Those fees help pay for standardizing Oregon\u2019s recycling standards and expanding recycling services to more communities. The distributors association argued the law was unconstitutional. <\/p>\n
After a five-day bench trial, U.S. District Judge Michael Simon sided with Leah Feldon, director of the Oregon Department of Environmental Quality, who was named in the lawsuit. Simon ruled that Oregon\u2019s Plastic Pollution and Recycling Modernization Act didn\u2019t violate commerce clauses in the U.S. Constitution. <\/p>\n
\u201cOregon has long been a national leader in waste prevention and recycling, and we\u2019re pleased that the court has recognized the state\u2019s authority to move forward with a modern recycling system that works for Oregonians,\u201d said Jen Parrott, DEQ administrator of land quality programs.<\/p>\n
The National Association of Wholesaler-Distributors is made up of 30,000 businesses representing the $8.6 trillion wholesale distribution industry. They range from mid-sized companies to publicly-traded corporations that rank among the Fortune 100. The association is challenging similar recycling laws in California and Colorado.<\/p>\n
![\"FILE:](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/08\/B4A5DWOLMZGUZACWVYNEFMJKUA.jpg\")
<\/p>\n
FILE: Cardboard packaging sits in a stack on top of a recycling bin outside a garage in Portland in 2026. Oregon lawmakers enacted a recycling system that shifts costs onto corporations, so they pay for the product packaging they bring to Oregon. <\/p>\n
Eli Imadali \/ OPB<\/p>\n
In court documents, the distributors association called Oregon\u2019s recycling system a \u201clabyrinthine scheme, shrouded in secrecy,\u201d that imposes fees on businesses that have little control over the rates they pay.<\/p>\n
They also argued the law discriminates against out-of-state businesses. In one example, the association noted exemptions for Oregon state, local and special government bodies, including Oregon public universities. <\/p>\n
Those in-state agencies don\u2019t need to pay product packaging fees, even when they sell branded merchandise. Out-of-state schools like Washington State University don\u2019t have the same exemption.<\/p>\n
The law also exempts small businesses with gross revenues under $5 million. The association argued this discriminates against companies with operations in multiple states. They presented an example: A $1 million-company solely with operations in Oregon would be exempt, but a company with $1 million-worth of operations in Oregon \u2014 in addition to other operations in other states \u2014 might still have to pay fees.<\/p>\n
Still, the judge found no evidence supporting their arguments. Simon wrote that by enacting the recycling law, \u201cOregon is exercising two fundamental police powers: mitigating waste pollution and protecting the health and safety of its citizenry.\u201d<\/p>\n
The ruling lifts a preliminary injunction that temporarily halted packaging payment requirements from the association\u2019s members. If a business fails to pay its required fees, it could face fees ranging from $375 to $3,000 a day.<\/p>\n
\u201cWhile we are disappointed with the outcome, we were prepared for it,\u201d the association\u2019s staff wrote in a press statement, adding that they are considering \u201coptions for next steps.\u201d<\/p>\n
If the association were to appeal Simon\u2019s decision, it would bring the case to the U.S. Court of Appeals for the Ninth Circuit.<\/p>\n