Court approves New York's expanded deposit law

NEW YORK (Aug. 14, 5 p.m. ET) -- A federal judge in New York has ruled that most of the provisions of the state’s expanded bottle deposit bill, challenged in court by bottled water companies, can go into effect immediately.

However, the extension of nickel deposits to bottled water won’t go into effect until after an Oct. 22 court hearing, said U.S. District Court Judge Deborah Batts, in an Aug. 13 ruling.

She suggested that the bill’s provision extending deposits to bottled water would take effect after the Oct. 22 hearing unless bottled water companies can show compliance would be impossible to achieve. The bottled water industry is “walking on unusually inhospitable legal terrain,” Batts said in her decision. “It is the Court’s expectation that [bottled water companies] are actively working to achieve compliance.”

The bill had originally been scheduled to go into effect June 1, but was challenged in court by the International Bottled Water Association, Nestle Waters North America Inc. and Polar Corp., which had obtained a temporary injunction barring the law’s implementation until April.

“We were surprised and pleased,” said Laura Haight, senior environmental associate with the New York Public Interest Research Group, in an Aug. 14 phone interview. “Judge Batts sent an extremely clear signal that she intends to put the provisions that expand the bottle bill to water bottles into place Oct. 22.”

But IBWA argued that the ruling does not change anything with regard to bottled water.

“The industry continues to be exempt from the decision until our hearing on Oct. 22,” said a spokesman for IBWA. “[It] does not affect bottled water.”

The court decision means that 80 percent of the unclaimed nickel deposits — estimated to be $115 million — will now go to the state. Distributors and bottlers will keep the remaining 20 percent, or roughly $30 million.

Previously, distributors had kept all of the funds from unclaimed deposits. Since 1982, when deposits went into effect in New York on soft drinks, distributors and bottlers have kept all unredeemed deposits, an amount estimated at $2 billion.

In addition, under the new law the handling fee that distributors pay to grocers, convenience stores and redemption centers for handling bottle returns will increase from 2 cents to 3.5 cents — the first increase since 1997.

Between 2.5 billion and 3.2 billion water bottles are consumed annually in New York, representing one-fourth of all beverages sold in the state. Bottled water represents 69 percent of all non-carbonated beverage sales in the state of New York.

“The ruling allows the provisions of the law that were not part of the bottled water industry lawsuit to go into effect,” Haight said. “The state had been losing $237,000 day. This is one of the most important environmental victories in the state of New York in a long time.”

New York Attorney General Andrew Cuomo agreed. “The court’s decision will allow essential, long-overdue updates to the bottle bill to finally take effect,” he said. [It] will ensure that the most critical elements of the bill move forward expeditiously.”

The one exception: the judge said the bill’s requirement that manufacturers develop a bar code specifically for products sold in New York state would remain on hold indefinitely.

Nestle Chairman and CEO Kim Jeffery said the company would abide by the judge’s decision after the upcoming hearing is held, but added that he felt the bottle bill was flawed and that he hoped to work with state officials and legislators to “strengthen it” in the next legislative session.

“National experience has shown that effective bottle deposit laws are based on four principles [and] the current New York bottle bill fails these tests,” Jeffery said in a statement issued by the Greenwich, Conn., company. The bill’s “gaping loopholes and sweetheart deals will hinder recycling,” he said.

Jeffery, in his statement, said that to be effective, deposit laws “must apply to all beverages, including sports drinks, teas, juices, and energy drinks and must make recycling convenient by allowing consumers to return bottles to any retail or redemption center.” In addition, he said handling fees must remain “reasonable” and deposit laws “must dedicate funding to support community recycling programs.”

Six of the 11 states in the U.S. with deposit bills now include carbonated soft drinks, beer and water bottles. Oregon added water Jan. 1, and Connecticut will add water bottles Oct. 1. California, Maine and Hawaii include water, beer, soft drinks and other non-carbonated beverages such as teas and energy drinks.

The number of plastic water bottles sold annually in the United States nearly doubled from 15 billion in 2002 to 29.8 billion in 2005, and water bottle sales are more than seven times higher than in 1997, when only 3.8 billion water bottles were sold, according to the Container Recycling Institute in Culver City, Calif.

The famous economist Lester Thurow argued that any pollution related fees, most of the time will essentially result into three outcomes: (1) an additional source of income for the administering agency, (2) a license to pollute at the user level or (3) a new business opportunity for people who can accomplish the task at hand.. (e.g., plastic waste collectors).

Imagine you are going to dispose off your bottled water., You have two choices – put it in a garbage container.., or hang on to it, collect more bottles and then go back to the store to claim nickel per bottle deposit..,. It purely becomes an issue of zero sum solution.. Is one nickel worth the effort…? No, then just dispose it off and consider the nickel as a license fee to pollute .. it doesn’t matter how you pollute.. nicely in a waste basket or on the street side.. You can do it a clear conscience, because you have, after all paid your nickel dues,, and have earned the right to pollute as you please…

The bottle deposit law started from the old glass milk and soft drink bottles from 40 years ago.. when milk and soft drinks were consumed at home or at an establishment.. not in transit… Plastics made possible the convenience of consumption with instant gratification and may not be amenable to the same old rules…, The system.. in this case… bottle manufacturers, distributors and the consumers have to work together to solve the issues… Consumer education is the key… not a nickel fee to pollute.,,,

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