GEORGE, J. I respectfully dissent.
In April 1990, the City of Rancho Mirage entered into an exclusive franchise agreement with Waste Management of the Desert, Inc. (Waste Management), under which Waste Management agreed to provide specified waste disposal and recycling services to all of the city’s residents and commercial entities, at regulated rates, and the city, in return, agreed to authorize only Waste Management to provide such services within the city’s boundaries. Shortly thereafter, Palm Springs Recycling Center, Inc. (Palm Springs Recycling), a competing commercial recycling enterprise, began sending its trucks into the city on a regular basis to collect recyclable material from large commercial customers, in violation of Waste Management’s rights under the exclusive franchise agreement. In response, the city and Waste Management sought injunctive relief from the trial court, which granted an injunction prohibiting Palm Springs Recycling from engaging in recycling services within the boundaries of the City of Rancho Mirage in violation of the exclusive franchise agreement.
The majority overturns the trial court injunction, concluding that the City of Rancho Mirage lacked authority to enter into an exclusive franchise [492]agreement for recycling services, insofar as that agreement limited the right of competing recycling companies to purchase and collect designated recyclable materials within city limits. Although the majority acknowledges that, under the California Integrated Waste Management Act of 1989 (the Act), the Legislature explicitly has authorized municipalities to enter into exclusive franchise agreements for “solid waste handling services,” the majority concludes that the municipality’s authority under this legislation does not extend to “recyclable material” that has a market value and that the owner wishes to sell to a commercial entity other than the exclusive franchisee.
As I shall explain, I believe the majority’s interpretation of the relevant legislation is clearly incorrect and will frustrate, rather than further, the important purposes of the Act by excluding a significant proportion of recyclable material from its operation. A glaring omission of the majority is its failure to acknowledge the fundamental legislative policies and objectives of the 1989 legislation—the promotion of “integrated waste management”— and the various components of the Act designed to accomplish these policies and objectives. Construing the statutory scheme as a whole, I believe it is clear that the Act authorizes the exclusive franchise agreement at issue in this case, and that the trial court did not err in enjoining the commercial activities of Palm Springs Recycling that violated the agreement, including the purchase and collection of materials that in the past would have been discarded as waste, but that now have some market value because of their recycling potential.
I
The Act comprises a comprehensive program for solid waste management throughout the state, reflecting the legislative concern that ever-increasing amounts of disposable waste, combined with diminishing waste disposal capacity, pose a threat of crisis proportion to the environment and the public health and welfare, presenting an “urgent need” for an “aggressive new integrated waste management program.” (Pub. Resources Code, § 40000; see Assem. Natural Resources Com. Rep., Integrated Waste Management: Putting a Lid on Garbage Overload (1988) p. i. [“Current State solid waste management policy is becoming increasingly ineffective in managing California’s solid waste and is potentially harmful to public health and the environment.”] [hereafter Assembly Report].)1
Under the Act, the responsibility for solid waste management is shared by the state and local governments (§ 40001), with solid waste handling services to be provided by one or any combination of the following: the local [493]entity itself, another local entity, or a private waste collection enterprise (§ 40058). A major component of the Act, not contained in the predecessor statutory scheme, is the substantial mandatory solid waste disposal diversion requirements imposed by section 41780. That section provides in part that cities and counties, through solid waste reduction, recycling, and composting activities, “shall divert 25 percent of all solid waste from landfill ... by January 1, 1995” and “50 percent of all solid waste by January 1, 2000.” (§ 41780, subd. (a)(1) & (2).)
To meet these waste diversion requirements, the Act requires cities to develop and implement integrated waste management plans providing for the reduction, recycling, and reuse of solid waste, to the maximum extent feasible, in an efficient and cost-effective manner.2 (§§ 40052, 40900, 41000.) Such local plan must include a “source reduction and recycling element” (§§ 40901, 41000), which in turn must incorporate a “recycling” component. (§ 41003.) The recycling component must include a recycling program and implementation schedule that demonstrate the recycling methods, in combination with the source reduction and composting components, [494]by which the city will reduce a sufficient amount of solid waste disposed of by the city in order to comply with the diversion requirements of section 41780. (§ 41070.) Failure to submit a timely plan incorporating these components, or failure to implement the plan and meet the diversion requirements and deadlines, will subject a city to penalties of up to $10,000 per day. (§§ 41813,41850.)
