The two-year grace period is about to end. As of August 30, 2018, thousands of companies will suddenly be at risk for millions in legal judgments for failing to comply with California’s updated Proposition 65 warning label requirements. And unfortunately, it isn’t just California-based businesses that are at risk: any company that manufactures, distributes or sells consumer products in the state is liable to civil penalties of up to $2,500 per day for each violation.
Disclaimer: I’m totally not a lawyer.
Proposition 65 has massive legal and liability implications for businesses across the country. If you produce a consumer good sold in California, talk to a trusted professional about your risk.
Because BBR has a number of clients that sell products, including food, in California via ecommerce and third-party distributors, we’ve done some investigating to find out more about Proposition 65 and how it may affect Louisiana businesses. There’s good news and bad news.
Good news first. If your company has less than 10 employees, you are exempt. Hooray!
Ok, now the bad: there’s a list of more than 900 chemicals you may now need to provide specific warnings to consumers about. (Sad trombone.)
I know. 900 is a lot of anything. But for food products, there are really just a handful of chemicals in particular that you’ll want to focus on.
Acrylamide, Arsenic, Bisphenol A (BPA), Cadmium, DEHP, Lead and Mercury
Yikes. But let’s back up a second.
What is Proposition 65 anyway?
Back in 1986, California passed the Safe Drinking Water and Toxic Enforcement Act. It required the state to publish a list of chemicals known to cause cancer or reproductive toxicity, and for businesses to provide warnings when they caused significant exposures to the listed chemicals. The purpose was to help Californians make informed decisions about their exposure to potentially dangerous substances.
But since then, the list of chemicals has grown to more than 900, and changes have been made to the kinds of warnings that are required. On one hand, the introduction of “Safe Harbor” levels for some chemicals allows for products with non-harmful levels of certain chemicals to avoid needing warning labels. But on the other, the warnings have been strengthened, requiring the chemical name to be included as well as a URL for consumers to find more information. These changes were made in 2016, with a grace period for implementation lasting until August 2018.
Ok, so back to that handful of chemicals common in food products. The weird thing is that many of these occur naturally–acrylamide, arsenic, cadmium, lead and mercury–or as a by-product of cooking like furfuryl alcohol or 4-methylimidazole. Other chemicals like bisphenol A (BPA) and DEHP are commonly used in food packaging.
The extent to which each of these chemicals poses a health risk to consumers is still the subject of great debate, but that hasn’t prevented a number of major food industries from being targeted by lawsuits in California. Cases have been filed against tuna producers (mercury), coffee merchants like Starbucks and 7-Eleven (acrylamide), bottled water companies (arsenic), breakfast cereal makers like Kellogg’s (acrylamide), and baby food companies like Gerber (lead and cadmium)–and the number of filings are rising each year. While Proposition 65 has undoubtedly contributed to consumer safety, it has also created opportunities for class-action lawsuits that line the pockets of attorneys on all sides.Source: Perkins Coie LLP “Food Litigation 2017 Year in Review”
So yeah, Proposition 65 is kind of a big deal.
If you sell to customers in California, you need to get on this ASAP. You may find out that the chemicals in your food product are at low enough levels that no warning is needed. (Hooray!) But you should also be aware that new chemicals are added to the list each year. What counts as safe today may not be next year–between FDA rulings, new scientific studies and lawsuits, the list and its levels will continue to be updated. And the odds are that other states will eventually get in on the consumer protection fun and pass their own laws.
But beyond whatever state regulations may arise, many consumers are already seeking out labels like “BPA-free” because they’ve heard enough to be concerned about the possible effects of BPA. So there are both pitfalls and opportunities available for manufacturers when it comes to chemicals and warning labels. You may be able to take advantage of your lack of Prop 65 chemicals by marketing to health-conscious consumers.
In addition to seeking advice from an actual attorney, I also recommend working with your industry trade association representatives, who should be aware of industry-wide trends and major lawsuits that may affect your business. And don’t forget to check with your suppliers and distributors, as the legal responsibilities for consumer warnings seem to fall most heavily on the manufacturer. Target sure isn’t going down because your product didn’t include a warning.