New Class Action Takes Aim at Oregon’s Packaging EPR Program, While Trade Association Challenge Gears Up for Trial

As litigation by a trade association challenging Oregon’s packaging extended producer responsibility (EPR) program gears up for trial this month, a producer has filed a new federal class action seeking to invalidate the program. On June 25, 2026, Lollicup USA, Inc., a Texas-based food serviceware manufacturer, filed the putative class action, Lollicup USA, Inc. v. Feldon, in Oregon District Court against the Director of the Oregon Department of Environmental Quality (DEQ). The lawsuit seeks to bar enforcement of the Oregon EPR law and its implementing regulations against a class of producers left unprotected by the preliminary injunction entered in February 2026 in the more advanced trade association lawsuit, National Association of Wholesaler-Distributors (NAW) v. Feldon, which is set for trial on July 13, 2026.

In NAW, the February preliminary injunction has prevented Oregon from enforcing the EPR law against the specific trade association plaintiff and its members through resolution of its claims. In the meantime, however, Oregon has been permitted to — and has in fact — continued to ramp up its enforcement efforts against other covered producers. In limiting the preliminary injunction and denying motions by other trade associations to intervene in NAW, the district court suggested that other parties were free to file their own lawsuits and seek their own injunctions to prevent enforcement of the EPR law against them. The Lollicup litigation seeks to do exactly that.

To What Extent Does the Class Action Complaint Overlap With the Existing NAW Litigation?

The Lollicup class action complaint presses the two federal claims that survived Oregon’s motion to dismiss in NAW. The first is a Dormant Commerce Clause challenge. As in NAW, the class action complaint alleges that the EPR law’s burdens on interstate commerce are clearly excessive relative to its local benefits; that it discriminates in practice against out-of-state producers; and that it reaches beyond Oregon’s borders by forcing nationwide packaging and sourcing decisions to conform to an Oregon-specific regime.

The second claim is a Fourteenth Amendment Due Process claim. Like NAW, the class action complaint argues that Oregon has unconstitutionally handed core regulatory power (fee-setting, material classification, audits, and enforcement referrals) to the Circular Action Alliance (CAA), the sole approved producer responsibility organization, a nonprofit organization selected by the state to administer the EPR program. It also alleges, as in NAW, that a confidential, retrospective fee methodology reviewable only through binding arbitration denies producers fair notice and a meaningful opportunity to be heard.

How Does the Complaint Build on the NAW Case?

The complaint is drafted as a deliberate sequel to the NAW case, but with some meaningful differences. First, it is a class action; rather than bringing claims on behalf of one trade association’s members, Lollicup seeks relief for every covered producer that the NAW injunction leaves unprotected. Second, it incorporates a new legal theory that recently appeared in a challenge to California’s packaging EPR law; specifically, the Lollicup complaint alleges that the EPR law additionally violates the Dormant Commerce Clause because EPR program fees function as an impermissible tariff or excessive charge on interstate commerce. This theory was not raised in NAW. Third, the Lollicup complaint is narrower by design than the amended complaint originally filed in NAW; the class action complaint presses only the two claims the NAW court allowed to proceed past the motion to dismiss, leaving out the theories the NAW court dismissed — namely the equal protection and unconstitutional-conditions claims and the state-law claims under the Oregon Constitution — noting that the Oregon federal court has already found those claims to be properly pled.

The complaint also leans on NAW’s progress. It cites the NAW court’s early finding at the preliminary injunction hearing that the Dormant Commerce Clause and Due Process claims raise “serious questions.” It also expressly includes in its Prayer for Relief a request for a preliminary injunction, suggesting that Lollicup’s efforts to obtain interim relief similar to the relief obtained in NAW are likely to follow in short order. (As of writing, no motion for a preliminary injunction has yet been filed.)

What to Watch as Trial Approaches

The NAW case begins a five-day trial on July 13, 2026. The parties’ late-June pretrial filings preview the issues that are likely to be the focus of the upcoming trial. For example, in its June 29 filings, Oregon stresses that producers are not required to join CAA and may instead form a competing producer responsibility organization, handle their own recycling, or stop selling into the Oregon market. Oregon also pushes back on the idea that CAA’s fees are “retrospective,” describing them instead as forward-looking estimates based on the prior year’s volumes. NAW, on the other hand, presses its argument that Oregon has improperly put regulatory power in private hands and emphasizes that the act favors in-state businesses, pointing to specific exemptions that it says shift the program’s costs disproportionately onto out-of-state producers. The parties’ joint status report previews a contested set of motions in limine, including cross-challenges to each side’s experts; admissibility rulings will further shape the record and framing of the issues as the case proceeds to trial. Of note, the district court in NAW has been freely granting leave to file amicus briefs to third parties on both sides of the issues in the lead-up to trial.

A merits ruling in NAW is likely to directly impact, if not resolve, the questions Lollicup raises for the broader class of covered producers. Given that both the timing and scope of such a ruling are unclear however, the Lollicup litigation seems clearly aimed at obtaining at least interim relief pending a final decision in NAW and enabling covered producers outside NAW’s members to benefit from any favorable rulings that may come out of the NAW trial while still pressing ahead with their own claims (including a new Dormant Commerce Clause theory) in the meantime.

Producers affected by the Oregon EPR program should watch both cases closely and consider potential avenues for involvement. With the NAW trial about to begin, the window to participate as an amicus may be closing; it is unclear whether the court will continue to entertain additional amicus curiae participation up until the time the court rules. Given that the outcome at trial will almost undoubtedly be appealed, producers might additionally or alternatively consider amicus participation at the appellate stage. The earlier-stage Lollicup litigation offers a more immediate avenue for active involvement, where producers may seek to file or join amicus briefs as the case develops, consider potential coordination with plaintiff in support of the class claims, or, as Lollicup itself illustrates, bring their own parallel claims to secure relief that does not depend on membership in another producer’s case.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.