If you follow extended producer responsibility (EPR) litigation, your inbox has been full of updates about Oregon. For good reason: the National Association of Wholesaler-Distributors (NAW) filed suit in federal court in July 2025 challenging the constitutionality of Oregon’s Plastic Pollution and Recycling Modernization Act, secured a preliminary injunction in February 2026, and has a trial date set for July. That’s high drama with potential real ramifications (although the court did rule that the injunction only covered entities who were members of NAW when the injunction issued and the court has denied at least one motion by other groups to intervene in the lawsuit as plaintiffs). The recent release of lists of compliant and non-compliant entities was also quite unexpected.
While everyone is focused on the Pacific Northwest, a second packaging EPR lawsuit quietly landed in Colorado, one of the other states with more advanced EPR programs. It deserves serious attention from manufacturers and distributors operating anywhere in the country.
What Happened in Colorado
On March 12, 2026 — the day before the plan at issue was to take effect — the Independent Lubricant Manufacturers Association (ILMA) filed suit in the District Court for the City and County of Denver challenging the Colorado Department of Public Health and Environment’s (CDPHE) implementation of Colorado’s Producer Responsibility Program for Statewide Recycling Act, HB22-1355.
The target of the lawsuit is CDPHE’s approval of an individual program plan (IPP) submitted by the Lubricants Packaging Management Association (LPMA), a nonprofit founded by five major petroleum producers. LPMA’s IPP is called Interchange 360. For all lubricant packaging, Interchange 360 would act in place of the producer responsibility organization (PRO) named to manage the program in general, the Clean Action Alliance (CAA).
The background issue for ILMA is that ILMA’s members compete directly with the five LPMA founders, and ILMA argues that CDPHE effectively handed a competitor coalition the keys to a parallel compliance infrastructure. ILMA’s CEO previously wrote to the U.S. Department of Justice calling state-level packaging EPR laws like Colorado’s “an existential threat,” citing the potential for fees to eliminate margins for smaller manufacturers and distributors operating in the state. The flat fee under LPMA’s plan is 56 cents per gallon for all packaged lubricants sold in Colorado, whether in plastic bottles or bag-in-a-box.
Why This Case Matters Beyond Lubricants
Like the Oregon challenge, ILMA’s lawsuit alleges constitutional violations, so its implications could extend well beyond the lubricant sector and Colorado’s EPR program specifically. As in the Oregon case, where certain aspects of that state’s EPR program have been found potentially unconstitutional, a challenge to the way the system is run in Colorado is likely to have an effect wherever similar systems are in place. ILMA’s general counsel has confirmed that ILMA’s and NAW’s legal teams have been “communicating regularly”, and ILMA’s press release leaves little to the imagination: “This lawsuit is the first major step in a wholistic [sic] strategy to address the flaws in EPR legislation, which is rapidly creating a costly patchwork of state regulations that harms small businesses.” In other words, this is the early architecture of a national litigation front against packaging EPR implementation.
Three Takeaways for Manufacturers and Distributors
1. The “Who Is a Producer?” Question Has Real Legal Teeth.
The definition of “producer” and the hierarchy of responsibility in EPR packaging laws varies from state to state, which is a well-known thorn in the side of nationwide compliance programs. This is a new twist: ILMA’s core statutory argument is that CDPHE approved a program plan from an entity—LPMA—that does not actually “produce” anything and therefore does not itself qualify as a “producer” under the plain text of HB22-1355 (as enacted, C.R.S. § 25-17-703(30)). Colorado’s EPR law, like some others, provides that only “a producer may submit an individual program plan proposal” for agency approval. If courts agree that CDPHE exceeded its statutory authority, it creates a template for challenging agency approvals in other states where PRO structures and individual plan mechanisms are similarly defined.
Every manufacturer and distributor subject to state EPR programs is likely already looking at whether they are the “producer” under the applicable state law; this case points out that companies should also scrutinize whether the entity collecting their fees has lawful authority to do so, particularly if the company falls nuder an IPP or other alternative compliance pathway. As of now, only Colorado and California allow IPPs, but alternative compliance pathways are allowed in other states and can take different forms.
2. Fee Structures May Be Legally Vulnerable if They’re Opaque, Unchallengeable, or Untethered from Actual Costs.
ILMA alleges that LPMA’s flat $0.56-per-gallon fee is unlawful for a number of reasons, including that because it bears no rational relationship to actual recycling costs for lubricant packaging and it is unclear if ILMA will ever benefit from a so-called “planning fee.” ILMA also argues the statewide CAA plan’s dues, which are based on a national methodology rather than a local one, is untethered to any Colorado-specific cost calculation. ILMA says that runs contrary to Colorado’s EPR statute’s plain text, which requires that a PRO’s funding mechanism not “exceed the direct and indirect costs of implementing the program.”
This cost-nexus argument is significant and likely applies under multiple EPR laws: if EPR fees function more like a revenue mechanism than a cost-recovery tool, they may be susceptible to legal challenge. Companies paying fees under any state EPR program should probe how those fee schedules were derived and documented. The apparent lack of meaningful process in determining or challenging those fees was one of the two reasons why the Oregon District Court enjoined that state’s EPR law—the other being the law’s likely interference with interstate commerce.
3. Constitutional Claims in State Court Are a Different and Potentially Powerful Strategic Choice.
While the Oregon challenge was filed in federal court, ILMA chose to file the Colorado case in state court. That would have been a deliberate choice, as it could open different procedural and substantive avenues, including state administrative law challenges to agency action, which may be required to be brought in a particular forum. Companies operating across multiple EPR states should monitor both tracks of litigation, because victories in either forum will shape how agencies defend their program approvals going forward—and may illustrate how different types of programs are susceptible to challenge. As of now, seven U.S. states have adopted packaging EPR laws: Oregon, Colorado, Maine, California, Minnesota, Maryland, and Washington. Five more are likely to pass similar laws this year: Massachusetts, New Jersey, New York, Rhode Island, and Virginia.
Our team will continue to track and provide updates in this rapidly-evolving space.