Grace Period Ends Soon for California Companies with Products Containing BPA
On May 11, 2016 products that contain Bisphenol A (BPA) manufactured, sold or distributed in California, without a proper warning, will be fair game for a Notice of Intent to Sue issued under the state’s Safe Drinking Water and Toxic Enforcement Act of 1986 (known as Prop 65).
Unless and until the Office of Environmental Health Hazard Assessment (OEHHA) establishes a "safe harbor" level, companies that manufacture, distribute, or sell products in California that may expose consumers to BPA should prepare to provide Prop 65 warnings for such products or face potential litigation and penalties when the grace period expires on May 11, 2016.
Last year, an administrative panel unanimously voted to add BPA to the Prop 65 list as a reproductive toxicant. The scientific evidence cited by the panel was somewhat controversial and the basis for the panel’s decision has been the subject of judicial scrutiny. Unless or until there is controlling legal authority invalidating the listing or regulatory action to de-list BPA, companies manufacturing, distributing, or selling products in California that contain BPA are required to provide a "clear and reasonable warning" of BPA’s hazards.
BPA is prevalent in many plastic product including food containers, baby bottles, plastic water bottles and many construction products. Thus, it is imperative that companies evaluate their product lines that end up in the state of California for the presence of BPA.
Background on Prop 65
Prop 65 (California Safe Drinking Water & Toxic Enforcement Act) was a voter initiative enacted into statute in 1986. It is codified in the California Health and Safety Code. Prop 65 has 2 prongs: (1) a discharge prohibition and (2) a failure to warn provision.
Most lawsuits fall under the failure to warn prong. Any company that manufactures, distributes or supplies a product that contains a carcinogen or reproductive toxicant without a proper warning can be liable for civil penalties under this statute.
Prop 65 Notice Period and Civil Penalties
After receiving a Notice of Intent to Sue under Prop 65, a plaintiff must wait 60 days from service of the letter before they can file a civil complaint to pursue litigation based on the purported statutory violations. Under Prop 65, civil penalties can amount to $2,500 per day per violation (i.e., if a company sold 10 products subject to the statutory requirements without a warning and this occurred over the course of 100 days then the Court could award $2.5 million in civil penalties alone). The company can also be on the hook for reasonable attorneys’ fees.
Prop 65 Exemptions/Defenses/Safe Harbor
A company will be exempt from the Prop 65 warning requirement under the following scenarios:
Business with nine or less employees.
For a carcinogen, proving that any exposure poses no significant risk of cancer. (This means the exposure is calculated to result in not more than one excess case of cancer in 100,000 individuals exposed over a 70-year lifetime.)
For a reproductive toxicant, proving there is no observable reproductive effect. Exposures that will produce no observable reproductive effect at 1,000 times the level in question: a warning is not required for chemicals known to the state to cause birth defects or other reproductive harm ("reproductive toxicants") if the business can demonstrate that the exposure will produce no observable effect, even at exposures 1,000 times the level in question. This is known as the "maximum allowable dose level” (MADL). In other words, the level of exposure must be below the "no observable effect level” (NOEL), divided by 1,000, as required by the statute.
Sales, distribution or manufacturer within 12 months of the chemical listing.
BPA was added to the Prop 65 chemical list on May 11, 2015. Once a chemical is added to the list, companies have a 12-month “grace period” to comply with Prop 65’s "clear and reasonable warning" requirement unless companies can show that the amount of BPA in the product(s) at issue fall below the “safe harbor” level, which has yet to be established. The warning must "be reasonably calculated, considering the alternative methods available under the circumstances, to make the warning message available to the individual prior to exposure" and "the message must clearly communicate that the chemical in question is known to the state to cause cancer, or birth defects or other reproductive harm."
In the case of BPA, the warning must convey the danger of reproductive toxicity. Warning requirements can impose a substantial burden on companies that manufacture, distribute or sell common consumer products or building material that contain chemicals on the Prop 65 list (currently there are more than 900 chemicals listed).
Although proof of no exposure above the “safe harbor level” serves as an exemption to the warning requirement, no such level has been determined yet by the OEHHA. Although the MADL for BPA is subject to the OEHHA’s discretion, and the OEHHA can ultimately decide to set no MADL at all, it is expected that one will be set in the future.