LA judge rules that coffee requires a Proposition 65 warning for acrylamide

By Jeff Margulies (US) on April 12, 2018 Posted in California Proposition 65

On March 28, 2018, Superior Court Judge Elihu Berle issued a proposed statement of decision that would require coffee roasters and retailers to provide Proposition 65 cancer warnings for coffee sold in California.

What the case is about

Plaintiff Council for Research and Education on Toxics (CERT) asserts that approximately 70 coffee roasters and retailers are required to provide cancer warnings for exposure to acrylamide in coffee. Acrylamide is listed as a carcinogen based on laboratory animal studies, but has not been proven to cause cancer in humans. Acrylamide is not added to coffee, but is formed in a complex chemical reaction when coffee is roasted (as is the case with other foods such as French fries and potato chips, in which acrylamide is formed when they are baked or fried).

Prop 65 liability issues

Once a plaintiff demonstrates an exposure to a listed chemical, Prop 65 puts the burden on defendants to demonstrate that the amount of exposure to a carcinogen such as acrylamide falls below the level at which a warning is required. For carcinogens, that level is defined as the no significant risk level, which is a default level of one excess case of cancer in 100,000 persons exposed. A business may seek to apply an “alternative significant risk level” (ASRL), where justified by “sound considerations of public health.” One such consideration is the so-called “cooking exemption”: “Where chemicals in food are produced by cooking necessary to render the food palatable or to avoid microbiological contamination.”

Phased dispute

The decision followed an initial phase of trial, in which Judge Berle found that the roasters failed to prove that:

the level of acrylamide in coffee was below the NSRL;
requiring a Proposition 65 warning for exposure to acrylamide in coffee violated the First Amendment by imposing misleading speech because coffee use was not associated with an increased risk of cancer, and was actually associated with a decreased risk of certain cancers; and
the Proposition 65 warning requirement was preempted by federal law.

Before the second phase of trial, the court granted summary adjudication to the plaintiff, finding that virtually all of the defendants knowingly and intentionally exposed individuals to acrylamide in coffee without providing a warning, on at least one occasion.

The second phase

The issues remaining to be tried were the ASRL defense, and the issues of civil penalties and injunctive relief, if the defendants did not prevail. In the first part of this phase, the parties submitted expert testimony on the ASRL defense.

The defense argued that the “cooking exception”—where chemicals in food are produced by cooking necessary to render the food palatable or to avoid microbiological contamination—supported a de facto defense, since acrylamide was formed during the roasting process. Roasting is both necessary to render coffee palatable and to destroy microbiological contamination. The defense argued alternatively that substantial epidemiological literature supported the concept that coffee had significant health benefits, justifying a lower risk level, and relied in part on the testimony of former FDA Commissioner David Kessler to support this argument. The defense also introduced testimony about the amount of the exposure based on testing of over 500 samples of coffee performed at Covance Laboratories and analyzed by an expert in exposure assessment. Plaintiff presented no evidence to counter this evidence.

Judge Berle rejected the defense’s assertion that the cooking exception was sufficient to avoid liability without quantifying the amount of the exposure. He also rejected Commissioner Kessler’s testimony about alternative risk levels, and the defense’s exposure assessment evidence, finding that the Covance data was not shown to be reliable because it was a novel technique that the scientific community has not yet generally accepted. He alternatively found that the Covance lab director and the expert were not credible, although he did not explain his reasoning on these findings.

Going forward

The defense will file objections to the proposed statement of decision shortly, although there is no reason to believe that Judge Berle will change his decision. The final phase of the dispute is not yet completed, as there will be a trial for the court to take evidence on the issues of civil penalties and injunctive relief. The potential exposure in this case is astronomical, with millions of units of coffee sold each year, and a maximum penalty of up to $2,500 per violation per day. It is anticipated that plaintiff will move for an injunction requiring the defendants to provide Proposition 65 warnings pending the conclusion of the case and appeal. There is no date yet set for this remedies phase, which could take upwards of two months to complete, based on the number of companies involved in the litigation.

The year in review: cosmetics remain target of California VOC enforcement

By Will Troutman (US) and Shirley Kim (US) on February 4, 2018 Posted in Recent legislation and regulations

A year-end review of the California Air Resource Board’s published enforcement settlements highlights that cosmetics remain a priority for ARB under the General Consumer Products Regulation, which limits the amount of volatile organic compounds (VOC) in consumer products.

