|Legal Opinion: |
Text of Document: August 16, 1994
A question I left unanswered in my letter of several days ago was whether it is legal for a municipality to enact a container ordinance. Container laws and ordinances generally require the purchaser of certain bottled or canned drinks to pay a deposit on the bottles and containers. The State of Tennessee has not enacted such a law, and as far as I can determine no city in Tennessee has passed such an ordinance. There are surprisingly few cases involving container laws and ordinances, but all of those I have found have upheld them. Those cases include two in which the container deposit was enacted by ordinance; the remainder involve container deposits enacted by state law. I have tried below to cover the challenges to the ordinances in considerable detail, and the challenges to the state law where different or peculiar issues were raised that might have some bearing upon a container ordinance. On most of the major issues, those two classes of cases differ little.
CONTAINER DEPOSIT ORDINANCES
In Bowie Inn, Inc. v. Bowie, 274 Md. 230, 335 A.2d 679, the Maryland Court of Appeals upheld an ordinance imposing a 5¢ deposit on soft drink and malt beverage containers against six challenges:
(1) Violation of Due Process under both the U.S. and Maryland Constitutions on the ground that the ordinance bore no real and substantial relationship to the reduction of litter in the city, its ostensible purpose.
The Court rejected this challenge by declaring that, "The exercise of the police power of a state is not subject to judicial review, and the law will not be held void if there are any considerations relating to the public welfare by which it can be supported." [Emphasis is mine] The Court apparently had its own doubts about the wisdom of the ordinance for reasons it did not make clear, but refused to substitute its judgment for the city council's:
We conclude that, although the petitioners by the evidence presented in the circuit court may have cast some doubt on the wisdom of Ordinance 0-4-71, they have failed to demonstrate that it bears no real and substantial relation to the public health, morals, safety, and welfare of the citizens of Bowie. There is a clear relationship between the mandatory deposit requirements and the object of reducing litter in Bowie. The City Council of Bowie could rationally conclude that the deposit law should motivate consumers to return containers. Moreover, respondents produced evidence of the need for a litter control measure in Bowie and evidence that a similar law had been effective in another state [Oregon].
Even though bottle deposits had not [at that time] been extensively tried, particularly on a municipal level, said the Court, "Here, invalidation of the ordinance would deprive the city council of Bowie and any other legislative body contemplating such a law of any opportunity to discover whether the ordinance will be good, bad or indifferent."
(2) Violation of Due Process (apparently only under the U.S. Constitution) on the ground that the definition of "soft drink" in the ordinance was vague.
The plaintiffs argued that it was not clear whether certain beverages such as Gatorade and Metrecal fit within or without the definition of soft drink.
That argument did not impress the Court. The constitutional requirement of the definiteness of a criminal statute was met when it gave a "person of ordinary intelligence fair notice that his conduct is forbidden by the statute." The ordinance at issue met that test. On the unlikely chance that a retailer could not determine what constituted a soft drink, he could ask the agency charged with the enforcement of the ordinance or seek a declaratory judgment.
(3) Violation of Equal Protection under the U.S. Constitution on the ground that it created "an artificial and arbitrary classification" of soft drink and malt beverage containers.
The plaintiffs argued that the ordinance had to treat all beverages the same, that the distinction it made between soft drink and malt beverage containers on one hand, and other beverage containers such as milk cartons and bottles, fruit juice cans, etc. on the other, was arbitrary and capricious.
Not so, said the Court. A classification having some reasonable basis "is for the Legislature, and the courts will not interfere, 'if any state of facts reasonably may be conceived to justify' the classification," and "classification having some reasonable basis does not offend against ... [the equal protection] clause merely because it is not made with mathematical nicety or because in practice it results in some inequality." Furthermore:
Legislative bodies are not required by the Equal Protection Clause to attack all aspects of a problem at the same time. The legislative body may select one phase of a problem and apply a remedy there, neglecting for the moment other phases of the problem.
Here, the evidence was that soft drink and malt beverage containers were the principal source of the litter problem, and the Oregon container law had improved roadside litter conditions in that state. It was reasonable for the city council to focus on those particular containers.
(4) Violation of the Commerce Clause of the U.S. on the ground that the benefit produced by the ordinance was negligible when compared to the burden on interstate commerce.
