Teresa D. v. City of Fruitland

PLUMMER, D. and David M. dba Teresa Sanitation,

T and M Plaintiffs-

Appellants,

v. FRUITLAND, Fruitland CITY OF Council, Limbaugh, Thomas E. Rick S. Watkins, Osborn, and Bert L. Counter

defendants-Respondents. Fruitland, Counterclaimant-

Respondent, Plummer, D. David M. dba T Teresa Sanitation, and M Counterdefendants-

Appellants.

No. 27999. Idaho, Supreme Court Boise, December Term.

2,May Rehearing July Granted Boise, Clark, Chtd., appel-

Ringert,

argued. lants. James G. Reid Parker, Boise,

Moore, re- & Baskin Paige argued. Parker spondents. A. Rives, LLP, Boise, granted non-exclusive franchises appearing as ami- would have Stoel However, at Sanitary to both Plummer and Hardin. cus curiae for Idaho Service Associ- reject- ation, meeting, April Council Inc. explanation non-exclusive fran- ed without TROUT, Chief Justice. of an exclusive franchise for chises favor any prevented ordinance Hardin. The (“the City City”) adopted The of Fruitland person operating garbage from a collection 388, provided Ordinance No. which an exclu- 388, City. in the Ordinance No. garbage hauling collection sive and ten-year granted which Hardin an exclusive (“Hardin”). Sanitation, Inc. to Hardin franchise, garbage hauling received its first ordinance also that it was a misde- reading City Fruitland on before the Council anyone engage garbage in meanor for else to July adopted 11. No. 388 was on Ordinance hauling services. Teresa and Matt Plummer August summary 22. A of the ordinance was (“Plummer”) operated competing a sanitation Indepen- published for the first time the City business and the enforced the ordinance 30, Enterprise August time dent on which by citing arresting employee went into effect. the ordinance collecting hauling garbage. The or- 19, repealed. later September dinance was Plummer sued On one of Plummer’s em- City, raising ployees collecting garbage the antitrust claims and a claim was when he was violating for tortious interference with their business. cited and arrested for Ordinance granted summary judg- City police The district court the chief was No. 388. While City, citation, concluding City ment for the issuing the ordinance the administrator Rick appeals up. police was constitutional. Plummer the Watkins drove chief bor- summary judgment City district court’s telephone award of rowed and called Watkins’s City. attorney per- favor of the district Because the Bert Osborn to ask whether a by concluding City court erred if son could be arrested the ordinance had garbage yet receiving an exclusive collec- not been codified. After Osborn, prevent tion franchise and to others from go-ahead police from chief ar- competing City, Following with the we employee. reverse rested Plummer’s events, requesting remand. these Plummer filed suit enjoined City permanently be from enforcing the ordinance. I. Temporary a The district court entered AND FACTUAL PROCEDURAL Order, Restraining BACKGROUND enforcing Ordinance No. 388. On October 1999, began In the summer of Plummer 10, repealed No. Council Ordinance investigating possibility moving ordinance, substitute No. was opening garbage Fruitland area and a collec- day. No. introduced on the same Ordinance inquiries tion business. After several made 392 also an exclusive franchise to authorities, to Fruitland Ms. Plummer Hardin; however, adopted. it has not been permitted by

was informed she law would response complaint, In to Plummer’s operate business in the Summary Judgment, filed a Motion for winter, City. bought property That Plummer granted. The district court dismissed T began marketing near the & M Plummer’s claims and found Ordinance Sanitation as a service for collection. This fol- No. 388 was constitutional. lowed. sought March Darrell Hardin collection franchise Sanitation, II. City for Hardin Inc. Hardin had only garbage run the collection business in STANDARD OF REVIEW and Hardin since Plummer meeting, considering ruling attended the March 28 Council on a mo When arguing summary judgment, both for a franchise. tion for this Court’s Council considered draft ordinances that standard of review is the same as that used franchise, disposal thereby prevent other ruling the trial court in on the motion. Barnes, operating competing

