In a significant decision for producers, brand owners, distributors, and other companies subject to state packaging Extended Producer Responsibility (EPR) programs, the U.S. District Court for the District of Oregon has upheld Oregon's Plastic Pollution and Recycling Modernization Act (RMA) against constitutional challenge. The ruling represents the first merits decision addressing the constitutionality of a modern packaging EPR program and may have implications for similar challenges pending in other states.
Background
The lawsuit, brought by the National Association of Wholesaler-Distributors (NAW), challenged Oregon's EPR program on both Dormant Commerce Clause and Due Process grounds. NAW argued that the law discriminated against interstate commerce, imposed burdensome and opaque fee obligations, and improperly delegated regulatory authority to the state's producer responsibility organization (PRO), currently the Circular Action Alliance (CAA).
Earlier this year, the court issued a preliminary injunction preventing Oregon from enforcing the RMA against NAW members while the litigation proceeded. The court also dismissed NAW's Equal Protection Clause and Oregon constitutional claims. Following a five-day bench trial in July 2026, however, Judge Michael Simon ultimately rejected each of NAW's remaining constitutional claims.
Key Holdings
No Dormant Commerce Clause Violation
The court concluded that Oregon's EPR program does not discriminate against interstate commerce, impose an unreasonable "user fee," or place an undue burden on interstate commerce and, therefore, does not violate the Dormant Commerce Clause. The court found NAW lacked standing to challenge the EPR program's small producer and government exemption. The court rejected claims that the statute favored Oregon businesses or imposed unlawful burdens on out-of-state companies. Instead, the court characterized the RMA as a facially neutral environmental program designed to address waste management and recycling challenges within Oregon.
The court also rejected arguments that Oregon's fee structure constitutes an unlawful "user fee" or that compliance costs imposed by the program create burdens on interstate commerce that are clearly excessive when compared to the state's environmental and public policy objectives. The court concluded that Oregon's underspend of funds in 2025 may reduce producer fees in 2026 and 2027 and was not evidence sufficient to conclude the program's fees were clearly excessive.
No Due Process Violation
The court likewise rejected NAW's due process claims. Of particular importance, the court found that Oregon did not improperly delegate governmental authority to CAA. The court concluded that although CAA plays a significant role in administering the program and calculating fees, the Oregon Department of Environmental Quality (DEQ) retains sufficient oversight and ultimate approval authority to satisfy constitutional requirements.
The court also found that DEQ's enforcement process provides adequate procedural protections, including notice, opportunities to cure alleged violations, administrative review, and judicial review before penalties become final.
Why This Matters
This decision is particularly noteworthy because Oregon was among the earliest states to implement a packaging EPR program and because the NAW challenge has been widely viewed as a bellwether case for the packaging EPR landscape. The ruling may influence ongoing or future litigation involving similar EPR laws, including challenges to California's and Colorado's EPR laws brought by NAW and the Independent Lubricant Manufacturers Association. These lawsuits include slightly different constitutional claims than those rejected by the Oregon court, but the California and Colorado federal courts may find the Oregon court's ruling as to Dormant Commerce Clause and Due Process claims persuasive.
The court's opinion is also significant for its discussion of core EPR principles. Judge Simon repeatedly emphasized that EPR laws are intended to internalize the end-of-life management costs associated with products and packaging and recognized states' longstanding interests in waste management, recycling infrastructure, and environmental protection.
Practical Takeaways for Producers
Companies subject to packaging EPR requirements should not assume that constitutional challenges will delay implementation or enforcement of state EPR programs. At least in Oregon, the federal court has now upheld the core structure of the program, including:
- producer registration requirements;
- producer responsibility organization administration through CAA;
- material-specific fee structures;
- eco-modulated fee incentives;
- state enforcement mechanisms; and
- producer reporting and payment obligations.
Businesses that have deferred compliance activities pending the outcome of the Oregon litigation should evaluate whether compliance strategies, reporting obligations, and fee reserves should be revisited in light of this decision. Producers operating nationally should also continue monitoring developments in California, Colorado, Minnesota, Maryland, Washington, and Maine, where implementation of packaging EPR requirements remains ongoing.
Looking Ahead
The decision is likely to be appealed to the Ninth Circuit. Unless stayed or reversed, however, the ruling provides the strongest judicial endorsement to date of a modern packaging EPR regime and may embolden states currently implementing or considering similar legislation.
If you have questions about these developments or would like to discuss the potential impact on your business, please contact a member of Baker Donelson's Environmental, Sustainability, and Product Stewardship Team.