On October 31, 2012, in a case that was closely tracked by industry, the California Court of Appeals, 3rd District1, affirmed a Superior Court decision prohibiting the inclusion of “possible” carcinogens styrene and vinyl acetate on California’s Proposition 65 list based solely on that classification. Proposition 65 imposes significant requirements on businesses, including discharge restrictions to public water sources and public notification requirements related to listed substances. The ruling is therefore seen as an important win for businesses and one that may have wide-sweeping impacts on chemicals manufactured and used in numerous industries.

SOURCES OF INFORMATION WHICH MAY FORM A BASIS FOR INCLUSION ON CALIFORNIA’S PROPOSITION 65 LIST

A substance will be listed under Proposition 65 based on any one of a variety of criteria. First, California’s Office of Environmental Health Hazard Assessment (OEHHA) can propose a listing through one of the methods described in the Health and Safety Code Section 25249.8(b). Second, OEHHA can use the California Labor Code approach of adopting findings from what are termed “authoritative sources.” One such authoritative source for identifying substances is California Labor Code Sections 6382(b)(1) and (d). Finally, the United States Environmental Protection Agency maintains a list of chemicals that cause cancer and reproductive toxicity, which also qualifies under the Labor Code as source of Proposition 65 listings.

CHEMICALS MAY BE INCLUDED ON CALIFORNIA’S PROPOSITION 65 LIST ONLY IF THERE IS A SUFFICIENT SHOWING THAT THEY ARE CARCINOGENIC

The International Agency for Research on Cancer (IARC), a branch of the World Health Organization, issues monographs which establish classifications of carcinogenicity for selected substances. IARC uses numerous categories to classify chemicals based on the level of proof of carcinogenicity. The categories range from Group 1, substances “known to cause cancer in humans,” to Group 4, those substances where the evidence shows that they do not cause cancer in humans.

In 1995 and 2002 IARC categorized vinyl acetate and styrene respectively as Group 2B, or substances that are “possibly” carcinogenic to humans. This categorization was based on a determination that there was less than sufficient evidence of carcinogenicity in experimental animals and limited evidence of human carcinogenicity exists. OEHHA used this Group 2B categorization as its basis for proposing to include styrene and vinyl acetate on California’s Proposition 65 list.

OEHHA primarily relied on Labor Code Section 6382(d) in making its determination to list styrene and vinyl acetate. Subdivision (d) allows listing of substances within the scope of the federal Hazard Communication Standard (HCS) issued by the Occupational Safety and Health Administration (OSHA). The HCS, in turn, includes several authoritative sources that establish a chemical as a carcinogen or potential carcinogen, including the IARC monographs on carcinogens. OEHHA relied on IARC’s monograph and the Group 2B categorization to propose inclusion on California’s Proposition 65 list.

The narrow issue presented to the appellate court was “whether chemicals categorized in Group 2B by an IARC monograph may be included on the Proposition 65 list.” The court boiled the issue down to a question of statutory interpretation, which it reviewed de novo.

OEHHA argued that an interpretation of Proposition 65 which limits it to substances known to cause cancer would be inconsistent with the interpretation of OSHA, the agency charged with interpreting the HCS, and OEHHA’s own administrative interpretation. The appellate court found that although agency interpretation of the meaning and legal effect of a statute is given consideration and respect by the courts, in this case, OEHHA “is entitled to little or no deference.” The Court said that is because OEHHA waited fifteen years after the enactment of Proposition 65 before it began using the Labor Code method for listing and because it had not adopted any formal regulations addressing this approach to listings.

Instead, the appellate court found that the legislative history of Proposition 65 and the minimum requirements language in Health and Safety Code Section 25249.8(b) supported an interpretation that chemicals may be included on the Proposition 65 list only if there is a sufficient showing that they in fact cause cancer or reproductive toxicity.

IARC’s Group 2B categorization did not meet this standard because it was based on “limited” evidence of human carcinogenicity. Therefore, the court found that a chemical “may not qualify for Proposition 65 listing on that basis alone.” Since OEHHA had no other basis for listing the chemicals, the court affirmed the Superior Court’s decision to grant the Styrene Information & Research Center’s motion for judgment on the pleadings.

THIS DECISION LIKELY APPLIES TO ALL IARC GROUP 2B CHEMICALS

While an appeal of this decision by OEHHA is still possible, the California Supreme Court accepts few appeals. Assuming this decision stands, the recent use of the Labor Code as a source will be curtailed since OEHHA will be precluded from adding any substance to the Proposition 65 listing based solely on an IARC 2B classification.