Ninth Circuit Upholds Preliminary Injury in Dormant Commerce Clause Ruling on Waste Management Enforcement in California

by Pillsbury - Gravel2Gavel Construction & Real Estate Law

On May 2, the U.S. Court of Appeals for the Ninth Circuit decided the case of Daniels Sharpsmart, Inc. v. Smith, Director of the California Department of Public Health. The Ninth Circuit affirmed the decision of the U.S. District Court for the Eastern District to issue a preliminary injunction enjoining state health officials from enforcing, on an extraterritorial basis, provisions of the California Medical Waste Management Act (MWMA) against Daniels Sharpsmart, Inc., an Illinois-based corporation that “designs, develops, manufactures, markets and sells reusable sharps container systems for the disposal of needle-inclusive biohazardous medical products” (Daniels).

Daniels sells these items in California, and also handles the transport and treatment of the resulting medical waste. In California, this waste is handled by Daniels’ waste management and transfer facility in Fresno, CA, which is subject to the MWMA, and has received an operating permit from the California Department of Public Health (Department). This permit requires this facility to comply with all applicable provisions of the MWMA.

The MWMA generally requires that all medical waste be disposed of by incineration. However, in 2014, there were no incinerators available to treat Daniels’ biohazardous medical waste, and Daniels transported this waste to other states for disposal. Daniels agreed to adhere to the waste management provisions of Kentucky and Indiana, which did not require incineration. In a three month period in 2014, Daniels transported 320,000 pounds of medical waste to facilities in Kentucky and Indiana, which was a cost-effective option for Daniels.

Following two inspections of its Fresno facility, the Department advised Daniels that any waste originating in California must be incinerated even if the law of another state allowed an alternative method of disposal. Daniels protested, but the Department issued a notice of violation and imposed a fine of $618,000 for 618 violation of the MWMA.

To avoid further penalties, Daniels transported its waste to out-of-state incinerators, but at a significantly higher cost. Daniels then filed a complaint in federal court, alleging that the Department’s policies and its officials violated the dormant Commerce Clause’s prohibition against the extraterritorial application of California law, which had the effect, as the Supreme Court remarked in Healy v. Beer Inst., of controlling conduct beyond  the boundaries of the state. The District Court granted a preliminary injunction, but denied the Department’s motion to dismiss on the basis of qualified immunity.

Concluding that “we are faced with an attempt to reach beyond the borders of California and control transactions that occur wholly outside of the State,” the Ninth Circuit affirmed the grant of a preliminary injunction.  The Ninth Circuit notes the U.S. Supreme Court’s admonition that, “If permitted, that kind of action would attack the cement that holds this nation together,” citing Oregon Waste Sys., Inc. v. Dep’t of Envtl. Quality of the State of Oregon and Healy. It quoted the Oregon Waste Court:

“The Commerce Clause provides that ‘[t]he Congress shall have Power … [t]o regulate Commerce … among the several States.’ Though phrased as a grant of regulatory power to Congress, the Clause has long been understood to have a ‘negative’ aspect that denies the States the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce. The Framers granted Congress plenary authority over interstate commerce in ‘the conviction that in order to succeed, the new Union would have to avoid the tendencies toward economic Balkanization that had plagued relations among the Colonies and later among the States under the Articles of Confederation.’ ‘his principle that our economic unit is the Nation, which alone has the gamut of powers necessary to control of the economy, … has as its corollary that the states are not separable economic units.'”

However, the Ninth Circuit reversed the District Court’s refusal to dismiss the claims against the Department officials, since Daniels’ constitutional rights in this “murky area” under the dormant Commerce Clause were not clearly established.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pillsbury - Gravel2Gavel Construction & Real Estate Law | Attorney Advertising

Written by:

Pillsbury - Gravel2Gavel Construction & Real Estate Law

Pillsbury - Gravel2Gavel Construction & Real Estate Law on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.