A federal district court has upheld Oregon’s packaging extended producer responsibility (EPR) law against a constitutional challenge brought by the National Association of Wholesaler-Distributors (NAW), according to the Independent Lubricant Manufacturers Association (ILMA).
The ruling rejects NAW’s claims that Oregon’s Plastic Pollution and Recycling Modernization Act violates the Constitution’s dormant Commerce Clause and due process protections.
The decision is significant for lubricant manufacturers selling packaged products into Oregon. ILMA said producers should continue to treat the law’s registration, reporting and fee requirements as enforceable, subject to any appeal, stay or further court order.
“While we are disappointed in the Oregon court’s decision, it does not change ILMA’s fundamental concerns about the way packaging EPR programs are being implemented across the country,” Holly Alfano, ILMA’s CEO, told Lube Report. “These programs can impose extraordinary costs on independent lubricant manufacturers while creating a growing patchwork of inconsistent state requirements.”
As previously reported, Oregon’s law requires producers of covered packaging, paper and food-service products to register with and join an approved producer responsibility organization (PRO) and help fund the state’s recycling system. Circular Action Alliance remains the only PRO approved by the Oregon Department of Environmental Quality.
The court had previously granted NAW preliminary relief, but that injunction applied only to NAW and its members. It did not protect the wider industry, including ILMA members that were not NAW members, ILMA said.
NAW had argued that Oregon’s exemptions and fee structure discriminate against interstate commerce and create “free riders,” whose recycling costs are shifted to participating producers. The court rejected those arguments, finding that NAW had not provided sufficient evidence of actual discriminatory effects or quantified the impact of the exemptions.
The court also rejected NAW’s argument that Oregon had unconstitutionally delegated governmental authority to CAA, a private organization. While acknowledging CAA’s potential financial interests, the court found that the Oregon Department of Environmental Quality retains sufficient oversight of the program.
ILMA said the ruling is also relevant to its ongoing legal challenge to Colorado’s EPR program, as well as separate NAW challenges in Colorado and Oregon. The association said the Oregon decision illustrates the importance of providing evidence of actual economic and competitive effects when challenging state EPR programs.
“The Oregon ruling underscores an important lesson for EPR challenges: Courts will look for evidence of actual harm, not simply hypothetical burdens. That is significant as these cases move forward,” Alfano said.
Colorado also raises constitutional issues that were not decided in Oregon, including a First Amendment concern with the state’s prohibition on separately identifying EPR costs on invoices or at the point of sale,” she explained. “ILMA continues to believe producers should be able to communicate transparently with their customers about government-mandated costs, and we will continue pursuing our challenge to Colorado’s law.
For lubricant manufacturers, ILMA said the ruling does not determine whether individual lubricant containers are covered by Oregon’s law, whether exemptions apply or whether particular fees have been calculated correctly. Companies should continue reviewing their Oregon sales, packaging weights and classifications, and potential eligibility for exemptions.
The decision is subject to any appeal or further court action.