Red River Service v. City of Minot ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
__________
No. 97-2979
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Red River Service Corp., *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* District of North Dakota.
City of Minot, North Dakota, *
*
Appellee. *
__________
Submitted: March 9, 1998
Filed: June 10, 1998
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Before WOLLMAN and LOKEN, Circuit Judges, and BATAILLON,1 District Judge.
__________
BATAILLON, District Judge.
When the City of Minot, North Dakota refused to allow Red River Service
Corporation (Red River), an Oklahoma waste transport business, to dispose of solid
waste from the Minot Air Force Base (MAFB) in the city’s landfill, Red River filed suit
1
The Honorable Joseph F. Bataillon, United States District Judge for the District
of Nebraska, sitting by designation.
against the city in the District Court for the District of North Dakota seeking damages,
injunctive relief, and attorney’s fees. In its complaint, Red River alleged that the city’s
refusal to allow Red River access to the landfill violated the Commerce Clause, U.S.
Const. art. I, § 8, cl. 3; violated the Equal Protection Clause, U.S. Const. amend. XI;
violated 42 U.S.C. § 1983; and breached an oral contract.
I.
Red River appeals from the district court’s denial of its motion for partial
summary judgment and the granting of the City of Minot’s motion for summary
judgment.
The district court held that Minot was not subject to the constraints of the
Commerce Clause because it operated the landfill just as any private operator would.
Hence, the city was a “market participant” rather than a “market regulator” and, as
such, it had the right to sell space in the landfill to whomever it chose.
On Red River’s equal protection claim, the district court noted that Red River
never asserted membership in a suspect class nor claimed that Minot was violating its
fundamental rights. Minot’s denial of access was, therefore, subject only to rational
basis scrutiny. The court held that preserving space in the landfill for citizens of Minot
was a rational reason for the city to deny Red River access.
The district court also ruled that any oral contract between Red River and Minot
was barred by the North Dakota statute of frauds requiring that contracts that cannot be
performed in a year must evidenced by a writing. Since the alleged oral contract was
apparently co-terminous with Red River’s five-year contract with MAFB, the court held
that it could not have been performed within a year.
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Finally, the district court noted that while the doctrine of estoppel could be
applied against the government under North Dakota case law, it was to be applied only
after a careful weighing of the equities involved. The district court declined to apply the
doctrine in this case because Red River had failed to obtain solid assurances from Minot
that it could use the city’s landfill before it bid the five-year contract with MAFB.
We review a grant of summary judgment de novo, applying the same standards
as the district court. See Rabushka ex rel. United States v. Crane Co., 122 F.3d 559,
562 (8th Cir. 1997), cert. denied, 118 S. Ct. 1336 (1998). Summary judgment is
appropriately granted if the evidence, viewed in the light most favorable to the
nonmoving party, demonstrates that no genuine issue of material fact exists and that the
moving party is entitled to judgment as a matter of law. State Farm Mut. Auto. Ins. Co.
v. Shahan, 1998 WL145925 (8th Cir. 1998).
Red River contends that the district court erred: 1) in finding that Minot is a
market participant” rather than a “market regulator”; 2) in finding that Minot did not
violate Red River’s equal protection rights under the United States Constitution by
allowing other waste transport businesses from outside of the city to use the landfill; 3)
in finding that Minot breached an oral contract with Red River which allowed Red
River access to the landfill; and 4) in failing to apply the doctrine of estoppel with
respect to the Red River’s contract claim.
We affirm.
II.
The City of Minot owns and operates a municipal landfill. Beginning in 1993,
Minot began to grapple with serious policy considerations involving the landfill. J.A.
at 162. Both the Public Works and Safety Committee of the Minot City Council and the
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Yard Waste Ad Hoc Committee debated over the course of several years what types of
waste and how much should be allowed into the landfill, which waste haulers should be
allowed to dump into the landfill, and what charges should be imposed on those using
the landfill. By early 1994, both groups had questioned whether Minot could continue
to take waste from outside the city. J.A. at 87, 96, 113, 114. Much of the debate
concerned disposal of municipal (also called domestic or household) solid waste,
putrescible matter such as the remnants of meals, and yard waste, grass clippings and
other organic materials collected from domestic residences. Municipal solid waste is
expensive to handle since, unlike inert waste, it requires leachate collection systems and
ground water monitoring.2 See Minot Code § 14-1, “Inert waste.”
