Mid-Year Check-Up: California’s Prop 65 Continues To Evolve and Pose Burdens on Businesses
Despite the pandemic, 2020 was a record year for Prop. 65 filings. There was a 46% increase in Notice of Violation filings from 2019, driven by the usual filers, as well as many new law firms and noticing parties. There have been 1,346 notices filed between Jan. 1, 2021 and June 3, 2021, compared to 1,327 Notices filed in the same time-period in 2020. These Notices consist primarily of phthalates, lead, cadmium, arsenic, BPA and acrylamide. General consumer goods such as bags, purses, supplements, spices, saws, sandpaper, makeup, exercise bands and gloves continue to top the list.
Department of Justice Updates
The Attorney General’s office closely monitors Notice of Violation filings, and in 2021 has already sent four publicly posted warning letters to noticing parties and their counsel. The recent letters state that the Notices failed to provide sufficient information to indicate there is a credible basis to conclude that there is merit to each element of the action on which plaintiff will have the burden of proof. The letter asks counsel to withdraw the Notices immediately. The Notices involve lead in dark chocolate, and DEHP and DINP in medical devices.
This is reassuring news for the defense bar to know that the Attorney General is acting as a back-stop to curb abusive and meritless Notices of Violation. However, businesses that receive a Notice must still be vigilant and consult with an attorney to ensure that the Notices of Violation are procedurally accurate.
Proposed Regulatory Changes
As previously expected, we are expecting major changes to the very popular “short form” label that many businesses have been using since August 2018. I anticipate that OEHHA will implement these changes later in 2021, giving businesses a one-year grace period before the new regulations take effect. The primary change is that the short form label will now require identification of a chemical or chemicals in the product, which is not currently required on the short form label. It also limits the size of the product for which the short form label can be used, and eliminates the use of the short form label on the internet or in catalogs.
This change is opposed by many business and industry groups such as the California Chamber of Commerce. Companies rightfully argue that they have just invested significant resources to comply with an overhaul of the Prop. 65 regulations in 2018, and many pivoted to the short form label at that time. It will be onerous and expensive for companies to overhaul their compliance programs once again, particularly on the heels of the pandemic.
As it relates to warnings for marijuana smoke and delta-9-tetrahydrocannabinol (THC), new warning requirements took effect on Jan. 3, 2021. The state listed both marijuana smoke and THC as reproductive toxins under Proposition 65. The recent changes expanded the range of products that could require a label, including CBD products made with industrial hemp and edibles. Currently there is no safe harbor limit for either chemical, which means that any product with a detectable level of THC could arguably require a warning. Recognizing the potential for confusion and the risk of over-warning, OEHHA now seeks to add content and methods for providing Prop. 65 warnings for both chemicals.
Consistent with the regulatory process for amending the California Code of Regulations, OEHHA scheduled a public hearing on the issue on May 10th and took comments through May 24th. This will provide some needed guidance to the cannabis industry and potentially decrease the number of Notices filed on these chemicals. We expect these regulations to take effect later this year, with a one-year compliance period.
In the food space, acrylamide has been widely covered given the active and heavy enforcement on such Notices. While acrylamide is not intentionally added to food, it forms in many types of foods when cooked at high temperatures. Earlier this year, the Chamber of Commerce sued the California Attorney General to stop bounty hunters from enforcing Notices related to acrylamide in food, given the scientific debate about whether there is an increased cancer risk with consumption of acrylamide in food and drinks. Relying on the First Amendment, the Chamber argued against the use of the safe harbor warning because it would not be “factual and uncontroversial” if used, and therefore it was an unconstitutional infringement on commercial speech since it compels speech that may not be true.
This is even more true because businesses usually use the OEHHA approved “safe harbor” label to avoid enforcement actions. The court ultimately issued a preliminary injunction barring the filing of new lawsuits by the state and any private enforcer seeking to enforce Prop. 65 against businesses that do not warn about acrylamide. However, this did not affect Notice of Violation filings, and multiple Notices of Violation have been filed through May 24th alleging acrylamide in plantain chips, corn kernels, bread sticks, cookies and cereal, to name a few. The ruling does not alter existing consent decrees, settlements or other agreements. However, the food space is constantly changing and businesses must walk the tight rope of meeting their compliance obligations while assuring customers that their products are safe and wholesome for consumption.
The takeaway from these updates is that Prop. 65 compliance is always convoluted, nuanced and oppressive for businesses. An experienced Prop. 65 lawyer can help minimize risk and decrease costly penalties and fees.
Anne Marie Ellis is a senior counsel at Buchalter, focusing on product liability defense, personal injury litigation, commercial litigation, premises liability, regulatory compliance and client counseling.
Article Link: https://www.law.com/therecorder/2021/06/18/mid-year-check-up-californias-prop-65-continues-to-evolve-and-pose-burdens-on-businesses-seeking-to-comply-with-its-ever-changing-regulatory-landscape/
Reprinted with permission from the June 18 issue of The Recorder. ©2021 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved
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