Another trade group is suing Colorado to stop a statewide recycling expansion based on a fee charged to consumer packaging companies, saying the law gives them no voice in how the fees are used and violates their First Amendment rights to show consumers the costs.
The National Association of Wholesaler Distributors is asking a federal judge to stop the launch of the Producer Responsibility Program in U.S. District Court in Denver, following a similar lawsuit filed this spring by the Independent Lubricant Manufacturers Association. The latest challenge is being handled by the nonprofit New Civil Liberties Alliance, which provides free representation to fight what it calls administrative overreach by federal and state agencies.
The state recycling expansion tapped a nonprofit coalition of major packaging users, like Coca-Cola and Amazon, to set per-package fees that will fund recycling grants for cities and recyclers across Colorado to boost services and increase diversions from landfills.
The new wholesalers’ lawsuit, filed July 30, says Colorado’s law forces trade group members to become dues-paying members of the Circular Action Alliance while giving up their rights to legally challenge the system’s rules. Colorado has in effect given legislative powers to a private party, the lawsuit says.
The big-company alliance is also barring companies from listing the new fees on bills, trampling First Amendment rights to explain fees to consumers, the lawsuit says.
“Colorado’s new law violates the Constitution many times over: by outsourcing lawmaking power to a private group controlled by industry insiders, and by hiding the program’s true cost from the public,” Andrew Morris, senior litigation counsel for the New Civil Liberties Alliance, said in a statement announcing the lawsuit.
A spokesperson for the Circular Action Alliance noted the program operates under state oversight.
“We are aware of recent lawsuits challenging Colorado’s law and are closely monitoring developments,” the alliance statement said. “CAA is not a party to the litigation, and, at this time, our role remains unchanged. CAA continues to implement Colorado’s program consistent with state law and regulatory oversight, and to deliver the investments that strengthen and modernize recycling for all Coloradans.”
The alliance is transparent about how it sets fees and communicates with producers, cities and other parties, the statement said. “Our methodology, principles and dues schedules are publicly available, discussed in public forums and reflected in our approved program plan.”
The Independent Lubricant Manufacturers Association, made up of packagers and sellers that are not part of the major oil companies, said in its March lawsuit that Colorado’s plan to raise about starting this year unlawfully charges them fees while denying a voice in how the money is used.
A similar challenge by trade groups in Oregon secured a temporary injunction against that state’s producer packaging fee, and the lubricant trade group hopes to either begin negotiations with Colorado officials to alter the program here, or get its own injunction.
Far from the frictionless, fraction-of-a-penny fee that recycling advocates have described in Colorado, the lubricant trade group says, the multinational packagers dominating the private committees developing the plan are setting high fees that will be passed on to consumers.
Smaller, family-owned companies are shut out of the decisions, the trade group says, and will be hurt most by the system. Colorado’s producer responsibility concept, first passed by the legislature in 2022, relies on the manufacturers’ self-imposed fees as other state have done.
The Circular Action Alliance is dominated by some of the largest consumer packaging names in the world, including McDonald’s, Molson Coors and Colgate-Palmolive.
The alliance’s budget for 2026 envisions fees raising $215 million to $267 million in the first year for distribution to reimburse existing and new community recycling programs applying for the money. By 2030, the annual budget from fees is expected to rise to between $300 million and $400 million.
The group is working to set the internal fees on packaging based on volume and actual recyclability. The program is designed to give companies incentives to shave new packaging to lower their overall fees, as well as use more recycled products in new packaging.