Overview
Restaurants and retail stores operating in California will likely need to find a new source for receipt paper as a result of a Proposition 65 complaint filed on April 3, 2025, in San Francisco: Center for Environmental Health v. Aesop USA, et al., San Francisco Superior Court, Case No. CGC-25-623997.
Proposition 65 is a chemical warnings law. Companies doing business in California must provide a warning for products they sell to California residents, or are in its California business locations, if those products contain certain chemicals known to the state to cause birth defects or other reproductive harm, unless the company can prove that the level of an exposure does not require a warning. The law provides for monetary penalties of up to $2,500 per day and a company that settles a Prop 65 case is required to pay the plaintiff’s attorneys’ fees and costs.
Bishpenol S, known as "BPS" is one of the chemicals regulated by Proposition 65. It is listed as a known reproductive toxicant. It is often found in thermal paper restaurants and retail stores print out at their registers. BPS was a chemical many paper companies began using as a replacement for Bisphenol A ("BPA") after BPA was added to the Proposition 65 list. BPA and BPS, as the names suggest, are chemicals with many of the same properties. The state listed BPS based on studies it claims show BPS and BPA have similar negative health effects. The state has established no "safe harbor" level for BPS, meaning that trying to prove exposure to BPS in receipt paper does not require a warning would be both expensive and likely unsuccessful.
The Center for Environmental Health has made sensationalized claims that have recently been picked up by the media, most notably that touching the receipt paper for 10 seconds results in BPS being absorbed through skin. The argument incorrectly assumes that any amount of BPS absorbed is automatically a health risk.
So far, 28 entities have received Proposition 65 notices of violation from CEH. The notice is a prerequisite to the named company being included in a lawsuit after 60 days. Targets include restaurants, retail companies, banks, grocery stores and gas stations - all places that print receipts on thermal paper. Currently, seven defendants are named, likely to maximize media attention as they include some of the largest retailers in the U.S. More will be added. In terms of restaurants, thus far three quick-service restaurants have received 60-day notices, all well-known brands. It is expected that they will be added to the complaint after the 60-days expires, and it is also expected that CEH will serve additional restaurants - and companies in other industries - with violation notices in coming months.
CEH wants the industry to source "phenol-free" receipt paper, eliminating the need for BPS. While there are many suppliers who claim to sell such paper, it is unclear whether they can provide it on the scale that will ultimately be needed. It is also unclear whether there is a difference in cost and functionality. To settle the case, a named defendant would need to agree to use paper CEH "approves" as phenol free. To avoid receiving notices of violation, restaurants not named in the complaint would benefit from sourcing such paper as soon as possible.
Steptoe's Proposition 65 team has over 30 years of experience successfully representing manufacturers, distributors and retailers in a wide variety of industries, and has secured favorable settlements and won dismissals and favorable verdicts for companies, both large and small.
For more information, contact Dennis Raglin draglin@steptoe.com or Carol Brophy cbrophy@steptoe.com
