California Finalizes Clarifications to Retailer/Supply Chain Prop 65 Warning Provisions
On January 14, California’s Office of Environmental Health Hazard Assessment (OEHHA) issued a final rule aimed at clarifying the regulations governing retailer and supply chain responsibility for providing warnings under Proposition 65. These provisions (found in Section 25600.2 of Article 6 of the Prop 65 regulations) are intended to provide greater certainty as to the business responsible for providing Prop 65 warnings, but continue to engender confusion in practice.
The 2016 amendments to the warning provisions of Prop 65 attempted to limit potential retailer burdens by providing manufacturers (and distributors) with two basic compliance options: (1) affix an appropriate warning to the product; or (2) provide written notice to the retailer regarding the required warning for the product. The manufacturer/distributor then must obtain confirmation of the retailer’s receipt electronically or in writing. Retailers that receive such a notice are only liable if they fail to post, obscure, or alter a warning provided to it. Retailers also may be liable for products sold under their own brand name or if they have “actual knowledge” that a warning is required for a product and there is no other potentially responsible party.
In November 2018, OEHHA proposed a series of changes to this retailer/supply chain liability framework (an updated proposal was issued in October 2019). In response to comments, OEHHA made several changes to the proposed rule (which was summarized in an earlier blog post) and adopted the following amendments:
First, OEHHA has amended the regulations to allow manufacturers and others in the supply chain to satisfy their obligation by providing written notice and warning materials either to the retailer or to the business to which they directly sell or transfer the product (i.e., the next distributor in the supply chain), if that business is subject to Prop 65 (i.e., distributors or retailers with less than 10 employees are exempt from Prop 65 and would not satisfy this criterion). The original rule only provided that such notice be sent to “the authorized agent for the retail seller.” The revision responds to business concerns that “the original manufacturer, distributor, importer, or others in the chain of commerce may not know where or by whom the product will ultimately be sold to a consumer.”
Second, OEHHA clarifies that where a business has not designated an authorized agent to receive Proposition 65 notices, the notice may be served on the business’s legal agent for service of process.
Third, OEHHA expands on the concept of “actual knowledge” that may trigger retailer responsibility for providing a warning by emphasizing that such knowledge can come from any reliable source. The regulations adopted in 2016 stated that retailers must provide a warning when they have “actual knowledge of a potential consumer product exposure and there is no manufacturer, producer, packager, importer, supplier, or distributor of the product who is subject to the act, and who has a designated agent for service of process or a place of business in California.” The new rule clarifies that “actual knowledge” means that “the retail seller receives information from any reliable source that allows it to identify the specific product or products that cause the consumer product exposure. Such knowledge must be received by the retail seller, its authorized agent or a person whose knowledge can be imputed to the retail seller.”
Further details on the latest OEHHA amendment to the Prop 65 warning regulations is available here.