Litigation is brewing in California as two major recycling regulations — extended producer responsibility and source reduction law SB 54 and “truth in labeling” law SB 343 — are slated for implementation this year.
CalRecycle finalized SB 54 rules on May 1. But Californians Against Waste and the Natural Resources Defense Council believe the regulations now create “huge loopholes for plastic packaging that violate the law.” On May 6, they signaled that they are working together to develop a lawsuit.
NRDC expects to file a lawsuit “as quickly as practicable given our on-going review of CalRecycle's final regulatory package,” NRDC’s Avinash Kar, senior director of the toxics program, said in an emailed statement. Some of the main concerns that environmental NGOs voiced throughout the revision process have to do with leeway around chemical recycling technologies and certain plastic packaging exemptions.
NRDC would like to see CalRecycle “revise the regulations to close these loopholes and be consistent with the law,” according to Kar.
More legal challenges are to be expected across the spectrum, observers say. Whether they would have lasting impact is a separate question.
“This is an ambitious program that Governor Newsom already scrapped once because of concerns about unworkable cost burdens. It’s not a surprise that stakeholders on both sides have remaining concerns about the final regulations,” said Rachel Saltzman, parter at law firm Hunton, in an emailed statement.
While the NGOs’ previewed challenge sounds substantive, it’s likely that potential business-backed lawsuits would be procedural, noted Christopher Smith, partner at law firm Saul Ewing. Procedural challenges “don't tend to change the law or overwrite the law or make it unenforceable,”
The National Stewardship Action Council is unsurprised by potential litigation. “From our experience, litigation is often part of how major environmental and regulatory frameworks establish guardrails, clarify authority and ultimately become more durable over time,” said NSAC Executive Director and CEO Heidi Sanborn, in an emailed statement.
Sanborn noted that topics of continued debate could include “definitions of responsible end markets, parity for different recycling and processing pathways including chemical processing methodologies, exemptions, and how yield and performance requirements tied to responsible end markets are ultimately interpreted and applied under California’s framework.”
“California’s standards and performance requirements are among the most robust in the country, so naturally there will continue to be significant discussion around implementation mechanics, program harmonization, and compliance expectations in practice,” she said. “Ultimately, our view is that the state, producers, recyclers, local governments and other interest holders should continue moving forward thoughtfully and collaboratively while legal questions are addressed.”
Elsewhere, a lawsuit originated by the National Association of Wholesaler-Distributors — which challenged Oregon’s packaging EPR law and has so far resulted in a hold on enforcement for select producers — is slated to go to trial in July. While other states, environmental groups and producers will likely be watching what happens in Oregon, Smith said, it’s important to remember that that law is distinct from other state packaging EPR laws.
Additionally, neither the existence nor success of lawsuits eliminate compliance obligations, Smith said, “because lawsuits are not final and judgments are not final.”
At the end of the day, SB 54 is “just another regulation,” Smith said. EPR has been around for decades for a variety of products and geographies. “It's not going away,” he said. “I would never rest my business interests on the prospect of succeeding in a lawsuit.”
Some producers are also in the midst of challenging another California recycling law. The Flexible Packaging Association, the American Forest & Paper Association and a range of other business groups jointly launched a free speech lawsuit in March challenging SB 343, which is set to take effect this October. The law is designed to crack down on chasing arrows or other recyclability symbols on products and packaging. On April 24, plaintiffs motioned for a preliminary injunction.