Here the plaintiffs made two arguments. First, the ordinance would increase the cost of doing business for retailers and distributors, and would exclude certain distributors and retailers from the Bowie market; second, that it would lead to the passage of similar but possibly conflicting ordinances by other municipalities, counties or states.
With respect to their first argument, the plaintiffs asked the court to apply a "weighing test." Apparently the Court did not feel it was necessary to do so, declaring that the ordinance did not discriminate against interstate commerce as such, but was a regulation of general application, affecting all distributors and retailers in and out of state. But the Court went ahead with an analysis of that argument under that test:
Assuming that a "weighing test" or "balancing approach" is applicable to a case such as this, we have no hesitancy in concluding that the putative local benefits of the Bowie ordinance clearly outweigh any burden which the ordinance might impose on interstate commerce. The benefit which the ordinance is designed to achieve is a substantially cleaner environment. The losses to Bowie retailers are, as the circuit court found, "speculative." The losses, if any, which distributors will have are even less certain. The distributors and their bottlers can continue to sell all of their products to Bowie merchants. If some products are available only in non-returnable containers, the retailers can continue to sell them. They need only collect a deposit upon sale of the containers and refund that deposit upon return of the containers.
With respect to their second argument, the plaintiffs could point to no case in which any other city, county or state had a law conflicting with the ordinance at issue.
(5) City not authorized by state law or its charter to pass the ordinance.
Citing Dillon's Rule, the plaintiffs argued that the city's charter did not contain an express authorization for the city to pass a waste container ordinance. The Court rejected this argument by pointing to the following state statute granting certain powers to all Maryland municipalities:
In addition to, but not in substitution of, the powers which have been, or may hereafter be, granted to it, ... [the legislative body of every incorporated municipality in this state] also shall have the following express ordinance-making powers:
(14) Garbage.-- To regulate or prevent the throwing or depositing of any dirt, garbage, trash, or liquids in any public place and to provide for the proper disposal of such material.
That was good enough for the Court to satisfy Dillon's Rule.
(6) State preemption of the matter of deposit requirements on malt beverage containers.
The plaintiffs argued that the comprehensive state regulations governing the sale of alcoholic beverages in Maryland preempted municipal regulation in this area. However, responded the Court, the ordinance was a waste control and environmental protection measure, not an attempt to regulate the sale of alcohol; therefore, the ordinance did not conflict with the state's regulation of alcoholic beverages. Under the state regulations, the comptroller was entitled to make container deposit regulations, but only with respect to manufacturers and wholesalers.
The Missouri Court Appeals of followed Bowie Inn in Mid-State Distributing Company v. City of Columbia, 617 S.W.2d 419 (Mo.App. 1981) in upholding an ordinance that also imposed a 5¢ container deposit. However, the ordinance in Mid-State required retailers to pay the deposit upon their receipt of the containers, and retailers to refund a 5¢ deposit upon the return of the containers to their establishments. It did not require retailers to charge a 5¢ deposit upon the sale of containers, although obviously it contemplated that they would do so. This case is distinguishable from Bowie only to the extent that the Court went into considerably more detail in analyzing the plaintiff's claims.
The plaintiffs challenged the ordinance on essentially the same grounds as arose in Bowie, and the additional grounds that the ordinance was not validly enacted, and was not validly amended. I will not address the latter two grounds because they were peculiar to the law governing the passage and amendment of ordinances in Missouri.
Their first major argument was that the ordinance was an unreasonable, arbitrary and capricious exercise of the city's police power because it lacked a rational relationship to its purpose [the reduction of litter in the city], and produced harsh results and unusual restrictions on private business. It failed in its purpose to reduce litter because beverage containers represented less than 20% of the total litter found in the City of Columbia, people would dispose of the containers rather than return them for a refund, containers purchased outside the city and not subject to the refund would be disposed of in the city, and other containers, including plastic and paper cups, were not subject to the ordinance.
