By David Connell, legal services counsel with the New Hampshire Local Government Center's Legal Services and Government Affairs Department
The following summary is based on an opinion of the U.S. District Court for the District of New Hampshire. Federal district court cases apply federal law and sometimes New Hampshire law. Their interpretations of law are not binding on the New Hampshire Supreme Court.
State and municipal regulatory measures are subject to challenge under the Commerce Clause of the United States Constitution, Article I, sec. 8, clause 3, which “prevents state and local governments from impeding the free flow of goods from one state to another” and “prohibits protectionist state regulation designed to benefit in-state economic interests by burdening out-of-state competitors.” Alliance of Auto. Mfrs. v. Gwadosky, 430 F.3d 30, 35 (1st Cir. 2005).
In 2007, the legislature passed several bills that cumulatively prohibit the burning of wood derived from construction and demolition (“C&D”) debris (except in certain existing municipal facilities). RSA 149-M:4, IV-a (defining C&D debris); RSA 125-C:10-c (banning combustion of wood C&D debris); and RSA 362-F:2, XV (excluding C&D debris from “biomass fuels” that qualify as renewable energy sources for producing electricity). The plaintiffs, a national organization that promotes reuse of C&D debris and a Massachusetts corporation involved in sales of C&D for fuel, sued the State, claiming that the statutes violate the Commerce Clause. The plaintiffs claimed that the statutes are intended to discriminate in favor of in-state virgin wood producers for biomass fuel at the expense of out-of-state producers of C&D wood who wish to compete. Alternatively, they claimed that the statutes burden interstate commerce in a way that clearly outweighs the benefits of the legislation. The State moved for summary judgment.
Legislation violates the Commerce Clause if it is either intentionally discriminatory or has a discriminatory effect against out-of-state commercial interests. The court reviewed the language and legislative history of the statutes and determined that the primary purpose is to protect the public health and environment and not to protect local commerce. The legislation does not distinguish between locally generated C&D and out-of-state C&D. Several proponents of the legislation had articulated a purpose to promote the New Hampshire forest products industry, but the court determined that this was at most an incidental justification for the legislation. Next, the court determined that there was no evidence to support the plaintiffs’ claim that the overwhelming majority of C&D producers harmed by the law are from outside New Hampshire, nor was there evidence to support the claim that most virgin wood sold for biomass fuel comes from local sources. The court ruled in favor of the State on the discrimination claim.
Turning to the claim of excessive burden on interstate commerce, the court first noted that the plaintiffs had no evidence for their claim that burning C&D is no more harmful to the environment than burning virgin wood. The plaintiffs also failed to prove the magnitude of the economic burden on out-of-state C&D producers caused by their exclusion from the New Hampshire market. The court ruled in favor of the State on the excessive burden claim.