California’s SB 574 and AB 495 Would Expand Regulation of Cosmetics Labeling and Ingredients

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California has always led the way when it comes to regulating cosmetic products, and bills recently introduced by Senator Connie Leyva (Senate Bill No. 574 or SB 574) and Assemblymembers Al Muratsuchi and Buffy Wicks (Assembly Bill No. 495 or AB 495) is in keeping with California’s reputation as a trailblazer in the cosmetics regulatory space.

SB 574, the “Toxic Fragrance Chemicals Right to Know Act of 2019”

SB 574, the “Toxic Fragrance Chemicals Right to Know Act of 2019,” was introduced last month. It would require cosmetic manufacturers, starting July 1, 2020, to disclose whether any of their cosmetic products contains a toxic fragrance or flavor ingredient.

Fragrance or flavor ingredients that appear on any one of 27 “designated lists” would be subject to public disclosure. The designated lists include chemicals listed as known to cause cancer or reproductive toxicity pursuant to California’s Proposition 65; chemicals classified by the European Union as carcinogens, mutagens or reproductive toxins; chemicals included in the European Union Candidate List of Substances of Very High Concern; and Group 1, 2A or 2B carcinogens identified by the International Agency for Research on Cancer (IARC) among many others.

Existing law – the California Safe Cosmetics Act of 2005 (“Safe Cosmetics Act”) – requires cosmetic manufacturers to disclose to the California Department of Public Health (CDPH) Safe Cosmetics Program whether any of their cosmetic products contain chemicals known or suspected to cause cancer or reproductive toxicity. The Safe Cosmetics Act’s list of reportable ingredients is compiled from a more far limited set of five designated lists. This self-reported information, in turn, is publicly available through the CDPH’s Safe Cosmetics Database.

While the Safe Cosmetics Act does not exempt fragrances and flavorings from being reported, the reportable chemicals in those cases are often identified simply as “trade secrets.” The proposed legislation would require the disclosure of the identities of the reportable chemicals or ingredients, but for trade secret purposes, would not require the weight or amount of a fragrance or flavor ingredient to be disclosed or any disclosure of how the fragrance or flavor is formulated. In addition, a manufacturer would not have to disclose any fragrance or flavor ingredients that are not found on any of the 27 designated lists. It is important to note that SB 574 as proposed would not ban or otherwise regulate the use of any fragrance or flavor ingredients.

AB 495, the “Toxic Free Cosmetics Act”

AB 495, also introduced in February 2019, would amend both California’s Sherman Food, Drug and Cosmetic Law and the Safe Cosmetics Act.

California’s Sherman Food, Drug and Cosmetic Law prohibits the manufacture, sale, delivery, holding or offer for sale of adulterated cosmetics. AB 495 would greatly expand the definition of an “adulterated cosmetic” to include cosmetics that contain specific ingredients. Any cosmetic that contains lead or asbestos or any of the following 13 intentionally added ingredients – without regard to the amount or exposure levels – would be banned from sale in California:

  • Butylparaben
  • Carbon black
  • Dibutyl phthalate
  • Diethylhexyl phthalate
  • Formaldehyde
  • Formaldehyde releasers
  • Isobutylparaben
  • Isopropylparaben
  • Mercury and related compounds
  • Per- and Polyfluoroalkyl substances (PFAS)
  • Propylparaben
  • Toluene
  • Triclosan

The bill would also amend the Safe Cosmetics Act by requiring referrals to be made to the Department of Justice for any sale of adulterated cosmetics, as well as any violation of the Safe Cosmetics Act.

If passed, the legislation would have the effect of requiring companies doing business anywhere in the United States to reformulate their cosmetics to remove these ingredients, effectively creating a nationwide ingredient ban. The bill comes as the FDA confirmed that cosmetic products sold in 2017 by Claire’s and Justice tested positive for asbestos.

It has become clear that California’s leadership position on cosmetic regulation has effectively driven changes in cosmetic products and labeling throughout the United States. Conkle, Kremer & Engel will continue to follow and update these important developments affecting the cosmetics industry.

Update on AB 495 as of April 9, 2019

Efforts to pass AB 495 have temporarily stalled.  On April 9, 2019, the Assembly’s Environmental Safety and Toxic Materials Committee postponed a scheduled vote to move the bill to the Assembly Health Committee due to lack of support.  The bill is not expected to be brought back again until next year. It is anticipated that the bill will be in a revised form when reintroduced.  Conkle, Kremer & Engel will continue to monitor the developments of AB 495.

