Oregon Defends Packaging EPR Program, Argues Court Lacks Jurisdiction

Oregon Environmental Quality Commission (EQC) officials are asking a federal court to dismiss a challenge to the state’s extended producer responsibility (EPR) law and implementing regulations, arguing that the court lacks subject-matter jurisdiction.

The motion to dismiss, filed December 22, 2025, comes after the plaintiff, the National Association of Wholesaler-Distributors (NAW), asked the District Court for the District of Oregon to halt the program on November 24, 2025.

According to the defendants, the Eleventh Amendment bars NAW from bringing suit against EQC officials.  While an exception to sovereign immunity exists for suits seeking prospective injunctive relief, the defendants contend that the named officials do not fall within the exception because they do not directly enforce the law.

“Absent allegations that EQC has an enforcement role or is continuously engaging in some activity that violates federal law, Plaintiff has not and cannot establish that the Ex parte Young exception should apply to the EQC Defendants,” the motion reads.

Enforcement authority, the defendants contend, rests with Oregon’s Department of Environmental Quality (DEQ), while EQC’s role is limited to promulgating administrative rules that “guide DEQ in its…administration” of the program.  Although both EQC and DEQ were named in NAW’s original complaint, the association removed the agencies as defendants in an amended complaint filed October 27, 2025.

The defendants also argue that the Eleventh Amendment precludes NAW’s state-law claims from being heard in federal court.

Oregon’s packaging EPR program, which launched July 1, 2025, is the first such program to take effect nationwide.  Many of its obligations are currently fulfilled by a single producer responsibility organization (PRO), Circular Action Alliance (CAA), though DEQ is authorized to approve additional PROs.

Last month, the Small Business Administration’s Office of Advocacy called for the federal government to preempt the program, citing concerns about interference with interstate commerce, the state’s delegationof authority to CAA, and the confidential methodologies used by CAA to calculate producer fees.

Merits Arguments

NAW raises similar concerns in its amended complaint, arguing that the program “produces unreasonable, arbitrary, and crushing burdens, including on wholesalers and distributors who are essential to moving products from manufacturers to Oregon consumers,” in part due to the delegation of  “essential regulatory authority to a private, third-party organization.”  CAA “has been granted wide discretion to apply a confidential methodology for setting fees, to establish other criteria and incentives for certain producers, and to penalize producers of certain materials,” NAW contends.

NAW alleges several constitutional violations.  After contesting the court’s jurisdiction, the defendants’ motion to dismiss addresses each, arguing that all fail to state a plausible claim for relief.

First, the motion challenges NAW’s dormant Commerce Clause claim, asserting that the program does not discriminate against interstate commerce.  “Increased compliance costs, even if borne largely by out-of-state businesses, do not amount to discrimination,” the defendants argue.  Nor, they add, does the program “establish a substantial or an excessive burden on interstate commerce, regardless of whether it is compared to the putative local interests.”

The defendants also contend that the program does not have impermissible extraterritorial effects because it “does not force any producer to make any product or packaging design, sourcing, or distribution decisions.”

The motion next addresses NAW’s unconstitutional conditions claim, which alleged that producers are compelled to surrender “freedom of contract and due process protections” when joining CAA.  In response, the defendants note that the law allows NAW’s members to form their own PRO, arguing that participation in CAA is a matter of choice.

NAW further argues that delegating fee-setting authority to CAA violates its members’ procedural due process rights.  The defendants counter by pointing to statutory safeguards that provide “opportunity for public input and continuing DEQ oversight” of the fees program.  These include DEQ approval of PRO program plans and fee methodologies, as well as annual reporting requirements.

Finally, the motion argues that Oregon has a rational basis for exempting small producers and does not unlawfully discriminate between mid-sized and large producers, rebutting NAW’s equal protection claim.

The case is National Association of Wholesaler-Distributors v. Feldon, 25-cv-1334 (D. Or.), filed July 30, 2025.