Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Prop 65 Revisions: Liability Allocation, New Safe Harbor Warning, Internet Warnings Compliance Challenges for Manufacturers, Distributors, Retailers and Others in the Chain of Business THURSDAY, JULY 12, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Mike Easter, J.D., CHMM, Principal, California EnSIGHT, Inc., San Francisco Christopher (Smitty) Smith, Attorney, Steptoe & Johnson, Los Angeles The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 1.

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5 Proposition 65 Understanding and Applying the New Warning Regulations Christopher Smitty Smith, Esq., Steptoe & Johnson LLP Mike Easter, J.D., CHMM, California EnSIGHT, Inc. July 12, 2018

6 Presenters Christopher Smitty Smith, Esq. Environmental Attorney at Steptoe & Johnson LLP National environmental practice focusing on litigation, administrative proceedings, regulatory compliance and business transactions Mike Easter, J.D., CHMM Mike Easter is a Principal at EnSIGHT and provides toxicology and risk assessment support. He has been involved with Proposition 65 since the late 1980 s and assists clients with Proposition 65 compliance and litigation defense. He has represented clients who have successfully obtained Safe Use Determinations for crystalline silica in pet litter, and for di-isononyl phthalate (DINP) in vinyl flooring products, PVC roofing membrane, and modular vinyl carpet tiles. 6

7 Overview General Background on Proposition 65 New Warning Regulations Evaluating Exposures Homework 7

8 General Background Regulations and Statutes Implementing Regulations and Enforcement Statutes Implementing Regulations California Code of Regulations, Title 27, Division 4, Sections through Enforcement Statutes California Health & Safety Code Sections through

9 General Background - Prohibitions Discharge of listed chemical into sources of drinking water (H&SC ) Exposure to a listed chemical (H&SC ) No person in the course of doing business (10 or more employees) Shall knowingly and intentionally expose any individual Actual knowledge for retail sellers (new regulations) First giving clear and reasonable warning to such individual Unless demonstrated to be insignificant (H&SC (c)) 900+ Listed Chemicals Carcinogens Reproductive/developmental toxicants 9

10 General Background - Prosecution Attorney General or citizen plaintiff Low evidentiary burden (exposure to listed chemical) Burden shifts to demonstrate warning provided or risk is not significant Exposure assessment Significant risk Carcinogens one excess case of cancer in an exposed population of 100K assuming lifetime exposure at the level in question, e.g., 10-5 Reproductive/developmental toxicants 1/1000 th of the No Observable Effect Level (NOEL) 10

11 General Background Potential Liabilities Enforcement Attorney General or Local District Attorneys Private Citizen Enforcer Civil penalties ($2500/day/violation) 25% to prosecutor Each unwarned exposure = one violation Attorneys fees Details are publicly available Injunctive relief Add Warning Reformulation 11

12 General Background - Litigation 60-Day Notice Identification of Prosecutor Certificate of Merit Venue California state court Legal Claims H&SC Available to Attorney General, District Attorney, and Private Enforcer B&PC Available only to Attorney General Potentially Extends Penalties Period 12

13 New Warning Regulations - Background California Code of Regulations, Title 27, Division 4, Sections through Repealed existing warning regulations (repealed 8/30/16) Adopted new warning regulations (effective 8/30/18) OEHHA s explanation for new warning regulations Making warnings more meaningful and useful to public Reducing over-warning in which businesses provide unnecessary warnings Giving businesses clearer guidance on who and where to provide warnings 13

14 New Warning Regulations - Breakdown Definitions and Responsibilities (Sections ) Warnings Methods and Content (Section 25601) Consumer Products (Sections ) Environmental (Sections ) Occupational (Section 25606) Specified Circumstances (Sections ) 14

15 New Warning Regulations Specified Circumstances Food (Sections ) Alcoholic Beverages (Sections ) Restaurants (Sections ) Prescription Drugs (Section ) Dental Care (Sections ) Wood Dust (Sections ) Furniture (Sections ) Diesel Engines (Sections ) Vehicles (Sections ) Recreational Vehicles (Sections ) Enclosed Parking (Sections ) Amusement Park (Sections ) Petroleum Products (Sections ) Service Station (Sections ) Smoking Areas (Sections ) BPA in Canned Goods (Sections ) Hotels (Sections ) 15

16 New Warning Regulations - Highlights New Warning Text and Design Features include: Warning language Exclamation Point in a Yellow or White Triangle Listing of the chemical(s) Reference to Proposition 65 website 16

17 New Warning Regulations - Highlights Further Direction on Methods of Transmission Each type of exposure now has directions on method of transmission Location of warning Electronic warnings Short form warnings Internet warnings Catalog warnings Foreign language warnings 17

18 New Warning Regulations - Highlights Shifting of Responsibility to Manufacturers/Distributors Presumption of no responsibility for retailer (Section (e)) 5 circumstances where presumption can be overcome (Sections (e)(1)-(5)) Retailer selling the product under a brand name or trademark that is owned or licensed the retail seller or an affiliated entity Retailer has knowingly introduced a listed chemical into the product, or knowingly caused a listed chemical to be created in the product Retailer has covered, obscured or altered a warning label that has been affixed to the product pursuant to subsection (b) Retailer has received a notice and warning materials for the exposure pursuant to subsections (b) and (c) and the retail seller has sold the product without conspicuously posting or displaying the warning Retailer has actual knowledge of the potential consumer product exposure requiring the warning, and there is no manufacturer, producer, packager, importer supplier or distributor of the product who: (A) [i]s a person in the course of doing business under Section (b) of [the Health & Safety Code], or (B) [h]as designated an agent for service of process in California, or has a place of business in California Actual Knowledge now required to hold retailers responsible (Section (f)) 18

