For retailers operating in California, the state’s Safe Drinking Water and Toxic Enforcement Act of 1986 (“Prop 65”) is a constant and often costly headache. Among other requirements, Prop 65 prohibits businesses with ten or more employees, including those that ship products into California, from exposing people in California to any of the over 800 listed chemicals without first providing a “clear and reasonable” warning. The statute also contains a prohibition against discharging or releasing listed chemicals to “sources of drinking water” in the state, but those provisions are not discussed here. The list of over 800 chemicals is revised and updated annually.

A primary exemption to the warning requirement is if the exposure in question is shown to be at an extremely low level. Failure to include a warning when required may result in the issuance of a 60-day notice of violation from “private enforcers,” often referred to as “Bounty Hunters,” who take advantage of Prop 65’s broad scope. Because the burden of proof to demonstrate that a warning is not required falls on defendants, and because Prop 65 allegations are especially difficult to defend, private enforcers are able to extract significant settlements.

As written in the consumer products arena, Prop 65 allows an action to be brought against any entity in the chain of commerce, from component suppliers and manufacturers, to distributors and retail sellers. Retailers are poorly positioned to defend against Prop 65 claims as they possess the least amount of knowledge about products’ chemical constituents, the least control over product specifications and manufacturing, and have little or no knowledge as to whether a product contains a chemical at a level where a warning is required. In order for retailers to obtain knowledge about compliance, a good place to start is a thorough audit of a business’s operations and products to determine what may be implicated by Prop 65 and if the business is exposing consumers to the listed chemicals through product or occupational exposures. Look for Part 2 of our Prop 65 mini-series where we will discuss the proposed regulations that are likely to increase retailers’ risks.