Huish Detergents, Inc. v. Warren County , Kentucky ; Monarch Environmental, Inc.

20 Huish Detergents v. Warren
County, Kentucky, et al.
No. 98-5566
______________________
CONCURRENCE
______________________
CLAY, Circuit Judge, concurring. I agree with the
majority’s reasoning and holding as far as it goes, but I would
proceed to hold that the County also violated the Commerce
Clause by designating Monarch as the exclusive waste hauler
and processor for municipal waste. It appears abundantly
clear on the record below, and not subject to serious dispute,
that the County instituted a comprehensive monopolistic
scheme by which it used its regulatory power to favor a single
provider of waste removal, disposal and processing services,
and by so doing eliminated other potential local and interstate
waste services providers from the relevant market. I would
not attempt to truncate the analysis with regard to segments of
the local waste disposal process, as does the majority opinion,
inasmuch as the County awarded a single monopoly to
Monarch with respect to all aspects of the waste disposal
business in Warren County.
The ordinance and finance agreement favor a single waste
hauler and processor to the detriment of both in-state and out-
of-state competitors by forcing all who generate waste in
Bowling Green to use the services of Monarch at a rate
designated by Warren County and Monarch. Given the way
in which vertical integration of the waste disposal services are
provided by Monarch pursuant to its arrangement with the
County for waste collection, hauling, processing and disposal,
and given the comprehensiveness of the contractual
arrangement between the County and Monarch, I would hold
that the County violated the Commerce Clause by designating
Monarch as the exclusive waste hauler and processor for
municipal waste--notwithstanding the district court’s
inappropriate failure to address the issue. I concur with the
majority opinion in all other respects.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0182P (6th Cir.)
File Name: 00a0182p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
HUISH DETERGENTS, INC.,
Plaintiff-Appellant,
v.
W ARREN C OUNTY ,
KENTUCKY ; M ONARCH
ENVIRONMENTAL, INC.,
Defendants-Appellees.
;>

1
No. 98-5566
Appeal from the United States District Court
for the Western District of Kentucky at Bowling Green.
No. 97-00123—Joseph H. McKinley, Jr., District Judge.
Argued: April 27, 1999
Decided and Filed: May 31, 2000
Before: RYAN, BATCHELDER, and CLAY, Circuit
Judges.
_________________
COUNSEL
ARGUED: Walter M. Jones, WYATT, TARRANT &
COMBS, Louisville, Kentucky, for Appellant. Dennis J.
Conniff, BROWN, TODD & HEYBURN, Louisville,
Kentucky, for Appellees. ON BRIEF: Walter M. Jones,

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2 Huish Detergents v. Warren
County, Kentucky, et al.
No. 98-5566
Stephen D. Berger, Cynthia B. Doll, WYATT, TARRANT &
COMBS, Louisville, Kentucky, for Appellant. Dennis J.
Conniff, Larisa E. Gilbert, BROWN, TODD & HEYBURN,
Louisville, Kentucky, Michael E. Caudill, Bowling Green,
Kentucky, for Appellees.
RYAN, J., delivered the opinion of the court, in which
BATCHELDER, J., joined. CLAY, J. (p. 20), delivered a
separate concurring opinion.
_________________
OPINION
_________________
RYAN, Circuit Judge. Huish Detergents, Inc., challenges
an ordinance enacted by Warren County, Kentucky, and a
franchise agreement entered into by Warren County and
Monarch Environmental, Inc., pursuant to which Monarch is
the exclusive contractor for collecting and processing all the
solid waste generated in the city of Bowling Green, Kentucky.
Huish’s claim is that the ordinance and companion agreement
violate both the so-called “dormant” Commerce Clause of the
United States Constitution and the Kentucky Constitution.
The district court dismissed the suit under Fed. R. Civ. P.
12(b)(6) for failure to state a claim upon which relief may be
granted. Because we hold that the district court erred in
dismissing Huish’s Commerce Clause claim, we reverse.
I.
Warren County, Kentucky, issued a Request for Proposal
(RFP) and considered competitive bids from trash haulers
interested in collecting and processing all municipal solid
waste in Bowling Green, Kentucky. The County awarded the
contract to Monarch and formalized the relationship in a
written “franchise agreement.” Under the franchise
agreement, Monarch has the exclusive right for five years
(1995-2000) to collect and process all municipal solid waste
generated in Bowling Green. Monarch is obligated to operate
No. 98-5566 Huish Detergents v. Warren
County, Kentucky, et al.