To extend the useful life of its landfill, the city council formally decided in late
1996 that it would accept only municipal solid waste generated by its own citizens and
by certain non-citizen haulers who were grandfathered in under the new arrangement.3
As a result of this evolving policy, the city council further decided that it would not
accept in its landfill the estimated 5,000 tons a year of municipal solid waste that Red
River collected from MAFB even though it had “ample room” for the waste. J.A. at
129, 142, 155. Minot allowed Red River and other haulers to dump inert waste --
construction debris -- from MAFB and elsewhere in the landfill. Aff. of Alan M. Walter,
J.A. at 193. The volume of inert waste brought to the landfill is “minuscule”
2
Examples of inert waste include construction and demolition material such as
metal, wood, bricks, masonry and cement concrete, tires, tree branches, bottom ash
from coal fire boilers and waste coal fines from air pollution control equipment. Minot
Code § 14-1, “Inert waste.”
3
While the city council did agree in April 1997 to accept for six months waste
from the Grand Forks, North Dakota area following the disastrous spring floods of that
year, this agreement resulted from an emergency request from the North Dakota State
Health Department. J.A. at 158. As the appellee notes, however, no waste from the
Grand Forks area was ever deposited in the Minot landfill. Appellee’s Br. at 16.
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compared to the volume of municipal solid waste that might find its way to the landfill
were open dumping allowed. Appellant’s Br. at 17.
At the time the city council decided not to accept Red River’s solid waste from
MAFB, however, Red River already had bid a five-year contract to haul MAFB’s solid
waste, apparently based on the belief that Minot would accept the waste. J.A. at 143.
Red River claims that it bid the MAFB contract only after it received quotes from the
city on usage rates and written assurances from the city’s director of public works that
Red River could use the landfill. J.A. at 131.
III.
Red River argues that Minot’s decision not to accept the solid waste from MAFB
in its municipal landfill violates the Commerce Clause because Minot is a market
regulator rather than a market participant. We disagree.
The Commerce Clause grants Congress the power to regulate commerce among
the states. It primarily has been applied to state taxes and regulatory measures that
restrict free trade by imposing burdens on out-of-state economic interests. Reeves, Inc.
v. Stake, 447 U.S. 429, 440 (1980). This limitation on state power, frequently called the
“dormant” Commerce Clause, “prohibits economic protectionism -- that is, regulatory
measures designed to benefit in-state economic interests by burdening out-of-state
competitors.” New Energy Co. v. Limbach, 486 U.S. 269, 273 (1988).
When a state or local government acts as a market participant rather than a
market regulator, however, its conduct is outside the reach of the Commerce Clause.
Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 809-810 (1976) (applying doctrine
to Maryland program paying a bounty for scrapping junk cars titled in Maryland, even
though out-of-state processors faced stricter documentation requirements, since
Maryland was similar to a private company bidding up the price of scrap); Reeves, 447
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U.S. at 440 (applying doctrine when, during a national shortage, South Dakota sold
cement from a state-owned plant only to its residents); White v. Massachusetts Council
of Constr. Employers, Inc., 460 U.S. 204, 207 (1983) (allowing Boston to require firms
seeking public construction contracts to have a workforce of at least fifty percent
Boston residents); South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 93
(1984) (plurality) (blocking Alaska from requiring that timber taken from state lands be
processed within the state before export since the requirement attempted to control the
market after sale of the timber). If a state or local government is a market participant in
a business, it may pursue its own economic interests free from the constraints imposed
by the Commerce Clause within the market in which it is a participant. Wunnicke, 467
U.S. at 97. This freedom includes the right to choose its own trading partners without
regard to whether its choices discriminate against out-of-state businesses, id. at 99, or
favor its own citizens, Alexandria Scrap, 426 U.S. at 810. In short, the Commerce
Clause does not “limit the ability of the States themselves to operate freely in the free
market.” Reeves, 447 U.S. at 437.
