Federal judge will decide future of Oregon’s new package recycling law by end of August

PORTLAND — A federal judge will determine by the end of August the future of Oregon’s nascent statewide recycling modernization law, meant to require product manufacturers and distributors to cover some of the packaging disposal costs Oregonians currently pay via municipal and specialty waste fees.

“I truly have not made up my mind on what to do and how to analyze this problem and what conclusion to reach,” said U.S. District Court Judge Michael Simon on Friday afternoon following a five-day trial in National Association of Wholesaler-Distributors v. Feldon that began Monday.

The wholesaler-distributors association, a trade group representing what it says is the $8.2 trillion wholesale distribution industry, first brought the suit against Oregon’s 2021 Recycling Modernization Act in July 2025. In it, they allege the law is unconstitutional and inhibits interstate commerce.

The trade group represents hundreds of companies that buy bulk products, repackage them and resell them to consumers, and it includes food, beverage and electronics companies.

The suit names the Oregon Department of Environmental Quality and its director, Leah Feldon, the Environmental Quality Commission and Attorney General Dan Rayfield as defendants.

Throughout the week, lawyers for both sides called in recycling systems experts who scrutinized the efficacy, cost fairness and constitutionality of Oregon’s recycling modernization law and compared it to similar laws implemented in Germany, Canada and more recently in other states.

Although Oregon is the first state to start charging companies for some of the end-life waste disposal costs created by their packaging, and the first to be sued over it, six other states have enacted similar packaging laws. The wholesalers are challenging or joining in challenges brought by other industry groups in those states, and the ruling in Oregon could impact those cases.

The Oregon Legislature passed the state’s law in 2021, intending to create statewide standards for what can and cannot be recycled. The law established new packaging fees for companies that sell products in Oregon.

The fees, based on the weight and recyclability of the material, are meant to require product manufacturers and distributors to cover some of the packaging disposal costs currently borne by taxpayers, who pay for municipal garbage and recycling services that are dealing with increasingly complex materials. The law exempts producers who earn $5 million or less in gross revenue.

Products with less packaging and with reusable packaging carry lower fees than goods packaged in bulky plastics and single-use materials, ideally encouraging producers to choose lighter, more sustainable materials. It follows regulations in Oregon in recent years that require manufacturers to pick up some of the end-of-life costs of paint, mattresses and electronics, or to invest in programs to recycle such products.

Researchers cast doubt on one another’s work

The final day of testimony involved recycling experts questioning one another’s research and findings. The wholesalers earlier in the week brought in two experts: Douglas Thomas, a business professor and supply chain management expert at the University of Virginia who argued the law impedes interstate commerce, and Calvin Lakhan, a professor at York University in Toronto whose research into producer-waste-responsibility fees getting passed onto consumers has been used in the wholesalers other lawsuits against states.

Lakhan’s estimates for how much of the producer fees get passed to consumers in Canada, and how much would likely come out of Oregonians’ pockets have far exceeded what state officials in Oregon and elsewhere have projected. Lakhan advocates more investment in reducing waste as opposed to complex recycling systems, and scrutinizes the cost-effectiveness of Canada’s producer-responsibility fees.

The state in turn on Friday brought in Scott Cassel, CEO of the Product Stewardship Institute and Reid Lifset, a research scholar and resident fellow at the Yale School of the Environment and the founding editor of the Journal of Industrial Ecology.

Cassel and Lifset scrutinized Lakhan’s data and methodology and questioned some of Thomas’ rationale around impacts to interstate commerce given many countries in the European Union have implemented collectively and independently recycling programs and fees similar to what Oregon is attempting to impose.

Earlier this week, wholesale industry representatives focused on their allegation that Oregon’s law is unconstitutional because a private nonprofit is effectively charged with executing the program and doing the work of a government agency. They also argued that the nonprofit that the state selected — the Washington, D.C.- based Circular Action Alliance — provides little transparency about how it sets the fees producers pay and who qualifies as a producer, even leaving the state without a full understanding of how the program operates.

The alliance, founded in 2022 by 20 multinational corporations in the food, beverage, retail and consumer goods industries, including Amazon, CocaCola and Nestle, oversees similar programs in California and Colorado and is attempting to lead programs in Maine and Maryland. The wholesalers alleged in court earlier in the week that these companies have written the rules in their favor.

In Oregon, the alliance is in charge of setting and collecting fees for 60 different material categories based on weight and recyclability. The alliance and local governments participate in choosing where to invest the revenue from those fees, though state rules require money go toward projects that improve Oregon’s recycling infrastructure.

Kim Holmes, Oregon director for the alliance, spent much of her testimony earlier in the week defending the relationship between the alliance and Oregon’s environmental quality department, which is responsible for enforcement. She affirmed that enforcement against noncompliant companies is the job of Oregon regulators, that the fee structure has to be confidential because of other groups that do similar work to the alliance and that the methodology was reviewed and approved by Oregon regulators.