OK, let's get moving here. In the next of our seemingly endless series of posts on the new warning regulations (going into effect in August, 2018) we'll talk about the changed rules on owners' manuals and use and care guides, and some new and different rules about product retailers:
Warnings in Manuals Are No Longer Sufficient
The current regulations provide that a product warning can appear on the “label or labeling.” The regulations define “labeling” very broadly as “any label or other written, printed or graphic matter affixed to or accompanying a product or its container or wrapper.” Based on this, it has been completely appropriate, and lawful, to place the warning in the manual or use and care guide. Indeed, in 2005, in Environmental Law Foundation v. Wykle Research, California's Court of Appeals held that a product insert (which is, in a way, a mini-manual) was "labeling," and a warning placed there was sufficient if it met the "conspicuousness" requirements of the regulations.
However, OEHHA, the lead agency, decided it didn't like warnings in manuals, because they might not be read before purchase -- even though the key to Proposition 65 compliance is a warning that is read before exposure, not before purchase. So, while retaining the “labeling” definition for other purposes, OEHHA used the new regulations to eliminate “labeling” as a location for warnings, requiring either a label with one of the long warnings or an “on-product” label with one of the truncated warnings. The regulations also permit product-specific shelf signs or tags at each point of display of the product. So it seems quite clear that starting in August, 2018, companies will no longer be able to comply with the safe harbor warning regulations by placing the warning on an insert or in a manual.
Much more to come after the jump.
New Rules Affecting Retailers
Generally speaking, Proposition 65 and the regulations are designed to send the warning requirement obligations as far up the distribution chain as possible, casting heavier burdens on manufacturers and distributors than on retail sellers. The new regulations in some ways are even more specific that way. But they also contain a number of changes that potentially place much more burden on retailers, and potentially provide a way for manufacturers and distributors to shift the burden of warning from themselves to retailers.
As discussed in an earlier post concerning product warnings, when a product is sold on line, the new regulations require on-line warnings. Since it is mostly retailers who sell on line, this warning requirement by necessity falls on retailers. And yet, while in most instances only a retailer can provide an on-line warnings, other new provisions, discussed below, seem to insulate retailers from liability in many instances; this begs a question: if a retailer does not provide an on-line warning, can the manufacturer or distributor be held responsible? We think not.
There is another and more novel twist, however. Under the new regulations, a manufacturer or distributor can meet its warning obligations “by providing a written notice directly to the authorized agent (specifically defined by the regulations) for a retail seller having ten or more employees. The notice must (1) state that the product may result in an exposure to one or more listed chemicals; (2) include the exact name or description of the product, or specific identifying information, such as a UPC code or other identifying designation; (3) include all necessary warning materials such as labels, labeling, shelf signs or tags, and warning language for products sold on the Internet. The manufacturer or distributor must receive electronic or written confirmation of receipt of the notice sent to the retailer.
The notice has to be renewed (and confirmation received) within six months during the first year after August, 2018, and annually thereafter. An additional notice is required within 90 days if warning of a different chemical or disease endpoint (e.g., cancer or reproductive toxicity) is included.
A retailer with ten or more employees is to be held responsible for failure to give product warnings only under the following circumstances:
- The retailer owns or licenses the brand or trademark for the product;
- The retailer has knowingly introduced the chemical into the product, or caused it “to be created in the product;”
- The retailer has covered, obscured or altered a warning label;
- The retailer has received a notice and warning materials from someone upstream (e.g., manufacturer, distributor, etc.) and has failed to provide warning.
- In addition, a retailer is responsible if it has “actual knowledge” of the potential consumer exposure and there is no upstream source having ten or more employees and an agent for service or place of business in California.
A retailer has “actual knowledge” if it receives a sixty day notice and is still selling the product five business days later.
Manufacturers and distributors can enter into a written agreement with retailers as to who provides the warning, which will supersede the regulations, but only if the consumer receives a warning, so this ability to make a superseding agreement is fairly meaningless.
As we continue to drone on about this subject, in our next post we will talk about environmental exposure warnings, non-English language warnings and non-Safe Harbor warnings.