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September 30, 2026 | Legal Update

Packaging EPR Litigation Update: Oregon’s Law Is Upheld While California and Colorado Challenges Continue

Welcome to the September edition of Nutter’s Environment & Energy Insights, a periodic update of current trends in environment and energy law. For this month’s Insights, we are taking a deeper look at the status of notable court challenges to EPR programs.

Packaging extended producer responsibility (EPR) programs continue to move ahead across the country, and they continue to be challenged in court. The first challenge to reach a decision on the merits has now been resolved in the state’s favor: on August 27, 2026, a federal court upheld Oregon’s EPR law and cleared the way for enforcement against all covered producers. Here is where the major cases stand and what producers should be watching.

Oregon: The First Packaging EPR Law to Reach Trial, and to Be Upheld

Oregon’s Plastic Pollution and Recycling Modernization Act (RMA) requires covered producers to participate in and help fund the state’s recycling system, with Circular Action Alliance (CAA) as the approved producer responsibility organization (PRO). The National Association of Wholesaler-Distributors (NAW) sued the Oregon Department of Environmental Quality (DEQ) in federal court and won a preliminary injunction in February 2026 that reached only its own members.

After a five-day bench trial in mid-July, on August 27 the United States District Court for the District of Oregon upheld the RMA in its entirety and thus ended the preliminary injunction against the law.

NAW made three primary arguments against the law, claiming that it (i) violated the Dormant Commerce Clause (which prohibits states from unduly discriminating against interstate commerce); (ii) was an impermissible delegation of state authority to a non-state entity (CAA); and (iii) that there were insufficient procedural protections and thus violated the Constitution’s Due Process Clause in the Fourteenth Amendment. As to the Dormant Commerce Clause, the court found that the RMA applies evenhandedly to in-state and out-of-state producers, that NAW had not shown the membership fees to be disproportionate to the cost of the services provided, and that increased compliance costs borne by individual producers do not establish a substantial burden on the interstate market. The court also rejected NAW’s delegation theory. It emphasized DEQ’s continuing control over the program and noted that the statute provides alternatives to participation in CAA, including establishing another PRO and qualifying under the private recycling rule. The court likewise concluded that producers have sufficient procedural protections when disputes arise, including an opportunity to cure alleged violations, administrative review, and access to the courts before DEQ penalties must be paid.

On September 24, 2026, NAW filed a notice of appeal to the Ninth Circuit from the district court judgment. The program remains fully enforceable while the appeal proceeds.

A second Oregon lawsuit, a putative class action filed in June by food serviceware manufacturer Lollicup USA, sought comparable relief for producers outside the NAW injunction. After the August 27 decision in the NAW case, the court extended the deadline for the parties to file a joint status report to October 16, 2026. The case remains pending.

California: SB 54 and Its Regulations Are Being Challenged From Both Directions

California’s EPR Law (The Plastic Pollution Prevention and Packaging Producer Responsibility Act, SB 54) faces challenges from both directions. In June, 17 states led by Nebraska, together with NAW, filed a federal lawsuit against the Director of the California Department of Resources Recycling and Recovery (CalRecycle) and CAA, alleging that aspects of the program violate several constitutional protections involving interstate commerce and due process, among others. The plaintiffs have moved for a preliminary injunction and a hearing is scheduled for January 2027.

A separate state court lawsuit by the Natural Resources Defense Council, Oceana, and Californians Against Waste Foundation argues the opposite: that CalRecycle’s final SB 54 regulations are too weak, including because they count certain advanced recycling technologies toward performance targets.

Neither case has currently stopped or changed implementation of California’s packaging EPR program.

Colorado: Now Facing Two Legal Challenges

In Colorado, CAA is the primary PRO for its EPR program (the Producer Responsibility Program for Statewide Recycling Act), but the Lubricants Packaging Management Association (LPMA) separately administers the program for petroleum and automotive products. The first lawsuit against Colorado’s EPR law was filed in March 2026 by the Independent Lubricant Manufacturers Association (ILMA), which argues, among other constitutional claims, that the state unlawfully delegated authority to both CAA and LPMA. In August 2026, ILMA moved for a preliminary injunction against CAA- and LPMA-related contracting, reporting, and fee obligations. No decision has been reached yet.

NAW followed with a separate federal lawsuit on July 30, raising constitutional challenges similar to those asserted in the other states’ cases and seeking a preliminary injunction. Colorado opposed that request on September 16, and NAW submitted its reply on September 28, completing the latest round of briefing on the motion. Both ILMA’s and NAW’s preliminary injunction requests remain pending, and, to date, Colorado’s program continues unchanged.

What Does This Mean for Producers?

For now, all EPR requirements remain in effect. A lawsuit by itself does not suspend a compliance deadline, and even a preliminary injunction issued by a court may protect only particular plaintiffs or their members. As the Oregon case shows, that protection can disappear when the case is decided. Producers should continue to determine where they are covered, meet applicable registration and reporting obligations, maintain accurate packaging data, and prepare for applicable fees unless a court order or other relief applies specifically to them.

This advisory was prepared by Matthew Connolly, Michelle Kenyon, and Matthew Snell in Nutter’s Environment and Energy practice group. If you would like additional information, please contact any member of our practice group or your Nutter attorney at 617.439.2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.