A new lawsuit in California adds another layer of complexity to producers’ 2026 preparations to comply with forthcoming packaging regulations in the state.
A coalition of 18 business member organizations banded together last week to file a lawsuit in California challenging the constitutionality of SB 343. The 2021 "truth in labeling" law tightens criteria for what can be labeled as recyclable and is slated to take force this October. The intention is to improve accuracy of recycling labels, but plaintiffs allege the law violates free speech and unduly burdens businesses.
While the lawsuit centers on labeling, many practical concerns for companies preparing to comply in the coming months surround the interplay with SB 54, California’s forthcoming extended producer responsibility and source reduction law.
“SB 343 also seems inconsistent with stated recycling goals” under SB 54, Keller & Heckman attorneys wrote in the wake of last week’s lawsuit. SB 54 stipulates that all covered packaging material in the state must be recyclable or eligible to be labeled compostable as of 2032.
“The state’s own assessments demonstrate that many types of packaging are indeed recycled in California, just not at the levels required by SB 343,” per the K&H analysis. “A law like SB 343 that purports to bar truthful claims about the ability to recycle particular packaging — even if current options are limited, but known to be available in the state — is unlikely to further the state’s stated goals of expanding recycling.”
It’s a complex time for companies to navigate, said Liz Morris, director for circularity and value chain transformation at consulting firm Anthesis Group.
“They want to use the summer to then start making the changes that they will need to make for October,” said Morris, who also noted additional cost pressures right now with tariffs and oil. “This is a cost that companies are worried about, how to do all of this. It’s a lot to balance in one year.”
But as companies contemplate potential marketing and artwork changes to comply with labeling rules, they’re also considering EPR-driven changes to packaging.
SB 343 “does have conflicts with EPR and lower EPR fees,” said Erika Violett, senior consultant at Anthesis. “Maybe something is recyclable under SB 343, and can be labeled as such, but transitioning to that is going to increase fees for EPR.”
Attorneys at DLA Piper noted in the wake of the lawsuit that there are numerous steps that companies can consider. First is whether they are part of, or want to be a part of, one of the trade associations that’s suing, as members will be the ones who potentially benefit from any injunctive relief obtained.
Generally speaking, it’s important for any affected companies to audit their current recyclability claims. “Businesses that are not involved in the litigation are encouraged to continue their compliance planning for SB 343,” DLA Piper wrote. At the same time, contingency planning with alternative labeling strategies is also important.
Other best practices include reviewing supply chain and vendor agreements, DLA Piper noted. “Evaluate whether your contracts address compliance with SB 343 and related indemnification obligations, particularly if you rely on third-party packaging suppliers,” the attorneys wrote.