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2018 Proposition 65 Trends Show Increasing Risk to Business

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2018 turned out to be the most lucrative year ever for Proposition 65 attorneys and their clients, according to settlement data collected by the California Office of Attorney General (OAG). The famous “right-to-know” law has been on the books for more than 30 years, and requires businesses to provide warnings for exposures to any one of the more than 900 chemicals on the Proposition 65 list that are known to cause cancer, reproductive harm or birth defects – or face hefty civil penalty and attorneys’ fees demands from the OAG, a district attorney or, far more commonly, private enforcers who initiate their claims by sending Notices of Violation.

Reviewing the recent trends, the indications are that the private enforcer claimants are becoming more efficient at extracting as much as possible from the unfortunate businesses who receive Notices of Violation. Even though California’s Office of Environmental Health Hazard Assessment (OEHHA) is supposed to benefit from Proposition 65 recoveries, the chart below shows graphically that the vast majority of the money obtained by the claimants stays with the claimants – and most of it stays with the claimants’ attorneys. In 2018, less than 12% of the money obtained by private enforcers went to OEHHA, and more than 79% went to the claimants’ attorneys.

2014-2018 CKE Prop 65 Settlement Chart

The claimants’ increasing efficiency is shown clearly by the fact that, even though the number of Notices of Violation sent to businesses dropped by approximately 13% (2,710 in 2017 and just 2,364 in 2018), the number of settlements and judgments increased from 693 in 2017 to 834 in 2018. The average settlement shot up by 13%, from $38,395 in 2017 to $44,097 in 2018. This was buoyed in large part by a huge increase in the attorneys’ fees and costs collected by plaintiffs’ attorneys. In 2017, plaintiffs’ attorneys took in $20.2 million in attorneys’ fees and costs. In 2018, plaintiffs’ attorneys recovered $29.1 million in attorneys’ fees and costs.

The small circle of private enforcers making these claims remains an exclusive club. The claimants active in 2018 included: Alicia Chin; Amy Chamberlin; Anthony E. Held, Ph.D., P.E.; Anthony Ferreiro; APS&EE, LLC; As You Sow; CA Citizen Protection Group, LLC; Center for Advanced Public Awareness, Inc.; Center for Environmental Health; Consumer Advocacy Group, Inc.; Dennis Johnson; Donny Macias; Ecological Alliance, LLC; Ecological Rights Foundation; Ema Bell; Environmental Law Foundation; Environmental Research Center, Inc.; EnviroProtect, LLC; Erika McCartney; Evelyn Wimberley; Gabriel Espinosa; Hector Velarde; John Moore; Estate of Karen Charlene Calacin; Kim Embry; Kingpun Cheng; Laurence Vinocur; Maureen Parker; Michael DiPirro; Paul Wozniak; Peter Englander; Precila Balabbo; Russell Brimer; Safe Products for Californians, LLC; Sara Hammond; Shefa LMV Inc.; Susan Davia; The Chemical Toxin Working Group, Inc.; and Whitney R. Leeman, Ph.D.

Questions still remain as to the effects on the Proposition 65 industry of the OAG’s amended settlement guidelines that went into effect October 1, 2016, and the new clear and reasonable warning requirements that went into effect August 30, 2018. We posited some theories in our previous blog post on the issue, but it’s too early to tell the collective effects of these changes on the net Proposition 65 costs for businesses. One thing is for certain: The risks to businesses are increasing as Proposition 65 claimants are demanding more money than ever to resolve their claims. Absent any meaningful Proposition 65 reform, that trend will only continue. Unfortunately, Proposition 65 is notoriously difficult to reform because it requires a two-thirds majority approval of each house in the Legislature and any amendment must further the purposes of Proposition 65.

The best approach for businesses is to be proactive to try to meet the Proposition 65 challenges before they become very costly burdens. Aside from carefully reviewing your compliance, the most important factor in reducing costs of resolution is to act promptly when you receive a Notice of Violation to contact qualified counsel experienced in Proposition 65 issues. Conkle, Kremer & Engel keeps up to date on developments in Proposition 65 and provides expert guidance to clients to ensure compliance with Proposition 65 and other regulations.

