The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5343 July 14, 1978 UNITED STATES CONSTITUTION: Interstate Commerce UNITED STATES CONSTITUTION: Twenty-first Amendment BEVERAGES: Deposits for beverage containers The Initiated Law of 1976, the so-called 'Bottle Bill', may not be applied to the sale or gift of beverages to airline passengers and beverage containers sold to airline carriers in interstate commerce need not meet embossing and refund requirements of the Initiated Law. Honorable H. Lynn Jondahl State Representative The Capitol Lansing, Michigan You have requested my opinion as to whether the Initiated Law of 1976 regulates the sale, gift or resale of beverages to its passengers by an airline while a plane is in flight. The Initiated Law of 1976, MCLA 445.571; MSA 18.1206(11), was asopted by the voters of Michigan on November 2, 1976, and takes effect on December 3, 1978. Designed to conserve natural resources and reduce litter, the law provides that the sale of soft drink and malt beverage containers is prohibited within this state except in returnable containers on which a deposit and refund of at least 10 cents is payable and which are embossed with the amount of refund and the State of Michigan. 'Dealer', 'distributor', and 'within this state' are defined in Section 1, MCLA 445.571; MSA 18.1206(11), as follows: ' (f) 'Dealer' means a person who sells or offers for sale to consumers within this state a beverage in a beverage container, including an operator of a vending machine containing a beverage in a beverage container. '(g) '(h) 'Distributor' means a person who sells beverages in beverage containers to a dealer within this state, and includes a manufacturer who engages in such sales. '(i) '(j) 'Within this state' means within the exterior limits of the state of Michigan, and includes the territory within these limits owned by or ceded to the United States of America.' (Emphasis added.) Section 2 of the Initiated Law, MCLA 445.572; MSA 18.1206(12) regulates the actions of a distributor as follows: ' (6) A distributor shall not refuse to accept from a dealer an empty returnable container of any kind, size, and brand sold by that distributor nor refuse to pay to the dealer its full refund value in cash, except as provided in subsection (7). '(7) Every beverage container sold or offered for sale by a dealer within this state shall clearly indicate by embossing or by a stamp, or by a label or other method securely affixed to the beverage container, the refund value of the container and the name of this state. A dealer or distributor may, but is not required to, refuse to accept from a person an empty returnable container which does not state thereon the refund value of the container and the name of this state.' Thus the Initiated Law, supra, applies only to a gift or a sale of beverages that occurs 'within this state.' Based upon common experience, it may safely be assumed that airlines that operate interstate flights will have a certain number of beverage sales, 'within this state', and that many such sales would be exempted under Section 1(f) and 1(j), supra, as not being in Michigan. The issue to be addressed therefore is whether the Initiated Law of 1976 may be applied to the sale or gift of beverages to passengers of airlines in the light of the Commerce Clause of the United States Constitution, regardless of the location of the plane at the time of the sale or gift. A literal reading of Sections 1(f) and 1(j), supra, could include an interstate carrier of passengers as a 'dealer' who sells beverages while 'within this state' at some point during an interstate trip. If considered a 'dealer', the interstate carrier would be prohibited from selling or giving away a beverage in a non-returnable container while 'within this state', or would be required to purchase, for resale while 'within this state' beverages in returnable containers from a distributor located within Michigan. Since a distributor is required by Section 2(6), supra, to pay a refund of at least 10 cents on all returnable containers, (1) the distributor would charge a deposit on all such containers which it sold, without regard to whether the beverage might be sold within the state or not. For example, a dealer who is an interstate airline carrier originating flights from Detroit could be required to pay the distributor at least a 10-cent deposit on all beverage containers bought for use on the flight. If the airline is to recover these deposit fees, the airline, instead of disposing of the containers at its destination would have to return the empty beverage containers to a distributor located in Michigan for refund. Also, a plane flying from Los Angeles to Detroit, for example, would have the burden of