Newly proposed legislation in New York, announced by Gov. Andrew Cuomo during the release of his Executive Budget late last month, would look an awful lot like California’s “Proposition 65” program … but, presumably, with crucial differences.  As described by the Governor’s office, under the “Consumer Right to Know Act”:

[A]gencies will assess the feasibility of on-package labeling and develop regulations establishing a labeling requirement for designated products, developing a list of more than 1,000 carcinogens and other chemicals that will trigger labeling and identifying the types of consumer products that will be subject to the new regime.

Sound familiar?

The Governor’s press release, the full text of which is available here, also noted that the Department of Environmental Conservation would administer the law, in consultation with the Department of Health and the Department of State.

While few details have been released outside of this announcement, and no actual legislative text has been issued, the parallels to California’s consumer product warning requirements are obvious.  In fact, it would be surprising if New York, assuming the law is adopted, did not default to the California Office of Environmental Health Hazard Assessment’s existing Proposition 65 list of carcinogens and reproductive toxins as the basis for the program.  The same may be true for the text of any required warnings as well, if for no reason other than to ease compliance given that many products already bear the California-required warnings, as well as the potential for consumer confusion from potentially multiple warning statements.

The differences with Prop 65, however, are critical.  First and foremost, there has been no mention of any role for private plaintiff enforcement of the New York law.  Second, the determination of which products require a warning apparently will be accomplished through a state agency regulatory process, rather than left to individual companies.  These two factors — private plaintiff enforcement combined with placing the burden of proof on the business to justify not providing a warning — combined in California to spawn a host of questionable “bounty hunter” suits and an absurd proliferation of warnings that litter the Golden State and do little to advance public health.

It will be fascinating, if the proposal advances, to see what, if any, lessons New York has learned from the California Prop 65 experience and how the state handles a number of critical issues, such as:

• Which products will be subject to warning requirements … all consumer products?  or just certain ones?

• What level of exposure or risk will trigger the need for a warning?

• The list of “potentially hazardous chemicals” that the press release alludes to is practically infinitely long, as almost any substance is “potentially hazardous” at a sufficient dose.  Will New York address substances other than carcinogens and reproductive toxins?

• How will the law be enforced and by whom?  What will the penalties be for non-compliance?

 

The California Office of Environmental Health Hazard Assessment (OEHHA), which oversees the state’s Proposition 65 program, is on the verge of finalizing an exemption from warning requirements for chemicals, such as acrylamide, “created by and inherent in the processes of roasting coffee beans or brewing coffee.”  The new regulation, which recently was sent to the state’s Office of Administrative Law (OAL) for a final review, would establish a new provision (Section 25704) entitled “Exposures to Listed Chemicals in Coffee Posing No Significant Risk.”

Proposed in June 2018, the exemption embodies OEHHA’s response to widespread backlash against a California court decision in favor of the plaintiff, the Council for Education and Research on Toxics (CERT), holding that dozens of coffee-serving defendants in the state violated Prop 65 by failing to provide warnings about exposure to acrylamide, despite the fact that the bulk of the science shows that drinking coffee does not increase cancer risk.  CERT is seeking millions of dollars in fines against the coffee roasting/retail defendants, though the penalty phase of the litigation has been put on hold pending resolution of the exemption rulemaking.  Finalizing the exemption, however, may not be the end of the case, as a CERT challenge to the legal sufficiency of the exemption also is pending in California court.

The OAL has until February 19 to review the regulation, and its accompanying “final statement of reasons,” including response to comments, and decide whether to accept, reject, or request further information from OEHHA.

For further information on the proposed exemption, please see my prior post from June 2018:  https://www.kelleygreenlawblog.com/2018/06/california-acts-decaffeinate-cancer-warnings-coffee/

 

 

Proposition 65 plaintiff groups are starting 2019 with a practically unprecedented bounty of enforcement actions underway.  According to information available from the California Attorney General’s Prop 65 website, almost 2,000 60-Day Notices of Violation have been filed since April 2018 with the vast majority remaining unresolved.  During the last quarter of 2018 alone, 607 new actions were initiated and 2,358 in total during the year.   An incredible 88% (2,083) of the actions filed in 2018 involved phthalates (especially DEHP and DINP), with lead, historically a Prop 65 favorite, a distant but still robust second with 570 actions during the year (note that some actions involve multiple chemicals).

