We at Grimaldi Law Offices hope that our friends and clients, and their families, are safe and well during these unprecedented, and painful, times.
Here, we offer advice on what a company should do when it receives a Proposition 65 Notice of Violation. Given the current crisis our nation – and world – are going through, this advice may seem like an unnecessary distraction. But in March 2020, as the Covid-19 crisis was escalating, we saw almost double the number of Notices of Violation compared to the same time period in 2019. With private enforcers stepping up their targeting of businesses, and increasing their monetary demands in settlements, this, unfortunately, is no time to let your guard down.
California boasts the fifth largest economy in the world, making it a lucrative market for business. Why, then, was the state ranked dead last in the Business Friendliness category (legal and regulatory climate) in a recent CNBC survey of America’s Top States for Business in 2019? There is little doubt that Proposition 65 enforcement plays a significant role in making the state a challenging place to do business.
What is Proposition 65?
California’s Proposition 65 (Prop 65) requires businesses with 10 or more employees to provide a clear and reasonable warning before exposing individuals to any chemical on the Proposition 65 list known to cause cancer, birth defects, or other reproductive harm. This applies to any company doing business in California, whether based in the state or not.
Although every entity in a supply chain may be liable under Prop 65, recent regulations clarify that the primary responsibility for providing warnings rests with manufacturers, producers, packagers, importers, suppliers, or distributors of consumer products. These businesses must either (1) provide a warning on the product labeling, or (2) provide their direct customers (including retailers) with a written notice and warning materials to notify consumers.
Prop 65 is enforced through civil lawsuits, which may be brought by specified public enforcers or by private persons in the public interest pursuant to the law’s citizen suit provision. Any company found to be in violation of this law can be assessed a penalty of up to $2,500 per day, and may be required to pay a plaintiff’s attorneys’ fees.
Prevalence of Prop 65 Notices of Violation
In 2019, there were 2,406 Prop 65 Notices of Violation (NOVs) filed in California — that’s more than nine filed every business day of the year. In 2020, there have been 1299 through the end of May — an average of nearly 9 per day, including weekends and holidays.
Clearly, the aggressive pursuit of enforcement actions under Prop 65 are showing no signs of slowing down since the more onerous warning obligations under the new regulations went into effect in August 2018 – or since the Covid-19 crisis began.
7 Things Your Business Should Do Upon Receipt of a Prop 65 NOV
- Don’t ignore the NOV, since that only puts the company in greater potential legal jeopardy. These letters can look like junk mail – they’re definitely not.
- Evaluate the NOV: does it identify a product that the company actually sells? Does it properly identify the company?
- Understand who the plaintiff’s attorney is. Different Prop 65 plaintiff attorneys approach enforcement in different ways, and it’s important to know with whom you are dealing.
- Consider reaching out to the Attorney General’s office during the 60-day notice period; that office receives all NOVs and reviews them to determine whether or not they are adequate and whether that office, as the primary enforcer of Proposition 65, will step in to file suit. They may have information they can share about the NOV.
- Consider putting warnings on the products as soon as possible to mitigate the accumulation of penalties, if any. This is a double-edged sword, though, so this decision should not be taken lightly or without the advice of an experienced Prop 65 attorney.
- Consider testing the product and/or conducting an exposure assessment to determine if the plaintiff’s claims are valid. There are pros and cons to this approach, and such technical work should be conducted under the supervision of an experienced Prop 65 attorney.
- Which brings us to this final thing to do: Retain an experienced Prop 65 defense attorney. Prop 65 claims are highly technical, and addressing them requires knowledge and experience of what the law requires and potential pitfalls in defending against a claim.
Grimaldi Law Offices has been advising clients for over 20 years on chemical and product law. For knowledgeable advice and in-depth analysis on your Prop 65 compliance obligations, contact Grimaldi Law Offices at (415) 463-5186 or email us at [email protected].
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