2018 by the Numbers

  • 2,364: Notices of Violation Served
  • 834: Number of Settlements/Consent Judgments
  • 39: Number of Active Prop 65 Plaintiffs
  • $36.7 Million: Paid by Businesses to Resolve Claims
  • $29.1 Million: Attorneys’ Fees & Costs Collected by Plaintiffs’ Attorneys
  • $3.3 Million: Payments Collected by Plaintiffs
  • $4.3 Million: Payments to State Agency
  • $44,097: Average Settlement/Judgment Amount

2017 by the Numbers

  • 2,710: Notices of Violation Served
  • 693: Number of Settlements/Consent Judgments
  • 38: Number of Active Prop 65 Plaintiffs
  • $26.6 Million: Paid by Businesses to Resolve Claims
  • $20.2 Million: Attorneys’ Fees & Costs Collected by Plaintiffs’ Attorneys
  • $2.7 Million: Payments Collected by Plaintiffs
  • $3.7 Million: Payments to State Agency
  • $38,395: Average Settlement/Judgment Amount

This blog post was coauthored by Desiree Ho.

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Prop 65: PILPs and ASPs and Fees — Oh My!

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We previously blogged about Proposition 65 trends based on data about settlements and judgments collected and made public by the California Attorney General’s Office. One trend we noted was the downward shift in civil penalty offsets known as “payments in lieu of penalties” (PILPs) or “additional settlement payments” (ASPs), due to recent amendments to the Proposition 65 regulations to rein in such payments. We’ll refer to these offsets collectively as ASPs and look at how the amendments have affected the Proposition 65 “industry”.

By way of background, Proposition 65 generally allows claimants (termed private enforcers) to keep 25% of the civil penalties as well as recover their attorneys’ fees and costs in enforcement actions. The state’s regulating agency, the Office of Environmental Health Hazard Assessment (OEHHA) retains the other 75% of the civil penalties. While Proposition 65 authorizes penalties of up to $2,500 “per day for each violation,” the reality is that civil penalties make up a very small portion of an overall settlement or judgment: The vast majority of the payment is earmarked as attorneys’ fees and costs paid to the claimant’s lawyers.

In the past, Proposition 65 private enforcers have often demanded additional payments that were treated as offsets to civil penalties. In other words, whatever the appropriate amount of civil penalties, they would carve out a portion of it as ASPs, because the claimants could keep the ASP portion entirely or direct it to a related entity – in addition to retaining their 25% share of the civil penalties. OEHHA does not receive any part of an ASP.

The practice became concerning enough that the Attorney General’s Office amended the regulations, effective October 1, 2016, to impose additional requirements for ASPs. According to the Final Statement of Reasons for the rulemaking, the amendments were intended, among other things, to “ensure that [OEHHA] receives the civil penalty funds specified in Proposition 65, so that it has adequate resources for Proposition 65 implementation activities” and to “limit the ability of private plaintiffs to divert the statutorily mandated penalty to themselves or to third parties, in the form of [ASPs].”

The regulations as amended also reflect the Attorney General’s position that ASPs should not be included in any settlement that is not subject to judicial approval and ongoing judicial oversight. The effect has been that, since 2017, only one private settlement agreement has included ASPs. Several others were reported in 2017 and 2019, but a review of the settlement agreements showed that the private enforcer in those cases erroneously reported its 25% portion of the civil penalties as ASPs.

While this can be seen as a bright spot, it may have the unintended consequence of lowering the incentive for certain private enforcers to settle early and privately, increasing costs to businesses who receive a Proposition 65 “notice of violation” – the official precursor to legal action. Indeed, since the amendments, we have continued to see a high number of court judgments contain ASP provisions, since those are still allowed under the amended regulations but subject to additional scrutiny by the Attorney General. In 2017, 90 of the 345 court judgments called for payment of ASPs (totaling $1,421,660) and in 2018, 109 of the 366 court judgments included ASPs (totaling $1,915,083). While not all plaintiffs are as aggressive about collecting ASPs, some NGO plaintiffs (such as As You Sow, Center for Advanced Public Awareness, Center for Environmental Health, Consumer Advocacy Group, Ecological Rights Foundation and Environmental Research Center) still show a strong preference for ASPs in resolving their claims. It is possible that OEHHA’s move to restrict ASPs results in more lawsuits and fewer pre-litigation settlements, but may not ultimately reduce ASPs as much as anticipated.

