Judge Upholds Oregon Packaging Recycling Law

A federal judge upheld Oregon’s extended producer responsibility law for packaging, rejecting a wholesale industry group’s constitutional challenge to a program that requires producers to help pay for recycling materials sold in the state.

U.S. District Judge Michael H. Simon ruled that Oregon’s Plastic Pollution and Recycling Modernization Act does not violate either the dormant Commerce Clause or the Due Process Clause. The decision followed a five-day trial in July over the National Association of Wholesaler-Distributors’ remaining challenges to the law.

The 2021 law shifts certain end-of-life recycling costs to producers of covered products. It applies to packaging, printing and writing paper and food serviceware, including items such as plates, wraps, cups, bowls, pizza boxes, cutlery, straws and similar food containers.
Covered producers generally must register with and join a producer responsibility organization and report the volume of covered products they bring into Oregon. Producers then pay membership fees based on those volumes. The law exempts certain small producers, including businesses with less than $5 million in annual gross revenue and qualifying restaurants and similar food establishments.

The National Association of Wholesaler-Distributors sought to block enforcement of the law, arguing in part that it unlawfully burdened interstate commerce and violated due process. The court previously dismissed several other claims but allowed the Commerce Clause and due process challenges to proceed to trial.

Simon rejected both remaining challenges. On the due process issue, the association argued that Oregon had improperly delegated regulatory authority to a private producer responsibility organization. The court concluded that the organization operates in a subordinate role, the law establishes criteria governing its decisions and the Oregon Department of Environmental Quality retains ultimate decision-making authority.

Circular Action Alliance is currently the only producer responsibility organization approved to administer the program in Oregon. Its Oregon board includes representatives from several major food and consumer products companies, including McDonald’s USA, Mars, Coca-Cola, Nestlé’s Nespresso, General Mills, Target and PepsiCo.