Litigation Threatens Enforcement of California’s SB 54 Efforts To Reduce Plastic Waste

Two lawsuits—one filed by numerous state attorneys general claiming that the law is unconstitutional, the other filed by environmental groups arguing that the regulations developed by the state to implement the law weaken it too much—threaten California's landmark law aimed at reducing plastic packing waste in California.

CalRecycle, the state agency overseeing recycling management in California, estimates that packaging constitutes over 50% (by volume) of waste disposed of in California's landfills. The Plastic Pollution Prevention and Packaging Producer Responsibility Act—more commonly known as Senate Bill 54 or SB 54—was signed into law in 2022 and requires reductions in the use of and increases in the recycling and composting of single-use plastic packaging and food service ware.

SB 54 is one of several of California's Extended Producer Responsibility (EPR) laws, which typically seek to hold businesses accountable for the financial burden of managing the waste streams associated with consumer products and packaging. (Other EPR laws in California target textiles, batteries, battery-embedded products, carpets, and other goods.)

CalRecycle has characterized SB 54 as "the most significant overhaul of California's plastics and packaging recycling policy in history," and as going "further than any other state on cutting single-use plastic at the source and represents a giant step toward a more circular economy that is essential to combat climate change." CalRecycle, SB 54 Plastic Pollution Prevention and Packaging Producer Responsibility Act Permanent Regulations. California is one of several states, including Oregon, Maine, Colorado, and others, that has recently enacted EPR legislation aimed at consumer product companies and plastic packaging waste.

Compliance with SB 54 presents significant burdens to businesses, such as joining a producer responsibility organization or "PRO," complex data submissions, payment of eco-modulated fees, and meeting aggressive recycling and source reduction benchmarks. Indeed, CalRecycle's first attempt at formal rulemaking to develop implementing regulations for SB 54 failed.

Beginning in March 2024, CalRecycle held three public comment periods. Just before the one-year deadline to finalize the draft rules, in March 2025, Gov. Newsom directed CalRecycle to start over "to ensure California's bold recycling law can achieve its goal of cutting plastic pollution and is implemented fairly" while "minimizing costs for small businesses and working families as much as possible." Susanne Rust, "Newsom Stymies Implementation of Landmark California Plastic Law, Orders More Talks," Los Angeles Times (March 7, 2025); Recycling Today, "Newsom orders SB 54 revision."

CalRecycle's second attempt to create regulations to implement SB 54 began in August 2025, and the regulations were finalized and approved in May 2026, setting off a series of onerous data collection, submission, and fee requirements for businesses selling consumer goods in California.

A month later, on June 2, 2026, three environmental groups—the Natural Resources Defense Council, Californians Against Waste Foundation and Oceana Inc.—filed a lawsuit arguing that the revised regulations "weakened" SB 54 and otherwise created "giant loopholes that undermine [SB 54's] recycling and plastic reduction goals." NRDC, Environmental Advocates to Challenge Plastics Regulations in Court. The environmental groups also claim that changes in the 2026 regulations create recycling rate compliance loopholes. Overall, the groups argue that CalRecycle's final 2026 regulations create invalid exclusions and exemptions to SB 54's requirements and fail to prevent the use of harmful recycling technologies that SB 54 should restrict. The environmental groups' complaint asks the court to require CalRecycle to address and correct the "weakened" regulations and to continue to implement and enforce SB 54 while developing the corrected regulations. Verified Pet. for a Writ of Mandate and Compl. for Declaratory and Injunctive Relief, No. CPF-26-519769 (SF. Superior Court June 25, 2026).

A few weeks after the environmental groups sued CalRecycle on the basis that the regulations weakened SB 54, on June 22, 2026, 17 states led by Nebraska's Attorney General, along with the National Association of Wholesaler-Distributors (NAW), filed suit against CalRecycle and the Circular Action Alliance (the PRO for SB 54) arguing that SB 54 is unconstitutional. Calling SB 54 an "offen[se to] State sovereignty," the attorneys general of Alabama, Florida, Idaho, Indiana, Iowa, Louisiana, Missouri, Montana, North Dakota, Oklahoma, South Carolina, South Dakota, Texas, Utah and West Virginia joined with Nebraska and the NAW in arguing various violations of the United States and California Constitutions, including the commerce and due process clauses, and the First Amendment. The states and NAW ask the court to halt implementation or enforcement of SB 54.

Consumer product companies are left in limbo for now, working to comply with SB 54 and the complex data collection, reporting, and fee schemes established by the regulations and CAA, notwithstanding these legal challenges. Businesses and environmental groups are closely monitoring these cases, particularly waiting to see if the states and NAW in Nebraska v. Heller seek a court order to pause SB 54 while the litigation proceeds.

However, a similar case in Oregon has given the parties a preview of how the litigation may play out. On August 27, 2026, an Oregon federal court ruled against NAW in a similar case challenging Oregon's plastic packaging EPR law. In National Association of Wholesaler-Distributors v. Feldon, No. 3:25-cv-01334-SI (D. Or.), the court sided with the Oregon Department of Environmental Quality. It ruled that the Oregon recycling law does not violate the Constitution. Consumer product companies are closely monitoring NAW's challenge to SB 54 to see if the California court makes a similar ruling that SB 54 is constitutional.

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