More problematically, the amendments seem to have had the unintended effect of driving up the civil penalties and attorneys’ fees and costs. The amended regulations provide that ASPs should not exceed the 75% share of the civil penalty paid to OEHHA. Previously, ASPs in both private settlements and judgments often exceeded the total civil penalties. The regulations now effectively place a cap on the amount of ASPs: ASPs that exceed 75% of the civil penalties may cause the Attorney General to file an opposition. So to maximize their own recovery private enforcers are now settling for what seems to be high civil penalties and ASPs that are a hair below 75% of that amount. Legally, that is a very doubtful practice – since ASPs are an offset to civil penalties, a defendant should pay the same total amount based on statutory factors, regardless of whether any part of the payment is earmarked as an ASP or if all of it is treated as a civil penalty.

One of the most stunning observations of the trends in Proposition 65 recoveries is that the attorneys’ fee portion of Proposition 65 settlements has increased every year. As we will discuss further in a later blog post, in 2018 the total amount of attorneys’ fees and costs collected by Proposition 65 plaintiffs shattered all records. Attorneys’ fees made up 79% of all Proposition 65 recoveries in 2018 – up from 76% in 2017. The claimants’ attorneys collected an astonishing $29,117,784 – an increase of nearly $9 million over 2017. It is not a big leap to infer that there is a connection between this and the changed regulations reducing claimants’ ability to rely on ASPs – claimants may be increasing the attorneys’ fees portion of their recovery to make up for perceived “losses” in ASPs.

What do the amended regulations and the settlement trends mean for businesses defending against Proposition 65 claims? For one, settling early and privately in an out-of-court settlement is a recommended strategy. ASPs should not be part of such early agreements. This means anyone receiving a notice of violation should act promptly to obtain qualified legal counsel, because private enforcers can sue in court after giving 60 days’ notice. Certain defense strategies can be utilized to try to force an out-of-court settlement for a non-cooperating private enforcer, or at least make a court judgment less appealing to the claimant. Businesses should also take steps to minimize civil penalties and thereby ASPs by taking immediate corrective action as well as ensure that their legal counsel put together a defense that supports a minimal civil penalty recovery under the law.

Conkle, Kremer & Engel attorneys are experienced at helping clients defend against Proposition 65 claims, resolving them cost-effectively and efficiently, as well as implementing proactive strategies to avoid Proposition 65 and other regulatory issues.

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California’s Cleaning Product Right to Know Act Requires Ingredient Disclosure

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California became the first state in the nation to have a cleaning products disclosure law, after Governor Brown signed the Cleaning Product Right to Know Act of 2017 (S.B. 258 (Lara)) into law in late 2017.

The Cleaning Product Right to Know Act requires manufacturers of certain cleaning products sold in California to disclose on the product label and on the product’s Internet web site certain information related to known hazardous chemicals contained in the product.  Manufacturers will have until January 1, 2020 to comply with the online disclosure requirements, and until January 1, 2021 to comply with the product label disclosure requirements.  However, any intentionally added ingredient that is regulated by California’s Safe Drinking Water and Toxic Enforcement Act (commonly known as Proposition 65) will not have to be listed until January 1, 2023.

The new law applies to so-called “designated products”, which are defined as a finished product that is an air care product, automotive product, general cleaning product, or a polish or floor maintenance product used primarily for janitorial, domestic or institutional cleaning purposes.  It does not apply to foods, drugs and cosmetics, trial samples, or industrial products specifically manufactured for certain industrial manufacturing processes.

The product label will be required to disclose each intentionally added ingredient contained in the product that is included on any of 22 specified designated chemical lists – including chemicals listed pursuant to Proposition 65.  Alternatively, manufacturers may list all intentionally added ingredients contained in the product unless it is confidential business information.  The Act also requires the disclosure of fragrance allergens greater than 0.01 percent (100 ppm).  Additional requirements include the manufacturer’s toll-free telephone number and Internet web site address on the product label.

As for the online disclosure requirements, manufacturers must list all intentionally added ingredients and state their functional purpose.  All nonfunctional constituents present at above 0.01 percent (100 ppm) must also be listed.  The website must include electronic links for designated lists and a link to the hazard communication safety data sheet for the product.  In addition, specific requirements apply for the disclosure of fragrance allergens online.

The Act also adds a section to the California Labor Code imposing an obligation on employers who are required to provide employees with Safety Data Sheets (SDS).  Those employers must similarly make the printable information from the online disclosure available in the workplace.

