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March 26, 2017

A summary of the new OEHHA Warning Regulations, effective 8/30/18

On August 30, 2018, revised Proposition 65 regulations will take effect impacting many business selling consumer goods and offering services in California. The revisions affect the warnings that manufacturers, distributors and sellers must provide to any California consumer who may be exposed by a business to one or more of the 900 chemicals listed by the State as being “known to cause cancer or reproductive toxicity.”

This article summarizes the new requirements and provides guidance to companies seeking to comply with the revised regulations, with the goal of avoiding costly enforcement litigation brought by the State, or by private Attorney General “bounty hunter” enforcers.

Background of Prop. 65 and Updated Warning Regulations

Originally approved by voters in 1986, California’s “Safe Drinking Water and Toxic Enforcement Act of 1986” (colloquially referred to as Proposition 65) requires the State of California to publish a list of chemicals (currently over 900 in number) known to cause cancer or birth defects. The Act further requires businesses (including out-of-state business) to provide warnings if their products or facilities can expose California consumers to a listed chemical above threshold levels. The Act is enforceable either by the California Attorney General’s Office or by private parties acting as a “private Attorney General.” The Act provides for financial penalties and for payment of attorneys’ fees to the enforcing party. As such, a number of boutique law firms have been established that are engaged solely in Proposition 65 enforcement for profit.

Since its implementation, the Proposition 65 regulations have undergone some limited revisions, with much of the focus on attempting to curtail excessive private Attorney General enforcement litigation. In 2014, California’s Office of Environmental Health Hazard Assessment (“OEHHA”) began developing amendments to the warnings required under the statute. In August 2016 (over the broad-reaching objections from the business community) OEHHA announced completion of its amendment efforts and released the language which will be contained in the amended regulations, which will be effective as of August 30, 2018. See Health & Saf. Code §§ 25600 et seq.

The amendments present a major departure from the current regulations, and will require a risk assessment by companies doing business in California. The warning requirements still only apply to businesses with more than 10 employees, but the amended regulations are so sweeping in content, and they are so lacking in clarity on many of the details, that many businesses may unwittingly expose themselves to liability under the new regulations.

While they provide some needed clarification on the responsibility of those in the supply chain to provide warnings and establish guidance on methods and content for safe harbor warnings, the amended regulations also greatly expand the requirements for the warnings. Some revisions are convoluted and quite confusing.

Until the effective date of August 1, 2018, businesses may choose to comply with either the current or the new regulations. However, the new requirements likely will lead to increased activity by the Proposition 65 plaintiffs’ bar once in effect.

In anticipation, all manufacturers, distributors, suppliers, and retailers of consumer products and all businesses that operate facilities that are open to the public should pay close attention to these changes to avoid being targeted in future enforcement lawsuits.

Key Changes Under the New Regulations

1. Responsibility Shifted to Upstream Entities

The amendments attempt to minimize the burden on retailers to provide warnings, placing greater responsibility on upstream entities.

A retailer’s responsibility for upholding the new warning requirements is limited to situations where the retailer sells under a brand name or trademark licensed by the retailer or related entity, knowingly introduces a listed chemical into the product, alters a warning, receives the warning materials from the manufacturer but fails to provide such, has actual knowledge of the exposure requiring the warning, or where no upstream supplier is subject to Proposition 65 enforcement. Otherwise, the burden is primarily on the manufacturer, distributor, or producer.

2. Safe Harbor Warnings

The amended regulations continue to provide voluntary safe harbor warnings that may be used by businesses for compliance. However, as discussed below, these safe harbor warnings vary from the prior language allowed. Alternatively, businesses may implement their own warnings so long as they can defend them as “clear and reasonable,” if challenged. However, alternative warnings lack presumptive validity and therefore pose the risk of plaintiff targeting.

a. Warnings on Product Label, Labelling, or Sign and Timing Required

The new regulations require that warnings be given at or before the point of purchase as opposed to on an invoice, package insert, or in a manual.

Most of the safe harbor warnings consist of three elements: (i) a triangle pictograph, (ii) specific warning language including naming at least one of the chemicals at issue, and (iii) reference to the new Prop. 65 website issued by OEHHA.

i. Pictograph

The first element is a pictograph of a yellow triangle with an exclamation point at the center. This warning symbol is required on all product warnings, except food warnings.

images

If a label, sign, or shelf tag containing the warning is otherwise printed in black and white, the pictograph can be printed in black and white.

ii. Specific Warning Language Required

The new regulations have expanded the language required for the safe harbor warning to be in compliance.

First, the new regulations retain the requirement that the warnings must include the signal word “WARNING” in capital letters and bold.

They also require language that the product “can expose” the individual to a listed chemical. The prior language of “contains” or “may contain” does not suffice to warn individuals they will be exposed to a chemical if they use a given product.

Third, while the current regulations require that the warning state that a product contains “a chemical” on OEHHA’s list, the new regulations require the warnings to explicitly name at least one of the listed chemicals for which the warning is being provided. No guidance has been provided as to how to select the chemical listed or whether all chemicals in the product must be included.

iii. Hyperlink to the Prop. 65 Website

Finally, almost all warnings after the effective date will require a hyperlink to the new Proposition 65 website – https://www.P65warnings.ca.gov/.

The hyperlink must be included at the end of the warning language. The hyperlink can be used alone in a truncated fashion as discussed below for on-product warnings.

