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REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 168 September Term, 1996

MAYOR AND CITY COUNCIL OF BALTIMORE

v.

THE NEW PULASKI COMPANY LIMITED PARTNERSHIP

Davis, Harrell, Eyler, JJ.

Opinion by Davis, J.

Filed: November 8, 1996

On January 5, 1996, the Circuit Court for Baltimore County issued a judgment declaring City of Baltimore Ordinance No. 128 of the 1992 Councilmanic Session preempted by State environmental laws. The court granted summary judgment in favor of appellee The

New Pulaski Company Limited Partnership, and the Mayor and City Council of Baltimore appealed. The principal issue presented for

our review is restated as follows: Whether Ordinance No. 128 State environmental laws. is preempted by

FACTS
The New Pulaski Company Limited Partnership (Pulaski) owns and operates a solid waste incinerator (Incinerator) located on Pulaski Highway in Baltimore City. Baltimore City (City) built the

Incinerator in 1956 and owned and operated it until 1981 when the City sold the Incinerator to Pulaski. Pulaski and the City entered into a Waste Disposal Service Agreement (WDSA) on May 6, 1981 for a term of fifteen years whereby Pulaski would dispose of municipal waste. retained three five-year options to In addition, the City the WDSA. Upon

renew

expiration of the WDSA, Pulaski would own the Incinerator for the remaining period of a fifty-year Ground Lease and be responsible for operating costs. During the term of the WDSA, however, the

City was responsible for one hundred percent of the operating, maintenance, and improvement costs. In 1985, the WDSA was amended

to reduce the City's responsibility to eighty-five percent of the

- 2 costs and to permit Pulaski to build a fifth furnace at the Incinerator. In January 1993, Pulaski and the Maryland Department of the Environment (MDE) entered into a Consent Order to establish a compliance schedule for the Incinerator's air emissions. On May

11, 1994, MDE issued another order to Pulaski directing Pulaski to take remedial action to bring the air quality emissions of the Incinerator regulations. Incinerator into compliance with the air pollution laws and

The City estimated that in order to bring the into compliance, the cost of retrofitting the

Incinerator would be $60-$100 million. According to the WDSA, Pulaski was required to notify and get the approval of the City for all improvements to the Incinerator. In a May 8, 1992 letter from George G. Balog, the Director of the Department of Public Works (Director or Public Works), the City stated that it was not "practical or technically competent to take any action to retro-fit" the Incinerator, and the City would not reimburse Pulaski for on any expenses taken to retrofit the

Incinerator.

Based

the

Director's

assessment,

Pulaski

recommended that a new solid waste, waste-to-energy facility be built. Pulaski claims that public opposition to the proposed

waste-to-energy facility existed, and as a result, Bill No. 54, which places a moratorium on new incinerators, was introduced at a session of the City Council. On July 18, 1992, Bill No. 54 passed

- 3 and became effective on August 7, 1992 as Ordinance No. 128 (the Moratorium). The Moratorium prohibits the construction, reconstruction, replacement, and expansion of incinerators within Baltimore City for a period of at least five years. If the City does not reach

its goal of recycling forty percent of its solid waste by 1997, the Moratorium will automatically be renewed for another five years or until the City reaches its recycling goal. The ostensible purpose

of the Moratorium, provided in

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Maryland Law