Assembly Bill 227 – An Ineffective Attempt To Reform California's Proposition 65

Assembly Bill 227 – An Ineffective Attempt To Reform California's Proposition 65

The 60-day notice provision of Proposition 65 was allegedly modeled after several then existing (1986) Federal environmental statutes. OEHHA: Final Statement of Reasons for Section 12903 (5/14/97) at http://oehha.ca.gov/prop65/law/903fsr.html. Like Federal law, Proposition 65's notice provision was and is meant to provide an opportunity for State or local prosecutors to undertake the legal action in lieu of "private enforcers."

Proposition 65, like most environmental laws, provides for injunctive relief. However, it is a long established general principle of equity that if the responsible party takes corrective action to cure the problem, then absent a showing of a likely continuance of the violation, injunctive relief will no longer be available. Paul v. Milk Depots, Inc. (1964), 62 Cal. 2d 129, 133; Ratterree Land Co. v. Hutton (1935), 4 Cal. 2d 100, 101 & 102; § 3532 California Civil Code.

However, one virtually never sees a case in which a Proposition 65 defendant contests a request for injunctive relief on the grounds that the alleged violation has become moot. As noted in more detail hereinafter, the likely primary reason is that determining whether the potential for an exposure has been abated is, under the current legal framework, extraordinarily difficult, especially given some of the bizarre exposure scenarios that are so popular with plaintiffs.

Further, there is no case law that affirms this general principle in the context of either a public or private enforcement of Proposition 65. Adding to the complexity of real world Prop. 65 actions, most private plaintiffs insist on some form of injunctive relief as the "price" of any settlement, often configured as a consent judgment, to be assured that the defendant will not engage in prohibited conduct in the future, even if there is no reason to so conclude. One may speculate that one reason that plaintiffs insist on such injunctions is to provide a rationale for their attorney's fees, which are part of any settlement that must be reviewed by the Court. Section 25249.7(f)(4&5) California Health & Safety Code.

Into this void has stepped AB 227 (introduced Feb. 4, 2013). See http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB227&search_keywords. This bill would allow a person who receives a 60-day notice to correct the alleged violation within 14 days after receipt of the notice. Further, to obtain such relief, the recipient must demonstrate within this 14-day period to a State or local prosecutor in whose jurisdiction the notice is filed that the violation has been corrected. The bill would then prohibit an enforcement action from being commenced if the public prosecutor concurs that the violation has been corrected. While the goal of the legislation is laudable, in the context of real-world Proposition 65 litigation, it does not provide a realistic remedy to what is a very significant problem.

Proposition 65 has a lofty goal, incentivizing manufacturers, distributors, wholesalers and retailers to reformulate their product so that consumers are not needlessly exposed to listed chemicals. Beginning with the Notice and Certificate of Merit required to initiate an action, the question is exposure (what is the dose of a listed chemical from the consumer's use of the product?). The Office of Health Hazard Assessment regulations make plain that normal use by average consumers is the paradigm to be applied in assessing an exposure. 27 California Code of Regulations §§ 25602(b) & 25821(c)(2).

But how is a business enterprise to know whether such an exposure may be taking place given that the 60-day Notice and Certificate of Merit create the illusion that often bizarre and unrealistic usage circumstances cause a violation of the law. I have had plaintiff's experts opine during deposition, without any relationship to the reality of how a product is used, that it would be lovingly held and used for many many hours on end (at least some of which would, of course, be by sweaty hands that will remove a listed chemical from a product and thereafter contaminate food, resulting in an
ingestion or inhalation), and even placed on the floor for a baby to lick like some precocious puppy.

Again, normal use by the average consumer is the standard. But without the assistance of legal counsel, a sophisticated analytical laboratory, and a toxicologist (and frequently other experts, such as statisticians), it takes time (certainly more than 14 days) to ascertain if normal use by the average
consumer results in an exposure than exceeds the warning threshold. Even if such an assessment is made, what assurance does the business entity have that the specified enforcement authorities will concur with the evaluation? The thesis that all this will happen in 14 days begs credulity. The only realistic option for the business entity, if facing such a short deadline, is to offer to take the product off the California market, pay the "greenmail" demanded by the plaintiff to "settle" the case, or take the matter to trial. This is a brutally difficult choice when it is recognized that California is a huge market. Using 2011 data, at least one study states that California has 12% of the U.S. population, and accounts for 13% of the nation's output. See http://www.lao.ca.gov/reports/2013/calfacts/calfacts_010213.aspx. Depending on whom one believes, California is either the eighth or ninth largest economy in the world.

Thus, a legislative solution requires two separate components. First, sufficient funding needs to be provided to OEHHA so that it can develop either regulations or guidance for ascertaining exposure to consumers from a product. The second prong would be a program like that proposed in AB 227, but with a much more realistic time-frame to undertake the assessment and present it for evaluation. In this day and age of tight budgets, there should be a fee charged for such an assessment so that the gate-keepers of the determination will deal with what is likely to be more than a few requests.