Although it is a state law, the effect of the Cleaning Product Right to Know Act is certain to be felt by manufacturers across the country who sell their products into California, as is true of many of California’s other regulatory schemes, including Proposition 65, and will most likely result in a nationwide relabeling of covered products.

Given the Act’s numerous and in some cases highly technical requirements, manufacturers of cleaning products would be well advised to determine whether any of their products are subject to the Act, and take steps now to ensure compliance by 2020.  Conkle, Kremer & Engel attorneys stand ready to help manufacturers handle all that is coming their way.

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California ARB’s Third Product Survey Starts July 1, 2016

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The California Air Resources Board’s ambitious, three-year long data collection effort is rounding third and heading for home.  The mandatory reporting period for the third and final year of the Consumer and Commercial Products Survey (now called “Data Reporting for the Consumer Products Program”) will begin July 1, 2016 and end November 1, 2016.

Businesses will once again be required to report detailed product ingredient information and annual sales for products sold in California during 2015, as they were required to do for chemically formulated consumer and commercial products sold or supplied for use in California during the 2013 and 2014 calendar years.  ARB requires the ingredient and sales information to be reported through its online Consumer Products Reporting Tool.  Veterans of the two prior Surveys may notice that ARB no longer refers to the mandatory reports as “Surveys,” apparently because that name suggested to some that the reports were somehow optional.  They are not optional.  Non-compliance will draw letters from ARB and persistent non-compliance will result in referral to ARB’s Enforcement Division.

Reports must be filed by each “responsible party” listed on the label of a consumer or commercial product that was sold or supplied for use in California during the calendar year, if the product falls into one of the many categories listed for 2015.  The general categories of consumer products that are subject to reporting are personal care products, adhesives, sealants and related products, household and institutional products, pesticide products, solvent and thinning-related products, vehicle and marine vessel aftermarket products, and aerosol coating products.  But for the 2015 Report, ARB has exempted 232 categories of consumer products due to its assessment that the products contain low or no volatile organic compound (VOC) emissions – less than 0.05 tons per day of emissions.  A number of beauty products, including facial cleansers and soaps, nail glues and gel nail polishes, are now exempt from reporting for 2015, even though they were required to be reported for 2013 and 2014 Surveys.  ARB’s full list of exempt consumer products is available here.

Conkle, Kremer & Engel attorneys assist clients with achieving compliance with California’s many regulatory requirements, including the Consumer and Commercial Products Survey, so that clients can focus on expanding their businesses in valuable markets.

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CK&E to Present on Emerging Legal Issues at PCPC Emerging Issues Conference

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Conkle, Kremer & Engel attorneys John Conkle and Kim Sim will once address current legal trends and developments in the cosmetic and personal care products industry at the Personal Care Products Council (PCPC)’s Emerging Issues Conference on November 18, 2015 at the Ritz Carlton Hotel in Marina Del Rey, California.

John and Kim will present on “Emerging Legal Issues in the Cosmetic and Personal Care Products Industry.”  The topics to be discussed include recent developments involving enforcement of prohibitions on container slack fill, trends in lawsuits and agency action concerning advertising, an update on the California Air Resources Board’s ongoing Consumer and Commercial Products Survey, as well as a discussion about protecting companies from counterfeiting and cybersquatting in the digital age.

CK&E’s presentation from last year’s Emerging Issues Conference can be found here.

The annual event by the PCPC – the leading national trade association for the cosmetic and personal care products industry – is a must-attend for beauty companies across the country, with its unique focus on the many challenges that are on the horizon for the beauty industry.

This year’s agenda will also include updates from the PCPC on key issues for the industry and from the California Department of Toxic Substances Control on the California Safer Consumer Products and Workplaces regulations, as well as presentations on emerging issues in the Americas, safety standards for cosmetics, current and future challenges for Proposition 65.  In addition, Deputy Attorney General Robert Sumner is slated to speak at the conference.

CK&E is pleased to once again participate in this annual event and to offer its experience and insight into legal issues affecting the industry to the PCPC and its members.

 

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The Conkle Firm Honors Industry Rock Star Steve Goddard at City of Hope Spirit of Life Award Gala

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PRAVANA Founder and President Steve Goddard literally rocked the house as he joined beauty industry members to “Rock the Cure” at the City of Hope’s Spirit of Life Award Gala in Las Vegas on July 11, 2015.  Conkle, Kremer & Engel attorneys were there to celebrate and support this industry rock star and friend of CK&E as he was honored for his many professional and humanitarian accomplishments.