stopping at the western boundary of the State to pick up embossed, returnable containers before proceeding on to Detroit if it is to sell or give beverages to its passengers on the flight. Also, a plane flying through Michigan air space without landing would not be permitted to serve beverages unless it landed at the border to pick up embossed, returnable containers. According to figures supplied by the Air Transport Association of America, approximately 600,000 beverage containers (including both soft drink and beer containers) are sold each month by Michigan distributors located in Detroit to interstate airlines for use on flights originating from Detroit. Other sales are made in other Michigan cities for use on interstate airlines and on other forms of interstate travel. Under the provisions of the Initiated Law, supra, a distributor would collect a deposit of 10 cents per container which would cost interstate passenger carriers at least $60,000.00 per month in loss of returnable fees. Historically, there has been much litigation over the extent to which a state may regulate interstate commerce because the United States Constitution in Article 1, Section 8, Clause 3, lists as one of the powers of Congress the power to 'regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.' In A&P Tea Co. v Cottrell, 424 US 366, 370-371; 96 S Ct 923; 47 L Ed 2d 55 (1976) the United States Supreme Court described the history of Commerce Clause litigation as follows: 'We begin our analysis by again emphasizing that '[t]he very purpose of the Commerce Clause was to create an area of free trade among the several States.' McLeod v J. E. Dilworth Co., 322 U.S. 327, 330 (1944). And at least since Cooley v Board of Wardens, 12 How. 299 (1852), it has been clear that 'the Commerce Clause was not merely an authorization to Congress to enact laws for the protecting and encouragement of commerce among the States, but by its own force created an area of trade free from interference by the States. . . . [T]he Commerce Clause even without implementing legislation by Congress is a limitation upon the power of the States.' Freeman v Hewitt, 329 U.S. 249, 252 (1946). It is no less true, of course, that under our constitutional scheme the States retain 'broad power' to legislate protection for their citizens in matters of local concern such as public health, H. P. Hood & Sons, Inc. v DuMond, 336 U.S. 525, 531-532 (1949), and that not every exercise of local power is invalid merely because it affects in some way the flow of commerce between the States. Freeman v Hewitt, supra, at 253; Milk Control Board v Eisenberg Farm Products, 306 U.S. 346, 351-352 (1939). Rather, in areas where activities of legitimate local concern overlap with the national interests expressed by the Commerce Clause--where local and national powers are concurrent--the Court in the absence of congressional guidance is called upon to make 'delicate adjustment of the conflicting state and federal claims.' H. P. Hood & Sons, Inc. v Du Mond, supra, at 553 (Black, J., dissenting), thereby attempting 'the necessary accommodation between local needs and the overriding requirement of freedom for the national commerce.' Freeman v Hewitt, supra, at 253.' Thus, in respect to the Initiated Law of 1976, there must be a balancing of the authority of the Federal government through the Commerce Clause which requires free trade and the authority of the State of Michigan to establish a mandatory refund system for beverage containers. In the recent case of Raymond Motor Transportation, Inc. v Rice, ---- US ----, 98 S Ct ----; 54 L Ed 2d 664, 675 (1978), the United States Supreme Court discussed the criteria upon which state statutes which regulate interstate commerce are judged as to their constitutionality: 'Although the criteria for determining the validity of state statutes affecting interstate commerce have been variously stated, the general rule that emerges can be phrased as follows: Where the statute regulates evenhandedly to effectuate a legitimate local public interest and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. Huron Cement Co. v Detroit, 362 US 440, 443 [4 L Ed 2d 852; 80 S Ct 813; 78 ALR 2d 1294]. