Court Takes Issue With Michigan Bottle Bill

(CN) - The 6th Circuit revived claims against a Michigan law that requires out-of-state beverage companies to put unique markings on recyclable containers.

To reduce fraudulent returns on out-of-state recyclable bottles, Michigan lawmakers passed a 2008 amendment to the Beverage Container Deposit Law, more commonly known as the Bottle Bill.

Under the new law, reverse vending machines would not accept beverage containers for refund unless they carried a unique, state-specific marking and deposit amount.

Containers can be refunded in states only with similar bottle deposit schemes, and retailers face six months imprisonment and a $2,000 fine if they fail to comply.

The American Beverage Association claimed that the change to the Michigan Beverage Container Deposit Law discriminates against out-of-state beverage makers and violates the dormant commerce clause.

It said out-of-state suppliers would have to implement costly manufacturing changes if they wanted access to consumers in Michigan, directly affecting interstate commerce.

A federal judge in Grand Rapids granted the defendant state officials summary judgment, but a three-judge panel in Cincinnati partly reversed last week.

The label requirement is "extraterritorial in violation of the dormant Commerce Clause because it impermissibly regulates interstate commerce by controlling conduct beyond the state," Judge Eric Clay wrote for the panel.

"Because the unique-mark requirement forces manufacturers and distributors of beverage containers to adopt the State's unique labeling system, without the consideration of other less burdensome alternatives, Michigan's unique-mark requirement has an impermissible extraterritorial effect," the ruling concludes.

Opponents of the law failed, however, to show that Michigan discriminated.

"The unique-mark requirement burdens in-state beverage manufacturers who meet the designated thresholds to the same extent as out-of-state manufacturers who meet the designated thresholds," Clay wrote.

Clay's colleagues on the panel each authored separate concurring opinions.

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