Oregon's "Bottle Bill" Survives Challenges, Produces Results

On October 1, 1972, the Oregon Minimum Deposit Act,¹ popularly known as the "bottle bill," went into effect. The first state act of its kind, the controversial Minimum Deposit Act seeks to reduce roadside litter by requiring refunds to be paid on all beer, malt and carbonated soft drink containers and by banning pull-top cans. The main force of the law is directed against popular use of disposable beverage cans and bottles, a significant step inasmuch as the Crusade for a Cleaner Environment recently estimated that it now costs the nation $1.5 billion a year to dispose of cans, nonreturnable bottles and plastic containers.

In promoting the use of returnable beverage containers, the Act has a three-fold purpose. Primarily it is a latter reduction measure. However, the law also provides a way to conserve energy, since returnable beverage containers have a considerably lower energy loss than disposable cans and bottles. Finally, the law promotes a method of resource conservation other than recycling, which has had little concrete success in Oregon. Rodale's Environmental Action Bulletin reports that glass returned by local citizens to a Portland Owens-Illinois bottle manufacturing plant represented less than five percent of the plant's total production.

The Minimum Deposit Act, despite its name, is not so much a deposit measure as it is a refund measure. The Act includes no provision requiring a deposit. According to Don Waggoner, President of the Oregon Environmental Council, it is assumed that "the deposit will be added to the cost of the product at the time of sale." Instead, the law provides for a mandatory five-cent refund on all beer, malt and carbonated soft drink containers. However, standard returnable beverage containers are required to have a refund value of only two cents, an indication that Oregon legislators are trying to encourage the use of Oregon's only standard returnable container, an eleven-ounce, short-necked beer bottle. Pull-top cans are banned outright by the Act. Finally, provision is made for redemption centers for empty beverage containers, in order to ease the burden the law places on retail merchants. The full text of the statute can be found at 3 ELR 43006.

By strongly encouraging the use of returnable beverage containers, this law in effect accomplishes a ban on popularly used disposable cans and bottles, which in recent years have contributed generously to the growing problem of roadside litter. After a survey undertaken during the 1971 legislative session, the Pollution Control subcommittee of the Oregon Environmental Council found that beverage cans and packaging comprised a large percentage of all litter. Significantly, the results of the survey also showed that the percentage of litter represented by returnable beverage containers was considerably smaller, despite the fact that that at the time the sales of cans and returnables were approximately equal. Similarly, Research Triangle Institute estimated after a 1971 survey that beverage containers comprised 19.1 percent of all roadside litter; of that group cans represented 73 percent and nonreturnable bottles 17 percent.

The "bottle bill" has been fiercely opposed by the soft-drink, canning and bottling companies, precisely because of their sizeable investments in disposable beverage containers. According to an April 10, 1973 article in the New York Times, industrial leaders have reported that nonreturnable containers have played an important role in increasing the demand for soft drinks. In 1960, before widespread use of disposable soft-drink cans, Americans drank on the average of four ounces of soft drinks per person each day. A full decade later, after the disposable soft-drink container was introduced to the public in the 1960's, this average skyrocketed to eight ounces for each person and is still increasing.

Consequently, the canning and soft-drink companies presented strong opposition to the Oregon measure from its birth. During the 1960 session of the Oregon legislature, a coalition of industrial interests succeeded in stopping an attempt to pass a beverage container refund bill very similar to the original form of H.B. 1036 of the 1971 session, which later came to be known as the "bottle bill."

After the defeat of the 1969 measure a Legislative Interim Committee was set up to study the problem of litter and to make recommendations to the Legislature during the 1971 session. Headed by Representative Gordon Macpherson, the Litter Subcommittee eventually recommended eight anti-litter resolutions to the Legislature, one of which evolved into H.B. 1036, the "bottle bill." Hearings on the bill were held in both the House and the Senate in the Spring of 1971, during which industrial spokesmen argued that the "bottle bill" was unnecessary, citing surveys showing that beverage containers represented only a small portion of all roadside litter. Industry representatives also predicted that the bill if enacted would increase unemployment. Despite a last-minute plea by industry "not for justice but for mercy," the bill passed both the House and the Senate during the 1971 session amid a flurry of publicity, and on July 2, 1971, Governor Tom McCall signed the bill into law.

