Tilted Forum Project Discussion Community - View Single Post - California: What do you think about the current economic crisis there?

Cynthetiq · 07-11-2009, 05:55 PM

Will, they had been alienating business via higher taxation and regulation.

Are you telling me that Prop 65 is not alienating business and at the same time scaring consumers?

I'm working on a small business now, and if I get to pick between the two states, I'm picking Nevada. Between the tax savings and the savings in labor costs, benefits etc. it's much better.

Quote:

View: Proposition 65 and Food
Source: Abanet
posted with the TFP thread generator

Proposition 65 and Food
Proposition 65 and Food
You Have Now Been Warned
By Jennifer Yu Sacro
Perhaps you've seen it posted in a California hotel lobby or gas station during a recent business trip:

WARNING: This area contains a chemical known to the State of California to cause cancer and birth defects or other reproductive harm.

You think about the message for a couple of seconds and assume that the chemical referenced is secondhand smoke, petroleum, or some other compound that you already expected to be present in that area. Having seen warnings like this more than once, and in a variety of places, you probably also don't give the warning too much thought.

But what if you represent a company that sells products in California and your client receives a letter from a California private attorney general notifying it that its products contain a chemical known to the state to cause cancer or reproductive harm and that, under California's Proposition 65, the company is required to warn California consumers that its products contain such a chemical. Even worse, what if the products your client sold were food items? In the last 10 years, the issue of Proposition 65 warnings with respect to foods has become an increasingly hot topic of debate and litigation. This article provides a brief overview of Proposition 65 and summarizes key Proposition 65 litigation involving food products.

What Is Proposition 65?
More formally known as the Safe Drinking Water and Toxic Enforcement Act of 1986, Proposition 65 is a California ballot initiative approved by voters that requires businesses to notify California consumers about the presence of certain chemicals in their products and prohibits California businesses from knowingly discharging certain chemicals into sources of drinking water.

The chemicals at issue are those "known to the state to cause cancer or reproductive toxicity" and are identified in a list that is updated and republished by the governor on a regular basis. A chemical is listed through one of several ways: (1) one of the state's two committees of scientists and health professionals—i.e., the Carcinogen Identification Committee (CIC) and the Developmental and Reproductive Toxicant Identification Committee (DARTIC)—finds that the chemical clearly has been shown to cause cancer or reproductive harm; (2) an organization deemed authoritative by either CIC or DARTIC finds that the chemical causes cancer or reproductive harm; or (3) a state or federal agency requires that the chemical be labeled as causing cancer or reproductive harm. Substances identified by reference in California Labor Code § 6382(b)(1) and (d) also are required to be included in the Proposition 65 chemical list, though it is unclear whether the requirement applied only to the initial Proposition 65 chemical list or whether it applies on an ongoing basis to every Proposition 65 chemical list that may be published.

Businesses selling products that expose consumers to a listed chemical must provide a "clear and reasonable" warning to California consumers that the products contain a chemical known to the state to cause cancer or reproductive harm or they must be able to demonstrate one of three things: (1) the existence of a federal law that governs warnings applicable to the exposure in a manner that preempts state authority; (2) that the exposure took place less than 12 months after the chemical in question was added to the Proposition 65 chemical list; or (3) that the exposure is "not significant." If a warning is necessary, it may be issued in various forms—e.g., a label on the product, a sign at the workplace, or a notice in a newspaper—subject to specific requirements listed in the regulations. Businesses that do not provide the requisite warning may be subject to a civil lawsuit by the California attorney general or any individual acting in the public interest and face stiff penalties as high as $2,500 per violation. The state agency charged with implementing Proposition 65 is the Office of Environmental Health Hazard Assessment (OEHHA).

Key Cases Involving Food
Improvements in chemical testing and scientific research on cooking have led more and more enforcement groups to set their sights on the food industry. Indeed, some of the Proposition 65 cases in recent years involve foods that are staples of the American diet—meat, potatoes, fish, and dairy products.

One of the first food items to be implicated in a Proposition 65 enforcement action was cheese. In 1997, the Working Group on Carcinogenic and Immune Suppressing Chemicals (Working Group) issued a Proposition 65 60-day notice of violation against cheese manufacturers and retailers including Altadena Dairy, Kraft Foods, and Sargento Cheese Co. The Working Group alleged that these companies failed to warn consumers that their cheese products contained diethylhexyl phthalate (DEHP). DEHP is a plasticizer commonly used in building products, medical devices, and food packaging such as plastic cling wraps, adhesives, food container seals, and inks. The Working Group alleged that DEHP in plastic wrappers on packaging materials leached into the cheeses that the defendant companies sold to Californians. Although no lawsuit or warning resulted from the notice, the resulting media attention raised public concern regarding the presence of Proposition 65 chemicals in foods.

