Much of the recent discussion regarding Prop 65 has been focused on the regulatory changes going into effect in August of 2018. And that makes sense since there will be significant changes to the warnings, responsibility, and labeling obligations on product websites. There is, however, other activity that may result in a more profound change as to which chemicals require Prop 65 warnings. As we have discussed in the past (see prior post here), there has been litigation in California state court addressing the appropriateness of adding the pesticide ingredient Glyphosate to the Prop 65 list. Continue Reading A Federal Court Gets Opportunity to Weigh In on Prop 65 With a Little Help from Some Friends
California’s Safe Drinking Water & Toxic Enforcement Act of 1986 (affectionately known as “Proposition 65”) has long been the subject of discussion, both pro and con. Much of the conversation is on various issues surrounding the enforcement of Proposition 65 (for example, see a prior post here). In March 2017, a California trial court in Monsanto Co. v. Office of Environmental Health Hazard Assessment (“OEHHA”), No. 16-CE CG 00183, addressed a much more basic issue: should a chemical – here Glyphosate, a key ingredient in Monsanto’s Round-Up® product – even be on Prop 65’s list of cancer-causing chemicals? Continue Reading California’s Prop 65: More Form Over Substance
We have had a huge election result, perhaps the most significant in our lifetime, potentially even exceeding what was called the Reagan Revolution. It is critical, particularly for anybody from Washington DC, to have a great deal of modesty and humility in prognosticating the future under the Trump administration even in the CPSC world. We assume, but really do not know, what the attitudes of the new Trump administration and the Republican-led Congress will be in our parochial, but critical, little product safety world.
We can understandably assume that within a year or less there will be a new CPSC Chairman and a new Republican majority on the Commission. We can also assume that this will change the direction and substance of many regulatory initiatives and maybe even some of the approaches to compliance and civil penalties.
Though we may be unsure about the future, I can say confidently that what we badly need from the outgoing Democratic majority and the yet to be defined incoming Republican majority is some perspective, restraint, and Aristotelian moderation. I hope that the current majority commissioners will not take advantage of their present but fleeting power to push through ill-conceived regulatory or compliance and enforcement initiatives. Such actions will be bitterly opposed and this Commission’s reign will end on a sour note and be subject to regulatory and congressional reversal.
On the other hand, all five of the current commissioners swore to uphold the Constitution and the laws of the United States. Those laws absolutely include CPSIA and other governing statutes of the CPSC. So the Commissioners need to, and I am confident that they will, continue to do their jobs.
There are some very important initiatives which will enhance safety and not be politically controversial. For example, I welcome Chairman Kaye’s interest in a comprehensive and interagency review of the lithium ion battery problem. We do not need to have any more spectacular safety problems to recognize that even without hoverboards and cell phones catching on fire, the increasing use and push-the-envelope application of products which use lithium ion batteries is causing lots of problems.
Indeed, the situation with respect to lithium ion batteries is even worse for smaller companies which don’t have vertical integration, don’t design batteries or battery packs, don’t have much control over their vendors, and basically have to take solutions off the shelf. Everybody in the product safety community will benefit from figuring out what combination of standards, practices, and designs we need to protect the public and thousands of businesses.
Nevertheless, the business community and the future leaders of the CPSC need to show some restraint as well. It would be a mistake to take advantage of the present politics to fundamentally reverse the key elements of the Consumer Product Safety Act, to strangle the agency with inadequate funding, or tie the agency up in knots so it cannot adequately function. This is a formula for exponentially increasing an already problematic patchwork of state and local government regulation of consumer products. It would also potentially allow for cheap, unsafe imports to flood our country and undermine significant product safety investments already made by U.S. companies.
This does not mean that nothing should be done or that the statute shouldn’t be revisited in some regards. There are plenty of ways the business community can achieve meaningful regulatory improvements and burden relief that would not cause larger issues.
I do not support crippling the CPSC. No members of industry that I have spoken with support such drastic action either. It will not be in the long term benefit of the business community and it leaves American consumers, our families and friends, less protected.
I’ve been involved in the product safety world for 30-plus years and have seen the political pendulum swing on multiple occasions. One constant is that most reasonable, informed people, whether business executives or consumer advocates, agree that a well-functioning CPSC is a critical part of a vibrant economy for consumer products in this country.
“…Clowns to the right of me, jokers to the left, here I am…”
-Stealers Wheel (1972)
Legal actions regarding “Made in the USA” claims, whether prosecuted by the Federal Trade Commission (FTC) or through various state unfair trade practices acts, often settle early in the proceedings. For example, in 2014, the FTC issued 16 “closing letters” wherein the target company agreed to revise its “Made in the USA” claim to clarify that its products, even those assembled in the United States, included imported components. In 2015, the FTC issued 28 such “closing letters”; and in 2016, to date, the FTC has issued 18.
Earlier this month, Chemence, Inc., the Ohio maker of Kwikfix, Hammer-Tite and Flash Glue, entered into a settlement with the FTC. Chemence was the third glue company that has resolved its claims issues with the FTC since 2015. Toagosei America, Inc., makers of the Crazy Glue brand, and Gorilla Glue both previously reached agreement with the FTC, with FTC issuing closing letters after both companies agreed to make clear that their products included some imported materials.
Chemence’s path to resolution with the FTC was different. Continue Reading Stuck in the Middle with the FTC
Last month, the California Office of Environmental Health Hazard Assessment (“OEHHA”) adopted new Proposition 65 warning regulations. Much of the discussions regarding these new regulations have centered on the warning requirements that become effective, after an approximately two-year phase-in period, in August 2018.