The court applied a "fairly debatable" standard in rejecting that argument. It was not the business of the Court to determine from empirical evidence whether the ordinance would have the desired effect of reducing litter in the city. Citing the U.S. Supreme Court's opinion in State of Minnesota v. Clover Leaf Creamery Company, ____U.S. _____, 101 S.Ct. 715, 66 L.Ed.2d 659 (1981), in which that Court upheld a law banning plastic nonreturnable milk containers for the stated purposes of promoting resource conservation, proper solid waste disposal, and the conservation of energy. While challenges to legislation on Equal Protection grounds could be based on empirical evidence supporting the proposition that the legislation is irrational, the Court said, they cannot prevail as long as 'it is evident from all the considerations presented to [the legislature], and those of which we may take judicial notice, that the question is at least fairly debatable."
The plaintiffs presented some sophisticated economic arguments to support their theory that it was beyond the reasonable exercise of the police power to pass ordinances that impose harsh and unusual restrictions on business where other less costly means of litter control are available. A witness from the Coca-Cola Bottling Company of Atlanta and Coca Cola Bottling Company of Mid-America, Inc. testified that the "package mix" would have to be changed, resulting in two additional route trucks and one additional tractor and side-loading trailer at a cost of $116,000, additional warehouse space at a cost of $122,000, a "bottle float" at a cost of $50,076, and additional shelves or cases for the returnable bottles at a cost of $12,055. Other retailers and distributors testified they would incur similar costs and inconveniences.
But the Court concluded that the actual economic impact of the container regulations was speculative, and that while the ordinance would require "a certain amount of adjustment" on the part of sellers of the covered beverages, there was no evidence that any of the plaintiffs would be put out of business, although some small brands sold in Columbia might withdraw from the market there. Moreover, "if there is a rational relationship between a legislative measure and the evil sought to be remedied, the cost of compliance argument is out of place in a Federal due process analysis." And even if there were other less expensive means of litter control, the legislative body could select which of a variety of approaches it would adopt.
The plaintiffs' second major argument was that the inclusion of beer or other malt beverages and a variety of soft drinks in the ordinance and the exclusion of others violated the equal protection clauses of the U.S. and Missouri Constitutions. Declaring that the plaintiffs could point to no case in which such a classification had been struck down, and citing Bowie, American Can Company v. Oregon Liquor Control Commission, 517 P.2d 691 (1973), and Anchor Hocking Glass Corp. v. Barber, 181 Vt. 206, 105 A.2d 271 (1954) in which similar classifications had been upheld, the Court rejected that argument. In doing so the Court also cited the city's evidence that litter counts showed that non-carbonated soft drink containers represented only a small part of litter, that paper containers had a shorter life, and that such containers were more likely than sealed carbonated beverage containers to be disposed of on premises where purchased. That evidence supported the reasonableness of the ordinance.
The plaintiffs' third major argument was that the ordinance was void for vagueness because it did not sufficiently define "sealed," "biodegradable," and "individual" with respect to a container. However, the Court declared that the prospect of difficulties of interpretation do not invalidate an ordinance or statute. The ordinance at issue clearly covered a large field of containers. Glass bottles and metal cans in which carbonated beverages were sold were sealed, individual, and non-biodegradable containers under the ordinance. Citing Bowie, the Court decided the definition problems could be easily resolved by administrative rule or by amendment.
The plaintiffs' fourth major argument was that a state liquor control law giving to the state supervisor of liquor control the power to prescribe labels on beer packages preempted municipal regulations in that area. That statute did not preclude the City of Columbia from requiring the word "Columbia" to be lettered on containers covered by the ordinance, and was otherwise inconsistent with state law regulating liquor.
Finally, the plaintiffs argued that a portion of both beer and soft drinks sold in the City of Columbia are imported into the state, that some small selling brands would be foreclosed from sale, that returnable containers are not practical for brands which come from long distances, such as foreign beers, that other places having mandatory refund systems had experienced the elimination of slower selling brands, and that strong brands would be burdened by additional costs. But the Court answered that argument by pointing again to the U.S. Supreme Court's opinion in the Clover Leaf Creamery Case, above:
Within Minnesota, business will presumably shift from manufacturers of plastic non-returnable containers to producers of paperboard cartons, refillable bottles and plastic pouches, but there is no reason to suspect that the gainers will be Minnesota firms or the losers out of state firms. Indeed two of the three dairies, the sole milk retailer and sole milk container producer challenging the statute in this litigation are Minnesota firms.
