A federal judge has ruled that Oregon’s Recycling Modernization Act (RMA) is constitutional, delivering the first full-record decision testing an extended producer responsibility (EPR) law against the US Constitution.
The case has been shadowing the state’s EPR rollout for more than a year.
US District Judge Michael H. Simon issued a 71-page decision on Aug. 27, concluding that the law, enacted as Senate Bill 582 in 2021, does not violate either the dormant Commerce Clause or the Due Process Clause.
The ruling comes in the case of National Association of Wholesaler-Distributors v. Feldon, filed by NAW in July 2025 and tried before Simon over five days in Portland this July.
Simon leaned on Justice Louis Brandeis’s “laboratories of democracy” framework to explain the court’s deference to Oregon’s approach, writing that it is “one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory, and try novel social and economic experiments without risk to the rest of the country.”
He traced the RMA’s lineage to Oregon’s 1971 Bottle Bill, calling it a continuation of the state’s “innovative leadership” on waste policy.
The decision runs through NAW’s arguments one by one, rejecting each:
Small-producer exemption: NAW argued the RMA’s carve-out for government bodies and small businesses under $5 million in gross revenue facially discriminates against interstate commerce.
Simon found NAW lacked standing to challenge the governmental exemption. On the revenue-based carve-out, that NAW offered only hypotheticals, no trial evidence that the exemption actually shifts market share toward in-state businesses.
Excessive fees: NAW pointed to Circular Action Alliance’s 2025 Annual Report, which showed CAA collected $145.5 million but spent only $56.5 million.
Simon called that a reserve-building pattern typical of a program in “its second year,” not a constitutional violation.
Pike balancing: NAW’s experts didn’t quantify the RMA’s interstate effects specifically enough to clear the threshold showing a “substantial or significant burden on interstate commerce.” Pike balancing is a legal test, from Pike v. Bruce Church (1970), that weighs a law’s burden on interstate commerce against its local benefits, striking the law down only if that burden is “clearly excessive” in comparison.
Private delegation to CAA: NAW argued Oregon handed unconstitutional authority to a “self-interested” private entity.
Simon held that producers aren’t actually compelled to join CAA. They can form a competing PRO or use the RMA’s private-recycling exemption. So, CAA’s confidential fee-setting methodology and arbitration provisions don’t trigger a due-process claim.
DEQ’s civil-penalty process: Simon found the on due-process issue is adequately protected by notice-and-cure periods, a hearing before an Administrative Law Judge and court appeal rights, with no penalty due until appeals are exhausted.
The ruling is the latest turn in a case Policy Now has tracked from the start. The court dismissed several of NAW’s claims and granted a narrower preliminary injunction back in February, then denied four trade groups’ bids to join the suit that April, around the same time DEQ issued its first list of noncompliant producers under the law.
“While NAW supports the goals of a circular economy, we believe Oregon’s law is unconstitutional and structured in a way that undermines, rather than advances, those goals,” Brian Wild, the association’s chief government affairs officer, said in a statement after July’s trial concluded.
Wild argued the trial “exposed a fundamental accountability problem with EPR,” pointing to CAA’s “confidential methodology producers cannot review or verify.”
An appeal to the Ninth Circuit is possible given CAA also administers PRO programs in California, Colorado, Maryland and Minnesota. The NAW has filed suit against EPR laws in both Colorado and California.
NAW’s other EPR fights
With the issue of EPR’s constitutionality, NAW is arguing similar claims at three of the seven state packaging EPR programs administered by CAA:
- California: NAW joined a 17-state coalition led by Nebraska Attorney General Mike Hilgers in Nebraska v. Heller (E.D. Cal.), filed June 22 as the sole business plaintiff alongside Alabama, Florida, Georgia, Idaho, Indiana, Iowa, Louisiana, Missouri, Montana, North Dakota, Oklahoma, South Carolina, South Dakota, Texas, Utah and West Virginia. The suit challenges SB 54’s regulations, which took permanent effect May 1, on Commerce Clause, Import-Export Clause, First Amendment and private-delegation grounds — naming CAA itself as a defendant this time, not just the state regulator. It’s separate from a narrower environmental-groups challenge to SB 54’s regulations (NRDC, Californians Against Waste, Oceana) that predates the NAW suit and doesn’t involve CAA.
- Colorado: NAW moved Aug. 5 for a preliminary injunction against Colorado’s Producer Responsibility Program for Statewide Recycling Act, seeking to bar enforcement and defer member fee obligations on an expedited basis. Colorado’s response is due Sept. 16. It’s NAW’s third state EPR suit and follows a separate, earlier state-court challenge from the Independent Lubricant Manufacturers Association.
