California's Proposition 65 Is Unfair to Food and Beverage Processors

Aug. 31, 2021
2020 was a record-breaking year, with more than 3,500 notices issued, an increase of 46% from 2019.

The Safe Drinking Water and Toxic Enforcement Act (Proposition 65) began as a pro-consumer law in 1986—the outcome of a California ballot initiative which, unfortunately, has spiraled into a cash cow for bounty hunter plaintiffs and left consumers confused by and desensitized to Prop 65 warnings.

Prop 65 prohibits manufacturers and retailers from knowingly and intentionally exposing consumers in California to chemicals “known” by the state to cause cancer, birth defects or reproductive harm without first providing a clear and reasonable warning. The state Office of Environmental Health Hazard Assessment (OEHHA) regulates and administers Prop 65.

For starters, the inclusion of several of the chemicals covered by Prop 65 is based on little or no science. In addition, the law includes a private right of action provision allowing individuals and organizations to bring enforcement proceedings even if they have suffered no harm or have not purchased the products in question. As a result, brands face a phalanx of what amount to private attorneys general effectively deputized by the state to enforce Prop 65.

The incentives for private enforcement are massive: a 25% bounty on the civil penalties available (up to $2,500 per unit sold), recovery of attorneys’ fees and burden-shifting that simply requires the private enforcer to demonstrate the mere presence of the chemical.

Not surprisingly, Prop 65 pre-litigation notices of violation affecting consumer packaged goods, particularly food and beverage and dietary supplements, have steadily increased over the years. 2020 was a record-breaking year, with more than 3,500 notices issued, an increase of 46% from 2019.

In May 2020, the Consumer Brands Assn., the umbrella association representing the consumer packaged goods industry, led the charge against bounty hunter enforcers by alerting Gov. Gavin Newsom to the significant rise in notices during COVID-19, the detrimental impact on the supply chain and the aggressive enforcement by new, out-of-state private enforcers. The letter specifically requested that Newsom issue an executive order extending the 60-day notice period.

In response, the California attorney general issued a letter to private enforcers of Proposition 65 requesting that they delay proceeding with litigation if requested by alleged violators and contact the office if they were unable to do so.

For more than a decade, Consumer Brands has advocated for reasonable regulation of naturally occurring, heat-formed chemicals in foods under Prop 65. OEHHA and the courts have long recognized that Prop 65 chemicals are ubiquitous in food and that applying the statute to food creates unique issues that require special treatment to avoid unintended and detrimental consequences. However, challenges remain.

In the past several years, there has been an explosion of private enforcement activity related to chemicals such as acrylamide, which has expanded to furan and furfuryl alcohol. Since 2016, private enforcers have issued at least 982 notices of violation to manufacturers and retailers regarding acrylamide in foods, resulting in $11.6 million in settlement payments as of this May.

In response to Consumer Brands’ efforts, OEHHA proposed a regulation in August 2020 that would establish an exemption from Prop 65’s warning requirement based on a feasibility standard for all unavoidable chemicals formed by cooking and heat processing. The regulation would also provide safe harbor maximum concentration levels for acrylamide in certain foods.

Working with a broad coalition of stakeholders, Consumer Brands and the California Chamber of Commerce submitted a detailed comment letter focusing on the urgency and necessity of the rule as well as OEHHA’s clear authority to establish safe harbor concentration levels for heat-formed carcinogens in foods.

Consumer Brands has long been a champion of smart regulations that protect public health, build consumer trust, foster innovation and maintain affordability of essential CPG products. As CPG companies navigate the patchwork of state regulations, Prop 65, however, continues to confound consumers, create warnings detached from science and require a disproportionate amount of time, attention and resources from companies to fend off frivolous lawsuits. Consumer Brands will continue to unite and educate key stakeholders on the shortcomings of Prop 65 and work towards regulatory solutions that promote choice and enhance safety for consumers.

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