Oregon can keep charging producers for its recycling system.
A federal judge in Portland upheld the state’s packaging EPR law last Thursday, throwing out both constitutional claims the National Association of Wholesaler-Distributors brought against it. It’s the first ruling on the merits anywhere in the country, and NAW lost every argument it made.
Judge Michael Simon's 71-page opinion is less a defense of EPR than a defense of a state’s right to try it. He opens with Justice Brandeis on states as laboratories for “novel social and economic experiments,” notes that Congress can impose a single national rule whenever it likes, and declines to do the job himself. “Judicial intervention, however, is not needed in this case.”
Who sued and why
NAW represents wholesaler-distributors, not brand owners. Its members get pulled in as “producers” under Oregon’s law two ways. First, private-label goods carrying their name, and then the pallets, stretch wrap and corrugate they add moving freight into the state. They pay fees on packaging they didn’t design.
Two claims reached trial in July. The first wasthat Oregon handed fee-setting power to Circular Action Alliance (CAA), a private non-profit whose board includes many of those members’ largest competitors, without meaningful oversight or any way to challenge an assessment in court. The second said the fees burden interstate commerce.
The due process claim died on a single finding. Simon held that nobody is forced to join CAA. A producer can form its own PRO, or privately recycle everything it’s responsible for and stop meeting the definition of “producer” altogether. Because that door exists, he wrote, CAA’s self-interest is legally beside the point, thus so is the fact that Oregon’s own regulator testified she had never seen the algorithm behind the fees. NAW’s witnesses called the alternative a fantasy. It might cost $150,000 just to have a plan reviewed, millions in annual fees after that. Impractical, Simon answered in effect, is not impossible.
The Commerce Clause claim got even less far. NAW never cleared the threshold showing of a substantial burden, so the balancing test never ran at all. Anecdotes about member costs don’t count, Simon wrote, because that test “protects the interstate market, not particular interstate firms.” Higher costs to producers and higher prices to shoppers aren’t burdens on commerce. NAW’s own experts never quantified an interstate effect.
He also brushed aside the argument that CAA is sitting on too much money )$145.5 million collected against $56.5 million spent last year) accepting the PRO’s explanation that a first-year underspend reflects contracting and procurement timelines, and may reduce 2026 and 2027 fees.
Reaction
NAW said it “strongly disagrees” but wasn’t surprised. “District courts are generally reluctant to overturn laws enacted by state legislatures, and we have always understood that this is part of a bigger fight,” the association said. It stopped short of promising an appeal, saying only that it is “reviewing its options.”
It repeated that Oregon “forces businesses to join a state-approved Producer Responsibility Organization” (the exact proposition Simon rejected) and pointed to members who testified they got invoices months after the sales that generated them, at rates they couldn’t verify. “The district court’s ruling is not the final word.”
CAA, which wouldn’t comment while the case was pending, said the ruling “provides important clarity as Oregon’s producer-funded recycling system continues to take shape,” and pledged to keep “supporting producers every step of the way.”
The Recycling Partnership, which filed a brief backing the law, went further. “Judge Simon’s decision demonstrates the legality of Extended Producer Responsibility in Oregon,” said Kate Davenport, TRP’s chief impact officer, adding that it “sets a strong tone for litigation against programs in other states.” She said the program’s first year put $30 million into local processing facilities and funded more than 70,000 curbside carts.
Scott Cassel, CEO and founder of the Product Stewardship Institute, who testified for Oregon as an expert witness, was blunter. “The plaintiff tried every conceivable angle to derail the implementation of the Oregon EPR law, but nothing stuck.”
What’s next
An appeal to the Ninth Circuit is widely expected, and the target is somewhat predictable. Simon’s whole due process analysis rests on a caveat. You can form your own PRO, or recycle your way out. Take that away and the rest has to be rebuilt.
The fight is also spreading. NAW and 17 state attorneys general are challenging California’s SB 54. NAW sued Colorado on July 30, bolting three First Amendment claims onto the same due process theory, including one over a rule barring companies from telling customers about the fees. Speech claims are harder for a state to shrug off than “this costs us money.”
For now the program runs, and the fees are owed.
