The National Association of Wholesaler-Distributors (NAW) has filed suit against Colorado’s EPR program for packaging, arguing the law hands unconstitutional fee-setting power to a private organization. This is the third such challenge NAW has brought against a state packaging EPR program.
The suit, NAW v. Ryan (Case No. 1:26-cv-03460), was filed in federal court along with a motion for preliminary injunction to halt enforcement while the case proceeds. NAW is the sole plaintiff and is represented by Andrew Morris and Jacob Huebert of the New Civil Liberties Alliance.
Colorado’s program has been building toward full implementation for months. The Colorado Department of Public Health and Environment (CDPHE) approved Circular Action Alliance’s (CAA’s) final program plan in November 2025, clearing the way for the producer responsibility organization (PRO) to administer the state’s industry-funded packaging stewardship system.
The plan requires CAA to fund all net recycling costs, expand access in underserved areas, more than double the state’s packaging and paper recycling rate by 2035, and standardize an accepted-materials list. Producers have been required to participate since July 1, 2025, and began paying mandatory fees in January 2026.
At issue in NAW’s suit is the authority Colorado’s law grants to the CAA. The DC-based nonprofit was founded by major consumer goods companies. It sets and collects fees on packaging materials including glass, aluminum, paper, cardboard and plastic using a fee methodology. Businesses have no court option to challenge an assessment; their only recourse is binding arbitration administered by CAA itself, according to the lawsuit.
NAW’s complaint raises four constitutional claims:
· that the law delegates government fee-setting power to a private entity without adequate oversight, violating the 14th Amendment’s Due Process Clause;
· that it compels businesses to join and fund CAA as a condition of operating in the state, violating the First Amendment;
· that it bars businesses from disclosing the mandated fees to their own customers, also a First Amendment claim; and
· that it lets CAA spend mandatory dues on its own political and policy advocacy, forcing businesses to fund speech they may not support.
“No state should limit interstate commerce, nor should they delegate power to set and collect fees to a third party outside the scope of public scrutiny” said NAW President and CEO Eric Hoplin in a statement.
NAW Chief Government Relations Officer Brian Wild pointed to the law’s reach beyond manufacturers.
“Manufacturers and brands get to choose what materials go into their packaging, but distributors do not,” Wild said in a statement. “Yet Colorado’s law still pulls some distributors into its fee structure as ‘producers,’ and those costs flow through the supply chain to businesses and consumers beyond Colorado’s borders.”
A similar playbook
NAW’s Colorado filing follows a strategy the association has refined over the past year.
The organization first sued Oregon over its EPR law in August 2025, and a federal court granted the group’s members a partial injunction in February 2026 — the first time any court had blocked a state EPR law, though the ruling was narrow and dismissed most of NAW’s other claims. That case went to trial July 13-17 in Portland, and post-trial briefing is ongoing.
Karen Harned, NAW’s director of litigation and legal policy, has said the association views the Oregon injunction as validation of its approach and is now moving earlier in other states rather than waiting for programs to fully take effect, as it did in Oregon. NAW is also the sole business plaintiff in a 17-state coalition, led by Nebraska Attorney General Mike Hilgers, that sued California over SB 54 on June 22, just days before the state’s own textile and packaging EPR deadlines took effect.
Harned has argued that wholesaler-distributors are uniquely exposed under EPR laws compared to manufacturers or retailers, since NAW members operate on profit margins averaging 3% to 5%, leaving little room to absorb new packaging fees. She has also pushed back on CAA’s characterization of its fee-setting process as transparent, arguing the public knows what packaging costs under the program but not how CAA arrived at those numbers.
Colorado’s law has already drawn one legal challenge before NAW’s filing: the Independent Lubricant Manufacturers Association (ILMA) sued the state in Denver District Court on March 12, 2026, over the same fee-delegation structure.
ILMA argued in its own statement announcing the suit that the state’s EPR fees pose “an existential threat to the industry, with fees often exceeding profit margins.”
The case remains unresolved. CDPHE has argued ILMA’s claims are untimely and that CAA and LPMA should have been named as parties, and no injunction was sought, so Colorado’s program has remained in effect throughout.
Colorado also recognizes a separate independent PRO, the Lubricants Packaging Management Association, for petroleum and automotive packaging, a status the state granted after the association’s own program plan was approved in October 2025.
