January 06, 2015 Articles

Proposed Changes to Proposition 65 Provide Limited Benefit to Business

By Elizabeth McNulty

Recent proposed changes to California's Proposition 65 require more stringent exposure warnings that will likely increase the burden on business and set in motion a new onslaught of litigation against consumer product manufacturers and those selling into the state of California.

California's Proposition 65, the Safe Drinking Water and Toxic Enforcement Act of 1986, is a law passed by a ballot initiative in November 1986. Proposition 65 was intended to protect California citizens and the state's drinking water sources from chemicals believed to cause cancer, birth defects, or other reproductive harm, and was envisioned by its drafters as a mechanism to provide warnings to citizens about potential exposures to listed chemicals. Unfortunately, the execution of Proposition 65 has proven to be more of a "private attorney general wealth insurance act" than a citizens' protection act. Recent proposed changes do nothing to improve the landscape for businesses selling consumer products into the state of California.

Proposition 65, as currently written, provides: "No person in the course of doing business shall knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving a clear and reasonable warning to such individual . . . ." Cal. Health & Safety Code § 25249.6.

The methods of transmission for the clear and reasonable warnings must be such as to ensure that a consumer is provided notice of the existence of a listed chemical, in excess of minimum daily exposure levels, in a consumer product in advance of purchase and exposure to the chemical. The requirements for the mandated warnings are set forth in the California Health & Safety Code and require, in the case of a chemical that is listed as both a carcinogen and a reproductive toxin, the following language: "WARNING: This product contains a chemical known to the state of California to cause cancer, birth defects, or other reproductive harm." (Note: If a product contains only a carcinogen or reproductive toxin, the warning is modified to address the singular chemical exposure.)

If a product is sold in the state of California without the mandated warning and the product contains a listed chemical in excess of the allowed daily exposure limits, enforcement may be commenced by any attorney general in the state of California or, the more commonly seen mechanism, by private attorneys general (or bounty hunters). The enforcement by private attorneys general has become a cottage industry, largely encouraged by the excessive attorney fees recoverable in settlement.

In a professed attempt to curb the abuses that have become commonplace with Proposition 65, and to "[r]equire more useful information to the public on what they are being exposed to and how they can protect themselves," Governor Edmund Brown released a proposal to reform Proposition 65, including the Clear and Reasonable Warnings provisions, on May 7, 2013. Thereafter, on March 7, 2014, the Office of Environmental Health Hazard Assessment (OEHHA) published a Notice of Public Workshop for potential amendments to Article 6, Clear and Reasonable Warnings. An open comment period followed, with an extension to the comment period closing on June 13, 2014. To date, no final regulations have been adopted.

As part of the possible regulatory action, material changes to the content of the mandated warnings are proposed. The current proposal requires that warnings contain, at a minimum, the following:

  1. The word "WARNING" in all capital letters and bold print
  2. The word "expose"
  3. The standard pictogram for toxic hazards from the Globally Harmonized System (GHS) for consumer products other than food, drugs, and medical devices
  4. A new OEHHA website, allegedly providing the public with more detailed information on warnings, including methods for reducing exposure
  5. The identification of 12 "common substances," each of which are already listed under Proposition 65, by name:
    • acrylamide
    • arsenic
    • benzene
    • cadmium
    • chlorinated tris
    • 1,4-dioxane
    • formaldehyde
    • lead
    • mercury
    • phthalates
    • tobacco smoke
    • toluene

Although the proposed warning language has been touted as a means of streamlining the warning provisions and providing clarity to consumers and businesses alike, the more realistic effect in application will be an increased burden on businesses whose products bear the label outside the state of California, leaving them to explain the reasoning behind the label. More damaging, however, will be the new boon for plaintiffs' attorneys within California who will use the warnings as an admission that the labeled consumer products are toxic and expose unwary consumers to chemicals that no longer "may" expose but do "in fact" expose consumers to carcinogens and reproductive toxins. Although perhaps not an intended result, in this age of increasing class action and toxic tort litigation, it is an inevitable concern and one that the present version of the pending revisions simply does nothing to address.

In addition to modifications to the actual warning language, the proposed changes to Proposition 65 also attempt to incorporate some exceptions, providing for "tailored" warning language for various scenarios, such as alcohol, drugs, parking facilities, medical devices, hotels, apartments, and amusement parks. Unfortunately, this de minimis carve-out fails to provide any relief to manufacturers or retailers of consumer products. The only true proposed safeguard for business is an "opportunity to cure" provision for small retailers to fix certain minor violations within 14 days and avoid private enforcement actions. This safeguard, like the limited "tailored" warning language, provides little relief, with limited application to most businesses operating in California. While the purported goal of the opportunity to cure provision is a noble one, "avoiding frivolous litigation," the limited net effect provided to business leaves much to be desired.

While we await the final word on the proposed regulatory changes, businesses selling into the great state of California are well advised to take stock of their inventory, and to create a plan for the implementation of this next stage of regulatory intervention.

Keywords: litigation, products liability, California, Proposition 65, Safe Drinking Water and Toxic Enforcement Act, exposure warnings

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