The requirement of an integrated waste management plan corresponds to the recommendation of the Assembly Report that California waste management “be revised to place greater emphasis on a multi-faceted approach to solving the State’s garbage woes” through an integrated waste management program, in which mandatory recycling measures may be incorporated into the overall solid waste planning process. (Assem. Rep., supra, at pp. i.,1-2, 53-60.)
II
Long before the adoption of the Act, it was well established that the regulation and control of waste collection and disposal constituted a proper exercise of municipal police power reserved to state and local governments. (See City of Camarillo v. Spadys Disposal Service (1983) 144 Cal.App.3d 1027, 1030 [193 Cal.Rptr. 22]; Matula v. Superior Court (1956) 146 Cal.App.2d 93, 99-101 [303 P.2d 871]; Davis v. Santa Ana (1952) 108 Cal.App.2d 669 [239 P.2d 656]; see also Health & Saf. Code, former § 4250; Gov. Code, former § 66757, subd. (b).) Furthermore, for nearly a century, California courts explicitly have affirmed the authority of cities and counties, in the exercise of their police power, to control waste collection and disposal by the means deemed most effective for the public health and safety, including the granting of exclusive waste collection and disposal privileges to one or more private enterprises.
Thus, for example, in In re Zhizhuzza (1905) 147 Cal. 328 [81 P. 955], this court, upholding a city ordinance restricting waste collection privileges by exclusive contract, held: “ ‘Laws or ordinances enacted under the police power for the protection of the public health, reasonably adapted to that end, are not unconstitutional because they may incidentally operate to deprive individuals of their property or its use without compensation, or interfere with their personal liberty, nor because they may give one person a monopoly of a certain business or occupation, private rights being required to yield in such case to the public good.’ ” (Id., at p. 335; see California Reduction Company v. Sanitary Works (1905) 199 U.S. 306, 321 [50 L.Ed. 204, 211, 26 S.Ct. 100] [granting of exclusive waste disposal privileges within City and [495]County of San Francisco was authorized by state constitutional provision for local determination of the “most appropriate method of protecting the public health in the matter of disposal of garbage, refuse and other materials found on private premises”]; Gardner v. Michigan (1905) 199 U.S. 325 [50 L.Ed. 212, 26 S.Ct. 106].)
The principles articulated in In re Zhizhuzza, supra, 147 Cal. 328, have been reiterated and affirmed repeatedly in subsequent decisions rendered through the present decade. (See City of Camarillo v. Spadys Disposal Service, supra, 144 Cal.App.3d. at pp. 1030-1032 [decision to restrict the issuance of waste disposal permits to no more than one company “falls within the clearly articulated and affirmatively expressed policy of the state”]; City of Santa Rosa v. Industrial Waste & Debris Box Rentals, Inc. (1985) 168 Cal.App.3d 1132, 1135 [214 Cal.Rptr. 737]; Universal ByProducts, Inc. v. City of Modesto (1974) 43 Cal.App.3d 145, 149, fn. 1 [117 Cal.Rptr. 525]; Matula v. Superior Court, supra, 146 Cal.App.2d at pp. 99-101; see also Hybud Equipment Corp. v. City of Akron, Ohio (6th Cir. 1981) 654 F.2d 1187, 1192 [“Courts in literally hundreds of reported cases have upheld the authority of local governments to monopolize and control local garbage collection by eliminating or restraining competition among private collectors.”].)
Cities and other local entities that have opted to rely upon an exclusive franchise for all waste handling services within their local boundaries traditionally have explained such action on the ground that competition in the solid waste handling industry may impede necessary regulation and encourage cost-cutting devices that pose a threat to the public health. Such entities apparently have concluded that the designation of an exclusive waste handling enterprise is an efficacious method to ensure that all persons and businesses within a community will be served at reasonable rates, regardless of their individual circumstances, and to minimize the noise and disruption of collection. (See City of Santa Rosa v. Industrial Waste & Debris Box Rentals, Inc., supra, 168 Cal.App.3d 1132, 1134-1135.)
