Massachusetts Wholesalers of Malt Beverages, Inc. v. Com.

• Decision Date: 01 March 1993
• Citation: 609 N.E.2d 67,414 Mass. 411
• Parties: MASSACHUSETTS WHOLESALERS OF MALT BEVERAGES, INC., & another 1 v. COMMONWEALTH & others. 2
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 67

609 N.E.2d 67

414 Mass. 411

MASSACHUSETTS WHOLESALERS OF MALT BEVERAGES, INC., & another¹ v. COMMONWEALTH & others. ²

Supreme Judicial Court of Massachusetts Suffolk.

Argued Nov. 5, 1992.

Decided March 1, 1993.

H. Glenn Alberich, Boston (Alice E. Moore, with him) for Massachusetts Wholesalers of Malt Beverages, Inc.

Toni G. Wolfman, Boston, for Massachusetts Soft Drink Ass'n.

Eric A. Smith, Asst. Atty. Gen. (Douglas H. Wilkins, Asst. Atty. Gen., with him), for the Com. and others.

David A. Nicholas and Joshua Kratka, Boston, for Massachusetts Public Interest Research Group, amicus curiae, submitted a brief.

Before LIACOS, C.J., and ABRAMS, NOLAN and LYNCH, JJ.

LYNCH, Justice.

In Massachusetts Wholesalers of Malt Beverages, Inc. v. Attorney Gen., 409 Mass. 336, 567 N.E.2d 183 (1991) (Mass. Wholesalers ), we considered whether G.L. c. 94, § 323 (g ), of the so-called "bottle bill," ³ as originally enacted, required bottlers and distributors to hold "deposits and/or handling charges" created by the law in trust for consumers and, with respect to unclaimed deposits, for the Commonwealth by application of principles of abandoned property law. Mass. Wholesalers, supra at 342, 567 N.E.2d 183. ⁴ We held that the unclaimed "deposits" belonged to the bottlers and distributors. Id. at 343, 567 N.E.2d 183.

In 1989, the Legislature amended G.L. c. 94, §§ 321-327, by St.1989, c. 653, §§ 68-72, 235-237 (amendment), adding a number of sections to the bottle bill. A new provision, G.L. c. 94, § 323(h ) (1990 ed.), required bottlers and distributors to maintain, as of January 1, 1990, a "separate account to be known as the Deposit Transaction Fund ... [which] shall be kept separate from all other revenues and accounts. Each bottler or distributor shall place in said fund the refund value for all non-reusable beverage containers it sells...." Amounts in the fund may only be expended to pay refund values for returned nonreusable beverage containers, and "shall not be used to pay the handling fees required by [§ 323(c )-(e ) ]." Id. In addition, the fund shall be maintained "on behalf of consumers who have purchased refundable non-reusable beverage containers and on behalf of the commonwealth; ... for no purposes are amounts in such fund to be regarded as income of said bottlers or distributors." Id. The bottler or distributor may, however, transfer to its own account any interest earned on the fund. G.L. c. 94, § 323C.

By the tenth of every month, bottlers or distributors must turn over to the Commissioner of Revenue all "abandoned deposit amounts" in the fund. ⁵ G.L. c. 94, §§ 323C, 323D. A specified portion of the "[a]mounts collected by the commissioner of revenue ... shall be deposited in the Clean Environment Fund," G.L. c. 94, § 323D; the remainder is deposited in the General Fund. ⁶ St.1989, c. 653, § 235. The amendment eliminated the provisions of G.L. c. 94, § 323(g ), which we construed in Mass. Wholesalers, supra, as of January 1, 1990. St.1989, c. 653, § 236. The amendment also provides for the retroactive funding of the "deposit transaction fund" by requiring each bottler to place into its fund by January 1, 1990, a sum equal to the refund value for each container that it sold during the last three months of 1989. St.1989, c. 653, § 237. Section 71 of the amendment also requires the Commissioner of Revenue to administer the deposit transaction fund and to promulgate "rules and regulations to effectuate the purposes" of G.L. c. 94, § 323 (g ) & (h ), and §§ 323B-323E. ⁷ G.L. c. 94, § 326.