19 New Warning Regulations Consumer Products Content Changes WARNING Exclamation Point in a Yellow or White Triangle This product can expose you to [chemical identification] which is known to the State of California to cause cancer. For more information go to which is known to the State of California to cause birth defects or other reproductive harm. For more information go to 19

20 New Warning Regulations Consumer Products Methods of Transmission (Section 25602) Posting of sign, shelf tag, or shelf sign at display effective Electronic warnings automatically provided to purchase prior to or during purchase effective Cannot require purchaser to seek out warning Short form warnings Internet warnings Can choose between displaying actual warning; or Hyperlink using word WARNING on display page Catalog warnings Foreign language warnings When signage or label utilize different language warning must be provided in same language 20

21 New Warning Regulations Short Form WARNING Exclamation Point in a Yellow or White Triangle Text Cancer Reproductive Harm Cancer and Reproductive Harm Variation with longer warning is: Listed chemical(s) not identified 21

22 New Warning Regulations - Internet Information disclosed to downstream purchasers Instructions provided Acknowledgment of receipt w/in 6 months and annually thereafter Ostensibly limits upstream liability 22

23 New Warning Regulations Liability Negotiation Upstream Downstream 23

24 New Warning Regulations - Occupational New regulations strip down occupational warning requirements and refer to other federal and state standards. Warning requirements now based on: Federal Hazard Communication standard (29 C.F.R. Section ); and California Hazard Communication standard (Cal. Code Regs., Title 8, Section 5194); and Pesticides and Worker Safety requirements (Cal. Code Regs., Title 3, Section 6700, et seq.) 24

25 New Warning Regulations Forecasting Challenges Ensuring the primary warning responsibility on manufacturers/distributors How to enforce this mandate for benefit of retailers Applying actual knowledge standard for retailers Effectively allocating liability between manufacturer/distributor and retailer Always been permitted, now part of regulations How to utilize to extinguish/limit claims against retailers 25

26 Is a Warning Needed on My Product? Burden is business to determine if a warning is needed Are listed chemicals present in product? Visual identification Upstream sources Analytical data If present, do chemicals expose users? Consumers Workers Environmental Does exposure pose a significant risk to average user? 1/1000 th no observed effect level for reproductive/developmental toxicants 1 additional cancer per 100,000 persons exposed (10-5 ) Warning required if average user exposed to a significant risk? 26

27 Evaluating Exposures Consumer Products Step 1: Is there a Proposition 65 chemical present in the product? Exterior Components Brass PVC Polycarbonate Plastic Other Safety Data Sheet Analytical Data Other Step 2: Are users exposed? 29

28 Evaluating Exposures Consumer Products Step 3: Does exposure pose a significant risk to average user? Data is needed Obtain in literature Develop it Time & costs Estimating exposure Safe Use Determinations Interpretive Guidelines Other sources Is there a Safe Harbor Level? 300 numerical levels established (inhalation, ingestion and dermal) Identify cancer potency factor or no observed effect level Provide warning if risk is significant 30

29 Evaluating Exposures Consumer Products Step 3: What is the content of the warning? Section of the new regulations spells out the content of the warning Long form Must identify at least one chemical and endpoint (cancer, reproductive toxicity, or both) WARNING: This product can expose you to chemicals including lead which is known to the State of California to cause cancer and birth defects or other reproductive harm. For more information go to Placed directly on product packaging Placed on a display for the product Short form Placed directly on product packaging WARNING: Cancer and Reproductive Harm Largely depends on to who and how the product is being sold Sold in bulk to distributor Internet sales Safety Data Sheet 31

30 Evaluating Exposures Consumer Products Step 4: How is warning transmitted and to whom? Section of the new regulations spells out the methods for transmission Long form Placed directly on product packaging Placed on display Short form Placed on product packaging 32

31 Products in Stream of Commerce Needing Warnings For brick & mortar retailers Notification of the retailer of the presence of listed chemicals in such products and the requirement to provide a warning to consumers prior to its purchase Transmittal of appropriate warning materials (signs, displays, etc.) consistent with the new warning regulations applicable to consumer products Transmittal of appropriate warning text and symbol consistent with the new warning regulations applicable to consumer products Acknowledgement of receipt by the retailer of Points 1 through 3 above For internet sales Notification of the operator of the website selling such products and the requirement that they need to provide a warning to consumers prior to its purchase from their website Transmittal of appropriate warning text and symbol consistent with the new warning regulation applicable to the sale of consumer products on the internet Instructions on the development of a Proposition 65 compliant website which assures that the appropriate Proposition 65 warning for the listed chemical(s) in the product is provided to every prospective purchaser prior to purchase Acknowledgement of receipt by the retailer of Points 1 through 3 above 33

32 Homework Consider an audit of product lines Evaluate potential exposures to understand liabilities Communicate with staff on compliance with new regulations Update product warnings to bring into compliance with new regulations Retailers coordinate with manufacturers/distributors on shifting liability Consider insurance to protect against litigation risks 34

33 Contact Info Christopher Smitty Smith (office) (mobile) csmith@steptoe.com

34 Contact Info Mike Easter (office) (mobile) measter@ensight.net