Barnes v. busi persons from liberally P.3d We must con- pure ness. A of the ordinance review non-moving strue the facts in favor of the repealed No. moot. The Ordinance party gen- and determine whether there is the solid fact, any uine issue as to material and wheth- pro though a similar ordinance has been moving party er the is entitled to Thus, there posed, it has not been enacted. 56(c). In mak- as a matter of law. I.R.C.P. controversy is not a live over whether determination, ing allegations all of fact franchise; can how record, and all reasonable inferences in.the ever, arise from several of Plummer’s claims light from the record are construed City’s adoption and enforcement Ordi party opposing most favorable to the validity nance No. 388. Because Lewiston, motion. 137 Thomson hinges claims on the lawfulness 476, 488, 473, 50 491 Idaho P.3d during the time that ordi Ordinance No. 388 proving the absence of material burden effect, whether the nance was we review upon moving party. Id. Once the facts right grant had the to moving party establishes the absence of a franchise.1 issue, genuine shifts to the non- burden moving party genuine to show that a issue of Municipal Power Under Section 50- challenged material fact on the element 344 of the Idaho Code nonmoving party the claim does exist. The may allegations upon not rest the mere or law does alleges Plummer first that Idaho must pleadings, denials contained but right not to establish produce by affi- come forward and evidence City argues that exclusive franchises. or as the rules davits otherwise authority to express no while there exists specific showing that there to set forth facts franchises, may be im- establish exclusive 56(e). trial. genuine is a issue for I.R.C.P. plied may choose to make their that cities grant- in an Failure to do so will result order and the dis- solid waste franchises exclusive ing summary judgment. agreed. the relevant trict court The text of statute, however, de- belies the district court

III. cision. DISCUSSION cities grants why operate offers several reasons to maintain and systems. waste collection maintenance exclusive franchise for solid waste collection Such justifications may Many may performed of its several operation is desirable. sense, “[cjontracts, good policy policy mechanisms, but franchis- including indeed make legislature. The providing decisions are left maintenance es or otherwise relevant persons,” cannot avoid the fact that the or by private operation performed not for exclusive fran- “[cjontracts, statute does franchises or otherwise has exceeded may provide chises. Because operation that maintenance and statutory authority, we reverse the district geographic all or collection for solid waste (d). 50-344(l)(b) that Idaho cities have not court and conclude city.” parts of a authority monopolize given the been permit “ex- expressly This statute does hauling by granting exclusive fran- franchises; thus, must this Court clusive” disposal. for solid waste chises mu- granted to implied powers examine nicipalities. Authority Monopo- A. The Lacks Hauling Garbage lize Services exam is a classic Municipal power longstanding power. It is ple of derivative question is whether the The initial only the possess that cities rule grant an exclusive solid waste entitled to any opinion in the haul “exclusive franchise” in 1. The use of hauling garbage. collecting entity entity authority granting to one means 136, (1990), powers expressly conferred on them 118 Idaho and con- or which can be franchising derived neces- cluded that exclusive solid waste Frederic, sary implication. State v. 28 Idaho permitted Alpett, under Idaho law. In 709, 715, 977, (1916); 155 P. see Sand this Court considered the of cities point Light &Water Co. v. Sand gas agree- to enter into water and point, 498, 503, 972, 31 Idaho 173 P. Alpert, ments. we concluded (1918) (recognizing city grants when cities, District, County Highway not the Ada exercising powers franchise it is not its own franchises to utili- exercising only powers but is such as have ties, agreements and the franchise did not state). upon been conferred This 141, violate the state antitrust laws. Id. at Court has articulated this rule aas strict gas 795 P.2d at 306. The water and construing limitation municipal powers: when Alpert franchises in were not exclusive. Id. “municipalities may only pow- exercise those Alpert 795 P.2d at 300. The decision ers to them or policy indicated that there was a state powers granted ... there is [and i]f permit monopoly public respect with service fair, reasonable, substantial doubt as to the services, including operating to several power, existence of a the doubt must be systems. solid waste collection Id. at city.” City Grange resolved 795 P.2d at 303. Those comments were dic- Haskin, ville v. ta, however, strictly dealt (1989). 1208, 1211 especially This rule is gas agreements. water and franchise The applicable functions, proprietary to of which legislature specifically gas treats water and garbage collection are services included.2 differently franchises from solid waste dis Id.; see Village Kimberly, Schmidt v. 74 of 50-329, posal. §§ (detailing See I.C. -329A 48, 60, (1953). Be special conditions and treatment for water § expressly cause I.C. 50-344 does not au- franchises). gas In Alpert, we were not perform thorize cities to garbage collection decide, decide, upon called to and did not franchises, exclusive upheld, to be authority grant whether cities have the to City’s necessarily actions this case must be exclusive solid waste collection franchises.3 implied from the statute. analysis crux of The is whether Necessarily Implied

