When it comes to Proposition 65 (also known as California’s Safe Drinking Water and Toxic Enforcement Act of 1986), the stakes are high for businesses in California. In 2018, alone, the California Attorney General reports that there were 368 consent judgments resulting in $30.7 million in payments and 467 out-of-court settlements that resulted in an additional $9.7 million in payments to private enforcers of Proposition 65. Roughly 80% of these payments went to attorney’s fees. Even if you have determined—based on sound data and analysis—that no warning is necessary for a listed chemical in your product, a private plaintiff simply needs to detect the chemical in a product to pursue an enforcement action. The burden of proof then shifts to the business to demonstrate that the product is not subject to the law’s warning requirements. While the assumptions underlying your determination may be rational from a scientific standpoint, the plaintiff has no legal obligation to accept these assumptions when it comes to Proposition 65.
Although California now represents the fifth largest economy in the world, compliance with Proposition 65 poses a significant hurdle to doing business in the State. But what if you could urge California officials to agree with your determination that a Proposition 65 warning for your product is not required? In fact, California’s Office of Environmental Health Hazard Assessment (OEHHA) offers this service through a process known as a Safe Use Determination (SUD). The SUD provides businesses with an opportunity to ask OEHHA to comment on whether a specific exposure scenario would trigger the need for a Proposition 65 warning for a given product. While OEHHA has issued less than 10 SUDs since issuing its first in 1999, SUDs are options that businesses should keep in mind for potentially limiting Proposition 65 liability.
Below we provide some general background on Proposition 65 and the SUD process. We also comment on some key factors to bear in mind as businesses contemplate whether this pathway is worthwhile for confirming the Proposition 65 status of their products.
Background on Proposition 65 and Safe Use Determinations
Proposition 65 is a right-to-know law that requires individuals to receive a clear and reasonable warning before being exposed to certain chemicals that California deems to be carcinogens or reproductive toxicants under Proposition 65. Exposures covered under Proposition 65 include discharges of listed chemicals into sources of drinking water, employee exposures at the workplace, and exposures to individuals from consumer products.
A business has an affirmative defense to an assertion that a Proposition 65 warning is required if it can establish that the exposure from a product would be less than the “safe harbor” level associated with a given chemical. For carcinogens, the safe harbor is known as the “No Significant Risk Level” (NSRL); this is the level of exposure that would result in not more than one excess case of cancer in an exposed population of 100,000 people, assuming exposure over a 70-year lifetime. For reproductive toxicants, the safe harbor is known as the “Maximum Allowable Dose Level” (MADL). The MADL is equivalent to 1/1000th of the No Observed Effect Level (NOEL), as derived from the relevant toxicity study for the substance.
Through the SUD process, businesses may request OEHHA to consider whether an exposure to or discharge from a listed chemical warrants a warning under Proposition 65. If OEHHA agrees that the discharge or exposure is at or below the safe harbor level for the substance, then the Agency will issue a SUD. Typically, SUDs are pursued when a business is confident that no warning is necessary.
Process for Obtaining a SUD
To obtain a SUD, a business must submit its own detailed exposure analysis to support its determination that no warning is necessary for a given exposure scenario. OEHHA encourages submitters to informally contact the Agency prior to submission. This is to ensure that the request satisfies OEHHA’s information expectations. These details may include:
- A detailed description of products covered by the request;
- Information on concentrations of the listed chemical in the products (e.g., several batch analyses demonstrating typical levels, rather than the results of testing a single sample);
- Data on the frequency, amount, and duration of product use; and
- Product and/or process descriptions that are relevant to evaluating exposure, including relevant peer-reviewed literature (e.g., metabolism and dermal absorption data).
There is a $1,000 fee for submitting a SUD request. Submitters can request that certain information in the SUD be maintained as confidential/trade secret; however, OEHHA does not typically consider exposure information and safety studies to be confidential.
Upon receipt, OEHHA will review the submission and conduct its own exposure analysis; if OEHHA has questions prior to accepting the submission, the submitter has 30 days to respond. If the questions are not answered within this period, the request is closed but can be reopened at a later date. When OEHHA determines that the submission is complete, the Agency will issue a written notice of acceptance that is published in the California Regulatory Notice Register. The written notice of acceptance will include an estimate of the costs that the submitter is expected to bear. Notably, OEHHA charges for the costs that the Agency incurs in reviewing the request, including the cost of staff time. Recent cost estimates for SUDs have ranged from $40,000 to $70,000.
Once OEHHA accepts the SUD request, the Agency may still pose questions to the submitter. If this occurs, the submitter has 60 days to respond, though OEHHA has the authority to issue an extension. Based on the SUD request, OEHHA may either issue a SUD, decline to do so, issue an interpretive guideline, or issue an information letter.
To date, OEHHA has issued 8 SUDs, which speak to items ranging from latex paints, pet litter, and outdoor furniture to modular carpet tiles and vinyl flooring. In all cases, except for the SUDs on latex paint and pet litter (which dealt with crystalline silica), the SUDs concerned exposure to diisononyl phthalate (DINP) in these products. DINP is listed as a carcinogen under Proposition 65 and is a commonly-targeted substance by private enforcers of the statute. Taking 2017 as an example, there were 57 out-of-court settlements involving DINP (alone or in combination with other listed substances), amounting to $1.1 million in settlements. There were an additional 45 consent judgments that totaled $1.6 million in fees and penalties.
While OEHHA has issued a more recent SUD regarding DINP exposure in carpet tiles, an earlier SUD demonstrates just how helpful this mechanism can be for businesses. In January 2017, OEHHA issued a SUD to Phifer Incorporated (Phifer) for its Phifertex® outdoor furniture fabric. The fabric contained 25% DINP. Phifer presented OEHHA with a worst-case assessment, showing that exposure to DINP from the fabric is below the safe harbor level for the substance. Although OEHHA did not agree with every assumption that Phifer presented, the Agency arrived at the same conclusion – exposure to DINP from the fabric was below its safe harbor level, thus providing Phifer with greater certainty about the Proposition 65 status of its Phifertex® fabrics.
When one reviews the Proposition 65 actions regarding DINP in consumer products, the value of the Phifertex® SUD becomes apparent. Consumer products that have been implicated with Proposition 65 violations for DINP include vinyl-coated hooks, toiletry bags, tools, and wallets—products that are handled for relatively brief periods of time and that contact a limited surface area of the palm and fingers. Further, when reformulation levels were specified in settlements for these products, the reformulation level was typically 0.1%--orders of magnitude less than the 25% concentration in the Phifertex® material. Considering the millions of dollars in fees and penalties that are spent on defending Proposition 65 and DINP, a SUD may well represent an appealing option to consider.
What’s the Catch?
Given that the SUD process exists as a resource to industry, why haven’t more companies requested SUDs? One reason is that SUDs are merely advisory opinions. They are not binding. As a result, a private plaintiff or the California Attorney General could theoretically pursue an enforcement action even after OEHHA issues a SUD that supports a decision not to warn. Even so, we are not aware of enforcement action being taken on a product that is the subject of a SUD. Other considerations that businesses should bear in mind include the public disclosure of information submitted in a SUD, and the costs and time associated with the SUD process (e.g., two years for the Phifertex® evaluation).
All in all, however, the SUD process may offer a glimmer of certainty in the otherwise complex landscape of Proposition 65 compliance.
This article first appeared as an Expert Analysis article in Law360.