If you’ve never heard of heard of California’s Proposition 65, you’re not alone. A California state law for several years now, its impact has only become a cause for real concern in recent months. This concern has now elevated from mild consternation to some rather serious consequences that may result in fines—and worse. It’s important to note that the law, while restricted to products used in California, reaches far beyond the state’s borders.
Also known as the Safe Drinking Water and Toxic Enforcement Act of 1986, Proposition 65 is an issue among firms that either ship goods to or receive products in the state of California. Enforcement of the law may now hit our industry’s companies in the wallet due to more lawsuits filed by private law firms and fines imposed by the California Attorney General’s Office.
Proposition 65 requires businesses to notify Californians via warning labels about significant amounts of chemicals—specified in a list of more than 700, such as lead and cadmium—contained in a company’s products. Yes, that’s right, 700 different chemicals that are deemed hazardous if consumers are exposed to them. More importantly, many of the compounds identified on the Prop 65 list are permissible under federal regulations. It just so happens that the California law specifies more restrictive guidelines than those imposed by the Federal government. So while the same products may be safely shipped and received in other states, doing so in California without the proper warnings carry significant penalties for the “violators.” Failing to provide warning notices violates Proposition 65 and can result in penalties as high as $2,500 per violation per day. And if shipped products violate the law, all involved—suppliers, distributors and end users—are potentially liable.
In recent weeks, suppliers have informed PPAI that they have received letters from distributors who were given a 60-Day Notice of Violation related to products purchased from them. These distributors expect to be indemnified for any costs, damages or other expenses incurred. In some cases, distributors have notified suppliers that future shipments from them would be rejected and all product inventory would be pulled from shelves. Unfortunately, as innocent as the suppliers may have been in unknowingly violating the state’s restrictions by not providing the warning labels or by adjusting the manner in which the products are manufactured or decorated, the supplier/distributor relationship can be damaged heretofore by a little known California law.
Prop 65 is enforced by the California Attorney General’s Office as well as district and city attorneys in California. Additionally—and here’s the caveat—any individual “acting in the public interest” may enforce Prop 65 by filing a lawsuit against a business alleged to be in violation of this law. Lawsuits have been filed by the Attorney General’s Office, district attorneys, consumer advocacy groups, private citizens and law firms.
However onerous the effect of Prop 65 may be on unsuspecting distributors or suppliers, there are remedies that prevent the lawsuits, fines, refused shipments and lost business. Warning labels, properly worded, do work. Changes in the composition of decorating inks to avoid the offending chemicals may be the better choice, however, as no one wants to “brand” products as being potentially hazardous to the end user. Changes to the manufacturing process—i.e. removing lead from lead crystal products—are clearly less realistic.
The best remedy seems to be educating our industry about the potential for problems and the methods that have proven successful for some suppliers. PPB will publish a comprehensive article in the May issue that spells out what distributors and suppliers need to know. In the very near future, we plan to launch a Webinar program for PPAI members that addresses the issue and provides guidance on the remedies available.
In the meantime, if you have clients in California, don’t leave things to chance. If you’re a distributor, ask your suppliers if they are aware of Prop 65 and the restrictions the law may impose on certain products or the methods used in decorating them. If you’re a supplier, be informed, so you can advise your distributor customers how you can help them avoid the sanctions that may come as a surprise.
For information on the Proposition 65 issue, including the list of prohibited chemicals, visit www.oehha.ca.gov/prop65.html.