How can California Prop 65 affect my business?

Prop 65 is the 1986 voter-approved Safe Drinking Water & Toxic Enforcement Act that includes a a list of Chemicals known to the State of California to cause cancer and/or reproductive toxicity. If a product contains a listed chemical, then the product must contain a “clear and reasonable” warning label informing consumers of the presence of the chemical and stating the chemical is known to cause cancer, birth defects, or other reproductive harm.

Although companies with fewer than 10 employees are exempt, if they sell a violative product to a retailer with more than 10 employees, the retailer could receive a notice of violation. In these circumstances, retailers usually rely on clauses within their contacts with importers that require the importer take responsibility for the violation.

A plaintiff may seek injunctive relief requiring a company caught selling a violative product to suspend sales, conduct a recall, or reformulate the product. Plaintiffs can also obtain penalties of up to $2,500 per violation per day. A more general California statute allows most successful plaintiffs to recover their attorneys’ fees as well.

Many are now choosing to rely on 3rd party testing companies to verify that hazardous substances are not being used in their products.