19
purchasing for it. In so doing, the County opened itself up to
Commerce Clause scrutiny. The Supreme Court has
explicitly “reject[ed] the contention that a State’s action as a
market regulator may be upheld against Commerce Clause
challenge on the ground that the State could achieve the same
end as a market participant.” South-Central Timber Dev., 467
U.S. at 98-99 (1984); cf. Chemical Waste Mgt., 504 U.S. at
351 (Rehnquist, C.J., dissenting).
Given our holdings in subsections (a) and (b) above, and
our understanding that the district court did not specifically
address whether the County violated the Commerce Clause by
designating Monarch as the exclusive waste collector and
processor for municipal waste, it is unnecessary for us to
decide this issue here. We note that some courts considering
the award of an exclusive waste collecting or processing
franchise, following an RFP, focus their inquiry on whether
in-state and out-of-state businesses competed on a level
playing field. See, e.g., Houlton Citizens’ Coalition v. Town
of Houlton, 175 F.3d 178, 188-89 (1st Cir. 1999); Atlantic
Coast Demolition & Recycling, 48 F.3d at 713. We express
no opinion on this approach or its potential application to the
County’s ordinance/franchise scheme.
III.
The district court’s dismissal of this action is REVERSED,
and the case is REMANDED for further proceedings
consistent with this opinion. Because we are reversing the
dismissal of the Commerce Clause claim, we also REVERSE
the dismissal of the section 1983 and state law claims. They
too are REMANDED.

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18 Huish Detergents v. Warren
County, Kentucky, et al.
No. 98-5566
The County’s prohibition on out-of-state disposal, therefore,
is subject to the restrictions of the Commerce Clause.
Although Carbone dealt with waste processing, its holding
applies with equal force to the waste disposal market,
compelling the conclusion that the County violated the
Commerce Clause by prohibiting out-of-state disposal. See
SSC, 66 F.3d at 514. This prohibition facially discriminates
against out-of-state disposal services which, again, constitutes
a per se violation sufficient, in and of itself, to survive the
Rule 12(b)(6) motion.
c. Award of “Exclusive Franchise” to a Single In-State
Waste Collector and Processor
The district court declined to address the merits of Huish’s
challenge to Monarch’s “exclusive franchise” for waste
collection and processing on the grounds that the County was
a market participant. The court reasoned that the County,
through its franchise agreement, effectively “purchased”
waste collection and processing services. We respectfully
disagree.
The County used its regulatory power—not its proprietary
purchasing power—to retain Monarch’s services by requiring
the County’s residents to pay for those services. Stated
another way, the County used its regulatory power to grant an
exclusive right to collect and process Bowling Green waste,
a result that no private party could accomplish on an open
market. The district court observed that the County would
have been a market participant had it purchased Monarch’s
services with “its own funds,” and reasoned that the exception
was still applicable where the County directed its residents to
purchase Monarch’s services. We agree with the district court
that the County could have achieved the same result, without
implicating the Commerce Clause, by hiring Monarch as its
exclusive waste hauler using public funds to pay for the
service. But the County rejected that strategy, opting instead
to apply its regulatory leverage by forcing residents to do the
No. 98-5566 Huish Detergents v. Warren
County, Kentucky, et al.
3
the city’s transfer station to process the waste it collects and
must dispose of all waste at a landfill “approved and
permitted by the State of Kentucky,” effectively prohibiting
the use of out-of-state disposal sites. The agreement can be
renewed for three terms of five years each and will renew
automatically for a five-year term absent prior notice by one
of the parties.
The franchise agreement provides that all residential,
commercial, and industrial entities that generate municipal
solid waste in Bowling Green must employ Monarch to
remove that waste; waste generators may not remove their
own waste, and they are prohibited from using any company
other than Monarch. Monarch bills its Bowling Green
customers directly according to a fee schedule fixed by the
franchise agreement; Monarch is solely responsible for
collecting payment. The County receives a portion of the
revenues Monarch generates servicing Bowling Green
businesses and residents, and Monarch removes the waste
generated at the County’s own buildings at no charge.
On the same day that the franchise agreement became
effective, the County passed an ordinance “executing” the
franchise agreement and incorporating its provisions by
reference. In essence, the ordinance transforms the franchise
agreement provisions into law.
