Michigan Soft Drink Ass'n v. Department of Treasury

• Decision Date: 01 August 1994
• Docket Number: 141586,Docket Nos. 141168
• Citation: 206 Mich.App. 392,522 N.W.2d 643
• Parties: MICHIGAN SOFT DRINK ASSOCIATION, a Michigan nonprofit corporation, Plaintiff-Appellee, v. DEPARTMENT OF TREASURY of The State of Michigan, Defendant-Appellant, and Associated Food Dealers of Michigan, Inc., a Michigan nonprofit corporation, Hollywood Supermarket, Inc., a Michigan corporation, Nadia, Inc., d/b/a Thrifty Scott Market, a Michigan corporation and B & B Market, Inc., d/b/a Palace Plaza, a Michigan corporation, Intervening-Defendants-Appellants.
• Court: Court of Appeal of Michigan — District of US

Page 643

522 N.W.2d 643

206 Mich.App. 392

MICHIGAN SOFT DRINK ASSOCIATION, a Michigan nonprofit corporation, Plaintiff-Appellee, v. DEPARTMENT OF TREASURY of The State of Michigan, Defendant-Appellant and Associated Food Dealers of Michigan, Inc., a Michigan nonprofit corporation, Hollywood Supermarket, Inc., a Michigan corporation, Nadia, Inc., d/b/a Thrifty Scott Market, a Michigan corporation and B & B Market, Inc., d/b/a Palace Plaza, a Michigan corporation Intervening-Defendants-Appellants.

Docket Nos. 141168, 141586.

Court of Appeals of Michigan.

Submitted Dec. 20, 1993, at Detroit.

Decided Aug. 1, 1994, at 9:35 a.m.

Released for Publication Oct. 31, 1994.

Dykema Gossett by William J. Perrone, Richard D. McLellan, Ronald J. Torbert, and Tom Downs, Lansing, for plaintiff.

Frank J. Kelley, Atty. Gen., Thomas L. Casey, Sol. Gen., and Clive D. Gemmill and Thomas R. Wheeker, Asst. Attys. Gen., for Dept. of Treasury.

Bellanca, Beattie & De Lisle, P.C. by James C. Zeman and James V. Bellanca, Jr., Detroit, for Associated Food Dealers of Michigan and others, intervening defendants.

Michigan United Conservation Clubs, and others by M. Carol Bambery, Lansing, for amici curiae.

Before SAWYER, P.J., and CORRIGAN and HOOD, JJ.

CORRIGAN, Judge.

In this case of first impression, we hold that the unclaimed deposit amendments of the act regarding beverage containers (hereafter referred to as the Bottle Law), 1989 P.A. 148, M.C.L. § 445.573b; M.S.A. § 18.1206(13b) and M.C.L. § 445.573d; M.S.A. § 18.1206(13d), do not offend the takings clauses of U.S. Const., Ams. V and XIV, and Const.1963, art. 10, § 2. Because these amendments constitute a valid exercise of legislative power, we order dissolution of the trial court's permanent injunction against enforcement of 1989 P.A. 148.

Plaintiff Michigan Soft Drink Association (MSDA), whose members consist of Michigan manufacturers and distributors of carbonated beverages, challenged the constitutionality of 1989 P.A. 148 as a taking of MSDA members' private property without just compensation. By stipulation of the parties, several retail merchants intervened to challenge plaintiff's standing and to oppose plaintiff's motion for partial summary disposition.

The circuit court first ruled that plaintiff had standing. Regarding plaintiff's motion for partial summary disposition, the court held that M.C.L. § 445.573b; M.S.A. § 18.1206(13b) and M.C.L. § 445.573d; M.S.A. § 18.1206(13d), which prospectively impose duties on manufacturers and distributors annually to report bottle deposits collected and refunds paid, and to pay unrefunded deposits to the Department of Treasury, effect an unlawful taking of private property for public use without just compensation, in violation of U.S. Const. Ams. V and XIV, and Const.1963, art. 10, § 2. The court permanently enjoined enforcement of 1989 P.A. 148, M.C.L. § 445.573a; M.S.A. § 18.1206(13a) and M.C.L. § 445.573c; M.S.A. § 18.1206(13c). Defendants appealed, their appeals were consolidated, and we reverse.

I. STATUTORY SCHEME

The concerns of Michigan's citizens about environmental damage and financial burdens caused by discarded beverage containers led the people to approve the Initiated Law of 1976, M.C.L. § 445.571 et seq.; M.S.A. § 18.1206(11) et seq., commonly known as the Bottle Law, which was effective December 3, 1978. The parties essentially agree on the mechanics of the Bottle Law's operation. The law prohibits dealers from selling to consumers beverages in nonreturnable containers for any off-premises consumption of beer and soft drinks, ¹ M.C.L. § 445.572(1); M.S.A. § 18.1206(12)(1). A purchaser must pay at least a ten-cent deposit on a returnable container. M.C.L. § 445.571(d); M.S.A. § 18.1206(11)(d). In turn, a dealer must pay a refund value of at least ten cents to a purchaser who returns an empty container of the same size, kind, and brand of beverage that the dealer sells. Id.; M.C.L. § 445.572(4); M.S.A. § 18.1206(12)(4). The dealer may then present the empty container to any manufacturer or distributor who sells the same size, kind, and brand of container; a distributor or manufacturer must accept the empty container and pay its full refund value. M.C.L. § 445.572(6); M.S.A. § 18.1206(12)(6). A manufacturer or distributor may originate a deposit on any beverage container it sells. M.C.L. § 445.572(11); M.S.A. 18.1206(12)(11).

