The legal battle surrounding Oregon’s pioneering recycling reforms has intensified as the American Forest & Paper Association (AF&PA) officially moved to intervene in a high-stakes lawsuit against the state’s environmental regulators. By filing to join the ongoing litigation, National Association of Wholesale Distributors v. Leah Feldon, et al., the AF&PA has signaled a significant escalation in the industrial pushback against Extended Producer Responsibility (EPR) frameworks that are currently sweeping across the United States. The association is not only seeking to be a party to the case but is also requesting a temporary stay—a legal pause—on the implementation of the law, mirroring the request previously granted to the National Association of Wholesale Distributors (NAW).
At the heart of this dispute is Oregon’s Plastic Pollution and Recycling Modernization Act (SB 582), a landmark piece of legislation passed in 2021 designed to overhaul the state’s aging recycling system. While the law aims to reduce plastic waste and streamline the recycling process by shifting the financial burden from local governments and taxpayers to the "producers" of packaging, the paper and forest products industry argues that the mandate is a "one-size-fits-all" solution that unfairly penalizes materials that are already being recycled at record-high rates.
Heidi Brock, the President and CEO of the AF&PA, expressed the industry’s growing frustration with the trajectory of these policies. According to Brock, EPR initiatives like the one in Oregon are moving in a fundamentally "wrong direction." She contends that rather than fostering a more circular economy, the current structure of Oregon’s EPR program is poised to create a bureaucratic nightmare characterized by escalating fees, a lack of fiscal transparency, and unnecessary operational complexity. The core of the industry’s grievance lies in the belief that the law fails to acknowledge the pre-existing, highly efficient, and privately funded recycling infrastructure that the paper industry has spent decades perfecting.
The paper industry occupies a unique position in the recycling value chain. Unlike many other packaging sectors that are still struggling to find viable end-markets for their waste, the paper and paperboard industry boasts a recovery rate that is often cited as a gold standard. In the United States, the recycling rate for paper has consistently hovered around 65% to 68% for several years, with corrugated cardboard (OCC) reaching recovery rates as high as 90%. This success is the result of billions of dollars in private investment. The AF&PA highlights that its members operate more than 100 materials recovery facilities (MRFs) across the country and have invested heavily in mill-based infrastructure designed specifically to utilize recycled fiber.
The intervention in the Oregon lawsuit is based on the argument that treating paper packaging the same as hard-to-recycle plastics or glass distorts the market. When a state imposes blanket mandates and uniform fee structures across all material types, it effectively forces high-performing industries to subsidize the development of recycling systems for materials that are currently failing. "Rather than penalizing materials like paper and paper packaging that are already widely recycled, policymakers should prioritize approaches that build on existing success and deliver measurable improvements," Brock stated. The industry argues that by ignoring the decades of progress made in paper recovery, the Oregon law risks stifling innovation and adding unnecessary costs to consumers and businesses alike.
The legal challenge specifically names Leah Feldon, the Director of the Oregon Department of Environmental Quality (DEQ), as the lead defendant. The DEQ is the agency tasked with implementing the Plastic Pollution and Recycling Modernization Act, which includes the creation of Producer Responsibility Organizations (PROs). These PROs are tasked with collecting fees from companies that sell products in Oregon and using those funds to pay for improvements to the state’s recycling infrastructure. However, the NAW and now the AF&PA argue that the administrative reach of the DEQ and the requirements of the PROs may exceed constitutional or statutory bounds, particularly regarding the Commerce Clause and the way fees are assessed on out-of-state entities.
Oregon’s law is a significant departure from traditional recycling models in the U.S. Traditionally, recycling has been a municipal service funded by local taxes or utility fees. Under SB 582, the "producer"—which can include manufacturers, brand owners, or distributors—must join a PRO and pay into a fund that covers the cost of processing their materials. The law also establishes a "Uniform Statewide Collection List," which dictates exactly what can and cannot be recycled across the entire state. While the state argues this will eliminate consumer confusion, the paper industry fears it removes the flexibility needed to respond to changing market demands for recycled fiber.
The economic implications for the distribution and packaging sectors are profound. Distributors, represented by the NAW, find themselves caught in the middle of a complex regulatory web. Many of these businesses do not manufacture the products they sell, yet they are categorized as "producers" under the law because they are the first point of entry for the products into the Oregon market. The added costs of compliance, reporting, and fee payments are expected to trickle down to the consumer, potentially raising the price of basic goods packed in paper or cardboard—materials that are already environmentally responsible.
Furthermore, the AF&PA argues that the EPR mandates could actually discourage the very innovation the law seeks to promote. By imposing rigid fee structures that do not fully account for the "design for recyclability" already inherent in paper products, the law may provide little incentive for other industries to improve their own packaging. The paper industry maintains that its track record proves that market-based incentives and private investment are more effective than government mandates. They advocate for a policy approach that is grounded in data and focuses on specific problem materials rather than a broad-brush regulation that disrupts functioning markets.
This legal battle in Oregon is being watched closely by environmental groups, industry leaders, and policymakers across the nation. Oregon was one of the first four states—alongside Maine, Colorado, and California—to pass an EPR law for packaging. Since then, Minnesota has joined the list, and several other states are considering similar legislation. If the court grants the AF&PA and NAW the requested pause or eventually rules in their favor, it could set a major precedent that forces other states to rethink how they categorize and tax different materials within their own EPR frameworks.
The AF&PA’s move is also a call for transparency. The association has raised concerns about how the collected fees will be managed and whether they will be used effectively to improve recycling outcomes. In many EPR systems globally, there is a tension between the government’s desire for revenue and the industry’s demand for accountability. The paper industry is essentially arguing that it should not have to pay into a system to "fix" a problem it has already largely solved through its own capital.
As the litigation proceeds, the focus will likely remain on the definition of "fairness" in environmental policy. Proponents of the Oregon law argue that the climate crisis and the plastic waste epidemic require radical shifts in how we handle all waste, regardless of current recycling rates. They believe that even successful industries must contribute to a centralized fund to ensure the entire system is modernized. Conversely, the AF&PA and its allies represent a growing coalition of industries that believe environmental progress is best achieved through targeted, material-specific strategies rather than sweeping state-run mandates.
The request for a stay is the immediate hurdle. If granted, it would halt the implementation of the law’s most stringent requirements, providing the industry with a reprieve while the deeper constitutional and administrative questions are debated in court. For the AF&PA, the goal is a policy environment that supports "fair, effective, and grounded in data" regulations. They continue to urge Oregon’s leadership to pivot toward a system that rewards performance and respects the existing infrastructure of the forest products sector.
In the broader context of the circular economy, this lawsuit highlights the friction between legislative ambition and industrial reality. As states continue to experiment with EPR, the outcome of National Association of Wholesale Distributors v. Leah Feldon will serve as a critical benchmark. It will determine whether the "Oregon Model" becomes a blueprint for the rest of the country or a cautionary tale of regulatory overreach that failed to account for the complexities of global supply chains and the proven success of the paper recycling industry. For now, the AF&PA stands firm in its position: the paper industry is a recycling success story, and it refuses to be penalized for its own achievements.
