A federal district court has upheld Oregon’s “Plastic Pollution and Recycling Modernization Act” against constitutional challenges brought by the National Association of Wholesaler-Distributors (NAW). The law requires producers of packaging, paper and food-service products sold in Oregon to participate in a producer responsibility organization and pay fees intended to fund the state’s recycling system. 

The August 27 decision followed a five-day bench trial. Earlier this year, the court had temporarily blocked Oregon from enforcing the law against NAW and its members after finding serious constitutional questions. After considering the full trial record, however, the court concluded that the law does not violate either the dormant Commerce Clause or the Due Process Clause. 

The court found that the law does not discriminate against interstate commerce and that NAW had not shown a substantial burden on interstate commerce when compared with Oregon’s interest in managing waste and protecting public health. It also rejected NAW’s argument that Oregon had improperly delegated governmental authority to the Circular Action Alliance, the private Producer Responsibility Organization (PRO) administering the program. According to the court, the Oregon Department of Environmental Quality retained sufficient oversight and ultimate decision-making authority. The court also found that the law provides adequate procedures for producers to challenge fees and enforcement actions. 

We expect NAW to appeal the ruling to the Ninth Circuit. The appeal could also affect the pending challenge to California’s SB 54, the “Plastic Pollution Prevention and Packaging Producer Responsibility Act.” In June, NAW and a coalition of 17 state attorneys general filed a federal lawsuit seeking to block SB 54. That case raises several arguments similar to those rejected by the Oregon court, including claims based on interstate commerce and the delegation of authority to a private producer responsibility organization. It also raises additional First Amendment claims concerning compelled speech and association. Although differences between the two laws and the claims asserted will matter, any Ninth Circuit ruling in the Oregon case could significantly influence the California litigation. 

Western Growers members are encouraged to refer to Western Growers’ SB 54 Resources and Updates page for additional compliance resources and ongoing updates.