Federal Court Upholds Oregon's EPR Law in Full After Constitutional Challenge

Oregon's Plastic Pollution and Recycling Modernization Act (RMA), enacted in 2021, is an extended producer responsibility (EPR) law designed to shift end-of-life costs for packaging and covered products onto producers. The law requires producers of covered products – including packaging, printing and writing paper, and food serviceware – to join a Producer Responsibility Organization (PRO), report volumes of covered products brought into Oregon and pay membership fees based on those volumes. The Circular Action Alliance (CAA) is currently the sole Department of Environmental Quality (DEQ)-approved PRO in Oregon.

In early 2026, the National Association of Wholesaler-Distributors (NAW), a trade association representing wholesalers and distributors across the U.S., brought suit against the Oregon DEQ, challenging the constitutionality of the RMA (the Feldon Case). On February 6, 2026, the court granted preliminary injunctive relief in favor of NAW, finding "serious questions" on the merits and a likelihood of irreparable injury, effectively blocking enforcement of the RMA against NAW members. The court later clarified that this injunction protected only NAW and its members as of that date.

Subsequently, a separate but related class action lawsuit was filed on June 25, 2026, challenging the RMA, asserting substantially similar constitutional claims on behalf of non-NAW member producers in Oregon and similarly seeking injunctive relief. The case was assigned to the same judge as the Feldon Case, and the parties in that case are required to submit a joint status update on September 10, 2026, a date that was set for the purpose of being informed by the decision in the Feldon Case.

The Court's Ruling in the Feldon Case

After a five-day bench trial held July 13-17, 2026, Judge Michael Simon issued Findings of Fact and Conclusions of Law on August 27, 2026, and entered judgment in favor of the state on August 28, 2026. The court evaluated and rejected NAW's two remaining constitutional theories that had survived the preliminary injunction phase.

Dormant Commerce Clause

NAW challenged the RMA under three Dormant Commerce Clause theories: 1) that the law discriminates against interstate commerce, 2) that the RMA's membership fees constitute unreasonable "user fees" and 3) that the law places an undue burden on interstate commerce.

On discrimination, the court found that NAW failed to demonstrate that the RMA has a discriminatory purpose, is facially discriminatory or produces discriminatory effects on interstate commerce. The court noted that the RMA applies evenhandedly to in-state and out-of-state producers alike and that NAW did not present sufficient evidence that any of the law's exemptions – including the "small producer" exemption or public entity exemption – created a discriminatory advantage for in-state interests.

On user fees, the court concluded that NAW failed to prove that the RMA's fee structure is unreasonable. The court noted that NAW did not quantify the impact of any statutory exemptions on Oregon's recycling system and could not show that fees were disproportionate or excessive in relation to the costs of the facilities and services provided.

On undue burden, the court held that NAW did not meet the threshold requirement of showing that the RMA imposes a substantial or significant burden on interstate commerce. The court emphasized that increased compliance costs on individual producers do not, by themselves, constitute a burden on the interstate market and that the law's benefits, including mitigating waste pollution and protecting public health, are not "clearly excessive" in relation to any incidental burdens.

Due Process Clause

NAW advanced two Due Process Clause theories: 1) that the RMA constitutes an unconstitutional delegation of regulatory authority to CAA, a private entity that includes competitors of NAW's members, and 2) that the RMA provides insufficient procedural safeguards for producers to challenge membership fee assessments.

On private delegation, the court found that the RMA does not impermissibly delegate authority because DEQ retains ultimate decision-making authority and oversight over the PRO. The court also noted that participation in CAA is not compulsory; producers may form their own PRO or avail themselves of the RMA's private recycling rule.

On procedural safeguards, the court held that the RMA provides sufficient process because producers have multiple avenues to dispute fees, including informal resolution with CAA and DEQ, and the law's civil enforcement mechanism affords a notice-and-cure period, a hearing before an administrative law judge and judicial review, with no payment due until all appeals are exhausted.

Next Steps

Prepare for Compliance

With the preliminary injunction effectively dissolved by the entry of judgment in favor of the state, producers that are members of NAW should promptly comply with Oregon's EPR program to the extent they have not already. Producers should ensure they are registered with CAA, submit required supply data reports and are prepared to pay applicable membership fees. As discussed in a previous Holland & Knight alert, the next fee schedules for Oregon are expected to be published by October 2026, with January 2027 invoices calculated using 2025 supply data.

Appeal

NAW may appeal the court's decision to the U.S. Court of Appeals for the Ninth Circuit. Given the importance of this decision for producers in Oregon and nationwide, it is possible that an appeal may be pursued. Producers should monitor whether NAW pursues an appeal, as a successful appeal could revive the constitutional challenge and even potentially reinstate injunctive relief in the meantime.

Related Litigation

The related class action challenging the RMA in Oregon, which was filed on June 25, 2026, on behalf of non-NAW member producers and asserts substantially similar constitutional claims, has a joint status report due on September 10, 2026. In light of the court's ruling after a full trial on the merits, the plaintiff in that case will need to address the court’s analysis, and producers should continue to monitor its status.

Additionally, as noted in a previous Holland & Knight alert, NAW and allied parties have filed similar constitutional challenges to EPR programs in California and Colorado.  Although the Oregon court's analysis of the Dormant Commerce Clause and Due Process Clause arguments may prove instructive, the courts in California and Colorado are not bound by the Oregon federal district court’s decision. The California and Colorado cases involve different statutes under different state regimes and may present distinct legal issues from the Feldon Case.

In California federal court, NAW and 17 state attorneys general filed a federal suit in June 2026 challenging California’s SB 54, alleging violations of the Dormant Commerce Clause, Due Process Clause, First Amendment and Import-Export Clause. The plaintiffs recently filed a motion for preliminary injunction, with a hearing scheduled for January 2027. Separately, environmental advocacy groups filed a state court challenge arguing that CalRecycle's EPR regulations are too weak.

In Colorado federal court, NAW filed a constitutional challenge to the Colorado EPR law, the Producer Responsibility for Statewide Recycling Act, in mid-2026 and moved for a preliminary injunction in August 2026, raising claims similar to those in the Feldon Case. Separately, another industry trade association filed its own lawsuit in state court in March 2026 alleging Due Process Clause, non-delegation, and First Amendment violations, and briefings on both a motion to dismiss and request for preliminary injunction remain ongoing.

Broader Implications

This decision is significant for the broader EPR legal landscape, and any company participating in EPR programs in one or multiple states should monitor these cases closely. How these challenges unfold will shape the constitutional landscape for EPR programs nationwide. Meanwhile, states that are considering adopting EPR legislation may be more inclined to do so following the Oregon court's decision to uphold the RMA.

Holland & Knight is closely monitoring developments in EPR law and EPR litigation nationwide. For questions about how this ruling may impact your company's compliance obligations or for assistance navigating the Oregon EPR program or other state EPR programs, please contact the authors.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.