Tox of the Town
SB 54 Under Fire: States and Industry Challenge California’s Packaging EPR Law
by Sedina L. Banks, Sherry E. Jackman, and Bryce Lourié
On Monday, June 22, seventeen states and the National Association of Wholesaler-Distributors sued California’s recycling and waste management agency (CalRecycle) and Circular Action Alliance to enjoin enforcement of California’s sweeping packaging EPR law, commonly known as SB 54. The lawsuit, State of Nebraska et al. v. Heller et al., No. 2:26-at-01047, was filed in the U.S. District Court for the Eastern District of California.
SB 54 requires that all single-use packaging and plastic food service ware in California be recyclable or compostable by 2032, with interim deadlines. Additionally, obligated producers must pay fees to a Producer Responsibility Organization (PRO) based on the amount of covered material that they put into the California market. The PRO then uses this money to implement programs for responsible waste management. While there are several packaging EPR laws around the country, SB 54 is widely regarded as the most ambitious.
The complaint alleges that SB 54 “offends state sovereignty” by “imposing its policy preferences” on other states. Further, it alleges that California has improperly delegated its power to an “unelected, unaccountable body,” the private PRO, Circular Action Alliance (CAA), which California has chosen to run its packaging EPR program. Finally, it alleges that SB 54 directly harms producers, manufacturers, distributors, and ultimately consumers by imposing burdensome costs that will increase the price of many goods.
Specifically, the complaint alleges the following:
- Violation of the Commerce Clause of the U.S. Constitution through (1) discrimination against interstate commerce, (2) placing substantial burdens on interstate commerce, and (3) imposition of unfairly apportioned taxes.
- Violation of due process and the separation of powers because the practical effect of SB 54 is to regulate commerce beyond California’s borders.
- Violation of the Import-Export Clause of the U.S. Constitution.
- Violation of the First Amendment and the California Constitution’s free speech protections by (1) forbidding companies from informing customers through a line item the portion of the price they are paying attributable to SB 54 fees and (2) compelling association with CAA.
- Violation of the Fifth and Fourteenth Amendments and the California Constitution’s non-delegation doctrine by improperly delegating state authority to private party CAA.
The complaint seeks declaratory relief that SB 54 and its implementing regulations are unenforceable, as well as an injunction against CalRecycle and CAA from implementing or enforcing SB 54.
Similar lawsuits challenging other state EPR laws have been filed in Oregon and Colorado. In February 2026, a federal court issued a preliminary injunction as to enforcement of Oregon’s packaging EPR law against the plaintiffs in that case. Trial in the Oregon case is scheduled for July 13, 2026.
Businesses affected by packaging EPR laws should continue to closely monitor the status of these lawsuits for any changes in obligations. If any of these lawsuits are successful, the implications for packaging EPR laws around the country could be significant.
