California already forced every automaker in America to build cars on Sacramento's terms.
Now Gavin Newsom is applying that same logic to every piece of packaging on every store shelf in America.
The group California put in charge of enforcing it answers to no government agency – and the bills are already going out.
California SB 54 Gives Billions to a DC Nonprofit No One Can Audit
California's Senate Bill 54, signed by Governor Gavin Newsom in 2022 and fully activated May 1, 2026, doesn't just regulate California – it reaches into Iowa, Indiana, and every state whose manufacturers, distributors, or retailers want access to the California market.
SB 54 requires producers of single-use plastic packaging to pay fees to the Circular Action Alliance – a private Washington, D.C. nonprofit – based on material type, weight, and recyclability.
The Circular Action Alliance is not a government agency – it dodges the state auditor, ignores California's open-meetings law, and owes nothing to public records requests.
Dispute the fees? The Alliance's own arbitration process is the only option – no court, no public hearing, no independent review.
The Alliance published its fee schedule in June but hasn't disclosed how it calculated a single number in it.
Even the Teamsters called it "a wholly independent nonprofit organization that has no oversight."
By 2032, the law is projected to funnel $5 billion through this organization – authorized to collect up to $500 million a year from businesses seeking access to California's market.
That money comes from the Iowa food distributor, the Indiana parts manufacturer, and the Texas retailer who just wants to sell products in California – none of whom get a vote in Sacramento, and all of whom pass the bill on.
That $5 billion shows up in the price of toothpaste, canned goods, and household products on store shelves across every state in America. Businesses were already pricing in the Alliance's fees before anyone outside Sacramento could verify the math behind them.
More than two dozen California Assembly Democrats – and one state senator – sent a letter in August demanding a two-year delay on SB 54 fees. Newsom's own party couldn't keep up with what he signed.
17 States Sue California Over Plastics Law That Will Raise Grocery Prices Nationwide
On June 22, 2026, Nebraska Attorney General Mike Hilgers led a coalition of 17 Republican attorneys general in filing a federal lawsuit in the Eastern District of California, joined by the National Association of Wholesaler-Distributors.
The coalition includes Nebraska, Alabama, Florida, Georgia, Idaho, Indiana, Iowa, Louisiana, Missouri, Montana, North Dakota, Oklahoma, South Carolina, South Dakota, Texas, Utah, and West Virginia.
The lawsuit makes two constitutional arguments. One: no state can use its market to conscript supply chains across all 50 states – that authority belongs to Congress, not Sacramento. Two: the government cannot force businesses to fund a private organization they oppose, which is precisely what SB 54 requires.
The attorneys general argue the law will trigger "steep and persistent price increases" on everyday goods, hitting lower-income Americans hardest. The coalition is asking the court to block enforcement while the case proceeds.
Oregon already tested this model – that same trade organization sued, a federal judge blocked enforcement in February, and the case went to trial this summer.
Newsom watched Oregon get hauled into court, watched a judge block the law, and pressed forward with California's version anyway.
Companies don't build a custom packaging line for California and a different one for Sioux Falls. When California attaches conditions to its market, those conditions travel across every warehouse, every distributor, and every shelf in the country – in states that never voted for Gavin Newsom or SB 54. That is not federalism – that is empire.
If this model survives, every liberal state in America gets the same playbook. Massachusetts runs its agriculture policy through a Boston nonprofit. New York picks a Manhattan nonprofit for its energy mandates. The model never stops growing – and because it runs through private organizations, no elected official is ever accountable for the bill landing on your kitchen table.
The Founders wrote that rule specifically to stop one state from becoming the legislature of the United States.
Seventeen attorneys general are in federal court asking whether it still applies. If Newsom wins, Sacramento writes the rules – and a nonprofit in Washington, D.C. collects the money.
Sources:
- State of Nebraska et al., "Complaint for Declaratory and Injunctive Relief," U.S. District Court for the Eastern District of California, June 22, 2026.
- Mike Hilgers, "Attorney General Hilgers Leads 17-State Coalition Against California Packaging Law," Nebraska Attorney General Office, June 2026.
- Legal Insurrection, "California's Packaging Law: Fees, Nonprofits, and Higher Consumer Prices," Legal Insurrection, July 2026.
- National Association of Wholesaler-Distributors, "NAW Joins Multistate Lawsuit Against California SB 54," National Association of Wholesaler-Distributors, June 2026.
