California Prop 65 updates pose aftermarket liability risks
Sacramento, Calif.—On Aug. 31, California’s Prop 65 will be updated with regulations that will affect the automotive aftermarket supply chain, from manufacturers to distributors, to repair facilities and retailers.
Businesses making and selling products in California that fail to comply with the rule are liable to civil penalties of $2,500 per day for each violation, said Kevin C. Mayer, partner and attorney with Crowell & Moring, and the burden of proof has shifted in the new regulations to businesses.
Enacted in 1986, Prop 65 is intended to help Californians make decisions about protecting themselves from chemicals known to cause cancer, birth defects, or other reproductive harm. Products that can potentially expose individuals to listed chemicals must contain a “Prop 65 warning.”
Some of the new requirements also include a warning symbol with distinct specifications, a description of the endpoint of the exposure and a Web address to the Prop 65 warnings website, as well as a specification for the font size/text of the warning label. The regulation requires that those warnings be made before the item is purchased, not just prior to the potential exposure.
Increased liability risk
Prop 65 is a “strict liability scheme,” which means liability without fault. “It doesn’t have to be shown that someone was negligent in failing to provide a warning, it simply has to be shown that a warning was required and wasn’t given,” said Mayer, who presented a webinar, “California’s Prop 65: Technical and Legal Compliance Requirements You Need to Know,” sponsored by the Auto Care Association and CAWA (California Automotive Wholesalers’ Association).
“Everyone in the distribution chain can potentially face liability in that circumstance. A completely innocent party, who is not involved in the manufacturing of a product and not given notice of the need to warn, may have a defense against a plaintiff,” though that has yet to be proven out, he said.
The Office of Environmental Health Hazard Assessment (OEHHA), which administrates Prop 65, has named more than 900 chemicals, including ingredients or additives in a variety of products as caution-causing chemicals. The new protocols will require businesses to identify at least one listed chemical that could be encountered in their products.
Suppliers need to determine if their products contain dangerous chemicals that a person could be exposed to either by inhalation or skin exposure, and if that exposure exceeds a particular safety threshold, before a decision is made to warn customers with Prop 65 warning or not.
“The concentration of a chemical that is present within a product, or based on an activity within a workplace, is the amount that is available for a person to be exposed to,” Mayer said. “We’re concerned about the level of exposure before it can be determined if a Prop 64 warning is required. It’s important to note that products are more likely not to pose a risk of cancer or reproductive toxicity.”
Hard parts, such as an ABS sensor that uses chemicals in its plastics, wouldn’t typically pose a risk, for example, because exposure would be limited to the time of installation only, and would be highly likely to be under the threshold, Mayer said. “However, if the supplier is unsure that the exposure is below the threshold, then they would be advised to place a warning on the product.”
If a business is selling retail products, then Prop 65 applies to them, as well. “If a repair shop is going to sell a product directly to a consumer — as opposed to merely putting it in their vehicle where the owner won’t be exposed to it — then the shop has an obligation to comply with Prop 65 if it presents a health risk,” he said.
Mayer explained that everyone within the commercial chain of distribution has the responsibility to provide the Prop 65 warnings. “If you are upstream, you can satisfy your obligation by providing the warnings on the product or packaging, or by providing the warnings to those downstream.”
If the obligation is passed on from manufacturers to distributors or retailers, then an explicit notification in writing, either by letter or email, must be provided that indicates what product or products are required to have warnings.
“Most importantly, the actual warning material must also be provided that complies with the regulations before it’s sent further down the supply chain. Written confirmation must also be obtained from those downstream that they have received the instruction materials. Doing so will provide suppliers a defense if a consumer buys a product from a retailer who was instructed to provide the warning and didn’t.”
If a company was deliberately disregarding Prop 65 and potentially exposing someone with a product, then there could be criminal ramifications, Mayer said.
Suppliers must first determine if Prop 65 applies to their products and to what degree. “We recommend an audit of products and any associated risks under Prop 65 to gain a reasonable assumption of what is likely contained in them, whether they are sourced from the U.S. or overseas.
“Understand what your obligations are and plan accordingly. Be ready when August 31 rolls around.”