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),
Plaintiff Michigan Soft Drink Association (msda), whose members consist of Michigan manufacturers and distributors of carbonated beverages, challenged the constitutionality of
The circuit court first ruled that plaintiff had standing. Regarding plaintiffs motion for partial
*396
summary disposition, the court held that MCL 445.573b; MSA 18.1206(13b) and MCL 445.573d; MSA 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 US Const, Ams V and XIV, and Const 1963, art 10, § 2. The court permanently enjoined enforcement of
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, MCL 445.571 et seq.; MSA 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 MCL 445.572(1); MSA 18.1206(12)(1). A purchaser must pay at least a ten-cent deposit on a returnable container. MCL 445.571(d); MSA 18.1206(1l)(d). In turn, a dealer must pay a refund value of at least ten cents to a *397 purchaser who returns an empty container of the same size, kind, and brand of beverage that the dealer sells. Id.; MCL 445.572(4); MSA 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. MCL 445.572(6); MSA 18.1206(12X6). A manufacturer or distributor may originate a deposit on any beverage container it sells. MCL 445.572(11); MSA 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)._
*398 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,
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,
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.
Defendants rely principally on
Michigan License Beverage Ass’n v Behnan Hall, Inc,
hi
TAKINGS CLAUSE
Defendants contend that the circuit court erred in holding that the unclaimed deposits amendments of the Bottle Law,
We begin from the premise that legislative enactments are presumed constitutional, absent a clear showing to the contrary. The party challenging the constitutionality of legislation bears the burden of proof.
Caterpillar, Inc v Dep’t of Treasury,
After the circuit court had already rendered its opinion in this case, the supreme courts of Massachusetts and Maine upheld the constitutionality of similar amendments of their states’ bottle laws against takings clause challenges brought by wholesalers’ associations in their states.
Massachusetts Wholesalers of Malt Beverages, Inc v Commonwealth,
414 Mass 411;
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Just as in this case, Massachusetts wholesalers again filed suit, asserting that Mass Gen, L ch 94, § 323(h) effected a taking without just compensation.
Mass Wholesalers II, supra.
The supreme court rejected this argument, holding that the amendment did not effect a taking because the plaintiffs possessed no right to the deposits under the amended bill.
Mass Wholesalers II, supra,
The plaintiffs’ right to the deposits created under the original bottle bill, as interpreted in Mass Wholesalers, supra, does not translate into a similar right to these deposits under the bottle bill, as now amended. "Property interests . . . are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.” Regents of State Colleges v Roth,408 US 564 , 577;92 S Ct 2701 , 2709;33 L Ed 2d 548 (1972). German v Commonwealth [410 Mass 445, 450;574 NE2d 336 (1991)]. What the Legislature granted in the original bottle bill, the Legislature can take away by amendment. [609 NE2d 70 .]
We find the analysis in
Mass Wholesaler II
persuasive. See, also,
Webb’s Fabulous Pharmacies, Inc v Beckwith,
We reject plaintiffs argument that the common law of sale and return contracts establishes that the deposits are its property, in reliance on
Goebel Brewing Co v State Bd of Tax Administration,
Plaintiff does not contend that its members charged deposits before the approval of the Initiated Law of 1976. Because the deposit system is a creature of the Legislature, the Legislature may define its dimensions. Nor does plaintiff argue or provide authority that the Legislature is barred from altering the conceptions of property derived from the common law. The Legislature had authority to settle the question of ownership by its adoption of the 1989 amendments. As
Mass Wholesalers II, supra,
"As a broad' principle of jurisprudence rather than as a result of the evolution of legal rules, it is *405 clear that a State, subject to constitutional limitations, may use its legislative power to dispose of property within its reach, belonging to unknown persons.” Standard Oil Co v New Jersey,341 US 428 , 435-436;71 S Ct 822 , 827;95 L Ed 1078 (1951). The abandoned property scheme set up in the amendment is proper.
