Suit Alleges N.Y.C. E-Waste Rules Impose ‘Crushing Costs’ on Makers

Most major tech companies take part in 19 mandatory state e-waste programs in the U.S. and others in Europe and Japan, the complaint said. The programs impose “some burdens” on manufacturers, but “none remotely approaches the draconian level of burdens” that New York puts on them, it said. Manufacturers tried for several years to work with the city “to develop a reasonable and effective recycling program, but their suggestions were rejected and efforts at dialogue and negotiation rebuffed,” it said.

The New York City e-waste program “is enforced against manufacturers through an array of fees, fines, penalties and mandatory performance standards,” the complaint said. For example, each manufacturer must by 2012 collect annually e- waste whose total weight is 25 percent of that of the new electronics gear it sells, it said. The requirement increases to 65 percent by 2018, it said. “These targets are completely arbitrary in that they mistakenly assume a manufacturer has the ability and legal authority to require equipment owners to relinquish ownership of their equipment,” it said. Yet the city can fine a company $50,000 for each percentage point they fall below the target, it said.

The program violates what’s called the Dormant Commerce Clause doctrine of constitutional law because “it discriminates against out-of-state manufacturers that lack facilities in the city to accommodate the collection process,” it said. The program also violates the doctrine by imposing burdens on interstate commerce “far outweigh the local benefits to city residents,” it said. For example, it requires manufacturers to “collect used electronics directly from residents’ homes at a cost to be borne solely by manufacturers and eventually passed along to consumers everywhere in the form of higher product prices,” it said. “Thus, consumers everywhere will end up subsidizing the unprecedented costs of New York City’s program,” which the complaint estimates will exceed $200 million a year.

The program illegally “exceeds the authority of the city to regulate interstate commerce” and was enacted without the environmental impact studies required under state and city law, the complaint said. The addition of private truck fleets to New York City streets to collect e-waste items weighing more than 15 pounds “will add to traffic congestion, cause increased noise impacts to city residents, decrease local air quality due to emissions from these trucks and contribute to greenhouse gas emissions, collectively causing a further erosion of the quality of life of residents of New York City,” it said.

New York City is trying to foist on manufacturers an e- waste program it has concluded would be “cost-prohibitive” for the Sanitation Department to run, the complaint said. Between the April 2008 enactment of the e-waste law and the Oct. 31 close of comments in the department’s rulemaking, tech companies “reached out on numerous occasions” to city and department officials “to express their concerns over the law’s unprecedented breadth and scope,” it said. In a July 21, 2008, phone call, the ITI Council told a city official that DSNY’s own Web site said high labor and transportation costs made it too expensive to collect e-waste directly from homes, it said. Within a week, the department had removed the statement, it said.

Asked why manufacturers are alleging that New York City exceeded its authority to regulate interstate commerce when they have made no such claim against state e-waste programs throughout the country, Rick Goss, the ITI Council’s vice president of environment and sustainability, said that’s because “none of them is as onerous as New York City’s program.” Since the program “is by far the most expensive one ever devised,” CEA and ITI think it violates the Dormant Commerce Clause by “imposing massive burdens on interstate commerce that are unnecessary to achieve the public policy goals of electronics recycling,” Goss said.

As for why no CEA or ITI witnesses testified at the Oct. 21 public hearing to object to the proposed rules, Goss said both groups “had numerous in-person meetings and phone discussions with DSNY officials” during the rulemaking period. Both also “submitted lengthy, detailed written comments” during the public comment period, he said. “Given this level of interaction, we saw no need to participate in the public hearing last October,” Goss said. “It comes down to two points” when CEA and ITI allege in the complaint that they attempts to have a substantive discussion with departments officials were “rebuffed,” he said. First, the department “ignored virtually all of the suggestions and comments submitted by industry regarding changes to the draft rule,” he said. Second, though the department granted a six- week deadline extension to July 31 for filing collection plans, the department “refused repeated requests to meet with industry representatives to discuss a potential resolution,” including having the agency and the sanitation workers’ union share in the burden of collecting e-waste, he said.