Overview
A federal court recently entered an injunction staying the enforcement of new Proposition 65 actions involving the chemical acrylamide. While it is unclear if the case will be appealed, it may spell the end of one of the "worst offenders" on the Proposition 65 chemical list. Listed based on dubious science, it is a chemical whose removal from the list is long overdue, violating the First Amendment rights of companies to sell their products in California without having to carry untruthful statements that they can cause cancer. The listing has also been responsible for over a thousand violation notices and millions of dollars in penalties and attorneys' fees and awards against companies large and small – and needless consumer confusion and concern in the process without making the environment safer or improving human health.
Acrylamide, Proposition 65, and Abuse
The chemical acrylamide has been a thorn in the side of companies doing business in California for years. Acrylamide is a chemical covered by California's toxics right-to-know warnings law, the "Safe Drinking Water & Toxics Enforcement Act of 1986" (Health & Safety Code § 25249.6, et seq.) (Proposition 651). Acrylamide is a chemical that is formed by the reaction of baking or roasting of certain elements in foods: it forms from sugars and an amino acid that are naturally present in food; it does not come from food packaging or the environment. French fries, potato chips, and coffee are the most common. Many people are aware of the "coffee case" from a few years ago where a state court judge ruled that the coffee defendant manufacturers, sellers, and retailers failed to meet their burden required under Proposition 65 to establish that acrylamide caused by the roasting of coffee beans did not cause cancer and ruled Proposition 65 "chemical known by the state of California to cause cancer" warnings were required on coffee products sold in the state. The state agency that regulates Proposition 65 enforcement, the Office of Environmental Health Hazard Assessment (OEHHA), faced with scientific evidence that contradicts acrylamide as cancer causing, as well as worldwide ridicule, quickly issued a regulation reversing the court's ruling.
The coffee case is the highest profile example of the damage this chemical's listing has inflicted on businesses that sell products in California. The issue with the acrylamide listing is that the "safe harbor" level under which a company is not required to place warnings on its products is a miniscule .2 micrograms per day (ug/day). There is significant dispute on the scientific basis upon which acrylamide was included on the Proposition 65 list. In fact, several peer-review journals and a wealth of evidence conclude that it is not a carcinogen in humans. But companies selling baked goods in California continue to be held hostage to this unrealistic .2 ug/day level. Private enforcer bounty hunters in turn issue thousands of violation notices forcing significant settlements. These have included some coffee retailers, fast food restaurants, cookie and cracker manufacturers, and baby food companies. And the notices multiply every year. Settlements and penalties have gone well into the six figures in the last few years. With no end in sight.
The Chamber of Commerce Case and the First Amendment
Until now, perhaps. The California Chamber of Commerce filed suit against the state arguing that Proposition 65's requirement that consumer products carry cancer warnings for acrylamide violated a company's First Amendment rights and constituted compelled speech. The case is California Chamber of Commerce v. Xavier Becerra, Case No. 2:19-cv-02019-KJM-EFB (C.D.Cal. March 30, 2021.) The seminal US Supreme Court Case, Zauderer v. Office of Disciplinary Council, 471 U.S. 626 (1985), provides that commercial speech may be compelled where it is: 1) purely factual and uncontroversial; 2) justified and not unduly burdensome; and 3) reasonably related to a governmental interest.
The court found that in this case Proposition 65 failed the test. It first found that the statement in Proposition 65 that acrylamide is "known to the state of California" to "cause cancer" is not factual and certainly not free of controversy. The court went through studies – much like the defense in the coffee cases presented – that addressed the factual evidence that naturally forming acrylamide in foods does NOT cause cancer in humans. The court then summarized how it would be untenable for a company to both carry a Proposition 65 warning while also not making untrue claims. Finally, due to the unsettled and disputed nature of acrylamide's cancer causing properties, a Proposition 65 warning would not advance the state's interest in protecting Californians.
The Second Federal Case Finding Proposition 65 Violates the First Amendment
This decision comes on the heels of a similar ruling by another California federal court, employing the same Zauderer analyses, holding that the First Amendment prohibits California from compelling a Proposition 65 warning for products containing the Proposition 65-listed chemical glyphosate. Wheat Growers, et al. V. Becerra, No. 2:17-cv2401 WBS EFB (E.D. Cal., June 22, 2020). In that case, glyphosate was listed as a possible human carcinogen by one European agency and not the Environmental Protection Agency (EPA) or any US entities. That case is on appeal. Taken together, the regulated community may have grounds for hope. Is it possible that, even if the state courts are not, federal courts are receptive to rejecting Proposition 65 chemical listings that are both scientifically questionable and unconstitutionally burdensome?
Injunction Applies to New Matters
It is unclear whether the Attorney General will appeal the court's order. The district court's injunction applies through the pendency of the action, or until further court order. It enjoins anyone or any organization, including the Attorney General's office, from filing or prosecuting any new lawsuit claiming a food or beverage product is in violation of Proposition 65's warning requirement for failing to carry a cancer warning regarding the ingestion of acrylamide through food and beverage products. The injunction is purely prospective and does not immediately impact any existing consent degrees, settlement, or other agreements related to Proposition 65. The district court's findings, however, if upheld on appeal, may ultimately be grounds for modification of existing consent judgments requiring warnings on food and beverages containing acrylamide. The court did leave the door open for the state to make a case for the injunction to be lifted with the creation and enforcement of alternative and "acceptable" warning language, but left this issue for a later time. What such an alternative would look like, and whether it would be workable, is unclear.
A private enforcer, Council for Education and Research on Toxics (CERT) intervened and argued that the injunction amounted to prior restraint. The court noted, as above, that it was not enjoining existing notices of violation or settlement demands, but also held that a federal court may enjoin a state action where those actions have illegal objectives.
Steptoe's Lawyers Advocate for the Regulated Community in Light of the Ruling
In light of this ruling, the lawyers of Steptoe's Proposition 65 group have written the Office of the Attorney General and requested it provide guidance and assistance to the regulated community. It asked that it contact all known Proposition 65 private enforcers and ensure they are aware of the injunction and understand its implications and prohibition on initiation of new actions pending the injunction. Second, it requested the office provide outreach to the regulated community in the area of acrylamide products, particularly small businesses who may not be aware of this ruling and who might still receive a new violation notice.
Steptoe's Proposition 65 lawyers continue to monitor this important issue and will provide updates as the matter unfolds.
