In re the Request for Solid Waste Utility Customer Lists
In re the Request for Solid Waste Utility Customer Lists
Opinion of the Court
The opinion of the court was delivered by
Appellants, the Waste Management Association, the National Solid Waste Management Association, and 92 individual solid waste collection companies, appeal from the April 1, 1985 order of the Board of Public Utilities (Board) which requires solid waste utilities to provide the Board with a complete list of all their customers, including the rates charged, rate schedules applied and the frequency and type of service supplied. The order requires the customer lists to be updated semi-annually. It provides that the lists would not be made available for inspection or use by other utilities or the public. The order had originally been promulgated on November 30, 1984 without the provision making the customer lists confidential. Because of objections filed by appellants, implementation of the order was suspended, a hearing was held on March 20, 1985 and the order was reconsidered. The order was reissued on April 1, 1985 with the provision making the customer lists confidential.
Appellants challenge the order, arguing that the Board had no authority to issue it; that it must be vacated since it was entered without adequate notice and evidentiary hearing; that it requires the disclosure of confidential “trade secrets” and is therefore an unlawful “taking” of a property right, and that the order provides no adequate safeguard to ensure the confidentiality of the “trade secret” information. We affirm.
Appellants argue that the production of the information sought can be compelled only as an incident to a pending or contemplated inquiry or investigation of a matter affecting a public utility. See N.J.S.A. 48:2-19 and 48:2-36.1. Since no such inquiry or investigation is present here, they argue that no
The Solid Waste Utility Control Act of 1970, N.J.S.A. 48:13A-1, et seq., recognized the compelling need to regulate the economic aspects of solid waste collection and disposal. N.J.S.A. 48:13A-2. Prior to the act, the solid waste industry was “... composed of numerous scavengers, serving overlapping territories ... [and] fraught with the potential for abuse in the form of favoritism, rigged bids, official corruption, and the infiltration of organized crime.” In re Application of Saddle River, 71 N.J. 14, 22 (1976). The act complemented the Board’s general powers over utilities by granting the Board specific authority to designate franchise areas in the solid waste industry, N.J.S.A. 48:13A-5; issue certificates of public convenience and necessity, a condition precedent to engaging in the business, N.J.S.A. 48:13A-6; regulate rates, N.J.S.A. 48:13A-4, and approve tariffs, N.J.S.A. 48:13A-6.1. It authorizes the Board to compel production of contracts, books, and records, “...
We are entirely satisfied that this pervasive legislative scheme provides ample authority for the Board to compel production of the data sought by the April 1, 1985 order, even absent a pending inquiry of a particular utility or utilities. Legislative grants of jurisdiction to the Board have traditionally been liberally construed to grant the widest range of regulatory and investigatory power over utilities subject to its jurisdiction. Barry v. Arrow Pontiac, Inc., 100 N.J. 57, 70-71 (1985); Public Utilities Bd. v. Helen Kramer San. Landfill, 171 N.J.Super. 500, 505 (App.Div. 1979). The powers expressly granted are in turn attended by “... those incidental powers which are reasonably necessary or appropriate to effectuate the specific delegation.” New Jersey Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 562 (1978); see also In re New Jersey Bd. of Public Utilities, 200 N.J.Super. 544, 557 (App.Div. 1985).
The information sought is unquestionably necessary to ensure the efficiency of solid waste collecting and disposal, and to prevent underpricing, monopolies, and other practices inimical to the public interest. See State v. Scioscia, 200 N.J.Super. 28, 40 (App.Div. 1985), certif. den. 101 N.J. 277 (1985). The order is prophylactic in nature, intending to prevent anti-competitive acts and practices before they begin. It is abundantly clear that disclosure to the Board of the type of information sought is critical to the Board’s recognition of potential anti-competitive practices. It would severely compromise the Board’s power to protect the public interest to require an anti-competitive practice to develop first before the Board could compel disclosure of the critical data as part of an inquiry or investigation. We conclude that the Board was empowered to enter the April 1, 1985 order.
