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• Environmental Law

A California law commonly known as "Proposition 65" has been catching non-California companies unawares.  The law both requires disclosure whenever a consumer could be exposed to certain identified chemicals known to the State of California to cause cancer and prohibits discharge of such chemicals into drinking water.  Among other things, the law has recently been used as the basis for suing those in the manufacturing industry - power tool manufacturers, for exposing consumers who use their tools to dust that may include silica or lead; hand tool manufacturers, for exposing consumers to chemicals in the PVC coating on the tools’ handles; and china manfacturers, for exposing consumers to lead.  Any company which manufactures, distributes or sells products in the State of California should be educated on the ins and outs of the law.

Proposition 65 was adopted in 1986, and its main features are a disclosure and warning requirement and a civil penalty for failing to provide the required warnings.  The law requires the governor to publish a list of chemicals known to the State to cause cancer, birth defects or other reproductive harm, and as you might imagine, the list includes a broad range of chemicals, including dyes, solvents, pesticides, drugs, and food additives.  Any company with ten or more employees that operates or sells products in California, including companies with no facilities in California that do no more than sell products in California through independent distributors, must comply with Proposition 65.  Anyone owning, purchasing, or selling industrial real estate in California should also be aware of Proposition 65's requirements, as the presence of chemicals on the property could subject the owner to disclosure requirements.

Proposition 65 requires all such companies to provide a "clear and reasonable" warning before knowingly and intentionally exposing anyone to a listed chemical.  The warning can be given by labeling a consumer product, posting signs or by publishing notices in a newspaper.  Failure to provide a warning could subject a company to a fine of up to $2500 per day.  Not all workplace exposures, however, are subject to Proposition 65; if a federal law such as OSHA applies to the exposure, it preempts Proposition 65 and Proposition 65 does not apply.

The level of exposure required to trigger the warning requirement is defined by the law.  Unfortunately, for many businesses, the cost of establishing that exposure poses no significant risk (in the case of a carcinogen) or will have no observable effect (in the case of a reproductive toxin) is often quite high and not justified by the risk of being sued for a Proposition 65 violation.  However, many businesses have already conducted studies for other purposes, such as OSHA compliance or marketing purposes, that may be of some use in defending against a Proposition 65 claim.  In addition, a company may want to consider a broader "environmental audit" of its facilities and practices to assess its risk under other state and federal laws.  Such an audit could include assessment of Proposition 65 risk.

Proposition 65 is enforced both by state or local governments and by private persons, who may recover attorneys' fees if successful.  While many cases have resulted in significant environmental and health-related protections, Proposition 65 has been criticized for encouraging "nuisance" litigation by some plaintiffs' lawyers who see the opportunity for attorneys' fees as a significant attraction.  As a result, many businesses have been surprised to find themselves the targets of Proposition 65 litigation over products like hand tools that neither they (nor others) ever thought posed significant health or environmental risks.  In addition, because retailers and distributors are also subject to Proposition 65 litigation, a common tactic in Proposition 65 cases is for plaintiffs to sue large retailers, such as supermarkets or home improvement stores, which then in turn sue their suppliers.  

If you sell, distribute or manufacture products in California that you think may be subject to Proposition 65's requirements, we can counsel you about the listed chemicals and how you can protect yourself from possible penalties imposed by the law.  Including the requirements of Proposition 65 in any environmental audit of your facilities may be advisable.