NAW sues Colorado over ‘secret’ CAA recycling fees, citing 14th Amendment violations

USA – The National Association of Wholesaler-Distributors has filed a federal lawsuit challenging Colorado’s packaging EPR law, arguing the state improperly delegated fee-setting authority to a private body and denied businesses the right to contest charges in court.

The trade group, represented by the New Civil Liberties Alliance, submitted a request for a preliminary injunction to stop the law from being enforced until the case is decided. 

At the centre of the challenge is Colorado’s use of the Circular Action Alliance, a Washington, D.C.-based private organisation, to set and collect charges on packaging materials including glass, aluminium, paper, cardboard and plastic. 

NAW argues the CAA’s pricing system is confidential, preventing companies from understanding how fees are calculated or challenging them in court. 

Constitutional Challenges and Due Process Concerns

The complaint states that companies covered by the charges cannot contest the assessments in court, with disputes limited to binding arbitration administered by CAA. 

NAW argues that the statute breaches the US Constitution in several ways: the state handed fee-setting powers to a private body without sufficient limits or supervision, while denying businesses court review, which conflicts with the 14th Amendment’s Due Process clause.

The group also claims the law forces companies to join and fund CAA to operate in Colorado, violating the First Amendment. 

Additionally, businesses are barred from telling customers about required state-imposed charges, and compulsory dues can be used by CAA to support policy or political positions that members may not share.

Precedent and Industry Context

NAW draws a comparison with California’s SB 54, saying Colorado likewise prevents businesses from informing customers about the fees they must pay. 

The association pointed to a February 2026 ruling in Oregon, where a federal court granted preliminary injunctive relief to NAW members challenging a similar EPR regime. 

NAW has also joined a 17-state coalition, as the only business plaintiff, in a separate federal challenge to California’s SB 54. 

NAW president and CEO Eric Hoplin stated that this is the third EPR lawsuit the association has been involved with filing, and while each state law has its own differences, the overarching challenge remains the same: no state should limit interstate commerce or delegate power to set and collect fees to a third party outside the scope of public scrutiny.

He added that NAW and its members support the goal of a circular economy, but Colorado’s EPR law does not advance that goal.

Subscribe to our email newsletters that provide busy executives like you with the latest news insights and trends from Africa and the World. SUBSCRIBE HERE