With apologies to Frank Sinatra, start spreading the news…Will we be seeing toxic chemical warnings on consumer products from the Big Apple to Buffalo? If New York Governor Andrew Cuomo gets his way it looks like we will and he can say, “I did it my way”. As part of his January, 2019 Executive Budget, the governor has proposed a toxic chemical warning scheme that contains striking similarities to California’s Proposition 65 law. Proposition 65, enacted in 1986, requires companies doing business in California, including the selling of products to California residents over the Internet, to place warnings on their products (a) if they contain one of hundreds of chemicals listed by the state as causing either cancer or reproductive harm and (b) if the chemicals are present in the products in amounts that are above established safe harbor levels. (California Health & Safety Code section 25249.5, et seq.) The burden is then on the defendant to show it does not expose consumers to chemicals at a level that would require a warning.
1. The Proposal – Identify Chemicals that Require Warnings
The governor’s proposed “Consumer Right to Know Act” would allow the Department of Environmental Conservation to create requirements for chemical warning labels for designated products. The proposal would further require the agency to (a) determine feasibility of on-package labeling (b) develop a list of carcinogens and other chemicals that will require warnings and (c) decide which consumer products will require such warnings. (January 21, 2019 Governor’s Announcement, https://www.governor.ny.gov/news.) This proposal would build upon New York’s “Household Cleaning Product Information Disclosure Program” which requires manufacturers of such products sold in the state to disclose the contents of the products and research concerning their effect on human health and the environment. (Environmental Conservation Law, New York Code of Rules and Regs., tit. 6, Art. 35, Part 659.)
2. The Similarities with Prop 65
This proposal contains similarities to Prop 65. First, it would require a “list” of chemicals that the New York state agency would be mandated to create and maintain. One of the lynchpins of Prop 65 is its chemical list containing about 900 separate chemicals deemed to require warnings. The agency that is responsible for enforcing Prop 65 in California, the Office of Environmental Health Hazard Assessment (OEHHA), created the list and adds chemicals to it from various sources, including foreign authoritative bodies. This is sometimes frustrating to the business community as OEHHA has added chemicals to this list even when U.S. and other international environmental agencies have concluded that a chemical is not hazardous. This issue is illustrated in pending litigation involving the chemical glyphosate, the main ingredient in the herbicide Round Up. Even before Gov. Cuomo’s proposal Prop 65’s influence has spread to other states. The OEHHA list has been used by other states in their chemical compliance programs, most prominently Maine and Washington State, but has also influenced many others. These states’ laws are focused mainly on children’s’ products but allow the agencies to import and rely of the Prop 65 list of chemicals to populate the states’ lists of “chemicals of concern” which they can choose from and regulate. So, a chemical can be listed and warnings required based on dubious science.
Second, the proposed New York law would vest the responsible agency with the power to enforce the law and impose penalties for failure to comply. If passed, what will the New York warnings be required to look like and what language will be required? Would the New York agency use the wording and appearance requirements set forth for Prop 65? Maybe imitation would be the sincerest form of flattery here as it would be the easiest and most cost effective thing to do. New York would not have to reinvent the wheel when Prop 65 has been in effect for 30 years and has a well-worn, though not universally loved, system in place. In fact, the Prop 65 scheme, including its chemical list, warning regulations, chemical website for consumers and safe harbor levels created and established for many frequently used chemicals could be lifted and dropped into any framework the New York agency might develop.
3. Less Onerous than Prop 65?
New York emulating Prop 65 is not something the business community is cheering. The law has been an expensive and often inefficient exercise for hundreds of companies caught up in its confusing and growing web. For all the money spent on penalties for sometimes picayune products and violations that more often than not do not present a real-world hazard to health, the only winners tend to be not the public but the attorneys who bring the actions on behalf of “bounty hunter” private enforcers. Prop 65 allows notices of violation and litigation to be commenced by either a private enforcer suing in the public’s interest or the state Attorney General. Allowing private enforcers to pursue these actions, and to pursue them against any product from shopping malls to safety pins, has created some very wealthy plaintiffs’ lawyers because it is by far more cost effective for companies to agree to place warnings or reformulate an often already safe product to resolve the matter and avoid more expense of paying a lawyer and experts to prove exposure is safe. Many companies settle and place the warnings as prophylactic measures, contributing to warning fatigue by customers who may tune out all warnings on the product – even important ones that they should read.
This is where the proposal by Gov. Cuomo and Prop 65 diverge, making his proposal “Proposition 65 lite”. Unlike Prop 65 the governor’s proposal does not mention enforcement by a private enforcer; only by the state agency. That is good news because the private enforcer provision of Prop 65 is by far the biggest driver of the law, both as the source of the mountains of violation notices sent each year and of millions of dollars paid annually mainly to attorneys’ fees and costs given the law provides that a company settling or who does not prevail in trial is required to pay the private enforcers’ attorneys’ fees and costs through resolution of the case. While the law also requires payment of penalties based on the number of products sold in California, penalties paid are but a fraction of what goes to the small group of lawyers who represent bounty hunters.
The proposal also limits the products that would be required to carry warnings. That too is a promising contrast with Prop 65. Rather than every product in the state being fair game for bounty hunters, the proposal would vest in the state agency the sole power to determine which products were at issue and subject to warnings requirements. This is similar to another California regulatory scheme – the Safer Consumer Products Act. That is a set of green chemistry regulations that vest in a state agency the ability to identify chemicals and products that will be regulated. (California Health & Safety Code section 25251, et seq.; 22 Cal. Code of Regs. tit 22, Chapter 55, et seq.) While this regulation has been far from perfect, a state agency being in charge of a set amount of products to regulate is much better than the anything goes landscape in Prop 65. It obviously can allow for more certainty to the regulated community and prevent some of the abuse inherent in Prop 65.
4. What Next?
Will tourists be greeted by chemical warnings on their souvenirs when visiting the Big Apple? Will the New York legislature go along with the governor’s proposal? Too soon to tell but the New York legislature has been receptive to consumer protection legislation of late, including considering a consumer privacy bill, among other related issues. That we are at this stage evaluating a further expansion of Prop 65 across the country is obviously of great importance to several industries and individual businesses. We will be monitoring this closely.