Federal Court Upholds Oregon’s Packaging EPR Law In Landmark Ruling

A federal district court has upheld the constitutionality of Oregon's Recycling Modernization Act (RMA), marking a first-of-its-kind decision that will surely carry implications for other state Extended Producer Responsibility (EPR) laws. Following a five-day bench trial and extensive post-trial briefing, Judge Michael H. Simon of the U.S. District Court for the District of Oregon held that the pioneering state's packaging EPR law does not violate either the dormant Commerce Clause or the Due Process Clause. See Nat'l Ass'n of Wholesaler-Distributors v. Feldon, No. 3:25-cv-01334-SI (D. Or. Aug. 27, 2026).

This decision arises from a wider challenge brought by the National Association of Wholesaler-Distributors (NAW) in July 2025. In February 2026, Judge Simon dismissed most of NAW's claims while granting preliminary injunctive relief based on a finding that NAW had raised “serious questions” on the merits of its dormant Commerce Clause and Due Process claims. The case proceeded to trial on these two claims, with testimony from more than a dozen witnesses and briefs from sixteen amici curiae.

The court's ruling looms large in two other pending challenges involving NAW: one brought against California's Plastic Pollution Prevention and Packaging Producer Responsibility Act, known as SB 54, in Nebraska et al. v. Heller, No. 2:26-cv-02214 (E.D. Cal. filed June 22, 2026), and the other brought against Colorado's Producer Responsibility Program for Statewide Recycling Act, or HB 22-1355, in Nat'l Ass'n of Wholesaler-Distributors v. Ryan, No. 1:26-cv-03460 (D. Colo. filed July 30, 2026). Both challenges raise several additional constitutional claims that were not decided by the Oregon district court, while each lawsuit raises unique factual issues tied to the respective state's EPR structure. Their overlap with Thursday's decision in Feldon is significant: in all three, the challengers argued that a state's packaging EPR law is unconstitutional on the theory that it unduly burdens interstate commerce and gives too much regulatory and fee-setting power to the same producer responsibility organization, Circular Action Alliance (CAA).

Oregon Court Rejects NAW's Dormant Commerce Clause Challenge

Beginning with the Supreme Court's recent admonition in National Pork Producers Council v. Ross that “[c]ompanies that choose to sell products in various States must normally comply with the laws of those various States,” Judge Simon framed EPR laws as an example of states acting as “laboratories” for economic and environmental regulation. He further emphasized that national uniformity is primarily Congress's responsibility, not a basis for judicial invalidation.

That framing carried through the court's dormant Commerce Clause analysis. NAW argued that Oregon's RMA discriminated against interstate commerce, imposed unreasonable fees on producers, and placed burdens on interstate commerce that were excessive compared to benefits Oregon aims to achieve with its EPR law. The court rejected all three of NAW's theories. Most significantly, Judge Simon held that NAW's evidence of compliance costs, supply chain disruption, and higher prices for particular companies was insufficient to show a “substantial burden” on interstate commerce. But even if that evidence sufficed, those burdens were not “clearly excessive” in relation to the Oregon's legitimate waste-management interests, the court held.

Oregon Court Rejects NAW's Fourteenth Amendment Challenge

Judge Simon also rejected NAW's claims that Oregon unconstitutionally delegated regulatory authority to a private entity, CAA, and deprived producers of adequate process to challenge fees. NAW argued that Oregon had effectively delegated regulatory fee-setting authority to a private organization governed by large market participants, some of which compete with NAW's members. It also contended that Oregon effectively compelled NAW's members to join CAA, which underscored concerns about the alleged lack of transparency of CAA's fee-setting methodology and oversight by Oregon's Department of Environmental Quality (DEQ).

Acknowledging NAW's arguments about potential self-interest tied to CAA's structure, the court still held that such self-interest is not dispositive because DEQ “retains appropriate oversight” over CAA and “ultimate decision-making authority.” The court also disagreed that joining CAA was effectively compelled under the RMA, reasoning that producers could theoretically “form their own PRO, engage in private recycling, avoid their obligations under the RMA together and subject themselves to civil fees, or simply not participate in the market.” Finally, as to the adequacy of procedural safeguards, the court assumed without deciding that NAW's members' property interest in membership fees is substantial and thus constitutionally protected but held that their voluntarily participation in CAA precluded a finding of property deprivation tied to membership fees. Even assuming that there was a property deprivation, however, Judge Simon concluded that the process available to NAW's members was “more than adequate” under the Fourteenth Amendment. He cited specific features such as how fee disputes can be resolved through contractual arbitration, and how before DEQ can take enforcement action, producers are entitled to a notice-and-cure period, an administrative law judge hearing, and administrative review and appeal process. These “substantial procedural protections,” he held, are constitutionally sufficient.

