Seventeen States and a National Trade Association Open a New Front With New Theories in the Fight Over Packaging EPR Laws

On June 22, 2026, a coalition of 17 states, led by Nebraska, filed a sweeping constitutional challenge to California’s packaging extended producer responsibility (EPR) program (the Act) in federal court. Also joining in the suit, State of Nebraska v. Heller, No. 2:26-at-01047 (E.D. Cal.), is the National Association of Wholesaler-Distributors, the trade association that has been leading the charge against Oregon’s EPR program in a case set for trial in mid-July. The California complaint names as defendants CalRecycle Director Zoe Heller and the Circular Action Alliance, the nonprofit producer responsibility organization (PRO) designated to administer the program. This is the first packaging EPR challenge to include the Circular Action Alliance, which serves as the PRO in nearly every state with a packaging EPR program. California’s EPR law — the Plastic Pollution Prevention and Packaging Producer Responsibility Act, better known as SB 54 — was signed into law in 2022, and its implementing regulations were finalized this May.

How Do the Claims Compare to Packaging EPR Challenges in Other States?

The California complaint builds on theories raised in challenges to Oregon’s and Colorado’s packaging EPR programs that were filed last year and earlier this year, respectively. For example, like the Oregon case, which is also proceeding in federal court, the complaint includes a dormant commerce clause claim emphasizing both the burdens that the state’s EPR program imposes on national supply chains and the ways the Act allegedly discriminates against out-of-state manufacturers and recyclers. And, like the Colorado case, which is proceeding in state court, the California complaint asserts that the state has improperly delegated its authority to a private entity without adequate oversight and that the law’s prohibition on itemizing cost increases as a result of PRO fees as a separate line item on consumer receipts violates the First Amendment and its state constitutional analog. (A non-delegation challenge also was raised but dismissed in the Oregon case on Eleventh Amendment grounds.)

What Sets the California Challenge Apart?

The California challenge, however, goes even further, adding novel theories not present in the other jurisdictions. These include a tax-apportionment theory under the Commerce Clause (alleging that the EPR law imposes fees and surcharges akin to an impermissible tax on interstate commerce), an Import-Export Clause claim (urging the court to extend that clause, which precludes conditioning the sale of a good on the use of preferred manufacturing or production practices in another jurisdiction, to domestic imports), and a due process and horizontal separation-of-powers claim (which charges California with trying to regulate conduct outside its borders). The complaint further alleges that forcing producers to join and fund the Circular Action Alliance, an organization whose policy agenda plaintiffs oppose, unconstitutionally compels both speech and association in violation of the First Amendment and its state analog. The plaintiff states allege sovereign and quasi-sovereign harms, alongside direct financial injuries, contending that SB 54 will raise prices nationwide, reduce tax revenues, increase healthcare costs, and increase the states’ costs as both producers and purchasers of packaged goods. Plaintiffs contend that California has, in effect, conscripted the national economy into its policy preferences and outsourced core sovereign authority to an unaccountable private organization.

How Could the Multistate Posture Affect Interim Relief?

While the case is at a very early stage, the breadth of the claims and the involvement of state entities are likely to impact any interim relief sought. For example, in Oregon, the federal court restricted the trade association plaintiff’s requested preliminary injunction to the plaintiff association and its members. In California, the state plaintiffs presumably will seek much broader relief if interim relief is pursued. The complaint itself seeks a permanent injunction enjoining defendants from “implementing or enforcing the Act and any regulations promulgated thereunder.” For this reason, and because of the novel theories now being tested, the California litigation is one to closely watch for the scores of manufacturers, wholesalers, distributors, and others in supply chains impacted by packaging EPR laws.

What Does This Mean for Producers?

While the state plaintiffs assert claims for broad injunctive relief, it is unclear how far such relief — or any interim relief — will ultimately extend. Because such relief would most likely extend at least to the named plaintiffs, producers that want the protection of a potential injunction from enforcement of a packaging EPR law might consider joining an organization leading these challenges while the cases remain pending, while continuing to plan for compliance on the assumption these laws will take or continue to be in effect. 

© 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.