Entrepreneurs Join the Institute for Justice Minnesota Chapter In Challenge to Red Wing’s Trash Monopoly

J. Justin Wilson
J. Justin Wilson · December 6, 2006

Minneapolis, Minn,—Entrepreneur Paul Larson knows what it takes to succeed: “If we don’t do a good job, the customer can always use someone else. People have a right to choose who they do business with.”

Except in the City of Red Wing, Minn.

Come January 1, 2007, all private commercial trash haulers—including Paul Larson of Paul’s Industrial Garage in Hagar, Wis.—will be required to use the City of Red Wing’s incinerator for 10 years as a condition of doing business in the city. The City made it illegal for haulers like Larson and Dale Gibson, owner of Gibson Sanitation in Cannon Falls, Minn., to take trash from Red Wing to less expensive and environmentally friendly waste disposal alternatives in Wisconsin and elsewhere, as they have been doing for years. In effect, the City is telling private haulers to do business exclusively with the City’s own costly and inefficient incinerator or get out.

As with any government-created monopoly, the inevitable result will be lost opportunities for entrepreneurs like Larson and Gibson and higher prices for businesses and consumers in Red Wing.

The two haulers refuse to play by the City’s anti-competitive rules and on December 6, 2006, they joined with the Institute for Justice, a public interest law firm that defends economic liberty nationwide, to file suit in the U.S. District Court in Minneapolis challenging Red Wing’s waste-hauling ordinance as a violation of the U.S. Constitution’s Commerce Clause.

“The City of Red Wing cannot engage in economic protectionism by forbidding the exporting of trash to another state any more than it can stop the exporting of shoes or the importing of cheese,” said Lee McGrath, IJ-MN’s executive director. “This is because the Constitution’s Commerce Clause protects the interstate movement of trash, as it does other products, and prohibits protectionist ordinances that promote parochial economic interests.”

The U.S. Constitution protects free trade among the states and the Commerce Clause prohibits municipalities like Red Wing from enacting laws that burden interstate commerce. In numerous cases, the U.S. Supreme Court and federal and state courts in Minnesota and elsewhere have struck down waste “flow controls” identical to Red Wing’s.

Larson and Gibson are not the only ones who want to engage in interstate commerce. Every state in the Union, including Hawaii, exports waste. Minnesota exports waste to Illinois, Iowa, Wisconsin and North and South Dakota. In 2003, Minnesota exported more than 600,000 tons, which equals 10.5 percent of the state total waste of 5.8 million tons.

“Red Wing cannot outlaw interstate commerce in order to prop-up its uncompetitive incinerator,” said IJ-MN’s staff attorney, Nick Dranias. “Red Wing businesses and the residents who own them should not be forced to pay higher waste disposal bills just because City Council wants to unconstitutionally maintain an inefficient incinerator.”

McGrath agreed and added, “Businesses and consumers, not overreaching government officials, should determine how best to dispose of commercial waste in Red Wing. Fortunately, the Constitution ensures that Larson and Gibson have the right to engage in interstate commerce free from Red Wing’s discriminatory law.”

Paul’s Industrial Garage, LLC. et.. al. v. City of Red Wing, is IJ-MN’s sixth lawsuit in its campaign to restore property rights, economic liberty and free speech under the Minnesota state and U.S. constitutions. Opened in 2005, IJ-MN is one of three state chapters of the Institute for Justice, a nonprofit public interest law firm founded in 1991 to advance free speech, property rights, educational choice and economic liberty.

The Institute for Justice advances a rule of law under which individuals can control their destinies as free and responsible members of civil society. Through strategic litigation, training, communication and outreach, IJ secures greater protection for individual liberty and extends the benefits of freedom to those whose full enjoyment is denied by the government. Headquartered in Arlington Va., the Institute for Justice has represented numerous ordinary Americans nationwide who have successfully fought arbitrary government regulations affecting property rights, economic liberty and free speech.