A coalition of can manufacturers, brewers, the Oregon Soft Drink Association and contract canners for soft drink companies brought suit in January, 1972, against the Oregon Liquor Control Commission and the State Department of Agriculture, the two agencies charged with implementation and enforcement of the Act. The plaintiffs sought to have the Minimum Deposit Act declared [3 ELR 10113] unconstitutional on five grounds, arguing that the law created an unreasonable burden on interstate commerce and that it violated the Equal Protection and Due Process Clauses of the U.S. Constitution, along with the Due Process and the Privileges and Immunities Clauses of the Oregon Constitution. Focused primarily on the plaintiffs' assertion that the Act violated the Commerce Clause, the complaint rested heavily on two allegations.First, the complaint stated that the regulation of beverage containers required by the Minimum Deposit Act would render certain types of containers economically impractical. Second, the complaint added that the law would not be effective in reducing the amount of litter in Oregon. Finally, the plaintiffs charged that the law was capricious and arbitrary in impact.

The trial was held during the months of July and August in 1972 in the Circuit Court of Oregon for Marion County. Amicus curiae briefs were prepared by both the Oregon Environmental Council and the Natural Resources Defense Council.

On September 1, 1972, Presiding Judge Val D. Sloper issued his decision upholding the Act.² Pointing out the "strong presumption … of the validity of legislative enactment,"³ Judge Sloper dismissed the charges that the law violated the Due Process and Equal Protection Clauses of the federal and Oregon constitutions. The judge insisted that the courts were not to be considered super-legislatures, recalling Mr. Justice Frankfurter's remark that "even if law is found wanting on trial, it is better that its defects should be demonstrated and removed than that law should be aborted by judicial fiat."⁴ He added that he could not find in the act any invidious discrimination against the plaintiffs.

Turning to the plaintiffs' main argument that the law violated the Commerce Clause, Judge Sloper described the two main categories of state laws which placed an unreasonable burden on interstate commerce — those which unduly restrict the "instrumentalities" of transportation, and those which discriminate in favor of intrastate economic activity. The Minimum Deposit Act, the judge stated, fell under neither category and consequently did not violate the Commerce Clause. Precedents cited included Anchor Hocking Glass Corp v. Barber,⁵ a 1954 U.S. District Court decision which sustained a Vermont statute prohibiting the sale of beverages in nonreturnable containers, Pacific States Box & Basket Co. v. White,⁶ in which the U.S. Supreme Court upheld as constitutional an Oregon law regulating the size and shape of berry containers, and Soap and Detergent Association v. Clark,⁷ a federal district court decision which rejected a plea for a preliminary injunction sought against a city ordinance prohibiting the sale of phosphate detergents.

Finally, the court affirmed that inasmuch as the Minimum Deposit Act was consistent with federal environmental policy as expressed in the Federal Solid Waste Disposal Act of 1965, the Environmental Quality Improvement Act of 1970, and the Federal Water Pollution Act, the Oregon law was a valid exercise of the state police power.

At present, according to the Natural Resources Defense Council, the case is pending in the Oregon Court of Appeals, and the coalition of can manufacturers, bottlers, breweries and soft drink companies are marshalling their legal forces in still another attempt to have the law declared invalid.

Although the Act has been upheld in its first court test, it remains the subject of heated controversy. Rumors have it that roadside litter in Oregon is worse than ever, that beer sales in that state have been reduced by thirty percent, and that a large number of breweries and distilleries have been closed. A Portland lawyer representing a group of container and beverage industries has gone as far as to declare that if other states enact similar legislation such laws "could topple a national can company or virtually bankrupt our national brewers."