While the Supreme Court has not recently revisited the doctrine in a waste
context, several lower courts have embraced it when state or local governments have
engaged in proprietary activities involving waste that “burden” private economic
interests.4 For example, in a closely analogous case, the United States Court of Appeals
for the Third Circuit held that a county acted as a market participant rather than a
4
This circuit has applied the doctrine several times in recent years, but not in a
waste context. See, e.g., Four T’s Inc. v. Little Rock Mun. Airport Comm’n, 108 F.3d
909 (8th Cir. 1997) (commission was a market participant when it provides concession
areas and assesses concession fees); Independent Charities of America, Inc. v.
Minnesota, 82 F.3d 791 (8th Cir. 1996) (state acted as an employer in the charitable
fund raising market by restricting the charities that may solicit from state employees in
the state workplace during business hours); and Chance Mgt., Inc. v. South Dakota, 97
F.3d 1107 (8th Cir. 1996) (state acted within the gaming market to impose a residency
requirement on all applicants for operators’ licenses for video lottery machines).
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market regulator when, in an effort to preserve space in its landfill for local residents,
it decided to charge a higher rate to receive and dispose of waste generated outside the
county and five nearby counties and to limit the daily amounts that an out-of-state waste
processor could dump. The volume limitations caused the out-of-state processor
economic hardship because it was forced to send its waste to more distant (and hence
more costly) disposal sites. The court found that the county was a market participant in
the disposal services market. The price and volume conditions that the county imposed
governed only the landfill operated by the county and applied only to the narrow,
immediate market of the county and its neighbors. Swin Resource Sys., Inc. v. Lycoming
County, 883 F.2d 245, 250 (3d Cir. 1989).
In another illustrative case, private waste disposal companies brought suit under
the Commerce Clause against three cities that had enacted ordinances restricting the
collection and disposal of solid waste in a four-county region. Each city was a
participating member of the public, non-profit Southeast Alabama Solid Waste
Authority. One ordinance required that all solid waste generated within the city must be
disposed of at the Authority’s facility. The second ordinance was similar to the first but
it also vested in the city title to all solid waste generated within the city and prohibited
private contracts between waste collectors and waste generators. The third ordinance
was also similar to the first but it permitted waste collectors and haulers the option of
taking waste out-of-state so long as they complied with reporting requirements not
imposed if waste was deposited in the Authority’s facility. The district court found that
none of the cities could claim the market participant exception since the cities were
“not purchasers as was Maryland in Alexandria Scrap, or sellers as was South Dakota
in Reeves, Inc. v. Stake, or bona fide interest holders in construction projects as was
Boston in White v. Massachusetts Council.” Waste Recycling, Inc. v. Southeast
Alabama Solid Waste Disposal Authority, 814 F. Supp. 1566, 1572 (M.D. Ala. 1993).
The court said that the intent behind the ordinances and the cities’ contracts with the
Authority was “not individual market participation but broad market regulation. . . .
[T]he ordinances impermissibly regulate outside the market in which the
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cities are actual participants.” Id. at 1573. See National Solid Waste Mgt. Ass’n v.
Williams, 966 F. Supp. 844 (D. Minn. 1997) (holding state acted as market participant
in the collection and management of waste even though contractors hired by public
entities had to comply with the county’s solid waste management plan); Barker Bros.
Waste, Inc. v. Dyer County Legislative Body, 923 F. Supp. 1042 (W.D. Tenn. 1996)
(holding county was market participant in the trash hauling market, even though it
contracted out garbage collection services in an exclusive contract with a private
hauler).
Here, Minot has chosen, in an effort to prolong the useful life of its landfill, to
limit those who can dispose of municipal solid waste in its landfill. Significantly, Minot
has not attempted to regulate the flow of waste beyond its own market nor to require
that all waste generated in the Minot market be deposited in the Minot landfill. Red
River obviously will suffer serious economic consequences as a result of the city’s
decision because it will be forced to haul the municipal solid waste from MAFB to more
distant landfills, thus increasing its costs. Minot is not obligated, however, to vouchsafe
Red River’s economic health. As a market participant, it has the freedom to choose its
trading partners without regard to Red River’s contractual obligations to MAFB.
Red River states that the district court “misconstrued the law” in applying the
market participant doctrine to Minot’s actions. Appellant’s Brief at 26. To establish
that Minot is instead a market regulator, Red River advances several unpersuasive
theories.
