California’s Prop 65: Enforcement Trends, Reform Efforts, and the Impact on your Business

by | Jul 2, 2014

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lee, james, 3E companyCalifornia Proposition 65 (Prop 65) is one of the most stringent state environmental laws for the chemical industry even though there is much confusion amongst Californians, whom the law was designed to protect, as to its exact scope and potential impact.

The main purpose of Prop 65 is to inform consumers about carcinogenic or reproductive risks of chemical exposure through a warning in sign or label. Prop 65’s biggest concern for the industry is that it can be enforced by private citizens – including those with less than noble motives. In fact, citizen enforcers file hundreds of Prop 65 cases every year in California, and it is estimated that they have collected more than $150 million in damages from businesses around the country since the inception of Prop 65 in 1986, with the majority of money going to attorney’s fees.

Enforcement Trends

In recent years, several notable enforcement trends have emerged. First, as a reaction to the increase in citizen lawsuits, industry started to pressure the state legislators for reform to alleviate the imbalances in Prop 65 actions. Another hope for legislative reform was the federal preemption through the Toxic Substances Control Act (TSCA). Second, industry-wide self enforcement began often in the form of cooperation through trade associations. Such concerted effort established harmonized solutions for a level playing field and funds for the scientific defenses that can be too burdensome for a small/medium sized company. Lastly, defendants have increasingly fought back in court and prevailed.

The latest reform proposal came from OEHHA, the state agency in charge of publishing Prop 65 chemical list, in March 2014. OEHHA’s proposed amendments substantially change the warnings if products or premises contain Prop 65 chemicals, with the revised warnings designed to convey “more clarity to the Proposition 65 warning requirements and more specificity regarding the minimum elements for providing a ‘clear and reasonable’ warning for exposures that occur from a consumer product, including foods and exposures that occur in occupational or environmental settings.”

The proposal also suggests that businesses no longer be able use the “safe harbor” warning language if a Prop 65 chemical may be in their product. The proposed regulation instead requires them to know definitively the chemical content of all their products and premises, including possible contaminants, and warn of potential “exposures” to the specified chemicals. The increased burden in creating the Globally Harmonized System of Classification and Labeling of Chemicals (GHS) style warnings and additional language requirements have significant cost implications associated with them. The proposal also requires companies to submit information about the chemicals to OEHHA for posting to a website. All of these requirements present significant challenges for businesses, combined with the potential risk of new enforcement lawsuits for those who do not or cannot comply to the satisfaction of citizen enforcers.

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