WARNING: Proposition 65 Background, Recent Amendments, and Compliance Strategies Tom Lee Partner, Environmental Bryan Cave Leighton Paisner, LLP tom.lee@bclplaw.com
Proposition 65 • Proposition 65 Background and Overview • Recent Regulatory Amendments • Compliance Strategies and Challenges
Proposition 65 Background
Proposition 65 Background • Prohibits “knowing and intentional” exposure to more than 930 chemicals without first providing a “clear and reasonable” warning. • Cal. Health & Safety Code§ 25249.6 List of chemicals at https://oehha.ca.gov/proposition- 65/proposition-65-list
Proposition 65 Background
Proposition 65 Background • Warnings required before exposure to: • Consumer products • Areas that contain listed chemicals (e.g. parking garages, buildings, airports, etc.) • Job functions that may lead to exposure
Proposition 65 Enforcement • Attorney General • District and City Attorneys • Private Enforcers – Must serve 60-day notice on violator, all of above https://oag.ca.gov/prop65/60-day-notice-search
Proposition 65 Penalties • Injunctions • Penalties of up to $2,500 per day for each violation • Attorneys’ fees • Settlement payments for the last three years that have been reported demonstrate a continued enforcement trend: Annual Settlement Totals $40.00 $30.00 $20.00 $10.00 $0.00 2016 2017 2018 Settlement Value $30.20 $25.80 $35.10 (Millions)
Proposition 65 Enforcement Trends • 2,410 new 60-day notices in 2019 • 529 notices in 2020 as of March 4th (3,016 annualized) Notice Trends for Key Chemicals 1800 1608 1600 1400 1200 2017 1000 2018 800 600 2019 400 205 202 200 87 0 Phthates Lead Acrylamide Cadmium
Proposition 65 Defenses • No “knowing and intentional exposure” • Must stop selling after receipt of 60-day notice • No exposure above “safe harbor levels” • List at http://oehha.ca.gov/prop65/pdf/P65safeharborlevels040116.pdf • No Significant Risk Levels for Carcinogens : No more than 1 excess case of cancer in a population of 100,000 over 70 years • Maximum Allowable Dose Level for Reproductive Harm : No observable effect level at x 1,000 product concentration • Chemicals are naturally occurring • Present solely as a result of absorption from the environment in which the food is raised or grown • Not feasible to reduce • Cooking – Chemical(s) caused by process needed to make food or beverage safe and/or palatable
New Warning Regulations
New Warning Regulations • Initial Changes Effective August 30, 2018 • Revisions Effective April 1, 2020 • Allows manufacturers to push their labelling responsibility to any downstream entity • Makes it easier for manufacturers and other upstream entities to provide notice • Confirms that obligation can be contractually allocated
New Warning Regulations • Must include the name of at least one listed chemical for each endpoint (e.g. one carcinogen and one reproductive toxicant) • Must be present in the product • Do not have to provide warnings for all listed chemicals in the product • Most warnings must have a yellow triangular warning symbol • Product label or shelf signs that do not use the color yellow can use a black and white symbol
New Warning Regulations • Manufacturer, producer, packager, importer, supplier, or distributor has primary burden to: • 1) Label products with warning, or • 2) Provide notice to retailers every 6 months specifically identifying products requiring warnings, and supply all warning materials • Parties can allocate burden contractually • Purchase order terms and conditions • Vendor guide • Many retailers have sent notices that they won’t accept responsibility, post shelf signs or accept warning materials
New Warning Regulations • Retailers can still be held liable for: • Private label products; • Knowingly introduced or created chemical; • Covered, obscured or altered product warning labels; • Failure to post a warning or label after receiving notice and warning materials from the manufacturer; • Actual knowledge of potential exposure when there is no manufacturer who is subject to Prop. 65 • Actual knowledge presumed 5 days after receiving a 60-day notice • Take Away: have procedures in place to respond promptly
New Warnings - Food • WARNING: Consuming this product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause cancer and [name of one or more chemicals], which is [are] known to the State of California to cause birth defects or other reproductive harm. For more information go to www.P65Warnings.ca.gov/food • Where potential exposure is to both carcinogens and reproductive toxicants, list one example of each • Set apart in box. No smaller than other consumer information, and not smaller than 6- point type size • If consumer information is provided in another language, provide warning in that language
New Warnings – Short Form Warnings • Examples: • WARNING: Cancer – www.P65Warnings.ca.gov • WARNING: Reproductive Harm – www.P65Warnings.ca.gov • WARNING: Cancer and Reproductive Harm – www.P65Warnings.ca.gov • Can appear on label, packaging, shelf signs • Shelf signs must be product specific and at each point of display • Can be received through electronic device
New Warnings • Supplemental information permitted if it identifies the source of the exposure or how to reduce exposure
New Warnings – Online • Warning required on: • Product display page, • Through hyperlink using word “ WARNING ,” or • Prior to completing purchase • Can be on pop-up triggered by entry of California address • But in any case, must be a product-specific warning • Where short form is used on product, same warning can be used online • WARNING : Cancer – www.P65Warnings.ca.gov • Catalogs : Warning must appear on product display page
New Warnings – Online • Retailers should specify procedures for notice and receipt of warnings, including warning image • Manufacturers should seek carve out from defense and indemnity provisions where retailers fail to post warnings
Compliance Strategies and Challenges
Risk Mitigation Options • Warn • Contractually allocate responsibility • Test your ingredients, packaging, and finished products to identify the presence and concentration of listed chemicals • If listed chemicals are detected, determine whether a warning is required • Are any of the defenses discussed above available • Conduct an exposure assessment to determine whether the dosage from anticipated interaction with the product is below the safe harbor level • Is reformulation an option
Warn • Ensure that your current warnings are up to date • Ensure that you comply with all requirements for the placement of the warning on packaging, in catalogues, and online
Prop. 65 and Food • Products contain listed chemical? • Monitor https://oag.ca.gov/prop65/60-day-notice-search • Labs can recommend testing protocols. • Consult with counsel • Reformulation? • Sales with a warning?
Contractually Allocate Liability • The regulations specifically allow manufacturers and retailers to contractually allocate responsibility for providing a warning • Manufacturers should consider their agreements with downstream distributors and retailers, as well as with their suppliers • Challenges • Even if a supplier has agreed to notify you of any listed chemicals, they may not know that their products contain listed chemicals because they can be inadvertently present in products • Similarly, the concentration of chemicals may vary across different lots of the same product, and that variability can present compliance challenges
Exposure Assessments • Exposure assessments establish whether or not the dose of a listed chemical that an average consumer or user of the product will be exposed to is above or below the relevant safe harbor level. If the dosage is below, then no warning is required • OEHHA has not established a Safe Harbor Level for all listed chemicals • Using published toxicology data and code requirements a Maximum Allowable Dose Level (MADL) or No Significant Risk Level (NSRL) can be derived • However, if new studies provide different data in the future that may change the derived MADL/NSRL
Questions? Tom Lee Partner, Environmental San Francisco, CA Bryan Cave Leighton Paisner, LLP (415) 675-3447 tom.Lee@bclplaw.com
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