Prop. 65 Reform on California’s Agenda.

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Last month, California Governor Jerry Brown unveiled his proposed reforms to Proposition 65, the 27-year-old law passed by voter initiative to protect Californians from harmful chemicals. Gov. Brown directed the California Environmental Protection Agency (“Cal/EPA”) to work with the legislature to improve the law and put an end to the proliferation of abusive “shakedown” lawsuits. Prop. 65 is best known for requiring clear warnings about chemicals known to the state to cause cancer or reproductive harm, often seen in retail stores and restaurants and on many consumer products. Like several other landmark environmental laws, Prop. 65 permits private citizens acting in the public interest to enforce the law by suing violators. Under the current law, unscrupulous lawyers are incentivized to bring Prop. 65 lawsuits because they may be able to recover all attorneys’ fees plus damages of up to $2,500 per day, or otherwise extract settlements with little proof of a meritorious claim.

The governor’s reform package includes:

  • capping attorney’s fees;
  • requiring plaintiffs to make a stronger showing of a violation before bringing suit, as well as other disclosures;
  • limiting the amount of money from an enforcement action that can go into settlement funds (as opposed to penalties);
  • authorizing the state to adjust the level at which warnings about reproductive harm are required; and
  • making more useful information available to the public on chemical exposure and protection.

The governor’s announcement adds to growing momentum in the legislature to reform Prop. 65. Assemblyman Mike Gatto introduced legislation this session which would allow business owners to avoid a costly lawsuit or settlement by paying a $500 fine and correcting the violation within 14 days after receiving a notice of violation. The bill, AB 227, has passed the state Assembly and this week was approved by the Senate committee on environmental quality; the Senate judiciary committee will consider it on Tuesday, June 25.

DTSC: Cost of Safer Consumer Products Rules Is Unknowable.

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The agency charged with implementing California’s Safer Consumer Products (“SCP”) regulations has concluded that the program’s costs cannot be determined until the rules are in place.

The Department of Toxic Substances Control (“DTSC”) released its Economic and Fiscal Impact Statement [PDF] for its proposed SCP regulations on May 22. DTSC cited the SCP program’s “number of unknowable factors” in explaining why the agency could not estimate the number of businesses affected or the total costs to the private sector.

The agency characterized the proposed rules as “process regulations” which would not directly affect any products or chemicals, and thus would not have any significant impacts on the private sector.

As we have previously discussed, the proposed SCP regulations create a system for prioritizing and evaluating chemicals in products with the goal of limiting exposure or reducing hazards posed by a chemical of concern.

DTSC noted that an Economic and Fiscal Impact Statement – along with other standard elements of the rulemaking process – would be completed for each product-chemical combination that the agency proposes to list as a Priority Product. Thus, specific costs and benefits would be identified and evaluated in a piecemeal, product-by-product manner.

The agency also argued that impacts could not be accurately estimated in part because of the flexibility built into the SCP program, which offers many options to both the regulator and the regulated community. For example, if a certain product is listed as a Priority Product, the manufacturer (or other responsible entity) may choose whether to conduct an Alternatives Assessment, stop using the chemical of concern, replace the product, or remove it entirely from the California market. DTSC will not be able to determine its own regulatory response – with its attendant costs – until after the manufacturer makes its “selection decision.”

The DTSC’s Economic and Fiscal Impact Statement did not provide an estimate for the number or percentage of impacted businesses which constitute small businesses; the agency explained that it had not determined the extent of information it needs to request from companies in order to implement the SCP regulations. Nevertheless, DTSC concluded that only “insignificant” costs would be incurred by those companies which choose to provide information requested by the agency.

Likewise, DTSC claims that no businesses or jobs would be created or eliminated by the proposed rules since they are “process regulations.” DTSC also asserts that the rules will not negatively impact California businesses’ competitiveness because the “process regulations” would not by themselves directly increase the cost of producing any particular product.

The 15-day comment period for the Economic and Fiscal Impact Statement is open through June 6, 2013. The agency’s public notice, containing additional details on commenting, is available online [PDF].

California’s New Revisions to Proposed Safer Consumer Products Regulations Released.

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Last week, California’s Department of Toxic Substances Control (“DTSC”) released the revised proposed regulations implementing the Safer Consumer Products law. The 15-day public comment period for the revised proposed regulations is open through April 25, 2013. The revised text, as well as an underline/strike-out version showing changes from the January 2013 version, is available online.

Notably, the revisions contain several changes affecting Alternatives Analysis. The definition of “Alternatives Analysis Threshold” now means the Practical Quantitation Limit or another applicable concentration limit which DTSC may specify. Under the new provision at §69503.5(c), DTSC may set a threshold concentration in a proposed or final Priority Products list for any Chemical of Concern that is an “intentionally added ingredient.” Under this provision, DTSC may also specify a threshold concentration higher than the Practical Quantitation Limit for any Chemical of Concern that is a contaminant. In addition, the revised regulations move the requirement for identifying factors relevant to comparing a Priority Product and alternatives (such as adverse public health impacts or physical chemical hazards) from the second to the first step of the Alternatives Analysis process. The new § 69505.8 provides that Final Alternatives Analysis Reports will now be subject to a public comment period, instead of the Preliminary Alternatives Analysis Report. The responsible entity will not be required to respond to all public comments, but instead will only have to address issues identified by DTSC upon review of the comments in an “AA Report Addendum.”

The revised proposed regulations change the definitions of several other key terms. The definition of “assemble” was revised to clearly specify repair and maintenance activities, and “manufacturer” now means anyone who “specifies the use of chemicals to be included in the product,” rather than anyone who has the capacity to do so. “Reliable information” has been re-defined to include only information that could be considered “scientific.” The definition also now specifies that the information must meet certain criteria – such as publication in a scientifically peer reviewed report or by a government agency “that implements laws governing chemicals” – which under the previous version were only considered as indicators of a study’s trustworthiness.

In addition, the revisions removed the provision requiring manufacturers to compensate retailers participating in any end-of-life collection program. In its summary of changes [PDF], DTSC states that these costs will instead be addressed by agreements between manufacturers and retailers.

For more information about California’s Safer Consumer Products Regulations, contact Verdant Law.

Verdant Proudly Sponsors Prop.65 Clearinghouse's Green Chemistry Conference

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Green Chemistry:

Verdant is pleased to announce its sponsorship of the Prop.65 Clearinghouse Green Chemistry Annual Conference.  This year’s conference will be held on Tuesday, April 9, 2013, at the The City Club of San Francisco, 155 Sansome Street.

  • Verdant attorney, Philip Moffat, will present on “REACH 2013.”
  • Verdant attorney, Catherine Lin, will present on “Supply Chain Management.”

More information about the conference is available here and an agenda is available here.   A copy of Mr. Moffat’s presentation is available here [PDF].

Reminder: DTSC Reschedules Meeting on Results of Information Call-In for Carbon Nanotubes

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Nanotechnology:

Due to state budget constraints, the California Department of Toxic Substances Control (DTSC) has had to reschedule its August 13 meeting on carbon nanotubes (CNTs) and other nanoscale chemicals substances and materials.  No new date has been provided.

DTSC was co-sponsoring the meeting with the US Environmental Protection Agency (EPA) and the University of California, Los Angeles.  The sponsors had planned to discuss the results of the CNT information call-in that DTSC recently completed, future activities by DTSC on nanomaterial call-ins, and U.S. EPA efforts related to carbon nanotubes and future regulatory plans for nanomaterials.

Although readers can register here to attend in-person or via teleconference, no new date for the event has been provided.