A recent decision from the California Court of Appeal, First Appellate District, in Environmental Law Foundation v. Beech-Nut Corporation applied the familiar substantial evidence standard to uphold a trial court judgment in favor of defendants that has enormous implications for Prop 65 enforcement cases.

Beech-Nut Trial Court Holding

Beech-Nut involved claims that users were exposed to lead from fruits and fruit juices manufactured by the defendants. There was no dispute that the products contained trace amounts of lead, although there was a significant dispute over whether some or all of the lead was “naturally occurring,” and thus exempt from Proposition 65, as well as to whether the amount of exposure exceeded the level at which a warning was required.

The trial court held that defendants had not shown that the lead in the products was naturally occurring, but had shown that the amount of the lead to which average users were exposed did not exceed the “safe harbor” levels of 0.5 micrograms per day (reproductive toxicity) and 15 micrograms per day (cancer), when exposures were averaged over a period of time.

Beech-Nut Appeal

On appeal, the plaintiff, joined by the California Attorney General as amicus curiae, asserted that exposures to lead could not be averaged over any time period for purposes of assessing whether it exposed users to 1/1000th of the No Observable Effect Level (the Attorney General did not oppose the use of averaging, but asserted that it was improper to do so when a defendant relied upon the 0.5 microgram safe harbor level provided by the regulations, and was required to support an alternative level in order to support averaging). Plaintiff argued that lead was a teratogen, and therefore agency guidance required assessing exposures to lead on a one-day basis.

The appellate court affirmed the trial court’s rejection of this argument, noting that “eight weeks is the shortest period during which an exposure to lead at levels detected in the products would be expected to have an adverse reproductive effect. . . .” Thus, the court held that substantial evidence supported defendants’ averaging of exposures based on the amount of lead to which a consumer was exposed over a two-week period, despite the fact that lead could be a teratogen in very high doses.

The court also rejected plaintiff’s contention that the opinion of one of the scientists at the Office of Environmental Health Hazard Assessment (OEHHA) constituted the agency’s official policy of not applying averaging to exposures to lead, thus constituting an interpretation of the regulations that would be deserving of deference by the courts.

Beech-Nut May Increase Evidentiary Burdens on Prop 65 Plaintiffs

The court’s affirmance of the use of averaging exposures to lead across a two-week period when consumers are not exposed to the product on a daily basis is extraordinarily significant.

The prevailing approach taken by plaintiffs in lead (and other reproductive toxin) exposures has to been to look at exposure on a one-day basis, even for products where exposure is not expected to occur daily, or even frequently. The requirement to average exposures over a longer period may significantly raise the bar for plaintiffs to credibly assert that, for example, a person’s one-day exposure to lead in the base of a light bulb, which may only happen once every few months, requires a warning.

Since a plaintiff must provide a certificate of merit when serving a pre-suit notice of violation and must anticipate the defendant’s burden on the amount of exposure, Beech-Nut could portend a significant downturn in enforcement actions over lead and other listed reproductive toxins (e.g., phthalates) – by far the leading chemicals in enforcement actions – which are not frank teratogens and are appropriately viewed as single-day exposures that can require a warning.

Challenges to Beech-Nut On The Horizon

What could stand in the way of Beech-Nut permanently altering the Proposition 65 enforcement landscape?

It almost certainly will need to survive a petition for review in the California Supreme Court. OEHHA, currently in the process of overhauling the Proposition 65 warning regulations, could also decide to revisit the exposure assessment regulations, or could issue an interpretive guideline rejecting the use of averaging for exposures to lead or other reproductive toxins. But perhaps the most immediate threat to the Beech-Nut decision may be the lawsuit recently filed seeking OEHHA repeal of the 0.5 microgram per day safe harbor exposure level for lead.

In Mateel Environmental Justice Foundation v. California Office of Environmental Health Hazard Assessment, filed January 13, 2015, plaintiff—one of the more active Proposition 65 enforcers—contends that the existing safe harbor level of 0.5 micrograms per day was derived from OSHA’s permissible exposure limit (“PEL”) for lead, and that the PEL did not represent the No Observable Effect Level. Thus, the safe harbor level is inconsistent with the statutory requirement that exempt exposures be at 1,000 times below the level at which there is no observable effect. Since Mateel asserts that there is no demonstrated threshold for lead as a reproductive toxin, it argues repeal of this safe harbor.

The Mateel lawsuit was widely viewed as a hedge against an affirmance by the Court of Appeal in Beech-Nut. OEHHA could agree with Mateel that the safe harbor should be reviewed and thus moot the lawsuit. If that happens, or if Mateel wins at trial, then the immediate result will be that, notwithstanding Beech-Nut, defendants in lead cases will be forced to either utilize a different safe harbor level, or will be required to develop their own daily exposure level, in the face of claims that there is no demonstrated safe level.

Regardless of how things play out, Proposition 65 enforcement just got interesting.