The General Consumer Products Regulation

The ARB General Consumer Products Regulation sets VOC limits (percent by weight) for a variety of consumer products, including hair styling products, personal fragrance products, and nail care products. Covered consumer products may not be sold, supplied, offered for sale, or manufactured for sale in California unless they meet the applicable limit.

For strict liability offenses, penalties can be assessed at up to $5,000 per day, or up to $10,000 per day, but at this higher maximum, the alleged violator may assert an affirmative defense that the violation was not the result of intentional or negligent conduct. Generally, ARB seems to pursue the $5,000 threshold for strict liability violations. Negligent violations are subject to $25,000 per day per violation.

(As a quick aside, the Legislature recently amended the Health and Safety Code to increase the maximum for strict liability violations from $1,000 to 5,000 per day, effective January 1, 2018).

ARB enforcement

ARB’s process for enforcement starts with market surveillance, in which it purchases products, tests them for VOC content, and upon finding a violation, initiates an informal investigation. This includes requesting sales data from the domestic manufacturer, importer, or private labeler, as well as any mitigating information. ARB will then propose a penalty settlement amount based on the following formula, and this proposal serves as the starting point for negotiations.

For first time violations, ARB has developed an administrative penalty formula based on excess tons of VOC emitted from the offending product. Under this approach, ARB seeks a penalty of $22,000 per excess ton of VOC. The floor for de minimis violations tends to be $3,000. For repeat violations or first time violations with aggravating circumstances, ARB will use the “per day” penalty scheme set forth above, seeking penalties for each day the product was available for sale in California. ARB will base the per day penalty amount on a sliding scale, taking into account various penalty factors, including past violations, remedial measures, and economic hardship. ARB has published an enforcement policy document outlining its approach to enforcement.

Cosmetics settlements

Since 2016 (we are fudging the “year in review” concept a little bit to provide more meaningful data), ARB has settled 23 cases involving cosmetic products, primarily for hair styling products and nail polish removers. The alleged violations ranged from 0.078 to 9.81 tons in excess VOC emissions (there was one de minimis violation, which we assigned a tonnage of 0.001), and the penalties ranged from $3,000 to $199,500:

In 17 out of the 23 settlements, ARB reduced the penalties for first time violators who cooperated in ARB’s investigation. ARB also factored in economic or financial hardship to reduce penalties in three settlements.

All told, ARB collected nearly $650,000 from cosmetics manufacturers and private labelers during that span (for reference, ARB collected a total of $1.3 million in 2016 from all Consumer Product regulation settlements combined).

E-A-G-L-E-S EAGLES!!!!

New security requirements issued for credit card payments on mobile devices

By Will Troutman (US) on January 30, 2018 Posted in General

Check out this new post from my colleague, Sue Ross, covering new standards for mobile device credit card payments, including at retail stores. The Payment Card Industry (PCI) Security Standards Council recently announced the new standards, which apply to PIN entry transactions on smartphones and tablets used at point-of-sale. The post is published in Norton Rose Fulbright’s Data Protection Report.

Trump FDA relaxes FSMA enforcement

By Will Troutman (US) on January 10, 2018 Posted in Food & Drug Administration

On Januay 5, 2018, the FDA announced that it will relax enforcement of the Food Safety Modernization Act in specified areas. Our colleagues at the Norton Rose Fulbright Health Law Pulse have put together a brief summary and analysis explaining the announcement, which is likely to have impacts on retailers and their food contact substance suppliers.

CPSC finalizes phthalate rule that may cause headaches for imports

By Will Troutman (US) and Andy Guo (US) on December 20, 2017 Posted in Consumer Product Safety Commission, Recent legislation and regulations

The U.S. Consumer Product Safety Commission has finally published its Final Rule on phthalates. CPSC first proposed the rule nearly three years ago, and its publication brings to eight the number of phthalates included in CPSC’s consumer product safety standard for children’s toys and child care articles.

The rule is effective April 25, 2018 – but in a move that is likely to have serious implications for importers of record, it applies to children’s toys and child care articles domestically manufactured or imported on or after that date, regardless of date of manufacture. These products will need to be tested for all eight phthalates by a third party CPSC-approved testing lab and certified as compliant by the manufacturer or importer of record. Importers of record will need to consider how to approach certification if they import products with significant gaps between time of manufacture overseas and importation.

What changed?