Bottled water also has come under Proposition 65 scrutiny. In 1999, the Environmental Law Foundation sued water bottlers such as Crystal Geyser, McKesson Water Products, and Vittel because their bottled water allegedly contained some Proposition 65 chemicals, including arsenic. One Proposition 65 enforcement group has theorized that such chemicals got into water supplies from industrial pollution. The notice led to litigation, which ultimately was settled in 2000.

Another food item that has become a focus of Proposition 65 litigation is fish. In 2001, the Public Media Center brought a Proposition 65 suit against tuna canning companies like Tri-Union Sea Foods, Bumble Bee Sea Foods, and Del Monte because their products allegedly contained unacceptable levels of methyl mercury. Methyl mercury, which is a chemical found in the ocean, bioaccumulated in tuna over time. Following a bench trial, the court issued a decision comprised of three key rulings in favor of the tuna canning companies. First, the court found that Proposition 65's warning requirement with respect to methyl mercury in canned tuna conflicted with the Food and Drug Administration's (FDA) "carefully considered" policy of advising consumers about both the benefits and risks of eating fish and recommendations concerning the frequency with which tuna products may safely be consumed by women of childbearing age and pregnant women. By contrast, a Proposition 65 warning would communicate only the risks associated with consumption of tuna and, thereby, frustrate the FDA's more balanced approach to this issue. Because of this conflict, the court held that federal policy preempted Proposition 65's warning requirement. Second, the court found that the tuna canning companies sufficiently demonstrated that the exposure of the average woman of childbearing age and/or pregnant woman to methyl mercury in canned tuna was at levels lower than the maximum allowable dose level for methyl mercury under Proposition 65. Finally, methyl mercury in canned tuna was naturally occurring, i.e., the chemical was not present in the food as a result of human activities and was found in the food at the lowest level currently feasible. For these reasons, the tuna canning companies were not required to warn consumers about methyl mercury in their products and had no liability under Proposition 65. This decision presently is under review by the court of appeal. Meanwhile, another Proposition 65 lawsuit had been filed against large grocery stores and restaurant chains that served tuna, swordfish, mackerel, and other sport fish that contained methyl mercury. This suit, however, has been stayed pending the court of appeal's decision in the tuna canning case.

Then came the candy and vinegar cases. In 2002, the American Environmental Safety Institute (AESI) filed a lawsuit against several chocolate manufacturers including Mars, Hershey's, Nestle, and See's Candies because their chocolate products contained lead. AESI initiated litigation despite a letter from the California attorney general's office in 2001 stating that they have investigated the matter and concluded that no warning under Proposition 65 was required because the lead present in chocolate products was naturally occurring. After over a year of litigation, AESI settled with the chocolate manufacturers.

In 2004, the Environmental Law Foundation, the Center for Environmental Health, and the Environmental Health Coalition filed Proposition 65 lawsuits against manufacturers and distributors of Mexican candies and vinegar. Apparently, various Proposition 65 enforcement groups had commissioned tests that showed that lead also was present in these food items. After a couple years of litigation, those cases settled as well.

Potato products also have become a focus of Proposition 65 litigation. In 2002, Swedish scientists discovered that many foods when cooked formed acrylamide—a chemical compound used in making plastics, grouts, water treatment products, and cosmetics. Acrylamide is found in virtually every item on the breakfast menu—breads, cereals, coffee, fried potatoes, and prune juice—as well as grilled asparagus, cookies, crackers, and canned black olives. A week after the Swedish data were announced, the Council for Education and Research in Toxics (CERT) sent a notice of intent to sue, and eventually sued McDonald's and Burger King for failing to warn consumers that their french fries contained acrylamide. In 2005, the California attorney general filed a separate lawsuit against the two companies as well as additional restaurant chains and potato chip manufacturing companies. CERT and the California attorney general ultimately settled those cases.

More recently, enforcement groups have targeted grilled meats. In 2006, veteran Proposition 65 plaintiff Whitney Leeman and the Physicians Committee for Responsible Medicine filed lawsuits against numerous restaurant chains for failing to warn Californians that their flame-broiled and grilled meat products contained polycyclic aromatic hydrocarbons (PAHs) and PhIP (i.e., 2-Amino-1-Methyl-6-Phenylimidazol[4,5-B]Pyridine). PAHs are chemical compounds formed during the burning of coal, oil, gas, wood, and other organic substances and are used to make dyes, plastics, pesticides, and asphalt. In meats, PAHs are formed when the fat drips onto a hot surface and the resulting smoke, which contains PAH, is deposited back into the food. PhIP, on the other hand, is formed directly in the meat as a result of grilling and broiling. While some of those Proposition 65 cases have settled, other suits remain in active litigation.

