Key Takeaways

• SB 343 enforcement is blocked, not repealed. U.S. District Judge William Q. Hayes granted a preliminary injunction in California League of Food Producers, et al. v. Bonta on July 14, 2026, barring SB 343 enforcement until further order of the court. 

• Four SB 343 provisions were found likely unconstitutionally vague: the “routinely becomes feedstock” standard, the Basel Convention facility requirement, the APR Design Guide's “prevent recyclability” test, and the catch-all “designed to ensure recyclability” requirement. All four were ruled severable, so SB 343's core 60/60 collection-and-sorting threshold stays on the books even while enforcement is paused.

• The First Amendment claim succeeded too. The court found California failed to show, with evidence rather than speculation, that SB 343 would actually reduce consumer confusion or improve recycling rates, the two interests the state cited to justify the law.

• SB 54's recyclability calls lean on the same underlying data. SB 54's fee structure and covered material category (CMC) classifications draw on CalRecycle's Material Characterization Report and SB 343's 60/60 criteria, so the injunction adds uncertainty to how packaging gets classified under SB 54, even though the ruling itself doesn't change SB 54.

• CalRecycle's SB 54 Producer Responsibility Advisory Board meets July 17, 2026, the first public forum where the state could address whether the injunction changes any recyclability assumptions behind SB 54's fee-setting.

What the court decided

A 20-member coalition of food, packaging, and retail trade groups, including the California League of Food Producers, the Flexible Packaging Association, the American Forest & Paper Association, and the California Grocers Association, sued California Attorney General Rob Bonta on March 17, 2026, arguing that SB 343, signed into law in 2021 and due to take effect October 4, 2026, violates the First and Fourteenth Amendments. Judge Hayes held a hearing on June 3, 2026, and roughly six weeks later, on July 14, granted the plaintiffs' motion for a preliminary injunction, enjoining Bonta from enforcing SB 343 until further order of the court. No security bond was required of the plaintiffs. The ruling is preliminary, not a final decision on SB 343's constitutionality: litigation continues before Judge Hayes, an appeal to the Ninth Circuit is likely, and it's still unclear whether the injunction protects only the plaintiff coalition's members or producers more broadly.

Four provisions ruled likely too vague to enforce

Judge Hayes found four SB 343 requirements likely unconstitutionally vague under the Fourteenth Amendment's due process clause:

1. The "routinely becomes feedstock" standard. Recyclable material must "routinely become feedstock used in the production of new products or packaging," but the law sets no threshold for how often that reprocessing must actually occur.

2. The Basel Convention tie-in. Recyclability is linked to processing at facilities that comply with the Basel Convention, a treaty the United States is not party to.

3. The APR Design Guide test. Plastic packaging must avoid features that "prevent" recyclability under the Association of Plastic Recyclers' guide, which is updated on a semi-annual basis, most recently in April 2026, leaving manufacturers unable to reliably determine which version applies at a given time.

4. The "ensure recyclability" catch-all. Packaging must be "designed to ensure recyclability," which the court found gives manufacturers no way to know how much redesign counts as enough.

All four were found severable from the rest of the statute, so SB 343's core 60/60 threshold (a “recyclable” material must be collected by recycling programs covering at least 60% of California's population and sorted by facilities serving at least 60% of the state's recycling programs) remains valid law on paper, even while the injunction blocks the state from enforcing any part of SB 343.

California couldn't back its case with evidence

The court also found the plaintiffs likely to succeed on their First Amendment claim, applying the U.S. Supreme Court's Central Hudson test for commercial speech. California argued SB 343 serves two substantial interests: reducing consumer confusion and improving recycling rates. Judge Hayes found the state failed to show, with evidence rather than speculation, that the law would advance either one. He also found SB 343 more restrictive than necessary, since it allows no middle ground: a company can describe a product as not recyclable in most areas and advise checking locally, but cannot describe that same product as recyclable in some areas, even when the packaging is identical.

Why this matters for SB 54

The ruling doesn't order any change to SB 54, and CAA continues to operate on the timeline it laid out in its June 15, 2026 program plan. But SB 54's fee-setting depends on the same recyclability determinations SB 343 was built to standardize. Per Resource Recycling's reporting, SB 54 relies on SB 343's 60/60 criteria and CalRecycle's Material Characterization Report to determine which materials qualify as recyclable in the state, the same classification that feeds CMC-level fee assignments and, eventually, eco-modulation bonuses and maluses. The near-term exposure is limited: CAA's plan already defers most eco-modulation factors to 2029, so 2027's simplified, category-based fees depend less on individual recyclability calls than the later phases will. The bigger open question is what happens to the underlying recyclability criteria if SB 343 is struck down or rewritten on the merits, since that would affect how CAA classifies materials for fee purposes well before 2029 arrives.

What to do now

1. Continue current compliance work. The injunction pauses enforcement of SB 343; it doesn't validate or invalidate any specific recyclability claim, so don't make labeling or packaging design decisions based on the assumption that SB 343 is gone for good.

2. Watch CalRecycle's Producer Responsibility Advisory Board meeting on July 17, 2026, in Sacramento, the first public forum where the state could address whether the injunction changes any recyclability assumptions behind SB 54's fee-setting.

3. Track the case docket for a Ninth Circuit appeal and further proceedings before Judge Hayes. This is a preliminary ruling, not a final one, and the outcome could still change.

4. Flag any packaging where your recyclability claims rest specifically on the four vague provisions (the feedstock standard, Basel Convention processing, the APR Design Guide test, or the “ensure recyclability” catch-all), since those are the parts of SB 343 most likely to change if the case reaches a final ruling or appeal.

Staying ahead

This is the second legal challenge to reach SB 54's ecosystem this year. A separate suit, filed on June 22, 2026 by 17 state attorneys general led by Nebraska Attorney General Mike Hilgers, challenges SB 54 itself, naming CalRecycle Director Zoe Heller and CAA as defendants and arguing the law violates the commerce clause and due process clause, among other claims. Neither case has been decided yet, and we're tracking both closely as they move through the courts.

At Neta AI, our proprietary AI agent tracks developments like these as they happen, across court dockets, CalRecycle's rulemaking, and CAA's advisory board meetings. Both SB 343 and SB 54 are moving in real time right now, so if you want the next update as soon as it breaks, subscribe to Neta AI's blog  or LinkedIn page. And if you want help sorting through what a ruling like this changes for your packaging portfolio, reach out. We'd love to walk you through it.