Spray foam manufacturer challenges California’s “pay-to-play” fee requirement

Quadrant Performance Materials is a Texas-based company that makes spray foam insulation. Unlike traditional insulation, it both insulates and seals gaps where air can escape. That means buildings that use spray foam insulation require less heating and air conditioning, decreasing their electricity usage and lowering energy bills.

Quadrant is only three years old, but it has quickly grown into the fifth-largest spray foam manufacturer in the country. The company has sold spray foam in California for years and has been seeking to increase its sales in California. But onerous and costly regulations are making that nearly impossible.

In August of 2026, the California Department of Toxic Substances Control (DTSC) began requiring spray foam manufacturers to pay two cents for every pound sold in the state. The money goes to a private organization to fund green research. The stated goal is to eliminate methylene diphenyl diisocyanate (MDI) from spray foam, even though DTSC cannot identify a single case of MDI causing the allergic reactions it cites. And any potential risks are already addressed through DTSC-mandated labeling, training, protective equipment, and purchaser-attestations.

But states cannot force companies to submit to unconstitutional restrictions as a requirement for selling products inside its borders. To vindicate its constitutional rights, Quadrant filed a lawsuit, represented free of charge by Pacific Legal Foundation.

In its complaint, Quadrant alleges violations of the First Amendment, which protects individuals and businesses from government-compelled subsidization of speech. Every dollar of DTSC’s fee is money Quadrant could be spending innovating its products or performing its own research; instead, it’s going toward a California policy goal that Quadrant never agreed to support. If the government wants to pursue green research, it must do so through its own resources—not by conscripting private companies into financing a government-preferred agenda.

The practical effect of the requirement discriminates against out-of-state companies whose only connection to California is shipping a lawful product into the state. If California is allowed to extract fees like this one from manufacturers, every state could adopt similar funding mandates on out-of-state manufacturers, straining commerce between states. The Constitution forbids inconsistent regulatory burdens that fragment the national economy, and California cannot condition entry into its market on manufacturers agreeing to pay an extra fee.

A win for Quadrant would make clear that states cannot use their market power to conscript businesses into funding speech or research they haven’t chosen to support, and that out-of-state companies cannot be singled out for special fees simply for selling their products across state lines.