Trade Group Lawsuits Challenge Extended Producer Responsibility (EPR) Laws in Oregon and Colorado

At a Glance

• For companies required to comply with extended producer liability regulations, the Colorado and Oregon lawsuits are important developments to track.
• In Oregon, the July 2026 trial will determine whether members of the National Association of Wholesaler-Distributors (NAW) will obtain permanent injunctive relief from the state’s EPR regulations. 
• In Colorado, the suit may demonstrate whether NAW’s success in securing an injunction can be replicated in other states.

Seven states enacted extended producer responsibility (EPR) laws requiring producers to report information and pay, in some cases, substantial fees for product packaging. Industry groups are challenging those laws through lawsuits in Oregon and Colorado. This alert provides preliminary analysis of the Oregon and Colorado litigation, and potential impacts to EPR regulations in each state.

Oregon Plastic Pollution and Recycling Modernization Act

The Oregon Plastic Pollution and Recycling Modernization Act (Oregon Act), enacted in 2021, aims to restructure the state’s recycling system by shifting the financial responsibility for end-of-life management of paper, packaging, and food serviceware upstream to producers (i.e., brand owners/manufacturers, licensees, and importers/distributors). Under the Act, producers must register with the state, report detailed information about the types and quantities of packaging materials they use and distribute into the state, and pay annual fees that reflect the environmental impacts of those materials. Enforcement falls to the Oregon Department of Environmental Quality, which can impose fines of up to $25,000 per day for noncompliance.

Key to the Act’s implementation is the requirement that producers become members of a producer responsibility organization (PRO). To date, the nonprofit Circular Action Alliance (CAA) is the PRO selected by states, including Oregon, with EPR laws for paper and packaging. The PRO manages compliance, collects data, and determines the fees producers must pay, using criteria such as material type, recyclability, and environmental impact. However, CAA’s fee calculation methodology is not disclosed, prompting concerns among businesses about a lack of transparency and fairness.

Since the Oregon law took effect in 2025, trade associations and affected businesses increasingly objected to the Oregon Act, arguing that delegating regulatory authority to a private entity like CAA creates conflicts of interest and limits accountability. These issues are central to the constitutional litigation currently unfolding in federal court in Oregon. The outcome of the case will determine the scope of enforcement and the future trajectory of Oregon’s recycling reforms.

Oregon EPR Litigation

The National Association of Wholesaler-Distributors (NAW) brought five claims alleging that the Oregon Act violates the federal and Oregon constitutions: 

• Violates the Dormant Commerce Clause of the federal constitution
  
• Sets unconstitutional conditions in violation of the Fourteenth Amendment
• Violates the Due Process Clauses of both constitutions
  
• Violates the Equal Protection Clause of the Fourteenth Amendment
• Violates the nondelegation doctrine under the Oregon constitution

On February 6, 2026, Judge Simon of the US District Court for the District of Oregon granted a preliminary injunction in favor of NAW on its federal constitutional claims under the Dormant Commerce Clause and Due Process Clause. The preliminary injunction limited its relief to NAW and its members, meaning that the law remains in force against all other businesses.

At the preliminary injunction hearing, Judge Simon expressed skepticism about the lack of transparency for CAA’s fee-setting methodology, asking why a nonprofit entity like CAA should be permitted to keep its methodology secret. Hearing Transcript at 37-38. He also noted that the law delegates authority “to a group of large-scale providers who have an economic interest in both reducing their own expenses, passing it on to their competitors, and keeping things about how they do their methodology hidden.” Id. at 44. Judge Simon asked whether the law “let[s] private businesses make decisions that really belong by state decision or public decision-makers who are accountable to the electorate.” Id. at 45. He also asked questions about whether businesses had sufficient transparency to identify incorrectly calculated fees and whether their only route to challenging those fees would be in binding arbitration. Id. at 64-67, 78-79.

On March 16, 2026, additional trade associations filed motions to intervene in the lawsuit. The organizations argued that their members were also harmed by the Oregon Act. Judge Simon denied those motions, holding that they were filed too late and would delay the expedited discovery schedule and trial. The preliminary injunction remains limited to NAW and its members.

The case is set for trial on July 13, 2026, and the court described that trial date as “firmly set.” Hearing Transcript at 98. Based on a review of Judge Simon’s prior rulings, if he does issue a permanent injunction in this case, we expect relief will be limited to NAW members.

Colorado’s Producer Responsibility Program for Statewide Recycling Act

Similar to the Oregon Act, Colorado’s Producer Responsibility Program for Statewide Recycling Act (Colorado Act) establishes a statewide EPR framework that requires producers of certain packaging and paper products to take financial and operational responsibility for the end-of-life management of these materials. Producers must also join a third-party private PRO, report data on covered materials supplied into the state, and pay fees based on that data, which fund statewide recycling and waste management programs. Penalties for noncompliance begin at $5,000 per day for the first day of the first violation with $1,500 added for each following day until the violation is cured.

As in Oregon, the main PRO administering Colorado’s EPR program is CAA. However, the Lubricant Packaging Management Association (LPMA) is also an approved PRO in Colorado, operating alongside CAA to manage petroleum and automotive products. These entities are authorized to manage producer registration and set producer fees, based on data reported by producers to these organizations regarding their packaging shipped into the state. Again, this structure and delegation of authority are central to the legal challenge brought against the Colorado Act.

Colorado EPR Litigation

On March 12, 2026, the trade group Independent Lubricant Manufacturers Association (ILMA) filed a similar lawsuit in Colorado state court to challenge the Colorado Act.

Like the Oregon lawsuit, ILMA’s Colorado lawsuit challenges the delegation of authority to the CAA. ILMA argues that Colorado unlawfully delegated authority to a private entity, LPMA. ILMA contends that “[a]s compared to the large multinational companies that have formed and control both LPMA and CAA, ILMA’s members are smaller, independent producers.” Complaint ¶ 104.

ILMA brings multiple constitutional claims against the Colorado Department of Public Health and the Environment, arguing that the Colorado Act: 

• Violates the Due Process Clauses of the federal and Colorado constitutions
• Violates the nondelegation doctrine of the federal and Colorado constitutions
• Violates the First Amendment by prohibiting producers from accurately informing consumers about the costs of complying with the Colorado Act.

In addition to its constitutional claims, ILMA also alleges that the Colorado Department of Public Health and the Environment violates the requirements of the Colorado Act by:

• Requiring producers to register with and report to LPMA
• Permitting LPMA and CAA to set arbitrary fees

In Conclusion

For companies required to comply with EPR regulations, the Colorado and Oregon lawsuits are important developments to track. In Oregon, the July 2026 trial will determine whether NAW and its members will obtain permanent injunctive relief. In Colorado, the Oregon suit may show whether NAW’s potential success in securing an injunction may be replicated in other states. 

For More Information

We will continue to provide updates as the litigation progresses.

Legal clerk Grace Rybak contributed to this alert.