Proposition Proposition

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					Proposition 65
    How This California Law
 Affects the Entire Promotional
       Products Industry
   Steve Slagle, CAE, PPAI President
   Stan Breckenridge, MAS, Moderne Glass
    Company, PPAI Board of Directors
   Trenton H. Norris, Esq., Partner, Bingham
    McCutchen, LLP, San Francisco
   John Satagaj, Esq., PPAI General Counsel
    and Legislative Affairs Representative
Presentation Agenda
   Background Information
   Proposition 65 Compliance
   Enforcement and Settlements
   Possible Legislative Remedies
   The Next Steps: Industry Education and Action
   Research and Resources
   Your Questions
Background Information
   In 1986, California voters approved an
    initiative to address growing concerns about
    exposure to toxic chemicals
       Safe Drinking Water and Toxic Enforcement Act
        of 1986 - Proposition 65

   California Law = National Issue?
Proposition 65 Requirements
   Proposition 65 requires that the Governor
    publish a list of chemicals known to the State of
    California to cause cancer, birth defects, or
    other reproductive harm
   List has grown to include approximately 750
    chemicals since it was first published in 1987
Proposition 65 Requirements
   Proposition 65 requires that businesses
    notify Californians about significant
    amounts of chemicals known to the State of
    California to cause cancer, birth defects, or
    other reproductive harm in the products they
    purchase, in their homes or workplaces, or
    that are released into the environment
Background Information
   Proposition 65 is a reality for companies doing
    business in California. There may be significant
    tangible and intangible costs associated with
    compliance and noncompliance with the law…
   Compliance
       Expense to test products
       Development of alternatives to listed chemicals
       Reducing discharges
       Providing warnings
   Non-compliance
       Lawsuits, legal fees, settlements, injunctive relief
 What Is On The List?
 Dyes and inks
 Solvents

 Pesticides

 Prescription and over-the-counter drugs

 Food and food additives

 Common household products

 Byproducts of certain processes
       Motor vehicle exhaust
What Must A Business Do or Not
   Businesses are required to provide a ―clear and
    reasonable warning‖ before knowingly or intentionally
    exposing anyone to a listed chemical
       Labeling a consumer product
       Posting signs at the workplace or public area
       Distributing notices
       Publishing notices in a newspaper
   Businesses are prohibited from knowingly discharging
    listed chemicals into sources of drinking water
What Must A Business Do or Not
   Any company with ten (10) or more employees
    that operates within the State or sells products
    in California must comply with the requirements
    of Proposition 65
   Once a chemical is listed, businesses have 12
    months to comply with warning requirements
   Once a chemical is listed, businesses have 20
    months to comply with the discharge prohibition
Who Monitors the Warnings?
   Businesses do not file reports with the State
    regarding what warnings they have issued and
       The State does not provide specific information
        about any particular warning
       The business issuing the warning is the party to
        contact for more information about the warning,
        chemicals involved, the manner the chemicals are
        present and how exposure may occur
Proposition 65 Enforcement
   Enforcement is carried out through civil lawsuit
       California Attorney General’s Office
       Any district attorney or city attorney (population
        above 750,000)
       Private parties acting in the public interest may
        enforce Proposition 65 by filing a lawsuit if:
         • It provides notice of the alleged violation to the business
           and all public prosecutors; AND
         • No public prosecutor sues first within 60 days of the notice
What Types of Promotional
Products Are Most Affected?
   Drink ware and glassware
   Food products, including alcohol
   Tableware, picnic products
   Costume or children’s jewelry
   Lead crystal awards, vases
   Anything with an electrical cord
   PVC or soft plastic
   Toluene markers
   Carbonless copy paper
   Brass products
Plaintiff’s Favorites