Ill
Recognizing that local entities generally are in the best position to determine the preferable means of addressing the health and safety problems posed by the handling and disposal of waste, the Act contemplates that local agencies may utilize exclusive franchises with private solid waste handling enterprises to implement the purposes and requirements of the Act. Section 40059, subdivision (a), expressly authorizes local entities to determine all [496]aspects of solid waste handling of local concern, including whether “solid waste handling services” are to be provided by means of exclusive franchise or contract. (§ 40059, subd. (a).)
Definitions governing the construction of section 40059, subdivision (a), are set forth in various provisions of the Act. “Solid waste handling” is defined as “the collection, transportation, storage, transfer, or processing of solid wastes.” (§ 40195.) “Processing” is defined as “the reduction, separation, recovery, conversion, or recycling of solid waste.” (§ 40172, italics added.) “Recycling” is defined as “the process of collecting, sorting, cleansing, treating, and reconstituting materials that would otherwise become solid waste, and returning them to the economic mainstream in the form of raw material for new, reused, or reconstituted products.” (§ 40180.) The phrase “segregated from other waste material” is defined as including the “binding of recyclable material separately from other waste material” and the “physical separation of recyclable material from other waste material ” (§ 40190, subds. (a), (b), italics added.)
Thus, in light of these definitions, under section 40059, subdivision (a), a city may grant exclusively to a solid waste handling enterprise the right of “collection, transportation, storage, transfer, or processing of solid wastes.” Because the “processing” of solid wastes includes the “recycling of solid waste,” which in turn includes “collecting . . . materials that would otherwise become solid waste, . . .” the Act authorizes a city to grant by exclusive franchise to a single private recycling enterprise the right to provide commercial recycling services within city limits, including the collection and removal of recyclable materials specifically identified in the franchise agreement.
The public benefits of, and municipal purposes served by, an exclusive franchise for recycling services are demonstrated by the exclusive franchise agreement in the present case between the City of Rancho Mirage and Waste Management. Under this agreement, at no additional cost to the city, Waste Management is required to collect and remove all recyclable materials (as specified and defined therein) that are segregated and placed in separate recycling containers at the curbside on public streets or adjacent to multifamily complexes, or in bins at a location designated by commercial establishments. Waste Management also is required to provide and distribute containers to all residences, and bins to all commercial establishments, and must assist homeowners in participating in the curbside recycling program. As compensation for providing recycling services at no additional cost to the [497]city and its residents, Waste Management is authorized to retain a portion of the revenues generated from the sale of recyclable materials.3
The agreement further provides that Waste Management shall develop and implement a public-awareness program to promote and inform the community of the benefits of recycling. Finally, Waste Management is required to submit (to the city) monthly reports of the total tonnage of recyclable materials recovered and sold and the market prices of such materials, as well as yearly status reports designed to facilitate an assessment of the effectiveness of all aspects of the program.
Thus, the exclusive franchise enables and requires Waste Management to provide a comprehensive recycling program throughout the city, offering recycling services to all city residents and commercial establishments, and promoting their participation in the recycling program. The exclusive franchise facilitates the city’s coordination and supervision of recycling services within city limits, and provides the city with a helpful method of meeting its obligations under the Act; among other reasons, Waste Management will be motivated strongly to ensure that the city meets its waste diversion and reporting requirements under the Act, in that failure to do so likely would mean a loss of franchise rights.
The exclusive nature of the rights accorded Waste Management under the agreement provides that entity with economic incentive to render the foregoing services and benefits, which it would not have under a nonexclusive arrangement. As explained by Waste Management in support of its application for preliminary injunction, the commercial customers that collect their recyclable materials in large bins generate far greater amounts of recyclable material and can be serviced much more efficiently. For this reason, according to Waste Management, commercial customers “are the key to the economic viability of the recycling program. Enough revenue must be realized from the sale of recyclable material generated by the few large commercial customers to cover the cost of servicing all customers for the program ultimately to succeed.”