The plaintiffs filed the instant action in Supreme Judicial Court for Suffolk County seeking a declaratory judgment that the bottle bill, as amended, takes the property of the bottlers and distributors without compensation in violation of the takings clauses of the United States Constitution and the Massachusetts Declaration of Rights. The plaintiffs also requested a preliminary injunction enjoining the Commonwealth from enforcing the provisions of the amendment. A single justice refused to issue an injunction and remanded the case to the Superior Court for further proceedings. In the Superior Court, the parties filed cross motions for summary judgment. The judge ruled that the amendment, apart from the retroactive funding portion, "does not effect a taking of any property of bottlers or distributors," "does not violate any constitutional requirement concerning abandoned property," and was a "proper exercise of legislative power that establishes that refund values belong to consumers until they escheat to the Commonwealth." He further ruled that the retroactive funding portion of the amendment "effects an unconstitutional retroactive taking of the property of bottlers and distributors as to refund values collected during the three months prior to the Amendment's effective date," but declared that the retroactive funding portion was severable from the rest of the amendment. He entered a detailed order, allowing in part and denying in part each of the cross motions, and reported the matter to the Appeals Court. See G.L. c. 231 § 111 (1990 ed.); Mass.R.Civ.P. 64, 365 Mass. 831 (1974). We granted direct appellate review and now affirm.

1. The first question before us is whether the amendment to the bottle bill violates the takings clause by conferring the right to the deposits to the consumer and, once abandoned, to the Commonwealth. Since the plaintiffs do not argue that we should apply any principles under the Massachusetts Declaration of Rights different from those established by the United States Supreme Court, we focus on the claimed violations of the United States Constitution. Steinbergh v. Cambridge, 413 Mass. 736, 738, 604 N.E.2d 1269 (1992). The material facts are not in dispute.

Government action does not constitute a "taking" if the plaintiffs do not have a property interest in the affected property. German v. Commonwealth, 410 Mass. 445, 450, 574 N.E.2d 336 (1991). The "government is not required to compensate an individual for denying him the right to use that which he has never owned." Flynn v. Cambridge, 383 Mass. 152, 160, 418 N.E.2d 335 (1981). The plaintiffs claim to have a property right to the deposits based on common law. However, they admit that the bottlers and distributors did not begin to include a separate deposit amount (equivalent to the statutory "refund value" for nonreusable containers) in the price of beverages charged to retailers until the enactment of the bottle bill. ⁸ They also admit that, prior to the bottle bill, they did not charge this extra deposit amount. ⁹ It follows, therefore, that any right to these deposits was created under the original bottle bill, as we interpreted that statute in Mass. Wholesalers, supra.

Contrary to the plaintiffs' argument, we did not recognize such a common law property right in Mass. Wholesalers, supra. ¹⁰ "It is in that context that we consider whether § 323(g ) reveals a legislative intent that beneficial ownership of the 'deposits and/or handling charges' ... resides not in the bottlers and distributors but, instead, in the consumers" (emphasis added). Id. 409 Mass. at 342, 567 N.E.2d 183. Moreover, the statement " 'deposits and/or handling charges' can only be viewed as a portion of the purchase price of filled containers paid by dealers to distributors and by distributors to bottlers" did not imply a common law property right on the bottlers and distributors to the deposits. Mass. Wholesalers, supra at 341, 567 N.E.2d 183. Instead, our holding was simply that, absent express legislative intent in the language of the original bottle bill, the deposits belonged to the plaintiffs. We stated:

"The motion judge considered significant, as do we, that 'there is no express provision [in the bottle bill] concerning the disposition of unclaimed deposits.... The absence of legislative direction, express or implied, leads to the fair inference that the unclaimed deposits belong to the bottlers and distributors' " (emphasis added). Id. at 342, 567 N.E.2d 183.

The plaintiffs' right to the deposits created under the original bottle bill, as interpreted in Mass. Wholesalers, supra, does not translate into a similar right to these deposits under the bottle bill, as now amended. "Property interests ... are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law." Regents of State Colleges v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). German v. Commonwealth, supra 410 Mass. at 450, 574 N.E.2d 336. ¹¹ What the Legislature granted in the original bottle bill, the Legislature can take away by amendment. See, e.g., Atkins v. Parker, 472 U.S. 115, 129, 105 S.Ct. 2520, 2528-29, 86 L.Ed.2d 81 (1985) (Congress had plenary power to define scope and duration of entitlement to food-stamp benefits, and to increase, to decrease, or to terminate those benefits); German v. Commonwealth, supra 410 Mass. at 450, 574 N.E.2d 336 (State furlough program did not violate takings clause since no property interest in future wages for future State employment existed). See Answer of the Justices, 406 Mass. 1220, 1225, 547 N.E.2d 17 (1989) (Legislature has power to amend prior legislation, so long as amendment would not violate provisions of Constitution). See also Answer of the Justices, 375 Mass. 790, 793, 374 N.E.2d 1345 (1978) ("[W]hatever interpretation we might give would not affect the Legislature's power to amend or clarify the statute, giving it whatever interpretation the General Court might desire"). ¹² As the Superior Court judge noted, the amendment now "makes it redundantly clear that these [deposit] rights belong to the consumer and to the Commonwealth and '... for no purpose [are] ... to be regarded as income of said bottlers or distributors.' " ¹³

2. The amendment includes a retroactive funding provision that requires each bottler and distributor...