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.' Applying the holding of Raymond, supra, although the purposes of the Michigan statute are legitimate areas of state interest and concern, these must be evaluated to determine if, in attempting to accomplish these purposes, the Initiated Law imposes a 'clearly excessive' burden on interstate commerce 'in relation to the putative local benefits'. The United States Supreme Court has held the statutes of several other states unconstitutional for discriminating against interstate commerce without significant local benefits. In Pike v Bruce Church, Inc., 397 US 137; 90 S Ct 844; 25 L Ed 2d 174 (1970), the Court ruled that an Arizona statute, which required cantaloupes that were grown in Arizona to be packed in Arizona rather than at the packer's California warehouse, was unconstitutional because it would require the packer to invest $200,000.00 in a packing shed in Arizona, when the local benefit to be derived by the requirement was only to obtain recognition for Arizona-grown cantaloupes. Bibb v Navajo, 359 US 520, 79 S Ct 962; 3 L Ed 2d 1003 (1959), held that an Illinois safety statute which required trucks to be equipped with contour mud flaps was unconstitutional because it placed too great a burden on interstate commerce without any real local safety benefits. In A&P Tea Co., supra, the Court held that Mississippi could not discriminate against interstate commerce by stopping the sale of Louisiana milk in Mississippi simply because Louisiana had not agreed to allow Mississippi to sell its milk in Louisiana. See also Toomer v Witsell, 334 US 385; 68 S Ct 1156; 92 L Ed 1460 (1948). If the provisions of the Initiated Law, supra, are construed to apply to airlines, unreasonable discrimination against interstate commerce would result because interstate airlines carrying passengers would either be prohibited from giving away or selling beverages while 'within this state' or would be economically burdened with the requirement that they purchase returnable containers with the resultant expense involved in the refund requirements. Even if airlines were to comply with the statute, no local benefits would result because airlines do not cause an environmental burden in Michigan when they dispose of their beverage containers at terminals outside of this state. Therefore, the provisions of the Initiated Law which could be construed to regulate airlines carrying passengers do not meet the constitutional test given by the United States Supreme Court. It will be noted, however, that National Railroad Passenger Corporation v Miller, 358 F Supp 1321 (1973) affd 414 US 948, upheld the right of a state to prohibit serving intoxicating beverages on an interstate passenger train. In its opinion, the lower court found that the Kansas law as applied to Amtrak passenger trains caused no undue burden on interstate commerce. Since the Initiated Law regulates the sale or giving away of alcoholic malt beverages as well as soft drinks, a review of a state's authority over the importation of alcoholic beverages is desirable. The Twenty-first Amendment to the Federal Constitution states: '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 United States Supreme Court has reviewed cases involving a state's authority over alcoholic beverages and the Federal government's authority inherent in the Commerce Clause. In United States v Simpson, 252 US 465; 40 S Ct 364; 64 L Ed 665 (1919), the Court held that the transportation of intoxicating liquor between states is interstate commerce. According to the Court in Hostetter v Idlewild Bon Voyage Liquor Corp., 377 US 324, 332; 84 S Ct 1293; 12 L Ed 2d 350 (1964). 'Both the Twenty-first Amendment and the Commerce Clause are parts of the same Constitution. Like other provisions of the Constitution, each must be considered in the light of the other, and in the context of issues and interests at stake in any concrete case.' This position was reiterated in Craig v Boren, 429 US 190, 260; 97 S Ct 451; 50 L Ed 2d (1977) wherein the Court held that '. . . the Twenty-first Amendment does not pro tanto repeal the Commerce Clause, but merely requires that each provision 'be considered in the light of the other, and in the context of the issues and interests at stake in any concrete case.' [Citations deleted].' It is apparent from these cases that the Twenty-first Amendment permits a state to exert control over the sale of alcoholic beverages within the state, but such control must be in accord with the authority of the Federal government to promote free trade under the provisions of the Commerce Clause. Thus, there must be a balancing between the powers of the State and the Federal government in conjunction with the interests of each. In view of the above authorities, it is my opinion that the Initiated Law of 1976, supra, may not be applied to the sale or gift of beverages to passengers by interstate carriers because such application would unduly burden interstate commerce and thus conflict with the Interstate Commerce Clause of the United States Constitution. Beverage containers sold to interstate passenger carriers by distributors need not meet the labeling and embossing requirements of this statute and no refund is applicable on such containers. Frank J. Kelley Attorney General (1)