Huish operates a laundry detergent manufacturing facility
in Bowling Green. Not surprisingly, this facility generates
considerable solid waste. Under the ordinance and franchise
agreement, Huish must use Monarch to remove this waste.
Huish filed this lawsuit seeking to invalidate the County’s
ordinance/franchise scheme, claiming that the scheme violates
the Commerce Clause , 42 U.S.C. § 1983, and section 164 of
the Kentucky Constitution.
The district court dismissed Huish’s complaint pursuant to
Fed. R. Civ. P. 12(b)(6). The court first concluded that the
County is not entitled to Eleventh Amendment immunity and

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4 Huish Detergents v. Warren
County, Kentucky, et al.
No. 98-5566
that Huish has the requisite standing to bring suit. With
respect to the Commerce Clause claim, the court took the
view that the County engaged in two separate challenged
activities: (1) “taking over” the local waste collection,
processing, and disposal markets; and (2) granting Monarch
the exclusive right to collect, process, and dispose of waste
generated in Bowling Green.
The court began its analysis of Huish’s Commerce Clause
claim by examining the County’s decision to prohibit
residents from independently purchasing waste collection,
processing, or disposal services on the open market, which the
court described as the County’s “takeover” of the local waste
collection market. The court held, as a preliminary matter,
that the County was not acting as a market participant in
taking this action and, therefore, its action was subject to
Commerce Clause restrictions. Proceeding with a “dormant
Commerce Clause” analysis, the district court concluded that
the County’s “takeover” of Bowling Green’s waste collection,
processing, and disposal market did not violate the dormant
Commerce Clause. The court reasoned that the “takeover”
did not discriminate against interstate commerce and that the
burden imposed on interstate commerce was not excessive in
relation to the benefits for the County.
As to the second issue, the district court concluded that the
County acted as a market participant in awarding an exclusive
franchise to Monarch. According to the district court, the
County “purchased” waste removal and processing services
and was free to choose Monarch as the County’s provider of
these services. In light of its conclusion that the market
participant exception applied, the district court did not
address whether the franchise agreement with Monarch ran
afoul of the Commerce Clause.
The court then dismissed Huish’s federal claims with
prejudice and its pendent state law claim without prejudice.
This appeal followed.
No. 98-5566 Huish Detergents v. Warren
County, Kentucky, et al.
17
Carbone and discriminated against the interstate flow of
waste for processing out-of-state.
Such discrimination constitutes a per se violation of the
dormant aspect of the Commerce Clause, “absent the clearest
showing that the unobstructed flow of interstate commerce
itself is unable to solve the local problem.” Carbone, 511
U.S. at 393. The County’s conclusory justification for its
actions—that it wanted to assure the “safe and efficient”
collection and disposal of solid waste—does not satisfy this
stringent test. See id. Even if we were to accept these
nonspecific goals as legitimate local interests, the County
offers no explanation why these goals cannot be satisfied out-
of-state. See Fort Gratiot, 504 U.S. at 366-67; Chemical
Waste Mgt., 504 U.S. at 343-44.
We hold, therefore, that for all these reasons, Huish’s
Commerce Clause claim survives the defendants’ Rule
12(b)(6) motion. While this holding alone requires that we
reverse the district court’s judgment, we will proceed to
consider Huish’s remaining arguments, at least to the extent
that the district court purported to address them.
b. Prohibition on Out-of-State Disposal
The County did not act as a market participant in
prohibiting out-of-state disposal of Bowling Green’s
municipal waste because the County neither bought nor sold
disposal services with taxpayer funds. Indeed, even if the
County’s “agreement” with Monarch constituted market
participation in either the waste collection or processing
markets, the market participant exception would not insulate
the County’s regulation of the separate waste disposal market,
which is downstream from the collection and processing
markets. See South-Central Timber Dev., Inc. v. Wunnicke,
467 U.S. 82, 97-98 (1984) (plurality opinion); SSC, 66 F.3d
at 515-16. Cf. Incorporated Village of Rockville Centre v.
Town of Hempstead, 196 F.3d 395, 399-400 (2d Cir. 1999).

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16 Huish Detergents v. Warren
County, Kentucky, et al.
No. 98-5566
a municipality labels its action as an “agreement.” Rather, we
must determine whether the municipality was acting in a
proprietary capacity as a purchaser or seller with regard to the
challenged action.
