On August 30, 2018, the new Proposition 65 warning requirements became applicable to all “persons in the course of doing business” in California, which means it generally applies to all businesses with 10 or more employees selling products into California. One change in the new warning regulations is additional requirements associated with sales through internet sites and via catalogues. Specifically, if a product is being purchased in, or shipped to California, a prescribed Proposition 65 warning must be provided to prospective purchasers prior to the point of purchase. This warning can be made on the business’ website or in the catalogue.
Notices of violation
It did not take Proposition 65 plaintiffs much time to identify businesses failing to comply with the new warning requirements for internet and catalogue sales. At least one plaintiff, Mr. John Devlin, began examining the Proposition 65 compliance status of companies selling wine and other alcohol-related products back in December 2018. Since the beginning of January 2019 through mid-February 2019, he has filed over 50 Proposition 65 Notices of Violation (NOVs) for sales of such products on internet sites, allegedly without the required Proposition 65 warnings issued to prospective purchasers consistent with the new warning requirements.(1)
To put these recent Proposition 65 NOVs into perspective for food-related businesses, no NOVs have been filed for ethyl alcohol in alcoholic beverages since 2014, i.e. no NOVs for five years. This observation indicates that other products containing chemicals that historically have been infrequently targeted by Proposition 65 plaintiffs may be targeted much more frequently in the future. Based on the large number of businesses selling consumer products - including food-related products - over internet sites, we envision many more NOVs being issued by this plaintiff. Furthermore, Proposition 65 plaintiffs are typically opportunistic often with little, if any, qualms about plagiarizing other P65 plaintiff’s NOVs. With low evidentiary burden on the plaintiff, we anticipate many other Propositions 65 plaintiffs will be issuing NOVs related to internet and catalogue sales for many other types of consumer products, including food-related products sold via the internet and catalogues.
Although this information illustrates a negative trend, it can be used in a positive manner to indicate where Proposition 65 plaintiffs may be looking for compliance vulnerabilities. NOVs can result in a maximum fine of USD2,500/day per product, with up to 25% of the settlement going to the private enforcer. In 2018 there were over 800 Proposition 65 cases resulting in USD40M in settlements and judgements. Plaintiffs do not need to demonstrate that the exposure is significant, only allege it. The evidentiary burden is then shifted to the defendant and most cases are not litigated due to the high cost and uncertainty to defend.