The Spirit of Life Award is a rare and prestigious honor, presented to exceptional individuals whose intangible qualities – their generosity, their ability to inspire and their desire to make a difference in the world – make their lives worthy of universal admiration.  Steve Goddard embodies each of these qualities.

Steve is a 30-year veteran of the beauty industry.  He founded PRAVANA in 2004 as a boutique brand of highly sophisticated products utilizing the power of  nature and the strength of technology to produce superior holistic formulas.  Since then, PRAVANA has turned into a global brand famously known for high quality, innovative and eco-conscious products. PRAVANA donates 5% of all sales of its NEVO Hair Care line to the City of Hope toward the fight against cancer.   PRAVANA is also an annual participant in Breast Cancer Awareness month and works closely with salons in numerous charitable events and programs including the Ronald McDonald house and the Beauty Bus Foundation.

Steve’s professional achievements and philanthropic efforts were recognized and lauded before his beauty industry peers.  In keeping with the theme of this year’s City of Hope Spirit of Life Gala, “Rock the Cure,” guests were treated to an evening of pure rock and roll.  First Steve, an acclaimed singer, songwriter and guitarist, delighted guests with his own special rock guitar performance.  And what better way to end the celebration than with a musical performance by none other than Don Felder, formerly of the Eagles, who entertained the crowd with Eagles hits, including Hotel California.  It was a fitting tribute to an extraordinary member of the beauty industry.

The City of Hope Spirit of Life Gala is held each year at the Mandalay Bay as a pre-cursor to the Cosmoprof North America beauty industry trade show.  Past Cit of Hope honorees include such industry leaders as Sara Jones, Senior VP and General Manager of Joico (2011), George Schaeffer, founder of OPI and Aloxxi (2012), Reuben Carranza, CEO of Wella (2013) and Harlan Kirschner, President of The Kirschner Group (2014).

CK&E is proud to have been able to join in the celebration of industry veteran and friend of the firm Steve Goddard for his many accomplishments, both professional and humanitarian.  CK&E joins the City of Hope in congratulating Steve on being this year’s City of Hope Spirit of Life Honoree.

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Seriously – Aloe Vera Whole Leaf Extract May be a Prop 65 Chemical

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We’ve recently written a series of articles about “natural” personal care products that may inadvertently run afoul of Prop 65 regulations.  You may be surprised to learn that such “natural” products may include ingredients that have been identified as “chemicals known to the State of California to cause cancer” under Proposition 65.

One of the more surprising of the proposed Prop 65 ingredients is Aloe Vera Whole Leaf Extract.  On April 23, 2015, California’s Office of Environmental Health Hazard Assessment (“OEHHA”) issued its notice of intent to list Aloe Vera Whole Leaf Extract as a chemical known to cause cancer. Although more than 420 species of Aloe plant exist, the specific form that is the subject of the proposed listing is: “Aloe Vera whole leaf extract” which “consists of the liquid portion of the Aloe Vera leaf and is a natural constituent of the Aloe barbadensis Miller plant.”  Fortunately, OEHHA specifically excludes Aloe Vera decolorized whole leaf extract, Aloe Vera gel, Aloe Vera gel extract and Aloe Vera latex, which are the more common forms used in personal care products.

When it issued the notice of intent to list Aloe Vera Whole Leaf Extract, OEHHA also issued a notice of intent to list Goldenseal Root Powder as a chemical known to cause cancer. OEHHA identified goldenseal root powder in the proposed listing as “the powdered dried roots and underground stems of goldenseal plants” and declared it to be “a natural constituent of the goldenseal plant.” OEHHA further specifies that Goldenseal is also known as Hydrastis Canadensis, orangeroot, Indian turmeric, and curcuma. Fortunately, OEHHA further specifies that the spice turmeric (Curcuma longa Linn.), frequently found in personal care products such as face and body lotions and cleansers, is not proposed for listing. The form of goldenseal root extract that is contemplated for addition to the Prop 65 list is most often used in the form of nutritional supplements.

