Proposed Changes to Prop. 65 Warning Rules Will Increase Costs, Litigation

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Prop_65_2011The California Chamber of Commerce and more than 170 organizations have outlined significant concerns with proposed revisions to the Proposition 65 warning regulations in a letter to the state Office of Environmental Health Hazard Assessment (OEHHA).

The extensive comment letter from the CalChamber and coalition includes more than 170 California-based and national organizations and businesses of varying sizes that, collectively, represent nearly every major business sector on which OEHHA’s proposal would have an impact.

On January 16, 2015, OEHHA formally proposed an extensive set of new rules regarding how businesses must warn under Proposition 65 in order for the warnings to be deemed “clear and reasonable” as required by the law.

Although Proposition 65’s current warning regulations allow for “safe harbor” compliance through a generic, one-sentence, simple black-on-white statement appearing in English, the proposed regulations will require, among other things:

• Use of a yellow triangle pictogram containing an exclamation point;

• A more unequivocal warning statement indicating that the product “can expose” a user to chemicals known to the state to cause cancer and birth defects or other reproductive harm, as opposed to the current language, which specifies that the product or facility “may contain” chemicals;

• Listing particular chemicals in the warning if they are among a group of 12 that OEHHA has identified;

• Adding a URL to all warnings linking to a public website that OEHHA will operate to provide information supplementing the warning for any interested party; and

• Presenting the warning in additional languages if the product label otherwise displays them for any other purpose (in French for Canadian products and often in other languages for free trade purposes).

The coalition’s comment letter explains in detail why OEHHA’s proposal makes compliance with Proposition 65 far more difficult, creates new avenues for increased litigation and imposes significant new costs on California businesses. Just two examples of how the proposal substantially exacerbates the already-problematic Proposition 65 litigation climate follow.

12 Chemicals

1One of the most concerning aspects of the proposal is the requirement that warnings specify one or more of 12 chemicals if those chemicals are causing an exposure above “safe harbor” thresholds.

This proposed section will create a new category of “bad warning” enforcement actions, which will punish companies making good faith efforts to comply.

The following hypothetical illustrates the point: A company whose product contains both a listed phthalate and lead determines that it should provide a warning for lead but that no exposure to the phthalate is occurring at a level requiring a warning. Thus, it provides a compliant Proposition 65 warning identifying lead only. Notwithstanding that compliant warning, that company may still be sued for failing to identify the phthalate, leaving the company to settle or engage in prolonged, expensive litigation. The only way to avoid such “bad warning” claims would be to identify all 12 chemicals, or alternatively to identify any of the 12 chemicals that the business believes may be present, even if they may be present at such infinitesimal levels that they do not trigger the warning requirement. This is the exact opposite outcome that OEHHA states it wishes to achieve in that it creates an entirely new sub-category of “overwarning,” wherein a business will specify chemicals in its warnings out of an abundance of caution, notwithstanding the fact that such chemicals are either not present at all or are otherwise present at infinitesimal levels such that no specification of the chemical is required by law.

Translation Requirement

The requirement to provide warnings in alternative languages generally suffers from vagueness, does not give proper guidance to businesses on how to comply, and thus will directly lead to more lawsuits.

• The subsection does not indicate what amount of another language needs to be present on a label to trigger a warning in that language.

• Although the proposed regulations give detailed and precise requirements for the language to be employed in the English-language warnings, they do not give an indication of how these warnings are to be properly translated.

• The foreign language proposal does not take space limitations into account.

During the March 25 public hearing on the proposed regulation, OEHHA stated that it intends to include translated warnings on its proposed website. OEHHA can eliminate the problems the coalition has identified with the foreign language requirement by including translated warnings on its website in multiple languages in lieu of requiring businesses to provide them whenever another language is present on a label.

Alternatively, if OEHHA remains inclined to require businesses to provide warnings in multiple languages on labels, it would only make sense for the foreign language requirement to be triggered if other health-related warnings for a product are given in multiple languages, not based solely on the mere use of multiple languages on a label in other regards. Even then, OEHHA should limit the requirement to one additional language.

Economic Analysis

OEHHA summarily concludes that the proposal will not have a significant statewide adverse economic impact directly affecting businesses. OEHHA reaches this conclusion based on the erroneous view that the proposal “does not impose any new requirements upon private persons or business because it primarily provides non-mandatory guidance and a voluntary safe harbor process for providing warnings already required under the Act that businesses can choose to follow.”

OEHHA’s assumption cannot be supported, as evidenced by an economic impact analysis prepared by Andrew Chang & Company, LLC, which demonstrates that OEHHA’s proposal—when characterized accurately—will have a significant economic impact on California businesses. Chang’s economic impact analysis further underscores that a meaningful economic analysis of OEHHA’s proposal—which satisfies the requirements for a major regulation—is a necessary and critical missing component of the rulemaking process.

Next Steps

The coalition believes that the new burden OEHHA is imposing on the business community substantially outweighs any perceived benefit from the proposed changes to the Proposition 65 warning requirements.

If OEHHA is not going to abandon this effort and devote itself instead to the more pressing need to better define when Proposition 65 warnings are really necessary, then, at a minimum, the coalition believes that OEHHA needs to substantially rework its draft rule and provide a meaningful economic impact analysis and then recirculate them for another round of full public comment before proceeding to finalize any change to the existing regulation.

OEHHA must adopt a final regulation by January 2016. It is anticipated that OEHHA will review public comments over the next several months, and circulate a revised version for public review and comment.

Staff Contact: Anthony Samson

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Anthony Samson
About Anthony Samson
Anthony Samson, CalChamber policy advocate for environmental regulation, housing and land use issues from November 2013 through 2016, is senior attorney/policy advisor for Arnold & Porter Kaye Scholer LLP. He previously was an attorney at a statewide law firm that specializes in mining, land use, and natural resources law. He earned a B.A. from the University of California at Santa Barbara, and a J.D. from Michigan State University College of Law, where he served as the articles editor of the Michigan State Law Review.