Proposition 65 requires persons providing goods and services to California consumers to provide clear and reasonable warnings for knowing and intentional exposures to any of the more than 900 chemicals listed by the State as causing cancer or reproductive toxicity. All three branches of government rendered important determinations during the first quarter of 2015. The Court of Appeal affirmed a major defense victory on how Proposition 65 exposures to lead in foods can be assessed. The executive branch, through the lead Proposition 65 agency, the Office of Environmental Health Hazard Assessments (OEHHA), promulgated major new warning regulations. And the legislature is considering new curbs on frivolous Proposition 65 lawsuits. Companies doing business in California should be aware of the changing Proposition 65 landscape.
The Judiciary: In Environmental Law Foundation v. Beechnut Nutrition Corp., et al., plaintiff alleged that defendants failed to provide a Proposition 65 warning regarding exposure to lead in certain baby foods, fruit juices and packaged fruit. Lead is naturally occurring in the environment and lead in soil can be absorbed by plants, including fruits and vegetables. Yet defendants did not prevail on a “naturally occurring” defense. Rather Defendants prevailed at trial by showing that the average consumer’s reasonably anticipated rate of exposure to lead in the products, when properly evaluated to account for non-daily consumption, did not exceed the “safe harbor” of 0.50 micrograms. The Court of Appeal affirmed. The ruling is seminal because citizen and public enforcers had argued for years that a Proposition 65 violation for exposure to lead in food could be established based on the amount of lead in a product consumed on a single day. Defendants established that, when a product is not eaten daily, lead exposures should be averaged over the time intervals between eating occasions.
The Court of Appeal also rejected plaintiff’s argument against averaging multiple lead test results within a lot and across lots. Private prosecutors regularly support pre-litigation certificates of merit, required under the law, with a single test result from a single lot (allegedly) above the warning trigger level. However, the average of all available test results across lots and within lots may affirm that there is no Proposition 65 violation for the product at issue. This ruling eventually should result in more accurate warnings, and fewer “precautionary” warnings accepted merely to end costly litigation. Defendants now have a judicially approved roadmap, which might work in other cases, for defending against some Proposition 65 claims.
The Executive Agency: OEHHA is the lead agency for implementing Proposition 65. On January 16, 2015, OEHHA gave notice of a proposed rulemaking to repeal and replace the regulations governing “clear and reasonable” warnings. The proposed rules would make significant changes including:
- Restricting the supplemental information that may be provided along with a Proposition 65 warning;
- Allocating between retailers and manufacturers the burdens of complying with Proposition 65;
- Requiring that “safe harbor” warnings for exposure(s) to one or more of 12 highlighted chemicals specifically name the chemical(s);
- Requiring safe harbor warnings be provided prior to purchase and not just prior to chemical exposure;
- Requiring safe harbor warnings to be preceded by a hazard triangle and printed in color and/or multiple languages under certain circumstances.
OEHHA also proposed changes to the regulations governing environmental and occupational exposures and new regulations for specific exposures involving food and alcoholic beverages, prescription drugs, dental care, raw wood, furniture, diesel engines, passenger vehicles, enclosed parking facilities, amusement parks, petroleum products, service stations and designated smoking areas.
On January 16, 2015, OEHHA gave notice of a second proposed rulemaking to create a website providing supplemental information “explaining” the various Proposition 65 warnings provided by businesses. The comment period for both rulemakings ended April 8, 2015. The California Chamber of Commerce submitted comprehensive comments on behalf of more than 170 companies representing nearly every major business sector. Several companies and other trade associations submitted comments directly. If OEHHA substantially changes the proposed rulemaking as a result of the comments submitted, stakeholders will be given another opportunity to review and comment.
The Legislature: Proposition 65 has been on the books for nearly 30 years but legislative amendments have been rare. Under California law, a two-thirds vote of the legislature is required for amendments to Proposition 65. This is a difficult hurdle. The most recent effort, AB 543, was introduced earlier this year by Assembly Member Quirk. The bill seeks to address Governor Brown’s goal, articulated in May 2013, to curb frivolous Proposition 65 litigation. To date, 20,000 pre-suit notice letters have been issued under Proposition 65. Some of those notice letters have been issued to companies that undertook the time, effort and expense to conduct exposure assessments and determined no warning was required. However, because the burden of proof in Proposition 65 cases is titled against the defendant, private plaintiffs have been able to leverage the time and expense of litigation to pursue settlements, via unnecessary litigation, from these and other defendants. This dynamic creates a perverse incentive against the investment of resources into exposure assessments by companies regulated under Proposition 65. AB 543 seeks to realign company and public incentives. As drafted, the bill would clarify that there is no knowing and intentional exposure under Proposition 65 if there is an exposure assessment that meets three specified criteria:
It is conducted by a qualified scientist in accordance with OEHHA’s regulations;
It evaluates the same chemical in or from the relevant source that is the subject of the alleged exposure and concludes there is no exposure requiring a warning;
It is documented in writing and signed by the qualified scientist before the company receives a pre-suit notice letter.
On April 6, the bill was slightly amended to narrow the definition of qualified scientist and strike language that would have expressly applied to a company decision to forego a specific warning as to the “list of 12” chemicals highlighted by OEHHA in its proposed rulemaking. The bill was re-referred to committee, and must be passed by the full Assembly by June 5 to be considered by the state Senate this year.