Federal Court Enjoins Oregon's EPR Program

This decision has potential implications for the implementation of EPR programs in the six other states that have adopted comprehensive EPR programs for packaging (California, Colorado, Maine, Maryland, Minnesota, and Washington).²

Background on Oregon’s EPR Program

Enacted in 2021, Oregon's Plastic Pollution and Recycling Modernization Act (RMA), Senate Bill 582, established one of the nation’s first comprehensive EPR programs, which the NAW describes as unprecedented.

Under Oregon’s RMA, the compliance obligations apply to “producers” of “covered products” which are either sold or distributed in Oregon. Producers covered by the RMA are required to participate in a Producer Responsibility Organization (PRO), which further requires producers to pay fees to finance statewide recycling system improvements.

The Act applies to packaging (which includes “storage items,” “service packaging,” and “shipping and moving items”); food serviceware (which includes wraps sold directly to consumers); and printing and writing paper.

Under the EPR law, the covered “producer” is determined according to a hierarchy. Generally, for packaging the covered producer is the brand owner (either where the brand owner is also the manufacturer, or where the brand owner directs a contract manufacturer, including by setting specifications for packaging); though in some cases, the licensee or importer may be covered; and if no such party exists, the covered producer is the person that first distributes the packaged item into the state. Note that for certain types of packaging (including storage items, shipping and moving items, and service packaging), as well as for printing and writing paper, the covered producer is determined using a different hierarchy. For food serviceware, the producer is the person that first sells the food serviceware into the state. Producers with less than $5 million in gross revenue or less than one ton of covered materials per year are exempt.

Only one PRO, Circular Action Alliance, applied for approval in Oregon. As a result, producers must join the sole PRO and accept its terms or exit the Oregon market. NAW characterizes this as a “captive compliance environment with little to no competition or oversight” over the PRO.

Case History

In July 2025, the National Association of Wholesaler‑Distributors (NAW) filed a lawsuit in the U.S. District Court for the District of Oregon challenging the constitutionality of SB 582 and seeking an injunction to prevent its enforcement. NAW alleges that the law imposes “unreasonable, arbitrary, and crushing” obligations on distributors, so much so that distributors will be uniquely disadvantaged by the law as they will be treated as “producers,” even though they have little to no ability to control the materials included in covered products.

On February 6, 2026, the court held a hearing to consider Oregon’s motion to dismiss and NAW’s motion for preliminary injunction. Following the hearing, the court issued an order dismissing certain claims without prejudice, and a preliminary injunction pending trial in July.

Claims That Survived

The court allowed the following federal constitutional claims to proceed, finding they presented serious questions on the merits:

• Dormant Commerce Clause: Challenges based on alleged discrimination against or undue burden on interstate commerce; and
• Due Process Clause (14th Amendment): Challenges based on alleged procedural or substantive due process violations.

Claims Dismissed with Leave to Replead

The court dismissed the following claims without prejudice, giving NAW until February 20, 2026, to replead:

• All claims against individual Environmental Quality Commission members (Donegan, Moynahan, Webb, and Tanner);
• All claims brought under the Oregon Constitution;
• Unconstitutional Conditions claim; and
• Equal Protection claim.

Preliminary Injunction Granted

The court granted NAW’s motion for preliminary injunction, applying the Ninth Circuit’s test from Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011), and finding:

• Serious questions go to the merits of NAW's constitutional claims;
• Likelihood of irreparable injury to NAW and its members; and
• Balance of hardships tipping sharply in favor of NAW.

As a result, the court enjoined the Director of the Oregon Department of Environmental Quality from enforcing the RMA against NAW and its members until after the case is tried in July.

The Dormant Commerce Clause Claim

The U.S. Supreme Court’s most recent guidance on Dormant Commerce Clause challenges comes from National Pork Producers Council v. Ross, 598 U.S. 356 (2023). That case involved California’s Proposition 12, which prohibited the sale of pork in California unless it came from breeding pigs housed according to California-defined animal confinement standards. Because only 3% of pork consumed in California is raised in California, the law effectively required out-of-state producers to comply with California standards to access the California market.

