NAW Files Lawsuit to Block Oregon EPR Law

The National Association of Wholesaler-Distributors filed a lawsuit on July 30 against the Oregon Department of Environmental Quality, challenging the constitutionality of the state’s newly implemented extended producer responsibility (EPR) law.

The Plastic Pollution and Recycling Modernization Act went into effect on July 1 and is intended to encourage a circular economy and modernize the state’s recycling program. To achieve this, it requires companies that are classified as “producers,” which can include distributors, to join and pay fees to a producer responsibility organization (PRO). The PRO then uses these fees to fund end-of-life processing or recycling for certain products, including packaged items, food serviceware, various types of equipment, and plastic and paper products. The new PRO fees and other compliance costs are expected to place a significant burden on distributors and other businesses in Oregon.

The NAW lawsuit alleges that the law defies the U.S. and Oregon constitutions in the following ways:

• It delegates control over the EPR program, including the setting of fees wholesaler-distributors must pay to a private, third-party group (the Circular Action Alliance, or CAA), with a financial interest in the program without clear rules or oversight.
• It unfairly targets out-of-state producers, disrupts national markets, and tries to control business outside Oregon, violating the U.S. Constitution’s limits on state regulation of interstate commerce.
• It mandates producers sign contracts with a single approved private organization (CAA), giving up their economic freedom and due process rights.
• It subjects producers to fees and rules set by CAA without a real chance to object or appeal or to expect transparency in the process.

“While NAW supports the goal of a circular economy, the Oregon EPR law as enacted is unconstitutional, creates new mandates, inhibits interstate commerce, and fails at its primary goal of encouraging circularity,” said Eric Hoplin, NAW president and CEO. “Rather than encourage sustainability through a uniform and transparent system where compliance burdens are shared across industries, Oregon chose to shift the burden to the parts of the supply chain that have little to no control over decisions to design, reduce, reuse, or recycle a product.”