by Melissa Jones, Stoel Rives, LLP
There are many misconceptions about California's Proposition 65 ("Prop 65"), one of which is the mistaken belief that if a product contains a chemical listed pursuant to Prop 65, a Proposition 65 warning is always required. The law, however, is more complex and a company that has received a 60-Day Notice of Violation (the precursor to a Prop 65 lawsuit) should consider whether it can establish that it did not need to provide a Proposition 65 warning pursuant to the "warning exemption," also known as the "Safe Harbor defense."
Proposition 65 generally requires businesses to warn consumers of exposures to chemicals that the State of California has determined cause cancer or reproductive harm. Today, well over 800 chemicals appear on the Prop 65 list maintained by the State of California's Office of Environmental Health Hazard Assessment ("OEHHA"). These chemicals include lead, cadmium, arsenic, and phthalates, among many others.
Proposition 65's warning requirement provides that "[n]o person in the course of doing business shall knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and reasonable warning to such individual …."1 But the statute also provides that the warning requirements do not apply if the company "can show that the exposure poses no significant risk assuming lifetime exposure at the level in question for substances known to the state to cause cancer, and that the exposure will have no observable effect assuming exposure at one thousand (1,000) times the level in question for substances known to the state to cause reproductive toxicity…." This exemption is what is often referred to as the Safe Harbor defense.
OEHHA has established No Significant Risk Levels ("NSRLs") and Maximum Allowable Dose Levels ("MADLs") for certain Proposition 65 chemicals. To succeed under this defense, a company must prove that the exposure to the chemical in question in its products is below the NSRL or MADL. The Safe Harbor level for lead, for instance, is 0.5 micrograms per day. If OEHHA has not established Safe Harbor levels, a company can still proceed with this defense but must also prove that the exposure meets the overall risk standards of the statute.
To meet this defense, a company must establish the "level of exposure" – this requires demonstrating through admissible evidence how an average user will be exposed to the product at issue. Under case law, the Court should consider an average user and not how the product may be misused by consumers or what may be done with the product by very high users of the product. Nonetheless, Prop 65 plaintiffs sometimes argue that Courts should consider any potential user of the product, which is yet another issue the defendant company will need to be prepared to address.
Another issue concerning this defense is whether it is appropriate to average exposure to the product over time. A recent decision issued in March 2015 by the California Court of Appeal in Environmental Law Foundation v. Beech-Nut provides additional support for companies asserting this defense. In the Beech-Nut case, the appellate court affirmed the trial court's decision that allowed food and beverage companies to calculate exposure to lead based on average lead levels detected across product lots and based on a 14-day exposure period. The plaintiff's method, which the trial court rejected, would have based exposure on the product sample with the highest concentration of lead and would have assumed daily consumption of the product.
Companies are often reluctant to proceed with the Safe Harbor defense because meeting the burden of proof requires the company to engage in litigation and retain expert witnesses, which can be costly. For this reason, many companies that may have a strong Safe Harbor defense make the practical decision to resolve the dispute via early settlement instead of engaging in litigation. Reform of the law is needed to make it more viable for companies to pursue this defense in court (for instance, by reforming the law to allow a prevailing defendant to be awarded attorneys' fees). Nonetheless, this is an important defense under the law and it has been asserted successfully by a handful of companies in Proposition 65 trials.
 Cal. Health & Safety Code § 25249.6.
Melissa Jones, Partner, Stoel Rives, LLP, is a trial lawyer who provides experienced and practical counsel in complex business disputes, appellate matters, and internal investigations. Her practice includes an emphasis on Proposition 65 defense as well. Melissa's civil experience includes litigating claims for breach of contract, fraud, negligent misrepresentation, misappropriation of trade secrets, products liability, false advertising and unfair competition. She regularly defends companies in litigation claims related to California's Proposition 65 and Unfair Competition Law (17200) and advises companies on Prop 65 compliance. She also advises clients on California's Safer Consumer Products Regulations and other California regulations. Melissa may be contacted at firstname.lastname@example.org.
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