Colorado EPR Faces a Second, Broader Constitutional Challenge: What Producers Should Know

On July 30, 2026, the National Association of Wholesaler-Distributors (NAW) filed suit in the U.S. District Court for the District of Colorado against the Executive Director of the Colorado Department of Public Health & Environment (CDPHE), seeking to declare Colorado’s Producer Responsibility Program for Statewide Recycling Act (the “Act”) unconstitutional and to enjoin its enforcement. As we have tracked over the past six months, extended product producer responsibility (EPR)[1] programs are now being litigated on constitutional grounds in parallel with their rollout. This complaint is the broadest such attack yet, and it lands well after the initial due dates for supply reporting and fee payment deadlines under the Colorado program.

NAW’s Attacks on Colorado’s EPR Law

The complaint pleads five legal theories.

• First, the plaintiff alleges that the Act violates the Fourteenth Amendment Due Process Clause by unlawfully delegating regulatory power to a self-interested private party, handing fee-setting and program authority to CAA, a private organization that the complaint alleges is controlled in substantial part by representatives of founding-member companies that compete with the producers CAA regulates.
• Second, the plaintiff claims that requiring producers to sign CAA’s non-negotiable participant agreement, including a waiver of court access in favor of binding arbitration, imposes unconstitutional conditions on the right to sell into the state; the same count also alleges that CAA dues lack even “rough proportionality” to producers’ actual impacts on Colorado.
• Third, the plaintiff alleges that the Act violates the dormant Commerce Clause in two distinct ways: by discriminating against interstate commerce, concentrating costs on out-of-state brand owners while exempting categories of businesses that the complaint alleges are overwhelmingly Colorado entities (sellers below a gross revenue threshold, state and local governments, nonprofits, Colorado-licensed retail food establishments, and construction companies), and, separately, under Pike balancing, by imposing burdens on interstate commerce that clearly exceed the Act’s putative local benefits, which Colorado could obtain by taxing at the point of sale or funding the program directly.
• The fourth and fifth counts are both First Amendment claims: Count IV alleges that the Act’s ban on point-of-sale fees to recoup EPR costs prevents producers from telling customers why prices rose, while Count V alleges compelled speech and compelled association, on the theory that mandatory PRO membership forces producers to join CAA and to fund advocacy with which they disagree.

The practical grievances behind the legal theories will be familiar to anyone administering EPR compliance or tracking existing challenges to EPR laws in Oregon and California. Fees are set by CAA using its own methodology across 61 covered material categories and assessed against prior-year volumes at rates determined only after the fact, which the complaint says leaves producers unable to predict their fees or to conform their operations accordingly. The Act requires CAA to make annual fee increases without CDPHE review, and neither CDPHE nor any other governmental entity approves the dues amounts CAA bills or permits a producer to appeal them. The costs for non-compliance can be equally steep: Penalties run to $5,000 for a first day of violation and $1,500 per day thereafter, escalating to $20,000 and $6,000 for repeat violations.

What This New Suit Means for Colorado Producers

The lawsuit filing does not change the compliance calendar, and no injunction has yet been issued. Roughly 3,400 companies appear on the most recent Colorado registration list (dated April 8, 2026), up from 1,594 registrants as of October 31, 2024, and enforcement authority remains with CDPHE while the case proceeds, with CAA obligated to track compliance and to refer delinquent producers to CDPHE. For most companies, the questions worth raising internally are narrower than the constitutional ones. Has your organization correctly determined, as a legal matter, where it falls in the Act’s producer sequence, and does that determination match how you are actually reporting? Which of your materials sit inside CAA’s covered-materials list, and which fall within the business-to-business, non-residential, or other exclusions? How do the arbitration and eco-modulation dispute provisions interact with your ability to contest an invoice, given that base dues cannot be challenged in court at all, that the burden of proof in the eco-modulation forum falls on the producer, that payment is required first, and that eco-modulation adjustments are capped at 10 percent of base dues? And if a court later holds part of the program invalid, what becomes of dues already paid — an issue that the challenge to the Oregon EPR law has shown is not academic?

The answers are company- and product-specific, turning on where a business sits in the supply chain, which states it sells into, and the terms of its participant agreement. Watch two dockets, not one. A ruling in the Oregon bellwether trial will shape how the Colorado court weighs the private-delegation and dormant Commerce Clause theories, and a favorable outcome in either forum will put pressure on program design in all seven EPR states. In the meantime, the litigation will take years. The invoices will not wait. Therefore, as the legal landscape continues to evolve, covered producers should not put their EPR programs on autopilot. With each round of new CAA invoices, producer determinations should be re-assessed with in-house or external counsel as necessary, as CAA and administrative guidance continues to evolve and consider the compliance allocation across the supply chain.

[1] Extended producer responsibility, or “EPR,” refers to a new wave of state statutory programs that shift the cost of end-of-life management for packaging and paper products from taxpayers and local governments to the companies that place those materials into the market. Colorado’s Act, enacted in 2022, is one such program. Under the typical structure, companies that meet the statutory definition of “producer” must join a private producer responsibility organization, report the covered materials they supply into the state, and pay dues that fund statewide recycling services. In Colorado, the designated PRO is Circular Action Alliance, which reports operating as the single PRO in California, Colorado, Maryland, Minnesota, Oregon, and Washington. This article is part of our ongoing series tracking EPR developments across the states. For prior coverage (including the federal court injunction against Oregon’s EPR law and the subsequent Oregon DEQ enforcement letters and fee-refund dispute, the bellwether Oregon trial, the 17-state challenge to California’s packaging law, the first industry suit challenging Colorado’s program design, and broader product stewardship developments), please see our earlier publications.