Amazon and Online Retailers Draw Proposition 65 Notices of Violation

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Conkle, Kremer & Engel attorney John Conkle was recently interviewed by chemical industry publication Chemical Watch in an article about the continued robust private enforcement of Proposition 65 against large retailers such as Amazon, Target, Walmart, CVS and Costco. John, a leading Prop 65 defense attorney who has counseled and defended companies throughout the supply chain, provided his expert insight in the article, which looked at the astronomical number of notices of violation being served on retailers by private enforcers.

In general, Proposition 65 enforcement has steadily risen over the years, reaching its peak in 2018 with 827 settlements and judgments totaling a record $35 million.

However, under the Proposition 65 regulations as amended last August, retailers are now legally responsible for compliance only under certain prescribed circumstances. In addition to having to provide Internet warnings for products sold online, a retailer is responsible for providing a warning if:
• the retailer is selling the product under its brand or trademark;
• the retailer knowingly introduced a listed chemical into the product or knowingly caused a listed chemical to be created in the product;
• the retailer covered, obscured or altered a warning label that was affixed to the product;
• the retailer received a notice and warning materials for the exposure but sold the product without posting or displaying the warning; or
• the retailer has actual knowledge of the potential exposure requiring the warning and there is no upstream entity that can be held liable for the violation. Actual knowledge means specific knowledge of the exposure received from any reliable source. If the source of this knowledge is a Prop 65 notice of violation, the retail seller is deemed to have actual knowledge five business days after receipt.

Despite the new regulations, retailers are continuing to be served with notices of violation. For example, while Amazon has received 1,027 notices of violation since the California Attorney General’s Office began keeping track in 2000, most of those notices were served in recent years: 255 in 2016, 404 in 2017, 180 in 2018 and 57 so far this year. Private enforcers often include retailers in their notices to apply settlement pressure on manufacturers, distributors and other entities upstream in the supply chain, who are often required to enter into indemnity agreements with their retailers. Retailers should continue to be vigilant about having adequate indemnity agreements in place, ensuring that the products they sell have been tested for compliance with Proposition 65 and if warnings are required, to provide the appropriate warnings.

Conkle, Kremer & Engel attorneys routinely assist clients in ensuring compliance with Proposition 65 and other regulations, and defend businesses against Proposition 65 when a notice of violation is received.

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Cosmoprof North America Features Challenging CBD, Natural and Organic Product Lines

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On July 29 and 30, 2018, Conkle, Kremer & Engel continued its annual firm attendance at Cosmoprof North America in Las Vegas, visiting with longtime and new clients and observing new brands and trends in the personal care industry.  This year’s edition of Cosmoprof had over 36,000 attendees with a record-breaking 1,278 exhibitors from 45 countries.  CK&E attorneys attend to connect with clients and others in the cosmetics, personal care, packaging, labeling and professional beauty markets, to help clients secure distribution agreements, and to learn about the newest industry innovations and issues.

This year, trends included substantial expansion of the mens’ care and beard care sector, along with CBD-infused cosmetics and hair care products and natural and organic hair regrowth formulas.  Organic products sold in California must meet strict requirements, and Products with “natural” claims can present special challenges and risks, as CK&E has addressed in previous blog posts, such as “What are Natural Products Anyway?”  A new twist has been recent growth (no pun) in “hair regrowth” products labeled as “natural” or “organic” .  Those classes of products face special issues in addition to whether they can fairly be called “natural” or “organic,” in that hair regrowth claims can at times run afoul of federal prohibitions on products that make drug-like claims without FDA approval, as well as federal and state labeling and advertising regulations.  Finally, a new class of beauty and hair care products are based on Cannabidiol (CBD) content, taking advantage of increased acceptance of cannabis-based products.  Yet CBD products continue to pose their own special issues, which will be the subject of an upcoming www.conklelaw.com blog post.  CK&E is well-versed in counseling clients on all such issues, from brand protection, vendor and distribution issues to the latest CBD, natural and organic product concerns.

Lastly, foremost on the minds of many manufacturers and distributors who sell in California were the new requirements for Proposition 65, the well-known California law requiring “Prop 65” warnings for products which contain chemicals known to cause cancer or reproductive harm.  New warning label requirements go into effect on August 30, 2018, which CK&E has already summarized on its blog.  CK&E is actively advising manufacturers about the most efficient and effective ways to address the changes and avoid the risks of inadvertent violations.