[498]The record indicates Palm Springs Recycling seeks to collect only the most commercially desirable recyclable materials, such as glass and cardboard, and to collect such materials only from large commercial establishments. Palm Springs Recycling has demonstrated no interest in the recyclable materials generated by residences and small commercial enterprises. As characterized by Waste Management, Palm Springs Recycling seeks “to skim off the cream of the recycling business,” leaving “the less profitable and unprofitable recycling business to [Waste Management] which it is contractually bound to accept.” Waste Management maintains that, absent enforcement of its exclusive franchise rights, the comprehensive recycling program is not economically viable.
IV
The majority concedes the Act authorizes exclusive franchises for solid waste handling services. The majority asserts, however, that “solid waste” as defined under section 40191, subdivision (a), of the Act does not include materials sold by the owner for recycling, because if sold the materials have not been “discarded” within the meaning of the statutory definition of “solid waste.” For similar reasons, the majority also maintains that if an owner of property is able to sell that property for recycling purposes, such disposition of the property does not fall within the category of “solid waste handling” that may be covered by an exclusive franchise.
I agree with the majority that the exclusive solid waste collection and recycling rights of an exclusive franchisee such as Waste Management do not arise until the owner of the recyclable or nonrecyclable material discards that material for collection by a waste handling service or a commercial recycling enterprise, thus rendering this material a part of the solid waste stream. Thus, the concern of the majority that enforcement of an exclusive franchise for commercial recycling services would interfere with a Boy Scout paper drive, or some other civic or charitable operation, is unfounded. When, however, an owner chooses to dispose of material that previously would have been disposed of as waste, by transferring the property to a commercial recycling enterprise, I believe it is clear that the material has been “discarded” within the meaning of the Act, and that the exclusive franchisee has the exclusive right to perform those collection services.
The majority’s conclusion, excluding from the ambit of the exclusive franchise arrangement authorized by the Act all material that a property owner chooses to sell for recycling purposes, is not supported either by the [499]fundamental purpose or the statutory language of the Act. As stated previously, the primary objective of the Act is to encourage and require integrated4 solid waste management, promoting recycling as the preferred waste management option over landfill disposal. To accomplish that goal, the Act establishes, as one of its major components, requirements for significant reductions in the amount of the solid waste disposed of at landfills. As stated, section 41780, subdivision (a), provides, in part, that cities and counties “shall divert 25 percent of all solid waste from landfill” by January 1, 1995, through “recycling . . . activities,” and “shall divert 50 percent of all solid waste” by January 1, 2000, through “recycling . . . activities.” The Act specifically provides in section 41781 that “(a) ... for the purpose of determining the base rate of solid waste from which diversion requirements shall be calculated, ‘solid waste’ includes . . . H] (1) The amount of solid waste generated within a local agency’s jurisdiction, the types and quantities of which were disposed of at a permitted disposal facility as of January 1, 1990.” This provision makes clear that, if a material is of a type and quantity that was disposed of at a permitted disposal facility as of January 1, 1990, the recycling of that material would be considered part of the solid waste stream regulated by the Act. Nothing in the language of the statute suggests that solid waste diverted from landfill disposal through recycling, and thus regulated by the Act, includes only material that has no value to the owner or has not been sold by the owner for recycling purposes. Instead, the clear implication of the statutory language of the Act, interpreted as a whole, is that the “solid waste stream” includes material sold for recycling purposes where, but for the availability of recycling, the material otherwise would have been disposed of as landfill.
