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Pour a Cup of Prop 65 Absurdity

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The coffee warnings case illustrates the law’s perverse results.

By Dennis Raglin

Thousands of Prop 65 violation notices have been served on companies selling foods, drinks and supplement products to California consumers. Millions of dollars have been paid in penalties and attorneys’ fees to resolve these matters.

California’s Proposition 65 was enacted in 1986 by the voters through a ballot initiative written by a public interest lawyer. (Health & Safety Code section 25249.5, et seq.) It requires warnings where certain chemicals are in products sold in California unless the defendant can prove the chemical is not present in the product at a level that causes harmful exposure. The law allows private enforcer “bounty hunter” plaintiffs who, in addition to a portion of penalties a company must pay, receive attorneys’ fees they incur, an amount that exceeded $20 million dollars last year. Over 30 years later, the law has only metastasized to go after more industries, the latest example being cannabis dispensaries, and often with absurd results.

Nothing exemplifies this more than the recent trial involving the chemical acrylamide in coffee. The court’s ruling finding Prop 65 regulations require warnings on roasted coffee has been a disaster and is emblematic of all that is wrong with Prop 65.

1. Bureaucrats Make and Interpret Prop 65 Law

Prop 65 has become so far reaching because of the interpretations and actions taken by the state agency that enforces the law and writes the regulations interpreting its provisions – the Office of Environmental Health Hazard Assessment (OEHHA). In many ways the agency has written regulations that have run amok, even in the face of former Governor Jerry Brown bemoaning Prop 65’s “shakedown lawsuits” and calling for the agency to use its regulatory powers to reform the excesses of the law. That did not happen. The agency has created some almost-impossible-to-meet safe harbor levels for chemicals. The strict level of the chemical acrylamide is part of what sank the coffee defendants.

2. Prop 65 Regulations Can Lead to Warnings Where None are Required

The coffee case is CERT v. Starbucks (Los Angeles Court Super. Ct., case no. BC435759.) It was filed in 2010 naming several companies involved in brewing coffee. Plaintiff claimed that the amount of acrylamide in coffee exceeded the level set in the regulations. Plaintiff also sought penalties allowed in the law for past and current sales of the coffee. Acrylamide is one of the approximately 900 chemicals contained on a list maintained by OEHHA whose exposure is believed to cause either cancer or reproductive harm.

Acrylamide is formed when starches are cooked, including French fries, potato chips and the roasting of coffee beans. Both the fast food companies and potato chip manufacturers have had their turns in the Prop 65 funhouse and entered settlements and paid penalties. The “safe harbor” for this chemical is a miniscule .2 micrograms per day, meaning, unless a settlement or trial establishes a different number, warnings are required if exposure (drinking a cup(s)) exceeds this number.

Prop 65 2The coffee defendants submitted evidence that consuming coffee did not cause cancer and, in some cases, consuming coffee helps reduce the risk of some cancers. The defendants also argued that they could establish an “alternative safe harbor level” allowed by the regulations based on an exception establishing the chemical is necessary to make the food palatable. (Title 27 section 25703(b) CCR.).

In a March 2018 ruling, the judge rejected the defendants’ position and held that the regulation required that to prevail on the defense they had to prove a number higher than the state agency safe harbor number was safe for coffee that was to be consumed. This had to be done with a “qualitative risk assessment”, which requires an expert to conduct certain exposure analyses and render an opinion, and thereby prove a minimum amount of the chemical in coffee was necessary to make it palatable. He held absent that warnings would be required and that the defendants would pay penalties to plaintiff and the state for failing to warn. (Decision After Trial, March 28, 2018.)

3. Nullifying the Court’s Ruling

Warnings on coffee when the evidence from international bodies and the FDA says otherwise and notes that it may help reduce the risk in some cases? OEHHA, knowing what a disaster this ruling is, has proposed a new regulation that would reverse that decision. On June 15, 2018, OEHHA proposed the following regulation: “Exposures to chemicals in coffee, listed on or before March 15, 2019 as known to the state to cause cancer, that are created by and inherent in the processes of roasting coffee beans or brewing coffee do not pose a significant risk of cancer.” (Proposed Adoption of New Section 25704, March 15, 2019.) While the rulemaking process goes forward the court’s decision is stayed.

4. No Nullification for Other Cases?

Nothing crystalizes the frustration of industries contending with this law better than the coffee case saga. The coffee defendants presented significant evidence in their defense and the judge felt compelled to follow the unforgiving and often confusing regulations. There are hundreds and hundreds of cases where these same regulations, because of the complexity and need for experts to prove an exposure assessment defense, and because of the uncertainties of taking these cases to trial (as just seen in this case), have forced companies to settle and agree to reformulations, placing warnings or even ceasing sales in California. Many agree to these remedies even when they have good evidence that the products do not need warnings. These defendants do not have the wherewithal to hire a team of lawyers and endure nine years of litigation expense. And, as we just saw, sometimes even then that is not enough to prevail. While coffee is getting a bailout by OEHHA’s reversing the court decision, what of the thousands of other products that will not benefit from one?

Prop 65 and its regulations are here to stay. They often cause perverse results. If the legislature is unable to make more than minor changes to the law over the years, and if a governor cannot get his own agency to reform its regulations, the future is unfortunately more of the same. The best practice is always to know your products and supply chain and learn what chemicals you are dealing with. And stay vigilant on compliance, with both the latest in Prop 65 and ever-changing state and federal chemical laws in general. Then, consider whether warnings, even with all the issues they bring, make sense as protection from claims.

Longer term, if you are not part of an industry or trade association, it is worth considering joining and becoming more active in one. As the coffee case demonstrated there is strength in pooling resources and its trade group though was a powerful voice.

Dennis Raglin is a shareholder with Buchalter, APC in Los Angeles. He is chair of the Chemical Law and Prop 65 Group and counsels clients on compliance with Prop 65 and other state and federal chemical regulations and defends Prop 65 cases in litigation. He also chairs the Medical Device and Pharmaceutical Group.

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