Federal Court Upholds Oregon's Extended Producer Responsibility Packaging Law

It is widely assumed that state-level environmental mandates cannot force out-of-state distributors to fund local recycling infrastructure without violating the U.S. Constitution's protections for interstate commerce. A federal court has just ruled otherwise.[1][7]

On August 27, U.S. District Judge Michael H. Simon upheld Oregon's Plastic Pollution and Recycling Modernization Act (RMA), delivering the first merits decision on a state packaging Extended Producer Responsibility (EPR) law. The ruling followed a five-day bench trial held in July.[2][3]

The lawsuit, brought by the National Association of Wholesaler-Distributors (NAW) against Oregon Department of Environmental Quality Director Leah Feldon, challenged the state's framework for managing packaging waste. NAW argued that the law placed an unconstitutional burden on national supply chains.[4][6]

Enacted in 2021, the RMA shifts end-of-life recycling costs from municipalities to the producers and distributors of packaging, printing paper, and food serviceware. It requires covered entities to join a Producer Responsibility Organization (PRO)—currently the Circular Action Alliance—and pay volume-based membership fees to fund local waste management.[1][5]

NAW argued this framework violated the Dormant Commerce Clause by imposing disproportionate compliance costs on out-of-state businesses and acting as an unreasonable user fee. The trade association contended that the law effectively controls commerce occurring wholly outside of Oregon by forcing national distributors to alter their packaging and logistics.[4][5]

Judge Simon rejected these claims, finding no evidence of protectionist intent or discriminatory effects on the interstate market. The court ruled that NAW failed to demonstrate that the law's compliance costs were clearly excessive in relation to Oregon's stated environmental and waste-management interests.[2][4]

The court also dismissed NAW's Due Process claims, which centered on the argument that Oregon unconstitutionally delegated governmental fee-setting and regulatory authority to a private entity. NAW had argued that the PRO operated without adequate transparency or accountability.[4][6]

In his ruling, Judge Simon determined that the state retains sufficient oversight and final authority over the PRO's decisions. The statute provides adequate procedural safeguards, the court noted, including notice-and-cure periods, hearings before an administrative law judge, and avenues for judicial review before any penalties are imposed.[3][6]

The decision immediately dissolves a February 2026 preliminary injunction that had temporarily shielded NAW members from enforcement. Those distributors must now prepare for full compliance, including registering with the PRO, reporting volumes, and paying assessed dues.[1][5]

The ruling serves as a critical bellwether for the packaging and distribution industries. Similar constitutional challenges led by NAW and allied groups are currently pending against EPR laws in California and Colorado, raising nearly identical Dormant Commerce Clause and Due Process arguments.[1][4]

While the Oregon district court decision is not binding in other jurisdictions, legal analysts expect it to serve as persuasive authority. The ruling is particularly significant as the California litigation advances in the neighboring Ninth Circuit, where appellate review of the Oregon decision is highly anticipated.[1][3][7]