NEW PROP. 65 WARNING REGULATIONS: MORE LITIGATION COMING? - PowerPoint Presentation

NEW PROP. 65 WARNING REGULATIONS: MORE LITIGATION COMING? Malcolm Weiss, Esq.mweiss@hunton.comHunton & Williams LLP EDUCATION CONFERENCE NOVEMBER 6-9, 2016

The Safe Drinking Water and Toxic EnforcementAct of 1986 aka “Proposition 65” OverviewExposure warning and discharge prohibitionRoles -- OEHHA, DOJ, PrivateNew warning regulationsImpacts to mining industryFocus on complianceMaterialsText of new warning regulations Side by side (old/new) comparison INTRODUCTION

Applies to businesses with 10 or more employees Requires “clear and reasonable” warnings (HSC § 25249.6)cancerbirth defects or other reproductive harm Prohibits knowing discharge of listed chemicals into sources of drinking water (HSC § 25249.5)Enforcement:AG’s Office, DAs, City Attorneys Individuals acting in the “public interest”Penalties up to $2,500 per violation, per day!$2,500 x 365 = $912,500Attorney feesLegal/preemption/constitutional challenges generally unsuccessfulProp. 65 OVERVIEW

CHEMICAL LIST Over 900 chemicals listed Carcinogens – No Significant Risk Level (NSRL)Reproductive/developmental – Maximum Allowable Dose Level (MADL)List contains naturally occurring and synthetic chemicalsmany in common household or commercial productsfoods, drugs, dyes, cleaners, clothing, consumer products by-products of activities such as mining, chemical processes and fuels.

TYPES OF EXPOSURES Consumer product exposure -- exposure that results from a person’s acquisition, purchase, storage, consumption, or any reasonably foreseeable use of a consumer product, including consumption of a food. Occupational exposure -- exposure to any employee at his or her place of employment. Environmental exposure -- exposure that occurs as the result of contact with an environmental source, such as air, water, soil, vegetation, or substances or objects, through inhalation, ingestion, or skin contact. Exposures that are not consumer product or occupational are environmental. 3 for 3

CONDITIONS FOR PRIVATE ENFORCEMENT Brought “in the public interest” by anyone.No public prosecutor diligently enforcing. 60-Day Notice of ViolationProduct or activity at issueChemical(s) at issueRoutes of exposures

PROP. 65 - UNIQUE ISSUES May be enforced by the publicAttorney's feesPenalties and fees in lieu of penaltiesInjunctive relief includingReformulation (exposure reduction)Warnings The burden of proof of exposureInitially on PlaintiffBut easily switched to Defendant

DISCHARGE PROHIBITION Prohibits discharge of Prop. 65 listed chemicals into sources of drinking water.“Source of drinking water” means either a present source of drinking water or water which is identified or designated in a water quality control plan adopted by a regional board as being suitable for domestic or municipal uses. Historically few such cases, but increasing lately.Settlements include injunctive terms and monetary payments.

SETTLEMENTS 2011 2012 2013 2014 2015 Total # of settlements 338437352663582Settlement Payments$16,286,728$22,560,022 $17 , 409,756 $29,482,280 $26,226,761 Attorney’s fees $11,941,918 $15,588,766 $12,731,262 $21,047,746 $17,828,941

AMENDMENTS: GOVERNOR’S GOALS Cap or limit attorney’s fees Require stronger demonstration by plaintiffs that they have information to support claimsRequire greater disclosure of plaintiff’s info.Provide the State with the ability to adjust the level at which warnings are neededRequire more useful information to the public regarding exposures and protections

NEW WARNING REGULATIONS Initial draft published in 2013 Nearly every commercial/industrial sector commented on the proposalMultiple draftsFinally approved in August 2016Effective August 2018

SAFE HARBOR: Voluntary safe harbor language that would be deemed “clear and reasonable” IMPACTS RELATION BETWEEN MANUFACTURERS AND RETAILERSSUPPLEMENTAL INFORMATION ALLOWEDNAMING CHEMICALS: At least one chemical has to be named for each endpointMETHOD OF WARNING TRANSMISSIONWARNING CONTENTLANGUAGES INTERNET SALES: Warnings on website, prior to purchase WARNING AMENDMENTS

PRODUCT, CHEMICAL AND AREASPECIFIC SAFE HARBOR LANGUAGESpecific Warnings Of InterestDiesel Engine Exposure Vehicle Exposure Enclosed Parking Facility ExposurePetroleum Products Designated Smoking Area Exposure

