Federal Court Enjoins Oregon's Extended Producer Responsibility Law—a Bellwether Moment for All Seven EPR States

On February 6, a federal judge in Oregon quietly issued a two‑page order that might have initially appeared to be a mundane procedural ruling, but it wasn’t. That order enjoined Oregon’s sweeping Extended Producer Responsibility (EPR) statute.  In doing so, the court exposed a fracture running through the nation’s fastest‑growing environmental regulatory experiment – state laws that are intended to shift billions in recycling costs from governments to regulated industries. The order amounts to the first judicial acknowledgement that this modern recycling model may rest on constitutionally unsteady ground.

In National Association of Wholesaler‑Distributors v. Feldon, the court granted a preliminary injunction against Oregon’s Plastic Pollution and Recycling Modernization Act, blocking enforcement only against the plaintiff trade group and its members. But the court’s reasoning – even noting “serious questions going to the merits” of constitutional claims – signals a structural vulnerability of EPR laws that potentially extends far beyond this case, including beyond Oregon’s borders. 

That vulnerability comes at a pivotal moment. Seven states now have recycling EPR statutes on the books, California, Colorado, Maine, Maryland, Minnesota, Oregon, and Washington, nearly all rest on the same architecture Oregon pioneered, with private Producer Responsibility Organizations collecting fees and dictating the compliance structure to be followed by regulated industries. Now, one of those statutes has been deemed suspect at its core, leaving the other six, and the industries they regulate, facing an uncertain future in which their compliance obligations could be rendered null overnight.

Background: Primer on EPR Laws

EPR laws are designed to shift the cost of recycling and waste management from taxpayers and municipalities to the regulated supply chain, typically by requiring “producers” to join a Producer Responsibility Organization (PRO), report packaging data, and pay fees tied to covered materials sold into the state. 

As we explained in our prior article, Extended Producer Responsibility Laws Are Here—What Manufacturers Must Do Now, EPR has become a fast-moving, multi-state compliance reality with real enforcement teeth and growing fee exposure. The Oregon litigation is therefore best understood as a harbinger of challenges not just to Oregon’s program, but to the other six states’ packaging EPR frameworks, and to the shared PRO-driven model many of them rely on.

Inside the Oregon Decision: Why This One Injunction Matters

The Oregon case began in 2025, when the National Association of Wholesaler‑Distributors (NAW) sued the state’s Department of Environmental Quality and members of its Environmental Quality Commission, aiming to stop Oregon’s EPR law based on a battery of constitutional arguments. After NAW amended its complaint, Oregon moved to dismiss, setting the stage for the court’s first real test of the statute’s legal durability.

When the dust settled, two claims survived, and they are the ones that cut closest to the architecture of modern EPR laws.

• Dormant Commerce Clause: A Direct Hit to Multistate Packaging Systems

NAW argued that Oregon’s law doesn’t merely regulate packaging, it reaches deep into interstate commerce. By imposing retrospective, unpredictable packaging fees and complex reporting obligations tied to supply chains that cross multiple states, NAW argues that the law risks duplicative or conflicting requirements as more EPR programs come online. That argument landed with the court. The court refused to dismiss the claim, signaling that Oregon’s framework may burden interstate commerce in ways the Constitution does not permit.

• Procedural Due Process: The Transparency Problem

The court also allowed NAW’s Due Process claim to proceed. At its core is a question that will resonate far beyond Oregon: Can a state compel producers to join a private PRO, accept non‑negotiable contracts, and submit to a fee‑setting process that is both opaque and changeable, all without meaningful public oversight or recourse?

NAW argued that producers are bound by opaque and shifting obligations without notice‑and‑comment rulemaking, without access to the methodology behind the fees, and without a public forum to challenge them, only private arbitration. The court found those concerns serious enough to permit that claim also to move forward. 

• The Claims That Fell Away (for Now)

  Other theories did not survive, though all were dismissed without prejudice, leaving the door open for future litigation.