The current version of Section 108 prohibits the phthalates DEHP, DBP, and BBP in concentrations above 0.1 percent (1,000 parts per million) in children’s toys and child care articles. CPSIA defines a children’s toy as “a consumer product designed or intended by the manufacturer for a child who is 12 years old or younger for use by the child when the child plays.” It defines a child care article as “a consumer product designed or intended by the manufacturer to facilitate sleep or the feeding of children age 3 and younger, or to help such children with sucking or teething.”

The Final Rule now also restricts the following five phthalates to 1,000 ppm:

DINP
DIBP
DPENP
DHEXP
DCHP

Import disaster

With regard to the issue of import date, in its rulemaking file, CPSC stated that it “expects that the rule will require minimal changes for manufacturers and testing laboratories. Therefore 180 days from publication in the Federal Register should be sufficient time for the rule to take effect.” On the contrary, we expect CPSC and CBP will have a mess on their hands in April.

Proposition 65 Listed Chemical update

By Jeff Margulies (US), Will Troutman (US) and Shirley Kim (US) on November 12, 2017 Posted in California Proposition 65

Here is the latest roundup of Proposition 65 chemical issues looming on the horizon for consumer products. Reminder: warnings are required 12 months after the listing effective date, assuming that there is an exposure, and the exposure exceeds the level that requires a warning:

Listed effective Oct. 27, 2017:

N,N-Dimethylformamide (DMF), CAS No. 68-12-2, used in leather tanning, production of plastics and acrylic fibers, and manufacture of adhesives, synthetic leathers, and surface coatings.
2-Mercaptobenzothiazole (MBT), CAS No. 149-30-4, used in vulcanization of rubber and dopamine beta-hydroxylase inhibition, and used for antibacterial and antifungal purposes.
Tetrabromobisphenol A (TBBPA), CAS No. 79-94-7, used as a reactive flame retardant to produce a bromine-containing epoxy resin and polycarbonate, an intermediate for synthesis of other complex flame retardants, and an additive flame retardant for ABS, HIPS, unsaturated polyester rigid polyurethane foams, adhesives and coatings.

Listed effective Nov. 10, 2017:

Perfluorooctanoic acid (PFOA), CAS No. 335-67-1, surfactant used in a variety of consumer products, including carpets, textiles, leather, non-stick cookware, and paper coatings used in food packaging, to confer stain, grease and water resistance; PFOA is used in the production of fluorpolymers.
Perfluorooctane sulfonate (PFOS), CAS No. 1763-23-1, surfactant used in a variety of consumer products, including carpets, textiles, leather, non-stick cookware, and paper coatings used in food packaging, to confer stain, grease and water resistance.

California enacts law requiring cleaning product ingredient disclosures

By Will Troutman (US) and Andy Guo (US) on October 25, 2017 Posted in Recent legislation and regulations

California has enacted Senate Bill 258, the “Cleaning Products Right to Know Act of 2017.” SB 258 requires cleaning product manufacturers to disclose the ingredients of their products to consumers. The bill is a victory for disclosure advocates after many failed attempts at a California “right-to-know.” The first disclosure requirements take effect for products manufactured on and after January 1, 2020.

Disclosure Requirements

SB 258 requires ingredient disclosure in two ways – online disclosures and product labeling. Manufacturers must comply with both requirements, although the compliance dates are phased in.

Online disclosures

Manufacturers of cleaning products sold in California must post the following information on their websites for each product:

A list of “intentionally added” ingredients in the product;
A list of all “nonfunctional constituents” present in the designated product at a concentration at or above 0.01 percent (100 parts per million);
The Chemical Abstracts Service (CAS) chemical identification number for all listed chemicals;
The functional purpose served by each intentionally added ingredient;
Hyperlinks to government information websites for chemicals, such as the Office of Environmental Health Hazard Assessment Proposition 65 consumer information website; and
A hyperlink to the Safety Data Sheet (SDS) for each product.

An “intentionally added” ingredient is a chemical that a manufacturer has added to a designated product that has a functional or technical effect. “Nonfunctional constituents” are “incidental component[s] of an intentionally added ingredient, a breakdown product of an intentionally added ingredient, or a byproduct of the manufacturing process that has no functional or technical effect on the designated product.”

This requirement applies to designated products sold in California on or after January 1, 2020, unless they are manufactured prior to that date and are marked with the manufacture date (date codes are permissible). In addition, designated chemicals appearing on the California Proposition 65 list do not need to be listed on the website until January 1, 2023.

