Are Extended Producer Responsibility Laws Constitutional: A Look At The Legal Challenge In Oregon – Contracts and Commercial Law

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Many states have now enacted extended producer responsibility (EPR) laws, creating new and costly requirements for manufacturers, wholesalers…

United States
Corporate/Commercial Law

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Key Takeaways

• Many states have now enacted extended producer responsibility
  (EPR) laws, creating new and costly requirements for manufacturers,
  wholesalers, and retailers based on the packaging of the products
  they produce, distribute, and sell. 




• The National Association of Wholesaler-Distributors (NAW)
  recently filed suit in federal court, alleging that Oregon’s
  EPR law violates multiple constitutional doctrines, including the
  dormant commerce clause, due process, and equal protection under
  the U.S. Constitution and the nondelegation doctrine under
  Oregon’s constitution. 




• The complaint argues that Oregon’s program is effectively
  a compulsory private regulatory regime, forcing companies to
  contract with a single Producer Responsibility Organization (PRO),
  a private entity (Circular Action Alliance) authorized to impose
  regulatory requirements that exceed constitutional
  limitations.




• The outcome could affect the operations of EPR laws nationwide,
  as despite significant differences, all state EPR laws grant
  substantial responsibility to the PRO. 




• Businesses subject to EPR obligations should monitor this
  litigation closely, as it may influence compliance structures in
  states implementing similar laws (e.g., California, Colorado,
  Maine, Maryland, Minnesota, and Washington).

Background

In NAW v. Feldon, filed on October 27, 2025 in the
District of Oregon, a national trade association representing the
wholesale distribution industry challenged Oregon’s Plastic
Pollution and Recycling Modernization Act (ORS §§
459A.860–975). The Act, enacted in 2021 and implemented in
2025, requires producers of packaging, paper, and food serviceware
to join a state-approved producer responsibility organization (PRO)
or create their own costly compliance program. Oregon has approved
only one PRO—Circular Action Alliance (CAA)—which sets
and collects fees from producers under a confidential fee
methodology. Each covered producer must register with CAA, sign a
mandatory contract, and pay fees based on product type, weight, and
recyclability. According to NAW’s complaint, for many
mid-sized wholesalers, the fees exceed product margins and are
determined through a methodology unavailable for public review.

Arguments in the NAW Complaint

Commerce Clause and Extraterritoriality: 
The law discriminates against and unduly burdens interstate
commerce, imposing inconsistent, state-specific EPR requirements
that force companies to alter national logistics and packaging
design decisions.

Unconstitutional Conditions and Due
Process:  The program conditions market access on
surrendering constitutional rights—forcing producers to
contract with a private monopoly and accept binding arbitration
without public transparency or judicial review.

Equal Protection:  The EPR framework
creates a two-tier system that exempts small producers, favors
large corporations through incentives, and disproportionately
burdens mid-sized firms lacking influence or cost absorption
capacity.

Nondelegation and Private Governance:  The
law delegates fee-setting and enforcement powers to CAA, a private
nonprofit, without legislative standards or procedural safeguards,
violating Oregon’s separation-of-powers provisions.

Analysis and Recommendations

• The Oregon litigation is an important development for those
  tracking state EPR programs, and the court’s decision could
  shape EPR programs nationwide.




• Federal litigation is one tool to address concerns with highly
  burdensome EPR programs. Businesses should also consider state
  court litigation, particularly to address nondelegation claims,
  which vary by state constitution. Some states, like
  California, Colorado, and Minnesota, have well-developed
  nondelegation doctrines.




• Other forms of engagement, including comments on rulemaking and
  work with state legislatures, can provide an opportunity to raise
  specific concerns but are unlikely to affect the overall structure
  of these laws.

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