First, citing Camps Newfound/Owatonna, Inc. v. Harrison, 117 S. Ct. 1590
(1997), Red River asserts that because public funds established and now support the
landfill, the city cannot be considered a market participant. In Camps
Newfound/Owatonna, the Court held that a Maine property tax exemption scheme for
charitable institutions incorporated in Maine did not fall within the market participant
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exception to the Commerce Clause because it excluded organizations operated
principally for the benefit of nonresidents. Creating a tax program to subsidize a
particular industry, such as charitable and benevolent institutions, is not a proprietary
activity nor the “sort of direct state involvement in the market that falls within the
market-participation doctrine.” Id. at 1606-07. Further, the Court noted that the tax
exemption statute swept far more broadly than the narrow, discrete activities at issue
in Alexandria Scrap and Reeves. Hence, the tax scheme “must be viewed as action
taken in the State’s sovereign capacity rather than a proprietary decision to make an
entry into all of the markets in which the exempted charities function.” Camps
Newfound/Owatonna at 1607. See also New Energy Co., 486 U.S. 269, 277, 278 (1988)
(holding Ohio’s assessment and computation of fuel sales tax was a “primeval
governmental activity” that “cannot plausibly be analogized to the activity of a private
purchaser,” even if it produces a subsidy).
Camps Newfound/Owatonna is hardly support for Red River’s position. If the
public funds that paid for the construction projects in Boston did not trigger application
of the Commerce Clause in White, then surely the public funds that paid for the creation
and maintenance of the Minot landfill will not trigger it either. In deciding to limit
access to its landfill to residents and grandfathered entities, Minot has not engaged in
the sweeping regulation characteristic of “a State[] acting in its distinctive governmental
capacity,” New Energy Co., 486 U.S. at 277, but instead is functioning in a true
proprietary capacity. Minot is running a trash disposal business involving one landfill
it has built and maintained. It does not attempt to manage the flow of waste outside of
its geographic market. It does not impose conditions that “have substantial regulatory
effect outside of [its] particular market.” Wunnicke, 467 U.S. at 97. It does not keep out
waste haulers or processors that might seek to enter the Minot market. It does not even
dictate that residents of Minot must use the landfill for their trash, thus laying waste, so
to speak, to both Red River’s “primeval governmental activity” and “regulatory
scheme” arguments. As a business, Minot may freely choose the parties to whom it
wishes to sell space in its landfill.
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Red River also argues that the market participation doctrine should not apply
because Minot is hoarding a scarce natural resource: space in a landfill. The Supreme
Court noted in passing in Alexandria Scrap that the right of states to claim the market
participation exemption might be limited if they “hoard resources which by
happenstance are found there.” 447 U.S. at 444. In Reeves, however, the Court applied
the market participation doctrine even though South Dakota was restricting purchase of
a nationally scarce commodity it produced -- cement -- to its own residents. Similarly,
the Court upheld Nebraska’s scheme to control the sale of groundwater since “given
[Nebraska’s water] conservation efforts, the continuing availability of ground water in
Nebraska is not simply happenstance; the natural resource has some indicia of a good
publicly produced and owned in which a State may favor its own citizens in times of
shortage.” Sporhase v. Nebraska, 458 U.S. 941, 957 (1982). If Nebraska could favor
its residents in times of ground water shortages simply because of the state’s water
conservation efforts, then Minot should certainly be able to favor its residents’ use of
its landfill because of the effort and expense Minot expended in developing the landfill.
See Swin, 883 F.2d at 253. See also Baldwin v. Fish & Game Comm’n, 436 U.S. 371,
389-90 (1978) (Montana could charge non-residents substantially more for elk hunting
licenses because state devoted resources to elk conservation).
Whether a landfill is a natural resource and whether a natural resources exception
exists in a solid waste disposal case as a matter of law are both unclear. See, e.g.,
Oregon Waste Sys., Inc. v. Department of Envtl. Quality, 511 U.S. 93, 107 (1994). We
decline, however, to find that the Minot landfill is a “happenstance” natural resource
that is geologically peculiar to North Dakota such as coal or oil or ground water would
be. Siting a landfill requires a convergence of political choices, economic initiatives,
environmental demands, and geological realities. Because Minot has expended effort
and expense to develop and maintain the landfill, it is a “good publicly produced and
owned” in which the city may favor its residents.
