AB 1760 is a California law, signed in September 2022, about bulk pallets held by recyclers and junk dealers. It lets them take in pallets in good faith, including rental pallets, and store them until the owner collects. If the owner doesn't collect within 35 days of being told to, the recycler may sell them. CHEP has challenged the law in court. This is a summary, not legal advice.
What problem was it meant to solve?
Pallet recyclers in California collect loads from businesses that are often a mix of white-wood and pooled pallets. Under the general rule, the pooled ones remain the pool's property, so recyclers end up storing other people's pallets, sometimes in large numbers, while disputes over collection and compensation go on. Recyclers argued they bore the cost of that storage. AB 1760 gave them a path out.
What does it do?
As reported by Reusable Packaging News when the bill was signed:
- Recyclers and junk dealers that acquire bulk pallets in good faith, including rental pallets, may store them until the owner collects them.
- Once the owner has been advised to pick up the empty pallets, it has 35 days to collect them.
- If the owner doesn't, the recycler or junk dealer may sell the pallets, or charge reasonable storage fees if the owner later demands their return.
- It also lets pallet transferors move and store pallets for businesses without first taking ownership of them.
Why is it contested?
The pools see it as a way for their property to be sold without their consent. Pallet Enterprise has reported litigation in both directions: CHEP suing California recyclers and asking a court to declare AB 1760 unconstitutional, and recyclers suing CHEP over recovery compensation and practices. Courts have made rulings at early stages, including orders letting CHEP retrieve its pallets from a recycler, but we found no final ruling on the law itself as of October 2026. When the 35-day clock starts is also disputed.
Does it apply to my store or warehouse?
No. AB 1760 concerns recyclers and junk dealers. A business that simply receives rental pallets with deliveries is in the ordinary position: the pallets belong to the pool, and the pool collects. See ownership rules and what to do with rental pallets you didn't order.
What should a California recycler do?
Get legal advice before relying on the law to sell pooled pallets, given the litigation. Keep records of good-faith acquisition and of any notices to owners. For a business outside the recycling trade, the practical advice is the same everywhere: separate the pooled pallets and request the owner's collection through the official channels.
Sources
- Reusable Packaging News, "California Assembly Bill (AB) 1760 Targets Abandoned, Unretrieved Pallets", September 28, 2022.
- Pallet Enterprise, coverage of CHEP and California recyclers in state and federal court.