of these problems, the Fifth Circuit held

that even seeking revenue via a flow control ordinance is a legitimate public purpose, because it

will ensure the economic viability of the local governments waste management system and

landfill. Natl Solid Waste Mgmt. Assn., et al. v. Pine Belt Reg'l Solid Waste Mgmt. Auth., 389

F.3d 491, 502 (5th Cir. 2004) (appeal of a flow control case brought in Mississippi by waste

management companies, including some of the Plaintiffs and their affiliates). In short, as

14United Haulers, 550 U.S. at 345 n.7, 346-7 (plurality opinion); see also Mid-Am. Waste Sys., 49 F.3d at 291 (7th

Cir. 1995) (Depositing garbage in landfills is not exactly a fundamental right, either. Disposition of waste is a high-ly regulated industry. A claim that the Constitution protects this industry from public controleven when the land-fill is public propertywould bring nothing but belly laughs.).



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Plaintiffs well know, the City is not required to wait for the proverbial levees to break before

making its repairs through the regulatory process. See Energy Reserves Grp., Inc., 459 U.S. at

412 (public purpose need not be addressed to an emergency or temporary situation). At any

point the City may act in the public interest and any of the following would sufficiently justify

the Ordinance: (1) the risk of private malfeasance alone; (2) ensuring waste streams to allow for

the full benefits of resource recovery to occur; or (3) ensuring the economic viability of the local

governments waste management system and landfill.

In any event, a host of legitimate and powerful public interests were clearly articulated,

developed, and documented throughout the legislative process. In May 2011, a Memorandum to

City Council explained that the Ordinance was only the first step toward fully utilizing the

citys waste stream as an avenue for expanding [its] maturing green policies. Nix Aff., Ex. B

at 1. This briefing emphasized that for the City to [b]roaden [its] green policies into waste, it

must begin to (1) treat trash as a valued resource, (2) make beneficial use and reuse of [its]

solid waste resources, and (3) prepare for new technology to replace landfilling. Id. at 4.15

The City affirmed that [w]aste service is a fundamental City function, and [p]rotection of

public health and environment are paramount. Id. at 11; see also Lipscomb v. Columbus Mun.

Separate Sch. Dist., 269 F.3d 494, 511 (5th Cir. 2001) ([f]unding schools and avoiding the

dissipation of state assets are classic police functions).16 It is true, of course, that the City has

not yet developed the entire infrastructure to support its initiatives. But advanced planning is a

virtue, not a vice. Plaintiffs, understandably, would rather make more money in the interim

15Plaintiffs agree that these are desirable public policy goals. See Lantrip Depo. 54:24-55:7; 68:13-5; 68:18-69:5.

16Statements by the Dallas Mayor and other Councilmembers also clearly show that the environmental goals and

public benefit and not the proprietary interest of the City was the primary concern when the Ordinance was be-ing considered. See Plaintiffs and Defendants Stipulation of Statements of City of Dallas Mayor and Other Coun-cilmembers (ECF Doc. 43). Nevertheless, Defendants reiterate their objection that such statements are inadmissibleand not relevant to legislative intent in this case.



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before the Citys new policies take effect. But nothing in the state or federal constitutions

require the City to await disaster before legislating to avoid it.

d. The Contracts Clause Claim is Improper When the Ordinance Does

Not Set Up a Defense Preventing Plaintiffs From Obtaining Damages

or Another Remedy.

The Contracts Clause claim would lie only if the Ordinance had been adopted as a ruse to

deprive franchisees of breach of contract remedies that they would have had but for the

Ordinance. See Council 31 of the Am. Fed'n of State, Cnty. & Mun. Employees v. Quinn , No.

113111, 2012 WL 1758807 (7th Cir. May 17, 2012). Council 31 provides the correct analysis,

and as in Council 31, Plaintiffs argue a classic breach of contract (i.e., the so-called right to

dispose under the franchise agreements has allegedly been breached). The breach itself gives

rise to a cause of action and, consequently, Plaintiffs claim under the Contracts Clause is

improper because the Ordinance does not set up a defense that prevented [any Plaintiff] from

obtaining damages, or some equivalent remedy, for the breach. See id. at *8.

2. The Ordinance Does Not Violate the Texas Constitutions Due Course OfLaw Provision Because the Ordinance is a Reasonable and Legitimate Ex-

ercise of the Citys Police Power.