This aggressive spate of activity continues a trend that has seen an almost 50% increase in Prop 65 plaintiff actions since the start of 2017 — following, coincidentally or not, the landmark Prop 65 reforms adopted in August 2016.  (A detailed overview of the 2016 amendments is available here.)  In 2017, there was a notable uptick in enforcement actions by Prop 65 plaintiff groups, with 2,711 actions filed (the 2017 totals are skewed somewhat by virtue of one plaintiff filing 675 notices in May 2017 regarding listed substances found in marijuana products; aside from those anomalies, 2,036 new actions were initiated that year).

A quick look at the number of 60-day notices (which are required to be filed with the state AG’s office) issued to businesses over the last decade shows just how popular (and increasingly so) Proposition 65 is with plaintiff “bounty hunters”:

YEAR # of 60-Day Notices of Violation
2018 2,358
2017 2,711   (2,036 per above)
2016 1,576
2015 1,336
2014 1,404
2013 1,097
2012 908
2011 1,079
2010 787
2009 604
2008 632

Why the increase in activity?  A number of factors clearly are involved, including the ever-increasing number of listed chemicals, as well as a larger number of active plaintiff groups that reflects a broader public consciousness regarding chemical issues.  Phthalates, lead, and, more recently, acrylamide are high profile attention-grabbing substances that are widely found in consumer goods and/or food products and are the focus of a large percentage of Prop 65 actions.  Of course, the increasing amount of money paid in settlements and fines (a substantial amount of which is paid to the plaintiff bounty hunter) no doubt is a lure as well.

Kelley Green Law will continue to follow Prop 65 developments closely and periodically examine enforcement trends as we move through the new year.

Happy 2019.

Only a few months after new provisions went into effect (on August 30th), California’s Office of Environmental Health Hazard Assessment (OEHHA) is proposing to clarify the rules governing retailer and supply chain responsibility for providing warnings under Proposition 65.  These provisions (found in Section 25600.2 of Article 6 of the Prop 65 regs) are intended to provide greater certainty to retailers, distributors, and manufacturers on who is responsible for providing Prop 65 warnings and when, but have sparked a fair amount of confusion due to several ambiguous provisions.

The 2016 amendments to the warning provisions of Prop 65 aimed to limit potential retailer burdens by providing manufacturers (and distributors) with two basic compliance options: (1) affix an appropriate warning to the product; or (2) provide written notice to the retailer regarding the required warning for the product.  The manufacturer/distributor then must obtain confirmation of the retailer’s receipt electronically or in writing.  Retailers that receive such a notice are only liable if they fail to post, obscure, or alter a warning provided to it.  Retailers also may be liable for products sold under their own brand name or if they have “actual knowledge” that a warning is required for a product and there is no other potentially responsible party.

Most notably, OEHHA is proposing three main changes:

First, OEHHA proposes to allow distributors to satisfy their obligation by providing written notice and warning materials either to the retailer or to the business to which they directly sell or transfer the product (i.e., the next distributor in the supply chain).  The current rule only provides that such notice be sent to “the authorized agent for the retail seller.”  The proposal responds to business concerns that “the original manufacturer, distributor, importer, or others in the chain of commerce may not know where or by whom the product will ultimately be sold to a consumer.”

Second, OEHHA would clarify that where a business has not designated an authorized agent to receive Proposition 65 notices, the notice may be served on the business’s legal agent for service of process.