  • Unconstitutional Conditions: NAW argued Oregon leveraged access to its market to force producers into non‑negotiable contracts with a private PRO that could adjust fees unilaterally, effectively requiring them to subsidize statewide recycling infrastructure that bore little relationship to their own operations. The court dismissed the claim but invited repleading.
  • Equal Protection: NAW challenged what it described as a two‑tier structure, one that exempts small producers and favors large ones, leaving mid‑sized companies squeezed in the middle. That claim, too, was dismissed without prejudice.
  • State‑Law Nondelegation: NAW’s argument that Oregon unlawfully delegated core regulatory power to a private entity with broad discretion also fell, again without prejudice.
• What the Court Ultimately Did

On February 6, the court delivered its split decision on Oregon’s motion to dismiss, and then granted NAW the relief that now has the country’s attention: a preliminary injunction prohibiting enforcement of the EPR statute against NAW and its members. Everyone else remains fully bound by the law. Where applicable, obligated producers must continue filing reports, paying fees, and complying with obligations the court has now deemed constitutionally suspect. With Oregon’s next round of invoices already issued and fee schedules rising, many producers find themselves trapped between compliance obligations today and legal uncertainty tomorrow. 

The urgency likely grows from here. The Oregon court has set a five‑day trial for July 13, 2026, a fast timeline for a challenge of this magnitude. A ruling on the constitutionality of Oregon’s EPR regime, and by extension the PRO‑driven models used across six other states, will follow soon after. If Oregon loses, the aftershocks could reach every state that has tied its packaging system to the same foundation.

Why This Case Is a Harbinger

For years, state EPR laws have been described as an inevitable result in response to global recycling market failures and municipal budget deficits. But until now, no federal court had signaled discomfort with the legal theory behind them. That changed when Oregon’s system collided with considered constitutional limits on state power.

At the center of both prevailing claims is a basic question: how far can a state go in outsourcing regulatory power to a single, privately run PRO—here, the Circular Action Alliance (CAA)—and then tying participation in the state’s economy to paying fees set through a methodology that businesses say they cannot see, test, or challenge? NAW argued those fees were not just high, they were “significantly higher than publicly projected,” often surpassing product margins and imposed through a confidential, retrospective methodology that companies had no meaningful ability to contest. 

Oregon defended its system as a modern response to a global recycling crisis, backed by extensive rulemaking and agency oversight. But the court’s decision to let arguments based upon the Dormant Commerce Clause and Due Process concerns proceed suggests unease with the state’s reliance on a private intermediary that both sets fees and can refer non-compliant entities to agencies for enforcement purposes. This may be of particular concern in light of the fact that only one entity – CAA – has been formed to act as the PRO for EPR laws, further increasing anticompetition concerns.

For every other state with a similar EPR law structure, the injunction serves as a flashing yellow light. The Oregon ruling arrives just as producers across all seven EPR states face rising fees, new reporting obligations, and simultaneous rulemakings. The shared architecture, mandatory PRO participation, eco‑modulated fees, cross‑state cost allocation, is precisely what NAW is attacking. 

Conclusion: The EPR Trend Has Arrived at an Inflection Point

For the first time, a federal court has paused enforcement of an EPR statute on constitutional grounds. Even though the injunction is narrow, the message is unmistakable: the legal theories underlying modern EPR laws are now live issues in federal litigation. Oregon may be the first state forced to defend its program at trial, but it likely won’t be the last.

As the July merits hearing approaches, producers, retailers, distributors, and PROs nationwide will be watching. Billions in fees, the shape of recycling markets, and the future architecture of U.S. packaging regulation are at stake.

In this fluid landscape, where compliance demands persist even as the legal ground shifts beneath them, Foley continues to counsel companies regularly on how to navigate EPR laws while managing their business.  Please reach out to any of the authors with questions you may have about EPR laws and how they apply to your business.