The latest proposed amendments to the state’s Proposition 65 warning regulations eliminate online warnings as a safe harbor warning method and are a substantial deviation from the existing plain language of the regulations, the California Chamber of Commerce and a broad industry coalition explain in a letter to the agency leading the rule drafting.
The coalition is requesting the revisions proposed by the Office of Environmental Health Hazard Assessment (OEHHA) be withdrawn because they are a clear violation of the Administrative Procedures Act (APA), will spur frivolous litigation with respect to warnings that are “clear and reasonable,” and cause tens of thousands of businesses to invest even more time and resources into changing their Proposition 65 warning programs yet again.
Online Warnings as Safe Harbor
The plain language of the current Proposition 65 safe harbor regulations under 27 Cal. Code Regs. Section 25602(a)(2) permits businesses selling consumer products over the internet to provide a product-specific warning online prior to purchase.
Since the regulations were adopted in 2016, thousands of companies have relied upon this safe harbor for creating and implementing their Proposition 65 warning programs by providing customers shopping online a product-specific Proposition 65 warning before they make a purchase.
OEHHA is now proposing under the current amendments to substantially change the regulations by eliminating the stand-alone online safe harbor method and creating a new two-warning approach.
The CalChamber and the industry coalition argue that the proposed amendments are not based on OEHHA’s objective that customers receive the warning prior to making a purchase. Instead, the change singles out website and mobile application sales for different treatment.
If a product has a warning on the label and is sold in a brick-and-mortar store, there is no requirement of a second warning via a shelf sign, a sign at checkout, or an electronic form of warning. Conversely, if a product has a shelf sign in a brick-and-mortar store, there is no requirement that the product also have a warning on the label.
The coalition asserts that there is no rational basis for treating products sold via a website or mobile application differently by requiring a Proposition 65 warning online prior to purchase and on the product label.
Violation of APA
The CalChamber and the coalition also identify a significant APA violation that demands OEHHA withdraw the proposed amendments.
In 2017, OEHHA published a “Notice of Non-Substantive Changes to Article 6: Clear and Reasonable Warnings.” Although Section 100 of the APA regulations allows an agency to make non-substantive regulatory changes without notice and public comment, OEHHA made at least one substantive change to the section of the regulation that explained the requirements for safe harbor internet warnings.
The coalition argues that this substantive change without notice and comment was a clear violation of the APA and substantially changed the meaning of that regulatory section.
That 2017 substantive change is now what OEHHA relies upon in its current proposed amendments to rationalize why an internet or mobile application warning is insufficient and two warnings are required for products sold online.
The CalChamber and the coalition argue that OEHHA’s current proposed amendments are an attempt to shore-up its improper amendment in 2017 and eliminate website and mobile application warnings as a stand-alone safe harbor method. Because the 2017 change was illegal and these proposed changes are not a clarification of the safe harbor warning regulations, but a dramatic change to the requirements for online warnings, the proposed changes must be withdrawn.
Unnecessary and Unjustified
From the perspective of the businesses selling online or mobile applications, adding this new requirement for on-label warnings will have a severe impact on production, distribution and manufacturing costs.
Unless a business is willing to provide an on-label warning to consumers outside of California, which the law does not require and which may cause confusion or alarm among those consumers, the business will need to create two lines of products with separate shopkeeping unit (sku) designations so that online retailers will know which are destined for California and which for other jurisdictions. This will substantially increase expenses and complexity in the supply chain and could add to consumer costs.
Furthermore, the proposed amendments will incite additional frivolous litigation by private enforcers over whether appropriate warnings were provided, the coalition explains.
As California businesses continue to reel from the unexpected economic impacts of COVID-19, introducing these unnecessary amendments to existing Proposition 65 regulations will cause substantial harm to businesses with no conceivable benefit to California consumers.
OEHHA will review public comments over the next several months and then decide whether to modify, withdraw or proceed with its proposed amendments. At that time, the public will have one more opportunity to comment before OEHHA finalizes its rulemaking.