After the voters approved the Initiated Law of 1976, manufacturers and dealers originated deposits on returnable beverage containers in anticipation of their duty to pay the refund value to dealers. Because consumers did not return all containers for their refund value, unredeemed deposits in an unknown amount began to accumulate. ² The 1976 legislation was silent about the ownership of these unredeemed deposits. In the absence of any explicit legislative directive, manufacturers and distributors kept all the unredeemed deposits.

The Attorney General opined that unclaimed deposits were not subject to escheat under the Initiated Law of 1976, that the deposits belonged to the collectors of those deposits, and that the containers belonged to the purchasers. The Attorney General also concluded, however, that appropriate legislation could render unclaimed deposits subject to escheat. OAG 1989-1990, No. 6578, pp. 84-89 (April 25, 1989).

In deciding this case, the circuit court acknowledged that the current deposit structure would not exist in the absence of state action and that the 1976 law imposed an artificial value on empty returnable containers. The court recognized that the advent of new product technology in the form of cheap nonreturnable containers had rendered obsolete the former practice of some beverage container manufacturers of charging deposits on returnable bottles. Were it not for the Bottle Law, manufacturers and distributors would not charge deposits on nonreturnable containers equal to their statutory refund value.

Because of public sentiment against windfall profits to distributors and manufacturers from the unredeemed deposits, the Legislature explicitly amended the Bottle Law to provide that unclaimed deposits on returnable containers are considered the property of the purchaser, not the manufacturer or distributor, 1989 P.A. 148, M.C.L. § 445.573d; M.S.A. § 18.1206(13d). Further, distributors or manufacturers are to report annually to the Department of Treasury the total dollar amounts of deposits collected and refunds paid. If a distributor's or manufacturer's total annual deposits exceed the total annual value of refunds, the excess must be remitted to the Department of Treasury for deposit in a revolving fund, M.C.L. § 445.573b; M.S.A. § 18.1206(13b). The Department of Treasury is to disburse annually seventy-five percent of the unredeemed bottle fund to the Unclaimed Bottle Fund. The remaining twenty-five percent is to be apportioned to dealers on the basis of the percentage of empty returnable containers each dealer handles. See M.C.L. § 445.573c; M.S.A. § 18.1206(13c).

1989 P.A. 148 was made contingent upon the enactment of what later became 1989 P.A. 157, which directed utilization of the Unclaimed Bottle Fund for specified environmental and public purposes, M.C.L. § 299.609a et seq.; M.S.A. § 13.32(9a) et seq. For the first ten years, the unclaimed deposits will remain in the Unclaimed Bottle Fund. Thereafter, the Department of Treasury will disburse one-third of the proceeds to the Environmental Response Fund, one-third to the Long-Term Maintenance Trust Fund, and one-third to the Clean Michigan Fund, M.C.L. § 299.609; M.S.A. § 13.32(9), M.C.L. § 299.609c; M.S.A. § 13.32(9c), M.C.L. § 299.375; M.S.A. § 13.33(5).

II. PLAINTIFF'S STANDING TO SUE

Defendants first contend that plaintiff lacks standing to sue because it has failed to demonstrate any direct economic injury from the unclaimed deposits amendments. We affirm the circuit court's ruling that plaintiff has standing to bring this action. Standing denotes "a party's interest in the outcome of litigation that ensures sincere and vigorous advocacy." House Speaker v. Governor, 443 Mich. 560, 572, 506 N.W.2d 190 (1993); Taylor v. Blue Cross & Blue Shield of Michigan, 205 Mich.App. 644, 517 N.W.2d 864 (1994). Evidence of a commitment to engage in litigation alone, however, is insufficient to confer standing. House Speaker v. State Administrative Bd, 441 Mich. 547, 554, 495 N.W.2d 539 (1993). "Standing requires a demonstration that the plaintiff's substantial interest will be detrimentally affected in a manner different from the citizenry at large." Id. Defendants contend that the lack of direct economic injury to plaintiff defeats standing, citing California Bankers Ass'n v. Shultz, 416 U.S. 21; 94 S.Ct. 1494; 39 L.Ed.2d 812 (1974). Although this argument certainly has persuasive force under relevant federal standards, Michigan does not always subscribe to federal authority on standing questions. House Speaker v. Governor, supra. Instead, plaintiff has standing pursuant to M.C.R. 2.201(B)(4), which provides in part:

An action to prevent illegal expenditure of state funds or to test the constitutionality of a statute relating to such an expenditure may be brought:

(a) in the name of a domestic nonprofit corporation organized for civic, protective, or improvement purposes.... [Emphasis added.]

Plaintiff, a domestic nonprofit Michigan corporation, exists to promote the strength and well-being of the Michigan soft drink industry and to influence legislation and public policies affecting the soft drink industry. These purposes qualify as protective or improvement purposes. 1989 P.A. 148 not only directs the collection and retention of unredeemed deposits, it also directs expenditure of those deposits in subsequent years, M.C.L. § 445.573c; M.S.A. § 18.1206(13c); 1989 P.A. 157, M.C.L. § 299.609a; M.S.A. § 13.32(9a). Accepting, as we must, the truth of plaintiff's allegation in the complaint that ...