There were, however, amendments to Prop 65 settlement terms, penalty amounts and attorney’s fees in civil actions filed by private persons that became effective on October 1, 2016. These amendments have “flown under the radar” but actually may be more problematic than the proposed new warnings.
Proposition 65 permits private citizens (known by the plaintiff’s bar as “citizen enforcers”) to initiate enforcement actions, and, when they do, they are entitled to 25% of any penalties assessed by the courts and attorney’s fees. Continue Reading California Prop 65: More Unintended Consequences
Earlier this month, California’s Office of Environmental Health Hazard Assessment (“OEHHA”) issued a Notice of Emergency Action to allow temporary use of a standard point-of-sale warning message for bisphenol A (“BPA”) exposures from canned and bottled foods and beverages. This emergency rulemaking came only three weeks before California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (“Proposition 65”) warning requirements for BPA becomes effective on May 11, 2016. Several days later, OEHHA also added styrene to the Proposition 65 list as a known carcinogen.
Allegations are increasing against The Honest Company, Inc. for false and misleading marketing of its products as “all natural” and “plant-based” when they supposedly contain synthetic ingredients. The Honest Company sells personal care, cleaning, and baby products in multiple channels including at retail, online and through consumer subscriptions. The company was co-founded by the actress Jessica Alba and guarantees that its products never contain certain harsh chemicals. Last month, a proposed class action complaint was filed in the Southern District of New York against The Honest Company and then, just last week, another putative class action was filed in the District Court for the Central District of California.
In both cases, the plaintiffs allege that the company violated each state’s consumer protection laws and also allege some variation of misrepresentation, false advertising, fraud, breach of warranty, and unjust enrichment. These lawsuits have been spurred, in part, by a recent Wall Street Journal report which showed that the results of independent tests proved that The Honest Company’s laundry detergent contained a chemical the company advertised as not being in its products. Reasonable people may debate whether the timing of these class action complaints was also spurred by recent news reports that The Honest Company is working on an initial public offering with a valuation that could be over $1 billion (see Bloomberg article here). A spokesperson for The Honest Company has defended its products, stating that the “allegations are without merit.”
As readers of this blog know, plaintiffs have for several years been targeting companies that distribute foods and beverages, cosmetics, and other consumer goods like soaps and cleaning products for allegedly deceptive labeling and advertising of those products with express and implied natural claims. Although FDA has begun what will certainly be long process towards developing standards and criteria for labeling food products under its jurisdiction as “natural” (note – the comment period for this FDA request for information was extended until May 10, 2016), the lack of a comprehensive policy has left many companies that use natural and plant-based labeling vulnerable to lawsuit. For instance, any future FDA guidelines for food may not fit comfortably onto cosmetics or personal care products due to the different types of processing techniques used in those different industries. In addition, answers about whether trace amounts of a synthetic ingredient in an otherwise plant-based product may require a labeling or advertising modification have not yet been determined. As a result of these litigation risks and the regulatory ambiguity surrounding the term “natural,” we believe that companies manufacturing natural products should carefully monitor developments in this area of law. We encourage you to check-in with this blog as we continue to highlight the legal and regulatory landscape of “natural” consumer products.
We recently blogged about a new wave of class action litigation related to California’s Transparency in Supply Chains Act. In December, Nestlé USA won the dismissal of a complaint against it alleging that the company was “obligated to inform consumers that some proportion of its cat food products may include seafood which was sourced from forced labor.” See Barber v. Nestle USA. The question was whether Nestlé had a duty to disclose on its packaging the possibility that some of its suppliers or suppliers’ suppliers used illegal labor practices, particularly when it is virtually impossible to trace such practices directly to their food products. The Central District of California found that the law recognizes a “safe harbor” and that Nestlé complied with the law by providing a limited disclosure to its customers regarding the company’s efforts to ensure compliance with labor laws on its website.
It turns out that fish used in cat food is not the only product that may include sourcing from forced labor. Suppliers of cocoa used to make chocolate may be using forced labor and child labor in cocoa fields. Continue Reading Another California Dismissal of Proposed Class Action Regarding Disclosure of Forced Labor in the Supply Chain
Our colleagues Michael Arnold and Gauri Punjabi recently discussed the U.S. Supreme Court’s rejection of the Federal Rule 68 “pick off” strategy on Mintz Levin’s Employment Matters Blog. We previously blogged about this crafty strategy employed by class-action defense counsel back in November 2014. Following the recent Campbell-Ewald Co. v. Gomez decision, defense counsel may no longer argue that a rejected Rule 68 offer that fully satisfies a named plaintiff’s claims is sufficient by itself to moot an action. Under basic principles of contract law, the Court ruled, an offer of judgment once rejected has no force and parties retain the same stake in litigation as at the outset. However, this decision does not necessarily foreclose defendants from “picking off” named plaintiffs by making an actual payment for the full amount of the claim. To read more about the defeat of the Rule 68 “pick off” strategy and the actual payment option, click here.
Last year, we wrote about a growing trend of local jurisdictions regulating children’s products, primarily toys and apparel. One such jurisdiction, Albany County, NY, enacted a far-reaching ordinance, “Local Law J of 2014,” that prohibited the sale of children’s products containing seven chemicals of “high concern” (see previous blog post here). At the time, we questioned the usefulness of this type of local legislation given the existing federal (and often state) product safety regulatory framework. Now, in the face of vocal opposition to the law from industry, which included the filing of a lawsuit in federal court, the Albany County Legislature has amended the law in an attempt to address industry concerns (see Local Law P of 2015). While the amendments are a step in the right direction, many concerns over potential adverse and unintended consequences remain.