Alamo Recycling, LLC v. Anheuser Busch InBev Worldwide, Inc.

239 Cal. App. 4th 983, 191 Cal. Rptr. 3d 592, 2015 Cal. App. LEXIS 734
CourtCalifornia Court of Appeal
DecidedJuly 23, 2015
DocketNo. E060392
StatusPublished
Cited by1 cases

This text of 239 Cal. App. 4th 983 (Alamo Recycling, LLC v. Anheuser Busch InBev Worldwide, Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alamo Recycling, LLC v. Anheuser Busch InBev Worldwide, Inc., 239 Cal. App. 4th 983, 191 Cal. Rptr. 3d 592, 2015 Cal. App. LEXIS 734 (Cal. Ct. App. 2015).

Opinion

[987]*987Opinion

KING, J.

I. INTRODUCTION

Plaintiffs Alamo Recycling, LLC (Alamo), and Chino Valley Recycling, LLC (Chino), operate “recycling center[s]” where beverage containers sold in California may be redeemed for their “California Redemption Value.” In this action, plaintiffs sued defendant Anheuser Busch InBev Worldwide, Inc., and other companies that sell or distribute beverage containers in California (the Beverage Companies or defendants).1 The trial court sustained defendants’ general demurrer to the complaint without leave to amend (Code Civ. Proc., § 430.10, subd. (e)), dismissed the complaint, and entered judgment in favor of defendants. Plaintiffs appeal.

The gravamen of the complaint is that defendants knowingly and “falsely” label beverage containers sold both inside and outside California with “CA CRV,” “California Redemption Value,” or similar labels when, in fact, under California law, only containers purchased inside California may be redeemed in California. The complaint alleges that containers sold outside California are transported into California and redeemed at recycling centers like those operated by plaintiffs, and this exposes plaintiffs to state regulatory fines and penalties, risks rendering the “California Beverage Recycling Fund” insolvent, and thereby risks the economic viability of plaintiffs’ recycling businesses.

Based on this allegation, the complaint alleges common law tort claims against defendants for fraud, negligent misrepresentation, strict products liability, interference with prospective economic advantage and business relations, and breach of express warranty. As remedies, plaintiffs seek to permanently enjoin defendants from selling beverage containers in California [988]*988as long as defendants continue to label containers sold outside California with “CA CRV” or other California redemption marks. Plaintiffs also seek “[s]pecial damages apportioned by the market share of each defendant,” general damages according to proof, and other damages. For the reasons we explain, the injunctive and compensatory relief plaintiffs seek cannot be awarded by a California court because it would violate the “dormant” commerce clause of the federal Constitution. We therefore affirm the judgment of dismissal.

II. BACKGROUND

A. Statutory and Regulatory Background: The California Beverage Container Recycling and Litter Reduction Act

California is one of 10 states that seeks to promote recycling through a beverage container redemption program. The California Beverage Container Recycling and Litter Reduction Act (the Recycling Act or Act) (Pub. Resources Code, § 14500 et seq.) establishes a comprehensive program “to encourage increased, and more convenient, beverage container redemption opportunities for all consumers.” (Id., § 14501, subd. (a).) One of the stated purposes of the Act is “to create and maintain a marketplace where it is profitable to establish sufficient recycling centers and . . . enhance the profitability of recycling centers . . . .” (Id., § 14501, subd. (f).)

The Act covers beer, wine coolers, carbonated water, soft drinks, and coffee and tea drinks sold in aluminum, glass, plastic, or bimetal containers. (Pub. Resources Code, § 14504.) The Act encourages recycling the containers “through a program of financial incentives” (Californians Against Waste v. Department of Conservation (2002) 104 Cal.App.4th 317, 319 [127 Cal.Rptr.2d 905], citing Pub. Resources Code, § 14501) designed “to balance the competing interests of the varied participants in the beverage container and recycling industries” (Shamsian v. Department of Conservation (2006) 136 Cal.App.4th 621, 627 [39 Cal.Rptr.3d 62]).

All beverage containers covered by the Act and sold in California are assigned a redemption value. (Pub. Resources Code, § 14560.) The Act requires that manufacturers label each such container offered for sale in California with one of five markings — “ ‘CA Redemption Value,’ ” “ ‘California Redemption Value,’ ” “ ‘CA Cash Refund,’ ” “ ‘California Cash Refund,’ ” or “ ‘CA CRV,’ ” by “either printing or embossing the beverage container or by securely affixing a clear and prominent stamp, label, or other device to the beverage container.” Id., § 14561, subd. (a); see id., § 14560.)

The Act authorizes California’s Department of Resources Recycling and Recovery (the Department) to promulgate regulations prescribing more precise labeling requirements for beverage containers. (Pub. Resources Code, [989]*989§ 14561, subd. (d).) The regulations specify that a label must display the redemption message “ ‘[c]learly and [p]rominently’ ” in a manner that is “distinguishable from refund messages of other states” placed on the same containers. (Cal. Code Regs., tit. 14, § 2000, subd. (a)(9).) The Act prohibits a beverage manufacturer from selling to a consumer in California any beverage that fails to meet the labeling requirements of the Act. (Pub. Resources Code, § 14561, subd. (c).)

The Act requires beverage distributors to make “redemption payment[s]” to the Department for each covered beverage container sold to retailers in California. (Pub. Resources Code, § 14560, subd. (a)(1).) The beverage distributors’ payments are deposited into the California Beverage Container Recycling Fund. (See id., § 14580.) Thus, the cost of the redemption payments is borne by the beverage distributors. To encourage recycling, the Act requires that consumers be paid a prescribed refund value (commonly, 5 cents per container) when they return and redeem empty beverage containers at retail establishments or recycling centers certified by the Department. (Id., §§ 14538, 14570-14575.1; see Cal. Code Regs., tit. 14, § 2500.) Certified recycling centers may then sell the redeemed beverage containers to a certified “[processor” who recycles them. (Pub. Resources Code, § 14518.) The processor pays the recycling center the refund value of the beverage container, plus a designated amount for administrative and processing costs. (Id., § 14573.5, subd. (a).) The Department, in turn, pays the processor the refund value, plus another designated amount for administrative and processing costs for each container it obtains from a recycling center. (Id., § 14573, subd. (a).) This tiered payment scheme ensures that the beverage distributors’ initial funding provides economic incentives to recycle throughout the chain from consumers to retailers, recycling centers, and ultimately processors.

The Act confines its operation to covered activities within the State of California and only to the extent permitted by federal law. (See Pub. Resources Code, §§ 14529, 14529.7, 14501.5.) The Act “is applicable uniformly throughout the state” of California and “occupies the whole field of regulation of recycling-related refund values, redemption payments, deposits, and similar fees relating to beverage containers . . . .” (Id., § 14529.) Neither the Act nor its implementing regulations prohibit out-of-state beverage containers from being labeled with “California Redemption Value,” or the redemption value for any other state. The regulations recognize that containers “imported into this State” may be “labeled with the message required in Section 14561 of the Act,” e.g., CA CRV, but provide that such containers “are not eligible for any refund value payments.” (Cal. Code Regs., tit. 14, § 2501, subd.

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239 Cal. App. 4th 983, 191 Cal. Rptr. 3d 592, 2015 Cal. App. LEXIS 734, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alamo-recycling-llc-v-anheuser-busch-inbev-worldwide-inc-calctapp-2015.