Third, OEHHA addresses the concept of “actual knowledge” that may trigger retailer responsibility for providing a warning.  Currently, the regulations state that retailers must provide a warning when they have “actual knowledge of a potential consumer product exposure and there is no manufacturer, producer, packager, importer, supplier, or distributor of the product who is subject to the act, and who has a designated agent for service of process or a place of business in California.”  The definition of “actual knowledge” would be expanded to clarify that “actual knowledge” must be of “sufficient specificity for the retail seller to readily identify the product that requires a warning.  Consistent with traditional agency/corporate law, OEHHA also would confine the scope of employees whose knowledge may be attributed to the business to either “an authorized agent for the organization, or an employee in a position of sufficient responsibility that his or her knowledge can be imputed or attributed to the retail seller.”

UPDATE:  OEHHA has extended the comment period through January 11, and scheduled a public meeting on January 3.

With the biggest sales day of the year shortly upon us, a new wave of on-line shopping Americans likely will see Proposition 65 warning notices for the first time.  Though California’s notorious program technically only applies within the state’s borders, Prop 65’s impact stretches well beyond.  Non-California businesses long have had to deal with Prop 65’s requirements since it was adopted by voter referendum in 1986.  Now, however, non-California consumers will be introduced to the ubiquitous warnings (that many Californians simply ignore) thanks to recent amendments emphasizing the need to provide warnings for internet purchases.  (For more details on the recent amendments, including the requirements for internet sales, please see my prior blog post.)

With an exponential increase in recent months of such internet warnings (and the fact that most businesses do not maintain “California-only” websites), consumers across the United States will be seeing many more of these warnings, perhaps for the first time, as they start their holiday shopping.  This article from Yahoo News (Article) — “‘This product contains chemicals known … to cause cancer’: How to navigate Prop 65’s scary warnings while toy shopping” — gives a sense of how consumers may respond … and, more importantly, hints at how such warnings should be understood.

In particular, consumers should keep in mind:

→ There are over 900 chemicals listed by the State of California as potentially causing cancer or reproductive/developmental harm.  Many of these substances are listed based on exposures (usually to laboratory animals) at levels hundreds or thousands of times higher than the level to which a person ever would be exposed.

→ Because of the punitive enforcement mechanisms of Prop 65 … and the proliferation of plaintiff “bounty hunters” that enforce the law … many businesses choose to provide a warning (even when one is not necessary) rather than defend a determination (based on sound science and common sense) not to provide a warning in a lawsuit at substantial cost.

→ Most importantly, remember that it is “the dose that makes the poison.”  The existence of a warning does not mean that the product actually poses any kind of meaningful risk.  In most cases, the presence of a warning only means that there may be some exposure to a listed substance, mainly due to the practicality of providing a warning even when one is not necessary.

Prop 65 is intended to force businesses to provide a warning if they choose not to reformulate listed chemicals out of their products.  For many products, reformulation is not an option.  Moreover, it may be impossible to avoid miniscule amounts of certain substances, such as lead, which are ubiquitous contaminants in many materials.  Hence, there is a proliferation of warnings on products that are provided simply out of an abundance of caution and serve no real risk-reduction purpose.  (Which is why they are routinely ignored by many Californians … unfortunately, the rest of the country is not nearly as familiar with them.)

Now these warnings are coming en masse to the Black Friday shopping website of your choice ….  something to consider while enjoying your turkey this Thanksgiving!

California has added a new chemical to the list of substances known to the state to cause reproductive toxicity under Proposition 65, though the listing is not as broad as originally proposed.  While the Office of Environmental Health Hazard Assessment (OEHHA) is adding “Nickel (soluble compounds)” to the reproductive toxin list, at an October 11 meeting, the expert panel that reviews proposed listings (the Developmental and Reproductive Toxicant Identification Committee or DARTIC) rejected a proposed broader listing that would have included metallic nickel and insoluble nickel compounds.

Extensive comments submitted by the nickel industry detailed how the available scientific information, summarized in a 347-page “hazard information” document released in August, did not support a listing beyond certain soluble compounds of nickel.  The DARTIC agreed, voting unanimously against listing “Nickel and Nickel Compounds” broadly for any of the three reproductive toxicity endpoints the Committee reviews (developmental toxicity and male/female reproductive toxicity).

