Extended producer responsibility (EPR) has stopped being a policy debate and has turned into an invoice.

EPR laws are now live in Oregon and Colorado, while California has opened its registration window ahead of billing in 2027, and a federal judge in Portland is expected to rule before the end of August on whether the first of those laws is constitutional at all.

The intent behind EPR is not hard to defend. The concept originated in Europe, moved to Canada, and has now taken hold in seven U.S. states, built on the premise that companies contributing waste or materials that end up in landfills and recycling centers should help pay to maintain that infrastructure. Dan Schuberth, chief revenue officer at the National Association of Wholesaler-Distributors (NAW), said the idea is simple and “it’s got some merits in terms of its intent.”

Keep reading and/or watch the “Navigating Extended Producer Responsibility (EPR): Litigation Updates from NAW” webinar replay below.

The definition swallows the supply chain

“The definition of ‘producer’ in these laws is so broad that it encompasses essentially the entire manufacturing supply chain, the distribution supply chain, in addition to a good portion of the retail supply chain,” Schuberth said.

Any company introducing covered packaging material into a state with an EPR law must report the annual poundage to that state’s environmental agency and pay a fee tied to the volume of material. What matters is not who manufactured the product but whether material crossed into the state and is expected to end up in a recycling center or a landfill.

Eric Hoplin, president and CEO of NAW, said the laws are “much more onerous than I think anybody expected, both on the compliance side and certainly on the cost side.”

Counting tape by the pound

The products themselves (i.e. the glass vials, tubes, and plastic bottles that carry cleaning chemicals) and the materials used to transport them (i.e. corrugate, void filler, dunnage, and even the tape used to seal cartons) must all be reported and are subject to compounding fees. If a company’s name is on a box, states treat that company as the producer, and pile on yet another layer of fees.

NAW heard the earliest complaints from five sectors: paper and packaging, food and food service, janitorial and sanitation, automotive and aftermarket parts, and general MRO. One food distributor reported a $15 million bill in Colorado with a five-year projection roughly twice that amount.

California offers a calculator that estimates what a company will owe once invoices begin. “It is an eye-watering number that’s going to come back to businesses,” Schuberth noted. National distributors selling cleaning products into the state may be on the hook for $30 – $40 million in fees per year in California alone, while some of the bigger players in the jansan space face bills topping eight figures.

The case against the laws

NAW’s position is not that EPR needs adjusting. “We believe that these laws are fundamentally unconstitutional. They are not designed to be fixed. They’re designed to be stricken from the books,” Schuberth said.

EPR laws structurally violate several constitutional clauses. The first is the dormant Commerce Clause, which restricts power to regulate and tax interstate commerce to Congress. States with EPR laws are effectively creating their own federal trade policies by applying fees to materials that originate outside the state. The 17 state attorneys general who NAW joined to file a lawsuit against California argue that their residents are being forced to pay for California’s EPR program through higher prices for products and services.

The second is the constitution’s Due Process clause. Packaging fee schedules are developed by the Circular Action Alliance (CAA), the private organization appointed to administer state EPR programs, not the states themselves. Handing taxation power to a private organization, with virtually no governmental oversight, is a violation of the Due Process Clause’s nondelegation doctrine.

In California and Colorado, businesses are required to join and financially support CAA as a condition of doing business in the state, and they’re separately barred from disclosing EPR fees to their own customers on invoices. Compelled silence and association are both violations of the First Amendment.

Nobody will explain the math

CAA’s board includes some of the largest packaging producers in the country. “They want to design a system where they pay the least possible, while the rest of us pay the most possible. But they won’t tell us how they decide,” Hoplin said. The algorithm behind the fees is confidential, a point NAW litigated in Oregon and is pressing in California and Colorado. “These handful of companies get to decide what everyone else has to pay,” Hoplin added.

One distributor testified in Oregon that fees applied to the same materials rose 47% from one year to the next, with no explanation given for why the hike was deemed necessary. “What business can manage its expenses and its operation when they have no idea how this is calculated?” Hoplin said. Others testified that their delivered costs in neighboring states run 50% above competitors’ because shipments originate from Oregon distribution hubs.

Penalties are spelled out. Oregon can assess $25,000 per day, for every day a company is out of compliance. “They’re very clear about what the penalty is for not complying. They’re a lot less clear on what we need to be doing to comply,” Hoplin said.

Who owes what is still contested up and down the supply chain. “10 different people could look at this same law and reach 10 totally different conclusions about who in the supply chain should be paying the bill,” Schuberth said, adding that “it’s almost like it’s intentionally ambiguous.” One interpretation holds that a distributor taking title to a sleeve of cups owes only on the packaging it adds. Another holds that it owes on everything it moves into the state, cups included. Both interpretations surfaced in the Oregon case.

Where the money goes is a separate concern. In 2025, Oregon collected roughly $110 million more than it needed to stand up its EPR program. Meanwhile, California’s law does not even require EPR revenue to be used for recycling. Schuberth described the pattern as a budget gap being filled without asking voters directly. “You can’t bend the Constitution to come up with gimmicks, revenue raises, and stop gaps to fill budgets,” he said.

Three lawsuits, three circuits

Oregon was the first state where NAW filed a lawsuit. It was also the first legal challenge to the constitutionality of an EPR law. A federal trial took place the week of July 13 in Portland. Prior to the trial, on February 6, Oregon granted a preliminary injunction to NAW member companies paying dues. That narrower relief tracks recent Supreme Court limits on district judges granting broad relief beyond the plaintiff. A ruling is expected before the end of August, the first in the country on the constitutionality of an EPR law.

In California, NAW joined a coalition of 17 state attorneys general to file a lawsuit against the state, naming CAA as a defendant. Because California’s mandatory fees don’t take effect until 2027, NAW is seeking injunctive relief before billing begins, rather than after enforcement is already underway, as was the case in Oregon.

NAW has also requested injunctive relief in Colorado.

Where compliance work still matters

Litigation does not relieve anyone of compliance while the laws stand. John Nothdurft, ISSA vice president of government and public affairs, said ISSA has published a member white paper summarizing state-by-state laws, including how products are classified, and is updating it as more states act. “It’s not going to give you all the technical advice you need but at least give you some sense of what you need to do to comply,” he said.

The gap between intent and execution is where the frustration sits. Nothdurft said ISSA supports sustainability goals and that the idea behind many of these bills comes from a good place, but “the devil’s in the details.” Even large companies are struggling with the calculations, he noted.

Some suppliers learned that lesson after the fact. Schuberth described janitorial, sanitation, and packaging companies that initially saw EPR as an opportunity, having pushed sustainable products for years and expecting lower fees as a result. Their bills arrived with those products categorized like everything else. “They’re not avoiding tax. They’re simply doing the right thing but not receiving any sort of a financial reward for that,” Nothdurft added.

“State-level policy is hard to follow, certainly compared to federal,” Schuberth said, and state capitals are where the experimentation is happening now. Seven states have EPR laws on the books, all built on similar frameworks, which is why a ruling from a Portland district court is being watched closely in six other states.