By Marisa Choy, Sherry Jackman, and Sedina L. Banks
Chemical exposure from consumer products is front and center for the American public. In June 2021, Johnson & Johnson issued a nationwide recall of certain Neutrogena and Aveeno aerosol sunscreens after internal testing identified low levels of benzene in the products. In 2019, the Mark Ruffalo thriller “Dark Waters” gave the Hollywood treatment to the problem of PFAS pollution in drinking water, implicating everything from Teflon pans, to Gore-Tex hiking boots, to ScotchGard stain protectants used in carpets and upholstery. Most consumers are well-acquainted with the claim “BPA-free” on bottles and cans. And cosmetic brands high and low have been quick to embrace the trend toward “clean” or “green beauty” – promoting skin care, makeup, and personal care products that use only “natural,” “organic,” or “vegan” ingredients.
Here in California, residents are already familiar with the granddaddy of all chemical labeling and disclosure laws – the Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as “Proposition 65” or “Prop 65” for short. Even if people haven’t heard of this law, they’ve certainly been subject to its requirements.
Just a few years ago, a state court ruled that posting Prop 65 cancer warnings was no longer required on coffee sold in California, prompting a takedown of signs at Starbucks, 7-Eleven, and other coffee chains. A quick look at the local drugstore or big box retailer will reveal that the labels are ubiquitous on products as diverse as toys, tools, food, furniture, and clothing. And anyone driving into a parking garage at an office building, shopping mall, or stadium in California has most likely encountered the following sign:
⚠ WARNING: Breathing the air in this parking garage can expose you to chemicals including carbon monoxide and gasoline or diesel engine exhaust, which are known to the State of California to cause cancer and birth defects or other reproductive harm. Do not stay in this area longer than necessary. For more information, go to www.P65Warnings.ca.gov/parking.
In the following self-study CLE article, we provide a brief overview of the Prop 65 regulatory background, highlight key compliance issues, and suggest tips and tricks to minimize liability. At the end, readers can test their knowledge with a 20-question quiz.
What is Prop 65?
Prop 65, passed as a ballot initiative in November 1986, is designed to protect the state’s drinking water sources from being contaminated with chemicals known to cause cancer, birth defects or other reproductive harm. The law also requires businesses to provide warnings to Californians about exposures to such chemicals in products, workplaces, or that are released into the environment.
Who is subject to Prop 65?
Businesses with 10 or more employees, businesses selling products in California or located in California, and businesses that cannot demonstrate safe harbor levels are all subject to Prop 65. This means that even if a company is based in another state or in a foreign country, but is selling to California customers online or through national retailers, that company will need to comply with Prop 65.
Since California is such a large market, and because it is difficult to keep track of different tags or packaging, many companies will opt for Prop 65-compliant packaging no matter where the product is sold. Note that government agencies are not subject to Prop 65.
What are Prop 65-listed chemicals and safe harbor levels?
California’s Office of Environmental Health Hazard Assessment (OEHHA), which is part of the California Environmental Protection Agency (CalEPA), administers the Prop 65 program. Prop 65 requires the state to publish an official list of chemicals known to the state to cause cancer or reproductive toxicity. The list is updated at least once a year and currently contains about 900 chemicals, including items as familiar as alcoholic beverages, aspirin, and marijuana smoke.
Safe harbor levels are levels of exposure to a listed chemical that do not require a Prop 65 warning. OEHHA has established No Significant Risk Levels (NSRLs) for cancer-causing chemicals and Maximum Allowable Dose Levels (MADLs) for chemicals causing reproductive toxicity for approximately 300 of the Prop 65 listed chemicals. If an exposure or discharge to a drinking water source is below the safe harbor level, a business does not need to provide a warning.
How do businesses comply with Prop 65?
Businesses can comply with Prop 65 simply by providing a “clear and reasonable warning” before exposing anyone to a listed chemical (unless the exposure is below the safe harbor level). The type of warning required depends on the type of exposure. For example, the warning can be placed on a product label or displayed prior to an online purchase (consumer product), posted at a business or in rental housing (environmental), or distributed at a workplace (occupational).
OEHHA has developed safe harbor long-form and short-form warnings which are presumptively “clear and reasonable.” Businesses can develop their own warnings, but they are encouraged (and often find it easier) to use the official warnings. Certain products or places (e.g., restaurants, parking garages, alcohol, furniture) have specific warnings.
Who has compliance responsibility under Prop 65?
Typically, primary responsibility falls on manufacturers, producers, packagers, importers, suppliers, and distributers of products, as opposed to retailers. However, a retailer can become liable for failure to provide a warning to consumers if:
- the retailer fails to pass on the warning or obscures the warning;
- the product is a house brand or the retailer knowingly caused the listed chemical to be added to the product; or
- the retailer had “actual knowledge” of the potential exposure to a listed chemical and there is no better party to hold liable (e.g., due to exemption or jurisdictional issues).
What are the consequences of non-compliance with Prop 65?
Businesses that violate Prop 65 by failing to provide notices can be penalized up to $2,500 per violation per day. Prop 65 allows for both government enforcement by the California Attorney General’s Office and district or city attorneys, as well as for private enforcement by individuals acting in the public interest.
A veritable cottage industry has developed around the private enforcement of Prop 65, with many plaintiffs’ firms focused on certain chemicals or product lines and conducting lab testing to evidence chemical exposures. Private enforcers must provide a 60-day notice accompanied by a Certificate of Merit before filing suit. 75% of the penalties collected go to the state, and 25% goes to the plaintiff. Attorneys’ fees and costs are also recoverable, which frequently comprise the lion’s share of penalty payments. In 2019 alone, there were 5,924 Prop 65 notices.
What legal strategies minimize Prop 65 liability?
When in doubt, warn. However, if a business receives a Prop 65 notice, there are multiple strategic issues to consider. The company may be able to defend against the notice by arguing federal preemption (e.g., regulation by FDA); that the chemical is naturally occurring; that the warning was sufficient or not needed; by conducting a chemical assessment to show the exposure is below a safe harbor level; or by highlighting procedural issues (e.g., defective notice, statute of limitations).
Depending on the chemical and usage, a company may be able to reformulate its product or provide an adequate warning – but reformulation does not absolve the company of past Prop 65 liability. If the company decides to settle or litigate, it will need to determine the appropriate settlement amount as well as whether to settle in or out of court.
In January 2021, OEHHA proposed amendments to the Prop 65 regulation which would limit the use of short-form warnings on products with surface area greater than 5 square inches and on internet and catalog warnings. The warnings would require additional information on the specific chemical and endpoint (e.g., cancer or reproductive harm) implicated by the exposure.
If the changes are approved, businesses will have one year to update their packaging or risk increased scrutiny by private enforcers. To avoid unpleasant surprises, anyone operating or selling into California markets, as well as their attorneys, would be well-advised to keep abreast of the ever-evolving Prop 65 requirements.
Marisa Choy is an associate attorney at Greenberg Glusker LLP in Los Angeles. She serves on the Executive Committee of the California Young Lawyers Association and as Liaison to the California Lawyers Association’s Environmental Law Section. Sherry Jackman and Sedina Banks are Counsel at Greenberg Glusker LLP and have experience with counseling and defending clients on variety of Prop 65 matters.