Examples of the New Consumer Product Warnings Required

The text of the regulations is a bit confusing, and some examples can help clarify what the amendments are now requiring. There are two classes of warnings described by the Act: (1) those that are affixed to the product (referred to herein as “Off-Product” Warnings”); and (2) those that are affixed to the product (referred to herein as “On-Product Warnings”).

1. Off-Product Warnings

The off-product safe harbor warning must look like this:

images

WARNING. This product can expose you to chemicals including [name of chemical(s)], which is [are] known to the State of California to cause [cancer] [and] [birth defects or other reproductive  harm]. For more information go to www.P65Warnings.ca.gov.

Notably, this changes from the current regulations which did not require the listing of a particular chemical. Generic warnings under the new regulations are not compliant. Moreover, the warning must include the language of “can expose you to…” the chemicals.

2. On-Product Warnings

If the warning is on the product itself (that is, on the product packaging and visible at or before the point of purchase), there is an option to use a truncated warning in lieu of the lengthier warning above, and omit the listing of the specific chemical for which the warning is being provided. Examples of this truncated warning:

imagesWARNING. Cancer – www.P65Warnings.ca.gov

imagesWARNING. Reproductive Harm – www.P65Warnings.ca.gov

images “WARNING. Cancer and Reproductive Harm – www.P65Warnings.ca.gov

This truncated version presents an interesting business decision because while it is a more succinct warning, it also baldly uses the words “Cancer” or “Reproductive Harm,” without any additional context, which may cause consumer confusion or alarm, or may cause the consumer to select a competitor’s product that does not have a shorthand reference to “Cancer” on its package.

That said, most Californians are accustomed to the Prop. 65 warnings; however, with the new revised warnings, we anticipate that many consumers will be concerned and want more information once the new warnings start to be widely used.

3. Facilities

The new regulations provide tailored safe harbor warning language for various industries including, but not limited to enclosed parking facilities, service stations, and designated smoking areas. See Health & Saf. Code §§ 25604 et seq.

The warning language mirrors that for the consumer product warnings in that there are requirements for content and the method of transmission. However, the facilities’ safe harbor warnings add an additional requirement that the consumer be warned, “Do not stay in this area longer than necessary.” Specifically, the safe harbor requires the pictograph, specific warning language, and a hyperlink to the Proposition 65 website. For example:

images

WARNING. Breathing the air in this area can expose you to chemicals including [list specific chemicals, e.g. carbon monoxide, gasoline, diesel engine/motor vehicle exhaust, benzene, tobacco smoke, or nicotine], which are known to the State of California to cause [cancer] [and] [birth defects or other reproductive harm]. Do not stay in this area longer than necessary. For more information go to www.P65Warnings.ca.gov/[parking/service-station/smoking-areas].

4. Obligation to Translate

Where product labeling or signage contains information in alternative languages, the amended regulations require the warnings to be translated into those languages.

This new requirement and will obligate businesses to evaluate the current warnings and ensure that any language where any other warnings are provided are covered with a new Prop. 65 warning as well.

5. Internet and Catalogue Sales

For internet purchases, the new regulations require that a warning be provided either on the product display page or otherwise “prominently displayed” to the purchaser prior to completing the purchase.

The regulations fail to provide a definition of the term “prominently displayed.”. However, they do provide that a warning is not considered prominently displayed if the purchaser must search for it in the general content of the website.

The internet warning can be the same as the general safe harbor warning described above, or it can be in the form of a clearly marked hyperlink using the word “WARNING.” Regardless of the specific language, the internet and catalog sales of products with Prop. 65 chemicals must provide a warning before the purchase. However, the regulations do not state how this warning must be provided, for example through the use of a pop-up window, etc. Presumably, so long as the warning is conspicuous and includes the safe harbor language, it should satisfy the new requirements.

For catalogue purchases, the warning must be provided in the catalogue in a manner that “clearly associates it with the item being purchased.” Again, there is little guidance provided as to what compliance with this obligation means.

6. Grandfathering of Prior Court-Approved Warnings

The amended regulations provide that if a business already has in place a court-ordered settlement or final judgment establishing warning methods or content for a facility or product, those businesses may continue to use such warnings notwithstanding the new regulations. For this reason, we anticipate many parties in early 2018 will be seeking to bring and resolve Prop. 65 matters.

Recent Trends

A recent survey1 shows that the top products targeted for Proposition 65 60-Day Notices of Violation (“Notices”) in 2016 were food, beverage, and tobacco products and plumbing and HVAC products. The top chemicals targeted were Phthalates and heavy metals (including lead and lead compounds), making up about 90% of all Notices in 2016. These trends are anticipated to continue throughout 2017. As companies are looking to anticipate compliance with the new warning requirements, special consideration should be given to the sale of products containing Phthalates and heavy metals, which continue to outnumber all other Prop. 65 matters.

Conclusion

The amendments to the implementing regulations for warnings under Proposition 65 will require affirmative changes by businesses to remain in compliance with the regulations. However, the regulations contain many pitfalls and complexities depending on the type of business, the type of product or facility, and the potential impact of a specified warning on the ability to effectively do business in California. Best practices befit that all California businesses consult with legal counsel familiar with this area of law as the regulations and working with OEHHA to ensure compliance is complex and requires careful planning to manage the risk and prevent litigation for insufficient Proposition 65 warnings.

_________________

1 Bureau Veritas Consumer Products Services, Inc., 2016 Summary of California Proposition 65 60 Day Notices (Jan. 2017).

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