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California Agency Announces Changes to Proposition 65

09 Sep 2016 00:00:00 -0800

In a move that could have significant implications for businesses throughout the State of California (as well as businesses whose goods are sold in California), the Office of Environmental Health Hazard Assessment recently announced that it has adopted new regulations that seek to clarify the methods for complying with Proposition 65’s “clear and reasonable” warning requirement.

In 1986, California voters approved Proposition 65, an initiative measure that sought to address concerns relating to exposure to toxic chemicals. Officially known as the Safe Drinking Water and Toxic Enforcement Act of 1986, Proposition 65 requires the State to publish a list of chemicals known to cause cancer or reproductive toxicity — a list that has grown to include more than 800 chemicals. In addition to this listing requirement, Proposition 65 requires any business (including manufacturers, producers, packagers, suppliers and distributors) that has 10 or more employees to provide a “clear and reasonable” warning before knowingly and intentionally exposing any Californian to a listed chemical.

Historically, businesses were provided relatively broad authority to determine the proper method for conveying this warning. Generally speaking, a warning would satisfy Proposition 65’s requirements so long as “the method employed . . . [is] reasonably calculated” to “clearly” communicate that the individual will be exposed to a listed chemical. In an effort to clarify Proposition 65’s warning requirements, OEHHA recently adopted new regulations strengthening this regulatory standard. Among the newly adopted regulations, there are several key provisions that could impact businesses selling, manufacturing or distributing products within the State.

Burden to Warn on Manufacturers

First, the regulations place the responsibility to warn on manufacturers, distributors and producers of consumer products. The regulations also clarify the circumstances in which a retailer may be responsible for creating warnings, such as where the retailer knowingly introduces a listed chemical into a product.

Key Changes to Warning Content

There are also several key changes to product warning requirements:

Consumer product warnings will need to state that the product “can expose” the individual to a listed chemical, and then identify each specific listed chemical for which the warning is being provided. For example, for exposures to listed carcinogens, the warning must state: “This product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause cancer.”
Consumer product warning labels will need to contain the signal word “WARNING,” as well as display a symbol consisting of a black exclamation point in a yellow equilateral triangle with a bold black outline.
Almost all warnings must include a hyperlink to an OEHHA-operated Proposition 65 website. Many of the required hyperlinks are product-specific, ranging from alcohol, furniture and diesel engines, to parking structures and amusement parks.
There are exceptions to some of the above requirements for on-product warnings. For example, as opposed to listing the chemical for which the warning is being provided, on-product labels need only include the words “cancer” and/or “reproductive harm.”

While the regulations do not become operative until Aug. 30, 2018, businesses should continue to work with legal counsel to ensure that any warnings fully comply with the new regulations and satisfy Proposition 65’s “clear and reasonable” warning requirement.

If you have any questions about these regulations or how they may impact your busines, please contact the attorney authors of this Legal Alert listed to the right in the firm’s Environmental Law & Natural Resources practice group, or your B B&K attorney.

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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

New Laws Affecting Businesses in California

26 Nov 2013 00:00:00 -0800

During the 2013 legislative session, Gov. Brown signed into law new legislation affecting California businesses, most of which will go into effect in less than six weeks. For more information on any of the new laws below, click on the title to view the full legal alert or article and contact the attorney author or your BB&K attorney.

AB 44 - Assembly Bill 44 Requires Submission of Subcontractors' License Numbers in Public Construction Bids
Public Agencies Must Modify Bid Forms to Require Subcontractor LicenseNumber
Effective July 1, 2014

AB 227 - Amendment to Prop 65 Provides Businesses a Grace Period
Assembly Bill 227 Aims to Reduce Frivolous Lawsuits and Excessive Penalties
AB 227 was effective immediately

AB 440 – Local Agencies Empowered to Order the Cleanup of Contaminated Properties
Assembly Bill 440 Provides Agencies Immunity from Liability For Cleanup Efforts
Effective January 1, 2014

AB 556 and AB 218 – Two New California Laws Will Affect Hiring and Fair Employment Practices
Assembly Bill 556 Impacts All Employers; Assembly Bill 218 Impacts Public Employers Only
AB 556 is effective January 1, 2014
AB 218 does not impact businesses

SB 7 – Controversial New Law Conditions State Funding on Charter City Compliance With State Prevailing Wage Law for Locally Funded Projects
Senate Bill 7 Could Face Legal Challenges
Effective January 1, 2015, unless the contract was advertised for bid prior to that date

SB 323 - New Law Will Change the Way Limited Liability Companies Form and Operate
The California Revised Uniform Limited Liability Company Act Will Impact Existing and Future Businesses
Effective January 1, 2014

SB 594 – New California Law Further Restricts Nonprofit Organizations From Engaging in Campaign Activity
Restricted Resources Include Cash, Office Supplies and Other Property Received From Local Agencies
Effective January 1, 2014

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

Amendment to Prop 65 Provides Businesses a Grace Period

30 Oct 2013 00:00:00 -0800

Gov. Brown recently signed Assembly Bill 227 into law, which amends California's Safe Drinking Water and Toxic Enforcement Act of 1986, otherwise known as Proposition 65. Prop 65 provides that businesses may not expose Californians to chemicals known to cause cancer or reproductive toxicity without first providing a warning. In response to complaints from California business owners that Prop 65 has resulted in frivolous litigation and excessive penalties, the Legislature adopted AB 227 in an attempt to reduce lawsuits and penalties levied against businesses. AB 227 was signed as urgency legislation and went into effect immediately.

Prop 65 imposes civil penalties of up to $2,500 a day for violating the warning requirement. Further, Prop 65 allows people acting in the public interest to file lawsuits to enforce the warning requirements.

