February 18, 2020

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Proposition 65: California Clarifies Responsibilities To Warn Amongst Manufacturers, Distributors and Retailers

The California Office of Environmental Health Hazard Assessment (OEHHA) recently adopted amendments to California Code of Regulations, section 25600.2 – the section titled “Responsibility to Provide Consumer Product Exposure Warnings.”  These amendments provide more specific guidance for manufacturers, retailers and other businesses in the chain of commerce on how to satisfy their responsibilities to provide consumer product exposure warnings for chemicals listed under Proposition 65. The amendments become effective on April 1, 2020.

Prop 65 requires that any person in the course of doing business (i.e., any private company that employs 10 or more persons) provide a “clear and reasonable warning” before exposing individuals to listed carcinogens and reproductive toxins in their products. Section 25600.2 seeks to “minimize the burden” on retailers. However, the new clarifications also help manufacturers who may not know who the ultimate seller will be in the product supply chain.

The amendments to section 25600.2 bring three major changes:

  • To comply with the warning requirement, businesses previously had to provide a written warning notice to the authorized agent of the retail seller of the products. Now, businesses can provide notice to the authorized agent for the business to whom they are selling or transferring the product, i.e. the next business in line, or the authorized agent for the retail seller. Additionally, the confirmation receipt of notice can now be sent electronically or in writing.

  • Confirmation of the renewed warning notices must be received electronically or in writing. If a business does not have a designated authorized agent, the notice may be served on the legal agent for service of process for the business.

  • A retailer’s “actual knowledge” of potential exposure triggering the warning requirement is satisfied if the retailer learns of it from “any reliable sources that allows it to identify the specific product.” If the source of the retailer’s knowledge of the exposing product is the notice from an upstream seller, the retailer will not be deemed to have actual knowledge of the exposure until five business days from the receipt of the notice, which must provide “sufficient specificity” for the retailer to identify the products subject to the notice.

Takeaways for Manufacturers

Manufacturers are often unaware of who the ultimate retail sellers of their products will be. In light of these amendments, a good rule of thumb would be to provide a written notice of the potentially exposing product(s) to the next business in line that takes legal possession of the products, such as the distributor or intermediary purchaser. Simply providing a warning to the shipping company or warehousing facility where the products may be temporarily stored, may not be sufficient to meet the “selling or transferring” requirement.

Takeaways for Distributors

In many cases, distributors may also be unaware of the actual retailer of the goods to the end consumer. However, to the extent a distributor can recognize the actual retailer, whether it is a large grocery store or a smaller online retailer, notice should be provided directly to the retailer to minimize the risk of liability.

Takeaways for Retailers

The “sufficient specificity” requirement puts some of the burden on the notifying party, i.e. the upstream business, to provide enough detail for the retailer to identify the exposing product. However, retailers should not rely on warning notices alone because the amendments significantly lower the standard for a retailer’s “actual knowledge” of the exposing products. Retailers should carefully monitor any product information received, as well as the sources of such information, and take necessary steps to create a record of actions taken in response to the information.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.

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About this Author

Whitney Jones Roy  Los Angeles Litigator at Sheppard Mullin Law Firm
Partner

Ms. Roy specializes in business litigation and complex environmental litigation. Her experience includes representing clients in a variety of business disputes and against claims of fraud, breach of fiduciary duties, breach of contract, unfair business practices, negligence, nuisance and trespass. Ms. Roy has also developed a specialty in litigation relating to products liability, Proposition 65, the Clean Air Act, and CERCLA. She has been involved in insurance litigation and defending class action lawsuits. Ms. Roy's cases have related to a broad spectrum of industries...

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Angela Reid Lawyer Sheppard Mullin Law Firm
Associate

Angela Reid is an associate in the Business Trial Practice Group in the firm's Los Angeles office.

Areas of Practice

Angela represents clients with business disputes. She has litigated claims involving breach of contract, fraud, unfair competition, breach of fiduciary duty, unlawful detainer, and shareholder actions in several industries.  She has experience with all aspects of civil procedure, including filing and responding to complaints, conducting discovery, motion practice, and judgment enforcement. Angela is also actively involved in the firm’s Diversity and Inclusion Attorney Network and Pro Bono efforts.

Prior to joining Sheppard Mullin, Angela conducted Business Development for corporations in the fields of Activated Carbon, Industrial Tires, and Third-Party Logistics. During law school, she served as an extern to the Honorable Deborah J. Saltzman, at the United States Bankruptcy Court for the Central District of California.

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