Plaintiffs allege that the Ordinance violates the Texas Constitutions due course of law

provision, Tex. Const. art. I, 19, because the Ordinance purportedly serves no valid police

power purpose. Pls. Brief 8-14. Plaintiffs are mistaken. Their claim is nothing more than a

substantive-due-process challenge to ordinary social and economic legislation. See Univ. of

Texas Med. Sch. v. at Houston Than, 901 S.W.2d 926, 929 (Tex. 1995) (equating the federal and

state constitutional standards). It accordingly stands as a forbidden invitation for the federal

judiciary, under the guise of state law, to interfere with questions that the Constitution properly

reserves for local governments. In its 2007 decision rejecting a challenge under the Dormant

Commerce Clause to a virtually identical flow-control ordinance, the Supreme Court cautioned



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against this type of unprecedented and unbounded interference by the courts with state and local

government. United Haulers, 550 U.S. at 343. Substantive due process, no more than the

Dormant Commerce Clause, is not a roving license for federal courts to decide what activities

are appropriate for state and local government to undertake, and what activities must be the

province of private market competition. Id.

Plaintiffs argument is predicated almost exclusively on a single caseTex. Power &

Light Co. v. City of Garland, 431 S.W.2d 511 (Tex. 1968)a decision that has nothing to do

with this case. In City of Garland, the city invoked its regulatory powers for the single and

conceded purpose of advancing its own economic and proprietary interests, 431 S.W.2d at

518and to do so at the expense of a private partys protected property interest in a previously

granted franchise. Garland, the Court confirmed, had no right to barter with the police power.

Id. Here, however, Plaintiffs have no protected right under the contractPlaintiffs never had an

absolute entitlement, proprietary or otherwise, to choose the disposal location. As clearly

demonstrated above, there is no right to dispose under the franchise agreements. This was a

predicate to City of Garlands entire analysis, and it remains unsatisfied here. Moreover, the

City is not simply acting in a proprietary capacity; this regulation addresses valid and legitimate

government interests, as United Haulers effectively confirmed. Plaintiffs may disagree about the

efficacy of the Citys exercise of its police powers, but a federal court is the wrong forum for that

debate. Social and economic policy passes constitutional scrutiny so long as there is any

reasonably conceivable state of facts that could provide a rational basis for the classification.

FCC v. Beach Commcns, Inc., 508 U.S. 307, 313 (1993); see also id. at 315 (1993) (a

legislative choice is not subject to courtroom fact finding and may be based on rational

speculation unsupported by evidence or empirical data). Because the Citys approach to

municipal waste disposal was plainly rational, Plaintiffs err in inviting the Court to rigorously



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scrutinize economic legislation passed under the auspices of the police power. United Haulers,

550 U.S. at 347.

3. Plaintiffs Are Incorrect That There Is Any Conflict, Much Less A Direct

Conflict, Between State Law And The Ordinance.

Even though (1) state and local law promote local regulation of solid waste; and (2) the

Ordinance and Administrative Directive harmonize and are consistent with state law, Plaintiffs

mistakenly contend that state law preempts the Citys regulation of solid waste because of

irreconcilable differences in the definition of recyclable materials. See Pls. Brief 26-37.

However, Plaintiffs fail to identify the proper standard for preemption under Texas state law, and

they fail to identify any applicable case law.17 The appropriate test for preemption states that the

existence of a Texas state law does not prohibit a city from regulating in the same field unless (1)

the intent to preempt appears in the state law with unmistakable clarity; and (2) an actual

conflict exists between the ordinance and a preemptive state law. See In re Sanchez, 81 S.W.3d

794, 796 (Tex. 2002).

Moreover, Plaintiffs misconstrue[d] the powers available to Dallas, a home-rule city.

MJRs Fare of Dallas, Inc. v. City of Dallas, 792 S.W.2d 569, 573 (Tex. App.Dallas 1990,

writ denied). A home rule city . . . has considerably more freedom to act, and is not required to

look to the legislature for a grant of power to act, but only to ascertain if the legislature has

placed limitations on the citys constitutional power. Cent. Ambulance Serv., Inc. v. City of

17Plaintiffs reliance on two Texas state court cases interpreting the Texas Alcoholic Beverage Code (TABC) is

likewise misplaced. InDallas Merchs. & Concessionaires Assn. v. City of Dallas, the Texas Supreme Court in-validated an ordinance that sought to regulate sales of alcoholic beverages in contravention of the TABC, whichexpressly provided that this code shall exclusively govern the regulation of alcoholic beverages in this state. 852S.W.2d 489, 491-92 (Tex. 1993) (emphasis added). Here, the relevant state law provisions do not restrict the regula-tion of solid waste regulation, and, indeed, specifically delegate the authority to adopt rules for regulating solidwaste collection handling, transportation, storage, processing, and disposal to the City. Tex. Health & Safety Code 363.111(a). And the city ordinance in City of Wichita Falls v. Abellwas incompatible with State law, 566 S.W.2d336, 338 (Tex. 1978); there is no direct conflict here.



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Dallas, 631 F. Supp. 366, 369 (N.D. Tex. 1986) (quoting Burch v. City of San Antonio, 518

S.W.2d 540, 543 (Tex. 1975)).

City's Reponse in Opposition to Flow Control Injuncition

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Transcript of City's Reponse in Opposition to Flow Control Injuncition