How transparent is fee-setting — and can a producer appeal its fees?¶
Producer responsibility organisations generally publish their fee rates but not the models that generate them, and a producer that believes its fee is wrong has, in most jurisdictions, no administrative appeal and no judicial route to challenge the amount. Those two gaps — opacity and unreviewability — have combined to produce the strongest legal theory against packaging EPR in the United States, including the first federal court order blocking a state program. This article reviews what actually gets published and what is withheld; the litigation the gap has generated; the parallel dispute running in the opposite direction in the United Kingdom, where local authorities cannot audit the model that pays them; the appeal mechanisms that exist and the one a legislature declined to create; and the three-tier disclosure design that would resolve most of the problem.
1. Rates are public; methodology is not¶
The distinction that matters is between publishing a fee schedule and publishing the model that produced it.
Rates are usually public. Circular Action Alliance — the producer responsibility organisation operating in six US states — published "California Illustrative Fees" in May 2026, covering roughly 110 material-category combinations across four fee components, with some allocation logic explained (one component of the plastic-pollution mitigation charge, for instance, allocated 80% by reported plastic component weight and 20% by component count). Citeo in France, CONAI in Italy, and the UK scheme administrator all publish tariff schedules.
The model underneath generally is not. The same California document withholds the program budget figures and underlying cost assumptions, describing its numbers as "good-faith, non-binding fee rate estimates." Analysts tracking the US rollout observed that fee estimates published in October 2025 were followed in May 2026 by illustrative fees reflecting full program costs — a dramatic increase in scope and magnitude that producers could observe but not reconstruct.
The statutes draw this boundary deliberately. Oregon requires an annual report including an independent certified public accountant's audit of the organisation's financial statements — but membership fees and market-share data go into a confidential addendum, with only aggregated summaries public. California's statute provides that an approved plan is a public record, "except that financial, production, or sales data reported to the department by the PRO is not a public record." The consistent pattern: producers, municipalities and researchers can see what the fee is, and cannot see how it was derived.
To be concrete about what is being withheld: a packaging fee model must decide (1) total program cost; (2) how collection, sorting, transport and residual-disposal costs are attributed across materials that travel together in the same truck and through the same facility — the choice that most affects who pays; (3) which materials are credited with commodity revenue; (4) whether fees are levied on tonnage, units or components, and in what mix; (5) what modulation adjustments apply; and (6) what reserves are collected above expected cost. Publishing rates discloses the output of all six decisions and none of the decisions themselves. Two very different models can generate the same headline rate for one material while allocating quite differently across the rest — which is why producers argue they cannot check their bills. Expert testimony in the Oregon litigation put the point precisely: model operators can shift costs between material categories in ways an outside party cannot detect. That is not an allegation that anyone has done so; it is a statement about what the disclosure regime makes checkable.
2. Why the gap became constitutional litigation¶
In the United States, the opacity intersected a structural feature of the American schemes: fees are set by a private organisation whose board includes the largest competitors of the firms being charged, with no administrative appeal and no judicial review of the amount.
NAW v. Feldon (US District Court for the District of Oregon, No. 3:25-cv-01334-SB) is the test case. Filed by the National Association of Wholesaler-Distributors in July 2025, the case proceeded to trial on dormant Commerce Clause and procedural due-process grounds after other claims were dismissed. On 6 February 2026 the court granted a preliminary injunction — finding serious questions going to the merits, likelihood of irreparable harm, and a balance of hardships tipping sharply toward the plaintiff — enjoining enforcement against association members. It was the first federal court order blocking a state packaging EPR law. The due-process theory is precisely about transparency: binding fee obligations with no visibility into calculation, no meaningful opportunity to challenge determinations, and no access to judicial review, with the detailed methodology designated confidential. A five-day bench trial ran in July 2026; the judge requested post-trial briefing only on due process — including whether a constitutionally protected property interest exists and what process is constitutionally required — with a ruling expected around the end of August 2026. No final ruling had issued at the time of writing; readers should check the docket.
Colorado has a parallel case. ILMA v. CDPHE (Denver District Court, No. 2026CV30902, filed March 2026) pleads due process; non-delegation — aggravated, it argues, because competitors of the fee-payers control the fee-setting body; a First Amendment challenge to Colorado's statutory ban on disclosing EPR costs at the point of sale; and a statutory claim that the fee schedules are untethered from actual Colorado recycling costs. A motion to dismiss was pending at the time of writing.
