Bagged Again: California Doubles Down on Prop 65 Warnings

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By Joseph F. DeRupo

California has repealed Proposition 65 warnings. But, squelch the impulse to cheer. It’s a repeal with a monstrous replacement.

For 30 years, it’s been noisome business as usual for manufacturers, packagers, and retailers. But, starting August 30, entirely new Prop 65 warning rules will send us all back to regulatory kindergarten.

The new regulations upend what today qualifies as the prior “clear and reasonable warning” proscribed by Prop 65 for products holding a listed substance. In short, the new rules change the requisite wording and format, as well as methods of transmittal. Notably, they build out the basic warning into a playlist of circumstance-specific templates and also extend the warning mandate to online and catalogue listings.

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And, perhaps most nettling to packagers, they shift responsibility up the supply chain, away from retailers, to those responsible for the chemical’s presence. That approach could turn up the heat for manufacturers and stoke new concerns for packagers.

Manufacturers

For manufacturers, the new rules mean chemical-specific warnings on labels, signs, and shelf tags. Warnings must identify at least one carcinogen and one reproductive toxicant present and refer consumers to a state website for additional information. The regulations also call for specific warnings for different routes of exposure. There’s also a newly minted symbol to make Prop 65 warnings more evident – a bold black exclamation point in a bright yellow triangle. While food items can omit the symbol, they must still specify the Prop 65 chemical(s) in the product.

Another notable change concerns notification requirements from manufacturers who ship products in bulk to retailers. The manufacturer must provide specific written notice directly to the authorized agent of a retail seller, must obtain the retail seller’s confirmation of the notice’s receipt electronically or in writing, and must issue a renewal notice and, subsequently, obtain the retailer’s confirmation of receipt of the renewal notice within six months during the first year of the regulations’ effective date.

Packagers

For packagers, the new regulations could mean potential liability to a new degree. Why? Two regulatory vectors may converge to put them more squarely under Prop 65’s thumb: 1) the new regulations’ push of responsibility up the supply chain; and 2) the increased likelihood of packaging as the chemical’s source with the recent listing of vinylidene chloride (1,1 – dichloroethylene), which has been used in coffee packaging. Legacy substances on the list, such as Bisphenol-a, lead, acrylamide, styrene polycyclic aromatic hydrocarbons, and vinyl chloride, also used in packaging materials, cans, and bottles, could also impact packagers.

Regarding bisphenol-A in canned foods and beverages, California issued separate provisions via an emergency rulemaking in April 2016, the first to require the identification of the chemical. Under those rules, retailers needed to post warning signs that identify BPA by name and disclose that California has determined that it causes harm to the female reproductive system. With the introduction of the new warning protocols effective 8/30, the rules for BPA are handled by the new regulations.

Ironically, while the new regulations aim to limit their liability, retailers become subject to warning requirements if they introduce a listed chemical into the product. Presumably, that would include retailers who roast coffee onsite – mom-and-pop cafés, independents, and specialty chains – who could find themselves on the wrong side of Prop 65 if they haven’t labeled. Their operations could be construed as introducing the substance – either through the roasting itself or by the packaging of beans in the store, or both.

Radical changes

A comparison of the current warning and the series of new warnings points up the degree of detail and potential confusion posed by the new regulations:

• Current: “WARNING: This product contains a chemical known to the State of California to cause cancer” or “WARNING: This product contains a chemical known to the State of California to cause birth defects or other reproductive harm.”

• New, long-form warning

-- The word WARNING in all caps and bold, plus:

-- Carcinogen: Consuming this product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause cancer. For more information go to www.P65Warnings.ca.gov/food

-- Reproductive Toxicant: Consuming this product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause birth defects or other reproductive harm. For more information go to www.P65Warnings.ca.gov/food

-- Both: Consuming this product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause cancer and [name of one or more chemicals], which is [are] known to the State of California to cause birth defects or other reproductive harm. For more information go to www.P65Warnings.ca.gov/food

-- Listed as both: Consuming this product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause cancer and birth defects or other reproductive harm. For more information go to www.P65Warnings.ca.gov/food.

-- For a single chemical, “chemicals including” may be deleted.

• New, short form:

-- Carcinogens: “Cancer – www.P65Warnings.ca.gov”

-- Reproductive toxicants “Reproductive Harm – www.P65Warnings.ca.gov”

-- Both “Cancer and Reproductive Harm – www.P65Warnings.ca.gov”

Moreover, manufacturers, packagers, and retailers must all review their Internet presence to add warnings for Prop 65-affected products. Warnings are now expressly required on the company’s website either by posting the warning or a clearly marked hyperlink using the word “WARNING” on the product display page. Alternatively, the warning must be prominently displayed before the buyer completes the online purchase, such as a pop-up when the buyer enters a California zip code. The new regulations also require Prop 65 warnings in catalogs in a manner that clearly associates it with the item being purchased.

Notably, however, unlike the existing warning regulations, the new ones present the possibility of liability even when a warning is provided since there is, arguably, a lot of potential for error. In turn, the industry can reasonably expect a substantial increase in the number of private enforcement cases after 8/30. The new provisions make navigating Prop 65’s safe harbor warnings more complex and leave room for missed warnings or those which are not technically compliant.

However, packagers are not overly worried since Prop 65 has been influencing packaging material design for many years. Packagers also need to remain FDA compliant, which keeps them vigilant about substances used in their products. According to Lou Dolgin of American Packaging, the company monitors the continuous changes to regulations and works with its supply chain to keep potentially harmful ingredients out of its packaging.

Ramping up

Until Aug. 30, current labeling rules still apply, although many affected parties have already begun adopting the new protocols. And, existing labeling for products already in the stream of commerce is specifically exempted.

However, with only four months to go, and eager litigation attorneys poised to pounce, it’s high time to retrench and retool to avoid being caught unprepared on Labor Day. So, coffee manufacturers, packagers, and retailers would be wise to take steps now to ensure their warnings comply with the new Prop 65 requirements before their products go on the shelves.

After all, the safe harbor warnings are an effective way to preempt being drawn into costly litigation from so-called “consumer advocacy groups.” If a company sells products without the new warnings after 8/30, they could spend a lot of time and money parsing the new rules and risk the serious consequences of non-compliance.

And, the stakes are high. Out of 333 judgments in 2017, total penalties amounted to more than $167 million. Yet, it’s hard to avoid Prop 65’s reach, even for businesses located outside California. As the sixth largest economy in the world, it’s an awfully big market to pass up. But, come summer’s end, keeping those revenues in the bag will take extra attention to what’s in it and what it’s made of.