Comment Submissions - Notice of Proposed Rulemaking: Amendments to Article 6, Clear and Reasonable Warnings Short-form Warnings

Director Zeise, We appreciate this opportunity to provide comments to the Office of Environmental Health Hazard Assessment (OEHHA) on its Proposed Rulemaking: Amendments to Article 6, Clear and Reasonable Warnings Short-form Warnings (January 8, 2021). While we support the efforts and intentions of Prop 65, Safe Drinking Water and Toxic Enforcement Act of 1986, we oppose the current proposal for a number of reasons. The proposed Amendments represent a major change in that OEHHA is proposing to withdraw the shortform warning option for businesses less than three years after it took effect and it is in direct conflict with the Proposition 65 regulations that took effect in 2018. We invested significant time and financial resources updating our systems, product labeling, packaging and sales and marketing materials to comply with the 2018 amendments. As a mid-sized company of less than 500 employees (considered small by the SBA of the United States), we are well above the exemption for companies with less than 10 employees, yet not nearly large enough to have the resources and in-house expertise to manage all compliance requirements. This has forced us to enlist the services of third-party compliance specialists at significant cost. The current proposal will further significantly increase our direct costs of compliance. OEHHA’s Prop 65 regulations are unique to California and in the United States. By default, the agency has created a de facto national and international standard. A midsize company like us cannot afford to create and manage separate part numbers and labeling requirements for products sold outside of California and the USA. The Prop 65 labels often cause significant confusion and issues with sales outside the USA. OEHHA should be more judicious in creating labeling obligations and legal exposures. It appears the only alternative considered by OEHHA was to repeal the shortform warning altogether, but the agency acknowledged this would be impossible when there were packaging size constraints. In its Initial Statement of Reasons (ISOR), the agency stated, “OEHHA has determined there are no reasonable alternatives to the proposed regulatory action that would carry out the purposes of the Act” (ISOR, p. 16). This conclusion seems to have been reached in a vacuum given that OEHHA did not rely on any studies or reports (ISOR, p. 15) and did not solicit public comment. The OEHHA states in the proposal that “The proposed regulatory action will not have a significant adverse economic impact directly affecting businesses, including the ability of California businesses to compete with businesses in other states. The action does not impose any new requirements upon private persons or businesses because the safe harbor regulations are non-mandatory guidance.” (ISOR, p. 16). This statement is false. OEHHA has failed to acknowledge that many companies, ours included, will need to invest significant time, money, and resources in understanding the changes, retooling product labeling and packaging, and revising catalogs and websites. These are direct costs. The reference to “non-mandatory” regulations is nonsense. Companies relied on OEHHA to uphold the regulations it implemented in 2018 which included a safe-harbor warning option. The list of Prop 65 chemicals keeps growing. In 2018, this list was over “900” chemicals. Less than three years later, it is over “1,100” chemicals and growing. We do not challenge that there are many chemicals that may pose a potential toxic risk if not handled correctly. Rather, the public also deserves context for the exposure risk. Simply referencing a chemical name on a warning label provides little context or value. Further, OEHHA should recognize that companies face a significant burden in tracking the constantly expanding list of chemicals and considering whether it is applicable to their products. The expansion provides additional opportunities for bounty hunters to pursue claims. OEHHA does not adequately explain how it arrived at 5 square inches or less as being the surface area permitted for a short-form warning label. The agency did not publish an analysis. The warning must now include the listing of at least one chemical. Simultaneously, OEHHA removes the short-form label as an option for catalogs and websites. There is no accompanying analysis justifying OEHHA’s conclusion that mandating a long-form for catalogs and websites is necessary or practical in all cases. Prop 65 is a well-intentioned 1986 California ballot initiative that has a significant flaw: California has deputized private parties to be the primary enforcers. The private attorneys receive a portion of the fine or settlement ultimately assessed on the alleged violator. Under the law, fines can run up to $2,500 per day, per violation. For many faced with Prop 65 cases, known as “bounty hunter” suits, it can feel like a shakedown because Prop 65 lawsuits are expensive to fight, and defendants often settle quickly to avoid the high cost of litigation. Many times, it is questionable as to whether there has been a violation of the law since there may be limited consumer exposure to the specific chemical. The burden of proof is on the defendant to prove an absence of risk or exposure, or reasonable warnings, rather than the plaintiff to prove that risk or exposure has occurred. OEHHA does not raise the issue of private party abuses while the agency seeks to rescind the proposed short-form warning option for many companies. OEHHA fails to acknowledge that the number of private enforcements keeps rising year after year costing companies tens of millions of dollars. The claims are pursuits of profit, not public interest. For the reasons provided above, we respectfully urge OEHHA to withdraw its proposed short-form warning rule changes. Thank you for this opportunity to provide comments. George Lathouris