By MICHAEL DEMASI
Albany Business Review

A U.S. District Court judge today issued a preliminary injunction against a new New York state law that requires a five-cent deposit on bottled water.

Hon. Thomas Griesa issued a ruling from the bench granting the preliminary injunction against the state-specific universal product code and the June 1 effective date of the law, said Brian Flaherty, spokesman for Nestle Waters North America Inc.

Nestle sued the state in federal court in Manhattan to block implementation of the law on the grounds that it was unconstitional because it impacts commerce in other states. The suit comes as bottlers and distributors around the state are scrambling to meet new requirements before they take effect June 1.

The judge did not set a date for the next step in the lawsuit; rather, he asked attorneys for Nestle and the state to submit motions, Flaherty said.

In the state budget, approved last month, legislators expanded the bottle bill to apply to unsweetened water. That means grocery and convenience stores would have to accept and store more empty bottles.

The budget also mandates that bottled beverages sold in New York must have a distinctive bar code so recyclers know which bottles qualify for the five-cent redeemable deposit. That created potential headaches for companies such as Nestle that sell bottled water in more than one state.

In addition, beverage companies would be forced to return 80 percent of any unclaimed deposits to the state, generating an estimated $110 million in revenue. Until now, they had kept all unclaimed nickel deposits.

Nestle doesn't oppose a five-cent deposit on bottled water, Flaherty said. But it does want more options for consumers to redeem the deposits and for the state to dedicate the $110 million to improving curbside recycling programs.

"We're saying modernize the bottle bill," Flaherty said. "Put the nickels to work for a cleaner New York."