Even when manufacturing or distributing “natural” products, beauty companies should take care to review the products’ current formulations to determine whether they contain an ingredient that is or may be on the Proposition 65 list, or whether any of their products contain an ingredient that may cause an exposure to a Prop 65 chemical.  It may be vital to work closely with manufacturers or suppliers, and have strong contracts to protect against Proposition 65 liability. Companies should be pro-active and consider reformulation if a proposed or actual Prop 65 chemical is being used.  And if a Proposition 65 Notice of Violation is received, affected companies should promptly contact counsel with experience in successfully resolving Prop 65 claims.

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Natural Products are Not Immune from Prop 65 – Beta Myrcene is a Listed Chemical

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The Conkle firm recently wrote about personal care product ingredients that are found in nature that are nonetheless among those that have been identified by the state of California to be “chemicals known to the State of California to cause cancer” under California’s Proposition 65.

On March 27, 2015, the Office of Environmental Health Hazard Assessment (“OEHHA”) added beta-myrcene (CAS No. 123-35-3) as a chemical known to cause cancer under Proposition 65.   This means that enforcement actions may commence starting March 27, 2016. Beta-myrcene is a natural constituent of food plants, such as hop, bay, verbena, lemongrass, citrus, pomegranate, and carrot, and of their juices and essential oils. Beta-myrcene is used as a fragrance in cosmetics and soaps, many of which are positioned  as “natural” products.  Other ingredients that are popularly used in “natural” beauty products are joining the list – check back for our additional blog posts on those in the near future.

In addition to such ingredients, businesses should be careful not to overlook diethanolamine (DEA), coconut oil diethanolamine (cocamide DEA) and benozphenone – three chemicals that became subject to enforcement action in June 2013 and which remain a favorite of Prop 65 plaintiffs. Thousands of companies, with particular focus on beauty industry manufacturers, distributors and retailers have been hit with Notices of Violation over these chemicals.

Beauty companies should review their current formulations to determine whether any of their products contain an ingredient that is or may be on the Proposition 65 list, or whether any of their products contain an ingredient that may cause an exposure to a Proposition 65 chemical. Companies should work closely with their manufacturer or supplier, and have strong contracts to insulate them from Proposition 65 liabilities. Companies should also consider being pro-active by reformulating chemicals out of their products early on, if possible.  If a Notice of Violation is received, contact counsel with experience in successfully resolving Prop 65 claims.

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Beauty Companies Beware: Natural Ingredients May be Subject to Prop 65

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Personal care product companies are riding the wave of strong consumer interest in “natural” products.  However, going “natural” can come at a cost:  In addition to concerns about drawing consumer claims that the term is being used in a potentially deceptive manner, there are other hidden risks to manufacturers, distributors and resellers of “natural” products. Perhaps surprisingly, a number of chemicals that are commonly found as a natural constituent of plants has been or is about to be classified as “chemicals known to the State of California to cause cancer” under California’s Proposition 65.

Pulegone is among the plant extracts found on the Prop 65 list.  Pulegone is a natural constituent of various plants, including mint and other herbs, and of their essential oils.  Pulegone was added to the Prop 65 list on April 18, 2014 as a chemical known to the state of California to cause cancer, and it became subject to enforcement actions a year later, on April 18, 2015.  Prop 65 bounty hunter Mateel Environmental Justice Foundation wasted no time in sending out a 60-Day Notice of Violation to businesses whose products involve exposure to this chemical.  It only took two days for the first Notice of Violation over exposure to pulegone to be served on businesses around the country.  A Notice of Violation is often a pre-cursor to a lawsuit.  The Notice of Violation claims consumer and occupational exposures to pulegone through use in products of pennyroyal oil.

The requirements of Proposition 65 are deceptively simple – provide a clear and reasonable warning if the use of the product results in an exposure to one or more of the 800+ chemicals on the Prop 65 list of known carcinogens and reproductive toxins.  But the penalties, fees and damage to business reputation for failing to comply can be severe:  Under Proposition 65, the civil penalties for failing to provide a clear and reasonable warning prior to exposure can reach up to $2,500 per violation per day, in addition to payment of an enterprising plaintiff’s attorneys’ fees.  Wherever they are located, manufacturers, distributors and retailers can be liable for Prop 65 violations, and the sale of even one product that may cause an exposure to a Prop 65 chemical is subject to zealous pursuit by Prop 65 plaintiffs.  Businesses are well advised to consult with counsel who are familiar with Prop 65 concerns and can help them proactively get ahead of the Prop 65 curve or successfully resolve claims in the event a Notice of Violation is received.

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