Oregon EPR Decision Highlights Growing Compliance Challenges

For manufacturers, distributors, retailers, and brand owners, EPR is becoming a regulatory-fragmentation problem. States are adopting similar, but not identical programs. Definitions, exemptions, reporting obligations, fee structures, and enforcement mechanisms differ. National companies increasingly must manage those differences simultaneously.

In National Association of Wholesaler-Distributors v. Feldon, the US District Court for the District of Oregon rejected Commerce Clause and due process challenges to Oregon’s Plastic Pollution and Recycling Modernization Act (RMA). The decision dissolved a preliminary injunction that had previously blocked enforcement against National Association of Wholesaler-Distributors (NAW) members and returned those companies to full compliance obligations, including Producer Responsibility Organization (PRO) membership, reporting, and fee payment. An appeal is likely, and related challenges remain pending in California and Colorado. But companies should not assume litigation will remove the need for multi-state EPR compliance.

Why the Decision Matters

The RMA was enacted in 2021 as one of the nation’s first comprehensive EPR laws for packaging and paper products. It shifts recycling costs from municipalities and taxpayers to “producers” of covered products, including packaging, printing and writing paper, and food serviceware. Under the statute, covered producers generally must join a PRO — a nonprofit entity that manages compliance, collects fees, and funds recycling infrastructure on behalf of its members — report covered-product volumes brought into Oregon, and pay membership fees tied to the cost of managing each material type.

The Circular Action Alliance (CAA) is currently the only approved Producer Responsibility Organization in Oregon. The Oregon Department of Environmental Quality (DEQ) reviews and approves PRO plans, may direct substantive changes, and can suspend or revoke plans that fail to meet statutory requirements. Enforcement may include civil penalties of up to $25,000 per day.

The statute also contains exemptions, including for nonprofits, public bodies, businesses with less than $5 million in gross revenue, businesses selling less than one metric ton of covered products into Oregon, single-location retailers, and restaurants selling food for immediate consumption. NAW challenged those exemptions but the court found no record showing that they favored in-state businesses over out-of-state competitors.

The Court’s Decision

NAW’s challenge reflected concerns shared by many regulated companies. NAW argued that its members operate in the middle of the supply chain, often serve multiple states from regional hubs, face difficulty determining which products trigger responsibility under the RMA, cannot easily pass compliance costs through to customers, and operate on thin margins. In February, the court granted a preliminary injunction, finding “serious questions” on the merits. After a five-day bench trial in July, Judge Michael H. Simon entered judgment for Oregon on August 27, dissolving the injunction.

Dormant Commerce Clause 

The dormant Commerce Clause prevents states from passing laws that unfairly favor local businesses over out-of-state competitors or that impose excessive burdens on interstate commerce. NAW challenged the RMA on theories of discriminatory purpose, facial discrimination, discriminatory effects, unreasonable fees, and Pike balancing. The court rejected each theory. For companies operating across multiple jurisdictions, the key holding is that compliance costs, price increases, and supply-chain effects were not enough to invalidate the law. Relying on National Pork Producers Council v. Ross, 598 U.S. 356 (2023) (covered by us here), the court concluded those burdens did not outweigh Oregon’s substantial interest in waste management and environmental protection.

The opinion draws a line likely to matter in future cases: cost alone does not equal unconstitutionality. Future challengers will likely need specific evidence of discriminatory effects, competitive injury, unreasonable fees, or other program-specific constitutional defects — not simply evidence that compliance is difficult or expensive.

Due Process and Delegation

NAW also argued that the RMA improperly delegates authority to the CAA and lacks adequate procedural safeguards. The court rejected those claims. It found that producers are not forced to join the CAA because they can form another PRO or privately recycle their covered products, and it emphasized DEQ’s oversight of the CAA’s fee-setting and program administration. Citing FCC v. Consumers’ Research, 606 U.S. 656 (2025), the court held it was sufficient that the CAA’s recommendations cannot take effect without DEQ approval.

The court also found that producers have adequate procedures to challenge fees, including informal invoice disputes with the CAA, binding arbitration before a neutral decisionmaker under the membership contract, and — if DEQ pursues enforcement — notice, an opportunity to cure, a hearing before an administrative law judge, and judicial review. The court’s emphasis on oversight and dispute procedures gives states a roadmap for defending EPR programs. For companies, the lesson is to scrutinize program administration, not just substantive obligations.

Pending Challenges in Other States

The Oregon decision does not end the EPR fight: challenges involving compelled speech, delegation, due process, and other unresolved issues remain pending in California and Colorado.

• California (SB 54): In Nebraska v. Heller, No. 2:26-at-01047 (E.D. Cal.), a 17-state attorney general coalition (joined by NAW on June 22) asserts Commerce Clause, First Amendment, nondelegation, and due process claims, including that SB 54 bars producers from itemizing EPR fees on invoices; a preliminary injunction motion filed on August 20 remains pending. A separate suit by environmental groups (filed June 2) challenges the implementing regulations as too weak.
• Colorado (HB 22-1355): In National Association of Wholesaler-Distributors v. Ryan, No. 1:26-cv-03460 (D. Colo. filed July 30), NAW challenges the Producer Responsibility Program for Statewide Recycling Act on due process, nondelegation, and First Amendment grounds (including a bar on disclosing compliance costs to consumers). An earlier state court challenge by the Independent Lubricant Manufacturers Association was filed in March.

Key Takeaways for Regulated Companies

Courts may eventually define the constitutional limits of EPR, but businesses should not plan on litigation eliminating the growing patchwork of state requirements. Some challenges may succeed; others will not. State variation is likely to remain a central feature of EPR compliance for the foreseeable future.

A dual-track approach makes sense: comply where required while identifying program features that may be vulnerable to challenge. Companies that integrate compliance planning with litigation readiness will be better positioned as EPR programs expand.

• Confirm Oregon compliance status. With the injunction dissolved, DEQ’s authority to enforce the RMA against NAW members has resumed. Confirm that your Oregon registration is current, required reports are complete, and fees are paid or are being addressed through a documented dispute process. Civil penalties can reach $25,000 per day, though the statute provides notice, an opportunity to cure, a hearing, and appeal procedures before penalties become final.
• Address fee disputes promptly. The court found that producers have adequate avenues to challenge fees, beginning with informal discussions with the CAA and, if needed, arbitration under the Oregon Addendum before a neutral decisionmaker. If you believe an invoice is incorrect, document the issue as soon as you identify it, preserve the underlying product, sale, and volume records, and request an adjustment from the CAA.
• Map coverage and responsibility. Identify covered products in each state, determine which supply-chain party qualifies as the “producer,” and keep records supporting those determinations.
• Use one data system where possible. A consistent system for product volumes, packaging materials, sales channels, customer categories, and shipment destinations can reduce duplicative reporting and make new state requirements easier to absorb.
• Preserve challenges early. If a program appears to create discriminatory effects, unreasonable fees, compelled-speech issues, improper delegation, or inadequate procedures, document the problem early. The Oregon court placed weight on agency oversight and dispute mechanisms, so companies should consider whether fee disputes, classification issues, exemption questions, or PRO actions should be raised through available administrative, contractual, or arbitration channels before — or alongside — litigation. An appeal to the Ninth Circuit is likely. Companies should continue to monitor the litigation (and the cases in other EPR states) but should not assume that an appeal pauses current obligations.