Oregon DEQ Issues Enforcement Letters And Vows Not To Refund Fees Following Temporary Injunction That Questions Constitutionality Of EPR Law

In early February, a federal district court held that Oregon’s Extended Producer Responsibility (EPR) recycling law is likely unconstitutional. In issuing a temporary injunction that barred enforcement of the law against the plaintiffs in the lawsuit, the court found that constitutional challenges were likely to succeed on the merits. Yet, rather than pause enforcement of Oregon’s EPR law pending a final ruling on the merits, the Oregon Department of Environmental Quality (DEQ) has intensified its efforts to enforce the law by declining to refund prior fee payments and issuing warning letters to allegedly non-compliant entities not covered by the injunction. 

Oregon’s EPR law requires producers of packaging, paper goods, and food serviceware to register with a single, state-approved recycling organization and pay fees, under threat of civil penalties of up to $25,000 per day. The EPR law is administered by Circular Action Alliance (CAA), a private third-party entity, but enforced by DEQ. The U.S. District Court for the District of Oregon’s February 6 injunction enjoins enforcement only against members of the National Association of Wholesale Distributors (NAW), which brought the original lawsuit. 

Immediately after that ruling, DEQ declined to extend the pause on enforcement to any producers outside NAW’s membership. Accordingly, producers that are not NAW members remain subject to the Act, including the requirement to pay fee invoices sent by CAA that came due in March 2026.

In February, the agency confirmed its intention to continue enforcement. On February 9, 2026, Oregon Business & Industry (OBI), a trade association, wrote a letter to the Director of DEQ formally requesting enforcement of the EPR law to be stayed in light of the district court’s ruling. OBI emphasized that its members were concerned that payments already made under the program would be unrecoverable if the law were ultimately held to be unconstitutional. In a response dated February 13, DEQ stated that it had no intention of ceasing enforcement more broadly and that it did not intend to voluntarily issue any refunds, noting, “[t]here is no basis for refunding fees. Statutes require payment of fees and those statutes remain in effect.” 

DEQ hardened its posture on March 5, issuing formal warning letters to producers placed on the CAA’s noncompliance list for failure to register, report and/or pay. The letters carried no acknowledgment of the pending constitutional litigation and signaled that civil enforcement proceedings could follow.

Given DEQ’s enforcement posture, regulated producers now face a difficult decision: Pay fees that a federal court has already described as constitutionally suspect and that may never be refunded, or withhold payment and face escalating penalties. That tension will remain unresolved until the Oregon court issues its merits ruling after a trial scheduled for July.

Companies in this position, and especially ones who have previously received warning letters or notices to correct from DEQ, should not proceed without considering wider implications to their businesses. Foley’s environmental attorneys, who are well versed in administrative proceedings and enforcement, have helped clients subject to EPR laws maintain a delicate balance between complying with applicable laws and preserving future rights in litigation or administrative appeals. 

Please reach out to Betsy Stone or Nick Johnson with questions you may have about EPR laws and how they apply to your business.

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