Dietary Supplement, personal care, food, and other companies doing business in California are well aware of Proposition 65 (Prop 65), a ballot initiative enacted in California under the State’s Safe Drinking Water and Toxic Enforcement Act of 1986. Prop 65 requires products sold in California that contain any chemicals “known to the state to cause cancer or reproductive toxicity,” to include a warning to this effect on the product label. Action to enforce Prop 65 may be brought by both the government and by private individuals acting “in the public interest.” Over the years, the number of private individuals filing “notices of violation” against companies offering products for sale in California has grown into a cottage industry.
The private individuals, sometimes less attractively characterized as “bounty hunters,” who send such notices of violation, often successfully negotiate settlements with notified companies for whom a fixed settlement is less uncertain than the outcome of potential litigation. Repercussions of violations are not slight: if a company violates Prop 65, a court may not only enjoin that product’s sale in California but hold the company liable for up to $2,500 in civil penalties per day for each violation. For the “bounty hunter,” a notice of violation can be a win-win situation since, if successful, the individual may receive the proceeds from a court-approved settlement with the company or if the matter proceeds to litigation either by the individual or by the State joined by the individual, the private individual will share in any penalties imposed upon the violator by the court, and reasonable attorney fees. Thus, for companies that may be caught in unsuspected Prop 65 violations and for whom the prospect of a disagreeable settlement or an expensive law suit are equally unattractive, the amendment introduced earlier this year by Assemblyman Mike Gatto (D-Los Angeles) may provide a welcome alternative. The proposed amendment to Prop 65, urged by a coalition of small business owners, would permit the recipient of a Prop 65 violation notice to correct the violation within 14 days of receipt of the notice without being subject to the retroactive $2,500 per day fine. The recipient would have to:
- Send the person that sent the “notice of violation” a written statement signed under penalty of perjury, describing the company’s remedial actions and a copy of any Prop 65 Warnings posted or labeled; and
- complete the proposed remedial actions.
When these actions are taken, the proposal prohibits any enforcement action by the private individual, although not by the State, should California wish to pursue the matter. The American Herbal Products Association has voiced its support for the legislation, stating, “AHPA is formally endorsing this amendment to Proposition 65 as a common-sense approach to enforcing the law”.
Supporters of the amendment should be aware that the proposed legislation faces several hurdles it before being enacted, as it must first clear committees in both the California State Assembly and the California Senate. However, due to legislation deadlines, if the legislation is to be enacted at all this year, it must be passed by September 13th. The proposal is scheduled to be considered by the California Environmental Safety and Toxic Materials Committee in a hearing on April 16th.
Affected companies selling in California, including makers and distributors of nutritional and dietary supplements, foods, consumer products and personal care products with an interest in reforming this aspect of Prop 65 should contact California State Assemblyman Gatto ((916) 319-2043) to discuss the most effective ways to support the proposed legislation.