NAW joins 17 attorneys general in challenge to California EPR law

A 17-state coalition led by Nebraska Attorney General Mike Hilgers and joined by the National Association of Wholesaler-Distributors (NAW) filed a federal lawsuit (State of Nebraska et al. v. Heller et al., Case No. 2:26-at-01047, E.D. Cal.) challenging California's “Plastic Pollution Prevention and Packaging Producer Responsibility Act,” known as SB 54. NAW is joining as the only business plaintiff in the case.

Along with Nebraska, the attorneys general of Alabama, Florida, Georgia, Idaho, Indiana, Iowa, Louisiana, Missouri, Montana, North Dakota, Oklahoma, South Carolina, South Dakota, Texas, Utah, and West Virginia joined the action. The coalition is asking the court to block enforcement of California's extended producer responsibility (EPR) law while the case proceeds.

California's vast and complex law requires businesses to register with and pay fees to the Circular Action Alliance (CAA), a private DC-based entity appointed by the state and authorized to both set and collect fees on everything from glass and aluminum to paper, cardboard, and plastic packaging. The founding board of CAA is composed of many of the world’s largest consumer goods companies. California has delegated to CAA the power to create its own fee methodology that is declared confidential. Businesses subject to the Act’s fees cannot challenge the assessments in court. Their only recourse is binding arbitration run by CAA itself.

"No state should limit interstate commerce, let alone delegate the power to set and collect taxes to a third party outside of the scope of public scrutiny," said Eric Hoplin, President and CEO of NAW. "A federal court blocked enforcement of a similar law in Oregon earlier this year, and we are asking the court to do the same in California.”

The coalition argues California's law violates four constitutional principles by, among other things:

1. Discriminating against businesses selling into the state in violation of the Commerce Clause

2. Imposing content-based restrictions on speech in violation of the First Amendment

3. Compelling NAW members to join CAA in violation of the First Amendment

4. Delegating to a private entity government authority to regulate and impose mandatory taxes and fees on businesses selling into California without adequate legislative standards or public oversight to a private organization.

“California cannot reach across state lines and force businesses in Nebraska, or any other state, to adopt California’s preferred environmental policies,” said Nebraska Attorney General Mike Hilgers. “California does not get to set national policy. Nebraska is leading this coalition because the constitutional problem here belongs to every state.”

In February 2026, a federal court in Oregon granted NAW members injunctive relief over the enforcement of the Plastic Pollution and Recycling Modernization Act, Oregon’s structurally similar EPR law, finding it raised serious constitutional questions under the Due Process Clause and the Dormant Commerce Clause of the U.S. Constitution. That ruling was the first time a court had blocked a state EPR law. The merits trial in that case is scheduled for July 13–17, 2026, in Portland, OR.

California's regulations took effect May 1, 2026.