A first-of-its-kind five-day bench trial came to a close in Portland on Friday after the plaintiff, the National Association of Wholesaler-Distributors, sought to expose constitutional cracks in Oregon’s extended producer responsibility for packaging program and state environmental regulators in charge of the program defended it.
In the span of less than a year, NAW filed its lawsuit, secured a preliminary injunction to temporarily block enforcement against its members and, last week, made its argument in court before Judge Michael H. Simon. NAW alleged problems with due process, burdens on interstate commerce and more, and took issue with aspects of producer responsibility organization Circular Action Alliance’s role in the program.
NAW told Packaging Dive on Monday that it awaits the court’s decision with anticipation.
“The legal argument focused on whether a private company can be handed the power to set mandatory fees on businesses, with no public process behind the number and no independent way to contest it,” said Brian Wild, NAW’s chief government relations officer, in an emailed statement. Wild said NAW supports environmental goals, but believes the program’s structure is unconstitutional and not clearly effective.
One of many points that stood out to observing lawyers was that the Oregon Department of Environmental Quality’s side suggested it did not really consider impacts in other states when formulating its law. “I think that when they were creating this program, they didn't necessarily realize the breadth and scope of attention that Oregon's EPR program was going to receive,” said L. Claire Hansen, associate at law firm Bergeson & Campbell.
Post-trial briefings are due by July 31, and any motions for further oral arguments are due by Aug. 3.
What’s next
Attorneys at Bergeson & Campbell blogged the trial day by day. They noted six specific questions that the judge posed for the post-trial briefings, largely centered on NAW’s procedural due process claim.
The post-trial briefings will apply the testimony to the law, covering the basis for the parties’ arguments, explained Jennifer Kwapisz, partner at law firm Arnold & Porter.
“Very often, courts, when they do draft their opinions, will pay very close attention to that post-trial briefing and to the authorities that are cited in there,” she said. “The post-trial briefing is where we'll see the most comprehensive set of arguments and evidence laid out.”
The court likely would want to avoid further testimony to ensure a decision as soon as possible. “There’s not a specific timeline,” Kwapisz noted. She said it’s clear the judge has wanted to keep things moving along, which factored into other parties not being allowed to join NAW’s case. “I think, given that background, the court has a lot of motivation to issue a decision quickly.”
Further implications
Producers are navigating compliance amid concerns that Oregon’s program could be partially or wholly struck down and companies may not be able to recoup fees already paid into it. Those concerns in part stem from commentary from Oregon DEQ’s counsel during the February preliminary injunction hearing, according to Stacey Halliday, partner at Arnold & Porter.
During the trial, DEQ detailed how it’s dividing enforcement responsibilities from CAA: While CAA has to publish producer delinquency lists, it’s up to DEQ to determine and exercise enforcement. Halliday noted that CAA published its first producer delinquency list this spring, but DEQ has not yet publicly announced cases of monetary penalties.
“My interest is in watching to what extent there will be more transparency around the enforcement process from CAA and DEQ to delineate those separate roles, particularly given the increased scrutiny of their oversight of the EPR program during litigation,” Halliday said.
There are also implications from this case for the class action lawsuit Lollicup USA filed in Oregon in June. That case was also assigned to Simon and is considered a related case, given the overlap with NAW’s arguments. Last week, the court granted a motion to extend deadlines and to file a joint status report following the court's decision in the NAW case. That status report is due by Sept. 10.
Another area where insights from the NAW trial could come up this year is in CAA’s California program plan, for which the public comment period is open until Aug. 14. Halliday expects a revised plan will take into account issues brought to light in the Oregon trial.
Given lawsuits in other states and heightened attention on burdens to interstate commerce, the idea of a federal packaging EPR framework has also resurfaced, the Bergeson & Campbell attorneys noted.
“I do think we'll see more more funding allocated toward some of those efforts at the federal level,” said Catherina Narigon, associate at Bergeson & Campbell.
