Although it was enacted almost 20 years ago, California’s Proposition 65 is continuing to expand and affect the operations of new companies with its far-reaching legal requirements. It is increasingly important for any retailer, manufacturer or business owner whose products could possibly be sold in California or be used by a California user to comply with the warning requirements of the law.
Proposition 65 requires clear and reasonable warnings to be placed on products that contain specific chemicals that have been “listed” by California’s Office of Environmental Health Hazard Assessment (OEHHA). Chemicals are listed that have a potential to cause cancer or reproductive toxicity in certain levels of exposure. While many of the listed chemicals have long scientific names, many are found in various consumer products such as furniture, purses, bottles and cans.
One of the most recently listed high-profile chemicals is Bisphenol A (BPA), which can be contained in canned and bottled food products. The one-year grace period for companies with products containing a regulated amount of BPA ends this month, and lawsuits or enforcement actions for failure to warn could be filed shortly.
While Proposition 65 provides for enforcement by the California attorney general, it more importantly allows private citizens (and plaintiff lawyers) to file lawsuits to privately police whether the law is being complied with. The number of these lawsuits and settlement amounts to resolve them have continued to rise, with the California attorney general reporting that approximately $29.4 million was paid to settle 663 lawsuits in 2014. The defendants in these lawsuits were from every facet of the distribution chain including, for example, retailers (Bed Bath & Beyond, Forever 21 and Costco), consumer product manufacturers (Britax, which makes car seats, and Dooney & Bourke, which makes purses) and home direct sales companies (Arbonne and Stella & Dot).
Lumber Liquidators saw a huge impact to its business when its stock price decreased to less than half after a TV investigative report noted levels of formaldehyde in a floor product that was being distributed. Lumber Liquidators faced a California attorney general enforcement action as well as more than 20 separate lawsuits alleging failure to comply with Proposition 65 and other causes of action for failure to warn of the formaldehyde levels in certain flooring.
It is important for any company doing business in California or distributing products into California to evaluate the chemical makeup of their process and whether any listed chemicals are present or could be present such that a Proposition 65 warning is necessary.