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Finally, Red River earnestly argues that the outcome of this case should be
governed by “flow control” cases rather than the market participant doctrine. When a
state enacts a flow control measure, it attempts to manage the waste stream for some
public good, usually to finance local disposal and processing facilities or to protect the
environment by extending the useful life of landfills. However, if the measure is also a
protectionist measure that deprives competitors, whether in-state or out-of-state, of
access to a local market, then the measure violates the Commerce Clause. Philadelphia
v. New Jersey, 437 U.S. 617 (1978); C&A Carbone, Inc. v. Clarkstown, 511 U.S. 383
(1994).
Red River’s reliance on the many flow control cases it cites in its brief is
unfounded since those cases deal with fundamentally different factual settings than the
present situation. For example, in Carbone, Clarkstown built a new solid waste transfer
station to receive bulk solid waste and to separate recyclable from nonrecyclable waste.
To guarantee that the amount of waste coming into the new station would be sufficient
to pay for the cost of its construction, Clarkstown enacted an ordinance requiring that
all nonhazardous solid waste generated within the town be deposited in the new transfer
station. Waste processors and recyclers in the town who received bulk solid waste
brought suit because under the ordinance their only option was to send the
nonrecyclable solid waste to the transfer station for processing and then to pay a tipping
fee for this waste from which they had already removed the recyclable materials. They
could no longer ship their nonrecyclable solid waste to cheaper processors in other
locales. The Court held that this local processing requirement discriminated against
interstate commerce. Such discrimination is per se invalid unless the state or
municipality “can demonstrate, under rigorous scrutiny, that it has no other means to
advance a legitimate local interest.” Id. at 392. Clarkstown protested that the ordinance
addressed health and environmental problems, but the Court noted that “any number”
of nondiscriminatory alternatives could achieve the same effect without obstructing the
flow of interstate commerce. Id.
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In most flow control cases, the challenged state or local regulations intrude on
transactions between willing third-party buyers and third-party sellers of waste materials
or disposal services. See, e.g., Fort Gratiot Sanitary Landfill, Inc. v. Michigan Dep’t
of Nat’l Resources, 504 U.S. 353 (1992) (invalidating as a protectionist measure statute
banning unauthorized acceptance of waste from outside a county because it protected
local waste producers from competition from out-of-state producers seeking to use local
disposal areas); Waste Sys. Corp. v. Martin County, 985 F.2d 1381 (8th Cir. 1993)
(holding ordinances requiring delivery of all in-county compostable solid waste to
counties’ facility violated Commerce Clause because ordinances discriminated against
interstate commerce by insulating the facility from competition with cheaper out-of-state
alternatives); Diamond Waste, Inc. v. Monroe County, 939 F.2d 941(11th Cir. 1991)
(holding county resolution banning new operator from importing any out-of-county
waste into the county’s landfill violated Commerce Clause because alternative measures
could have achieved county’s goals with less effect on interstate commerce). But here,
no third-party seller exists. Minot is itself the seller -- a market participant in the waste
disposal business. Red River seeks to buy space in Minot’s landfill for the MAFB
waste, but Minot simply does not wish to sell to Red River. Minot has in no way
discriminated against the “flow” of interstate commerce. Because we find that the
market participation doctrine applies, we do not need to further discuss whether Minot’s
policy has a discriminatory effect on interstate commerce.5 We hold that it does not.
IV.
5
For an interesting discussion applying the market participant doctrine to a flow
control ordinance, see Barker Bros. Waste, Inc. v. Dyer County Legislative Body, 923
F. Supp. 1042, 1054 (W.D. Tenn. 1996). The court observes that for the doctrine to
apply to such an ordinance, “the governmental entity must participate in both the trash
hauling business and the trash disposal business.”
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Red River argues that Minot’s decision to refuse Red River’s MAFB municipal
solid waste violates its equal protection rights under the Fourteenth Amendment because
Minot’s decision on its face discriminates against out-of-city waste processors and
haulers. Red River believes that the “rigorous scrutiny” standard described in Carbone
should invalidate Minot’s decision since other less discriminatory methods of achieving
Minot’s goals of preserving space in its landfill exist. Given our decision in the
preceding section that Minot has not discriminated against the “flow” of interstate
commerce, we disagree that the “rigorous scrutiny” standard applies in this situation.