CK&E’s attorneys continue to pride themselves on keeping abreast of developments in the personal care market, along with assisting clients of all sizes with growth and protection of their brands and interests.  CK&E is an active member of the Professional Beauty Association, the Personal Care Products Council, and other important industry trade organizations.

 

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It’s Time: New Prop 65 Warnings are Required August 30, 2018

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In November 2017, we advised readers of Conkle, Kremer & Engel’s blog that products sold in California would become subject to new Proposition 65 warning requirements beginning August 30, 2018.  The new “Clear and Reasonable Warning Regulations” from California Office of Health Hazard Assessment (OEHHA) significantly changed warning requirements for affected products that are manufactured on or after August 30, 2018.  Among other changes, the new regulations affect the safe-harbor warning requirements that govern the language, text, and format of such warnings, and also impose downstream warning mandates through retail, online and catalog sales channels. Generally, some of the major changes that companies selling consumer products should be aware of include:

  • The “warning symbol” :  A graphic “warning symbol” is now required on consumer products, other than food products. The “warning symbol” must be printed in a size no smaller than the height of the bolded word “WARNING,” and should be in black and yellow, but can be in black and white if the sign, label, or shelf tag for the product is not printed using the color yellow. The entire warning must be in a type size no smaller than the largest type size used for other “consumer information” on the product, and in no case should be smaller than 6-point type.
  • Listing of a specific chemical:  Warnings must now specifically identify at least one listed ingredient chemical for each toxicological endpoint (cancer and reproductive toxicology) and include a link to OEHHA’s new website P65Warnings.ca.gov. Certain special categories of products, such as food and alcoholic beverages, have a specialized URL that must be used instead.
  • New warning language:  Warning language must now warn of an exposure to a chemical or chemicals from the product, rather than just warn that the product contains the chemical or chemical. For example, “ WARNING: This product can expose you to diethanolamine, which is known to the State of California to cause cancer. For more information go to www.P65Warnings.ca.gov.”
  • Internet and catalog requirements:  For internet sales, warnings must be provided with a clearly marked hyperlink on the product display page, or otherwise prominently displayed to the purchaser before completion of the transaction. It will not be sufficient if the product sold on the internet bears the required label, but the internet point of purchase listing does not. For catalog sales, a warning must be provided in a manner that clearly associates it with the item being purchased.
  • Short-form warnings:  The regulations allow the use of certain abbreviated “short-form” warnings, which may omit the identity of any specific chemical, only if the warning is printed on the immediate container, box or wrapper of the consumer product or is affixed to the product.  For example, “ WARNING: Cancer – www.P65Warnings.ca.gov.”  If a short-form warning is used on the product, the same short-form warning may be used for internet and catalog sales.

The regulations seek to minimize the burden on retail sellers of consumer products, but there are some obligations affecting resellers. Manufacturers, producers, distributors, and other upstream businesses comply with warning requirements if they affix a clear and reasonable warning to the product, or provide written notice and warning materials to an authorized agent of a retailer, among other requirements.  Retailers who receive products with a Proposition 65 warning on the label, or who receive proper notice that a warning is required, are responsible for placement and maintenance of internet warnings for those products before selling to consumers in California.  Retailers should only be liable for Proposition 65 violations under limited circumstances, such as if they cover, obscure, or alter a product’s warning label, or if they receive notice and warning materials but fail to display a warning, including catalog and internet warnings preceding consumer sales into California.

The particular requirements for each specific product can vary, so manufacturers and resellers are well-advised to seek qualified counsel to review their circumstances before committing to potentially costly label and website changes that may not comply with the new requirements.  Conkle, Kremer & Engel attorneys stay up to date on important regulatory developments affecting their clients in the manufacturing and resale industries, and are ready to help clients navigate the changing regulatory landscape in California and elsewhere.

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October 2018 Update

H. Kim Sim of CK&E was interviewed and quoted extensively in ChemicalWatch about the difficulties manufacturers face in implementing the “very confusing and very complex” requirements of the new warning label requirements of Prop 65.  For example, as Kim said, “The requirement that manufacturers name at least one substance for which they are providing warning has proven particularly challenging. Determining which one to include ‘can be tricky for companies to decide’, she said. ‘Is one more scary to the public than another?'”

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CK&E Attorneys Lobby California Legislature with PCPC

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On March 20, 2018 Conkle, Kremer & Engel attorneys Eric S. Engel and Aleen Tomassian helped the Personal Care Products Council fulfill part of its mission by organizing and executing an effective lobbying day to advance the legislative interests of the industry.  Led by PCPC Senior Vice President Government Affairs Mike Thompson and PCPC Director of Government Affairs Karin Ross, a group of personal care product industry members, lobbyists and advisors heard presentations by pivotal regulatory agencies and then met with key legislators and their staffs to address issues of importance to the industry.

