April 24, 2013
Landfills and Zoning

by Justice Paul E. Pfeifer

Should a private sanitary landfill be considered a public utility? That’s the question we had to consider in a case that came before us here – at the Supreme Court of Ohio.

The case involved Rumpke Sanitary Landfill, Inc., and its subsidiaries, which operate a landfill in Colerain Township near Cincinnati, in Hamilton County. In 2006, Rumpke applied to change the existing zoning of land adjacent to its property at I-275 and Hughes Road, in order to expand its landfill.

The county planning commission recommended the rezoning request, but the Colerain Township Zoning Commission recommended that the township trustees deny it. Following public hearings, the trustees did, indeed, deny the request.

After that, Rumpke filed a complaint in court against the township and the trustees seeking a declaration that Rumpke is a public utility. Why did the company seek designation as a public utility? Because, under Ohio law, public utilities are exempt from local zoning restrictions.

The trial court granted summary judgment in favor of Rumpke. In response, the township filed an appeal, arguing that the trial court had improperly granted summary judgment in Rumpke’s favor because a privately owned sanitary landfill is not a public utility.

The court of appeals disagreed. In its decision, the court of appeals wrote: “As a general rule, Ohio law provides that townships have no power under the zoning laws to regulate the location, erection, or construction of any buildings or structures of any public utility.” The public-utility exemption law was “intended to exempt public utilities providers from regulation by township zoning boards and boards of zoning appeals.”

The reason for this exemption is to ensure “that public utilities will be able to construct the facilities required to serve the public interest across the state without undue interference from township zoning resolutions.”

The court of appeals then analyzed whether Rumpke was a public utility. To make that determination, a court must consider the factors related to the “public service” and “public concern” characteristics of a public utility.

The factors relating to the public-service requirement “include a demonstration that the entity provides ‘an essential good or service to the general public which has a legal right to demand or receive this good or service.’ The entity must also demonstrate that it provides its service to the public ‘indiscriminately and reasonably.’ And the provider must have an obligation to provide the good or service that cannot be arbitrarily or unreasonably withdrawn.”

The public utility must also “conduct its operations in such a manner as to be a matter of public concern. Factors considered in reaching this determination include the nature of the services provided, competition in the local marketplace, and regulation by a government authority.”

Taking into consideration those factors, the court of appeals agreed with the trial court that Rumpke was entitled to the declaration that it is a public utility. Following that, the case came before us for a final review.

In its appeal, Colerain Township argued that a private sanitary landfill is not exempt from township zoning regulations. The township also argued that a privately owned landfill cannot be considered a public utility when there is no public regulation or oversight of its rates or a regulatory requirement that all solid waste delivered to the landfill be accepted.

Our court has considered similar questions in public utilities cases in the past. We have concluded that a simple claim that a business’s services are open to the public does not automatically categorize the business as a public utility.  Such a holding would incorrectly encompass as public utilities “traditional private business enterprises which are, in various degrees, regulated by diverse public authorities” – for example, dry cleaners, restaurants, and grocery stores.

We have also determined that the business claiming public-utility status bears the burden of offering sufficient evidence on these factors.

In this case, we have the question of whether a private sanitary landfill can be a public utility. Given the fact that no governmental body regulates private sanitary landfills on those factors that make an entity a public utility, the question rather answers itself.

In previous cases, we have cautioned owners of sanitary landfills that although achieving public-utility status would exempt the landfills from local zoning restrictions, obtaining public-utility status also invites “even greater governmental regulation and control than is currently experienced in this industry.”

As a private sanitary-landfill operator, Rumpke is subject primarily to the regulations of the Ohio Environmental Protection Agency (“OEPA”) as well as the local solid-waste regulator, which has authority over the construction and operations of solid waste facilities within the district.

Our court has determined that the “public concern with environmental regulation is separate and distinct from the public concern involved in the regulation of public utilities.” Therefore, the public concern of both OEPA and the solid-waste regulator are not the same public concern that is relevant when determining whether an entity is a public utility.

What about the public-service factor? The lack of governmental regulation means that Rumpke determines to whom it provides its services and how or when that service is provided. The general public has no right to demand to receive Rumpke’s services. Therefore, there is no guarantee that Rumpke will provide its services to the public indiscriminately and reasonably, nor is there anything preventing Rumpke from arbitrarily or unreasonably withdrawing its services. Rumpke could lawfully close its doors to the public.

And, as a private company, Rumpke has the ability to set its own rates without any governmental oversight. Thus, Rumpke fails to meet the public service factor of the public-utility test.

The lack of governmental control over the public-service and public-concern factors was critical in determining that Rumpke is not a public utility. We therefore concluded – by a seven-to-zero vote – that a privately owned sanitary landfill cannot be a public utility exempt from township zoning when there is no public regulation of its rates, no regulatory requirement that all solid waste be accepted, and no right of the public to demand and receive its services.

EDITOR'S NOTE: The case referred to is Rumpke Sanitary Landfill, Inc. v. Colerain Twp., 134 Ohio St.3d 93, 2012-Ohio-3914. Case No. 2011-0181. Decided September 5, 2012. Majority opinion written by Chief Justice Maureen O'Connor.