David Gabor is a shareholder at Weintraub Tobin. He is a trial lawyer and represents production companies, infomercial companies, direct response companies and multi-level marketing organizations asto both operational and compliance matters. In particular, David is focused on advertising and compliance issues, including FTC counseling and litigation, class actions, and multi-agency governmental compliance involving the marketing and sale (over multiple media platforms) of various products including educational and health-related products.
Thomas Jefferson once famously warned that, “The natural progress of things is for liberty to yield and government to gain ground.” In the current political climate, this certainly seems to be the case. Businesses are being encroached by increasing regulatory scrutiny of what they can and cannot do. This manifests itself most readily in consumer protection laws and proposed regulations that affect, among other things, the way products need to be advertised and disclaimed.
As anyone who read Upton Sinclair’s The Jungle in grade school can readily attest, some regulation is necessary as a reasonable check on unfettered commercial forces and the often unfortunate “race to the bottom” in terms of public health and safety. This article does not mean to suggest that all regulation is inherently wrong.
However, as anyone who runs a business today, particularly in California, is acutely aware, the tendency of government regulators to regulate in what is already seen as a “nanny state,” is increasing. To a certain degree, this is only logical: if a regulator’s job is to regulate, the regulator will aggressively seek to enlarge her portfolio by offering ever increasing and ever more detailed regulations. It’s a matter of self-created job security.
A prime case-in-point is California’s notorious Proposition 65 (the California Safe Drinking Water and Toxic Enforcement Act of 1986, codified at California Health & Safety Code section 25249.7, et seq.). This act, originally known in part as the Safe Drinking Water Act, has now largely transmogrified into just another advertising regulation that has little to do with drinking water, safe or otherwise. As has been commented on before in this publication, Proposition 65 has devolved into a bizarre statute where every product that contains even a trace element of any one of literally thousands of products listed on an obscure government website (oehha.ca.gov) can be the subject of a lawsuit based on imaginary exposure of “California consumers” to the alleged toxins in that product. See D. Gabor “Proposition 65 – 27-Years Later And Still No Observable Effect” here.
For years, the only saving grace of the Proposition 65 statute has been its safe harbor provision. If a manufacturer, producer or distributor was somehow either smart enough or lawyered-up enough to know about Proposition 65, it could place “safe harbor warnings” on its product. Those warnings, which are fixed by statute, state: “WARNING: this product contains a chemical known to the state of California to cause cancer [or reproductive toxicity (or both)].” Nothing more is required. When these magic words are on a product or in a place likely to be seen by consumers before the act of purchase, the product is, for the most part, legally untouchable. And that’s where the problem is from the standpoint of the Plaintiff’s bar and the regulators who too often seem to work hand-in-glove with them.
As set forth in an excellent article by my colleague, Lee N. Smith, there is now a proposed new set of Proposition 65 regulations that aims to revise the safe harbor warning label regulations. These warnings are proposed by the selfsame obscure California government entity (OEHAA) that has negatively impacted literally billions of dollars-worth of California business and is at least partly to blame for chasing some business out of California entirely.
The proposed new regulations, which require five new elements to be placed on consumer warnings, is going to simply represent a new battleground for plaintiff’s attorneys seeking to sue companies unaware of this potential enactment. Worse, should the proposal become law, it will open a Pandora’s Box of litigation regarding the exact language on not only new products coming into California, but on all of the old products that already carry existing proposition 65 safe harbor warnings. In other words, it will be another boondoggle for lawyers. The proposal would establish additional minimum required elements for warnings:
1. Use of the signal word “WARNING”;
2. Use of the word “expose” to be consistent with the language in the statute;
3. The standard (Globally Harmonized System) pictogram for toxic hazards (only for consumer products other than foods, occupational and environmental warnings);
4. Disclosure of the names of up to 12 commonly-known chemicals that require warnings, such as lead and mercury, in the text of the warning;
5. A link to a new OEHHA website to allow the public to access more information relating to the warning, including additional chemicals, routes of exposure, and if applicable, any actions that individuals could take to reduce or avoid the exposure.
Not only is this an example of fixing something that isn’t broken, it is an example of fixing something that never needed to be there in the first place. Proposition 65 has devolved into the playground of plaintiffs and defense counsel, charging clients to either sue or defend products for which California consumers are not legitimately at risk. See Gabor article, supra.
Far from protecting California consumers – except in the rarest instances – this statute has become yet another advertising compliance stumbling block for business seeking to make sales in the Golden State. If the proposed enactment becomes an actual law, everyone doing business in California will have to huddle with their counsel to ensure that they will be immunized from lawsuit under the proposed not-so-safe-harbor provisions. The regulators march on.