In the News

New York Court Allows Partial Implementation of Bottle Bill Amendments

Aug 27, 2009

A New York federal court has lifted an earlier injunction that prohibited New York State from enforcing amendments to the State's Returnable Container Act. The Returnable Container Act, commonly known as the "Bottle Bill," was first enacted in 1982 and requires a deposit of at least five cents for certain beverage containers.

New amendments to the Bottle Bill were signed into law on April 7, 2009. Key provisions of the amendments include:

• The addition of bottled water to the beverage containers subject to the five cent deposit (although "water" beverages to which sugar is added were exempted);
• An increase of the handling fee from 2 cents to 3.5 cents;
• Reversion of 80% of the unclaimed deposits to the state (the remaining 20% would go to the "deposit initiator," which is the bottler or the distributor if the container was not purchased from a registered deposit initiator); and
• A registration requirement for labels on beverage containers intended for sale in New York State.

The amendments also required labels to bear a New York-exclusive universal product code (UPC) to prevent redemption of beverage containers purchased out-of-state. The UPC was to be unique to New York State, prohibiting the sale of beverage containers with New York UPCs in other states. The amendments were to become effective on June 1, 2009.

IBWA Challenges New Amendments

The International Bottled Water Association (IBWA) and others filed a lawsuit on May 18, 2009 in the United States District Court for the Southern District of New York. They argued that the New York-exclusive UPC provision interfered with interstate commerce because it controls commerce outside of New York by disallowing the sale of beverage containers bearing a New York UPC in other states. The suit also claimed a violation of a due process, arguing that the complex manufacturing and distribution modifications required to comply with the new regulations could not reasonably be implemented by the June 1 deadline. In a press release about the lawsuit, IBWA stated that the arbitrary sugar water exception, which gives special preference to companies that sell sugar water products, violates the U.S. Constitution's Equal Protection Clause.

On May 27, 2009, the New York federal district court entered a preliminary injunction enjoining the State from implementing and enforcing the new provisions. The court found that "[r]egardless of the purpose of the legislature in enacting this provision, the provision is a violation of the Commerce Clause of the U.S. Constitution. It prohibits a sale of a commodity on the basis of state borders." The court also determined that covered entities should have until April 1, 2010 to comply with the other portions of the amendments. In ruling, the court stated, "[d]efendants are enjoined from implementing and enforcing any and all other amendments to the Bottle Bill . . . to allow persons subject to the amendments sufficient time to comply with the law's requirements."

On August 13, 2009, the New York federal district court modified the preliminary injunction to allow most of the amendments to the bottle bill to be implemented immediately for all products except bottled water. However, the injunction of the New York-exclusive UPC requirement for all beverage containers remains in full force and effective. The court set an October 22, 2009 hearing date for the plaintiffs to show cause why "due process requires a continuation of the injunction." IBWA stated in a press release that it will present the court with information that demonstrates the need to maintain the April 2010 effective date at the hearing.