Introduction

Environmental Health Advocates v. Sream, Inc., (2022) 83 Cal.App.5th 721 (Sream), and three other California appellate cases were subjects of a panel discussion on September 18, 2023 at the annual Proposition 65 Conference held in San Francisco, California.[1] Sream, Inc., who prevailed on a motion for judgment on the pleadings at the trial court level and from an appeal of that ruling in the appellate court, was represented by Environmental General Counsel PC (EGC). [2]Sream addresses the important question of what constitutes an exposure under Proposition 65 – and represents a significant victory for the Prop 65 defense bar in the Alameda Superior Court, a favored venue for Prop 65 plaintiffs, as well as a win in the First Appellate District, generally recognized as the most liberal appellate court in California.[3]

As panelist Julia Thrower explained, in the absence of applicable case authority or a statutory definition of the term “expose,” the court’s decision was based on an analysis of the regulations and the legislative/regulatory history, with policy concerns taking a prominent role – particularly concerns that not all warnings advance Prop 65’s remedial purpose and may, in fact, only serve to confuse consumers and reduce the efficacy of the warnings.

Sream has obvious implications from a settlement/litigation perspective for certain types of alleged violations – but Sream also has beneficial implications for the development and implementation of Prop 65 compliance programs generally.

Background

Under Prop 65, with some exceptions and subject to certain defenses, companies may not “knowingly” or intentionally “expose” any consumer to a Prop 65 chemical without first giving a “clear and reasonable” warning.[4] The statute does not define “expose.” The regulations, however, define “expose” as “to cause to ingest, inhale, contact via body surfaces or otherwise come into contact with a listed chemical ….”[5] A subsection of the regulations (Article 6, describing what constitutes a “clear and reasonable” warning for purposes of the safe harbor warnings)[6] defines “consumer product exposures” to include exposures caused by a “reasonably foreseeable use” of the product.[7]

Discussion

For several years, certain plaintiffs have filed notices of violations against manufacturers of products that do not themselves contain a Prop 65 chemical – claiming the “reasonably foreseeable use” of the products result in a Prop 65 exposure – and further, that this language represents a constructive notice standard in the Act for knowledge of an exposure. For example, plaintiffs have filed notices of violations against manufacturers of air fryers, power tools, and smoking paraphanalia. In Sream, the plaintiff alleged that water pipes required a warning because consumers may use the pipes with marijuana which will expose them to marijuana smoke, a Prop 65 chemical.

The Prop 65 plaintiff’s bar achieved a win on the general issue of constructive notice in the recent appellate case of Lee v. Amazon, (2022) 76 Cal.App.5th 200 (a case which was also discussed by the panel). As panelist Rachel Doughty explained, the case held that constructive notice is sufficient to satisfy the “knowingly” element of Prop 65 and that a 60-day notice served by plaintiffs can serve as knowledge of an exposure.[8]

In Sream, however, the same appellate court ruled for the defense on the issue of whether a foreseeable use of a product requires a Prop 65 warning – at least where the product does not contain or emanate a Prop 65 chemical and any potential exposure is contingent upon the use a consumer chooses to make of the product.

According to the court, only direct exposures require Prop 65 warnings, not indirect exposures.[9] Among other things, the court rejected plaintiff’s reliance on the “reasonably foreseeable use” language, pointing out that this definition served only to identify situations where a safe harbor warning can be used on a voluntary basis.[10]

Policy concerns also factored heavily into the court’s decision. Based on the court’s review of materials circulated as part of the ballot initiative, the regulations, and the regulatory history, the court affirmed Prop 65’s broad remedial purpose – to protect consumers from harmful chemicals and enable them to make informed choices about coming into contact with such chemicals.

According to the court, however, “requiring a warning for possible indirect contact, depending on how a consumer chooses to use the product, would introduce confusion into that decision-making process. Consumers could, for example, interpret such a label on a water pipe to warn of direct exposure caused by the material the pipe is made of, or to warn of the effect of burning any substance on the pipe. Such confusion does not advance the purpose of Proposition 65.”

The court harmonized its ruling with Lee v. Amazon, explaining that constructive knowledge of an exposure does not include a situation where the exposure depends on how the consumer chooses to use the product.[11]

While not expressly discussed by the court, Sream also advances another important policy consideration – the ability of businesses to plan and implement meaningful Prop 65 compliance programs.

The facts in Sream illustrate this point. As EGC argued during oral argument before the appellate court, marijuana can be inhaled through objects other than a water pipe – such as apples and pumpkins.[12] Should grocery stores post Prop 65 warnings by the apple bin about marijuana exposure? Should there be warnings in the pumpkin patch? Expanding to other types of exposures, should manufacturers of paper plates warn about mercury in tuna?

Under the "reasonably foreseeable use" standard, businesses who seek to comply with Prop 65 would need to evaluate various contingencies outside their control – diverting resources from the expense and effort involved in evaluating exposures associated with their own product. Moreover, no matter how thorough their efforts at compliance, they could never be confident they had anticipated every foreseeable use of a product that a creative plaintiff might assert in a notice of violation.

By contrast, following Sream, the manufacturers of consumer products are themselves responsible for any applicable Prop 65 warnings associated with their products – not third party manufacturers of unrelated products.

Conclusion

Sream represents a common-sense approach to Prop 65, enabling businesses to better plan for compliance and minimizing the likelihood that consumers are bombarded by meaningless and confusing warnings.

[1] The annual Proposition 65 Conference is sponsored by Proposition 65 Clearinghouse News.

[2] Catherine W. Johnson, EGC’s principal, represented Sream at both the trial court and appellate level; Julia Thrower, who represented EGC at the Prop 65 Conference panel, was an indispensable and key member of the Sream appellate team. EGC also wishes to acknowledge and thank Melanie Oxhorn, Alex Torres, Beth Koh, and Emma Roos-Collins for their invaluable assistance with the appeal.

[3] Other panelists were Denis Raglin, Partner, Steptoe & Johnson (CEH v. Perrigo Company (2023) Cal.App.5th 1); Bill Verick, CEO, Mateel Environmental Justice Foundation (Mateel Environmental Justice Foundation v. Fiskars Living US, LLC (2023, unpublished decision); and Rachel Doughty, founder of Greenfire Law (Lee v. Amazon, (2022) 76 Cal.App.5th 200).

[4] California Health & Safety Code, § 25249.10

[5] California Code of Regulations (“CCR”) § 25102(i).

[6] Safe harbor warnings are deemed to meet the “clear and reasonable” standard of the Act. Businesses are not required to provide safe harbor warnings but they provide reasonable certainty that they will not be subject to an enforcement action.

[7] CCR § 256001(e).

[8] Although beyond the scope of this article, and as discussed at the panel, Lee v. Amazon addressed other significant issues, with the constructive notice feature being a relatively minor aspect of the case.

[9] Sream, 83 Cal.App.5th at 732.

[10] Sream, 83 Cal.App.5th at 734.

[11] Ibid.

[12] The “Leafly” webpage, devoted to cannabis use, describes the “time-honored tradition of creating a homemade bowl with an apple.” https://www.leafly.com/learn/consume/smoke/how-to-make-apple-pipe