Double-Billed for Recycling? What Colorado Producers Need to Know About Overlapping Extended Producer Responsibility (EPR) Fees

Key Takeaways

• The Auto Care Association is seeking to join the federal challenge to Colorado’s EPR law, extended producer responsibility (EPR) law, arguing that automotive aftermarket companies are being required to comply with and pay fees to two separate producer responsibility organizations (PROs) for packaging associated with the same products.
• Member declarations describe significant costs, including one member paying more than $575,000 to the two organizations in Colorado alone, plus a recent fee change that tripled fees in many instances.
• Existing compliance obligations remain in place while the litigation proceeds. Producers potentially subject to specialty programs should evaluate their reporting and fee obligations and monitor the case for developments that could affect Colorado’s EPR framework.

Producers have spent the past year asking how much Colorado’s EPR program will cost them. For one industry, the answer may be: double. On October 15, 2026, the Auto Care Association moved to intervene as a plaintiff in National Association of Wholesaler-Distributors v. Ryan, the pending federal challenge to Colorado’s Producer Responsibility Program for Statewide Recycling Act. Its core grievance: Colorado has directed producers of lubricant- and petroleum-related products, such as automotive aftermarket companies, to register with, report to, and pay dues to two separate private organizations for packaging associated with the very same product.

Who is Auto Care, and What is the “Double Charge” Problem?

The Auto Care Association is a national trade association representing the independent auto care industry and automotive aftermarket, with nearly 3,000 direct members and affiliates and roughly 150,000 businesses in the industry, about 10,000 of them in Colorado. Its members include national retailers such as AutoZone and O’Reilly, as well as manufacturers and remanufacturers of fluids, parts, and accessories. The association estimates that more than 200 of its members are mid-sized companies that exceed the EPR law’s small-business exemption but lack the compliance infrastructure of large producers.

Most Colorado, Oregon, and California producers deal with the same  PRO: Circular Action Alliance (CAA). According to the motion, however, the Colorado Department of Public Health and Environment (CDPHE) approved an Individual Program Plan operated by the Lubricants Packaging Management Association (LPMA), also known as Interchange 360, for packaging used with petroleum and automotive products. CDPHE apparently informed CAA that these producers must report primary packaging for LPMA-listed products to LPMA, while reporting secondary packaging and paper to CAA, creating confusion and a significant compliance burden. The motion states that CDPHE specifically instructed at least one member that it must report and pay fees to both organizations.

One member’s example in the motion makes the problem concrete. A unit of its diesel exhaust fluid ships in a plastic container inside a cardboard shipper. The plastic jug gets reported to LPMA; the cardboard around that same jug gets reported to CAA. Each organization has its own registration process, participation agreement, reporting portal, data format, material categories, deadlines, and fee schedule, and the motion asserts there is no apparent coordination between them.

The Dollars Are Real

The Auto Care Association’s member declarations put numbers on the burden. According to one member, LPMA charges a flat $0.56 per gallon of fluid sold, applied retroactively to April 1, 2025, regardless of container size, weight, or material — roughly $1.40 for the plastic container of a single 2.5-gallon unit of that member’s diesel exhaust fluid. LPMA applies that per-gallon fee even to diesel exhaust fluid and windshield washer fluid, which contain no petroleum, rather than CAA’s weight-based fee for the same container. These dual fees have led to high costs, for example:

• CAA invoiced one member more than $160,000, and LPMA invoiced it more than $415,000. That member reports paying more than $575,000 to the two organizations in Colorado alone, on top of roughly $390,000 in consultant and software costs.
• CAA invoiced another member more than $350,000, and that member expects LPMA fees to exceed $500,000.

In October 2026, LPMA notified producers that it was changing to a material-type methodology while tripling fees in many instances, without, according to an Auto Care member, any producer input.

The motion also alleges that LPMA — whose founding members include competitors of Auto Care’s members — imposes changes on a take-it-or-leave-it basis: the board sets fees and covered products “from time to time,” may amend the agreement unilaterally, binds participants for at least three years, and provides no dispute-resolution mechanism or refund right.

A New Legal Theory: The Second PRO Was Never Authorized

Auto Care’s proposed complaint pleads four constitutional claims that track those in the case brought by the National Association of Wholesaler-Distributors (NAW): unconstitutional conditions, dormant Commerce Clause, compelled speech and association, and unlawful delegation to private parties. What sets it apart is the relief it seeks that NAW does not: a declaration that CDPHE’s approval of LPMA’s plan, and its incorporation into CAA’s Program Plan, were ultra vires and contrary to the Act. Auto Care argues that CDPHE has required members to report to two PROs even though Colorado’s regulations do not permit more than one until 2029.

That is a statutory argument, not just a constitutional one, and it may prove the more practical path. A court need not strike down Colorado’s EPR framework to conclude that the agency went beyond what the Act and its regulations allow. For affected producers, a win on that narrower theory could eliminate the duplicate obligation without disturbing the rest of the program.

Why This Intervention May Fare Better Than Oregon’s

Notably, an intervention attempt in another EPR case failed. In Oregon in April 2026, the court denied motions by the American Forest & Paper Association and the Northwest Grocery Retail Association to intervene in NAW’s challenge, reasoning that keeping the case on track for a July 2026 trial was critical and that adding new parties would delay that schedule.

Colorado is in a very different posture. Auto Care stresses that the case is in its early stages and the scheduling conference has not yet occurred. The Oregon movants were trying to board a train weeks from trial, whereas Auto Care is asking to join before a trial schedule even exists. The motion also notes that CDPHE’s counsel consented to the intervention. Auto Care’s dual-PRO facts give it a credible argument that NAW, a broader distributor association, will not fully develop LPMA-specific issues. Of course, the court has not yet ruled, and the motion remains subject to opposition.

Why It Matters Beyond the Auto Aftermarket

Colorado’s program has so far been described as a single-PRO system administered by CAA. Auto Care’s filing suggests that, in practice, at least one industry is already living in a multi-PRO world, with no coordination on data, deadlines, or fees. The motion warns of the prospect of additional plans and PROs that would multiply those burdens. Any company whose products could fall within a specialty program — not only automotive and petroleum products — should be watching.

The filing also adds to the national cost story. Members say they negotiate national pricing and cannot isolate Colorado costs, so EPR fees are borne by customers in states with no EPR program at all.

The motion does not change any compliance deadline, and no court has relieved anyone of either set of obligations. In the meantime, producers should consult legal counsel about their EPR compliance and strategy.

Reach out to Betsy Stone or Nick Johnson with questions you may have about EPR laws and how they apply to your business.