As a business owner in the Pacific Northwest, you likely have heard of the changes to California’s regulations regarding warning labels on consumer products, Proposition 65, which takes effect August 30, 2018.  Your business may be affected by the changes if your business conducts any consumer product-related business in California.  This article is intended to provide Oregon and Washington businesses with general information and is not intended to serve as legal advice regarding any specific matter; information should not be acted upon without legal advice. .

Under the new Proposition 65, a “clear and reasonable” warning takes on a whole new meaning.  On August 30, 2018, the warning that “this product contains chemicals known to the State of California to cause cancer, and birth defects or other reproductive harm” is no longer available as a safe harbor compliance option.  Instead, products manufactured on or after August 30, 2018, must meet the new warning standards if chemicals in the product, or created through the use of the product, are on this list.  Any products manufactured prior to August 30, 2018, do not need updated warnings as long as they comply with the old warning language.

Who Must Provide a Prop 65 Warning?

All manufacturers, producers, packagers, importers, suppliers, and distributors, regardless of whether they are located in California or out of state, must provide a warning if their products cause exposures to any listed chemical to individuals in California.  These businesses must either (1) label the product with the required warning or (2) follow a specific process to provide notice and warning materials to the authorized agent for the retail seller, packager, importer, or distributor and receive an acknowledgement that the notice and materials were received.

There are only three circumstances that allow a business to avoid Prop 65’s warning standards: if the business has nine or fewer employees; if that business has already agreed to different warning language through a court-approved settlement; or if the amount of the chemical falls within a specified safe harbor level for that chemical.

What Should the Warning Say?

The Full Warning

The “clear and reasonable” standard under the new Prop 65 regulations requires much more specificity than before. The warning for most consumer products (excluding food and beverages, which have specific, tailored warnings, discussed generally below) require:

• The name of the listed chemical(s) that prompted the warning and the corresponding risk ‎of harm (cancer, birth defects and/or reproductive harm);‎
• The word WARNING in all caps and bold font;
• A triangular yellow warning symbol with an exclamation point; and
• The link for the Office of Environmental Health Hazard Assessment’s new Prop 65 warnings website: www.P65Warnings.ca.gov.‎

For example, if a chemical is listed only as a carcinogen, the warning should not include the language regarding birth defects or other reproductive harm. The warning should read:

 WARNING: 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.

If a chemical is listed only as a reproductive toxicant, the warning should read:

 WARNING: 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.

If a single chemical is listed as both a carcinogen and a reproductive toxicant, the warning should read:

 WARNING: 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.

If a product contains both listed carcinogens and reproductive toxicants, the business does not have to create two warnings. Instead the warning should read:

 WARNING: 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.

All of the full-length warnings require the business to name “one or more chemicals.” What if a product has five chemicals that are on the Prop 65 list?  The Office of Environmental Health Hazard Assessment (OEHHA), the agency responsible for the Prop 65 regulations, released a Questions and Answers for Businesses guide that states the answer depends on whether the chemicals are carcinogens, reproductive toxicants, or both. For example, if all five of the chemicals were only carcinogens, then the business is required to list only one of those chemicals, but may choose to list all of them. If some of the five chemicals are carcinogens and the others are reproductive toxicants, the business is required to list only one each.

A business does not have to use this exact warning language. Warning text may differ from this “safe harbor” language, as long as it clearly warns people of exposure to a chemical that causes cancer or reproductive harm. A business may add language to explain the warning and inform consumers about how to lessen or avoid the exposure as long as the language does not contradict or dilute the force of the warning. Businesses that use these specific safe harbor warnings are deemed compliant with the law’s requirement for clear and reasonable warnings. Using the provided language is also an effective way for businesses to protect themselves against Prop 65 enforcement actions.

Short-Form Warnings

To avoid including the name of a listed chemical on the warning, a business may use a short-form warning either affixed to or printed on the product label, container, or wrapper. Depending on the type of exposure, there are three versions of a short-form warning:

 WARNING: Cancer – www.P65Warnings.ca.gov.

 WARNING: Reproductive Harm – www.P65Warnings.ca.gov.

 WARNING: Cancer and Reproductive Harm – www.P65Warnings.ca.gov.

Although California originally adopted the short-form warning for smaller products, the regulations do not prohibit the use of the short-form warning on any product, even a very large one. The catch is that the short-form warning must be in a type size no smaller than the largest type size used for other consumer information on the product, and no smaller than 8-point font size. A business may be reluctant to utilize the short-form warnings on larger products because it may lead to a larger sized warning.

Where Should the Warnings Be Placed?

Consumer product warnings must be “prominently” displayed on a label or sign and must be “conspicuous” enough to render the warning likely to be seen, read, and understood. There are generally three ways to provide the warning: (1) on the label of the product; (2) a short-form warning on the label; or (3) a product-specific warning posted on a sign or shelf tag at each point of display of the product.

A label is a “display of written, printed or graphic material that is printed on or affixed to a product or its immediate container or wrapper.” A product that has exterior packaging does not need a warning on both the packaging and the product. Instead, a warning must only be visible to consumers before exposure, and OEHHA has given businesses some autonomy in deciding how best to do that.  

What About Providing Products to Retailers?