In other words, as in Clover Leaf, concluded the Court:
there is nothing to show that the customers for the beverages which may no longer be found in the Columbia retail outlet will shift to intrastate beverages in preference to out-of-state beverages.
For those reasons, the plaintiffs' argument that the ordinance produced a burden on interstate commerce also failed.
[The dissent in Bowie discusses a Michigan Circuit Court case in which that court threw out an Ann Arbor ordinance imposing a container deposit.]
Needless to say, the Tennessee Court has spoken in other contexts on all the issues raised in the cases involving container deposits enacted by ordinance. In other words, there is a body of Tennessee law on each of these issues that in theory would support the city's argument that a container deposit enacted by ordinance satisfies both federal and state law. I have not covered those bodies of law here, but I will be glad to do so. However, let me mention that Section 216 of the City Charter arguably represents state authority to enact a container deposit ordinance. It should also be pointed out that container ordinances passed today have the advantage of having been tested for effectiveness in other jurisdictions over a long period.
STATE CONTAINER DEPOSIT LAWS
A state container deposit law [Oregon] was upheld in American Can Company v. Oregon Liquor Control Commission, 517 P.2d 691 (1973). This case is a virtual mirror image of Bowie and Mid-State except that the challenges and their rejections involve a state container deposit law under which every retailer of beer or carbonated beverages was required to "accept from a consumer any empty beverage containers of the kind, common size and brand sold by the dealer, and to pay the consumer the statutory 'refund value' of the container," which was to be indicated on the container. [I cannot determine from the case what the statutory refund value was.] The distributor had a similar obligation with respect to the retailer.
A similar result for essentially the same reasons was reached in the earlier case of Anchor Hocking Glass Corp. v. Barber, 101 A.2d 271 (1954). However, the plaintiffs also made an additional claim under the 21st Amendment to the U.S. Constitution. That case involved a state statute [Vermont] that prohibited the sale of beer or ale in nonreturnable glass bottles. Brewers and wholesalers charged retailers a deposit against the return of the bottles and the retailers were required to impose a deposit on purchasers of the bottles.
The 21st Amendment provides that:
The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.
The plaintiffs argued that to fall within the 21st Amendment the state statute had to contain the words "import," or "importation;" it did not do so. However, those words were not necessary in this case, said the Court, because it was common knowledge that no ale or beer for resale was brewed in the state, that all such beverages packaged in the nonreturnable bottles were imported into the state. For that reason the statute implied that no such beverages would be imported in nonreturnable containers.
Finally, a container deposit state law [Maine] was not a compensable taking under the Fifth Amendment to the U.S. Constitution and a provision of the Maine Constitution in Maine Beer & Wine Wholesalers v.State, 619 A.2d 94 (Me. 1993). That case involved an amendment to the Maine container deposit law. Under the Court's reading of the original container deposit law, the principal responsibility for the proper disposal of certain beverage containers belonged to the bottlers themselves. The bottling industries were required to pay the minimum refund value for returned containers. However, while the industries were permitted to charge consumers a container deposit to cover the cost of their statutory duty to pay the refunds, that permission did not operate to relieve those industries of their responsibility under the statute for the disposal of used containers. In that light, the amendment was drafted in response to address a litter problem that the container deposit law did not correct: containers that in spite of the deposit law ended up as litter along roadways and in landfills rather than in the container recycling process. Those "disappearing containers" resulted in a cost to the state, a part of which the amendment thrust upon the industries profiting from the sale of the containers by requiring a percentage of the unrefunded deposits to be remitted to the state.
That amendment was not a physical invasion or confiscation of the industry's property, said the Court, but merely a regulation on its sale of beverage containers by making it financially accountable for those containers not returned.
Although the basic legality of the container law was not an issue in Maine Beer & Wine Wholesalers, that case also stands for the proposition that the container law itself was legal.
[Also see Massachusetts Wholesalers of Malt Beverages, Inc. v. Attorney General, 567 N.E.2d 183 (Mass 1991), Commonwealth v. Mass. CRINC, 466 N.E.2d 792 (Mass. 1994) and Russin Beer, Inc. v. Phoenix Beverages, Inc., 556 N.Y.S.2d 454 (Sup. 1990) respecting other aspects of container deposit laws that do not have a direct bearing upon the question of their basic legality.]
Sidney D. Hemsley
Senior Law Consultant