Minot has neither targeted nor excluded a suspect class with its decision, Independent
Charities, Inc. v. Minnesota, 82 F.3d 791, 797 (8th Cir.), cert. denied, 117 S. Ct. 982
(1996), nor impinged on a fundamental interest, Swin, 883 F.2d at 255, so any review
using a “strict” or “rigorous” scrutiny standard would be inappropriate. Instead, we find
that the rational basis standard governs Red River’s equal protection challenge.
Alexandria Scrap, 426 U.S. at 813-14. Under this standard, legislation is presumed
valid if the classification drawn by the legislation is rationally related to a legitimate
state interest. City of Cleburne v. Cleburne Living Ctr., Inc., 473 U.S. 432, 440 (1985).
Red River has the burden of proving “that the classification is so attenuated to its
asserted purpose that the distinction it draws is wholly arbitrary and irrational.” Chance
Mgt., Inc. v. South Dakota, 97 F.3d 1107, 1114 (8th Cir. 1996), cert. denied, 117 S. Ct.
1083 (1997) (citing City of Cleburne, 473 U.S. at 446). Red River must also negate
“every conceivable basis which might support” the classification. Independent
Charities, 82 F.3d at 797 (citing FCC v. Beach Communications, Inc., 508 U.S. 307,
315 (1993)). Red River has not carried its burden.
The record clearly demonstrates that the Minot City Council has struggled since
1993 with difficult landfill issues. Its decision to no longer accept municipal solid waste
from anyone but its residents and existing customers is rationally related to its goal of
preserving the useful life of its landfill for its residents, even though potential new
customers, out-of-city haulers and processors like Red River, are excluded. After all,
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“[a]ny hole, no matter how large, can only accept a specific volume of garbage.” Swin,
883 F.2d at 256. The preference created for existing customers does no more than
recognize and protect their reliance interest. See New Orleans v. Dukes, 427 U.S. 297,
304-306 (1976) (holding grandfather provision of an ordinance prohibiting food sales
by pushcart vendors in the French Quarter did not violate the Equal Protection Clause
because the ordinance was rationally related to the purpose of preserving the area’s
appearance and customs).
V.
Finally, Red River claims 1) that Minot is estopped from denying that it has a
contract with Red River to accept delivery of MAFB municipal solid waste at the Minot
landfill, and 2) that Minot has breached that contract. Neither the facts nor the law
supports those claims.
Red River claims that an oral contract was created when it obtained quotes on
tipping fees from the city for municipal solid waste. The district court ruled, however,
that such a contract would be void under the North Dakota statute of frauds which
makes invalid any oral contract “that by its terms is not to be performed within a year
from the making thereof.” N.D. Cent. Code § 9-06-04 (1997). The court said that any
contract between Red River and the city obviously could not be performed in a year
because it would be co-terminous with the five-year contract between Red River and
MAFB.
No signed writing exists here but Red River argues that part performance of the
oral contract removes it from the statute of frauds. Poyzer v. Amenia Seed & Grain Co.,
409 N.W.2d 107, 111 (N.D. 1987). We find no such part performance. The existence
of an oral contract is always a question of fact. Johnson Farms v. McEnroe, 568
N.W.2d 920, 924 (N.D. 1997). The city concedes that someone in the public works
department may have given Red River a quote on tipping fees while Red River
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was preparing its bid for the MAFB contract since many parties call the department
requesting information about tipping fees and Red River may have been one of them.
The city never had any formal communication with Red River about landfill rates or
access, however, until after Red River had been awarded the MAFB contract. Aff. of
Alan M. Walter, J.A. at 194. While the city accepts Red River’s inert waste, the dispute
here has, from the beginning, concerned only municipal solid waste from MAFB. Since
Minot never allowed Red River to deposit any municipal solid waste in the Minot
landfill, even before formally denying its request in December 1996, Red River could
not have partially performed an oral contract to deposit municipal solid waste in the
landfill. No such contract existed, despite statements to the contrary in the affidavit of
Red River’s president. Aff. of James Smith, J.A. at 45.
