Oregon’s packaging extended producer responsibility law has just produced the first federal court ruling anywhere in the country on whether a state can build an EPR program the way most of them are now built: by handing fee-setting, material classification and enforcement referrals to a single producer responsibility organization. That ruling is now headed to the Ninth Circuit Court of Appeals, and a second, related lawsuit has just been paused to wait for the outcome. The procedural detail matters more than it looks: the informal truce that had kept Oregon’s Department of Environmental Quality from pursuing a group of producers appears to have quietly expired, and nobody has moved to renew it.
For packaging teams tracking US state EPR exposure, this is the development worth understanding in depth this month.
The ruling that started this
The case is National Association of Wholesaler-Distributors (NAW) v. Feldon, filed against Leah Feldon, director of Oregon’s DEQ, challenging the constitutionality of the state’s Plastic Pollution and Recycling Modernization Act. Judge Michael H. Simon did not find Oregon’s Recycling Modernization Act to be unconstitutional, ruling that the 2021 law did not violate the Dormant Commerce Clause nor the Due Process Clause. The ruling followed a five-day trial in July, and NAW had argued that Oregon improperly delegated regulatory authority to Circular Action Alliance (CAA), the state’s only approved PRO.
Before the trial, NAW had partial protection. On February 6, 2026, Oregon’s district court issued a preliminary injunction prohibiting DEQ from enforcing the Act pending a ruling on the merits, but the injunction applied only to NAW and its members and did not block enforcement against non-members. Once Judge Simon ruled against NAW on the substance in August, that shield came down. The ruling allows Oregon’s producer responsibility framework to move forward, requiring covered producers of packaging, paper products and food serviceware to participate in and fund the state’s program through CAA.
Why the Lollicup case is different
NAW’s lawsuit only ever covered its own membership. A second suit, Lollicup USA, Inc. v. Feldon, was built specifically to cover everyone else. Lollicup USA, a wholly owned subsidiary of publicly traded Karat Packaging, filed the class action on June 25 in the U.S. District Court for the District of Oregon, wanting the law declared unconstitutional and enforcement enjoined. The lawsuit cites the NAW case and seeks to represent producers that were not covered by NAW’s preliminary injunction.
The two cases press the same legal theories. The class action complaint presses a Dormant Commerce Clause challenge, alleging that the EPR law’s burdens on interstate commerce are excessive relative to its local benefits, that it discriminates against out-of-state producers, and that it forces nationwide sourcing decisions to conform to an Oregon-specific regime. It also presses a Fourteenth Amendment Due Process claim, arguing that Oregon unconstitutionally handed core regulatory power over fee-setting, material classification, audits and enforcement referrals to CAA, a nonprofit selected by the state to run the program. Those are the same claims Judge Simon rejected in NAW’s case, and the same judge is overseeing Lollicup’s.
Over the summer, Lollicup won something NAW’s membership no longer has: a temporary truce. On July 16, 2026, the parties agreed that DEQ’s Materials Management Program would not issue pre-enforcement notices against Lollicup or members of the putative class until at least August 31, 2026. That date has now passed.
What changed this month
Judge Simon’s August ruling meant NAW members lost their injunction. According to one legal summary of the decision, the pause on enforcement was lifted and Oregon’s law now applies to all covered producers again. That left Lollicup’s separate truce as the only remaining enforcement protection in Oregon, for a different and larger group of producers: those not party to NAW’s case at all.
That protection has now lapsed too. On October 10, Lollicup and DEQ jointly asked the court to pause the entire case pending NAW’s appeal. NAW’s opening brief on appeal is due Dec. 17, and Feldon’s answering brief is due Jan. 18. Arnold & Porter partner Jennifer Kwapisz, quoted in Packaging Dive’s coverage of the filing, flagged the gap directly: the earlier agreement limiting DEQ enforcement while the trial court decided the NAW case “appears to have expired on August 31, 2026,” and the new filing “makes no mention of extending or ren[ewing]” it.
Her reading of the practical effect is blunt. How the Ninth Circuit resolves NAW’s appeal will have direct implications for Lollicup and may even be dispositive, but in the meantime, companies remain subject to their compliance obligations under Oregon’s EPR program. In plain terms: the litigation is paused, the obligations are not.
| Date | Event | Who it affected | Enforcement status |
|---|---|---|---|
| Feb 6, 2026 | Court grants preliminary injunction in NAW v. Feldon | NAW members enrolled by that date | Enforcement paused for NAW members only |
| Jun 25, 2026 | Lollicup USA files class action over the same law | Producers not covered by the NAW injunction | No protection yet |
| Jul 16, 2026 | Lollicup and DEQ stipulate to a pause on pre-enforcement notices | Lollicup and the putative class | Enforcement paused to Aug 31, 2026 |
| Aug 27, 2026 | Judge Simon rules Oregon’s EPR law constitutional in NAW v. Feldon | NAW members | Injunction lifted; full enforcement resumes |
| Aug 31, 2026 | Lollicup’s stipulated pause expires | Lollicup and the putative class | No formal protection remains |
| Oct 10, 2026 | Parties jointly move to stay Lollicup case pending appeal | All Oregon-covered producers | Case paused; no enforcement truce renewed |
| Dec 17, 2026 | NAW’s opening appellate brief due at the Ninth Circuit | N/A | Appeal proceeds |
| Jan 18, 2027 | Feldon’s answering brief due | N/A | Appeal proceeds |
What this probably means in practice
Taken together, the record suggests every producer covered by Oregon’s RMA, whether a NAW member, a Lollicup class member, or neither, is currently operating without any litigation-based shield from DEQ enforcement. The law says registration, reporting, fee payment and recordkeeping continue. In practice, this probably means DEQ has the legal room to resume active enforcement against the broader population of producers it was previously treating cautiously, even though the underlying constitutional question will not be settled until the Ninth Circuit rules, likely sometime after briefing closes in January.