In the interim, business entities subject to a Proposition 65 60-day notice need to understand how the game is played, and what practical options are available to them to defend against such claims.

As a general rule, how do plaintiffs demonstrate exposure? They have generally undertaken a lab test that takes a piece (or pieces) of the consumer product, dissolves them in an acid strong enough to extract a listed chemical from vitrified glass (which EPA wants used for the long-term storage of nuclear wastes), and then measures the presence of the listed chemical. Plaintiffs claim that there is an association between the quantity of a listed chemical in a product and exposure. This is not factually correct. Material science makes plain that the matrix of substances composing the
product or its relevant parts within which the listed chemical is present determines whether the listed chemical can be "liberated" by consumer activities or not. Yet, this fundamental fact of science is never addressed in nearly any Prop. 65 cases. This twisted logic even shows up in
settlement agreements, where SOP is to have "standards" set at some seemingly arbitrary concentration number. In the real world these numbers have little, if any, relationship to an actual exposure because the key element in determining whether an exposure will occur is the make-up and structure of the product (at the molecular level) and the quality of its creation and manufacture.

Plaintiffs will also trot out their "NIOSH wipe test", and allege that it mimics the handling of the product by a consumer, a claim allegedly supported by work done by the Federal Trade Commission. Not true. Not surprisingly, such proof is never produced at deposition. Research has shown, in fact, that FTC studies have often found no correlation between wipe tests and what is removed by actual consumer handling. In one assessment, the FTC study showed that a wipe removed between 5-times and 13-times more lead from the product than the actual handling of the product by people, depending on whether the wipe was wet or dry. There is little or no truth to the allegation that wipe tests are the same as handling by people.

Let us assume that a prima facie case can be made and that challenges to the qualifications of plaintiff's experts (another consideration that can often prove productive) have fallen short. How does one show exposure? Working with a variety of experts, we have developed a six step test methodology that in fact measures exposure.

Step Number 1. Identify the presence of the alleged listed chemical. Because the distribution of a listed chemical is often not uniform, we put a strong acid on a cloth and rub it in discrete small sections of the product. We then analyze the results in order to learn how the listed chemical is distributed over the product. Sometimes it is uniformly present; sometimes, it is not.

Step 2. With knowledge of how the product is handled or used and where the listed chemical is present on the product, we then develop a protocol for the handling of the product in a manner that mimics real world conditions.

Step 3. Using a variety of samples of the product (to reduce the likelihood that any one sample is an "outlier"), we have real people first clean their hands and thereafter handle the product to simulate a potential exposure. We then remove the chemicals from their hands and determine the exposure to the listed substance.

Step 4. After several days have passed so that the tester's hands have recovered and are more au naturel, we repeat the exposure study and have samples of the product handled by different individuals. We use the same group of individuals (though each will handle different products than the one done in the first round of testing). We again analyze the result by removing the listed substance from their hands as a result of this second round of testing.

Step 5. At this point we have a data set. In some cases, the results show that the amount on the tester's hands was less than the amount triggering the warning requirement. For example, when we recently tested a "plastic" product that contained lead in the plastic, all the samples showed that the amount of lead on the hands of the testers was less than the 0.5 mcg. level. With this result we could definitely state that there was no warning requirement triggered because even if 100 percent of the lead on the hands made it inside the body, the exposure level was less than that triggering the warning requirement.

Step 6. In some cases the amount present on the hands will be more than the warning threshold. At that point we engage in some sophisticated modeling, based on standard data sets, of how the listed substance might be transferred from the hands to (for example) the mouth where it would be ingested. Since all such transfer actions are less than perfect, there are losses all along the way. This transfer assessment may also result in the conclusion that the exposure is less than the warning threshold trigger.

This type of testing requires careful attention to detail and execution. One must scope out potential confounding factors and address them with scientific measures to assure that the results are not skewed; attention to detail and QA/QC must be exquisite. Complex statistical assessment of test design and results may also be necessary. But, that is what it takes to actually measure whether an exposure (dose from use) will occur. All the surrogates commonly used are very much flawed, especially those commonly employed by plaintiffs.

This process which is described herein also eliminates the use of extreme examples of hypothetical exposure scenarios as a basis for litigation. Although such scenarios are popular with plaintiff's experts, they are not part of the law. As stated beforehand, the OEHHA regulations make plain that normal use by average consumers is the paradigm to be applied. 27 C.C.R. §§ 25602(b) & 25821(c)(2).

Thus, AB 227 does not go nearly far enough in addressing the huge gaping hole in Proposition 65, standardization of exposure measurements. This hole is rather ironic since the literal language of Proposition 65 is all about exposure, not the concentration of a listed chemical within the components of a product. Much more needs to be done than the limited agenda of AB 227.

An earlier version of this article was published in the March 19, 2013 issue of the California Daily Journal. Copyright 2013.