Scrap Tire Program/Transportation: Louisiana Supreme Court Considers Fee Assessment Issue | Mitchell, Williams, Selig, Gates & Woodyard, LLC

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The Louisiana Supreme Court (“Court”) addressed in a January 28 opinion a matter arising from the Louisiana Scrap Tire Program (“Program”). See Winmill Tire, LLC, et al. against Colt, Inc., et al., 2022 WL 263004.

The issue discussed was whether waste tire processors were prohibited from charging waste tire producers freight charges in addition to the fees paid to them by the Tire Program.

The goal of the program is to remove used tires from the solid waste stream. It is governed by the Louisiana Solid Waste Recycling Reduction Act (“SWRRL”). See RS 30:2411, et seq.

The program includes regulations that describe the requirements for the disposal and recycling of used tires. It is administered by the Louisiana Department of Environmental Quality (“LDEQ”).

Used tires are defined as:

. . . whole tires that are no longer fit for their original purpose due to wear, damage or defect and/or that have been discarded by the consumer.

The program provides definitions for key participants, including:

  • Generator (a person whose activities result in the production of used tires)
  • Carrier (carries used tires)
  • Transformer (processes used tires using a method that modifies old used tires so that they are no longer whole. . . )

Processors reportedly began charging producers in 2015 for transportation costs to transport used tires from production facilities to processing facilities.

The producers sued to have the levy declared illegal. They argued that any fees charged by processors above the program fee were prohibited.

The generators argued:

  • LDEQ fees and subsidies provided to processors cover both transportation and processing costs
  • The 2016 revisions to the program rules did not change the responsibility of who pays carriers and are not relevant to the legality of fees
  • Allowing processors to charge fees to producers defeats the purpose of paying transporters after delivery

Processors responded that none of the relevant laws or program regulations:

  • Prohibit charging this type of fee
  • Establish that the subsidy that processors can apply for is the only compensation granted to them
  • Require subsidy to be used by processor to pay transportation costs

The Louisiana Court of Appeals decision dismissed the charges. In reversing the Louisiana Court of Appeals, the Court said:

Although our learned colleagues in the lower courts correctly noted that the LDEQ is the competent authority to set fees and administer the scrap tire program, the statutes and regulations are silent on how scrap tire haulers receive compensation. compensation since the 2016 reviews. As the clear wording of the relevant legislative and regulatory provisions does not prohibit a processor from charging freight charges, we consider these charges to be allowable.

The Court has undertaken a review of the evolution of legislative and regulatory provisions relating to waste tyres. She ruled that none of the relevant laws and regulations grants the Secretary of the LDEQ exclusive authority to set all costs related to scrap tires. Moreover, there was no ban on charging fees to the private sector. He further noted that:

. . . although the handling of scrap tires is regulated to some extent, the LDEQ has not regulated the area so broadly that the levy at issue here would be prohibited.

A copy of the notice can be downloaded here.

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