NAW Enters Federal Lawsuit Over California Packaging Law

The National Association of Wholesaler-Distributors (NAW) has joined a 17-state coalition in a federal lawsuit challenging California’s extended producer responsibility law, which places new requirements and fees on some distributors to fund packaging recycling programs.

California’s Plastic Pollution Prevention and Packaging Producer Responsibility Act was signed into law in 2022, and final regulations took effect on May 1, 2026. The law requires businesses to register with and pay fees to the Circular Action Alliance (CAA), a private entity appointed by the state to set and collect fees on everything from glass and aluminum to paper, cardboard, and plastic packaging. CAA’s fee methodology is confidential, and businesses cannot challenge those fee assessments in court.

“No state should limit interstate commerce, let alone delegate the power to set and collect taxes to a third party outside of the scope of public scrutiny,” said Eric Hoplin, president and CEO of NAW. “A federal court blocked enforcement of a similar law in Oregon earlier this year, and we are asking the court to do the same in California.”

In the lawsuit, the coalition argues California’s law violates four constitutional principles:

1. It discriminates against businesses selling into the state in violation of the Commerce Clause.
2. It imposes content-based restrictions on speech in violation of the First Amendment.
3. It compels NAW members to join CAA in violation of the First Amendment.
4. It delegates to a private entity government authority to regulate and impose mandatory taxes and fees on businesses selling into California without adequate legislative standards or public oversight.

“California cannot reach across state lines and force businesses in Nebraska, or any other state, to adopt California’s preferred environmental policies,” Nebraska Attorney General Mike Hilgers said. “California does not get to set national policy. Nebraska is leading this coalition because the constitutional problem here belongs to every state.”

NAW is the first business organization to join the lawsuit. The states involved are Nebraska, Alabama, Florida, Georgia, Idaho, Indiana, Iowa, Louisiana, Missouri, Montana, North Dakota, Oklahoma, South Carolina, South Dakota, Texas, Utah, and West Virginia. The group is asking the U.S. District Court for the Eastern District of California to block enforcement of the EPR law while the case proceeds.

NAW won a similar victory in February 2026 when a federal court in Oregon granted NAW members injunctive relief over that state’s EPR law. The Oregon court found the law raised serious constitutional questions under the U.S. Constitution’s Due Process Clause and the Dormant Commerce Clause. Arguments in that case are scheduled to begin July 13, 2026.