NAW’s challenge to Oregon’s 2021 recycling law has reached federal court this week, with the association arguing the law places excessive and unnecessary fees on distributors, interferes with interstate commerce, and is administered by a not-for-profit organization instead of a government agency.
The case will be decided by a judge, not a jury. The trial is expected to end on Friday, with no indication of when the federal judge will rule.
The recycling law impacts packaging, where product producers are held responsible for collecting and recycling some packaging materials. Distributors also face fees for products they receive from manufacturers. The fees go toward the state’s recycling infrastructure and technology upgrades. NAW won a preliminary injunction against the law last February.
The Circular Action Alliance is the regulatory group in charge of enforcing the law. The Circular Action Alliance is a private organization that was formed by some of the companies most impacted by the recycling law, including Coca-Cola, Walmart, and Amazon. Those companies could decide on potential fees for other companies, and themselves, under the law. NAW argues the fees are set in arbitrary amounts. NAW’s challenge states, “the law runs roughshod over fundamental due process rights by outsourcing taxing and regulatory authority to an unaccountable private party, without meaningful input or recourse.”
“This isn’t about recycling. This is a revenue raiser for the state of Oregon,” said Eric Hoplin, president and chief executive officer of the wholesaler-distributors association. NAW believes Oregon took in $167 million in recycling fees last year and only spent $55 million.
Hoplin is also defending distributors, saying they do not create the packaging, but have to pay for it. “If the point of the law is to reduce packaging, they’re targeting the wrong companies,” Hoplin said. “We receive the products from manufacturers and move them through the supply chain.” NAW’s attorney made the claim in court that some distributors are paying up to $25,000 a day in recycling fees to Oregon. NAW also claims Oregon never conducted an economic impact analysis” of the law.
Oregon claims the law’s intent is to require companies to comply with environmental standards for the products they sell. In court papers, they wrote, “Plaintiff’s members do not have a fundamental constitutional right to sell products into any state free of environmental or other regulations. And no Oregon law allows businesses to operate unfettered within its borders.”
The state says fees each year are based on tonnage of packaging reported the previous year. But during the trial, Kimbery Holmes Kantrowitz, the executive director of Circular Action Alliance, was allowed to tell the jury how fees are calculated without the public in the courtroom. Holmes Kantrowitz admitted under questioning from the NAW attorneys that the not-for-profit organization owes its members tens of thousands of dollars.
R.J Schinner, a distributor of disposable food service, janitorial, and paper products based in Washington state, claims it had no choice but to register with the state of Oregon in order to continue to do business there. In 2024, the company’s profit from Oregon sales was nearly $1.2 million, but it had to pay $884,000 in packaging fees to the Circular Action Alliance. Last year, it paid $915,000 in fees.
Lawyers from California were among those seated in the public gallery on the trial’s first day, as the national association along with a 17-state coalition last month filed a similar suit there to challenge California’s packaging recycling law.
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