The decision to limit the listing to only soluble nickel compounds is significant for industries that produce nickel-containing materials, such as stainless steel and other metal alloys, as well as companies that use such materials to manufacture consumer and industrial products.  While metallic nickel and other nickel compounds currently are listed as carcinogens under Proposition 65, the regulations exclude nickel exposures via the route of ingestion.  OEHHA also has stated that the carcinogen listing for nickel does not include “nickel alloys” within its scope.  Perhaps most notably, a series of cases and settlement agreements have determined that stainless steel and other nickel-containing alloys do not require a Proposition 65 warning when used in a variety of “high contact” products, such as  jewelry, body piercings, and medical and dental implants.  These “no warning” determinations have been based on a conclusion that the potential exposure to nickel from various metal alloys — in which nickel is entrained within the alloy matrix and not readily released — is minimal and below the threshold required for warnings under Proposition 65.

A broader reproductive toxicity listing that included metallic nickel would have triggered a review of the “no warning” determinations for these materials, as well as the need to develop a maximum allowable dose level (MADL) to define the safe threshold level for exposure.

OEHHA staff now are charged with the task of defining the scope of the soluble nickel compounds listing.

 

Live from San Francisco, Kelley Green Law Blog is reporting today from the Prop 65 Clearinghouse 2018 Conference …. the largest annual assemblage dedicated to the cottage industry that is California’s “Proposition 65.”  Uniquely, the Clearinghouse conference brings together the full spectrum:  California regulators, the plaintiff’s bar, defense and corporate in-house counsel, and assorted other ne’er-do-wells. It’s a great opportunity to be reminded, from my usual defense counsel perch, of what motivates “the other side” and to gain insights into the latest trends, current developments, and future direction of the program.  Forthwith are some of those “insights,” observations and other musings from the front lines of Prop 65:

•  There are a lot of people here … more than ever before (a good sized ballroom’s worth) and the first year it is “sold out.” And not just folks from California.  Testament to the broad interest of the newly in force amendments and, generally, the long reach Prop 65 has for companies from all over and anyone whose products may be sold in the state (meaning:  almost everyone).

•  The best and most enlightened of the plaintiff’s bar do have a good story to tell, highlighting true successes of the program over the last three decades (perhaps the greatest of which is focusing attention, and more thoughtful analysis, on the chemicals in the products we use and encounter every day) … even if it is just part of the story and comes at a significant cost in not only economic terms, but in undermining ACCURATE risk communication and management.

•  Quote of the Day 1:  “Keep the blood pressure under control.”

• Prop 65 is entering a new phase with the advent of the amended warning requirements and emerging judicial challenges … some of the chief questions:  How will “private enforcers” react to departures from the new “safe harbor” warning text and mechanisms?  Will defense counsel launch a wave of preemptive challenges in the wake of the glyphosate “compelled false speech” First Amendment case?

•  Internet warnings very much warrant an entire panel session … for good reason as e-commerce expands exponentially.  Private enforcers are active web surfers!

•  Quote of the Day 2:  “how will the bounty hunt- errrr…. private enforcers react ….?”

•  What’s next from OEHHA?  Expanding warning website chemical “fact sheets.”  Increased use of “information request” authority to obtain from companies details on the source, concentration, route, etc. of the exposure for which a warning is being provided.  Guidance or amended regs on the duty to pass information through along the supply chain.

• The “safe use determination” process is seeing a significant uptick in interest.

• Overwarning is still a major issue despite the goal of the new amendments to reduce “prophylactic warnings.”  Of course it is – the amendments did nothing to address the main issue with Prop 65 (the determination as to WHEN a warning is required) or change the incentives to provide a warning out of an abundance of caution.

•  The retailer/manufacturer provisions on “clarification” of responsibilities throughout the supply chain is riddled with ambiguities and questions with which the market is struggling.  Who is an “authorized agent” for retailer notifications? What and how many warning materials must the manufacturer provide?  How are distributor instructions/notifications to be handled?  How should retailers respond when they receive a 60 day notice?  How can private enforcers certify that a retailer may or may not be held liable under the new standards?