Appellants next contend that the information sought constitutes privileged trade secrets and is therefore protected from disclosure under N.J.S.A. 48:2-16.2 which permits Board officers and employees to inspect “... all books ..., records and memoranda kept by any public utility ... which would not be privileged in any judicial proceeding.” [Emphasis supplied]. They also argue that the Board’s order constitutes an unlawful “taking” of a property right.
We find appellants’ argument unpersuasive for several reasons. Firstly, N.J.S.A. 48:13A-11, which applies specifically to solid waste utilities, allows for the production of contracts, books, “... and all the documents necessary to enable the Board to administer its duties as prescribed by law and this act.” Of significance is the absence of any privilege exception, as exists in N.J.S.A. 48:2-16.2, to the Board’s power to compel production of books and records. We view the absence of such exception as a clear legislative expression that the Board’s power to investigate the economic aspects of the solid waste industry under N.J.S.A. 48:13A-11, because of pervasive abuses existing prior to the act, was intended to be broader and more
Secondly, we need not resolve the question of whether the customer lists constitute trade secrets. Even if the lists are trade secrets to which appellants enjoy property rights, see New Jersey State Chamber of Commerce v. Hughey, 600 F.Supp. 606, 626 (D.N.J. 1985), aff'd in part, rev'd and remanded on other grounds 774 A.2d 587 (3d Cir. 1985); Sun Dial Corp. v. Rideout, 16 N.J. 252 (1954), we know of no legal constraint to the State’s right to compel disclosure if disclosure is rationally related to a compelling, legitimate governmental interest. Not only may the State compel disclosure under this test, but there are absolutely no legal restraints to the State’s use of the materials unless appellants’ “reasonable investment-backed expectation” that the materials will be maintained in confidence, or the economic impact upon appellants resulting from disclosure, outweighs the State’s interest in protecting the public good. Ruckelshaus v. Monsanto Co., 467 US. 986, 104 S.Ct. 2862, 81 L.Ed.2d 815, 834 (1984); see also New Jersey State Chamber of Commerce v. Hughey, supra, 600 F.Supp. at 627. Here the governmental interest in compelling production of the information is clear. Further, the Solid Waste Utility Control Act has no provision which expressly provides for the confidentiality of trade secrets. Cf. N.J.S.A. 34:5A-15 (provides for the protection from disclosure of a trade secret to the public under Worker and Community Right to Know Law); N.J.S.A. 17:23-14 (makes all financial reports filed by insurance companies with the Commissioner of Insurance confidential). Thus, appellants had no “reasonable investment-backed expectation” when they became regulated utilities that the Board would maintain business-related information in confidence. Moreover, we are entirely satisfied that appellants’ expressed concern of potential economic impact upon the solid waste industry resulting from disclosure cannot prevail over the State’s significant interest in protecting the public welfare.
Finally, we reject appellants’ assertion that once the lists are filed, they shall constitute “public records” under either N.J.S.A. 47:1A-1, et seq., or the common law, and thus be subject to public scrutiny. The lists are not required by law “... to be made, maintained or kept on file ...” by the Board. N.J.S.A. 47:1A-2; see Nero v. Hyland, 76 N.J. 213, 220 (1978); D’Elena v. Burlington County Bd., 203 N.J.Super. 109, 115 (App.Div. 1985). The Board’s order was an administrative directive, clearly not coequal to a statute or regulation, and thus are not public records within N.J.S.A. 47:1A-2. See Irval Realty v. Bd. of Pub. Util. Commissioners, 115 N.J.Super. 338 (App.Div. 1971), aff’d 61 N.J. 366 (1972). Nor can the lists be deemed public records under the common law right to know, since they are clearly not written memorials, made by a public officer authorized by law to make them. See McClain v. College Hospital, 99 N.J. 346, 354 (1985); Irval Realty v. Board of Pub. Util. Commissioners, 61 N.J. 366, 372 (1972).
We conclude that the Board has the statutory power to compel the information sought by its April 1, 1985 order; that even if the customer lists constitute trade secrets, there is no privilege against inspection by the Board, and that the customer lists do not constitute public records under either N.J.S.A. 47:1A-1, et seq., or the common law.
We affirm.
Reference
- Full Case Name
- IN THE MATTER OF THE REQUEST FOR SOLID WASTE UTILITY CUSTOMER LISTS
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- 3 cases
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