Despite fears articulated by industry spokesmen, on the whole the "bottle bill" has not seriously damaged the various industries which initiated the suit against the law. For the most part industry has accomplished a major change-over from disposable to returnable beverage containers only with minor problems. One of the most striking results of the transformation is the almost total elimination of beverage cans, for as far as most manufacturers are concerned, unrefillable cans are not worth redeeming. The Environmental Protection Agency reports that before enactment of the Act it was announced by the Oregon Soft Drink Association that approximately 51 percent of all soft drinks sold were contained in returnable bottles, eight percent in disposable bottles, and a hefty 41 percent in sans. After October 1, 1972, a significant change was reported. As of March, 1973, Oregon dealers no longer sell soft drinks in disposable bottles; soft drinks in cans now comprise less than one percent of all soft drinks sold. Similarly, in December, 1972, the Oregon Liquor Control Commission announced that 35 percent of all beer in Oregon was sold in cans. A month after enactment of the "bottle bill" this percentage plummeted to 4.3 percent. And by December, 1972, 99.5 percent of all beer sold was contained in returnable bottles.

Generally, breweries have not suffered any damage to sales as a result of this transformation. From 1971 to 1972 beer sales increased 5.28 percent, although the population grew only 1.88 percent. Wine sales have not increased [3 ELR 10114] more quickly than previous years in spite of predictions from breweries that the law would augment wine sales to the detriment of beer sales. Nor has any unseasonal decrease in total soft drink sales been discerned.

However, companies which had heavy investments in cans have been badly injured. No local beverage can manufacturers have operated in Oregon, but the state does have two soft drink canning companies, one of which has recently announced that it will no longer continue to sell soft drinks in Oregon. Presently only Shasta Beverage Company, based in California, continues to sell beverages in cans, although the company has suffered a sharp decline in sales.

Despite pessimistic predictions, the Act has not caused widespread unemployment in breweries and is soft drink related industries, for all the ill effect the law hs had on canning companies. A study by the Environmental Protection Agency estimates an initial loss of 142 jobs and surmises that new jobs might be created by the growing need to process returnable containers.

The most prominent consequence of the Minimum Deposit Act has been a considerable reduction of litter in public areas. In its first progress report on the law, dated February 15, 1973, the Oregon Environmental Council made three general conclusions after a series of surveys of highway litter. First, although the number of returnable beverage containers on the market had increased considerably, the number of returnable containers found in surveys of roadside litter did not rise. Second, the number of beer and carbonated soft drink containers, once a conspicuous portion of all roadside litter, dropped by approximately fifty to seventy percent. Finally, roadside litter has decreased by twenty to twenty-five percent. These conclusions are roughly confirmed by a separate study undertaken by the Oregon State Highway Department begun in 1971. The results of the survey can be found at the end of this comment.

A law unique for its stringent regulations and remarkable success, the Oregon "bottle bill" has set a precedent in solid waste management which is gradually eliciting response from both Canada and the rest of the country. Even while the Oregon legislature was considering the bill in 1971, interest was growing. In 1970 British Columbia enacted a Litter Act, which like Oregon's law, requires a refund to be paid on ale and carbonated soft drink containers.⁸ Similarly, the Canadian law also provides for the establishment of redemption centers for empty beverage containers. And in the United States several local ordinances were passed during the same year that the Oregon statute was enacted. Prominent among this group is a 1971 municipal ordinance passed by the City Council in Bowie, Maryland, which requires retailers to charge a five-cent deposit on all malt and soft drink containers sold in Bowie.⁹ Because it also authorizes the City Manager to inspect local retail stores for violations, this ordinance has been the subject of a certain amount of controversy. Nevertheless, the Bowie ordinance was upheld by a Maryland court decision handed down in December, 1971.¹⁰ In that same year both a Maryland and a Virginia county enacted ordinances resembling the Oregon Act. An ordinance of Howard County, Maryland, upheld by a Maryland circuit court decision in 1972,¹¹ expressly prohibits the sale of beer, malt liquors and soft drinks in nonreturnable containers. ¹² And in Virginia the County Board of Supervisors in Loudon County, Virginia, enacted an ordinance which requires a refund value on beverage containers, the amount of which is to be determined by the individual manufacturers.¹³ The Loudon County ordinance is presently being litigated.