Here, it is clear that the County was not acting in a
proprietary capacity in forcing all municipal waste to flow
through the city’s transfer station. The County was not
“purchasing” the processing services with public funds, nor
was it “selling” its own processing services. These factors
routinely govern courts’ analysis of the market participant
exception in the waste context. See USA Recycling, 66 F.3d
at 1288-89, 1291; SSC, 66 F.3d at 515-16; GSW, Inc. v. Long
Cty., Georgia, 999 F.2d 1508, 1513-14 (11th Cir. 1993). “A
governmental entity which expends or risks no public money
. . . is not subject to the vagaries of the market and need be
afforded no corresponding freedom” under the market
participation doctrine. See GSW, 999 F.2d at 1514. By
effectively forcing all city residents to purchase the processing
services directly from Monarch, the County’s action far
exceeded that which a private entity could accomplish on the
free market. See SSC, 66 F.3d at 512-13; Atlantic Coast
Demolition & Recycling, Inc. v. Board of Chosen Freeholders
of Atlantic Cty., 48 F.3d 701, 717 (3d Cir. 1995). Thus, the
market participation exception does not shield Warren
County’s action from scrutiny under the Commerce Clause.
Carbone controls the remainder of our analysis. To be
sure, the essentially unitary ordinance/franchise scheme in
this case was not identical to the flow control ordinance in
Carbone. The county in Carbone required that all waste be
processed at the town’s transfer station. Here, on the other
hand, the County “contracted” with Monarch to collect and
then process all municipal waste. But the “contract” went
further than that. Warren County dictated where Monarch
must provide the processing services—at the city’s transfer
station and nowhere else. This explicit condition is the
functional equivalent of the flow control ordinance in
No. 98-5566 Huish Detergents v. Warren
County, Kentucky, et al.
5
II.
A. STANDING
At the outset, we must address the defendants’ contention
that Huish lacks standing to bring this action. The defendants
claim that, inasmuch as Huish is not a member of the solid
waste industry, its injuries do not fall within the zone of
interests protected under the Commerce Clause. The district
court concluded that Huish has standing, and we agree.
In cases such as this involving a constitutional claim, the
plaintiff must satisfy two tests for standing: first, it must meet
basic Article III constitutional requirements; and second, the
plaintiff’s injury must fall within the “zone of interests”
protected by the constitutional guarantee.
To establish Article III standing, Huish must demonstrate:
(1) an injury in fact that is actual or threatened; (2) a causal
connection between the defendants’ conduct and the alleged
injury; and (3) a substantial likelihood that the injury will be
redressed by a favorable decision. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992); Coyne v. American
Tobacco Co., 183 F.3d 488, 494 (6th Cir. 1999). “At the
pleading stage, general factual allegations of injury resulting
from the defendant’s conduct may suffice, for on a motion to
dismiss we presum[e] that general allegations embrace those
specific facts that are necessary to support the claim.” Lujan,
504 U.S. at 561 (internal quotation marks and citation
omitted) (alteration in original).
We find that Huish satisfies the requirements for standing
under Article III, and, indeed, the defendants do not argue
otherwise. Huish alleged an actual injury as a result of the
County’s ordinance and agreement with Monarch, in
consequence of which Huish is forced to pay Monarch more
to collect, process, and dispose of its waste than Huish would
spend if it could purchase one or more of these services from
a company operating out-of-state or perform the work itself.
The fact that Huish is not a member of the waste industry

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6 Huish Detergents v. Warren
County, Kentucky, et al.
No. 98-5566
does not undermine the causal connection between the
challenged scheme and Huish’s injury as a consumer.
[C]ognizable injury from unconstitutional discrimination
against interstate commerce does not stop at members of
the class against whom a state ultimately discriminates,
and customers of that class may also be injured, as in this
case where the customer is liable for payment . . . and as
a result presumably pays more for the [product] . . . .
Consumers who suffer this sort of injury from regulation
forbidden under the Commerce Clause satisfy the
standing requirements of Article III.
General Motors Corp. v. Tracy, 519 U.S. 278, 286 (1997).
Finally, Huish’s injury can be redressed with a favorable
result.
Huish must also satisfy a prudential limitation on our
jurisdiction—a further standing requirement—by showing
that the interest it seeks to protect “arguably fall[s] within the
zone of interests protected or regulated by the statutory
provision or constitutional guarantee invoked in the suit.”
