Because so many companies sued for alleged Proposition 65 violations seek to quickly settle claims against them, one might think Prop 65 is a strict liability statute. This is incorrect. Health & Safety Code § 25249.6 requires that an exposure without a warning be knowing and intentional:
No person in the course of doing business shall knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and reasonable warning to such individual….
Ambiguity
To the layperson, this requirement probably suggests that a company must know that its product contains a Listed Chemical and the chemical will come out of the product during use, causing an exposure. Further, the company intends for that chemical to come out of the product to cause the exposure.
Not so. The knowing and intentional standard has always been a topic of controversy.
Defining knowing and intentional exposures
The Prop 65 regulations define “knowingly” as “refer[ring] only to knowledge of the fact that [an] … exposure to a chemical listed … is occurring. No knowledge that the … exposure is unlawful is required….” The regulations do not define “intentionally.”
OEHHA has provided some clarity on what “knowingly” means, stating in its Final Statement of Reasons supporting the Prop 65 regulations that “knowingly” refers to the knowledge that an exposure is occurring and knowledge that the chemical at issue is a listed chemical.
The California Court of Appeal has also addressed the knowing and intentional requirement in Nicolle-Wagner v. Deukmejian. In doing so, the Court reviewed the statute and its ballot arguments, stating that “the use of terms such as ‘knowingly and intentionally’ and ‘putting’ imply that human conduct which results in toxins being added to the environment is the activity to be controlled.”
In practice
Taken together, this should mean that a manufacturer, distributor, or retailer with no knowledge of the composition of a consumer product it supplies to or sells in California is not liable for a Proposition 65 violation unless it receives some information confirming the presence of a Listed Chemical and that the product exposes consumers to the Listed Chemical. Unfortunately, this is not the case.
Given the haziness, Prop 65 plaintiffs lawyers have varying positions on knowing and intentional exposure. Some plaintiffs lawyers argue that once a company receives a 60-day Notice, if it did not have knowledge before, it has knowledge going forward (that is, notice recipients should accept the plaintiffs notice as gospel that the product requires a warning). Others argue what amounts to a negligence standard – if a company supplies or sells the product, it should know what is in it and whether it exposes consumers to a Listed Chemical.
These positions can impact legal strategy for a case. The former approach creates an opportunity for a company to cut off liability by providing a warning or ceasing supply to, or sales in, California as soon as practicable after receiving a 60-day Notice. The latter position is more difficult, as the plaintiff may not be willing to settle quickly and cheaply, and may seek discovery into sales dating back to well before the 60-day Notice. In both cases, the lack of clarity makes it difficult to handicap the likelihood of success of a dispositive motion.
Some relief in sight?
OEHHA’s proposed amendments to the Proposition 65 may bring some relief on the knowledge-front, especially for retailers. The proposed regulations would include a provision defining “actual knowledge” of a retailer to mean “specific knowledge of the product exposure that the retailer receives from any reliable source,” and if the source of the knowledge is a 60-day notice, the retailer does not have actual knowledge of any alleged exposure until two business days after receiving the notice. This would provide a retailer with two business days to warn or stop sales of a product to avoid causing a knowing and intentional exposure.
However, if the proposed changes are enacted, the rest of the supply chain will still be stuck rolling the dice.
