Prop 65: Will a Newly Proposed Bill Protect Supplement Companies?

California’s Safe Drinking Water and Toxic Enforcement Act of 1986, better known as Prop 65, has long plagued the dietary supplement industry with a bevy of bounty hunter lawsuits. Prop 65 requires consumer warnings for any products sold in California that may contain any of the more than 850 Prop 65–listed chemicals known to cause cancer, birth defects, or other reproductive harm.

The problem? Many products may naturally contain trace amounts of these chemicals, but at levels too low to be harmful to humans; however, under Prop 65’s low threshold, a company would be at jeopardy of being slapped with a hefty Prop 65 fine anyway.

“Prop 65 is flawed because of the thousand-fold provision of the law,” Steve Mister, president and CEO of the Council for Responsible Nutrition (Washington, DC), told Nutritional Outlook columnist James Gormley in an interview for our Global Regulations column. “It states that if the level of the chemical in the product has been shown to cause cancer at one-thousandth of the level found in the product, then that level is too high and the product must be labeled.  That is an unreasonable requirement.”

Recent months, however, have finally brought a few pieces of-if not good, then at least better-Prop 65 news. As Gormley discuses in his article, in a February Prop 65 lawsuit, a California Superior Judge sided with the defendants (in this case, a group of dietary supplement companies). The judge ruled that the companies’ products in question fall under an exemption to the Prop 65 rule: if a product-including a dietary supplement-is classified by law as a food, it does not have to carry a Prop 65 warning if its chemicals are considered to be naturally occurring. Could this ruling set a precedent for other supplement companies fighting the same kind of suit?

Another Prop 65 flaw is that the law gives firms no time at all to respond to a notice of violation before automatically incurring the $2,500 per day fine.

“Right now, if you get slapped with a notice from a private plaintiff that says, ‘We have observed the alleged violation and we’re therefore going to sue you,’ there’s nothing you can do about it,” says Michael McGuffin, president of the American Herbal Products Association (AHPA; Silver Spring, MD), who was also interviewed for our Global Regulations piece.

More importantly, companies automatically then need to deal with the lawsuit from the private plaintiff. In the dietary supplements industry, at least, the cost per case has averaged $50,000–$60,000, says McGuffin-even if companies’ products have not yet actually been proven to cause harm.

With these burdens in mind, in February, California Assemblyman Mike Gatto (D–Los Angeles) introduced legislation to amend Prop 65-specifically, the time period in which companies can respond to a violation notice. Gatto’s bill proposes that firms get a 14-day grace period to correct violations after receiving a notice; if they do so, “the bill would prohibit an enforcement action from being commenced if the Attorney General, the city attorney, or the district attorney concurs that the violation has been corrected.” Thereafter, the company would incur no fines nor have to continue defending itself against private plaintiff.

Correcting a violation could be easy-or difficult. The solution would be easy in the case of, say, a coffee shop that receives a Prop 65 notice for coffee sold on site. Under Gatto’s bill, within 14 days, the company could simply put a Prop 65 warning sign in its store window and consider the matter solved. “Then they wouldn’t have to settle the lawsuit,” McGuffin says. “They could just go to the private plaintiff and say, ‘Thank you very much. I wasn’t aware of the problem, but I’ve fixed it now.’”

The solution is a lot tougher for a supplement company with hundreds of thousands of SKUs retailed nationwide. Within 14 days, could this company label every one of its existing products with a Prop 65 warning? Not likely.

As such, McGuffin says that AHPA, which officially endorsed Gatto’s bill, is hoping to talk to the Assemblyman about how the bill might likewise cover these companies. “We think there should be the same 14-day opportunity for correction,” McGuffin says. He suggests that CPG companies could instead issue Prop 65 warnings to consumers via newspaper, the Internet, or signs at retail stores. These are viable solutions in the short term. And, should Gatto’s bill pass one day, it would be one step forward in helping companies cope with Prop 65.

Jennifer Grebow

Editor-in-Chief