Bennett v. Spear, 520 U.S. 154, 162 (1997); see also
Association of Data Processing Serv. Orgs., Inc. v. Camp,
397 U.S. 150, 153 (1970). In this case, the constitutional
guarantee arises under the Commerce Clause, which is
designed to prevent economic protectionism and insure the
free movement of goods between State borders, prohibiting
“laws that would excite . . . jealousies and retaliatory
measures” among the several States. C & A Carbone, Inc. v.
Town of Clarkstown, New York, 511 U.S. 383, 390 (1994).
Huish argues that it meets this additional standing
requirement because it has pleaded an injury that falls within
the zone of interests protected by the Commerce Clause, and
we agree. Huish seeks to protect its right to contract with a
company that can transport its waste for out-of-state
processing and/or disposal. In making this claim, Huish is
asserting its individual right as a consumer to purchase waste
No. 98-5566 Huish Detergents v. Warren
County, Kentucky, et al.
15
at one location within Bowling Green; and (2) the prohibition
on out-of-state disposal. We also note that, while we agree
that Monarch acted as the County’s “exclusive franchisee” for
waste collection and processing in Bowling Green, the district
court erred in characterizing Monarch as the County’s
“exclusive franchisee” for waste disposal. Monarch
apparently was not involved in waste disposal at all, but rather
purchased these services from a third party.
We identify Huish’s three challenges to the
ordinance/franchise scheme as follows: (1) the designation of
a single in-state processing station for municipal waste; (2)
the prohibition on out-of-state waste disposal; and (3) the
award of an “exclusive franchise” to Monarch for waste
collection and processing. At this stage of the proceedings,
Huish’s lawsuit can survive the Rule 12(b)(6) motion if any
one of these three challenges states a valid Commerce Clause
claim.
a. Designation of a Single In-State Processing Station
The defendants contend that the County acted as a market
participant in requiring Monarch to process all municipal
waste at a single Bowling Green transfer station. According
to the defendants, the challenged restriction is not subject to
Commerce Clause scrutiny because it appeared in an
“agreement” with Monarch, rather than in an ordinance. We
disagree with both the factual and legal premises of this
argument and hold that the County was not acting as a market
participant when it designated a single in-state processing site
for all municipal waste.
First, as a factual matter, the defendants overlook the
relationship between the ordinance and franchise agreement
scheme. The ordinance did contain the challenged restriction
because it incorporated the full franchise agreement by
reference. More importantly, the distinction that the
defendants identify is legally irrelevant. The market
participant exception does not come into play simply because

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14 Huish Detergents v. Warren
County, Kentucky, et al.
No. 98-5566
expenditure of state resources) to favor their own
citizens—is entirely absent where the States are buying
and selling in the market.
College Sav. Bank v. Florida Prepaid Postsecondary Educ.
Expense Bd., 527 U.S. 666, ___, 119 S. Ct. 2219, 2230 (1999)
(citation omitted).
3. Huish’s Challenges to the Ordinance/Franchise
Scheme
To address Huish’s Commerce Clause claim, it is
imperative that we properly characterize Huish’s challenges
to the ordinance/franchise scheme. We believe that the
district court mischaracterized the challenged activities, and
this mischaracterization led to a mistaken analysis. The
district court separated Huish’s challenges into two
categories: (1) the County’s “takeover” of the private market
for waste collection, processing, and disposal; and (2) the
County’s award of an exclusive franchise to Monarch for
collecting, processing, and disposing of municipal waste. As
to (1), the court held that the County was not a market
participant and therefore not entitled to the market
participation exception, but that its “takeover” of the waste-
services market in Bowling Green did not violate the
Commerce Clause. As to (2), the court held that the County
was acting as a market participant in awarding an “exclusive
franchise” to Monarch. Therefore, the court did not proceed
to consider whether this “franchise” violated the Commerce
Clause.
The district court correctly observed that it must evaluate
each challenged activity separately, see USA Recycling, Inc.
v. Town of Babylon, 66 F.3d 1272, 1283 (2d Cir. 1995), but
having said so, the court failed to do so. Specifically, by
grouping several challenged activities together under the
heading of a County “takeover,” the court overlooked the
unique aspects of two provisions of the ordinance/franchise
scheme: (1) the requirement that Monarch process all waste
No. 98-5566 Huish Detergents v. Warren
County, Kentucky, et al.
7
processing and disposal services across State boundaries, an
interest that falls squarely within the zone of interests
protected by the Commerce Clause. The Clause protects not
only producers, but also consumers like Huish who “‘may
look to the free competition from every producing area in the
Nation to protect [it] from exploitation by any.’” Dennis v.