Product labeling

Manufacturers of cleaning products sold in California must also include on the label for each product:

A list of “intentionally added” ingredients in the product that are currently listed on any of a number of well-known lists of designated toxins, carcinogens, chemicals of high concern, etc.; and
The manufacturer’s toll-free telephone number and internet web site address.

The Act specifically identifies 23 chemical lists, including:

California Proposition 65;
Washington Department of Ecology’s PBT chemicals;
Chemicals included in the EU Candidate List of Substances of Very High Concern (SVHC); and
Carcinogens identified by the International Agency for Research on Cancer (IARC).

The labeling requirement does not apply to contaminants, in contrast to the online disclosure requirement.

If a manufacturer cannot list all of the required information on the label, it must provide a statement directing consumers to a web address or toll free number for complete ingredient information. Manufacturers may also provide information via developing consumer information technology, such as QR codes or other electronic links.

Who must comply?

SB 258 applies to “manufacturers” of “designated products.”

A “manufacturer” is a “person or entity who manufactures the designated product and whose name appears on the product label” or a “person or entity who the product is manufactured for or distributed by, as identified on the product label under to the federal Fair Packaging and Labeling Act.”

A “designated product” is a “finished product that is an air care product, automotive product, general cleaning product, or a polish or floor maintenance product used primarily for janitorial, domestic, or institutional cleaning purposes.”

Exemptions

SB 258 does not apply to:

Foods, drugs, and cosmetics, including personal care items such as toothpaste, shampoo, and hand soap;
Industrial products manufactured for and exclusively used in:
- Oil and gas production.
- Steel production.
- Heavy industry manufacturing.
- Industrial water treatment.
- Industrial textile maintenance and processing other than industrial laundering.
- Food and beverage processing and packaging.
- Other industrial manufacturing processes.

Exceptions for “Confidential Business Information”

The Act provides some slight exceptions for “confidential business information,” but does not permit CBI claims to cover a chemical ingredient appearing on any of the designated lists of chemicals identified as causing harm to human health or the environment and certain fragrance allergens. Beyond those designated list chemicals, an ingredient may be protected as CBI if it is “a claim [that] has been approved by the United States Environmental Protection Agency (US EPA) for inclusion on the Toxic Substances Control Act (TSCA) Confidential Inventory, or for which the manufacturer or its suppliers claim protection under the Uniform Trade Secrets Act.” The CBI provisions are complex and should be consulted in detail when assessing compliance approaches to the Act.

Requirements for Employers

SB 258 also adds a requirement for employers to make the ingredient information listed on a manufacturer’s website available to employees in the workplace if the employer is already required to make safety data sheets/SDS readily accessible employees.

Enforcement

SB 258 does included a specific enforcement provision, and more general enforcement provisions in the Health and Safety Code appear to be inapplicable. At a minimum, we could see the Attorney General or district or city attorneys enforcing violations under California’s Unfair Competition Law, but we will be on the lookout for more guidance from the state on enforcement.

Oregon children’s product reporting instructions and portal go live

By Will Troutman (US) on October 13, 2017 Posted in Green chemistry, Recent legislation and regulations

With less than three months to go before the first biennial reporting deadline, the Oregon Health Authority has opened its reporting portal and issued instructions for reporting under the Oregon Toxic Free Kids Act. The Act requires manufacturers (or importers into the state) to report the existence of “High Priority Chemicals of Concern for Children’s Health” (HPCCCH) contained in children’s products offered for sale in Oregon, if the HPCCCH are intentionally added above de minimis levels or are present as contaminants above 100 parts per million. The first reporting deadline is January 1, 2018, for all covered products sold offered for sale or sold in the state in 2017.

Manufacturers are “any person that produces a children’s product or an importer or domestic distributor of a children’s product.” An importer is “the owner of the children’s product.”

“Children’s products” are:

(A) Any of the following products that are made for, marketed for use by or marketed to children under 12 years of age:

(i) A product designed or intended by the manufacturer to facilitate sucking, teething, sleep, relaxation, feeding or drinking.

(ii) Children’s clothing and footwear.

(iii) Car seats.

(iv) Children’s cosmetics.

(v) Children’s jewelry.

(vi) Toys.

The Act specifically exempts a number of products, ranging from athletic shoes with cleats/spikes to bicycles to scooters.