3. What recourse exists today: arbitration by the fee-setter¶
Outside the courtroom, the documented recourse in the US schemes is binding arbitration administered by the producer responsibility organisation itself. According to litigation filings reported in legal analysis, the mechanism requires payment first; places the burden of proof on the producer — who by construction cannot see the methodology being challenged; and caps adjustments at 10% of base dues.
Taken together, the structural problem is not unfairness in any individual case. It is that a producer with a well-founded objection to the methodology — as distinct from an arithmetic error in its own bill — has no forum in which that objection can succeed, because the forum belongs to the party that wrote the methodology and the maximum relief is smaller than the stakes. Separating the dispute types makes the gap precise:
| Dispute type | Example | Current recourse |
|---|---|---|
| Arithmetic | Tonnage misrecorded; wrong rate applied | Arbitration; usually resolvable |
| Classification | Packaging placed in the wrong material category | Arbitration; contested but tractable |
| Allocation | Costs apportioned between materials in a way that overcharges one format | No effective forum — requires the model |
| Program cost | Total spend unreasonable or inefficient | No forum anywhere |
| Modulation criteria | Bonus/penalty criteria arbitrary or capture-driven | No forum |
The bottom three rows are where the money and the principle sit, and they are precisely the rows with no answer.
4. The legislature that tried, and stopped¶
The clearest evidence that the gap is recognised comes from a legislature that attempted to close it. Colorado Senate Bill 26-192, the "Producer Responsibility Dues Appeals Process," introduced in May 2026 with bipartisan sponsorship, would have let a producer request a hearing before the state's existing advisory board; the board would issue written recommendations to the state health department; the department would decide within 45 days; and the department's decision would be final agency action subject to judicial review. The bill passed the Senate 22–12–1 on 12 May 2026, was introduced in the House the same day — and died on adjournment the following day.
The sequence is a clean data point: a legislature actively considered and declined to create producer appeal rights in the same session in which two federal due-process suits over the absence of those rights were live. The bill's design remains the reasonable template: a specified forum, written reasons, a decision-maker with authority, and judicial review of the decision — features that cost little and would convert the central US constitutional challenge into ordinary administrative process.
5. The dispute runs the other way too¶
It would be a mistake to read this as producers versus everyone else. In the United Kingdom, the complaint about an unauditable model comes from local authorities — the payment recipients. UK producers pay modelled "efficient costs" rather than actuals (the pay-or-run article), and the government publishes the payment methodology; the dispute concerns its adequacy. LARAC, the UK local authority recycling association (a membership and advocacy body, cited here for claims made rather than findings), publicly criticised "the lack of clarity and transparency on the calculations" in July 2025, with officers raising concerns that the methodology was informed by data and engagement primarily focused on England — gate-fee data drawn from a limited sample with few Scottish authorities — risking disadvantage to the devolved nations.
The symmetry yields the general observation: wherever a model determines who pays or receives, the party on the wrong end will demand to audit the model, and will usually be refused. Whoever holds the model holds the advantage — which is why disclosure design, not any particular jurisdiction's grievance, is the underlying policy question.
Two other jurisdictions' answers complete the picture. Europe has oversight architecture but not, generally, an individual appeal right against a fee: Article 8a(5) of the Waste Framework Directive requires member states to establish adequate monitoring and enforcement, and France's oversight commission for the producer responsibility schemes advises on approvals with the State deciding — its 2025 report flags transparency concerns on fee-setting justification and records a disputed cost-coverage rate for household packaging (officially 75%; contested by local authorities at 45–55%). That is a supervisory apparatus, not a producer remedy. Ontario offers a structural rather than legal answer: in its competitive multi-organisation market, the practical remedy for a producer dissatisfied with its fee is exit to a competitor. Exit disciplines fee levels where switching is real; it does nothing in single-organisation jurisdictions — which is every US packaging state. Ontario also enacted the most direct legislative response to the information gap: 2025 legislation authorising the Minister to require the regulator to collect specified information from parties engaged in producer responsibilities — an information-gathering power with an access-to-information carve-out for commercially sensitive material, not a public transparency right.
