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Proposition 65

Proposition 65. How This California Law Affects the Entire Promotional Products Industry. Presenters. Steve Slagle, CAE, PPAI President Stan Breckenridge, MAS, Moderne Glass Company, PPAI Board of Directors Trenton H. Norris, Esq., Partner, Bingham McCutchen, LLP, San Francisco

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Proposition 65

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  1. Proposition 65 How This California Law Affects the Entire Promotional Products Industry

  2. Presenters • Steve Slagle, CAE, PPAI President • Stan Breckenridge, MAS, Moderne Glass Company, PPAI Board of Directors • Trenton H. Norris, Esq., Partner, Bingham McCutchen, LLP, San Francisco • John Satagaj, Esq., PPAI General Counsel and Legislative Affairs Representative

  3. Presentation Agenda • Background Information • Proposition 65 Compliance • Enforcement and Settlements • Possible Legislative Remedies • The Next Steps: Industry Education and Action • Research and Resources • Your Questions

  4. Background Information • In 1986, California voters approved an initiative to address growing concerns about exposure to toxic chemicals • Safe Drinking Water and Toxic Enforcement Act of 1986 - Proposition 65 • California Law = National Issue?

  5. Proposition 65 Requirements • Proposition 65 requires that the Governor publish a list of chemicals known to the State of California to cause cancer, birth defects, or other reproductive harm • List has grown to include approximately 750 chemicals since it was first published in 1987

  6. Proposition 65 Requirements • Proposition 65 requires that businesses notify Californians about significant amounts of chemicals known to the State of California to cause cancer, birth defects, or other reproductive harm in the products they purchase, in their homes or workplaces, or that are released into the environment

  7. Background Information • Proposition 65 is a reality for companies doing business in California. There may be significant tangible and intangible costs associated with compliance and noncompliance with the law… • Compliance • Expense to test products • Development of alternatives to listed chemicals • Reducing discharges • Providing warnings • Non-compliance • Lawsuits, legal fees, settlements, injunctive relief

  8. What Is On The List? • Dyes and inks • Solvents • Pesticides • Prescription and over-the-counter drugs • Food and food additives • Common household products • Byproducts of certain processes • Motor vehicle exhaust

  9. What Must A Business Do or Not Do? • Businesses are required to provide a “clear and reasonablewarning” before knowingly or intentionally exposing anyone to a listed chemical • Labeling a consumer product • Posting signs at the workplace or public area • Distributing notices • Publishing notices in a newspaper • Businesses are prohibited from knowingly discharging listed chemicals into sources of drinking water

  10. What Must A Business Do or Not Do? • Any company with ten (10) or more employees that operates within the State or sells products in California must comply with the requirements of Proposition 65 • Once a chemical is listed, businesses have 12 months to comply with warning requirements • Once a chemical is listed, businesses have 20 months to comply with the discharge prohibition

  11. Who Monitors the Warnings? • Businesses do not file reports with the State regarding what warnings they have issued and why • The State does not provide specific information about any particular warning • The business issuing the warning is the party to contact for more information about the warning, chemicals involved, the manner the chemicals are present and how exposure may occur

  12. Proposition 65 Enforcement • Enforcement is carried out through civil lawsuit • California Attorney General’s Office • Any district attorney or city attorney (population above 750,000) • Private parties acting in the public interest may enforce Proposition 65 by filing a lawsuit if: • It provides notice of the alleged violation to the business and all public prosecutors; AND • No public prosecutor sues first within 60 days of the notice

  13. What Types of Promotional Products Are Most Affected? • Drink ware and glassware • Food products, including alcohol • Tableware, picnic products • Costume or children’s jewelry • Lead crystal awards, vases • Anything with an electrical cord • PVC or soft plastic • Toluene markers • Carbonless copy paper • Brass products

  14. Plaintiff’s Favorites • Toluene • Lead • Mercury • Formaldehyde • Asbestos • Chloroform • PCBs • Crystalline Silica • Cadmium

  15. Options for Dealing with Proposition 65 • Prevention and Compliance • Don’t sell products in California • Don’t sell products with listed chemicals in California • Seek alternative manufacturing and/or decorating methods • Arrange indemnities with suppliers • Provide a “clear and reasonable” warning • Seek knowledgeable legal counsel • Support legislative remedies

  16. Art Supply Clay Bricks/Cement Blocks Calcium Supplements Cheese Dandruff Shampoo Soldering Irons Fleets of Trucks Fluorescent Bulbs Hair Dye Hair Lice Treatment Jet Skis Nail Polish Nicotine Patches Parking Garages Pasta Sauces Pipe Valves Potato Chips/Fries Railroad Ties Toys Tuna Fish Vitamins Water Meters What Other Products Have Been Affected?