Assembly Bill 227 provides that prior to filing an enforcement action, the intended plaintiff must first provide the alleged violator with a notice of special compliance procedure and proof of compliance form. If the allegation is that the business failed to provide a clear and reasonable warning of chemicals known to cause cancer or reproductive toxicity, then AB 227 allows the business to correct the alleged violation within 14 days and agree to pay a nominal $500 civil penalty. To further reduce the possibility of frivolous litigation, AB 227 provides that only 25 percent of the $500 civil penalty will be given to the party bringing the enforcement action, with the remainder deposited in the Safe Drinking Water and Toxic Enforcement Fund.

Although AB 227 offers businesses accused of violating Prop 65 an opportunity to comply with Prop 65’s warning requirements before facing higher civil penalties, businesses should note that the bill does not prevent the Attorney General or a district attorney from bringing a subsequent action to enforce Prop 65.

For further information on how Assembly Bill 227 may impact your business or for questions regarding Proposition 65, please contact one of the attorney authors of this legal alert listed at right in the Environmental and Natural Resources practice group, or your BB&K attorney.

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

Image courtesy of Flickr by Schill.

California Green Initiative Final Report Brings New Focus to Environmental Regulations

19 Dec 2008 00:00:00 -0800

On December 16, 2008, the California Environmental Protection Agency (“Cal EPA”) released the Green Chemistry Initiative (“GCI”) Final Report. The Final Report identifies policies to eliminate or reduce the use of toxic substances in the design, manufacture and application of chemical products. Instead of concentrating on storing and disposing of hazardous waste, the Final Report identifies the following six-step strategy to promote use of safer, sustainable chemicals and eliminate the use of toxic compounds in the first place:

1. Expand pollution prevention programs to more business sectors and refocus additional resources on prevention rather than clean up.

2. Develop Green Chemistry education and training programs.

3. Create the first in the nation, online product ingredient database and require manufacturers to disclose non-confidential information regarding products sold in California. The database would allow consumers to access a list of the chemical ingredients for an individual product.

4. Create an online toxics clearinghouse to help prioritize chemicals of concern and identify existing data gaps regarding hazardous chemicals.

5. Accelerate the development of safer products by creating a process to evaluate the use of chemicals and alternatives to ensure product safety and reduce or eliminate the need for chemical-by-chemical bans.

6. Move toward a "cradle-to-cradle" economy by 2050 that will produce “benign-by-design” products and establish a California green products registry. Ultimately, this registry would be available to consumers while they are shopping and would provide information regarding a product's environmental footprint.

Although the Final Report was only released this week, the strategies recommended by the GCI are already being implemented. On September 29, 2008, Governor Arnold Schwarzenegger signed Assembly Bill 1879 authorizing the Department of Toxic Substances Control (“DTSC”) to identify and prioritize chemicals of concern, evaluate alternatives and specify regulatory responses. The bill also allows DTSC, with advice from a green ribbon science panel, to establish regulations necessary to advance Green Chemistry in California. Specifically, it empowers DTSC to establish labeling requirements and ban the use of certain chemicals in consumer products. The Governor also signed Senate Bill 509 on September 29, 2008, which establishes an online toxics information clearinghouse to provide public access to information on the toxicity of chemicals. The State has until January 1, 2011 to develop the regulations necessary to implement the two bills.

The Final Report could result in a significant expansion of existing environmental law depending on how the recommendations are implemented. The State is currently required to publish a list of chemicals known to cause cancer, birth defects or other reproductive harm under the Safe Drinking Water and Toxic Enforcement Act of 1986, better known as Proposition 65. Proposition 65 further requires businesses to provide notice before exposing anyone to a listed chemical. Proposition 65’s list covers hundreds of naturally occurring and synthetic chemicals, including additives or ingredients in pesticides, common household products, foods, drugs, dyes, and solvents.

In contrast, the Final Report recommends the creation of two separate lists - one that identifies all product ingredients and another that catalogs hazardous ingredients. The creation of the first database would significantly expand beyond Proposition 65’s reach by requiring businesses to disclose all chemical ingredients in products sold in California, including nanomaterials, in addition to those that are known carcinogens. Other than a safeguard for trade secrets, there are no limits or exceptions to the listing requirement identified in the Final Report’s third recommendation. The Final Report is also silent with respect to any timing requirement. Proposition 65 only requires the State to update its list annually. However, the Final Report could be interpreted to require businesses to maintain up-to-the-minute information regarding product ingredients.

The extent of the Final Report’s second list requirement for a hazardous substances clearinghouse may greatly overlap with the requirements of Proposition 65. The Final Report even suggests using Proposition 65 as a starting point for creating the clearinghouse. The extent of this list will be better known once the State’s Office of Environmental Health Hazard Assessment identifies the data that must be included in the clearinghouse as authorized by SB 509. Since the Office of Environmental Health Hazard Assessment has until January 1, 2011, to establish this criteria, businesses and other stakeholders should consider participating in the State’s decision-making process to help determine what chemicals, ingredients and other data are included in the clearinghouse.

Like Proposition 65, the recommendations of the Final Report will probably increase costs for entities doing business in California. It is not clear how programs identified in the Final Report will be funded. State government costs could be supported from fee-based special funds or the government may seek funding from specific industry sectors.

However, businesses that adopt the green practices outlined in the Final Report may benefit from reduced liability and insurance payments, reduced regulatory burdens and reduced hazardous waste clean-up costs. Additionally, at a time when green businesses have reached a level of mainstream popularity, businesses that comply with the recommendations may even benefit from greater sales. Those that do not comply with the recommendations may face increased financial penalties and additional litigation risks.

The Final Report can be viewed at www.dtsc.ca.gov/greenchemistry.