Proposition 65 or “Prop 65” as it is now commonly known, is a California state law that regulates chemical carcinogens and reproductive toxins in an effort to protect public health and the environment. Prop 65 was adopted as the “Safe Drinking Water and Toxic Enforcement Act of 1986,” by way of California’s unique initiative process. As a result, this law was not considered or adopted by the California Legislature but instead Prop 65 was written by citizens and adopted by a vote of the people in a statewide election. Prop 65 creates two basic legal duties regarding the commercial uses of more than 900 listed chemicals and applies to those private sector businesses with more than 10 employees.
First, Prop 65 bans the discharge of listed chemicals determined to cause cancer or reproductive harm into sources of drinking water. Second, Prop 65 also requires that a warning be given for exposures to such chemicals above certain risk levels in environmental, occupational or consumer product settings. In contrast to virtually all other environmental statutes in California or under federal law, where a regulatory agency is generally charged with their enforcement, Prop 65 is enforced exclusively through lawsuits, the vast majority of which are filed by a small group of private citizens or public interest groups. Fueled by a unique set of financial incentives integral to the law, Prop 65 has created a “bounty-hunter” class of private litigants responsible for filing an ever increasing number of enforcement suits.
In May 2013, Governor Brown proposed to: “revamp Proposition 65 by ending frivolous ‘shake-down’ lawsuits, improving how the public is warned about dangerous chemicals and strengthening the scientific basis for warning levels.” In response, on January 12, 2015, the California Office of Environmental Health Hazard Assessment (OEHHA) formally released a draft of new Prop 65 warning regulations (Proposed Regulations). Unfortunately, the Proposed Regulations do not appear to advance Governor Brown’s stated aims but, if implemented, are more likely to cause greater regulatory complexity, industry and consumer uncertainty and increased bounty-hunter litigation.
There are two primary components to the Proposed Regulations. The first is a comprehensive rewriting of the regulations regarding “clear and reasonable” warnings under Prop 65’s “safe harbor” provisions. The second component is the creation of a Lead Agency Website which will be developed and maintained by OEHHA in order to provide supplemental information regarding exposures to the listed chemicals, including common routes or pathways of exposure and potential strategies for reducing or avoiding exposure to those chemicals.
Revamped Prop 65 Warning Regulations
The primary changes to the “clear and reasonable warning” regulations are:
- A more definitive warning statement indicating that the product “can expose you to a chemical” rather than the current language of “this product contains a chemical”. Additionally, the warning must be accompanied by a yellow triangle graphic containing a bold exclamation mark within a black outline. However, for on-product labeling, the warning must simply state “WARNING Cancer” or “WARNING Reproductive Harm” or both.
- Listing 12 particular chemicals or groups of chemicals if they are among a group that OEHHA has identified that must be listed specifically by chemical name and which are frequent targets of Prop 65 litigation.
- Including warnings in additional languages if the product label otherwise includes additional languages for any other purpose.
- Adding a URL link to the Lead Agency Website to be developed and maintained by OEHHA in order to provide information supplementing the warning for those interested, including avenues of exposure and methods to minimize any potential risks.
- Lengthy and complex sections regarding allocation of responsibility between retailers, manufacturers and others in the stream of commerce of a particular product. The Proposed Regulations attempt to place primary responsibility for the safe harbor warnings upon the product manufacturer and only impose the requirement upon the retailer when any of the following applies:
- the product is a house brand;
- the retailer caused the listed chemical to be added to the product;
- the retailer has altered the warning label;
- the supplier has provided warning materials that the retailer has failed to pass on to the consumer;
- the retailer has “actual knowledge” of the potential exposure to a listed chemical; and either (i) there is no supplier subject to Prop 65 or (ii) the supplier is not subject to US jurisdiction.
- Specification of alternative and additional requirements for certain types of products and industries. For example, specific warning requirements are included for food, restaurants, alcoholic beverages and other facilities that previously have been the subject of Prop 65 litigation.
Unfortunately, the Proposed Regulations may create more potential problems than they purport to solve. First, the more definitive changes in the required warning language may suggest a more direct exposure than is actually supported by the applicable science. Depending upon the nature of the product or how it is used, there may actually be no exposure at all. These changes are likely to sew undue fear and confusion among consumers and provide further grounds for additional private lawsuits. Second, in a jurisdiction as multicultural as California’s, the requirement for multi-lingual warnings creates further burdens and expense to business and provides yet another opportunity for bounty-hunter litigation regarding whether all required warning languages are included. Third, the significant changes in the safe harbor warning language also creates significant uncertainty with regard to the thousands of prior court approved consent judgments containing warning protocols different from those required in the Proposed Regulations. It is unclear whether those prior settlements will be required to be reopened and amended to comply with the Proposed Regulations. Finally, while the delineation of manufacturer responsibilities is intended to clarify the respective warning obligations among those in the products supply chain, it is unlikely that this provision will reduce future litigation given its complexity and the heavy reliance placed on “actual notice” or the state of mind of the retailer, a finding which generally requires a judicial determination to resolve.
New Lead Agency Website
The key components of the Proposed Regulations regarding the Lead Agency Website include:
- A dramatic expansion of OEHHA’s authority over the businesses falling within the purview of Prop 65. This provision, tucked within the language relating to potential public education, allows OEHHA to demand broad and extremely intrusive information from manufacturers, importers and distributors regarding their products and processes including, among other things:
- the location of the chemical or chemicals in the product;
- the concentration (mean, minimum, maximum) of the chemical or chemicals in the final product. If the product contains multiple component parts, the business must provide the concentrations (mean, minimum, maximum) of the chemical or chemicals in each of the component parts;
- the matrix … in which the listed chemical or chemicals is found in the product and the concentration of the listed chemical(s) in the product matrix, if known;
- the anticipated routes and pathways of exposure to the listed chemical(s) for which the warning is being provided;
- the estimated level of exposure to the chemical or chemicals;
- any other related information that the agency deems necessary.
- While trade secret protection may be available to certain products, the requirement to provide information upon request will be enforceable by public prosecutors, including the California Attorney General and District Attorneys.
- Although creation of the Lead Agency Website or this information gathering authority does not appear to have been contemplated by the voters when they approved Prop 65, OEHHA is proposing a sweeping expansion of its authority to obtain a broad swath of company data as it relates to perceived exposures under Prop 65.
It is clear that OEHHA has solicited significant input from stakeholders and concerned citizens in its efforts to update Prop 65. However, the Proposed Regulations are unlikely to live up to Governor Brown’s aspirations. As currently proposed, they have significant potential to expand new Prop 65 bounty-hunter lawsuits and impose further administrative complexity and expense on the private sector. Given the scope of the proposed changes, it is important for all interested parties to participate in the rulemaking process and provide formal feedback and comments.
OEHHA will accept public comments on the Proposed Regulations from January 16 through April 8, 2015. Additionally, OEHHA will hold a public hearing in Sacramento on March 25, 2015 to receive input from all interested parties.