DENVER – A national trade association is suing over a Colorado recycling mandate that was rolled out for the first-time last year, arguing the program’s constitutionality, as well as the David vs. Goliath scenario the new law creates for the companies forced to foot the bill.
Colorado’s “Producer Responsibility Program for Recycling” has been controversial since first introduced in the legislature in 2022, and in late July the National Association of Wholesale-Distributors (NAW) filed suit in U.S. District Court against the executive director of the Colorado Department of Public Health and Environment (CDPHE), Jill Hunsacker Ryan, over the scheme.
NAW is represented by New Civil Liberties Alliance, a public interest law firm based out of Arlington, Virginia.
Fighting the mandate
The recycling mandate, created by House Bill 22-1355, forces any business that deals in “packaging materials and paper products sold, offered for sale, or distributed in the state” to fund a statewide recycling program via fees– labeled “producer responsibility dues.” The money is intended to provide “free” curbside recycling to more than 700,000 residences, businesses, schools, government buildings, and other public places.
The bill also created another appointed bureaucracy via the “statewide recycling advisory board.”
When the program first began rolling out in 2025, three years after its passage, numerous questions about the fee structure emerged, with the program predicted to raise between $215 million and $267 million by charging anywhere between 2 cents and 90 cents-per-pound to producers of packaging materials used in Colorado.
At that time, NAW was launching a similar lawsuit against a similar law in Oregon. That trial ended just last month and the judge is expected to make a ruling by the end of August. In that case, a preliminary injunction against the mandate was issued, blocking enforcement of the law against the association’s members while the trial played out.
NAW argued in that case that the law was unconstitutional, specifically violating the First and 14th Amendments, among other things, adding it is an “unreasonable hardship on the wholesale distribution industry.
After the Oregon trial concluded, NAW released a statement that said, in part:
“NAW witnesses showed the court the real-world costs this law imposes on wholesaler-distributors—in dollars, time, and operational disruption. Our expert testimony demonstrated how those costs ultimately flow through to businesses and consumers far beyond Oregon’s borders.”
David vs. Goliath
NAW also argued that these poducer responsibility laws have an accountability problem, pointing to what it called “enormous authority” given to Circular Action Alliance (CAA), which is a “private organization that sets fees using a confidential methodology producers cannot review or verify.”
CAA is the same organization contracting to run Colorado’s program. In its suit against Hunsacker, attorneys for NAW said that CAA is “controlled by industry giants that compete with smaller businesses to distribute products ranging from groceries to household goods.”
CAA is made up of major industry leaders including Amazon, Campbells, Coca-Cola, Colgate, General Mills, McDonald’s, Nestle, Target, and Walmart, among many others.
In a statement, NAW said businesses subject to the fees are held hostage by their bigger competitors.
“They have no way to challenge an assessment in court,” the statement said in part, adding that violates the due process clause of the 14th Amendment. “Their only recourse is binding arbitration run by CAA itself. … Allowing CAA to use mandatory member dues to promote its own political and policy positions, compelling businesses to fund speech they may not agree with–in violation of the First Amendment
NAW is asking a U.S. District Court judge in Denver for a preliminary injunction that would prevent Colorado from moving forward with the program while the case is litigated. The Colorado suit is NAW’s third such case. In June, they launched a suit on the same grounds against a similar law in California.
“While each state law has its own idiosyncratic differences, our overarching challenge remains the same,” said Eric Hoplin, President and CEO of NAW. “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.”