Moreover, one of the primary purposes of the Act is to encourage more efficient methods of recycling, as well as the creation of markets for recycled materials (i.e., to make recyclable materials more commercially marketable). In light of this objective, it would be anomalous to interpret the Act as excluding a particular recyclable material from a city’s integrated waste management program simply because, through technology encouraged by the Act, the recycling process for that particular material has become economically viable. Indeed, it may well be impossible for municipalities to further the Act’s objectives and meet the Act’s very substantial waste-diversion requirements if, as newer and more efficient recycling processes are developed and additional markets are created, municipalities cannot count, as part of the quantum of solid waste satisfying the waste-diversion requirements, those materials that, because of their recyclable potential, have achieved some commercial value to the owner. Correspondingly, if recyclable material sold by its owner for recycling purposes cannot be counted [500]under section 41780 as waste diverted from disposal through recycling, municipalities may have little incentive to encourage either new forms of recycling, or markets for recyclable materials.
Furthermore, if the recycling of material that has commercial value, and that may be sold by the owner, is not part of solid waste handling regulated by the Act, exclusive franchises for specified recycling services frequently may no longer be economically viable for the exclusive franchisee, thereby diminishing a municipality’s ability to effectuate a comprehensive citywide recycling program such as that provided by Waste Management under the exclusive franchise agreement at issue. Under the majority’s interpretation of the Act, a municipality would have no authority to prevent a competing commercial recycling enterprise such as Palm Springs Recycling from “skimming off the cream” of the recycling business, leaving many of the municipality’s residents without an economically viable recycling program.5
Finally, courts long have rejected the notion that the owner of waste material having some market value has an interest in that material superior to the police power to protect the public health and safety. (See California Reduction Company v. Sanitary Reduction Works, supra, 199 U.S. 306; Gardner v. Michigan, supra, 199 U.S. 325; In re Pedrosian (1932) 124 Cal.App. 692 [13 P.2d 389]; Ex parte Santos (1928) 88 Cal.App. 691 [264 P. 281].) More recently, the Sixth Circuit in Hybud Equipment Corp. v. City of Akron, Ohio, supra, 654 F.2d 1182, reached a similar conclusion in the context of recycling. In that case, the Court of Appeals upheld an ordinance [501]of the City of Akron requiring that all solid waste be delivered to the City’s “waste to energy” facility. Rejecting the claim that recyclable material had become more valuable in modem times and that the older case law relating to the municipal police power to regulate waste therefore no longer was applicable, the court held: “The old cases are not anachronisms. They are not distinguishable on any of these grounds. The solid waste disposal problem is as serious today for cities as in the past, perhaps more serious.” (Id., at p. 1193.)
V
The provisions of the Act authorizing a municipality to establish an exclusive franchise for the recycling of material, even if the material is of the type that has a market value because of its potential for recycling, do not permit a municipality to require that the owner of such property dispose of it through the exclusive franchisee without receiving just compensation for such recyclable material. The just compensation rights of property owners, however, is not an issue presented by this case, because no property owner is a party to this action. Instead, the sole issue before us is whether a competing recycling company possesses the right to operate in violation of an exclusive franchise agreement (for recycling services) authorized by state law.
Moreover, it is important to note that any exclusive franchise for waste handling services will impinge to some extent upon the economic interests of property owners. Even when dealing with waste having no market value, an exclusive franchise for its collection and disposal may require that some residents pay rates for waste handling services higher than these particular residents might have been able to negotiate with a private enterprise other than the exclusive franchisee. As discussed previously, however, past cases repeatedly have affirmed the authority of municipalities to enter into exclusive franchises that limit the authority of individual residents to dispose of their waste, because of the general societal benefits afforded by an exclusive franchise—for example, the assurance that all persons and businesses within a community will be served at reasonable rates, without regard to their individual circumstances, and the reduction of the municipality’s burden of supervising the safe delivery of these services.
VI
For the foregoing reasons, I believe that the city’s grant of an exclusive franchise to Waste Management for solid waste handling services within city limits, including the recycling services described in the exclusive franchise agreement, was authorized by the Act. Therefore, I would reverse the [502]judgment of the Court of Appeal and remand the case to that court with directions to affirm the judgment entered by the trial court.
Mosk, J., concurred.
The Act incorporates in substantial part the provisions of its predecessor statutory scheme, the Solid Waste Management and Resource Recovery Act of 1972, formerly contained in the Government Code, the Health and Safety Code, and the Revenue and Taxation Code, the [493]provisions of which were repealed or recodified concurrently with the adoption of the Act. (Stats. 1989, ch. 1095, p. 3810.)
