What Does a California Law Have To Do With New Hampshire Manufacturers? 

Recent amendments to regulations implementing California’s Safe Drinking Water and Toxic Enforcement Act of 1986, the so-called Proposition 65 (“Prop 65”), now impact manufacturers and distributors in other states:  All businesses that manufacture or distribute products to California are now subject to labeling requirements if the product contains one of hundreds of potentially harmful chemicals.  See Cal. Health & Safety Code §§ 25249.5 to 25249.14, and 27 CA ADC § 25600 et seq.  Failure to comply comes with hefty fines and exposure to civil liability.

Originally, Prop 65 required the State of California to develop a list of chemicals that cause cancer, birth defects, or other reproductive harm.  In 1986, the list had 30 chemicals; today it has more than 900.

In general, Prop 65 requires companies to provide Californians with “clear and reasonable warning” if a product contains one of the listed chemicals before purchase and prohibits the discharge of any of the listed chemicals.  The law applies to any person in the course of doing business in California, any business with 10 or more employees, and any environment and product that contains a listed chemical.  Businesses are exempt if the exposures are so low that they pose no significant risk, but the burden is on the business to prove this low exposure level.  Before the recent amendments, the burden of labeling fell exclusively on the retailers that sold products containing any of the listed chemicals.  As of August 30, 2018, the burden of labeling now falls on manufacturers, too.  This means that products manufactured in New Hampshire but sold in California must comply with the new requirements.

Manufacturers may comply with Prop 65 by placing a warning on the consumer product that contains the listed chemical.  The warning must be given before the sale is complete and located on the product or posted on a sign, shelf-tag, or shelf-sign at each point of display.  The warning requirement also applies to electronic and catalog sales. 27 CA ADC § 25602(b),(c).  The warning could be communicated electronically if the buyer sees the warning before buying the product (i.e. a pop-up notification). § 25602(a)(1), (2).  If a manufacturer and distributor have provided consumer information about the product in a language other than English, they also have the responsibility to provide a sign or label in a language other than English to warn about the listed chemical(s). § 25602(d).

Instead of directly labeling the product, manufacturers may also fulfill their legal obligation by providing adequate written notice and labels to distributors and retailers, who then have the burden of providing clear and reasonable warning to the consumer.  § 25600.2(b).  If the manufacturer chooses this method of compliance, notice must be delivered (with receipt confirmed) by February 28, 2019, and then every year thereafter as long as the product is sold in California. § 25600.2(c)(1).  Once the manufacturers discover that a product contains a new chemical or produces a new result (reproductive harm or cancer), the manufacturer must provide additional notice within 90 days.  § 25600.2(c)(2).

For extra protection, manufacturers can also enter into contracts to shift the responsibility for compliance to the distributor or retailer; these contracts are effective as long as the consumer receives a warning before purchase.  See § 25600.2(i).  The distributor and/or retailer must agree that it is an authorized agent for purposes of complying with Prop 65, that it will provide clear and reasonable warning, that it will accept sole responsibility for any violation of Prop 65, and that it will indemnify and hold harmless the manufacturer for any liability if the distributor fails to provide the Prop 65 notice and/or if the retailer fails to provide the Prop 65 notice.

The recent amendments to Prop 65 impose regulatory burdens on businesses that sell products to Californians, even if indirectly.  New Hampshire manufacturers should evaluate whether any of their products contain a listed chemical and consult a qualified attorney for help with compliance.

About the Author: Laura Hartz

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