Since enactment of the Minimum Deposit Act, forty other states have recently considered similar bills as of May, 1973; however, only seventeen state legislatures have allowed such bills to survive in committee. Vermont alone has followed Oregon's lead by enacting a law which encourages the use of returnable beverage containers.¹⁴ Under the law all Vermont manufacturers and distributors of beer, malt and soft drink containers must now charge consumers a five-cent deposit on each beverage container sold; the deposits must be refunded upon return of empty beverage containers. This law took effect on July 1, 1973, at which time a litter levy placed on nonreturnable beverage containers, paid by manufacturers and distributors, expired.

More encouraging is the growing number of local governments which have enacted ordinances along the general lines of the Oregon Minimum Deposit Act. In Michigan alone six towns and one county have enacted ordinances encouraging the use of returnable beverage containers. In Ann Arbor an ordinance very similar to the Oregon law has recently been enacted, which is presently being litigated. And in Ohio the small town of Oberlin prohibits without exception the sale of all beverages in cans within city limits.¹⁵ The city hall in Oberlin has received over a hundred requests for copies of the ordinance, which indicates interest on the part of other local governments in passing similar measures.

In perspective, then, the Oregon Act has achieved a [3 ELR 10115] striking amount of success despite a stormy debut and persistent industrial opposition. Roadside litter has been sharply reduced in Oregon, and beverage-related industries have suffered minimum damage. Despite the rumors that have clouded the achievements of the law, other parts of the country are showing a growing interest in passing similar measures. Already a "bottle bill" has gone into effect in Vermont, and the number of county and municipal ordinances is rapidly increasing. >100"> >101">

*6*A COMPARISON OF OREGON LITTER DATA BEFORE

*6*AND AFTER MINIMUM DEPOSIT ACT *

*5*Before enactment

Winter

Oct.-Nov. Dec. Feb. Winter average

1971 1971 1972 average per mile

Total beverage containers 8,527 9,580 5,254 7,787 269

Returnable 971 1,060 689 907 32

Nonreturnable 7,556 8,520 4,565 6,880 267

Total other litter 15,860 11,440 12,357 13,219 456

Total all items 24,387 21,020 17,611 21,006 728

Beverage container

percentage of total 34.9 45.6 29.8 37.0 37.0

*7*A COMPARISON OF OREGON LITTER DATA BEFORE

*7*AND AFTER MINIMUM DEPOSIT ACT *

*5*After enactment

Winter

Winter average

Nov. Jan. Feb. Winter average comparison

1972 1973 1973 average per mile per mile

before/after

Total beverage containers 1,705 949 1,168 1,274 51 -81.0%

Returnable 316 272 335 308 12 -62.5%

Nonreturnable 1,389 677 833 966 39 -85.4%

Total other litter 7,052 4,896 4,470 5,473 219 -51.9%

Total all items 8,757 5,845 5,638 6,747 270 -62.9%

Beverage container

percentage of total 20.7 16.2 19.4 18.9 18.9 -49.1%

* Source: Oregon State Highway Department Litter Survey

1. Ch. 745, Oregon Laws of 1971.

2. See in general American Can Company v. Oregon Liquor Control Commission, 2 ELR 20643 (Cir. Ct. Ore., 1972).

3. Id. at 20643.

4. Id., citing A.F.L. v. Amercian Sash Co., 335 U.S. 538 (1949).

5. 105 A2d 271 (1954).

6. 296 U.S. 160 (1935).

7. 330 F. Supp. 1218 (D.S. Fla. 1971).

8. No. 33, British Columbia Laws of 1970.

9. Ordinance No. 0-4-71, Bowie, Md.

10. Bowie Inn, Inc. v. City of Bowie, 2 ELR 20056 (Cir. Ct. Prince George's County, Md. 1971).

11. Allview Inn, Inc. v. Howard County, 2 ELR 20023 (Cir. Ct. Md. 1972).

12. Bill No. 7, Legislative Day No. 3of 1971 Legislative Session of Howard County Council, Md.

13. Ordinance of Loudon County Board of Supervisors (May 17, 1971), Loudon County, Va.

14. Title 10, Ch. 53, § 1521 et seq.

15. 804 AC CMS, Oberlin, Ohio.