More Changes to Prop. 65 in 2014?

more+
less-
more+
less-

Though his broader range of reforms did not make it out of the Legislature last year, California Gov. Jerry Brown is attempting to effect some reform of Proposition 65 (Prop. 65) through administrative action.  The Office of Environmental Health Hazard Assessment (OEHHA), the agency that oversees Prop. 65 and wrote its regulations, is looking at ways to revise the 27-year-old law’s warning requirements.  Prop. 65 currently requires that a product sold in California carry a warning to consumers if the product contains certain levels of any of approximately 900 chemicals on a state list.  Prop. 65 has created numerous headaches for companies that do business in the Golden State.  One of the biggest is what is an “adequate” warning, and when does it have to be given?  The law’s implementing regulations give little real world guidance, and the law was written before the Internet and e-commerce exploded.

 

Plaintiff and consumer groups argue that consumers must have the information that a product contains a Prop. 65 chemical before they make their purchasing decision. As far as content is concerned, several environmental and consumer groups that regularly bring Prop. 65 suits want to see all Prop. 65 chemicals that a product contains listed on the product label.  This could be a big deal because right now there is no requirement that a warning specify which of the state-listed chemicals is in the product, and some companies actually place a Prop. 65 warning on their products sold in California as a prophylactic strategy to avoid Prop. 65 notices.  Requiring a defendant to specifically list which chemicals are in the product from the state list would defeat that strategy.  Moreover, what if there are more than one or two chemicals at issue?  Would the warning start to take over more and more of the product’s labeling?  And, if the warnings requirement changed to require the listing of specific chemicals in each product, what happens to the unfortunate company whose supplier failed to include Chemical X in the list because it never tested for it, or the chemical got onto the Prop. 65 list after the product was made?  Under current law with the blanket warning we have now, the company would be okay as it warns, and that warning covers all listed chemicals.  Under a specific-warning requirement being debated, the company would be subject to Prop. 65 notices for the failure to include each and every chemical a plaintiff’s lawyer may find in his or her testing.

 

The governor is supporting OEHHA’s efforts with a $765,000 increase to the agency’s budget for the next fiscal year – to assist it in both the revisions in the regulations dealing with warnings, but also to help fund the development of a website that the agency wants to create to be able to provide detailed information to consumers about the chemicals that they may see listed on products.  Thus far, there is not a lot to go on in terms of what OEHHA is planning, though the budget proposal from the governor’s office states that the extra money will help fund staff to “better inform the public about their exposures to chemicals that cause cancer or reproductive toxicity by revising existing regulations to take into consideration technological advances made over the last 25 years” and develop a website that “will contain detailed information regarding listed chemicals as well as exposure pathways, risks, and avoidance measures.”  The development of a government-run website that promises more transparency about products and chemicals is always a concern, particularly in terms of accuracy and then for trade secret information.  This is an ongoing concern for California’s new green chemistry “Safer Consumer Products” regulations that went into effect last year and which I will touch on in our next newsletter after the state identifies the first of the “Priority Products” it will require information on in April 2014.

 

It seems that Prop. 65 changes are ripe for discussion now, particularly given the continuing complaints of business groups regarding the unpredictability and unfairness of the law, and the sometimes excessively high attorneys’ fees plaintiffs’ lawyers obtain.  Prop. 65 underwent at least one minor reform from last session – the passage of A.B. 227.  Over strong opposition from the author of the ballot initiative that created Prop. 65 and the California trial lawyers’ group, the Legislature passed, and the governor signed, the bill.  Its main “fix” to existing law is to help small businesses that  inadvertently violate the law to “cure” the violation (most likely by placing a warning on site) within 14 days after a notice of violation is received, and to pay $500 to avoid more penalties and attorneys’ fees.  The revision is narrow and only covers exposures to exhaust, tobacco, alcohol or food when on the violator’s premises.  Gov. Brown had hoped for achieving much broader reforms to Prop. 65 in the last legislative session, including defining the amorphous “clear and reasonable” warning definition in the statute, providing reasonable time for business to come into compliance with the law and avoid notices, and to cut down on some suspicious 60-day notices for old product not sold in California anymore.  Most interesting, his proposed changes would have required the private plaintiff litigants suing in the public interest to show more proof to the Attorney General concerning the date the product was purchased and from where, and would require more data establishing exposure to the consumer of the chemical in the product.  These changes would have been quite significant as, currently, the bar for bringing notices of violation is a low one indeed, and the defendant company is then required to defend, and expend defense costs, against this weak (or nonexistent) “proof.”  Given 2014 is an election year, and given it takes two-thirds of the Legislature to approve revisions to the law (because it was originally a voter-approved initiative), it is unclear whether the governor and his supporters in the Legislature will try again or wait.