•  More pointedly, the retailer provisions, by allowing independent agreements on liability allocations, may have the perverse result of sticking responsibilities on the smaller actors with less market power.  Which leads to Quote of the Day 3: “Leave me alone or the little guy gets it!”

• There is no foolproof compliance solution … it is a matter of risk tolerance and minimization.  One important component:  testing!  Some is better than none.  For example,  testing showing “non-detect” levels can provide an affirmative defense if done within the past 12 months …. but make sure you meet the requirements of section 25900(a), such as use of a proper test method and a certified laboratory.  Also, how many samples are enough?  There is no set answer but look to do enough for statistical power (maybe three at least?!) given inherent variability.

And that’s a wrap from the City by the Bay!  All signs suggest that next year’s conference will be at least as well attended.  As always, for the latest on Prop 65 stay tuned to Kelley Green Law Blog.

 

Today, August 30, 2018 … marks the date that the 2016 amendments to the warning requirements of California Proposition 65 go into full effect.  This brings to a close the two year phase-in period for the new “safe harbor” warning provisions, meaning that those ubiquitous “old” warning signs are no longer considered de facto compliant … what a difference a day makes!  Just yesterday, those very same signs were accepted as “clear and reasonable,” but no more (at least for products manufactured after today).   Further, and perhaps of most importance, the new provisions governing retailer and supply chain liability for providing warnings now go into effect.

For more details, and analysis that attempts to wade through the swamp of Proposition 65, please see my prior blog post.

Out with the Old
In with the New

 

Historically, the bulk of Prop 65 actions have come from plaintiff attorneys sending waves of people into retail stores in California to purchase and then test products for possible exposures to listed chemicals.  This paradigm is shifting increasingly to a new pattern of plaintiff behavior:  scouring websites for possibly non-compliant products that are sold and shipped to California addresses.  While statistics on the source of alleged Prop 65 violations are not available, it is clear from experience, at least anecdotally, that perhaps a majority of new cases are instigated by on-line sales.

Companies that may not consider themselves to be “selling in California” very often are, at least from a Prop 65 perspective.  Unless your company strictly limits distribution and sale to places outside of California, you may end up in the Prop 65 web.  And internet sales are the easiest way for a Prop 65 plaintiff to track you down.

The recent amendments to the Prop 65 warning regulations provide compliance guideposts for the sale of products on-line that may result in exposure to listed chemicals.   For an internet purchase to qualify for the “safe harbor” warnings prescribed in the new regulations (i.e., for the warning to be presumed compliant), a business must provide either the warning statement or a clearly marked hyperlink using the word “WARNING” on the website product display page, or otherwise prominently display the warning to the purchaser prior to completing the sale.  Guidance from the Prop 65 implementing agency, the Office of Environmental Health Hazard Assessment (OEHHA), earlier this year clarifies that in addition to the website warning, the consumer also must receive the warning through the traditional methods related to sale of consumer products — meaning that a warning must appear on the product label (on the product itself or its immediate packaging/container) as well as be delivered prior to completion of the on-line sale.

In short, if you do any business on-line, your company should be thinking about Prop 65 and the tangled web it weaves for any product that may end up within California.

In a remarkable and perhaps precedent-setting decision, a California appellate court sided with cereal manufacturers in ruling last week that Proposition 65 cancer warnings for acrylamide were preempted by federal policy encouraging the consumption of more whole grains.  In overturning a lower court ruling finding no preemption, the three-judge panel of the state appeals court gave remarkable deference to Food and Drug Administration policy and guidance which, the court stated, “contained persuasive reasoning why Proposition 65 acrylamide warnings on whole grain cereals would mislead consumers and lead to health detriments.”

Continue Reading Prop 65 Court Win for Cereal Manufacturers Sets the Table for Further Challenges to Warning Requirements