Ceramic Industry

Legislative Issues: Proposition 65 Is Alive And Well

October 26, 2000
California's Proposition 65 has been a continuing problem for various segments of American business, including the ceramic industry. Over the last few months it has manifested itself in several actions that can impact the industry. Everyone who does business in California (and who doesn't?-it constitutes 15% of the U.S. economy) needs to stay current on how it is being used and interpreted.

What is Proposition 65?

Proposition 65 is a California state law known officially as "The California Safe Drinking Water and Toxic Enforcement Act of 1986." It does not ban any products, but it does require warnings to consumers. Some retailers in California will not carry products that require Proposition 65 warnings, so if a product requires a warning it may lose shelf space.

The warnings are mandated if certain chemicals are known to the state of California to cause cancer, birth defects or other reproductive harm. Currently there are hundreds of chemicals on the list, including lead and cadmium, as well as others that are used in producing various ceramic products.

A major problem with Proposition 65 is the manner in which it can be enforced. The State Attorney General may bring actions to enforce it. The real problems, however, develop mainly from a "Robin Hood" provision that also allows private citizens to sue. Those bringing private Proposition 65 actions need not have been harmed by the product, or even to have acquired it. If a private action is successful, the party instituting the suit can be awarded considerable sums and be compensated for all legal fees and costs.

Due to the potential financial awards from such private actions, several groups and lawyers in California specialize in looking for and instituting Proposition 65 cases. Procedurally, a private party contemplating a Proposition 65 legal action must first notify the State Attorney General and give the Attorney General the opportunity to take over the case.

Of particular interest in the ceramic industry is a Proposition 65 action the State Attorney General brought in 1991 against several producers of ceramic foodware. The Attorney General alleged that various types of ceramic foodware contained lead that could expose consumers to reproductive injury. It was further alleged that no warnings of this exposure had been given to consumers.

The case was settled in 1993. The settlement adopted a rather complicated compliance program that mandates various consumer warnings, such as product stickers, point of sale signs and packaging inserts, as well as periodic testing and reporting by the producers of the ware.

Retailers Can Be Targeted

Certain recent developments under Proposition 65 are giving many business people concern because of the broad impact it can have. A few months ago an environmental group, the Mateel Environmental Justice Foundation, gave notice to the California Attorney General that it was going to institute an action against a number of retailers for failing to provide Proposition 65 warning notices in connection with the sale of lead crystal tableware. The foundation claims that the retailers have failed to give warnings to those who drink from such items. Last year the same group also instituted a Proposition 65 action relating to crystalline silica.

What is troubling to many about the latest action involving crystal tableware is that it has been brought against retailers, not the producers of the ware. Proposition 65 could be interpreted to make those who sell goods just as responsible as those who manufacture the items. This type of action puts pressure on retailers and seeks to hold them responsible for goods they did not produce, goods that could well comply with all federal standards and goods that have not been associated with any injury to anyone.

Federal Preemption

The Proposition 65 problem in California has prompted some groups to seek a federal preemption so that if a federal agency has set standards for particular products, a state could not require "warnings" related to more onerous standards. This summer a bill sponsored by U. S. Senator Pat Roberts (R-KS), with substantial bipartisan support (37 co-sponsors), was reported on favorably by the Senate Agriculture Committee. Committee approval is an important step in legislative enactments. As drafted, it would apply only to items regulated by the FDA, but it is an important first step towards preemption of Proposition 65.

If congressional action is not forthcoming, Proposition 65 vigilantism will continue, with the possibilities of large payouts by those who are found in violation.