California Packaging EPR Program Faces Legal Challenges

On June 22, 2026, a coalition of 17 states led by Nebraska’s attorney general (AG), and the National Association of Wholesaler-Distributors (NAW), filed a federal lawsuit in the Eastern District of California, challenging the constitutionality of SB 54 (or the Act), California’s extended producer responsibility (EPR) law for packaging. Defendants include the California Department of Resources Recycling and Recovery (CalRecycle), that agency’s head, and the Circular Action Alliance (CAA), the Producer Responsibility Organization (PRO) selected by California to implement SB 54. Notably, NAW filed a similar lawsuit last year against Oregon’s EPR law (defendants were Oregon’s Department of Environmental Quality (ODEQ) and the agency’s head but not CAA). NAW obtained a preliminary injunction from enforcement by ODEQ (but only for NAW members as of the date of the court’s preliminary injunction order) while the case is being tried. Oral arguments in the Oregon case are scheduled for July 13. Plaintiffs in California are seeking to bar both CalRecycle and CAA from enforcing SB 54 as to all affected producers. Specifically, the plaintiffs seek a permanent injunction against the Act’s enforcement and a declaratory statement that the Act violates both the United States and California constitutions.

This litigation follows a more narrowly focused lawsuit filed in the San Francisco Superior Court on June 2, 2026, by the Natural Resources Defense Council (NRDC), Californians Against Waste (CAW) Foundation, and Oceana, against CalRecycle and the agency’s head. That lawsuit does not include CAA as a party and it is narrower in scope, challenging the legality of some elements of SB 54’s implementing regulations. The plaintiffs are largely focused on the acceptance of advanced (also referred to as “chemical” or “molecular”) recycling (which breaks plastic materials into their base molecular building blocks) to meet program metrics, which the plaintiffs oppose. They seek a writ of mandate or injunction directing CalRecycle to revise the final regulations and instruct CalRecycle that further implementation of SB 54 be “consistent with the substance of the Court’s judgment until they have promulgated new, compliant final regulations.”

While these lawsuits work their way through the courts, both CalRecycle and CAA are moving forward with implementing SB 54. Just last week, CAA released its proposed program plan to implement the Act. Unless these dates are changed by the courts, the first SB 54 Advisory Board meeting to review the plan is scheduled for June 26, 2026, and a public webinar by CAA is planned for July 8, 2026. The public has until August 14, 2026, to submit comments on the proposed program plan, using the form here.  

SB 54 incorporates features that make compliance significantly more expensive for businesses – especially businesses that use plastic packaging – and many experts believe advanced recycling must be part of the equation to expand recyclability of plastics. Thus, the outcome of both cases will be closely watched.