The state of Oregon’s packaging and paper Extended Producer Responsibility (EPR) program, enacted in 2021, has progressed into its enforcement stage. With the first fee obligations and real-world compliance deadlines now in place, the risk of litigation under and against the program has transitioned from theoretical to real. In July 2025, a major trade association, National Association of Wholesaler-Distributors (NAW), filed a constitutional challenge to Oregon’s law, raising issues that are expected to reverberate across other states implementing similar frameworks. Provided below is an overview of the statutory foundation of Oregon’s EPR program, highlights from the pending NAW litigation, and strategic implications for producers operating in multiple states.
Background
Oregon became the first U.S. state to enact a comprehensive packaging and paper EPR law when Governor Kate Brown signed the Plastic Pollution and Recycling Modernization Act (SB 582B) on August 6, 2021. The statute represents a significant shift in solid waste management policy — moving financial and operational responsibility for managing post-consumer packaging materials away from local governments and onto “producers” of those materials. The Act covers products on the Producer Responsibility Organization Recycling Acceptance List, including, for example, glass bottles, certain high-density polyethylene (HDPE) products, shredded paper, and more.
The Act directs the Oregon Department of Environmental Quality (DEQ) to oversee a statewide EPR program funded and administered by Producer Responsibility Organizations (PRO) — private, non-profit entities approved by DEQ. Producers must join an approved PRO and pay fees based on packaging weight, material type, and recyclability attributes. The PRO, in turn, uses collected fees to finance improvements to recycling infrastructure, consumer education, and end-market development for recyclable materials. Circular Action Alliance (CAA) is the approved PRO in Oregon — the program was officially launched in February 2025 after DEQ approved CAA’s PRO plan.
The formal start date of Oregon’s program was July 1, 2025, but producers subject to the program were subject to requirements before this date. Producers were first subject to obligations under the program in March and April of 2025, wherein regulated entities were required to register and report baseline data to CAA. The first fee payments due from producers co-aligned with the formal start date of July 1.
The Litigation’s Parties and Litigants’ Procedural Posture
On July 30, 2025, NAW filed a complaint in the U.S. District Court for the District of Oregon against Oregon’s DEQ, the Oregon Environmental Commission (OEC), and the state Attorney General. The suit challenges Oregon’s packaging EPR program as unconstitutional, citing multiple federal and state constitutional theories. The litigation remains in its early stage.
NAW is direct about the impetus for this challenge: the complaint’s introduction notes pervasive concerns with the structure and design of the Act, that “in fact produces unreasonable, arbitrary, and crushing burdens” to producers. The complaint acknowledges the goals of the Act, including setting statewide recycling-rate goals, creating an enforcement program within DEQ, and other requirements “intended to promote sustainable life-cycle management.” NAW’s view, however, is that the Act’s structure creates an unsustainable framework for regulated entities.
The complaint advances several key challenges, both on legal grounds and policy grounds.
Legal: Claims and Theories
The key legal challenges outlined in the complaint include:
- Nondelegation/Excessive Delegation: The law vests substantial regulatory authority in a private entity (CAA) to set fees and operate the program, with insufficient legislative standards or public rulemaking obligations. NAW notes that there are not legal safeguards or “adequate legislative standards” in place to ensure proper oversight and regulation of PRO action.
- Dormant Commerce Clause/Interstate Commerce Impact: The law is alleged to burden out-of-state producers/distributors and interfere with interstate commerce by virtue of its registration/distribution requirements and fee structure. NAW further contends that implementation of the program may “unduly burden” national markets.
- Due Process/Contractual Conditions: Producers claim that the mandatory contract with CAA (and binding arbitration clause) eliminates meaningful judicial review of fee assessments or reporting obligations. As CAA is the only approved PRO, compliance in Oregon necessitates that producers agree to the terms of CAA’s program. DEQ believes CAA has the authority to change fees without notice or approval, whereas producers can only challenge these fees through private arbitration, which producers had to agree to in order to comply with the program through CAA.
- Unconstitutional Conditions/Economic Liberty: The law is alleged to impose fees and obligations without giving producers sufficient control over packaging design, supply chain decisions, or transparency into underlying cost-allocations. CAA’s fee-setting methodology has been “deemed confidential,” meaning producers have no reasonable way to access information about the process.
Policy: Key Points of Contention
The key policy challenges include the following points of contention:
- The confidentiality and methodology of the fee schedule set by CAA is criticized as opaque and lacking public comment or challenge mechanisms. NAW underlines the lack of transparency under a program impacting such a wide range of entities.
- The law covers not only “brand manufacturers” but also wholesalers/distributors and importers, potentially sweeping in entities with limited control over packaging choices. This concern stems from the broad definition of “producer” under the statute. The definition encompasses brand owner, licensee of the brand/trademark, importer of packaged items into the United States for sale in Oregon, or first distributor of packaging in Oregon.
- The timing of registration/reporting (March/April 2025) and fee payment (July 1, 2025) has placed pressure on compliance, raising arguments that the transitional burdens are significant, especially for smaller businesses. Fees were “unexpected and unexpectedly high.”
- The Act punishes market success. For example, a company may cut down on the amount of packaging used to package an individual product, but if that same company sells more of that same product the next year, generating more packaging waste, simply because of a larger number of sales, that company may be penalized.
Commentary
Oregon’s packaging EPR program and the current litigation present both a wake-up call and an opportunity. For producers selling into Oregon, compliance is no longer an abstract future concern — it is an active regulatory reality with significant contractual and financial stakes. For producers operating across multiple states, Oregon’s experience is likely to serve as a template (or cautionary tale) for other jurisdictions.
The litigation challenging Oregon’s law is an issue of first impression as the first challenge to the legality and constitutionality of a state EPR program. Given the early stage of litigation and lack of precedent due to the newness of packaging and paper EPR state frameworks, likely outcomes and impacts of the litigation are uncertain. The following consideration may be valuable to stakeholders in the meantime.
Implications and “Ripple” Effects
For Oregon producers, the outcome of this litigation may influence the enforcement posture of the PRO and DEQ — e.g., how strictly non-registrants are pursued, how transparent fee adjustments become, and whether more producers will contest assessments. Producers should ensure they have robust registration documentation, clear tracking of covered materials, and legal review of their contracts with CAA (or other PROs) for rights of audit, appeal, and dispute‐resolution. The law includes daily penalty exposure (up to $25,000 per day) for noncompliance, and consequentially, even an individual audit or enforcement action could carry substantial financial risk.
Multi-State Producers/Other States
Oregon is the first state to implement fully a packaging EPR law and, subsequently, the first state facing litigation related to such a program. Many other states are watching closely Oregon’s experience. States such as California, Colorado, Maine, Maryland, and Minnesota have enacted or are implementing packaging EPR laws. The constitutional and administrative issues raised in the Oregon challenge may become litigation vectors in those (and potentially other) states. Producers should monitor whether other states revise their statutes in ways that address issues central to Oregon’s EPR litigation or whether they become targets of similar suits.
EPR programs differ from state to state, but most, including Oregon, are structured around a set of key features (e.g., single PRO governance, fee schedules based on weight/recyclability, auditing/reporting obligations). While the specifics vary from program to program, the programs, at a high level, function in much the same way. As a result, companies should prepare for these changes by conducting an audit of their supply chains, and conducting a legal review of contracts will be advantageous. Given the potential for cross-state burden (e.g., producers selling into multiple EPR states), companies should evaluate their global packaging strategies, supply-chain controls, and how different state definitions (producer, covered materials, exemptions) vary. The litigation underscores the risk of a “patchwork” regime where producers may face overlapping and conflicting obligations.