OEHHA's Updated Prop 65 Draft Reg Still Problematic – Industry Groups

Years in the works, the Office of Environmental Health Assessment's latest proposal to update Prop 65 warning content and clarify businesses' responsibilities still poses compliance and legal issues, the California Chamber of Commerce and Natural Products Association say in comments.

Measures proposed by California's Office of Environmental Health Hazard Assessment to clarify Proposition 65 warnings and provide "certainty and confidence" to businesses would in some instances complicate companies' compliance responsibilities and potentially increase their exposure to litigation, industry groups suggest.

In November, OEHHA issued a revised version of a proposal published in early 2015 to make Prop 65 warning statements on products more meaningful to consumers.

OEHHA also has been under pressure to reform Prop 65 to reduce frivolous lawsuits under the law, though industry stakeholders have viewed many of its ideas in recent years as counterproductive (Also see "Proposed Prop 65 Changes Would Exacerbate A Bad Situation – Industry" - HBW Insight, 2 Jul, 2014.).

Such is the case with the agency's latest stab at rulemaking to update Prop 65, which includes some improvements to previous proposals but does not go far enough and could introduce new ambiguities and risks, according to industry groups.

In an effort to better inform consumers and address "over-warning," a phenomenon that's increased as companies looking to play it safe affix warnings to products that may not need them, OEHHA has been toying with the idea of mandating that specific chemicals of concern be named in warnings.

The agency proposed a system in January 2015 that would have required warnings to identify any of 12 common chemicals of concern, including formaldehyde and lead, which industry saw as arbitrary, thorny from a legal standpoint and potentially more confusing for consumers than the status quo.

Under OEHHA's redrafted proposal, businesses instead would be compliant with Prop 65's "clear and reasonable" warning requirement if "the name of one or more of the listed chemicals for which the warning is being provided is included in the text of the warning, to the extent that an exposure to that chemical or chemicals is at a level that requires a warning."

The change still poses problems for companies, largely due to the wording used, according to the California Chamber of Commerce, which represents businesses and industry groups including the Personal Care Products Council and the International Fragrance Association North America.

CalChamber recommends in comments that OEHHA tighten language in the draft regulation to address ambiguity that could prompt lawsuits targeting firms for not listing all of the chemicals covered by a warning, or for selectively highlighting one substance that plaintiffs might deem of lesser concern than another unnamed Prop 65-listed chemical that is also present in the product at a level accounted for by the warning.

The chamber also urges OEHHA to lose the piece directing businesses to name a chemical “to the extent that an exposure to that chemical or chemicals is at a level that requires a warning," which it says "would inappropriately, unnecessarily and unlawfully require businesses to demonstrate that a warning is indeed required."

Currently the burden of proof on defendants in private enforcement actions is to demonstrate that a warning is unnecessary based on the likely exposure risk to which a consumer is subjected. The language at issue could compound challenges for companies targeted with suits, CalChamber suggests.

The chamber proposes a fix to the current draft to specify that "if a warning is being provided for more than one listed chemical, the warning meets the requirements of this article if the name of any one of the listed chemicals for which the warning is being provided is included in the text of the warning."

In terms of the warning itself, CalChamber recommends a template statement: "This product can expose you to chemicals, including [name of one or more chemicals], known to the State of California to cause cancer and/or birth defects or other reproductive harm. For more information go to www.P65Warnings.ca.gov/product."

Proposal Places Burden On Online Retailers

The updated proposal seems designed to encourage use of on-product warning labels, as opposed to signage at point of purchase or other methods for transmitting warnings consistent with consumers' "right to know."

CalChamber points to a section that would allow on-product labels to omit the names of specific Prop 65 chemicals, instead indicating whether the warning is for one or more listed carcinogens, reproductive toxicants or both. Companies would include a URL directing consumers to a new Prop 65 website under development where they could obtain more detailed information regarding the potential exposure risk.

However, if OEHHA's intention in permitting "truncated" warnings is to incentivize on-product labels, thereby relieving the burden on retailers, the proposed regulation should be revised to clarify the responsibilities of internet retailers and companies with e-commerce platforms, the chamber says.

The agency lays out requirements for online retailing in a section of the proposal titled “Consumer Product Exposure Warnings – Methods of Transmission."

“For internet purchases, the warning must be provided by a clearly marked hyperlink using the word 'WARNING' on the product display page, or otherwise be prominently displayed to the purchaser before the purchaser completes his or her purchase of the product," OEHHA says.

It goes on: "The warning must be in a type size no smaller than the largest type size used for other consumer information on the page. For purposes of this article, a warning is not prominently displayed if the purchaser must search for it in the general content of the website."

CalChamber notes that "the proposal is silent and therefore leaves unanswered whether internet or mail-order catalog retailers who sell products bearing on-product warning labels must also warn online or within the catalog. Absent a regulatory clarification, the proposal can be interpreted to promote an unprecedented warning regime wherein certain products would require two Proposition 65 warnings merely because of the manner in which they are sold."

OEHHA's proposed warning requirements for online retailing has “flipped the burden on internet retailers to affirmatively provide warning statements, whether or not a warning has been provided on the product label by the manufacturer," NPA suggests.

The Natural Products Association expresses similar concerns in its comment. The trade group points to a section of the proposal titled "Responsibility to Provide Consumer Product Exposure Warnings," which acknowledges OEHHA's duty under Prop 65 to minimize the burden on retail sellers of consumer products except when they are responsible for introducing a listed chemical into a product.

OEHHA specifies that the manufacturer, producer, packager, importer or distributor of a product is responsible for affixing a label to the product or providing a notice directly to the authorized agent for a retailer seller so they can place that warning on the shelf.

However, with the updated text addressing online retailing, OEHHA has “flipped the burden on internet retailers to affirmatively provide warning statements, whether or not a warning has been provided on the product label by the manufacturer," NPA suggests.

The trade group predicts that "internet retailers will be targeted with pre-litigation letters because on-product labeling will be insufficient to protect these retailers."

Further, the onus of checking each product to make sure a retail website displays all the required warnings “will undoubtedly lead to over-warning and desensitization of these warning statements by the California consumer," NPA says.

CalChamber recommends language for the change it seeks on the subject, which is addressed in Section 25603 of the proposed reg: "A retail seller that sells a product containing an on-product warning label pursuant to subsection (b) via mail order catalog or the internet is not required to provide an additional warning for that product using the methods of transmission identified."