Amendments to California’s Safe Drinking Water and Toxic Enforcement Act of 1986¹ (commonly known as Proposition 65 or Prop 65) go into effect on April 1, 2020, providing clarifying guidance concerning the responsibility of manufacturers, distributors and other businesses in the chain of commerce to provide warnings for consumer products.

Prop 65 requires businesses to provide a clear and reasonable warning before exposing individuals to listed carcinogens and reproductive toxins in their products. Section 25600.2 of the Act seeks to "minimize the burden" on retail sellers of consumer products by placing the primary burden on manufacturers, distributors, packagers, importers, producers and suppliers (upstream entities), except where the retail seller itself is responsible for introducing a listed chemical into the product. The amendments bring three major changes to section 25600.2:

• To comply with the warning requirement, upstream entities previously had to either 1) apply a warning label to the product or 2) provide a written notice of the warning requirement to the authorized agent of the retail seller of the product. The previous regulations left some uncertainty among intermediate parties in the chain of commerce as to whether providing a written notice to the next downstream entity satisfied their warning obligation under Prop 65. Under the new amendments, upstream entities electing to comply with Prop 65 by sending written notice to a retail seller may do so by providing written notice to the authorized agent for the business to whom they are selling or transferring the product, (i.e. the next business in line), or the authorized agent for the retail seller.
• Where a business has not designated an authorized agent, the upstream entity may serve the notice on the legal agent for service of process for the business.
• Confirmation of receipt of the notice and any renewed notices can now be received either electronically or in writing.

Key Takeaways

As upstream entities are often unaware of who the ultimate retail seller of their products will be, they should opt to comply with Prop 65 via written notice to the next business in line that takes legal possession of the products, such as the distributor or intermediary purchaser. Retail sellers should update their terms and conditions with suppliers to ensure that any written notices provided upstream are ultimately provided to the retailer to minimize the risk of liability.

^{1 Health and Safety Code section 25249.5 et seq.}