Higgins, 498 U.S. 439, 450 (1991) (quoting H.P. Hood &
Sons, Inc. v. Du Mond, 336 U.S. 525, 539 (1949)).
The defendants rely on two cases from our sister circuits in
arguing that Huish’s grievance does not satisfy the zone of
interests test: Individuals for Responsible Government, Inc.
v. Washoe County, 110 F.3d 699, 703 (9th Cir. 1997), and
Ben Oehrleins and Sons and Daughter, Inc. v. Hennepin
County, 115 F.3d 1372, 1382 (8th Cir. 1997). Individuals for
Responsible Government involved a challenge to county
ordinances that required all residents to purchase garbage
collection and disposal services from a company chosen by
the county. Unlike the ordinance and agreement in this case,
however, the challenged ordinances in Individuals for
Responsible Government permitted residential customers to
opt out of the requirement and dispose of their own garbage,
without any restriction on the location of disposal. Residents
who elected this self-help option were exempted from paying
fees to the county-designated hauler, provided the residents
submitted appropriate documentation to the hauler.
Individuals for Responsible Gov’t, 110 F.3d at 701. Three
residents who apparently failed to submit the required
documentation for the exemption sought a declaratory
judgment that the ordinances violated the dormant Commerce
Clause. Id. at 701-02.
The Ninth Circuit held that these residents did not satisfy
the “zone of interests” test. Id. at 704. The court observed
that the ordinances did impose a barrier to interstate
commerce by reducing the flow of garbage out of the state,
but that the residents’ claimed injury—“being forced to pay
for services they do not want”—would exist even if the
ordinances imposed no barrier to interstate commerce because

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8 Huish Detergents v. Warren
County, Kentucky, et al.
No. 98-5566
all garbage was disposed out-of-state. Id. at 703-04. But that
is not the case here. Huish’s claimed injury—paying a higher
cost for in-state waste processing and disposal—would
disappear if it could hire a waste hauler to transport its waste
out-of-state for processing and/or disposal. Thus, Individuals
for Responsible Government does not contradict our holding.
In Ben Oehrleins, the county required all waste haulers to
deliver waste to a designated transfer station. The Eighth
Circuit held that residential waste generators who challenged
the ordinance failed to satisfy the zone of interests test. Ben
Oehrleins, 115 F.3d at 1381-82. Reasoning that the harm
suffered by residential waste generators—having to pay
relatively high bills for waste disposal—was “narrow,
personal, and strictly local,” the court declared that “[l]ocal
consumers shouldering the end-line burden of a purely local
regulation are not within the zone of interests of the
Commerce Clause.” Id. at 1382.
We find Ben Oehrleins to be distinguishable. The Ben
Oehrleins waste generators did not allege a direct injury;
rather, their “sole allegation of injury and claim for relief is
that they have incurred increased costs because of
enforcement of the designation requirements against
haulers.” Id. at 1379 n.6 (emphasis added). Huish—by
challenging the County’s restriction on Huish’s own ability to
purchase out-of-state waste processing or disposal
services—claims an injury more directly implicating the
interests under the Commerce Clause. Moreover, we disagree
with the Eighth Circuit’s reasoning, at least insofar as it
applies to waste generators. As we have explained, waste
generators participate directly in commerce, and the
Commerce Clause guarantees to them access to the interstate
market for waste-related services.
For these reasons, we hold that Huish has standing.
Because the County does not challenge the district court’s
holding on Eleventh Amendment immunity, we do not
consider that issue here.
No. 98-5566 Huish Detergents v. Warren
County, Kentucky, et al.
13
U.S. 204, 208 (1983). “There is no indication of a
constitutional plan to limit the ability of the States themselves
to operate freely in the free market.” Reeves, Inc. v. Stake,
447 U.S. 429, 437 (1980). The market participation
exception applies equally to States and municipalities. See
White, 460 U.S. 204. Consequently, if we determine that
Warren County was acting as a market participant with regard
to any of its challenged actions, we need not proceed to
consider whether the actions burdened interstate commerce in
violation of the Commerce Clause. See id. at 210.
The market participation inquiry is limited to “whether the
challenged program constitute[s] direct state participation in
the market.” Id. at 208 (internal quotation marks and citation
omitted) (emphasis added). The Supreme Court has applied
the market participation exception to the dormant component
of the Commerce Clause only in cases where the State was
spending “its own funds,” see White, 460 U.S. at 214, Hughes
v. Alexandria Scrap Corp., 426 U.S. 794 (1976), or selling a
resource that it owned or produced, see Reeves, 447 U.S. 429.
