WASHINGTON - A New York town's trash disposal law encountered intense scrutiny and criticism by several Supreme Court justices yesterday when the high court held arguments in a case brought by a trash broker challenging the law.

The case is significant for the municipal market because a ruling against the Clarkstown, N.Y., law could undermine the security of municipal revenue bonds issued around the country for various solid waste facilities.

The law at issue in the case, C&A Carbone Inc. v. Clarkstown, N. Y, requires that all trash picked up in or brought into the town be disposed of at the town's solid waste facility. Such laws, known generically as flow-control ordinances, are designed to ensure a steady supply of waste for landfills, recycling centers, and waste-to-energy plants by eliminating competition.

Flow-control laws are particularly popular among municipalities that have a financial stake in their solid waste facilities, especially when they have issued revenue bonds for construction.

C&A Carbone's lawyer, Betty Jo, Christian, said the Clarkstown law "is an overt discrimination against interstate commerce." The commerce clause in the U.S. Constitution prohibits states from erecting barriers to the free flow of goods and services across state lines.

C&A Carbone had been in the business of taking trash from jurisdictions outside of Clarkstown, separating it into recyclable and nonrecyclable materials, and then shipping the nonrecyclable materials to landfills or waste-to-energy plants. Under the Clarkstown law, C&A Carbone was prohibited from sending the nonrecyclable trash to any facilities other than the town's designated trash "transfer" facility. A transfer facility receives unsorted trash, bales it, and ships it to other locations for permanent disposal.

The trash facility charges a fee of $81 per ton to handle trash, compared to the $70 per ton that C&A Carbone had charged.

During Christian's presentation, Justice John Paul Stevens interrupted to say the Clarkstown law appears to put local companies like C&A Carbone at an unfair disadvantage. "If you're going to stay in business, you would have to move the plant" out of town, Stevens said to Christian.

William C. Brashares, the lawyer representing Clarkstown, told the high court that the town has "legitimate police power reasons" for requiring all trash to be processed at one designated facility.

"State law has elaborate requirements" for handling trash, Brashares said. One central facility for processing trash is needed because "the town needs the ability to monitor" whether those requirements are being met, he said.

But Brashares underwent intense questioning and criticism by several justices. Justices Anthony Kennedy and David Souter both said that they did not understand why Clarkstown could not come up with another way of addressing its concerns about trash.

You don't need a local facility to accomplish the end you're addressing," Kennedy told Brashares.

Souter said Clarkstown has "got to justify the burden [placed on C&A Carbone] even if it's a nondiscriminatory burden."

Justice Antonin Scalia said that in a similar case heard by the court, a municipality required all milk produced within its borders be pasteurized at one particular facility. The court truck down the city's requirement. In that case, "we said there are a lot of other ways to preserve those [health] interests,' Scalia said.

Scalia said he was concerned about the Clarkstown law because, in promulgating it, the town seems to be "saying you can prevent local people from dealing in interstate commerce."

During the arguments, the justices injected bit of levity into the proceedings

Kennedy provoked laughter when he said he marveled that "our civilization has advanced to the point where garbage is valuable."

Similarly, Scalia prompted laughter when he said that "the specter of all the states and municipalities wrestling for control over garbage is quite wonderful."

The high court also heard arguments yesterday in BFP v. Resolution Trust Corp., a dispute over whether federal bankruptcy courts may review foreclosure sales conducted in accordance with state law. The issue is of keen interest to municipalities, which have enjoyed sovereignty in property transactions.

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