Second Lawsuit Challenges Constitutionality of Oregon’s Packaging EPR Law
On June 25, 2026, Lollicup USA (Lollicup), a manufacturer of single-use disposable products for the restaurant and food services industries, filed in federal district court a putative class action lawsuit (the Complaint), challenging the constitutionality of Oregon’s Plastic Pollution and Recycling Modernization Act, SB 582 (the Act or RMA). Like several other state laws, the RMA establishes extended producer responsibility (EPR) requirements for packaging products sold into or in the state. Lollicup filed the lawsuit against the Oregon Department of Environmental Quality (DEQ), the state regulator tasked with enforcing SB 582, following a May 13, 2026 “Notice of Unresolved Deficiency,” which, according to the Complaint, Lollicup received from the Circular Action Alliance (CAA). CAA is the nonprofit Producer Responsibility Organization (PRO) vested with authority under the RMA to, among other tasks, set and collect fees, and to refer non-compliant producers for enforcement to DEQ. According to the Complaint, “Lollicup’s file has been formally referred to [DEQ] for enforcement.”
This is the second lawsuit challenging the RMA’s constitutionality. The National Association of Wholesaler-Distributors (NAW) filed an initial challenge to the RMA in July 2025, alleging that the Act violates the Due Process Clause of the Fourteenth Amendment, the Dormant Commerce Clause, the federal Unconstitutional Conditions Doctrine, and the Oregon Constitution. NAW subsequently amended its complaint to seek a preliminary injunction, and on February 6, 2026, NAW obtained a preliminary injunction from enforcement by DEQ while that case is being tried, but only for NAW members as of the date of the court’s preliminary injunction order, February 6, 2026. Trial is set to begin on July 13, 2026. While the judge assigned to hear the NAW challenge rejected several attempts by industry organizations to join that lawsuit, the court all but invited others to “bring[] [their] own constitutional suit[s] challenging enforcement of the Act,” laying out several potential arguments for others to pursue.
The Lollicup lawsuit asserts two causes of action—violation of the Dormant Commerce Clause and Due Process Clause. The suit is brought on behalf of all regulated “producers” (as defined in the RMA) “that are not afforded the protection of the preliminary injunction entered in [the NAW lawsuit].” According to the Complaint, there are “thousands of other producers, who are subject to the Act but are not members of NAW[],” and “[t]he challenged scheme operates against every regulated producer in identical terms.” Lollicup seeks both a preliminary and permanent injunction against enforcement of the Act against itself and the proposed class members.
The Lollicup and NAW lawsuits highlight a growing tide of litigation challenging the constitutionality of well-intended state EPR laws that appear to go too far in imposing obligations on companies for managing disposal, recycling, and alleged pollution associated with packaging products. As we wrote here, on June 22, 2026, a coalition of 17 states, along with NAW, challenged the constitutionality of SB 54, California’s extended producer responsibility (EPR) law for packaging. In March, the Independent Lubricant Manufacturers Association (ILMA) challenged the constitutionality of Colorado’s packaging EPR law.
As the extraordinary costs of various state packaging EPR schemes on industry become clearer, producers are anxiously awaiting judicial responses to the various legal challenges. With a bench trial on the merits of the NAW lawsuit set to begin in a couple of weeks, the business community hopes to get a legal opinion on these important constitutional questions relevant to the Oregon law very soon.