Two major California recycling laws—the producer responsibility and source reduction law SB 54, and the "truth in labeling" law SB 343—are both set to take effect this year, and legal disputes over their details are brewing. Environmental groups and business organizations have expressed differing concerns about the final rules, and litigation expectations are rising.

SB 54 rules trigger threat of lawsuit from environmental groups

CalRecycle finalized the SB 54 implementing rules on May 1. However, Californians Against Waste and the Natural Resources Defense Council (NRDC) believe the new rules create "massive loopholes that violate the law" for plastic packaging. On May 6, the two organizations jointly announced they would file a lawsuit.

Avinash Kar, senior director of NRDC's toxic substances program, said in an email statement that the organization "will file suit as soon as possible following its ongoing review of CalRecycle's final regulatory package." The main concerns raised by environmental groups during the revision process centered on the discretionary space for chemical recycling technologies and exemption clauses for certain plastic packaging. Kar noted that NRDC wants CalRecycle to "revise the rules to close these loopholes and align them with the law."

Observers believe more legal challenges from different perspectives may emerge in the future, but whether these challenges will have lasting impact remains uncertain.

Industry and legal experts hold divergent views

Rachel Saltzman, partner at Hunton law firm, said in an email statement: "This is an ambitious program that Governor Newsom once shelved over concerns about unworkable cost burdens. It is not surprising that stakeholders still have concerns about the final rules."

Christopher Smith, partner at Saul Ewing law firm, noted that the challenges previewed by environmental groups appear substantive, but potential business group litigation may be more procedural in nature. Procedural challenges "often do not change the law, overturn it, or render it unenforceable."

The National Stewardship Action Council (NSAC) is not surprised by potential litigation. Its executive director and CEO Heidi Sanborn said in an email statement: "In our experience, litigation is often part of how major environmental and regulatory frameworks establish guardrails, clarify authority, and ultimately become more durable over time."

Sanborn noted that topics of ongoing debate may include "the definition of responsible end markets, the parity of different recycling and treatment pathways (including chemical treatment methods), exemption clauses, and how production and performance requirements tied to responsible end markets under California's framework will ultimately be interpreted and applied." She added: "California's standards and performance requirements are among the strictest in the nation, so discussions around implementation mechanisms, program coordination, and practical compliance expectations will naturally continue. Ultimately, we believe the state, producers, recyclers, local governments, and other stakeholders should continue to work together thoughtfully and collaboratively while legal issues are resolved."

Oregon EPR lawsuit and SB 343 challenges

Elsewhere, a lawsuit filed by the National Association of Wholesaler-Distributors—challenging Oregon's packaging EPR law and already causing some producers to pause compliance—is scheduled for trial in July. Smith said that while other states, environmental groups, and producers may be watching Oregon's progress, it is important to note that this law differs from packaging EPR laws in other states.

Smith also emphasized that the existence or success of litigation will not eliminate compliance obligations, "because litigation is not final, and judgments are not conclusive either." He concluded: "At the end of the day, SB 54 is just another regulation. EPR has been in place for decades across various products and regions. It is not going away. I would never stake my business interests on the likelihood of litigation success."

Meanwhile, some producers are challenging another California recycling law. The Flexible Packaging Association, the American Forest & Paper Association, and several other business groups jointly filed a free speech lawsuit in March challenging SB 343—which takes effect this October and aims to crack down on chasing arrows or other recyclability symbols on products or packaging. On April 24, the plaintiffs filed for a preliminary injunction.