Of course, the State has no funds of “its own,” only funds it
has exacted from taxpayers and holds in trust for all of its
citizens. The reference in these cases is to taxpayer funds in
the hands of the State, or in this case, the County. White,
Hughes, and Reeves “stand for the proposition that, for
purposes of analysis under the dormant Commerce Clause, a
State acting in its proprietary capacity as a purchaser or seller
may ‘favor its own citizens over others.’” Camps
Newfound/Owatonna, Inc. v. Town of Harrison, Maine, 520
U.S. 564, 592-93 (1997) (quoting Hughes, 426 U.S. at 810)
(emphasis added).
The Supreme Court recently observed that the market
participation exception
makes sense because the evil addressed by [the
Commerce Clause]—the prospect that States will use
custom duties, exclusionary trade regulations, and other
exercises of governmental power (as opposed to the

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12 Huish Detergents v. Warren
County, Kentucky, et al.
No. 98-5566
finance the transfer station, the town guaranteed a minimum
waste flow to the station and permitted the contractor to
charge a “tipping fee” to haulers depositing waste at the
station. The town chose the flow control ordinance as the
mechanism for ensuring the minimum waste flow.
Carbone operated a recycling center of its own in
Clarkstown, performing functions equivalent to those
performed at the new transfer station. Carbone challenged the
flow control ordinance on dormant Commerce Clause
grounds. In its defense, Clarkstown pointed to its need to
finance the transfer station. Id. at 386. The Court sided with
Carbone. The Court explained that by preventing any
company “except the favored local operator” from processing
waste generated in the town, the flow control ordinance
deprived out-of-state businesses of access to the local market.
Id. at 389. In other words, the offending ordinance “hoards
solid waste, and the demand to get rid of it, for the benefit of
the preferred processing facility.” Id. at 392. The Court held
that the ordinance’s discrimination against out-of-state waste
processors was per se invalid, rejecting Clarkstown’s
argument that it had no other means to advance its interest in
ensuring the long-term viability of the transfer facility. Id. at
392-94.
The reach of the Commerce Clause into the waste industry
extends not only to waste processing, but also to waste
disposal. See Fort Gratiot, 504 U.S. 353; Chemical Waste
Mgt., Inc. v. Hunt, 504 U.S. 334 (1992); City of Philadelphia,
437 U.S. 617. Carbone teaches us that a State cannot “hoard”
solid waste by prohibiting or restricting the flow of waste to
an out-of-state disposal facility.
2. The Market Participation Exception
So-called dormant Commerce Clause principles are not
implicated when the State’s activity can be characterized as
“market participa[tion],” rather than market regulation. White
v. Massachusetts Council of Constr. Employers, Inc., 460
No. 98-5566 Huish Detergents v. Warren
County, Kentucky, et al.
9
B. RULE 12(b)(6) DISMISSAL
We turn now to Huish’s claim that Warren County’s
ordinance/franchise scheme violates the so-called “dormant”
Commerce Clause. Huish argues that it has adequately
pleaded a valid Commerce Clause claim on three independent
grounds: first, the scheme discriminates against out-of-state
waste processors by requiring that all municipal waste be
processed at the Bowling Green transfer station; second, the
scheme discriminates against out-of-state waste disposers
because it prohibits the disposal of Bowling Green waste
outside of Kentucky; and third, the scheme discriminates
against the interstate market for waste collection and
processing by designating Monarch, a local business, as the
exclusive waste collector and processor for Bowling Green.
We review a Rule 12(b)(6) dismissal de novo. George
Fischer Foundry Sys., Inc. v. Adolph H. Hottinger
Maschinenbau GmbH, 55 F.3d 1206, 1208 (6th Cir. 1995).
Our duty is to construe the complaint in the light most
favorable to the plaintiff, accepting all well-pleaded factual
allegations as true. Columbia Natural Resources, Inc. v.
Tatum, 58 F.3d 1101, 1109 (6th Cir. 1995). “[A] complaint
should not be dismissed unless it appears beyond doubt that
the plaintiff can prove no set of facts in support of his claim
which would entitle him to relief.” Hartford Fire Ins. Co. v.
California, 509 U.S. 764, 811 (1993) (internal quotation
marks and citations omitted) (alteration in original).