Implications for Pending Challenges to EPR in California and Colorado

Currently pending in the Eastern District of California is another challenge by NAW and a coalition of 17 state attorneys general, who on August 19, 2026, moved for a preliminary injunction against California's SB 54. The motion asserts six principal theories: vagueness, ultra vires, violations of free speech and association, import-export clause, and dormant Commerce Clause, and lastly, improper private delegation of government power. The last two mirror the constitutional claims that were just rejected in Feldon.

In their preliminary injunction brief in the California challenge, plaintiffs underline that “efficient manufacturing and distribution require uniformity and consistency” and that “[s]upply networks are not designed to desegregate products based on the requirements of a single state,” and further argue that SB 54 “threatens to fragment the national economy.” These allegations closely parallel NAW's argument in Feldon that Oregon's law burdened interstate commerce by forcing packaging changes and rerouting distribution networks, albeit at a smaller scale than in California. Judge Simon's dismissal of those concerns and deference to state legislative action will undoubtedly be cited in CalRecycle's opposition brief, which is slated to be filed on October 23, 2026.

When arguing that SB 54 constitutes an impermissible private delegation of power, plaintiffs similarly point out that CAA's board is comprised of “the nation's largest companies and direct competitors with NAW members.” This echoes the concern dismissed in Feldon after Judge Simon found that CAA was ultimately accountable to Oregon's state agency. CalRecycle will likely argue in its defense that, like the RMA with respect to Oregon DEQ, SB 54 gives CalRecycle sufficient oversight and decision-making authority over CAA's fee-setting methodology. CalRecycle, like Oregon DEQ, will also likely argue that producers have an alternative to joining CAA. Although California, unlike Oregon, does not permit producers to form more than one PRO until January 1, 2031, California permits producers to comply individually with SB 54's requirements. Cal. Health & Safety Code §§ 42051(b)(2), 42061.5(b). Whether these features are enough will be a question for Judge Dena Coggins, who is expected to hear the challengers' motion for preliminary injunction in January 2027. 

Meanwhile in Colorado, where NAW's pending motion for preliminary injunction brings similar constitutional challenges against HB 22-1355, the state agency will surely cite in its defense relevant parts of the Feldon decision. With respect to NAW's dormant Commerce Clause claim, Feldon offers out-of-circuit authority that the burdens on interstate commerce under Colorado's law are not “clearly excessive” in relation to the putative local benefits. 

As for NAW's non-delegation claim, producers in Colorado, like in California, may comply individually without joining the PRO, and they may form an alternate PRO as of January 1, 2029. See Colo. Rev. Stat. §§ 25-17-705(8)(a), 25-17-708(2)(a)-(b); 6 Colo. Code Regs. 1007-2-Part-1 § 18.6. The Colorado Department of Public Health & Environment's arguments on this point will likely parallel those of CalRecycle in opposing NAW's argument that Colorado has designated CAA as “the exclusive private PRO” that “every producer must join.”

A second challenge to Colorado's EPR law by the Independent Lubricant Manufacturing Association (ILMA) is pending in state court. Indep. Lubricant Mfg. Ass'n v. Colorado Dep't of Pub. Health and Envt., No. 2026cv30902 (Colo. Dist. & Cnty. Ct. Mar. 12, 2026). On August 18, 2026, ILMA moved for a preliminary injunction against certain aspects of CAA's program plan in Colorado, including the fees imposed on lubricant manufacturers. Like NAW, ILMA argues that Colorado has delegated significant regulatory and fee-setting authority to CAA without adequate governmental oversight or a meaningful mechanism for affected producers to challenge the obligations imposed on them. Among other claims, ILMA asserts violations of the due process clauses of both the U.S. and Colorado state constitutions but does not bring a dormant Commerce Clause claim.

Back in California, another challenge is underway against the enforcement of SB 343, California's Truth in Labeling for Recyclable Material law. In California League of Food Producers et al. v. Bonta, 21 trade and commodity associations representing the food and consumer products industries are contending that SB 343's recyclability labeling restrictions are unconstitutionally vague and violate the First Amendment's freedom of commercial speech. See No. 3:26-cv-01675 (S.D. Cal. Mar. 17, 2026). Judge William Hayes preliminarily enjoined enforcement of the challenged provisions on July 14, 2026, after finding that the plaintiffs had shown a likelihood of success. Because California's SB 54—the country's most sweeping and demanding piece of EPR legislation—incorporates parts of SB 343's recyclability criteria, the challengers in Nebraska et al. v. Heller have amended their complaint to also argue that SB 54 is unconstitutionally vague. 

Given the significance of the issues decided in Feldon—and the noticeable overlap between NAW's claims there and in pending challenges to the California and Colorado EPR laws—an appeal to the Ninth Circuit, which will be due September 28, 2026, appears all but certain.

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