Today we offer a guest article, straight from San Francisco, about one of the most worrisome piece of legislation for exporters to USA and marketing into the Golden State.
The article has been written by Sophia Castillo. Sophia is a partner in the San Francisco office of Downey Brand, LLP (www.downeybrand.com). She specializes in Proposition 65 and toxics law, and has a particular interest in and passion for Proposition 65 as it relates to the food industry. Sophia publishes an overview of Prop. 65 claims and trends each month on LinkedIn and J.D. Supra, and can be reached at firstname.lastname@example.org, or via her LinkedIn page.
Those in the food industry doing business in California are undoubtedly aware of Proposition 65, the California law that requires all products sold in the state to be labeled with a standard, statutory warning if the products contain certain chemicals, and could expose California consumers to those chemicals at a level causing cancer or reproductive toxicity. It is a powerful California law that is enforced in California state courts, frequently by “interested citizens” alleging that they have purchased products in California that put their health at risk. Companies receiving a Prop. 65 60 Day Notice of Violation (“60 Day Notice” or “Notice”), the document initiating the claim against them, can be sued in California courts and accordingly subject to litigation in California. The regulation has a “citizen suit” provision that allows citizens to recover their attorneys’ fees for their claims. It also authorizes monetary penalties for violations, of up to $2,500 a day, per violation, of the law. Many companies receiving Prop. 65 claims will settle their claims, both in and “out of court.” Settlements can be as large as several hundred thousand, or even a million dollars, per defendant. For companies with high sales volume in California, this risk is significant.
Those doing business in California also might have assumed that the COVID-19 pandemic would have slowed Proposition 65 claims, and given the food industry some much needed “breathing room” from defending these claims. Unfortunately, this has not been the case. Citizen Plaintiff groups have sent hundreds of 60 Day Notices during each month of the pandemic, challenging the chemical contents of many different foods. These food Notices allege that lead, mercury, acrylamide, arsenic, and cadmium content in food products requires a warning.
In June of 2020 alone, Plaintiff groups sent over 120 new 60 Day Notices alleging that chemicals in foods required a Prop. 65 warning label. With the onset of summer, in particular, citizen Plaintiff groups sent over 70 Notices alleging that seafood products, including clams, cuttlefish, shrimp, oysters, mussels, eels and snails contained allegedly toxic chemicals and required a warning, in addition to over 40 other Notices alleging that chemicals in a host of food products and snacks violated Prop. 65 because they did not bear the standard warning language. These Notices are significant in their volume and their variety. Food brands, manufacturers, private label suppliers, and food retailers have received Notices during the COVID-19 pandemic.
Food products targeted during the COVID-19 pandemic include:
- Seafood products – including clams, cuttlefish, shrimp, and snails (lead and cadmium)
- Seaweed (lead, arsenic & cadmium)
- Canned goods, including fruits & vegetables (mercury, lead & acrylamide, and furan)
- Vinegars (lead & carbaryl)
- Baby food fruit & vegetable pouches (acrylamide & lead)
- Almond products, including butters (acrylamide)
- Crackers, cookies, chips, pretzels & popcorn (acrylamide)
- Granola (acrylamide)
- Bread (acrylamide)
- Waffles (acrylamide)
What Should Food Companies Selling in California Do Next?
Companies selling in California should monitor Prop. 65 60-Day Notice trends and evaluate their California sales for products that could be challenged by Prop. 65 Plaintiffs in the future, as well as understand any prior settlements they have that may preclude the claims. The State of California hosts a website describing the law here: https://oehha.ca.gov/proposition-65.
Those selling products in targeted industries can be proactive in understanding the chemical contents of their products and working to comply with the parameters of the Prop. 65 law. This includes a specific risk assessment, testing products for common Prop. 65 chemicals, understanding consumption, and feeling comfortable with the results of an exposure assessment and whether safe harbor levels are exceeded and a warning label is required. An understanding of the Prop. 65 law and proactive compliance can help to cut off any frivolous and unexpected Prop. 65 claims.