CalChamber, Coalition Continue to Voice Concerns on Draft Prop. 65 Warning Rules

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Prop_65_2011Although improved since previous iterations, proposed revisions to the Proposition 65 warning regulations by the Office of Environmental Health Hazard Assessment (OEHHA) continue to be a concern to the California Chamber of Commerce and a coalition of more than 200 organizations.

The CalChamber and coalition have outlined their issues in a recent letter to OEHHA.

The 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.

Proposition 65 Background

Proposition 65, the Safe Drinking Water and Toxic Enforcement Act of 1986, is the most far-reaching consumer “right to know” law in the nation.

Proposition 65 requires California businesses with 10 or more employees to provide clear and reasonable warning before knowingly and intentionally exposing individuals to chemicals known to cause cancer and/or reproductive toxicity.

When to Warn

California allows a business to use a chemical without providing warning as long as exposure does not exceed a specified threshold level. The mere presence of a Proposition 65-listed chemical does not trigger the warning requirement; instead, the threshold question is whether the chemicals would expose persons at levels that would require a warning.

Of the more than 800 substances that are on the list of chemicals known to cause cancer, birth defects or other reproductive harm, OEHHA has developed threshold levels for only 300 chemicals to guide businesses in determining whether a warning is necessary. If the chemical is at or below the levels listed, the business has a “safe harbor” from providing a warning.

How to Warn

The current regulations allow businesses to prove they are providing “clear and reasonable” warnings by any means, but also set criteria to establish when the warnings will be deemed “clear and reasonable” for purposes of Proposition 65.

The regulations also lay out warning language and methods for occupational and environmental exposures, alcoholic beverages, and restaurants. Businesses using these so-called “safe harbor” warnings are protected from the threat of litigation and can carry out business with a sense of certainty.

Alternatively, the regulations allow businesses to provide warnings other than those specified under certain conditions.

Proposed Warning Regulations

After several pre-regulatory iterations and one formal rulemaking proposal, on November 27, 2015, OEHHA released an updated formal proposal overhauling the requirements for “clear and reasonable” warnings under Proposition 65.

OEHHA had released its first formal rulemaking proposal on January 19, 2015 after a year-long pre-regulatory process. Due to significant concerns from both sides, however, including the CalChamber coalition, OEHHA was unable to adopt a final rule within one year as it was required to do under the California Administrative Procedures Act (APA).

Accordingly, the November 27, 2015 proposal represents a new formal rulemaking proposal under the APA but represents a continuation of the previous proposal released January 29, 2015. Under the APA, OEHHA now has until November 27, 2016 to adopt a final rule.

OEHHA’s most recent proposal:

• Requires warning to name at least one of the listed chemicals for which the warning is being provided.

CalChamber: Although the requirement to specify any of the listed chemicals will likely cause undue alarm, the new requirement is more workable than OEHHA’s previous proposal to require warnings to name one or more of 12 chemicals (coined the “Dirty Dozen” requirement), and will likely lead to far less “bad warning” litigation. The new requirement however, suffers from significant drafting flaws that create practical difficulties and confusion, thus undermining OEHHA’s intent. CalChamber’s comment letter proposes drafting suggestions to address these drafting flaws.

• Continues to establish a two-year effective date, but states that a warning for consumer products manufactured prior to the effective date is “clear and reasonable” so long as it complies with the warning regulations in effect as of the date of manufacture.

CalChamber: This change will avoid frivolous litigation targeting products that are manufactured prior to the effective date but which have a longer shelf life and are not purchased until after the effective date.

• Requires most warnings to contain a pictogram of an exclamation point encompassed by an equilateral triangle.

CalChamber: This symbol is associated with more significant or acute hazards than those that fall within Proposition 65’s reach, such as choking or allergic reaction risks. It would be more consistent with the statute to use within a symbol a “P65” or “65” that associates the basis for why the warning is being given.

• Continues to allow warnings to provide supplemental information, but states that the supplemental information cannot “contradict” the warning.

CalChamber: The requirement that supplemental information can’t “contradict” the warning potentially infringes on businesses’ First Amendment right to commercial speech.

• Expressly allows warnings subject to previously court-approved settlements and final judgments to be deemed in compliance with the new regulation.

CalChamber: This change will eliminate any questions or litigation regarding whether warnings subject to previously court-approved settlements and final judgments comply with the new regulation. However, this aspect of the proposal could unintentionally be interpreted as opening the door to third-party enforcement of court-ordered settlements or final judgments.

• Requires warnings to be presented in additional languages if those languages are used on the products label for any other purpose.

CalChamber: The proposal suffers from vagueness, does not give proper guidance to businesses on how to comply, and thus will directly lead to more lawsuits.

• Permits businesses to warn in any way they please so long as they can defend the warning as “clear and reasonable” if challenged, but eliminates existing regulatory guidance on which businesses have historically relied.

CalChamber: If the current regulation’s language explaining what it means for a warning to be “clear and reasonable” is not retained, businesses will be forced to use the warnings OEHHA has provided or risk being subjected to litigation over whether the alternative warnings the businesses used are “clear and reasonable.”

Next Steps

OEHHA will review public comments over the next several months and is anticipated to release a revised proposal by the middle of the year. At that time, the public will have one more opportunity to comment before OEHHA finalizes a rule by the November 27, 2016 deadline.

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.