Whether DEQ chooses to use that room is a separate question from whether it has the legal authority to. The agency had already shown a willingness to publish noncompliance lists and refer cases earlier in 2026, before the injunction era. Packaging teams with Oregon exposure should not assume restraint will continue just because an appeal is pending.
Why this reaches beyond Oregon
The structural challenge in both Oregon cases, that a state cannot hand this much regulatory power to a single nonprofit PRO, is not an Oregon-specific argument. Legal commentary on the original injunction noted it has potential implications beyond Oregon as other states implement their own EPR programs, including collecting fees from producers via PROs. CAA is that PRO in most of them. Resource Recycling reported that the organization runs or is building packaging EPR programs in six states: California, Colorado, Maryland, Minnesota, Oregon and Washington, each with its own deadlines, fee structures and regulatory oversight.
A Ninth Circuit ruling on the Dormant Commerce Clause and Due Process theories would be binding only on Oregon’s case, but its reasoning would be closely read by litigants and regulators in California and Washington, both within the same circuit, and watched everywhere else CAA operates.
That multistate footprint is also under its own internal pressure right now. Packaging Dive reported that CAA’s founding CEO Jeff Fielkow will leave the organization later this year, with current Chief Strategy Officer Jeff Meyers serving as interim CEO, a transition that lands as the organization works through program plan approval in California and litigation in multiple states at once. Packaging Dive’s own reporting on the announcement noted plainly that multiple lawsuits still aim to block implementation and enforcement of SB 54 even as CAA pushes forward with its California plan.
California is a useful contrast: its program keeps moving on schedule regardless of what happens in Oregon’s courts. CAA published a flat early fee schedule for the 2026 program year covering six material categories, ahead of the per-material fees due to start in 2027. The schedule set six flat per-pound rates for program year 2026: Glass and Ceramics 0.3 cents per pound, Metal 0.8 cents, Paper/Fiber 0.4 cents, Plastic Rigid 1.3 cents, Plastic Flexible 2.5 cents, and Wood and Other Organic Materials 0.8 cents.
Open questions to watch
- Will DEQ enforce without restraint. Nothing in the record requires it to continue the informal caution it showed while the Lollicup truce was live. Watch for new compliance notices or published noncompliance lists in the coming weeks.
- Timing of a Ninth Circuit decision. Briefing alone runs to mid-January 2027. A ruling on the merits will take longer, likely well into 2027, which means this uncertainty is not a short-term issue for procurement or legal teams budgeting for Oregon compliance.
- Whether other circuits see similar challenges. NAW and allied groups have raised comparable Dormant Commerce Clause and PRO-delegation arguments in other forums as additional states stand up CAA-run programs. A different outcome elsewhere would complicate, rather than settle, the national picture.
- Whether Oregon amends its program in response. DEQ’s rulemaking process continues independently of the litigation, including work on exemptions and material classifications that could narrow or widen who is actually obligated.
What to do now
- Confirm your Oregon producer status and registration under the RMA regardless of NAW or Lollicup membership; neither case currently removes anyone’s obligations.
- Do not treat the Lollicup stay as a compliance pause. Continue reporting, fee payment and recordkeeping on the existing schedule.
- If your organization is a Lollicup class member or considering joining either suit, get a current read from counsel on what the stay does and does not cover, since the public record shows the informal enforcement truce has lapsed without renewal.
- If you also have California, Colorado, Maryland, Minnesota or Washington exposure through CAA, track the Ninth Circuit briefing schedule: a ruling could shape how aggressively other CAA-run programs defend their own structures.
- Treat this analysis as background, not legal advice. Given the live litigation and the compliance exposure involved, confirm your specific obligations with counsel or directly with DEQ.
Sources
- Source: Lollicup USA’s Oregon EPR class action at bay after NAW appeal – Packaging Dive
- Source: Federal Court Upholds Oregon Packaging EPR Program – OFW Law
- Source: Oregon EPR Law Enjoined – Saul Ewing
- Source: A Reprieve From Packaging EPR Enforcement in Oregon (For Now) – Arnold & Porter
- Source: New Class Action Takes Aim at Oregon’s Packaging EPR Program – Arnold & Porter
- Source: After novel Oregon EPR ruling, attention turns to other legal battlegrounds – Packaging Dive
- Source: CAA shares revised California EPR program plan, announces CEO change – Packaging Dive
- Source: Fielkow to step down as CAA CEO – Resource Recycling
- Source: CAA Publishes California’s 2026 Early Fee Schedule – EPR Atlas