PCPC Chief Scientist Alex Kowcz seminar to Calif Legislative Staff

The PCPC held a luncheon at which it presented its first Legislator of the Year Awards to congresspersons who have been the most effective in advancing the important interests of both business and consumers in relation to personal care products.  Legislative staff also received an educational presentation from PCPC’s new Chief Scientist, Alex Kowcz, to help bring to Legislators the most current scientific information about issues affecting personal care products.  After a long day of meetings, participants unwound and connected at an informal reception for legislators, the governor’s office and administration officials at Ella, a popular restaurant near the State Capitol.

 

Eric S. Engel and Aleen Tomassian at PCPC Calif Lobby Day Reception

Some of the highlights of the 2018 PCPC California Lobby Day included a presentation by Meredith Williams, Deputy Director of Department of Toxic Substances Control (DTSC), and Rick Brausch, Chief of DTSC’s Policy and Program Support Division, Hazardous Waste Management.  The mission of the DTSC is the Safer Consumer Products (SCP) program, directed toward advancing the design, development and use of products that are chemically safer for people and the environment.  The aim is to reduce toxic chemicals in consumer products and create new business opportunities in green chemistry.

Dr. Williams advised the PCPC group that DTSC’s SCP program intends to focus over the next three years on nail salon products, particularly to assure a safe working environment for salon employees as well as customers, such as by assuring adequate ventilation and safety equipment.  Dr. Williams also noted that Volatile Organic Compounds (VOCs) are not only within the ambit of California’s Air Resources Board (ARB) as to their effect on the environment, but they are also within the scope of DTSC’s authority when regulation of VOCs can meaningfully enhance protection of human health.

On February 8, 2018, DTSC released a draft 2018-2020 Priority Product Work Plan for public review, in which “Beauty, Personal Care and Hygiene Products” are identified as targets for possible regulation.  Of some concern to PCPC, the Priority Product Work Plan includes DTSC’s interest in broad classifications of chemicals without defining exactly which chemicals in what formulations are of concern.  For example, DTSC’s Priority Product Work Plan identifies oxybenzone, BPA, DEA, formaldehyde, phthalates, parabens, triclosan, titanium dioxide, tolulene and VOCs as classes chemicals being considered for possible regulation, but there are a great many specific chemicals, formulations and uses within such classes, and not all of them are likely to be of concern to DTSC.  PCPC expressed its concern that broad classifications can cause confusion among manufacturers and consumers, and unnecessarily inhibit product development and sales.  For example, oxybenzone (aka Benophenone-3) is one of just 16 chemicals approved by the US Food and Drug Administration (FDA) as safe and effective for use as an ultraviolet (UV) filter to achieve broad-spectrum sun protection.  The health benefits of effective UV sunscreens are well documented, but the broad suggestion of “endocrine toxicity” or “dermatoxicity” in DTSC’s identification of oxybenzone is on shaky scientific footing.  Dr. Williams noted that the 2018-2020 Priority Product Work Plan is only in draft form, and that DTSC recognizes the broad nature of the chemical groups identified and is working on identifying specific chemicals of concern rather than entire classes of chemicals.

DTSC’s Richard Brausch spoke of the hazardous waste logistics issues facing the personal care product industry, affecting the entire supply chain from manufacturers to retailers.  The issue often occurs when products are returned from retailers, and questions arise as to whether they may be regarded as hazardous waste if they are no longer considered fit for regular sale, such as when new product labeling is introduced.  Issues can arise as to who has responsibility for proper transportation and disposal of the products, whether by sale in secondary markets, repair or refurbishment, donation to charities or recycling.  It is notable here that improper transportation and disposal has led some local authorities to sue retailers and wholesalers for failing to use hazardous waste transporters.  That in turn has caused retailers to impose anticipatory disposal charges on manufacturers and wholesalers for a wide range of products.  PCPC therefore supports Assembly Member Bill Quirk’s introduction of new legislation, AB 2660, which places the onus on the disposal company to determine the correct method of transportation, as that is not within the expertise expected of retailers.

