Federal Court Upholds Oregon’s Extended Producer Responsibility Law against Constitutional Challenge

Ruling Could Serve as Persuasive Authority for Future Challenges under the Dormant Commerce Clause or the Due Process Clause

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At a Glance

On August 27, 2026, a federal court issued a ruling upholding Oregon’s Plastic Pollution and Recycling Modernization Act.
The decision is the first federal ruling to address the constitutionality of a state extended producer responsibility (EPR) law for packaging.
Challenges to EPR legislation in other states are currently pending, but other courts could look to this ruling as persuasive authority for any challenges under the dormant Commerce Clause or the Due Process Clause.

On August 27, 2026, US District Judge Michael H. Simon of the US District Court for the District of Oregon issued a 71-page ruling upholding Oregon’s Plastic Pollution and Recycling Modernization Act (RMA) following a five-day bench trial. The court concluded that the RMA does not violate either the dormant Commerce Clause or the Due Process Clause of the US Constitution. The decision is the first federal court ruling to address the constitutionality of a state extended producer responsibility (EPR) law for packaging on the merits after a full trial and is expected to influence pending EPR litigation in other states.

Background on Oregon’s EPR Law

Enacted in 2021, Oregon’s RMA is an EPR law designed to shift “end-of-life” costs of packaging, printing and writing paper, and food service ware onto producers. The law’s stated purpose is to “preserve public health, safety and welfare, and conserve energy and natural resources” by minimizing the unintended consequences of the state’s recycling policies, including pollution and greenhouse gas emissions. The RMA requires producers (generally brand owners, manufacturers, or first importers) to register with a producer responsibility organization (PRO), to report the volume and material composition of covered products distributed in Oregon, and to pay membership fees proportional to their products’ contribution to the state’s recycling system costs. The Oregon Department of Environmental Quality (DEQ) retains enforcement authority, with civil penalties of up to $25,000 per day for noncompliance.

The Lawsuit

In 2025, the National Association of Wholesaler-Distributors (NAW) filed suit against DEQ Director Leah Feldon, challenging the RMA under multiple federal and state constitutional provisions. NAW alleged that the law violated the dormant Commerce Clause by favoring in-state producers while imposing disproportionate compliance costs on out-of-state businesses and violated the Due Process Clause by unconstitutionally delegating regulatory authority to Circular Action Alliance (CAA), the private nonprofit PRO administering the program. NAW further contended that the RMA’s fee-calculation methodology lacked transparency and that producers had inadequate means to challenge fees. In February 2026, the court granted NAW a preliminary injunction blocking enforcement against NAW members while narrowing the case to the federal dormant Commerce Clause and Due Process claims for trial.

The Court’s Trial Ruling and Reasoning

After a five-day bench trial in July 2026, Judge Simon ruled in favor of DEQ Director Feldon, holding that the Oregon law was consistent with the federal Constitution.

Dormant Commerce Clause

On the dormant Commerce Clause claim, the court found no evidence that the RMA was enacted with a protectionist purpose, finding instead that the legislature’s intent was environmental protection, not shielding in-state businesses from competition. The court held that NAW failed to demonstrate that any of the law’s exemptions, including for small producers and public entities, resulted in actual discriminatory effects on interstate commerce. The court further rejected NAW’s argument that CAA’s membership fees constituted unreasonable “user fees” and found that NAW failed to meet the threshold showing of a substantial burden on interstate commerce required for Pike balancing.

Due Process Clause

On the Due Process Clause claim, the court rejected NAW’s private-delegation challenge, concluding that DEQ retained ultimate decision-making authority over the fee methodology and that CAA functioned in an advisory role subordinate to agency oversight. The court also found that the RMA’s enforcement procedures, including notice-and-cure periods, administrative law judge (ALJ) hearings, agency review, and judicial appeal, provided “more than adequate” procedural protections.

Implications for Litigation in Other States

Challenges to EPR laws in other states are currently pending, including Nebraska v. Heller and Natural Resources Defense Council v. California Department of Resources and Recycling Recovery in California and Independent Lubricant Manufacturers Association v. Colorado Department of Public Health and Environment (CDPHE) and NAW v. CDPHE in Colorado. Judge Simon’s ruling will not be binding for any of those challenges, but other courts may look to his reasoning as persuasive authority for any challenges under the dormant Commerce Clause or the Due Process Clause. Companies operating in Colorado and California should continue to monitor developments in those cases.

This ruling will be binding for the Oregon EPR litigation pending before the same court, Lollicup USA, Inc. v. Feldon. The parties are expected to file a status report in that litigation by September 10, 2026.

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