The Maine Supreme Court has also upheld amendments of its bottle law analogous to
Although both tangible and intangible property may be the subject of an impermissible taking, there is no property right to potential or future profits. York Hosp v Maine Health Care Fin Comm’n,719 F Supp 1111 , 1121 (D Me, 1989) ("Absent legal entitlement to specific profits, there can be no property interest, and thus, no taking.”); Seven Islands Land Co v Maine Land Use Regulation Comm’n,450 A2d 475 , 482, n 10 (ME, 1982) (citing Andrus v Allard,444 US 51 , 66;100 S Ct 318 , 327;62 L Ed 2d 210 [1980]). Furthermore, an appropriation of money does not constitute a per se taking, as would a physical occupation of property or a denial of all its beneficial use. United States v Sperry Corp,493 US 52 , 62, n 9;110 S Ct 387 , 395, n 9;107 L Ed 2d 290 (1989) ("It is artificial to view deductions of a percentage of a monetary award as physical appropriations of property. Unlike real or personal property, money *406 is fungible. . . . Such a rule would be an extravagant extension of the [definition of per se takings].”) Accord Wellman v Department of Human Servs,574 A2d 879 , 885 (ME, 1990) ("In order for there to be a taking . . . there must be a physical invasion of private property or a substantial impairment of its use and enjoyment. The concept of a taking does not apply to an overpayment of money to the state by a citizen, ... or a fine under a statute later declared to be unconstitutional.” [citations omitted]). [619 A2d 97 -98.]
The Maine court recognized that its bottle law fell squarely within the police powers. It observed that the amendments intended to place cost burdens posed by disposable containers on the industry, rather than the public. The court opined that the Maine legislature intended that the cost of unreturned containers must be borne by the industry that profits from their sale. The court rejected the bottlers’ claim of a taking per se:
The challenged amendment does not authorize a physical invasion or confiscation of the industry’s property but merely regulates its sale of beverage containers by making it financially accountable for those containers not returned. See Yee v City of Escondido, 503 US —, —;112 S Ct 1522 , 1529;118 L Ed 2d 153 , 166 (1992) (The existence of a wealth transfer does not "convert regulation into physical invasion.”); Prudential Ins Co of Am v Insurance Comm’r,293 A2d 529 , 537 (Me, 1972). [619 A2d 99 ].
The regulatory action involved here is not a permanent physical occupation of property that amounts to a taking per se.
Loretto v Teleprompter Manhattan CATV Corp,
To aid in this determination, however, we have identified three factors which have "particular significance”: (1) "the economic impact of the regulation on the claimant”; (2) "the extent to which the regulation had interfered with distinct investment-backed expectations”; and (3) "the character of the governmental action.” Penn Central Transportation Co,438 US 104 , 124;98 S Ct 2646 ;57 L Ed 2d 631 (1978).
Applying the
Penn Central
factors, the economic impact of the regulatory taking on plaintiff is nonexistent. The economic impact on plaintiff’s members is unknown on this record. Plaintiff has not attempted to identify a legitimate, investment-backed expectation in future profits from unclaimed deposits.
3
Finally, the character of the governmental action is not a permanent, physical occupation of property by the government. The amended act is prospective; plaintiff has not identified a concrete taking of any particular deposit. Because the prospective amendments are rationally related to the general welfare, an alteration of plaintiff’s expectations is appropriate.
Blue Cross & Blue Shield of Michigan v Baerwaldt,
We need not decide defendants’ remaining issues because our disposition renders those issues moot.
Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
Notes
MCL 445.571(g); MSA 18.1206(ll)(g) defines a dealer as anyone who sells beverages in beverage containers to consumers. Subsection b of that section defines a beverage container as an airtight metal, glass, paper, or plastic container, or a container composed of a combination of these materials, which, at the time of sale, contains one gallon or less of a beverage.
The amount of unredeemed deposits is unknown on this record. Plaintiff did not disclose the actual amount. A recent study estimates that the annual income from unclaimed deposits is between $26 million and $121 million a year. Webster & Pratt, Unclaimed Beverage Container Deposits: An Update, Michigan Commentary (Public Sector Consultants, Inc, June 29, 1988).
In discovery, plaintiff responded that a question framed on this subject was vague, ambiguous, and irrelevant. It claimed it did not understand the question.