1. The “Dormant” Commerce Clause
The Commerce Clause grants Congress the power to
regulate commerce among the States. It reads, with disarming
simplicity: “[The Congress shall have Power] [t]o regulate
Commerce with foreign Nations, and among the several
States, and with the Indian Tribes.” U.S. Const., art. I, § 8,
cl.3. As interpreted by the Supreme Court, the Clause, by
negative implication, restricts the States’ ability to regulate
interstate commerce. See CTS Corp. v. Dynamics Corp. of

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10 Huish Detergents v. Warren
County, Kentucky, et al.
No. 98-5566
Am., 481 U.S. 69, 87 (1987). There is, of course, no
“dormant” clause to be found in the text of clause 3 of section
8 of article I. Clause 3 is the Commerce Clause; the judge-
made notion that a negative implication is subsumed in the
affirmative declaration of clause 3 that Congress has power
“[t]o regulate Commerce . . . among the several States”
should more properly be called the dormant aspect or
component of the Commerce Clause. But it is too late in the
day to rewrite the substantial case law that speaks, however
inaccurately, of “the dormant Commerce Clause.” Instead,
we can only yield to this inaccurate but settled usage.
The Supreme Court has interpreted the Commerce Clause
to “prohibit[] States from ‘advanc[ing] their own commercial
interests by curtailing the movement of articles of commerce,
either into or out of the state.’” Fort Gratiot Sanitary
Landfill, Inc. v. Michigan Dep’t of Natural Resources, 504
U.S. 353, 359 (1992) (quoting H.P. Hood & Sons, 336 U.S.
at 535). And this court, among others, has construed the
Clause as limiting the regulatory activity of counties and cities
as well as States. Waste Mgt., Inc. of Tennessee v.
Metropolitan Gov’t of Nashville and Davidson Cty., 130 F.3d
731, 735 (6th Cir. 1997), cert. denied, 523 U.S. 1094 (1998).
Thus, where this opinion refers to “States,” the defendant,
Warren County, is included in this designation.
If an ordinance discriminates against interstate commerce
by treating in-state and out-of-state interests differently,
benefitting the former and burdening the latter, it is per se
invalid unless the State has “no other means to advance a
legitimate local interest.” Carbone, 511 U.S. at 392; see also
Waste Mgt., 130 F.3d at 735. On the other hand, if the law
regulates evenhandedly, it will be upheld unless the burden it
imposes on interstate commerce is “‘clearly excessive in
relation to the putative local benefits.’” Carbone, 511 U.S. at
390 (quoting Pike v. Bruce Church, Inc., 397 U.S. 137, 142
(1970)).
No. 98-5566 Huish Detergents v. Warren
County, Kentucky, et al.
11
As a preliminary matter, there is no question that a State
law restricting the interstate travel of waste implicates the
Commerce Clause, and, as we have indicated, this is equally
so of a local ordinance. Any doubt about this fact was laid to
rest by the Supreme Court in 1978. City of Philadelphia v.
New Jersey, 437 U.S. 617, 621 (1978). Since then, the Court
has reiterated that garbage is not valuable, in and of itself, but
it is a “profitable business” because “its possessor must pay
to get rid of it. In other words, the article of commerce is not
so much the solid waste itself, but rather the service of
[collecting], processing and disposing of it.” Carbone, 511
U.S. at 390-91.
Whether the business arrangements between . . .
generators of waste and the . . . operator of a waste
[processing or] disposal site are viewed as sales of
garbage or purchases of transportation and disposal
services, the commercial transactions unquestionably
have an interstate character. The Commerce Clause thus
imposes some constraints on [a State’s] ability to
regulate these transactions.
Fort Gratiot, 504 U.S. at 359 (internal quotation marks
omitted). Indeed, one of our sister circuits has observed that
federal courts are now clogged with cases challenging
restrictions on waste-related services, making garbage the
modern legal battleground over the Commerce Clause. See
SSC Corp. v. Town of Smithtown, 66 F.3d 502, 505 (2d Cir.
1995).
In Carbone, 511 U.S. 383, the Supreme Court held that a
so-called flow control ordinance that required all solid waste
in the town to be processed at a designated transfer station
before leaving the town violated the dormant Commerce
Clause. The town of Clarkstown, New York, had agreed to
close its landfill and build a new solid waste transfer station.
Id. at 387. A local private contractor constructed the transfer
station and agreed to operate it for five years, at which time
the town would buy the station for a nominal price. Id. To

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