Pork producers challenged the law, arguing it violated the Dormant Commerce Clause by forcing Iowa and other states’ producers to change how they raise hogs nationwide. The district court dismissed the case on the pleadings, but the Ninth Circuit allowed it to proceed. The Supreme Court ultimately held that the case could go forward for factual development, outlining the appropriate Dormant Commerce Clause analysis.

The Two-Prong Dormant Commerce Clause Test

The Supreme Court clarified that Dormant Commerce Clause challenges proceed under two distinct prongs:

• Prong 1 - Discrimination: If a state law discriminates against out-of-state actors in favor of in-state actors, it is highly suspect and likely to be struck down.
• Prong 2 - Excessive Burden: Even if a law applies equally to in-state and out-of-state actors, it can still violate the Dormant Commerce Clause if it creates excessive burdens on interstate commerce.

NAW’s case centers on the following arguments:

• Disproportionate Compliance Burdens on Out-of-State Businesses: Because out-of-state distributors and wholesalers must disaggregate Oregon-bound products from their multi-state shipments to ensure proper tracking and reporting, these businesses face higher compliance costs compared to in-state producers.
• Oregon’s EPR Law Disrupts the National Market: The Oregon program creates state-specific requirements that disrupt the uniformity of national packaging and distribution—an inherently interstate activity. For example, products passing through Oregon but destined elsewhere may be overcounted, as upstream entities cannot track customer routing decisions.
• Regulating Instrumentalities of Commerce: NAW has advanced an additional argument based on a subset of Dormant Commerce Clause jurisprudence: the regulation of “instrumentalities of commerce.” This doctrine applies heightened scrutiny when states regulate items essential to the movement of goods across state lines. The classic example of unconstitutional regulation of instrumentalities comes from cases striking down state requirements that would force trucks or trains to stop at borders to change equipment. NAW argues that Oregon-specific regulation of packaging used to transport goods in interstate commerce unconstitutionally regulates the tools of interstate distribution.

Implications for EPR Programs

This preliminary injunction represents the first time a federal court has halted an EPR program based on constitutional concerns. While this is not a final ruling on the merits, it signals potential vulnerabilities in EPR legislation that producers and PROs in other jurisdictions should watch closely.

Broader Context: EPR Program Landscape

This decision comes at a critical time for EPR programs nationwide. Currently:

• California’s SB 54 (Plastic Pollution Producer Responsibility Act) is in implementation phases, with regulations expected to be approved in the near future.
• Maine, Colorado, Minnesota, Maryland, and Washington have enacted producer responsibility requirements for packaging.
• Multiple other states are considering similar legislation.

The Oregon preliminary injunction may embolden challenges to these programs and influence how courts in other jurisdictions evaluate EPR legislation.

Important Limitations

This preliminary injunction is not a final judgment on the merits. The court found only that “serious questions go to the merits”—a lower threshold than finding the claims are likely to succeed. The Oregon Department of Environmental Quality will have opportunities to defend the statute, and the court's ultimate ruling could differ from this preliminary assessment.

Moreover, pursuant to the Supreme Court’s recent ruling in Trump v. CASA, Inc., 606 U.S. 831 (June 27, 2025), the court’s preliminary injunction only applies to the parties to the case. Oregon has not stated whether it will appeal this decision, but the prevailing standard of review in the Ninth Circuit would likely insulate the judge’s decision from reversal, and any decision would be unlikely prior to the July trial.

Next Steps in the Oregon Case

Key dates and milestones to monitor:

• February 20, 2026: Deadline for NAW to file amended complaint addressing dismissed claims.
• March 9, 2026: Deadline for Oregon to appeal the preliminary injunction order.
• July 13, 2026: Five-day trial begins.
• Ongoing: Discovery and merits briefing on surviving Dormant Commerce Clause and Due Process claims.

The preliminary injunction in Nat’l Ass’n of Wholesale Distributors represents a significant development and may signal increased scrutiny of extended producer responsibility programs in other states.

Next Steps

We will continue to monitor developments in this case. Please contact us if you have any questions.

Authored by Trenton H. Norris, Veronica Colas, Evan Kudler, and Rebecca Popkin.