DIESEL ENGINE EXPOSURE(Except Passenger Vehicle Engines) Methods of Transmission: Printed in Owner’s ManualA label is easily visible to the operator orOn screen display Content:WARNING Breathing diesel engine exhaust exposes you to chemicals known to the State of California to cause cancer and birth defects or other reproductive harm. Always start and operate the engine in a well-ventilated area. If in an enclosed area, vent the exhaust to the outside. Do not modify or tamper with the exhaust system. Do not idle the engine except as necessary. For more information go to www.P65warnings.ca.gov/diesel

VEHICLE EXPOSURE Methods of Transmission:Printed in Owner’s Manual andOn a label attached to driver’s side front window Content:WARNING: Operating, servicing and maintaining a passenger vehicle or off-road vehicle can expose you to chemicals including engine exhaust, carbon monoxide, phthalates, and lead, which are known to the State of California to cause cancer and birth defects or other reproductive harm. To minimize exposure, avoid breathing exhaust, do not idle the engine except as necessary, service your vehicle in a well-ventilated area and wear gloves or wash your hands frequently when servicing your vehicle. For more information go to www.P65Warnings.ca.gov/passenger-vehicle.

ENCLOSED PARKING FACILITY EXPOSURE Methods of Transmission: On a 20 x 20 inch sign posted at each public entrance to the enclosed parking facility andMust be in English and any other language in which other entrance signage is in the facilityContent:WARNING: Breathing the air in this parking garage can expose you to chemicals including carbon monoxide and gasoline or diesel engine exhaust, which are known to the State of California to cause cancer and birth defects or other reproductive harm. Do not stay in this area longer than necessary. For more information go to www.P65Warnings.ca.gov/parking

PETROLEUM PRODUCTS Methods of Transmission:Methods in §25604 andProvided in languages other than English where other signage is in other languagesContent:WARNING: Crude oil, gasoline, diesel fuel, and other petroleum products can expose you to chemicals including toluene and benzene, which are known to the State of California to cause cancer and birth defects or other reproductive harm. These exposures can occur in and around oil fields, refineries, chemical plants, transport and storage operations, such as pipelines, marine terminals, tank trucks, and other facilities and equipment. For more information go to: www.P65Warnings.ca.gov/petroleum

DESIGNATED SMOKING AREA EXPOSURE Methods of Transmission: Provided on an 8 ½ by 11 inch sign posted both at the entrance to and within the area in which the exposure occursContent: WARNING: Breathing the air in this smoking area can expose you to chemicals including tobacco smoke and nicotine, which are known to the State of California to cause cancer and birth defects or other reproductive harm. Do not stay in this area longer than necessary. For more information go to www.P65Warnings.ca.gov/smoking-areas

LISTING OF ASPHALT OEHHA publicly assessing potentially listing asphalt at the Carcinogen Identification Committee meeting on Nov. 15th, 2016CIC will discuss whether asphalt should be listed and what priority it should be given. If it is given low priority then there is a chance that it will not be listed at all It may be superfluous

FOCUS ON COMPLIANCE Conduct a compliance assessmentChemicals of concernLocations of concernWarning transmission methodsWarning contentLong form warning or WARNING: Cancer and Reproductive Harm- www.P65Warnings.ca.gov. Consider up stream and down-stream issues Evaluate and revise business agreements WARNING : Entering this area can expose you to chemicals known to the State of California to cause cancer and birth defects or other reproductive harm, including diesel exhaust known to cause cancer, from operating equipment and tobacco smoke known to cause birth defects or other reproductive harm, from smoking areas. For more information go to www.P65Warnings.ca.gov

FOCUS ON COMPLIANCE Understand the new requirements WARNING: This area contains chemicals known to cause cancer, birth defects and other reproductive harm. ADVERTENCIA : Al entrar en esta zona puede quedar expuesto a sustancias químicas conocidas en el Estado de California como causante de cáncer, defectos de nacimiento u otros daños reproductivos, incluyendo las emisiones de diesel sabe que causan cáncer, desde el equipo de operación y el humo del tabaco se sabe que causa defectos de nacimiento y otros daños reproductivos, a partir de las zonas de fumadores. Para obtener más información, visite www.P65Warnings.ca.gov [note translation is not accurate ]

NEW PROP. 65 WARNING REGULATIONS: MORE LITIGATION COMING? Malcolm Weiss, Esq.mweiss@hunton.com Hunton & Williams LLP