Hunton Retail Law Resource

What is California’s Proposition 65?

California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (“Prop 65”) is one of the most onerous chemical right-to-know statutes in the nation. It prohibits businesses with 10 or more employees, including businesses that merely ship products into California, from exposing people in California to listed chemicals without providing a “clear and reasonable” warning.

Why Should I Care?

Bringing a Prop 65 action is relatively easy and lucrative for private plaintiffs and their counsel. In 2017, there were nearly 700 cases settled with defendants paying more than $25,000,000 in plaintiffs’ attorneys fees and penalties. This does not include defense counsel fees, business interruption and other costs to comply.

In a recent article published in Law360, Hunton & Williams LLP attorneys Walter Andrews, Malcolm Weiss and Paul Moura discuss two recent decisions in Tree Top Inc. v. Starr Indem. & Liab. Co., No. 1:15-CV-03155-SMJ, 2017 WL 5664718 (E.D. Wash. Nov. 21, 2017). There, the Eastern District of Washington rejected an insurer's attempt to escape insurance coverage for a Proposition 65 lawsuit filed against juice-maker, Tree Top Inc. 

We previously reported on the proposed regulations initiated by the California Office of Environmental Health Hazard Assessment and its impact on retailers. Retailers should take steps to ensure that they are protected from Prop 65 claims, particularly with the proposed regulations in the pipeline. As with any regulatory requirements that impact businesses, often the best defense is a good offense -- forethought, assessment and implementation of a compliance program can minimize the costs, headaches, business disruption and negative publicity that may otherwise occur.

As we previously reported, the Prop 65 statute prohibits businesses from exposing people in California to any of the over 800 listed chemicals without first providing a “clear and reasonable” warning. Currently, California’s Office of Environmental Health Hazard Assessment is working to repeal existing Prop 65 warning regulations and adopt new requirements. However, the proposed regulations contain several problematic provisions regarding the content and method of transmission for required warnings. Retailers need to be aware of proposed provisions which clearly apportion responsibility for providing warnings throughout the chain of commerce. Though purportedly aimed at reducing retailers’ Prop 65 warning burden, if implemented as written, the provisions will actually increase retailers’ risks and allow manufacturers to insulate themselves from liability at retailers’ expense.

For retailers operating in California, the state’s Safe Drinking Water and Toxic Enforcement Act of 1986 (“Prop 65”) is a constant and often costly headache. Among other requirements, Prop 65 prohibits businesses with ten or more employees, including those that ship products into California, from exposing people in California to any of the over 800 listed chemicals without first providing a “clear and reasonable” warning. The statute also contains a prohibition against discharging or releasing listed chemicals to “sources of drinking water” in the state, but those provisions are not discussed here. The list of over 800 chemicals is revised and updated annually.