Lots of nickels: Supreme Court overturns $5.8 million award in bottle bill case

A Connecticut Supreme Court decision Tuesday overturns a $5.8 million award to a dozen beer and soda distributors who challenged the state’s ability to retroactively seize unclaimed bottle deposits in 2009.

The decision settles a controversy that opened in the fall of 2008, when Gov. M. Jodi Rell and the General Assembly adopted a deficit mitigation plan whose provisions included an end to what had been a revenue stream for the distributors.

The industry, despite arguing for years against the concept, did not challenge the state’s legal right to the unclaimed nickel deposits going forward, but challenged the constitutionality of a provision that seized the deposits for four months prior to the law’s effective date.

A trial court agreed and awarded $5.8 million in compensatory damages.

But in a decision by Justice Peter Zarella, the Supreme Court concluded that the industry had no right to the deposits, retroactive or otherwise.

“We are pleased with the Supreme Court’s decision in this case and agree with its determination that the state is not liable to the plaintiff distributors because they had no vested property interest in the unclaimed beverage container deposits for the period at issue,” said Jaclyn Falkowski, a spokeswoman for the attorney general’s office.

Those unclaimed nickels add up: According to the Office of Policy and Management, Connecticut collects between $25 million and $30 million annually, with the tally reaching $128 million since the law took effect in January 2009.xxx

“Today’s decision is surprising because those funds have been collected and used by the distributors for over 30 years to fund the operations of the state’s bottle recycling program,” said James K. Robertson Jr., a lawyer for the distributors.

Robertson said his clients have collected, banked and paid taxes on the deposits since the bottle deposit law was enacted in 1980 as a way to reduce litter and promote recycling.

“The distributors also priced their beer and soft drink products on the basis of their ownership and use of that money,” Robertson said. “So, the distributors will undoubtedly be surprised to learn that according to the court, they did not have any property interest in that money.”

Connecticut and Massachusetts are the only states that “escheat” or seize 100 percent of the unclaimed deposits. Three other states allow the bottlers to keep a portion to offset handling costs.

In Michigan, where the deposits are a dime instead of the traditional nickel, less than 5 percent of the containers are not returned, according to bottlebill.org, a site that promotes deposit laws.

In other states, it says, the return rates range from 61 percent to 90 percent.

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