California’s businesses are keeping a close eye on potential regulation changes which could dramatically alter the requirements for warning consumers about the potential risks of chemicals that could cause cancer or harm to the reproductive system. On December 13, 2023, the Office of Environmental Health Hazard Assessment (OEHHA), responsible for implementing California’s Proposition 65, conducted a quasi-legislative hearing on the proposed rule amendments that may severely modify the short-form warning requirements of the Proposition.
Implemented in 1986, Proposition 65—known as the Safe Drinking Water and Toxic Enforcement Act—obligates businesses with 10 or more employees to provide a clear and reasonable warning to Californian individuals exposed to any listed chemical potentially causing cancer or reproductive damage. The proposed alterations put forward by the OEHHA in October demand the identification of at least one Proposition 65 chemical for each exposure pathway where, currently, companies fulfill their obligation simply by warning of potential harm, either cancer, reproductive harm, or both, without having to name a particular chemical in the product.
The OEHHA’s proposed changes came as a response to the over-use of the short-form warning in cases where there were no Proposition 65 chemicals in the products. This measure was used predominantly as a risk management strategy, causing unnecessary concern and leading to the proposed regulation change of requiring the indication of one chemical per endpoint.
OEHHA had previously made similar attempts to overhaul the short-form warning requirements two years earlier, but the regulated community’s significant opposition caused the rulemaking to lapse. This time around, the proposed changes faced staunch resistance during the public comment period, with key industry stakeholders, industry representatives, trade associations, and the California Chamber of Commerce expressing their disapproval.
Criticisms of the regulatory changes stem from concerns over excessive compliance costs and insufficient compliance periods. In particular, smaller businesses and those with multiple products would experience significant financial impact. Single-product lab tests to identify chemical composition and single-product exposure assessments could amount to hundreds and thousands of dollars respectively. The proposal could set an average manufacturer’s compliance costs rocketing to an estimated $8 million.
The complexities of the proposed regulations, coupled with hard-to-achieve timelines, could also lead to consumer confusion. Manufacturers are unable to control where their products will end up, and, given the size of California’s economy, they will likely continue to apply labels to products distributed nationwide and internationally. Out-of-state consumers may be puzzled by the unfamiliar regulatory landscape.
Additionally, controversy arose over the arbitrary identification of chemicals. Due to the law allowing the identification of any one chemical, regardless of its relative concentration, quantity, or toxicity, consumers could be misled into thinking the listed chemical is primarily harmful. This selective identification provides little useful information to Californian consumers.
Aside from the critiques, some comments expressed worry that the proposed changes could limit product availability within California. With businesses, particularly smaller ones, possibly choosing to bow out of market participation, California’s stringent regulatory climate could be teetering on the edge of being unsustainable for some businesses.
Despite overwhelming opposition, supporters of the proposed changes exist. Notably, the Center for Environmental Health, having issued over 1,000 notices of violation over time, is in favor. Should the law be passed, companies unfamiliar with the new regulatory framework could find themselves facing substantial litigation exposure.
Companies that rely on short-form warnings should be vigilant of the proposed changes, staying abreast of developments and ensuring they have enough time to amend their warnings if the changes are adopted by the OEHHA. It is also advisable for companies to start educating all parties in the supply chain—manufacturers, packagers, distributors, and retailers—on possible future changes.
Non-compliance with Proposition 65 exposes businesses to enforcement actions, potential penalties, plaintiff attorneys’ fees, and stressful litigation. Being proactive in investing in a well-structured compliance plan will assist in reducing the risks of long-drawn enforcement actions. Implementing a compliant Proposition 65 warning strategy, engaging in periodic compliance monitoring, analyzing current product risks, and shifting the burden and liability to other supply chain participants form the core of this plan. The need for effective preventive measures before the fact cannot be overstated.