  17. What is an Exposure? • Exposures can be • Oral • Inhalation • Transdermal (through the skin) • Hand-to-mouth • Exposure matters (micrograms/day) • NOT concentration of the chemical (micrograms per liter or parts per million) • Average use

  18. Dealing with Proposition 65What are your options? • Provide A “Clear and Reasonable” Warning • If products contain listed chemicals, provide a warning: • That one or more listed chemicals is present in the product • That you have evaluated the exposure and concluded that it exceeds the “no significant risk” level, or • The business has chosen to provide a warning simply based on its knowledge about the presence of a listed chemical, without attempting to evaluate the exposure • In these cases, exposure could be below the Proposition 65 level of concern or could even be zero

  19. Example of Warning Label Product label provided by promotional products industry supplier CALIFORNIA PROPOSITION 65 WARNING Glassware and Ceramic drink ware with colored decorations on the exterior contain lead, lead compounds and/or cadmium which are known to the State of California to cause cancer or birth defects or other reproductive harm.

  20. Suppliers Become partners: • Eliminate the use of chemicals and processes listed under Proposition 65 • Make certain products meet the Safe Harbor levels • Communicate with distributors about the distribution of products into California • Label products accordingly

  21. Distributors Become consultants: • Work with clients to determine the suitability of a product or service including where the product will be used and distributed • Do your homework. Work with reliable and educated suppliers

  22. Seek Knowledgeable Counsel • The issues of the potential practical level of financial exposure of your company versus others involved in the transaction, the court’s jurisdiction over your company, and the merits of settlement are complicated legal questions to which there is no “one answer fits all.” Therefore you should consult with an attorney familiar with California Law and Proposition 65 about your situation.

  23. Possible Legislative Remedies • Federal legislation to preempt Proposition 65 • The National Uniformity for Food Act of 2006 • Would have amended the Federal Food, Drug, and Cosmetic Act to provide for uniform food safety warning notification requirements • Passed House, died in Senate in 2006 • New legislation in 2007? New approach? • Federal legislation to preempt Proposition 65 • Canned tuna case • Prescription drugs • State legislative action • Proposition 65 requires 2/3 majority for amendment • Amendment must “further the purposes” of the law • Ballot propositions considered

  24. Next Steps for Industry Education and Action • Additional Webinar programs in 2007 • PPAI L.A.W. Action Alerts as warranted • Coalition with other trade associations • National Uniformity for Food Coalition – More than 100 companies and organizations whose industries are impacted by Prop 65

  25. Research and Resources Learn more and take action! • PPAI LAW: www.ppa.org • Proposition 65 Legislative Alerts • Letter sample and template • March 2006 PPB President’s Perspective • May 2006 PPB Article Indecent Proposition • Proposition 65 Q&A

  26. Research and Resources Learn more: • Bingham McCutchen: www.prop65law.com • Office of Environmental Health Hazard Assessment (OEHHA—program administrator, chemical lists) www.oehha.ca.gov/prop65.html • Enforcement Reporting – CA Attorney General www.ag.ca.gov/prop65

  27. Research and Resources Learn more: • Society of Glass and Ceramic Decorators 515 King Street, Suite 420 Alexandria, VA 22314 703-838-2810 www.sgcd.org For information on test procedures for metal release from tableware, consult a recognized testing facility that is experienced with the appropriate testing procedures. SGCD does not recommend any particular laboratory.

  28. Research and Resources Learn more and take action! • PPAI LAW: www.ppa.org • Proposition 65 Legislative Alerts • Letter sample and template • March 2006 PPB President’s Perspective • May 2006 PPB Article Indecent Proposition • Proposition 65 Q&A

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