857 F.3d 101
1st Cir.2017Background
- AES Puerto Rico (AES-PR) operates a coal-fired plant in Guayama producing ~200k–250k tons/year of coal combustion residuals (CCRs), marketed in part as a manufactured aggregate called Agremax.
- The Puerto Rico Environmental Quality Board (EQB) adopted regulations (State Regulation No. 5717) and issued resolutions (2014, 2015) authorizing disposal and certain beneficial uses (disposal, solidification, and potential alternate daily cover subject to waivers) of CCRs at three EQB‑permitted sanitary landfills (Peñuelas Valley, Ecosystems Peñuelas, El Coquí).
- Municipalities of Peñuelas and Humacao had preexisting ordinances banning placement/deposit of coal ash/CCRs on the ground within their boundaries, aimed at protecting public health/environment; these ordinances would prohibit the EQB‑authorized activities.
- AES-PR sued the two municipalities seeking declaratory and injunctive relief, arguing the ordinances are preempted by federal law (RCRA) and Commonwealth law (EQB resolutions) and violate federal constitutional provisions (including the Commerce Clause).
- The district court granted summary judgment to the municipalities on AES-PR’s federal claims, declined to decide Commonwealth preemption (finding it a novel Puerto Rico law issue) and dismissed supplemental Commonwealth claims; AES appealed.
- The First Circuit, relying in part on a subsequent Puerto Rico Supreme Court decision (Ecosystems), held that EQB resolutions and permits that specifically authorize CCR uses carry the force of Commonwealth law and preempt conflicting municipal ordinances; reversed and remanded with judgment for AES‑PR on Commonwealth preemption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal RCRA preempts municipal bans on CCR placement | RCRA and EPA’s regulatory scheme (subtitle D) favor cooperative state/local implementation and authorize beneficial uses; municipal bans frustrate Congress’s objectives | Ordinances regulate locally and do not conflict with RCRA’s structure; RCRA does not prefer specific beneficial uses, so no federal preemption | Court affirmed district court: RCRA does not preempt the ordinances (federal preemption claim not resolved in AES‑PR’s favor) |
| Whether EQB resolutions/permits under Commonwealth law preempt conflicting municipal ordinances | EQB has statutory authority to set Commonwealth solid‑waste policy; final resolutions and permits have legal force and preempt inconsistent municipal laws | Municipalities argue they retain authority over local solid‑waste measures and that EQB action does not automatically preempt local ordinances | Held for AES‑PR: EQB resolutions and explicit landfill permits are Commonwealth law and preempt local ordinances to the extent of direct conflict; judgment for AES‑PR on Commonwealth preemption |
| Whether district court should have certified or resolved Commonwealth preemption question | AES‑PR: court should decide or certify the unsettled state‑law question rather than dismiss | Municipalities: question is novel/complex and for Puerto Rico courts | First Circuit resolved de novo in light of intervening Puerto Rico Supreme Court precedent (Ecosystems) and reversed district court’s dismissal |
| Whether the municipal ordinances violate the Commerce Clause by discriminating against out‑of‑state products | AES‑PR: ordinances effectively target products derived from imported coal (Agremax) and burden interstate/foreign commerce | Municipalities: ordinances regulate CCRs produced domestically and impose, at most, a slight burden on commerce | District court previously held ordinances do not discriminate and burden is slight; First Circuit did not reach or reverse this federal claim because Commonwealth preemption disposition was dispositive |
Key Cases Cited
- Meghrig v. KFC W., Inc., 516 U.S. 479 (describing RCRA’s purpose and federal role in waste regulation)
- City of Chicago v. Envtl. Def. Fund, 511 U.S. 328 (explaining distinction between RCRA subtitle C and D and federal‑state roles)
- Liberty Cablevision of P.R., Inc. v. Mun. of Caguas, 417 F.3d 216 (municipal ordinances must harmonize with state law; state law prevails in conflict)
- Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744 (standards for de novo review of legal questions)
- Pierce v. Underwood, 487 U.S. 552 (standards for reviewability of discretionary decisions)
- Smith v. Holder, 627 F.3d 427 (examples of review standards distinguishing legal error and abuse of discretion)