The Sixth Circuit Court of Appeals has held that part of Michigan’s bottle and can recycling bill is unconstitutional. Am. Beverage Ass’n v. Snyder, No. 11-2097 (6th Cir. 11/29/12).
Requiring consumers to pay a 10-cent deposit on every can and bottle of most non-alcoholic and alcoholic beverages, the legislation initially took effect in 1976. Finding that more deposits were paid back to consumers than had been collected for non-alcoholic beverages, the Michigan Legislature amended the law in 2008 to require that bottles and cans sold in Michigan contain a “statespecific” identifying mark and that redemption could occur only for containers that displayed the mark. The 2008 amendment also made it illegal to sell containers with the Michigan mark outside Michigan. The American Beverage Association (AmBev) sued, asserting the Michigan law violated the so-called “dormant” Commerce Clause, which is based on the U.S. Constitution’s grant to the Congress of power to regulate interstate commerce and, in general, makes some state laws that burden interstate commerce unconstitutional.
AmBev asserted that while nine other states had deposit laws similar to Michigan’s, none imposed a state-specific mark requirement. AmBev claimed, in part, that the state-specific marking requirement unduly burdened out-ofstate manufacturers that sold beverages in Michigan. It asserted that the law therefore unfairly favored local Michigan participants in the beverage industry and thus ran afoul of the dormant Commerce Clause. The district court granted judgment to the defendants, finding that the Michigan law passes constitutional muster.
Disagreeing, the Sixth Circuit did not find that requiring out-of-state manufacturers to place the state-specific mark on containers for sale in Michigan was discriminatory. But the court did find that by making it illegal to sell outside of Michigan containers that bear the Michigan mark, the law “directly controls commerce occurring wholly outside the boundaries of” the state and was therefore extraterritorial. Because the statute had extraterritorial effect, it violated the dormant Commerce Clause. The appellate court remanded to the district court “to proceed consistently with this opinion.”