Dive Brief:
- Lollicup USA, a wholly owned subsidiary of publicly traded Karat Packaging, is leading a class action lawsuit against Leah Feldon, director of the Oregon Department of Environmental Quality, over Oregon’s extended producer responsibility for packaging law, known as the Plastic Pollution and Recycling Modernization Act.
- Lollicup’s attorneys filed the lawsuit on June 25 in the U.S. District Court for the District of Oregon in Portland. The plaintiff wants the law to be declared unconstitutional and for there to be an injunction against enforcement.
- The lawsuit cites an ongoing case in Oregon brought by the National Association of Wholesaler-Distributors last year. Lollicup seeks to represent producers that were not covered by a preliminary injunction currently blocking enforcement of the law for NAW members.
Dive Insight:
Lollicup USA’s complaint calls Oregon’s EPR law “an unprecedented experiment in privatized regulation.”
The Texas-based company manufactures and distributes food serviceware, including PET thermoformed cups and trays, polypropylene containers and polycoated paperboard cups, as well as plastic lids, straws and cutlery. The plaintiff said it ships items to the Oregon market from California, and to comply Oregon’s law it would have to implement “significant operational changes at those California-based facilities,” among other burdens.
As with NAW’s case, Lollicup’s complaint alleges that Oregon’s EPR implementation violates the Dormant Commerce Clause and the Due Process Clause of the Fourteenth Amendment.
Referring to Oregon’s selected producer responsibility organization, Circular Action Alliance, the complaint says the law in part “conscripts a national supply chain into a state-specific regulatory regime that is opaque, retrospective, unilaterally revisable, judicially unreviewable, and administered by a private actor whose founding members and board are the very industry participants the Act empowers them to regulate.”
Lollicup has been a registered producer in Oregon since Sept. 25, 2025, according to the complaint. Since then, the company has been warned multiple times by CAA and DEQ about noncompliance issues.
“CAA’s founding members and board members occupy both sides of the regulatory relationship: they sit on the body that sets the fees, and they receive the incentives and fee adjustments that the body grants,” the complaint states. “Mid-size and smaller producers – including Lollicup – have no comparable access to the fee-setting machinery and no representation on the board that sets it.”
NAW filed its federal lawsuit in Oregon court last July after Oregon became the first U.S. state to kick off a packaging EPR program. NAW’s lawsuit targeted the Oregon Department of Environmental Quality, the Oregon Environmental Commission and Oregon Attorney General Daniel Rayfield.
Added between 1st and 2nd edit: All the while, CAA has continued to collect and dole out funds in Oregon, including rolling out thousands of recycling carts in the state.
Lollicup’s case was assigned to Judge Michael Simon, who is also presiding over the NAW case that is due to go to trial starting July 13. Discovery in the Lollicup case is to be completed by Oct. 23, and a pretrial order is due by Nov. 23, according to the court docket.
Lollicup’s case is the latest to challenge state packaging EPR laws. Last week, Nebraska’s attorney general filed a federal lawsuit on behalf of 17 state attorneys general challenging California’s packaging EPR law, which NAW also joined as the sole participating business entity. That case alleges violations to the Commerce Clause and the First Amendment, among other issues.