The reporting form and required information appear to track closely to the Washington Children’s Safe Products Act. Key differences are that:

Reporting entities must pay a $250 fee for each HPCCCH reported, regardless of how many different products contain that HPCCCH; and
There is NO exception for inaccessible components.

To report, a manufacturer/importer must first fill out a “Notice Template” identifying:

Manufacturer/importer
Product brick
Component name
Chemical name and CAS number of each HPCCCH
Concentration range
Chemical function
Target age
Number of bricks sold in Oregon in 2017; and
Number of bricks offered for sale in Oregon in 2017.

The Notice Template is a downloadable spreadsheet.

Second, the manufacturer/importer must submit the appropriate fee amount (by check or credit/debit) to the OHA (as noted above, each HPCCCH requires a $250 payment, regardless of how many product bricks contain that HPCCCH).

Finally, the manufacturer/importer must go to the OHA reporting portal to upload and submit the completed Notice Template and payment receipt ID.

California Governor signs Proposition 65 amendment

By Jeff Margulies (US) on September 26, 2017 Posted in California Proposition 65

Updating our prior post, California Governor Jerry Brown has signed the Proposition 65 amendment bill. As of January 1, 2018, Proposition 65’s certificate of merit requirements will be amended to:

Require the Attorney General to send a letter to the private enforcer and the recipients of the 60-day notice when the Attorney General has reviewed the certificate of merit and determined that there is no merit to an action;
Make the basis for the certificate of merit discoverable in litigation, to the extent that the information is relevant to the subject matter of the action and not subject to the attorney-client privilege, the attorney work product privilege, or any other legal privilege.

You can read more about the bill here.

California legislature seeks to clarify Prop 65 certificate of merit discovery rules

By Jeff Margulies (US) on September 18, 2017 Posted in California Proposition 65

The California Legislature has done something it’s found exceedingly difficult to do since Proposition 65’s adoption by ballot initiative 31 years ago: amend the law.

For only the third time since 1986, the Legislature has made substantive revisions to Prop 65 that focus on the private enforcement mechanism.

Since 2001, private enforcers who serve a pre-suit notice alleging a violation of Prop 65’s warning requirement must include with the notice a “certificate of merit.” The certificate must recite that the enforcer:

has consulted with one or more persons with relevant and appropriate experience or expertise who has reviewed facts, studies, or other data regarding the exposure to the listed chemical that is the subject of the action, and that, based on that information, the person executing the certificate believes there is a reasonable and meritorious case for the private action.

Private enforcers must also attach “factual information sufficient to establish the basis of the certificate of merit” to the copy of the certificate served on the California Attorney General, but need not provide it to the noticed company. This factual information is generally not discoverable in litigation, unless the court finds that there was no credible basis for an exposure to a listed chemical after an in camera hearing, in which the noticed company does not get to see the information.

On September 14, 2017, the Legislature amended the certificate of merit provisions and sent AB 1583 to Governor Brown for signature. AB 1583 would do two things:

Require the Attorney General to send a letter to the private enforcer and the recipients of the 60-day notice when the Attorney General has reviewed the certificate of merit and determined that there is no merit to an action;
Make the basis for the certificate of merit discoverable in litigation, to the extent that the information is relevant to the subject matter of the action and not subject to the attorney-client privilege, the attorney work product privilege, or any other legal privilege.

The first revision codifies the Attorney General’s current practice of sending letters when his office determines that an action has no merit, although it is not clear how the Attorney General currently reaches such determinations, and whether this will have an impact going forward.

The second revision address ambiguity in the current statute, which provides that the factual basis of a certificate of merit is not discoverable, unless it is relevant to the subject matter and otherwise discoverable. This confusing language—nothing is discoverable unless it is relevant to the subject matter of the litigation—resulted in many private plaintiffs taking the position that the basis of the certificate of merit was never discoverable, forcing defendants seeking such information to try to pierce the privilege and what appeared to be a presumption of non-discoverability.

Under the amendment, defendants would have a prima facie right to seek discovery of the factual basis for the certificate, and the burden would be on the private enforcer to justify any privilege or work product objections, as is the case with any other assertion of privilege.

AB 1583 is widely supported by the business community and had no recorded opposition. The Governor is expected to sign it, and assuming he does, it would become effective on January 1, 2018. As was the case after the adoption of SB 471 in 2001, there may be litigation over the retroactive application of the amendment to notices served prior to its effective date (the 2001 amendments were deemed retroactively applicable procedural rules, and there is every reason to believe that this amendment will be treated similarly).