By Ann Grimaldi and Jennifer Karpinski Singh
If your business is currently using Proposition 65 warnings pursuant to a consent judgment, take heed: You may need to modify the judgment to address business, not legal, pressure to use the new warnings recently established under the new safe harbor warning regulations that go into effect August 30, 2018.
California law has long required businesses to provide clear and reasonable warnings prior to exposing individuals to chemicals placed on the Proposition 65 list. However, recent shake-ups in what defines “clear and reasonable” are changing the liability landscape for businesses selling products in, or destined for, California. On August 30, 2016, the Office of Environmental Health Hazard Assessment (OEHHA) adopted new safe harbor warning regulations, which become effective and enforceable on August 30, 2018. As of that date, the safe harbor warnings that have been in place since 1988 will no longer provide shelter, and their continued use may subject companies to liability.
The new safe harbor warning regulations do not affect warnings required under court-approved settlements such as consent judgments. In other words, companies subject to consent judgments may (and indeed, must) continue to use the warnings the consent judgments require. Nevertheless, consumer product manufacturers and suppliers may face demands, from their business customers, that the new warnings be used. Such demands may arise from a number of reasons, such as limitations in how the business customer is able to tailor warnings on its own website. In many cases, particularly with larger retailers, such businesses customers simply do not want to deal with a hodgepodge of warnings due to different suppliers being subject to different settlement requirements.
Thus, one scenario that is particularly ripe for confusion is one in which a product manufacturer or distributor previously entered into a consent judgment regarding its warning requirements and now seeks to reconcile those warnings with the new safe harbor regulations. Although consent judgments do protect such businesses from enforcement actions arising out of the new regulations, it is often in the company’s best interest to make the covered warnings consistent with the new requirements. To achieve that goal, the parties may stipulate to a modification, or move the Court for an order modifying the consent judgment.
Grimaldi Law Offices recently moved for and obtained such an order, which granted the modification of a consent judgment that was previously entered in settlement of a Proposition 65 claim. Our client was sued for allegedly failing to provide warnings for purported lead exposure. The parties settled the claims, and a consent judgment was entered, requiring the seller to provide a particular warning for the products covered by the settlement. The specified warning language was closely patterned after the regulatory safe harbor warnings text previously in effect.
Although our client is not legally required to change the covered warnings, it desired the flexibility of using the new safe harbor warnings, including the new short form “on-product” warning, for a number of reasons. Among these is its need for a single, uniform warning system. In other words, the client wished to use the same warning across all relevant products, whether or not the product is covered under the Consent Judgment. Utilizing a single system of warnings across all product lines is financially sensible, more efficient to implement, and less subject to error.
In fact, the client’s business relationships essentially required it to use the same warnings that its competitors – and everyone else – will be using. In our online-centric market, retailers seek to provide a consistent message to the ultimate purchaser, thereby minimizing confusion and regulatory non-compliance. For all parties in the California chain of sale, the safest maneuver is to utilize the language that has been deemed “clear and reasonable” under the law. To avoid confusion and future liability, potential customers may simply deselect businesses using “expired” warning language, and instead choose a company that uses the new compliant language. In effect, a consent judgment may inadvertently serve as a restraint on a company’s ability to freely compete on a level playing field.
With the Court’s recent order, our client has effectively steered clear of these concerns. It is now positioned to comply with the new warning regulations while simultaneously streamlining the implementation of its Proposition 65 warning program across the board. Many other businesses are in a similar boat, i.e. covered by a consent judgment that might prove unwieldy and ineffective in this evolving market.
If your company is covered by such a consent judgment, consider the possibility that it may be in your best interest to seek a modification of that Judgment. Indeed, modification may be the most efficient route toward streamlining your company’s compliance, while accommodating your customers’ demands and helping avoid future liability actions.
Jennifer Karpinski Singh, now with Grimaldi Law, has practiced in a broad range of civil litigation since her graduation from the University of North Carolina School of Law in 2005. She has primarily focused on products liability and has successfully defended clients and secured summary judgments in state and federal courts throughout the United States. She is an active member of the California State Bar and the Illinois State Bar.
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