Proposition 65: Big Changes for Direct Marketers


Proposition 65: Big Changes for Direct Marketers

Starting next summer, you’ll be required put Proposition 65 product safety warnings in your catalogs and on your websites near every affected product.

Proposition 65:  Background

As a vendor or a consumer, no matter where you live, you’ve no doubt seen Proposition 65 warning stickers on a variety of products–from clock radios to fishing rods to licorice candies.  Although they are creatures of California law, and intended for California residents, these stickers end up on products shipped around the globe.  Visit California and you’ll also see Proposition 65 on everything from restaurant menus to hotel room doors.

Once, a long time ago, these stickers were alarming to Californians. Now, they are so ubiquitous that Californians generally ignore them.  Judging by the labels, virtually everything is unsafe, and when everything is unsafe, consumers stop caring.

The only people paying attention, it seems, have been lawyers scouring the landscape for products that ought to have been labelled, but weren’t. The results have been more and more labelling, even of completely safe products–after all, why take the risk? (Note that it’s illegal to put a warning label on a safe product, but there is an incentive to do so because products bearing labels won’t get you sued.) We’ve also seen a growing number of lucrative bounty-hunter lawsuits and settlements over often remote health concerns.

Current Proposition 65 Label

Illustration A

In theory, a Proposition 65 label it means that the product (or place) contains one or more chemicals that the State of California has determined to cause cancer, birth defects, and/or reproductive harm.  Currently, there are 1,006 chemicals on California’s list right now– everything from A-alpha-C (2-Amino-9H-pyridol [2,3-b] indole) to Zileuton.  The list itself is a moving target.  Chemicals can be added (or more rarely, deleted) over time.

You should note that the current Proposition 65 label (see Illustration A) doesn’t tell you what chemical or chemicals (out of the list of 1,006) a product contains.  As discussed below, starting after August 30, 2018, that’s going to change.

If you think that compliance with Proposition 65 “only” requires you to test your products to see if they contain any of the 1,006 chemicals currently appearing on the list, you’d be wrong.

With the exception of where a safe harbor content number has been established by the state (covering about 25% of the listed chemicals), Proposition 65 requires a toxicological analysis of the product, including how it is used and the vectors of individual exposure over a lifetime.

In other words, even if a product contains Zileuton (which, in case you’re wondering, is an orally active inhibitor of 5-lipoxygenase), it need not be labelled if a toxicological analysis shows that it would result in “not more than one excess case of cancer in 100,000 individuals exposed to the chemical over a 70-year lifetime. In other words, a person exposed to the chemical at the ‘no significant risk level’ for 70 years would not have more than a ‘one in 100,000’ chance of developing cancer as a result of that exposure.”

As you might imagine, performing this kind of analysis can cost hundreds of dollars or more per chemical per item, which cost can increase based on your sampling strategies and periodic retests to ensure compliance over time.

And even if you test a product frequently, there are no guarantees.  Quality control is never perfect, and the random sample that a bounty hunting lawyer pulls off a shelf may test differently than your samples.  If that happens, you may soon find that it’s far less expensive to give up than to fight, even if you ultimately win your case. Penalties can be thousands of dollars per violation per day if a product that should bear a warning label does not.

Big Changes Next Year

Beginning on August 30, 2018, major changes go into effect for Proposition 65, and we address some of them here.

New Warning Format

New Proposition 65 Warning

Illustration B

Warnings will now need to identify at least one chemical from the official Proposition 65 list that triggered the warning.  This change could inhibit the “slap a generic label on it” approach that some manufacturers, distributors, and retailers may have adopted to avoid potentially huge testing costs (and to fend off bounty hunters).  Proposition 65 warnings, as shown in Illustration B, will also have to conform to a new design, with triangle warning graphics and links to the official Proposition 65 website.

Catalog and Internet Warnings

Mail order catalogs and web sites will have to publish a Proposition 65 warning near every product that requires such a warning.  Substantial catalog space, which comes at a premium, could be lost.  Some direct marketers may opt to send different catalogs to California consumers.  Others might opt out of sending any catalogs to California.

A New (Almost) Safe Harbor for Retailers

The new changes also provide a “safe harbor” for retailers, shifting the onus of testing and labelling to “product manufacturers, producers, packagers, importers, suppliers or distributors.”  Note that the safe harbor, however, doesn’t come into effect until after August 30, 2018.  Until then, retailers are equally on the hook for labeling violations.

Specifically, as California’s FAQs explain:

“For consumer product exposures, businesses in the above categories [those selling to retailers] must either provide a warning on the product, or provide notice and warning materials to ‘the authorized agent’ for a retail seller and receive an acknowledgment that the notice and materials were received. The retail seller is responsible for placement and maintenance of the warning materials he/she receives from the product manufacturer, producer, packager, importer, supplier or distributor. Businesses should carefully review the new requirements (Section 25600.2).”

In other words, retailers will generally only be liable if they fail to post a warning after being told to do so by a manufacturer, producer, packager, importer, supplier, or distributor.

But even this new safe harbor isn’t completely safe.   A retailer can still have primary responsibility for warning consumers if:

“(5) The retail seller 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) Is a “person in the course of doing business” under Section 25249.11(b) of the Act, and
(B) Has designated an agent for service of process in California, or has a place of business in California.”

Proposition 65:   Next Steps

At a minimum, you should contact your suppliers to make sure they are getting ready for the new Proposition 65 requirements.  Generally speaking, under the safe harbor, the onus will fall on them to determine if a warning is required and, if so, what chemical or chemicals must appear in that warning.  You should also begin preparing for catalog and online warnings, which will be required after August 30, 2018.  You can safely bet that, come September, the bounty hunters will be scouring web sites and catalogs for their next targets.

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