Assessing Compliance with Proposition 65
Failure to comply with California's Safe Drinking Water and Toxic Enforcement Act of 1986 (better known as "Proposition 65" or "Prop. 65") may result in severe financial repercussions for companies subject to the Act.1 With potential civil penalties of up to $2,500 per day for each violation, as well as injunctive relief, enforcement actions can be financially devastating to violators.
To get a sense of the impact of these penalties, keep in mind that a product manufacturer that is alleged to have violated the warning requirements of the law is considered to have done so with each product it has sold in the state. With a three-year statute of limitations, the potential amounts involved are astronomical, and settlement can be an enticing escape regardless of the merits of an action. As a result, very few Prop. 65 warning cases have gone to trial, but quite a few "bounty hunters" have managed to become very wealthy without ever securing a verdict.
The best way to defend against a Prop. 65 suit is to be prepared ahead of time, by reviewing your products and assessing their components to determine whether a Prop. 65 warning is required-and, if not, why.
Given that there are over 700 chemicals now on the Prop. 65 list, and that the burden of proof resides with the product manufacturer, this is not necessarily a simple task. However, the following framework should help companies determine whether they are in compliance with the warning provisions
The Four Steps of a Prop. 65 Audit 1. Determine whether any listed chemicals are used in the manufacture of the product or are present as byproducts or impurities of starting materials used to make the product.
The key to any Prop. 65 analysis is whether, in the course of doing business, one "exposes" an individual in California to a listed carcinogen or reproductive toxicant. Such "exposure" is a prerequisite for the "clear and reasonable" warning requirement of Prop. 65 to be applicable. Section 12201 of the Prop. 65 regulations2 defines "exposure" as:
to cause to ingest, inhale, contact via body surfaces or otherwise come into contact with a chemical. An individual may come into contact with a chemical through water, air, food, consumer products and any other environmental exposure as well as occupational or workplace exposures.
This broad definition covers virtually the entire range of manufacturing and distribution activities. Accordingly, it is necessary to assess the potential for consumer, workplace, and environmental exposure to products. For workplace exposures, however, out-of-state product manufacturers have some immunity, as the U.S. Occupational Safety and Health Administration has ruled the law to be preempted by the federal Hazard Communication Standard with respect to out-of-state manufacturers.
2. Determine whether any of these chemicals are present in the finished product at the level in question. If so, quantitate.
If a Prop. 65 chemical is used as a starting material, it is important to know what happens to it by the time a finished product is produced. Does it react to form a new chemical substance? If so, are there likely to be residual (unreacted) levels of the substance remaining in the product? What is the residual level likely to be? The same analysis applies with respect to byproducts or impurities present, or produced by the manufacturing process. If expected to remain in the finished product or article, quantitation of the level may be necessary to determine whether it is significant in terms of potential exposures. Determination of significant exposures is discussed in the next two steps.
3. Determine whether an NSRL has been established for the chemical substance of interest. If so, review the basis and validity of that level. If not, independently assess the significant risk level.
Prop. 65 provides that no warning is necessary for a listed chemical present in a product if the exposure to the listed chemical is below the "no significant risk level" (NSRL) for carcinogens, or below the "maximum allowable dose level" (MADL) for reproductive toxicants. (For the sake of convenience, we refer to both here as NSRLs.)
These levels are intended to provide a "safe harbor" for persons subject to the act, and may be found on the California Environmental Protection Agency's website. The NSRL is the daily intake level calculated to result in one excess case of cancer in an exposed population of 100,000, assuming lifetime (70-year) exposure at the level in question. This is equivalent to a 1x10-5 risk level. The MADL is the level at which the chemical would have no observable adverse reproductive effect assuming exposure at 1,000 times that level.
NSRLs may be developed in one of three ways:
- a de novo dose response assessment conducted or reviewed by California's Office of Environmental Health Hazard Assessment (OEHHA),
- an assessment conducted by another state or federal agency, or
- an expedited process conducted by OEHHA.
Unless a company can demonstrate with compelling evidence that this value is in error, this number is used as the threshold limit to decide whether a warning is necessary.
NSRLs have been established for only about 220 chemical substances, although proposed values have been developed for some additional substances. Thus, the vast majority have no safe harbor level referenced. This does not, however, mean that the exemption is not available. On the contrary, a manufacturer can use the available data, particularly that used to list the substance in the first place, to determine an appropriate NSRL. In doing so, it is important to use the method set out in the Prop. 65 regulations for undertaking the risk assessment.3 It is somewhat different from that used by other federal agencies, such as the U.S. Environmental Protection Agency (EPA) and the U.S. Food and Drug Administration (FDA).
Also note that, in determining an MADL for a reproductive toxicant, the relevant period in question is based upon the hazard presented. Thus, exposure to a teratogen on just one occasion, if at a high enough level, could be sufficient to trigger the act's warning requirements. Similarly, exposure to substances that interfere with fertility must be gauged over the period of time that such problems may result-not over a 70-year lifetime.
4. Conduct an exposure analysis to determine whether the given or calculated NSRL may be exceeded by foreseeable use of the product.
The last step is to undertake an analysis to determine whether the presence of the listed chemical substance in the product will result in an exposure that will exceed the NSRL or MADL.
While the factors to be considered in an exposure analysis will vary with the product, the analysis usually takes into consideration the residual level of the listed chemical in the product, the average use of the product (i.e., single use or repeated use), the amount of the product used at one time, and the manner in which the product will be used.
If the route of exposure is through ingestion (which is usually the case with components of packaging materials used with food), an appropriate consumption factor, such as those used by FDA to estimate exposure, can be used for Prop. 65 as well. The "consumption factor" is the fraction of an individual's diet that is likely to contact a specific material. As with risk assessments, the California regulations also outline the required method to be used in undertaking an exposure assessment, but do not cover matters such as consumption factors. Therefore, their method analysis can be supplemented with other information.
Much of the data generated in a Prop. 65 analysis may be subject to discovery if a suit alleging a violation of the law is filed against the manufacturer. To limit discovery of such data, it may be useful to have the work undertaken by and at the direction of counsel. Sometimes, such information can be considered privileged as a consequence of having been developed within the confines of an attorney-client relationship.
On other occasions-for example, where the data is being developed in anticipation of litigation by counsel for the client-it may be considered "attorney work product"; again, disclosure to an adverse party may be limited. However, the privilege and discovery limitations are not absolute and are not even assured unless established and documented correctly. Given the complications that inevitably arise with this law, we strongly recommend consulting with qualified counsel prior to undertaking any Prop. 65 compliance inquiries. In the course of attempting to determine whether you have any compliance difficulties, you could inadvertently wind up making your adversaries' case instead.
1Cal. Health and Safety Code §§ 25249.5 et seq.
2Cal. Admin. Code Title 22 § 12201.*
3Cal. Admin. Code Title 22 § 12703.*
* Effective June 18, 2008, all Proposition 65 regulations were moved from Title 22, sections 12000 to 14000 inclusive, to Title 27, sections 25000 to 27001 inclusive, of the California Code of Regulations (CCR). Click here to see a chart showing the location of each regulation.