By Nathan C. Hunt, Counsel to Thompson Hine LLP practicing in the firm’s Dayton, OH office.

On August 30, 2018, California’s updated Proposition 65 regulations took effect. Among the changes was a requirement that a Proposition 65 warning be included with internet purchases of products that may expose California consumers to one or more of the chemicals on the state’s Proposition 65 List. This requirement caught some companies doing business in California off guard, particularly smaller companies otherwise unacquainted with Proposition 65 whose only connection to the California market is through internet sales.

For the uninitiated, California’s Safe Drinking Water and Toxic Enforcement Act, better known as Proposition 65, requires companies doing business in the state to provide a “clear and reasonable” warning before “knowingly and intentionally” exposing California residents to products containing any one of approximately 900 chemicals the state has determined cause cancer, birth defects, or other reproductive harm. Businesses have typically provided the required warnings using labels or tags on their products or packaging, or by posting notices with warning language at retail locations where the products are sold. Failure to provide a Proposition 65 warning can result in a civil penalty of $2,500 per day for each violation. The bane of many companies doing business in California is Proposition 65’s private right of action, under which the state’s active plaintiffs’ bar routinely sues businesses for violations, collects civil penalties on behalf of the state, and recovers their attorneys’ fees.

Under the new regulations, internet purchases of products that expose consumers to listed chemicals must include a Proposition 65 warning. Section 25603(a) of the rules identifies the Proposition 65 warning language that retailers should use. The regulations then specify three methods for prominently displaying the internet warning to potential online purchasers:

• Provide the warning on the product’s display page;
• Provide the warning via a hyperlink on the product’s display page using the word “WARNING”; or
• Otherwise conspicuously display the warning to the purchaser before their online transaction is completed.

While the internet-warning requirement is aimed at furthering the right-to-know purpose that underlies Proposition 65, some businesses have raised questions regarding how best to meet the new requirement.

One concern online retailers have noted is how they can provide warnings to Californians without unnecessarily warning other online customers in states where Proposition 65 does not apply. Some online retailers are displaying a product-specific Proposition 65 warning as a pop-up when a purchaser enters a California ZIP code during an online transaction. Using this method, online retailers are able to provide targeted Proposition 65 warnings to California consumers.

Online retailers are also uncertain which warning among the alternatives provided at § 25603(a) they should use. According to the California EPA, in situations where the product manufacturer has included a warning on the label of a product sold at a physical location, the online retailer may use the same warning language on its website or provide a picture of the product’s label to the extent that the warning is readable in the picture. What if the product manufacturer or supplier fails to provide the online retailer with any warning information for its products? The new rules include a potential defense to Proposition 65 liability that online retailers may be able to use in such cases.

These are just a few concerns online retailers already face in the wake of the new rules, which have only been in effect for a few months. More issues are sure to come if past experience with Proposition 65 is any indication.