A coalition of 17 US states has filed a federal lawsuit challenging SB 54, California’s Plastic Pollution Prevention and Packaging Producer Responsibility Act. The suit, filed on 22 June 2026 in the US District Court for the Eastern District of California, seeks to block enforcement of one of the most far-reaching packaging extended producer responsibility (EPR) programs in the United States. For an industry already navigating a patchwork of state-level EPR laws, the case raises fundamental questions about how far a single state can extend its packaging requirements across national supply chains.
TABLE OF CONTENTS
What SB 54 Requires
SB 54 is California’s flagship packaging EPR and source reduction law. Its core obligations are demanding: by 2032, producers must cut single-use plastic packaging and foodservice ware by 25 %, ensure 65 % of such material is recycled and guarantee that 100 % of single-use packaging and plastic foodservice ware is recyclable or compostable.
Implementation runs through the Circular Action Alliance (CAA), the nonprofit producer responsibility organization selected by CalRecycle to administer the program. The financial scale is significant: CAA has projected the California program budget could reach up to $1.87 billion in 2027 and as much as $17.2 billion over the next five years, funded through producer fees. Producer fee obligations are scheduled to begin on or before January 1st 2027.
The Basis of the Legal Challenge
The coalition, which includes 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, alongside Nebraska, argues that SB 54 amounts to regulatory overreach that extends well beyond California’s borders. Their central contention is that by conditioning access to the California market on compliance with the state’s packaging requirements, California effectively sets national packaging policy without congressional authorization.
The complaint raises several constitutional grounds, including alleged violations of the Dormant Commerce Clause, the First Amendment and the Due Process Clause. The argument is that businesses located outside California are forced to adopt the state’s environmental standards or lose access to the most populous US market, a burden the plaintiffs say raises costs for consumers nationwide.
The National Association of Wholesaler-Distributors (NAW) has joined the case as the sole business plaintiff. NAW is not new to this fight: it previously secured a preliminary injunction delaying enforcement of Oregon’s structurally similar EPR law for its members. That Oregon case, the first time a court had blocked a state EPR law, went to trial in mid-July 2026, with a federal judge expected to rule by the end of August. The outcome could directly influence the California case.
The Defendants’ Position
According to Packaging Dive, CalRecycle, which does not comment on pending litigation, stated that it remains focused on implementing SB 54 and advancing the requirements established in statute. The Circular Action Alliance similarly indicated that its role is unchanged, saying it continues to implement SB 54 consistent with state law and regulatory oversight. CAA also pointed to its record on fee-setting transparency and noted it has launched a consultative effort to engage the producer community in the fee-setting process.
The lawsuit is not the only legal pressure on SB 54. The law has separately been challenged by environmental organizations, including Oceana, the Natural Resources Defense Council and the Californians Against Waste Foundation, who argue from the opposite direction that the final regulations weaken the law’s recycling and reduction targets. A further federal case over California’s SB 343 ‘truth in labeling’ law resulted in a preliminary injunction on 14 July 2026, blocking enforcement of the law that was due to take effect in October 2026.
Why This Matters Beyond the US
For European producers and exporters, the California case is a useful illustration of a broader tension that also runs through EU packaging policy: the friction between ambitious sub-national or national environmental requirements and the free movement of goods across a shared market. The dynamic mirrors, in some respects, the infringement pressure the European Commission has applied to national labelling schemes that it considers barriers to the single market. In both systems, the central question is the same, how far one jurisdiction can set packaging rules that, in practice, dictate the terms of trade for producers based elsewhere.
For businesses selling into the US market, the immediate practical implication is uncertainty. Until the courts rule, producers face the prospect of preparing for SB 54 compliance while its enforceability remains contested – a situation that complicates investment and reformulation planning.
Conclusion
The 17-state challenge to SB 54 is the most significant legal test yet of packaging EPR in the United States and its outcome, together with the Oregon ruling expected by end of August, will shape the trajectory of producer responsibility law across the country. For now, California maintains that implementation continues on schedule. Whether the courts agree that a state may condition market access on packaging requirements that reach across state lines is a question with implications well beyond packaging and one that producers on both sides of the Atlantic will be watching closely.
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