6. The three-tier design that would resolve it¶
The confidentiality arguments deserve to be taken seriously, because they justify part of the current arrangement. Producer-level supply data is genuinely competitively sensitive, and both Oregon's and California's statutes protect it explicitly. Aggregation does not always protect it — in material categories with few producers, a category total can effectively disclose an individual firm's volumes. And contract rates negotiated with haulers and sorting facilities are commercial terms whose disclosure could weaken the organisation's negotiating position, raising costs for the very producers complaining.
The reason these arguments do not settle the matter is that they justify withholding inputs, not rules. The allocation methodology — how costs are apportioned between materials, how revenue is credited, what the volume base is — is not commercially sensitive in itself. A model can be fully specified in public while its inputs remain confidential. The design that separates the two is standard in utility regulation:
| Tier | Who sees it | Contents |
|---|---|---|
| Public | Everyone | The methodology: allocation rules, volume bases, revenue treatment, reserve policy, modulation formulas |
| Regulator, under confidentiality | The regulator, with statutory access rights | The full model, including producer-level inputs and contract rates |
| Published conclusion | Everyone | The regulator's audited opinion that fees were calculated in accordance with the published methodology |
This is approximately what the UK does — the methodology is published, and the criticism concerns its adequacy rather than its existence — and what the North American schemes do not. Combined with an appeal route on the Colorado template, it would answer both the due-process theory (a forum exists, before a decision-maker independent of the fee-setter, reviewable by a court) and the practical grievance (the rules are checkable even where the inputs are not).
Short of statutory reform, parties on either side of a fee model can ask for specific things, in ascending order of ambition: the allocation rules, separately from the rates — the minimum, and not commercially sensitive; a year-on-year reconciliation stating what drove each fee change (program cost, volume base, revenue, or allocation); a statement of reserve policy and the current reserve position; confirmation of what the regulator can actually see — the question nobody asks, and the one that determines whether any oversight is possible; and an independent opinion that fees follow the stated methodology, the cheapest credible assurance available.
7. Where the argument stands¶
Three conclusions organise the record. First, the rates-versus-methodology distinction is the entire dispute: every documented grievance, on both sides of the Atlantic and on both sides of the payment flow, reduces to a party bound by a model it cannot examine. Second, the absence of an appeal route is doing most of the work in the US litigation, and the cheapest insurance against the constitutional theory — an administrative appeal ending in reviewable agency action — was designed, passed one chamber, and died on a calendar. Third, the fix does not require choosing between confidentiality and accountability: the three-tier structure protects genuinely sensitive inputs while making the rules public and the regulator's verification visible. The jurisdictions that adopt something like it will take this issue off their litigation dockets; those that do not will keep meeting it in court, through whatever doctrinal door is locally available.
References¶
- Circular Action Alliance, "California Illustrative Fees" v1.0 (May 2026).
- ORS 459A.887 (Oregon); California Public Resources Code §42051.2.
- NAW v. Feldon, No. 3:25-cv-01334-SB (D. Or.): preliminary injunction, 6 February 2026; bench trial 13–17 July 2026; post-trial briefing on due process; no final ruling as of early August 2026.
- ILMA v. CDPHE, No. 2026CV30902 (Denver District Court, filed 12 March 2026); motion to dismiss pending at the time of writing.
- Colorado SB26-192 (2026): passed Senate 22–12–1, 12 May 2026; died on adjournment 13 May 2026.
- Arbitration terms as described in litigation filings, reported by Foley & Lardner and Resource Recycling (2026).
- LARAC press release and officer statements (July 2025) — advocacy source, cited as claims made.
- GOV.UK, local authority payment calculation methodology.
- Directive (EU) 2018/851, Art. 8a(5); CIFREP (France), annual report 2025. Note: France's censeur d'État mechanism, sometimes cited as a current control, was abrogated with effect from 1 January 2021.
- Ontario Bill 46, Protect Ontario by Cutting Red Tape Act, 2025, Schedule 20; ERO decision notice 025-0536 (December 2025).
Verification note: litigation status is stated as of early August 2026 and should be re-verified before reliance; the Ontario measure is described as an information-gathering power rather than a public transparency mandate, reflecting the statutory text rather than press characterisations. See Sources and method.