Conclusion
The application of Proposition 65 to food items raises concerns for the industry for several obvious reasons. First, no manufacturer, restaurant, or grocer wants to tell its customers that its food products contain ingredients that the state of California believes are cancerous or cause reproductive harm. Second, while most Proposition 65 enforcement actions ultimately settle, resolving such actions—whether through litigation or a settlement—costs both money and time.

Unfortunately, food probably will continue to be a focus of future Proposition 65 litigation. For one thing, the Proposition 65 chemical list is steadily growing. The list, which in 1987 contained approximately 85 chemicals, now has expanded to include roughly 700 compounds. Beginning in 2000, the list has grown at an approximate net rate of eight chemicals per year with approximately 76 chemical compounds being added and only seven chemicals being delisted. Additionally, the technology used to detect different chemical compounds at lower and lower levels has been rapidly improving. Advances in analytical methodologies have made it cheaper, simpler, and faster to analyze a greater variety of chemical compounds in foods at nanogram and picogram levels for larger amounts of samples. Given the increasing number of Proposition 65 chemicals and the technology available to detect compounds at trace levels, there is a good chance that even more Proposition 65 chemicals will be discovered in food items.

What can members of the food industry do to address Proposition 65 concerns?
1. Don't be caught by surprise. Monitor the Proposition 65 list and participate in the regulatory process. Businesses that take a proactive approach to Proposition 65 and take advantage of opportunities to participate in the regulatory process ultimately may be more successful in addressing Proposition 65 issues than businesses that pay little or no attention to Proposition 65 issues until they receive a notice letter from an enforcement group. Proactive businesses, for instance, will be better informed about the current state of food and health science relevant to their products as well as OEHHA's current and anticipated regulatory activities. Greater knowledge in these areas will provide companies with more options in addressing Proposition 65 concerns and a longer time frame within which to consider different business and legal solutions.

With respect to chemicals relevant to their products, companies should consider participating directly or through trade associations in the comment process concerning contemplated listings. Even if CIC or DARTIC ultimately decides to recommend a chemical for listing, it still may be useful for companies to participate in the public hearings in order to develop an administrative record that may later help establish defenses to a Proposition 65 enforcement action.

Companies also should participate in OEHHA's ongoing process of evaluating Proposition 65's continued application to food. In April 2008, OEHHA announced that it was forming a working group comprised of stakeholders to assist it in drafting possible regulatory language to address warnings for exposures to listed chemicals in foods. In December 2008, following conferences with the working group, OEHHA announced that it will begin drafting such regulatory language this year. Companies that have not taken part in the workshops still have an opportunity to participate in the regulatory process by providing input during the notice and comment period.

2. Know the rules. Understand the limitations of Proposition 65, particularly as they apply to food. The warning requirements have some key limitations. For instance, no warning is required for certain chemical exposures caused by "naturally occurring" chemicals in the food. Chemical contaminants that occur naturally are only exempt from the warning requirement if they are found in amounts that are "at the lowest level currently feasible," and much litigation has arisen over the meaning of this phrase. As mentioned above, authorities have applied the "naturally occurring" provision to exempt tuna canning companies and chocolate manufacturers from having to warn consumers of methyl mercury and lead in their products.

Additionally, the regulatory definition of the "no significant risk" level is more flexible in cases where the chemical at issue is produced by cooking necessary to render the food palatable or to avoid microbiological contamination. This alternative standard would apply, for instance, to the carcinogen exposure issues in the grilled meat cases.

Further, a warning is not required when the chemical exists at or below the "no significant risk" level. This level basically is one of two numbers—the "safe harbor" established by the State of California as a default or the level of exposure the company can demonstrate presents no significant risk of cancer or reproductive toxicity. Companies that seek to establish this alternative level, however, must do so using a quantitative risk assessment that meets certain regulatory criteria.

3. Stay ahead of enforcement groups. Know your product. It is prudent for businesses to stay abreast of relevant scientific developments and periodically reevaluate previous conclusions they may have reached regarding their product's contents. Products that contain known Proposition 65 chemicals normally should undergo some type of Proposition 65 compliance assessment.

4. Stay in touch with the FDA. If a company believes that a Proposition 65 warning would be misleading as it relates to a particular food product, it should consider discussing its concerns with the FDA or another federal agency with appropriate expertise. The FDA obviously has expertise over food and health issues that likely will be given some deference by OEHHA and California courts. In connection with the canned tuna case, for instance, the then-FDA Commissioner, Lester Crawford, wrote to the California attorney general to convey the FDA's view that there is no scientific basis for requiring warning labels on tuna products and that the lawsuits could have "adverse public health consequences." The letter ultimately helped secure a trial victory for the tuna canning companies.