The National Association of Wholesaler-Distributors (NAW) has filed a reply brief in federal court urging a judge to halt Colorado's Producer Responsibility Program for Statewide Recycling Act while its constitutional challenge proceeds, arguing the state's defense collapses on the question of coerced membership in Circular Action Alliance (CAA).

The Washington-based trade group filed its lawsuit in July, challenging the extended producer responsibility (EPR) program for packaging established under HB22-1355, and paired it with a motion for a preliminary injunction shielding NAW members from the law's requirements during litigation. Colorado filed its response opposing the motion, and NAW submitted its reply on Sept. 28.

At the center of the dispute sits the state's chosen producer responsibility organization, CAA, which producers must pay into under the program administered by the Colorado Department of Public Health and Environment (CDPHE). NAW argues the state's defense rests on two claims: that joining CAA is voluntary, and that CDPHE "controls CAA." The organization rejects both.

NAW contends Colorado's EPR structure requires companies to join CAA as a condition of selling products in the state, and that CDPHE does not provide the constitutionally required oversight for a private organization wielding government power. In its reply, NAW says the state has left several core arguments unaddressed.

The constitutional arguments

NAW argues Colorado does not dispute that it could reach its recycling goals with less burden on interstate commerce. It also claims the law's ban on businesses listing EPR fees on their invoices runs afoul of speech protections, noting courts already have ruled such bans regulate speech, and that the state "can't distinguish on interstate commerce."

On the compelled-association issue, NAW says the law forces businesses to join and pay into CAA even though the state "has not identified a compelling state interest to justify that requirement."

The organization also frames the law as misdirected at its members' role in the material stream. Distributors do not design the packaging of the products they sell, NAW says, and they have no control over any state's recycling and waste management programs. Yet Colorado's EPR law treats some distributors as if they control both. The fees, in NAW's assessment, will not change how products are packaged or disposed of — they will raise the cost of doing business.

"NAW members are suffering constitutional harm right now, and they're being forced to pay fees to CAA they can't easily contest or recover," the organization says. "That's why NAW is asking the court to halt this law now."

Parallel track in Oregon

The Colorado filing is the second active EPR courtroom fight for NAW. The organization previously challenged Oregon's packaging EPR program and has appealed a ruling against its position in that case, keeping legal pressure on the two operational packaging EPR programs in the West.

For producers and distributors selling into Colorado, the stakes are immediate: if the court grants the preliminary injunction, payment obligations to CAA under the state program would be suspended for NAW members while the case proceeds. A denial would keep the fee structure in force through litigation, which could run well past the program's implementation timeline.

The next decisive step is the federal court's ruling on NAW's preliminary injunction motion in the Colorado case — the milestone that will determine whether the state's packaging EPR fee obligations stay in force while the constitutional questions move toward trial.