2. Municipal Pow- authority grant to exclusive solid waste ers collection necessarily implied franchises is from I.C. 50-344. While the The district court concluded that the of Grangeville case does not hold that can authority grant cities to exclusive franchises is nec provide solid essarily through waste services the use implied. The district court limited franchises, of exclusive it City Grangeville facts, does a test to its which dealt of determining city whether or not a city with whether the authority to powers. determining city’s certain if a against enforce lien ordinance landlords for power unpaid express them tenants’ an utilities. from Because the present power, questioned case all doubts the existence of a must be resolved municipal city. power, City Grangeville, different district court 116 Idaho at of analysis determined the in City Grange- 777 P.2d at 1211. The United States Instead, apply. ville Supreme issue, did not weighed district Court has in on this Alpert court turned to v. Corp., holding Boise Water that because a Kansas statute did not "Proprietary 2. good goes directly city functions” refers to the actual act to the resident. This hauling garbage. Passing regulating laws sol- readily monopoly lends itself more to control governmental id waste collection is function. collection, city. With the value is in good. of a The does not own its Another difference between and this case and, such, residents’ residents should gas is that with the water and utilities they be free to deal with whomever choose. Alpert, pure residents are consumers. City may monopolize provider While the utilities, case, In this good residents have a control residents' cannot parties that has value to who are not con- regarding disposal personal property. choice Thus, city’s utility sumers of the service. gas, city provides water and the value the is the Anticompetitive

expressly provide municipal corporations 13. Prohibition on Con- grant with the to an fran- duct exclusive water, supply to electrici- chise citizens with City’s next issue The is whether ac- grant ty, gas, municipality such a restricting ability carry tions to Water, impermissible. Light & Gas Co. on a solid waste collection business constitut- Hutchinson, 207 U.S. anticompetitive prohibited ed conduct I.C. 135, 52 L.Ed. 257 S.Ct. treatise on §§ The district court -105. municipal provides law that if the granted summary express is not that the upon based its determination implication, but derives an exclusive fran- had enough implied power is “conve- garbage hauling. chise [express powers], nient but must be indispensable to them.” McQuillin, Munici- City impermissibly Because the pal Corporations (3d ed.1995); see 34.23 genuine an exclusive Hutchinson, 207 U.S. at 28 S.Ct. 135. as to issue of material fact exists whether Resolution of the turns on how indis- issue §§ 48-104 -105 have been violated. pensable are to exclusive franchises statutory provisions prohibit contracts These disposal. restraining Idaho and forbid mo commerce of the ordi nopolies. record consists Necessarily Does Have Not granting nance franchise Har Implied Garbage Powers to Restrict competition by din and all other Entity to One Collection treating as a way of such violations misde facts of this case demon meanor. The record also includes letters exclusivity integral to the strate that is not City in Plummer is told provision Har services. citation. This discontinue business or face carried on the of solid waste din had is actionable threat to discontinue business collection in Fruitland 1950without the since Act. See Competition under the Idaho I.C. an and this case use of exclusive Therefore, legal the au § without 48-113. notwithstanding, no there has been exclusive franchise, a thority franchise in the 1986 when I.C. since regard fact exists genuine issue of material Granted, may § it 50-344 was enacted. ing anticompetitive claim of behavior. the hauling financially beneficial a for summary judgment on this reverse the We there by to be assured that issue. guaranteed be a number of customers. will However, necessarily competition does not Comply the Com- C. Failed to With prevent accomplishing its ob petitive Bidding Statute jectives; just may garbage haul mean that if the subject capital that even ing itself to the effects of Plummer contends will grant an exclusive fran- specifically were authorized to ism. The chise, required competi- in to follow a franchise when it so called “exclusive” 50-341(B). § 31-4002, See, bidding practices I.C. 50- e.g., §§ tive mandated I.C. tends. “fair, claim be reasonable, found this doubt” 341. The district court Because substantial 50-344(2) exempts § municipality’s power unfounded because I.C. to the existence as competitive municipality, solid waste collection must be resolved we this bidding Specifically, statute process. an conclude that the mayor “[u]pon finding provides not I.C. franchise is safety or manager public neces- § or 50-344.4 on, agencies entrusted with parties prong is and the test directed 4. The district court relied administering about, agency responsibility statute argue four-prong statu- test for agency expertise. The deference is on tory interpretation this Court in based established Comm'n, agency charged Simplot is not an administrative Co. v. Idaho State Tax J.R. 862-863, administering for which this the statute with Idaho (1991). 820 P.2d statutory this four- deference is intended. deference embraced Vagueness sary protection public health and welfare D. Void property, provisions of section 50- Plummer asserts Ordinance No. 388 Code, apply shall not to solid moot, vagueness. was void for This issue collection, herein.” Ordinance No. 388 has because 50-344(2). § The district court concluded repealed hinge been and no other claims on necessary findings, made the question. accordingly granted summary judgment City. favor of the The facts refute the district Prospec- E. Interference Tortious with conclusion, making summary judg- court’s Advantage tive Economic improper. ment remaining two issues deal whether Plummer can maintain a claim tort The Cityjustified avoidance of I.C. prospec for intentional interference with a § findings. 50-341 based on two sets of advantage, tive economic and whether Idaho language Contained of Ordinance No. provides immunity Code 6-904 to the following: 388 is the “Pursuant to Idaho employees against and its Plummer’s tort 50-344(2), Code Section of Fruit- claims. Plummer fails cite or land, public safety Idaho finds that and nec provide argument for the claim that the essary health, welfare, protection public tortiously prospective interfered with eco property exception necessitate the advantage. nomic Such failure is fatal to this competitive bidding procedures outlined in appeal. Highland issue on Enterprises, See “finding” Section 50-341.” This Barker, Inc. v. simply a recitation language directly of the (1999) (noting appellate court will 50-344(2). from I.C. There are no facts not consider issues cited on that are explaining public safety set forth how law, supported by propositions of authori health, welfare, public property are safe ty, argument). generous reading or guarded by competitive avoidance of the bid briefing argu finds at most ding process. Accordingly, there is no basis ment acted with ill will in for a court to assess whether there is indeed adopting Ordinance No. 388. scant ar Such a factual avoiding competitive basis for bid gument is insufficient make out a claim for ding. prospective tortious interference with eco advantage. nomic decline to We consider The second at making effort legal Plummer’s tort claim due to the lack of findings came four months after the ordi- Thus, argument authority. we also need nance’s adoption and one month after its consider whether the is August effective date. In this be- immunity from the tort claim. finding, lated City Mayor wrote that the competitive reason bidding practices complied