As mentioned above, businesses must either (1) label the product with the required warning or (2) follow a specific process to provide notice and warning materials (sign or tag) to the authorized agent for the retail seller, packager, importer, or distributor and receive an acknowledgement that the notice and materials were received. If a manufacturer, producer, packager, importer, supplier, or distributor of a product does not wish to put the warning on the product label, they may provide a notice directly to a retail seller’s authorized agent (person or entity designated by the retail seller to receive notices) that:

1. States that the product may result in an exposure to one or more listed chemicals;
2. Includes the exact name or description of the product or specific identifying information for the product such as a Universal Product Code or other identifying designation;
3. Includes all necessary warning materials such as labels, labeling, shelf signs or tags, and warning language for products sold on the Internet; and
4. Has been sent to the authorized agent for the retail seller, and the manufacturer, producer, packager, importer, supplier, or distributor has obtained confirmation electronically or in writing of receipt of the notice.

The notice must also be renewed, with receipt of renewed notice confirmed, annually. If different or additional chemicals are added to the product, an additional notice is required within 90 days.

If a manufacturer or producer does not sell directly to retailers, they may either put the warning label on the products, or provide both a written notice that a warning is required and provide all the necessary warning materials to the packager, importer, supplier or distributor via their authorized agent. If the latter approach is selected, manufacturers and others in the chain of commerce should take appropriate actions to ensure that the warning is passed along to the retailer and ultimately to the consumer. The best way to guarantee safe harbor for your products, however, is to put the necessary warning language on the product label. This ensures that your business will not be embattled in litigation if the shelf signs or tags fail in any way to warn the consumer prior to exposure.

What About Internet Purchases?

Recognizing the sheer volume of online sales that occur, Prop 65 drastically changed the regulations regarding Internet sales. The previous regulations only required warnings prior to exposure or use of the product. Now, not only must there be a warning on the product or label, but the website must also communicate a warning to the consumer before the online purchase is completed.

Warnings for Internet purchases must be either included or hyperlinked using the word “WARNING” on the page where the product is displayed, or prominently displayed on any other page before the purchase is completed. If the warning on the label is a short-form warning, the website may use the same content. The warning must be “product-specific” and may be provided via any electronic device that “automatically provides the warning” prior to purchase and does not require the purchaser to “seek out the warning.”

What About Food and Beverages?

The new regulations provide tailored safe harbor warning provisions for new classes of products and exposure scenarios, such as food and beverages. Food and non-alcoholic products, a category that includes dietary supplements, are required to provide warnings if the products contain listed carcinogenic or reproductive toxicants. When the warning is provided on the food product label, it must: (1) be set off from other surrounding information, (2) be enclosed in a box, and (3) comply with the language requirements described above. Notably, food and non-alcoholic beverage warnings are not required to display the yellow warning symbol.

Food and beverage warnings, like warnings for general consumer products, should not include the language regarding birth defects or other reproductive harm if the chemical is only listed for cancer, and vice versa.

Alcoholic Beverages

Alcoholic beverages, which include beer, malt beverages, wine, and distilled spirits, have a different warning requirement. The warning must include: (1) WARNING in all capital letters and bold print; and (2) the words “Drinking distilled spirits, beer, coolers, wine and other alcoholic beverages may increase cancer risk, and, during pregnancy, can cause birth defects. For more information go to www.P65Warnings.ca.gov/alcohol.”

There are four methods to provide that warning, but only two may be relevant to businesses in the Pacific Northwest. Those require:

1. A notice or sign no smaller than 5 by 5 inches placed at each retail point of sale or display so as to assure that it is readable and conspicuous. The warning message must be in a type size no smaller than 20-point type and be enclosed in a box.
2. For alcoholic beverages sold or distributed to purchasers within California through package delivery services, a warning provided by incorporating or placing the warning message on or in the shipping container or delivery package in a type size no smaller than the largest type size used for other consumer information on the product. In no case shall the warning appear in a type size smaller than 8 point. The warning message must be readable and conspicuous to the recipient prior to consumption of the alcoholic beverages.

 Coffee

In May 2018, a California Superior Court judge sent a jolt to the coffee industry when he ruled that coffee labels are required to provide carcinogen warnings. You may have read in the news that Starbucks and other coffee purveyors were battling a lawsuit that would require them to put cancer warnings on all their coffee products for containing acrylamide, a substance that naturally occurs during the roasting process. Starbucks argued that the health benefits of drinking coffee far outweighed any potential cancer-causing effects. The judge found that the substance also happens to be on the Prop 65 chemical list and thus requires a warning, regardless of the health benefits associated with drinking coffee.

To the surprise of many, California’s Office of Environmental Health Hazard Assessment (OEHHA) has tried to step in and help the coffee industry. In June 2018, OEHHA proposed an amendment to its regulations that does not require a Prop 65 warning on coffee labels for acrylamide that results from the roasting process. This announcement initiated a public comment period that will run until August 30, 2018. In addition, OEHHA held a public hearing on the proposed regulation on August 16, 2018. If the proposed regulation is passed, it would largely exempt coffee from Prop 65 cancer warnings. It does not, however, address the need for warning for exposures to listed chemicals that may occur if the chemicals are intentionally added to the coffee mixture or enter the mixture as contaminants in some way other than by the process of roasting and brewing. 

What Are the Risks for Not Complying?

Prop 65 imposes significant financial liabilities for not complying with the regulations. Penalties can be up to $2,500 per day, per violation, in addition to various other penalties a court may impose. Private plaintiffs that can bring suit for non-compliance as well. When a private party seeks to enforce Prop 65, they must first give 60 days’ advance written notice of their intent to sue to the California Attorney General, the business, and several other public officials. If the public enforcement agencies do not act within 60 days, the private lawsuit may proceed.  If your business receives a 60-day notice, tell your counsel immediately. Notice letters should be scrutinized to ensure compliance with all of Prop 65’s notice requirements. After analyzing the notice, your counsel can best guide you on how to proceed.

Depending on your products, you may need to further research and assess the requirements of the regulations. If you need additional information, please contact communications@schwabe.com.