The overriding hazardous waste concern is that California uses an “aquatic toxicity” (aka “fish kill”) test that is grossly out of alignment with federal law, and which results in most cosmetic products being characterized as hazardous under California law.  The “fish kill” test is exactly like it sounds – it tests only whether quantities of the subject product added to a water tank will kill fathead minnows.  The test is not regarded as especially accurate, notably because high viscosity products that are otherwise harmless can kill the fish by clogging their gills.  Further, the test presents a significant problem for the personal care products industry, which has taken a strong stand against animal testing, so manufacturers generally do not conduct this “fish kill” test on finished products.  PCPC therefore advocates a more modern approach to accomplish the same goal, by use of a more recently developed fish embryo test (FET), in which live fish are not killed.

An interesting side note is that SB 1249 was introduced by Senator Cathleen Galgiani to prohibit importation or retail sale of any cosmetic that was developed or manufactured using animal testing after January 1, 2020.  While PCPC takes a strong stand against animal testing, it could not support the bill as written because it included no exception for products marketed in countries (notably China) which require that products be subject to animal testing.  Rather, the PCPC has been working to obtain an amendment of the proposed legislation to make it conform to that of the European Union, which has strong anti-animal testing regulations but allows for accommodations to make products acceptable for sale in China.

Dr. Michael Benjamin, Air Resources Board Chief of Air Quality Planning and Science spoke about the substantial product data that ARB had collected from product manufacturers selling in California, through extensive annual surveys conducted over the past three years.  From that data, ARB is working to identify trends in emissions of VOCs.  Of particular interest is a February 15, 2018 publication in the academic journal Science of a study of VOC emissions from consumer products.  The Science publication (Volatile Chemical Products Emerging as Largest Petrochemical Source of Urban Organic Emissions, by Brian C. McDonald, Joost A. de Gouw, Jessica B. Gilman and others), Science Vol. 35, Issue 6377, pp. 760-764 (Feb. 16, 2018)) caught popular attention and some popular press because it found that vehicle emissions had become so much cleaner over the past decades that they were now responsible for less than half of VOC emissions.  Overall, the total volume of VOCs had diminished greatly.  Further, while the Science article authors made many assumptions on which they based their assessment of VOC contributions of consumer products, Mr. Benjamin pointed out that ARB has the actual data from its industry surveys to determine whether the author’s assumptions and conclusions are well founded.  ARB therefore intends to do its own assessment of the points made in the Science article to determine what further action is appropriate.

PCPC’s first Legislator of the Year Awards were presented to Senator Ed Hernandez, Assembly Member Bill Quirk and Senator Galgiani.  In his comments to PCPC members, Senator Hernandez emphasized, “We want business to stay here in California, we want businesses to be successful.  There’s a lot of people here that purchase your products.”   Assemblyman Quirk addressed the need for common sense limitations on legislation such as Proposition 65, remarking that “[Someone] sent me a package of Coors beer with a Prop 65 warning on it.  We now have cases in court where people want Prop 65 warnings on coffee. * * * One study after another shows it’s not a health risk. * * * We’ve got to do something about this.  I’m definitely going to be working as time goes on in the legislature so that we don’t end up with things that are harmless being labeled.”  Finally, Senator Galgiani observed that good legislative policy is not a zero sum game:  “It’s not about having a proposal that’s just good for the environment or just good for business but we can meet in the middle and have regulations and policies that work for both sides and help everybody involved.  It’s just harder to get there – it takes more work, it takes more time and it takes patience, and all of you [at PCPC] have done a great job.”

 

 

 

 

 

 

 

 

 

 

See the Beauty Industry Report article on the PCPC California Lobby Day here.

 

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What’s in Your Packaging? Prop 65 Applies to PVDC

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Can your product wrap subject you to Proposition 65 warning requirements?  You bet.  California has added vinylidene chloride to its long list of chemicals to which Proposition 65 applies, effective on December 29, 2017.  The Office of Environmental Health Hazard Assessment (OEHHA) has not established a safe harbor level for vinylidene chloride, although that remains under consideration.

Vinylidene chloride is used in the production of polyvinylidene chloride (PVDC) copolymers. PVDC was developed by Dow Chemical Company, and was at one point used in the production of the popular food wrap product, Saran Wrap. PVDC has characteristics ideal for food packaging because it has low permeabiltiy to water vapor and gasses. While use of PVDC in Saran Wrap was later phased out due to cost and environmental concerns, other copolymers of vinylidene chloride are still commonly used in food packaging, including box overwrap, vertical form fill seal, horizontal form fill seal, and pre-made bags. Vinylidene chloride is also extensively used in a variety of other packing materials, as flame retardant coating for fiber and carpet backing and in piping, coating for steel pipes, and adhesive applications. Other common consumer products that may contain vinylidene chloride include cleaning cloths, filters, screens, tape, shower curtains, garden furniture, artificial turf, doll hair, stuffed animals, fabrics, fishnet, and shoe insoles.

