If you’ve ever been to California, you’ve probably seen the foreboding signs proclaiming “WARNING: This [product/place] contains a chemical known to the State of California to cause cancer, birth defects, or other reproductive harm.” Though you might be tempted to infer that California is a particularly cancer-laden state, these warnings are merely the product of California Proposition 65 (“Prop 65”), a “right to know” law that requires retailers, manufacturers, and importers to provide warnings to Californians if a product contains certain listed chemicals. The penalty for failing to provide the requisite warning can be steep – as high as $2,500 per product, per day. If you are going to do business with California residents, here’s what you need to know about Prop 65.
Who is Affected by Prop 65?
Any company that distributes, stores, manufactures, or sells products in the State of California or to California residents must comply with Prop 65, regardless of where the product was manufactured or whether it was purchased online or through a catalogue. There is an exemption for businesses that have fewer than 10 employees, but even small companies may be liable for Prop 65 violations if their contracts with third-party retailers require them to indemnify the retailers for labeling or other violations.
What Triggers the Obligation to Provide a Prop 65 Warning?
Once a chemical is added to the Prop 65 list, companies whose products contain a listed chemical have twelve months to comply with the statute’s warning requirements, unless one of the exemptions discussed below applies.
Since 2012, several ingredients found in cosmetics were added to the Prop 65 list, including:
- Diethanolamine – commonly found in shampoo, soap, sunscreen, and self-tanning products.
- Cocamide Diethanolamine (Cocamide DEA) – commonly found in shampoos and liquid soaps, skin creams, including facial masks and shaving creams, and hairspray and hair treatments.
- Titanium Dioxide (Ti02) – “airborne, unbound particles of respirable size.” commonly found in powdered cosmetics, make-up and skin care products, sunscreens, and acrylic nail systems.
A complete list of Prop 65 chemicals can be found at: http://oehha.ca.gov/prop65/prop65_list/Newlist.html
Since the summer of 2013, hundreds of companies have received Notices of Violation for products containing Cocamide DEA and Ti02. Even though many of the challenged products contain the listed chemical at quantities so low they do not pose a significant risk to consumers, most companies have elected to settle the Notices, often for tens of thousands of dollars, rather than incur the cost of litigation.
Prop 65 warnings are not required if a company can establish that exposure to the listed chemical is low enough that it poses “no significant risk” of cancer (the so-called “NSRL”) or if exposure to the chemical is below “maximum acceptable dose levels“ to cause birth defects or reproductive harm (the so-called “MADL”). The governmental agency responsible for administering Prop 65, California Office of Environmental Health Hazard Assessment (OEHHA), has established NSRLs for certain Prop 65 chemicals, which can be found at http://oehha.ca.gov/prop65/pdf/safeharbor070113.pdf. Products containing chemicals below the OEHHA-established NSRL are not required to carry Prop 65 warnings. Unfortunately, OEHHA has yet to establish NSRLs for chemicals found in many cosmetics, including Cocamide DEA and Ti02. Therefore, to invoke the NSRL exemption, companies have to establish the NSRL, a showing that requires expert analyses, can be quite costly, and will most certainly be challenged by plaintiffs’ experts.
How to Warn
Prop 65 warnings must be made so that they are reasonably available to an individual prior to exposure. This is frequently accomplished by placing the Prop 65 warning directly on the product label. For products sold online or through direct retail sales, the warning must be displayed in conjunction with product images. For products sold in-store, for which warnings are not provided on the product label, signs and placards must be provided in close enough proximity to the products to establish a clear association between the covered products and the warnings. Such warnings should be prominently placed so that they are likely to be read and understood.
Prop 65 Updates
OEHHA regularly adds new chemicals to the Prop 65 list. That is reason alone to continually monitor the agency’s website. In addition, OEHHA recently announced that it is considering significant changes to Prop 65, including requiring specific warning language and symbols, as well as the listing of certain chemicals, and requiring companies to provide specific product information, including exposure levels, which will be listed on a publicly available OEHHA website. The changes, which are subject to public comment, are currently expected to go into effect in the summer of 2015.
For more information, please feel free to contact me at [email protected] or 213.430.3375.