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Protectionism and Overcriminalization in Michigan

| December 27, 2011

In 2008, Michigan passed a law requiring all high-volume beverage manufacturers to imprint a unique logo on any cans and bottles sold in the state because Michigan takes part in the bottle deposit refund system. Under this system, consumers pay an extra fee at the point of sale, but can get the amount back if they return the bottle or can.

Manufacturers are required to place the logo on all bottles and cans sold in-state, and they are prohibited from selling bottles and cans with the logo anywhere else.

The penalty for noncompliance is up to $2,000 per bottle or can sold and a maximum of six months in prison.

Not only does the Michigan law inhibit open commerce, but it is a troubling criminalization of behavior that would not traditionally be considered blameworthy. There is no direct victim if logo-free bottles and cans are sold in Michigan, or if imprinted bottles are sold in, say, Indiana.

This policy requires distributors to set up entirely distinct production, warehousing, and distribution systems for the state of Michigan—and risk hefty criminal penalties for the failure to comply.

The Washington Legal Foundation recently filed an amicus brief with the Sixth Circuit supporting a national beverage association’s lawsuit over the restriction, based on a theory of interstate trade discrimination, but the overcriminalization aspect of this case is equally distressing.

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