Manufacturers, distributors and retailers are required to provide Prop 65 warnings to workers and consumers who are exposed to vinylidene chloride.  Companies have one year from the listing date to comply with Prop 65.  Companies that have not reformulated their products to remove vinylidene chloride, or that fail to provide a Proposition 65 warning on products containing it, by December 29, 2018 are at risk of receiving a “Notice of Violation” from private enforcers seeking to gain thousands of dollars in penalties and attorneys’ fees.  A Notice of Violation typically precedes a lawsuit for violation of Proposition 65.

The listing of vinylidene chloride as a chemical known to cause cancer by OEHHA is a reminder that not only product contents, but also packaging materials, are included within Prop 65 compliance requirements.  As we previously reported, since December 2014, products sold in California that contain diisononyl phthalate (DINP) have required a Proposition 65 warning.  DINP is found is many soft plastic and vinyl products, and purported violations have been found in seemingly innocuous packaging, such as gift bags for cosmetic products.

Conkle, Kremer & Engel has many years of experience advising clients with respect to Proposition 65 and other regulatory compliance issues. CK&E attorneys help clients stay out of legal crosshairs by working with them to ensure their products continue to meet all legal requirements, and helping them plan for foreseeable changes in the law.

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WARNING: Are Your Products and Websites Ready for the New Prop 65 Requirements?

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California’s Office of Health Hazard Assessment (OEHHA) has issued new Proposition 65 Warning Regulations that will go into effect on August 30, 2018. It is important for companies to understand the changed regulations and be proactive in adapting their product labels and even internet marketing to adapt to the new regulations.  The coming changes have introduced a variety of new concepts, imposing additional burdens on businesses selling their products in California, and making it easier for plaintiff Prop 65 attorneys and groups to bring costly private enforcement actions.

The OEHHA has made significant changes to the safe-harbor language requirements that govern the language, text, and format of such warnings. The new regulations introduce the concept of a “warning symbol,” which must be used on consumer products, though not on food products. The “warning symbol” must be printed in a size no smaller than the height of the word “WARNING,” and should be in black and yellow, but can be in black and white if the sign, label, or shelf tag for the product is not printed using the color yellow.

Warnings must now also specifically state at least one listed chemical found in the product and include a link to OEHHA’s new website www.P65Warnings.ca.gov.  These are examples of the new format for more specific warnings:

  • For exposure to carcinogens: “ WARNING: This product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause cancer. For more information, go to www.P65Warnings.ca.gov.”
  • For exposure to reproductive toxins: “ WARNING: This product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.”
  • For exposure to both carcinogens and reproductive toxins: “ WARNING: This product can expose you to chemicals including [name of one or more listed chemicals], which is [are] known to the State of California to cause cancer, and [name of one or more chemicals], which is [are] known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.”

Certain special categories of products, such as food and alcoholic beverages, have a specialized URL that must be used. For example, warnings on food products must display the URL www.P65Warnings.ca.gov/food.

Recognizing that many consumer products have limited space “on-product” to fit the long-form warnings, the OEHHA has enacted new regulations allowing abbreviated “on-product” warnings. This short warning is permissible only if printed on the immediate container, box or wrapper of the consumer product. An example of the required format for the abbreviated warnings is:

  • WARNING: Cancer and Reproductive Harm – www.P65Warnings.ca.gov

The new regulations also specifically address internet sales for the first time. Warnings must be provided with a clearly marked hyperlink on the product display page, or otherwise prominently displayed to the purchaser before completion of the transaction.  It will not be sufficient if the product sold on the internet bears the required label, but the internet point of purchase listing does not.

The particular requirements for each specific product can vary, so manufacturers and resellers are well-advised to seek qualified counsel to review their situation before committing to potentially costly label and website changes that may not comply with the new requirements.  Conkle, Kremer & Engel attorneys stay up to date on important regulatory developments affecting their clients in the manufacturing and resale industries, and are ready to help clients navigate the changing regulatory landscape in California and elsewhere.

Although the new regulations take effect August 30, 2018, and the new warning labels are required for products manufactured after that date, companies can begin using the changed labels now. It is definitely not advisable to wait until August 2018 to begin making the required changes.

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