A. GALLO & COMPANY et al. v. GINA MCCARTHY et al., SC 18764

Judicial District of Hartford

 Constitutional Law; Takings Clause; Bottle Bill; Whether Trial Court Properly Concluded that Certain Provisions of Public Acts 2009, No. 09-01, Effected a Retroactive Taking of Beverage Distributors' Property.  In 1978, the legislature enacted the "Bottle Bill," requiring beer and soft drink distributors to pay a five cent refund value upon the return of each empty container.  Public Acts 2008, No. 08-1, directed those distributors to establish a special account into which the refund value for each beverage container sold would be deposited and from which the reimbursement amount for each returned container would be paid.  On January 15, 2009, the legislature enacted Public Acts 2009, No. 09-01, requiring the distributors to pay from the special accounts to the state's general fund the value of the unclaimed beverage container deposits from the sale of beverage containers for the period of December 1, 2008, through March 31, 2009, and to pay additional quarterly payments on an ongoing basis.  The act provided that it was "effective April 1, 2009, and applicable to periods commencing on or after December 1, 2008."  After paying the required balances to the state, the plaintiffs, who are beer and soft drink distributors, brought this action, claiming that the provisions of the 2009 act requiring them to pay the value of the unredeemed deposits attributable to the four month period ending on March 31, 2009, effected a retroactive taking of their property in violation of the fifth and fourteenth amendments to the United States constitution and article first, § 11, of the constitution of Connecticut.  The trial court granted summary judgment in favor of the plaintiffs.  In reaching its decision, the court determined that, under the original Bottle Bill, the unclaimed deposits were the property of the plaintiffs and that the 2008 act did not affect that property interest because it did not make any provision for the disposition of the unredeemed refund values.  The court next considered the effect of the 2009 act on the balances in the special accounts for the period of December 1, 2008, through March 31, 2009.  Rejecting the state's contention that the passage date of January 15, 2009, should be construed as the effective date, the court determined that the legislature intended the pay-over provisions to be applied retroactively from the act's effective date of April 1, 2009.  Lastly, the court held that the retroactive portion of the act constituted a taking of the plaintiffs' property without compensation.  On appeal, the state argues that the takings clause does not apply to the regulatory obligation to pay money imposed by the 2009 act.  The state further contends that, to the extent the takings clause applies, the 2009 act did not effect a taking when properly analyzed under the regulatory takings framework.  Finally, the state maintains that even if the court properly applied a per se takings analysis, the 2009 act did not effect a per se taking because the plaintiffs did not have a valid property right in the special account funds, and, further, even if there was a per se taking, the act did not apply retroactively to any period after January 15, 2009.