CHICAGO, June 26, 2026 — Seventeen states are suing California to block enforcement of the state’s sweeping extended producer responsibility (EPR) law, arguing that lawmakers there exceeded their authority by enacting regulations that affect packaging manufacturers nationwide.
The measure aims to shift the cost of recovering plastic food containers and disposable utensils to the materials’ producers, who in turn are expected to pass along the expense to their wholesale customers. The underlying law, SB 54, expressly prohibits buyers like restaurants from channeling the cost down to consumers by tacking surcharges onto guests’ tabs.
The cost and logistical burdens of recovering the disposables is currently borne by local and state governments. By shifting the expense to producers and users, the government hopes to drastically curtail the use of plastic food packaging within the state.
Enforcement of the law is expected to begin on Jan. 1. Packaging manufacturers and buyers have argued for an extension, noting that many details of the recovery process, including the fees that will be charged up and down the supply chain, have yet to be determined.
The complexity of the recovery program is reflected in the report that was issued June 15 by the Circular Action Alliance (CAA), a packaging industry-backed group that has been designated as the administrator of the reclamation process. In 361 pages, it puts forth a planned set-up for channeling materials back up the supply chain, but does not include such key details as the precise fees various links will be required to pay.
The law only applies to plastic food packaging used in California, one of seven states with an EPR law on the books. But because California is the nation’s largest foodservice market, it’s a plum target for food-container and disposable-ware manufacturers located elsewhere.
The federal lawsuit filed Monday contends that the state is exceeding its power by dictating requirements that parties elsewhere will have to meet if they want to do business in the coastal jurisdiction.
“California is not entitled to pronounce nationwide policies; it has no power to 'project its legislation' into other States as if it were first among equals,” the suit alleges.
The suit also asserts SB 54 "purports to delegate a wide swath of California’s legislative, regulatory, enforcement, and taxing authority to an unaccountable private organization: The Circular Action Alliance.” In delegating so much governmental authority to a nongovernmental entity, the action contends, the law is unconstitutional.
The CAA is named as a defendant in the suit.
The collaboration of packaging producers is serving as the EPR administrator—known as the Producer Responsibility Organization, or PRO—in six of the seven states that have enacted EPR laws. Maine, the first state to pass such a law, is the only jurisdiction using a different setup.
Although the recovery requirements and program being developed for California will be unique to that state, EPR proponents in New York, New Jersey and Massachusetts have indicated they’re eyeing SB 54 as a model for their legislation.
Other states with EPR legislation already under consideration include Virginia and Rhode Island.
The feasibility of an EPR system is being studied by nine more: Illinois, Georgia, North Carolina, Connecticut, Hawaii, Tennessee, Wisconsin, Missouri and New Hampshire.
California is viewed as a high-profile illustration of EPR’s feasibility and impact because of the market’s size. The state is also viewed as a progressive state, often adapting measures that are subsequently copied elsewhere.
The lead plaintiff in the lawsuit filed June 22 is Nebraska. The other participating states are Alabama, Florida, Georgia, Idaho, Indiana, Iowa, Louisiana, Missouri, Montana, North Dakota, Oklahoma, South Carolina, South Dakota, Texas, Utah and West Virginia.
The National Association of Wholesaler-Distributors is also a plaintiff.
The suit was filed in the U.S. District Court for the Eastern District of California. It seeks an injunction against the enforcement of SB 54.