Red River also urges us to find that the city should be estopped from denying that
a contract exists between it and Red River for the disposal of MAFB’s solid municipal
waste. Even in the unlikely event we were to find that Red River could successfully
bring an estoppel suit against a governmental body such as the City of Minot, see
Blocker Drilling Canada, Ltd. v. Conrad, 354 N.W.2d 912 (N.D. 1984) -- a question
we need not decide -- estoppel simply does not exist on these facts. Under North
Dakota law, the party claiming estoppel must prove that: 1) it did not and could not
know the truth of the facts in question; 2) it relied, in good faith, upon the conduct or
statements of the party to be estopped; and 3) based on that reliance it acted or did not
act with the result that it changed its position or status, to its injury, detriment, or
prejudice. Id. at 920.
Red River’s claim that the city should be estopped from denying the contract is
apparently based on an October 21, 1996, letter that the Minot Director of Public
Works, Alan M. Walter, sent to Red River following its request to put MAFB’s
municipal solid waste in the Minot landfill. In the letter, Walter wrote:
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You have requested the use of the City of Minot landfill for hauling
municipal solid waste from the Minot Air Force Base. We have
researched the record on this request and find that the City Council did
not take any formal action with regards to limiting solid waste from what
was then Region II in North Dakota. At this time, I cannot state that you
can not [sic] bring the solid waste to our landfill.
I am sending your letter and a memo to the City Council with your
request. In the memo I have explained the history of the use of our landfill
and the comments made in 1994 about the use of the landfill with regard
to Region II.
The Public Works Committee of the City Council meets on October 31,
1996.
At this point there is no council action prohibiting the use of the landfill
for Minot Air Force Base. If you need further information or have further
information, please contact me.
J.A. at 70. Just as it was impossible to find an oral contract in the possibility that the
city had quoted rate information to Red River over the phone, it is difficult to find in
this letter anything to support a claim of estoppel. On its face, the letter nowhere
contains a clear statement of permission or invitation. The letter nowhere “welcomed
RRSC’s [Red River’s] business,” as Red River claims. Appellant’s Br. at 11. The letter
nowhere states terms, conditions, rates, or other information one would expect in a
letter creating a contract. Red River had been in the Minot area long enough to have bid
a contract with MAFB -- certainly long enough for a national waste disposal business
to be charged with the knowledge that the city council was frequently and publicly
discussing landfill issues. Red River can hardly claim that it did not know or could not
have found out that Minot was contemplating limits on access to the landfill.
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Further, no reasonable entrepreneur would rely on the hesitant and ambiguous
language in the letter that the public works director sent to Red River. Walter wrote that
his research of the record showed that the Minot City Council had not taken “formal”
action on limiting solid waste disposal in the landfill. For eyes that will see, this
language indicates that something had happened in Minot -- perhaps some “informal”
action. In the very next sentence, Walter qualifies this absence of “formal action” by
telling Red River that “[a]t this time, I cannot state that you can not bring solid waste
to our landfill.” At the very least, this sentence, however unartfully phrased, should
have caused Red River to inquire further about whether Minot was planning formal
action that would prevent Red River from bringing the MAFB solid municipal waste
to the landfill, especially given Walter’s statement in the next paragraph that he would
be sending Red River’s request on to the city council, a clear indication that he did not
have the authority to grant Red River access to the landfill. See also Aff. of Alan M.
Walter, J.A. at 194-5. Moreover, Walter’s affidavit indicates that Red River had actual
notice that the city would not accept the MAFB municipal solid waste.
Red River could not in good faith have interpreted my letter of October
21, 1996, as implicit acceptance of its waste stream, for at the same time
as I was saying therein that ‘I cannot state’ that its waste was prohibited,
I certainly was not allowing them to use the landfill! They well knew I
wasn’t allowing them to use the landfill (except for inert construction
wastes) as evidenced by their repeated and vigorous complaints to me
about their exclusion.
J.A. at 193. Red River considerably overstates its case with the comment that “Minot
had a duty to speak out, rather than lulling an out-of-state citizen into a position of
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detriment.” Appellant’s Br. at 45. Because it did not like the message, Red River
simply failed to hear what the City of Minot was telling it.
VI.
For the foregoing reasons the judgment of the district court is affirmed in its
entirety.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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