The Act also reflects, however, many of the concepts and policies developed by the Municipal Solid Waste Task Force (an arm of the federal Environmental Protection Agency), as set forth in the task force’s 1989 report on the national waste management crisis. The introduction to the task force’s report explains in part: “From 1960 to 1988, [the United States] generated more waste every year, both in total tonnage and in pounds per person, and this trend is projected to continue. In addition, we are running out of places to put our waste because old landfills are closing and few new landfills and combustors are able to be sited and built. There are concerns about potential threats to human health and the environment from combustor emissions and ash, from landfill emissions, leachate, and litter . . . . H] . . . This report recommends using ‘integrated waste management’ systems to solve municipal solid waste generation and management problems at the local, regional, and national levels.” (Final Rep. of the Municipal Solid Waste Task Force, United States Environmental Protection Agency, The Solid Waste Dilemma: An Agenda for Action (Feb. 1989) pp. 1-2.)
All further statutory references are to the Public Resources Code unless otherwise indicated.
In its report, cited at footnote 1, ante, the Municipal Solid Waste Task Force observes that “[a] key element of integrated waste management is the hierarchy, which favors source reduction (including reuse) to first decrease the volume and toxicity and increase the useful life of products in order to reduce the volume and toxicity of waste. Recycling (including composting) is the preferred waste management option to further reduce potential risks to human health and the environment, divert waste from landfills and combustors, conserve energy, and slow the depletion of nonrenewable natural resources.” (The Solid Waste Dilemma: An Agenda for Action, supra, at p. 2, italics in the original.) This suggested hierarchy is adopted in section 40051, providing in part that local agencies shall “[p]romote the following waste management practices in order of priority: [1] (1) Source reduction. [*I] (2) Recycling and composting. [J] (3) Environmentally safe transformation and environmentally safe land disposal, at the discretion of the city or county.” (§ 40051, subd. (a).)
Waste Management is authorized to retain the revenue from the sale of recyclable materials, except (1) in the event the curbside and multifamily recycling programs become “self-sufficient,” Waste Management shall share with the city, on an equal basis, any revenue generated by these programs in excess of their cost, and (2) Waste Management is required to credit to each commercial customer a fixed percentage (depending upon the type of recyclable material involved) of the revenue received by Waste Management from the sale of recyclable materials collected from that customer.
See footnote 2, ante.
Although the majority does not rely upon section 41952 in support of its holding, the Court of Appeal construed that provision as authorizing owners of recyclable materials to contract with a recycling enterprise of their choice for the collection of these materials, notwithstanding the existence of an exclusive franchise granted by the local governing entity. I conclude the Court of Appeal misconstrued the scope of section 41952. That statute appears in chapter 9 of part 2 of division 30 of the Public Resources Code (§ 41950 et seq.), entitled “Unlawful Acts.” The provisions of chapter 9 proscribe, among other actions, the unauthorized removal of recyclable materials from receptacles maintained for their collection. This provision relied upon by the Court of Appeal clarifies that chapter 9, proscribing “unlawful acts,” does not in and of itself (1) require the owner of recyclable materials to dispose of them in curbside receptacles, (2) subject the owner of such recyclable materials to civil penalties for retrieval of an item previously placed in its own receptacle, or (3) otherwise restrict the owner’s ability to sell or dispose of such materials.
By its express terms, however, section 41952 pertains solely to chapter 9. Although nothing in chapter 9 restricts the disposal of recyclable materials by the owner, as explained above, section 40059, subdivision (a), contained in a different part and chapter of the Act, does authorize a city to regulate commercial recycling services within city limits by exclusive franchise, and thereby to restrict the manner of collection and disposal of recyclable material by commercial entities. In view of its language, context, and purpose, section 41952 cannot reasonably be interpreted as repealing the authority of a local entity (to enter into exclusive franchises) explicitly conferred by section 40059, subdivision (a).