were not with was because “a IV. long waste hauler needs a term commitment CONCLUSION from municipal customers so it can obtain financing which purchase existing statutory Under the frame amount equipment type work, of equip- and the of power Idaho cities do not have the required ment to best service the citizens exclusive solid waste franchis prohibit Fruitland.” Such after-the-fact carrying es that others from on com provide justifica- rationalization fails to peting garbage do, hauling services. Cities required tion before a can avoid the regulate have the for competitive bidding requirements. public More- health and welfare the manner in over, it is difficult to see the link between is earned out. The financing equipment the hauler’s granting summary district court erred in public protected by exemption concerns on the exclusive fran 50-344(2). Thus, chise, antitrust, in I.C. competitive bidding district court is in granting summary judgment erred Summary judgment against sues. Plummer City on this issue. properly vague- was entered on the for void challenges.

ness and tort This case is re- proceedings court manded to the district CONSTRUCTION, L.L.C., an Idaho SE/Z opinion. in with this accordance We award liability company, limited and Steven W. costs on to Plummer. Zambarano, individually and on behalf taxpayers

of all of the State of other Idaho, Plaintiffs-Appellants, WALTERS, KIDWELL and Justices concur. EISMANN SCHROEDER, Dissenting.

Justice body UNIVERSITY, pol IDAHO STATE Idaho, corporate, itic and The State respectfully I dissent from the conclusion Department Administration, acting that Idaho 50- the Court Code section through the Division of Public 344(1) not authorize does cities to Works, Defendants-Respondents, for solid waste collection. exclusive franchises (b) (d) Admittedly, subparts speci- do not fy may exclusive, franchises be but Co., Inc., Harris Brothers Construction that

read in context it is clear corporation, Intervenor- the cities. intended to confer Respondent. fact This follows from the that use of the surplus language term unless “franchises” No. 28649. meaning it the that an exclu- carries with right may granted. notes sive Court Idaho, Supreme Court of Corp., v. Boise Water Boise, March 2004 Term. (1990), April acknowledged that section Court public permits monopoly service for collection. While that statement solid waste case, not essential to the decision in the interpre- it represented a clear statement of recognized meaning of the tation that when surrounded word “franchises” point- language that would render the term right. mean an less if not read to properly upon Al- court relied The district statute, pert construing recognizing interpretation that it stated the of this Court major municipal dealing question unchanged Legislature left pronouncement Alpert. since the

Case Details

Case Name: Teresa D. v. City of Fruitland

Court Name: Idaho Supreme Court

Date Published: Jul 29, 2003

Citation: 89 P.3d 841

Docket Number: 27999

Court Abbreviation: Idaho