Federal Court Upholds Oregon’s Recycling Modernization Act Against Constitutional Challenge

A federal court has rejected constitutional challenges to Oregon’s Recycling Modernization Act (“RMA”), the nation’s first extended producer responsibility (“EPR”) law for packaging to be implemented in the United States. Last week, the U.S. District Court for the District of Oregon upheld the RMA and rejected the National Association of Wholesaler-Distributors’ (“NAW”) dormant Commerce Clause and Due Process Clause challenges.

Background

Oregon enacted the RMA in 2021 with the stated goals of shifting certain recycling costs from local governments and ratepayers to producers of packaging, paper products, and food serviceware. Although producer reporting and fee obligations first took effect in 2025, regulated entities are continuing to navigate and assess the law’s financial, compliance, and operational consequences as experience under the program grows and the full scope of those effects become clearer.

The RMA requires producers of covered packaging, paper products, and food serviceware to participate in a producer responsibility organization (“PRO”), report data regarding the types and quantities of covered materials they supply into Oregon, and pay material-specific fees used to fund recycling services, infrastructure improvements, public education, and other program costs. Circular Action Alliance (“CAA”), Oregon’s approved PRO, reported collecting approximately $167.9 million in producer fees during the program’s first year. The Oregon Department of Environmental Quality (“DEQ”) oversees the program, including review and approval of CAA’s program plan and fee methodology.

In 2025, NAW filed suit alleging that the RMA discriminates against interstate commerce, imposes unconstitutional fees, unlawfully delegates governmental authority to a private organization, and fails to provide adequate procedural protections. In February 2026, the court granted limited preliminary relief barring DEQ from enforcing certain RMA requirements against NAW members. After a five-day bench trial and supplemental briefing, the court rejected NAW’s remaining claims, dissolved the preliminary injunction, and entered judgment in favor of DEQ.

The Ruling

On August 27, 2026, Judge Michael Simon issued Findings of Fact and Conclusions of Law rejecting NAW’s principal challenges and concluding, based on the evidence presented at trial, that the RMA does not unlawfully favor Oregon interests, impose unconstitutional producer fees, place impermissible burdens on interstate commerce, or delegate excessive governmental authority to CAA. The court ultimately held that the RMA does not violate either the dormant Commerce Clause or the Due Process Clause of the United States Constitution.

The court relies heavily on the theory of judicial restraint to support its holding. Relying on National Pork Producers Council v. Ross, 598 U.S. 356 (2023), and Supreme Court precedent recognizing states’ authority to test novel responses to social and economic problems, the court emphasized that Oregon has substantial latitude to develop solutions to waste-management and pollution concerns within constitutional limits.

Although significant, the ruling should not be read too broadly. The court’s conclusions are based on the specific legal claims NAW asserted and the evidence presented at trial. The opinion repeatedly notes that the court could not determine the significance of certain alleged effects without additional supporting evidence, a limitation that may reflect the relatively recent implementation of the RMA and the still-emerging evidence regarding the law’s impacts described above. Moreover, the court’s ruling was limited to the federal constitutional claims that remained before it at trial and did not address any claims under the Oregon Constitution.

Additionally, the seven states with enacted EPR laws related to packaging—California, Colorado, Maine, Maryland, Minnesota, Oregon, and Washington—have all adopted structurally unique EPR laws. Distinctions among those laws may limit the precedential value of the court’s ruling with regard to EPR laws in other states. Nevertheless, the ruling provides what appears to be the first substantive judicial consideration of the constitutionality of a state EPR law relating to packaging, and the court upheld the law against every claim presented at trial. The opinion also suggests that compliance costs, reporting burdens, supply-chain impacts, and packaging redesign challenges may not be sufficient to invalidate an EPR law absent evidence demonstrating a constitutionally significant burden, a showing the court found lacking on the record before it.

Practical Implications

While NAW may appeal, the decision dissolves the preliminary injunction that had limited enforcement against NAW members. DEQ will continue implementing the RMA and may pursue enforcement against producers that have not registered with CAA, reported required materials data, paid applicable fees, or otherwise complied with the law. Producers should evaluate their compliance obligations rather than assume that a potential appeal will delay implementation or enforcement.

Stoel Rives will continue monitoring developments in this litigation, including any appeal and potential implications for packaging EPR programs nationwide.