NAW Takes Oregon EPR Challenge to 9th U.S. Circuit Court of Appeals

The National Association of Wholesaler-Distributors (NAW) has appealed a U.S. district court’s ruling upholding Oregon’s extended producer responsibility (EPR) law for packaging.

In a ruling issued Aug. 28, the district court rejected NAW’s argument that the law was unconstitutional because it violated companies’ due process rights. The court also determined that Oregon did not improperly delegate its authority and that the fees imposed by the private organization administering the state’s packaging recycling program, the Circular Action Alliance (CAA), were not excessive.

NAW disagrees with those conclusions, and on Sept. 24 it asked the 9th U.S. Circuit Court of Appeals to reconsider the lower court’s decision in the case of NAW v. Feldon. In a statement announcing the appeal, NAW noted that few material facts of the case were in dispute and that the ruling hinges mostly on questions of law. “The facts we established at trial haven’t changed, and they still show Oregon’s law is unconstitutional,” NAW President Eric Hoplin said. “The district court reached the wrong legal conclusions, and we’re asking the 9th Circuit to correct them.”

The appeal focuses on two principal issues. First, Oregon’s EPR law disrupts nationally integrated supply chains by imposing fees on wholesaler-distributors who control neither the packaging nor the final destination of their products. This forces multistate companies — including many foodservice equipment distributors — to reengineer their operations and, in some cases, route products around Oregon entirely. Additionally, NAW states the Oregon Department of Environmental Quality anticipated producers would recover some of their costs for the EPR program by charging more to customers in other states. The association argues that funding a new statewide recycling program at the expense of out-of-state wholesaler-distributors and consumers violates the U.S. Constitution’s Dormant Commerce Clause.

Second, NAW says Oregon violated the Constitution’s Due Process Clause when it delegated authority to run the program and collect fees to CAA. Under the Plastic Pollution and Recycling Modernization Act, CAA calculates EPR fees using a methodology it has designated as “confidential.” Further, any fee disputes go to binding arbitration under the CAA’s mandatory contract. This setup limits distributors’ ability to challenge the fees, NAW contends.

“These laws leave distributors with three terrible options,” said Brian Wild, chief government relations officer at NAW. “They can absorb fees they can’t afford on their already slim 3% to 5% margins, they can pass costs on to customers, or they can just stop selling into EPR states. Every one of those options raises costs for Americans.”