On June 3, 2019, the California Office of Administrative Law approved a regulation adopted by the California Environmental Office of Health Hazard Assessment (OEHHA) exempting chemicals in coffee from Prop 65’s warning requirement. The regulation, which has an effective date of October 1, 2019, provides:

Exposures to chemicals in coffee, listed on or before March 15, 2019 as known to the state to cause cancer, that are created by and inherent in the processes of roasting coffee beans or brewing coffee do not pose a significant risk of cancer.

While the adoption of the regulation would seem to end the ongoing controversy about whether Prop 65 warnings are required for acrylamide in coffee, and to be very good news for those who make and sell coffee, much dust remains to settle.

Background and current status of Prop 65 coffee litigation

This regulation follows an industry-wide litigation brought by the Council for Education and Research on Toxics (CERT) in which Los Angeles Superior Court Judge Elihu Berle found that coffee roasters and retailers failed to demonstrate that the levels of acrylamide – a chemical formed when coffee beans are roasted – did not pose a significant risk of cancer.

In September 2018, Judge Berle rejected the coffee companies’ request to stay the litigation during the rulemaking (as well as their first amendment argument that compelling a warning that coffee caused cancer was controversial and factually inaccurate in light of the overwhelming evidence in the June 2018 monograph published by the International Agency for Research on Cancer (IARC) on which OEHHA relied for its regulation), and set an October 15, 2018 trial date for the CERT’s request for civil penalties and an injunction. The Friday before trial was to start, October 12, 2018, the California Court of Appeal granted the companies’ request for a stay, which has been in effect since that date.

Meanwhile, on September 7, 2018, CERT filed a separate action against OEHHA, seeking to have the proposed regulation deemed invalid, for a variety of reasons. The case was originally assigned to Judge Berle, but OEHHA requested reassignment to another judge due to the fact that his original decision was based on much of the same evidence as OEHHA’s regulation, but would be determined under a different standard. The new judge, Carolyn Kuhl, stayed the litigation until the regulation was finalized, and then decided to stay the action entirely to let Judge Berle determine the validity of the regulation in the enforcement case. On June 5, 2019, OEHHA filed a writ petition in the Court of Appeal, seeking to have Judge Kuhl ordered to lift the stay and determine the validity of the regulation. CERT has yet to file a response to the writ petition.

On May 31, CERT asked the Court of Appeal to allow Judge Berle to resume handling the case so that the parties can litigate whether the regulation applies to it, and if so whether the regulation is valid. The defendants have asked the appellate court to maintain the stay so that the validity of the regulation can be decided in the case in which OEHHA is a party – the case currently stayed by Judge Kuhl. As of June 10, the Court of Appeal has yet to take any action on either request.

What’s Next?

There are a number of issues that remain unresolved, and it is quite likely that these issues will take quite some time to resolve, with appellate proceedings expected.

Procedurally, the following issues need to be sorted out:

• Which Superior Court judge–Berle or Kuhl–will decide whether the regulation is valid?

In its writ petition, OEHHA contends that it is not a party to CERT’s enforcement litigation, and it will not be bound by any decision Judge Berle makes. OEHHA contends that it should not be required to litigate the validity of the regulation before a judge it has challenged, who has already made decisions on some of the same evidence, with a different legal standard (the proof necessary for a “no significant risk” defense to a Prop 65 enforcement action vs. the proof necessary to show that a regulation is invalid because it is “arbitrary and capricious”).

• Will the Court of Appeal rule on the first amendment defense?

The defendants’ writ petition sought to have Judge Berle’s ruling on the first amendment defense reversed by the Court of Appeal. To this point, the court has simply stayed the case pending the OEHHA rulemaking. The defendants have reiterated their position that the court can and should rule on this defense.

Substantively, the following issues remain to be decided:

• Is the regulation valid?

CERT has raised a kitchen-sink’s worth of challenges to the regulation. The most sensational claim is that former Governor Jerry Brown put out a “kill order” on Judge Berle’s ruling at the coffee companies’ request, directing OEHHA to adopt a regulation to reverse the ruling. OEHHA’s position is that its regulation is eminently justified by the science, as it told the Court of Appeal in its writ petition:

As the Administrative Record supporting OEHHA’s Regulation will show, although coffee contains chemicals that have been identified as carcinogens in some contexts, there is overwhelming scientific evidence that consumption of coffee poses no increased risk of cancer; to the contrary, consumption of coffee may lower the risk of several types of cancer. (Emphasis added.)

• Does the regulation apply to the existing litigation?

Everyone recognizes that, if the regulation applies to the litigation, the case must be dismissed. Not surprisingly, CERT takes the position that because the regulation was not adopted until after the court found liability, it cannot be retroactively applied. CERT also argues that the defendants did not include the regulation in their affirmative defenses, so they cannot rely on it.

The defense has argued that because Proposition 65 is a statutory remedy, and because OEHHA is authorized to develop regulations to implement Prop 65 (including how the no significant risk defense is established), any changes that are adopted before final judgment are applicable to pending litigation under the “statutory repeal” rule. The defendants also note that their answers all raised the no significant risk defense, and that this new regulation is simply a specific implementation of that defense, such that no amendment of their answers is necessary.

• The first amendment defense.

Judge Berle rejected the defense’s attempt to renew their first amendment defense following a 2018 opinion from the US Supreme Court and a US District Court order enjoining the state from requiring Prop 65 warnings for glyphosate. The defendants asserted that any Prop 65 warning about acrylamide in coffee would not be “purely factual and uncontroversial,” given statements by IARC, OEHHA, and the US FDA that coffee does not cause cancer. As noted above, the Court of Appeal has yet to address this issue; if it does not take the issue up now, undoubtedly it will be asked to take the issue up at some time in the future.

• Has conflict preemption arisen?

FDA supported the proposed regulation. In a statement, FDA Commission Scott Gottlieb, M.D., stated:

We’ve taken this position because we too have carefully reviewed the most current research on coffee and cancer and it does not support a cancer warning for coffee. In fact, as our letter to California states, such a warning could mislead consumers to believe that drinking coffee could be dangerous to their health when it actually could provide health benefits. Misleading labeling on food violates the Federal Food, Drug, and Cosmetic Act. No state law can require food to bear a warning that violates federal law.

While Prop 65 has avoided many preemption challenges, it has been successfully challenged where its warnings are at odds with federal agencies’ positions on product labeling, most famously when the California Supreme Court upheld a finding that Prop 65 warnings for nicotine replacement therapy products was preempted by FDA’s rejection of the Prop 65 warning language in Dowhal v. Smithkline Beecham Consumer Healthcare, 32 Cal. 4th 910 (2004).

If the regulation and first amendment do not dispose of the litigation, it is likely that the defense will assert that imposing a Proposition 65 warning for coffee will irreconcilably conflict with federal law, given FDA’s  position that such a warning could mislead consumers.

Conclusion

Unfortunately, this long saga does not seem to be heading to a conclusion anytime soon. We do expect that the procedural issues will be resolved in the next 60-90 days, but likely the briefing and decision on the substantive issues will take several months longer. And, it takes no crystal ball to predict years of appellate proceedings initiated by whichever party or parties are unhappy with how the litigation plays out.