   Toluene
   Lead
   Mercury
   Formaldehyde
   Asbestos
   Chloroform
   PCBs
   Crystalline Silica
   Cadmium
Options for Dealing with
Proposition 65
 Prevention   and Compliance
   Don’t sell products in California
   Don’t sell products with listed chemicals
    in California
   Seek alternative manufacturing and/or
    decorating methods
   Arrange indemnities with suppliers
   Provide a “clear and reasonable” warning
   Seek knowledgeable legal counsel
   Support legislative remedies
What Other Products Have
Been Affected?
   Art Supply Clay           Nail Polish
   Bricks/Cement Blocks      Nicotine Patches
   Calcium Supplements       Parking Garages
   Cheese
                              Pasta Sauces
   Dandruff Shampoo
                              Pipe Valves
   Soldering Irons
   Fleets of Trucks          Potato Chips/Fries

   Fluorescent Bulbs         Railroad Ties
   Hair Dye                  Toys
   Hair Lice Treatment       Tuna Fish
   Jet Skis
                              Vitamins
                              Water Meters
What is an Exposure?

   Exposures can be
       Oral
       Inhalation
       Transdermal (through the skin)
       Hand-to-mouth
   Exposure matters (micrograms/day)
       NOT concentration of the chemical
        (micrograms per liter or parts per million)
       Average use
     Dealing with Proposition 65
             What are your options?

    Provide A ―Clear and Reasonable‖ Warning
     If products contain listed chemicals, provide a
       •   That one or more listed chemicals is present in the product
       •   That you have evaluated the exposure and concluded that it
           exceeds the ―no significant risk‖ level, or
       •   The business has chosen to provide a warning simply based on
           its knowledge about the presence of a listed chemical, without
           attempting to evaluate the exposure
       •   In these cases, exposure could be below the Proposition 65
           level of concern or could even be zero
Example of Warning Label
  Product label provided by promotional products
  industry supplier

 Glassware and Ceramic drink ware with colored
 decorations on the exterior contain lead, lead
 compounds and/or cadmium which are known to the
 State of California to cause cancer or birth defects or
 other reproductive harm.
Become partners:
   Eliminate the use of chemicals and processes
    listed under Proposition 65
   Make certain products meet the Safe Harbor
   Communicate with distributors about the
    distribution of products into California
   Label products accordingly
Become consultants:
   Work with clients to determine the suitability of a
    product or service including where the product will
    be used and distributed
   Do your homework. Work with reliable and
    educated suppliers
Seek Knowledgeable Counsel
   The issues of the potential practical level
    of financial exposure of your company
    versus others involved in the transaction,
    the court’s jurisdiction over your company,
    and the merits of settlement are
    complicated legal questions to which there
    is no “one answer fits all.” Therefore you
    should consult with an attorney familiar
    with California Law and Proposition 65
    about your situation.
Possible Legislative
   Federal legislation to preempt Proposition 65
       The National Uniformity for Food Act of 2006
       Would have amended the Federal Food, Drug, and Cosmetic
        Act to provide for uniform food safety warning notification
       Passed House, died in Senate in 2006
       New legislation in 2007? New approach?
   Federal legislation to preempt Proposition 65
       Canned tuna case
       Prescription drugs
   State legislative action
       Proposition 65 requires 2/3 majority for amendment
       Amendment must “further the purposes” of the law
       Ballot propositions considered
Next Steps for Industry
Education and Action
 Additional Webinar programs in 2007
 PPAI L.A.W. Action Alerts as warranted

 Coalition with other trade associations
       National Uniformity for Food Coalition
        – More than 100 companies and
        organizations whose industries are
        impacted by Prop 65
    Research and Resources

Learn more and take action!
    PPAI LAW:
       Proposition 65 Legislative Alerts
       Letter sample and template
       March 2006 PPB President’s Perspective
       May 2006 PPB Article Indecent Proposition
       Proposition 65 Q&A
Research and Resources
Learn more:
   Bingham McCutchen:
   Office of Environmental Health Hazard
    Assessment (OEHHA—program administrator,
    chemical lists)
   Enforcement Reporting – CA Attorney General
Research and Resources
Learn more:
   Society of Glass and Ceramic Decorators
    515 King Street, Suite 420
    Alexandria, VA 22314
    For information on test procedures for metal release from
    tableware, consult a recognized testing facility that is
    experienced with the appropriate testing procedures. SGCD
    does not recommend any particular laboratory.
    Research and Resources

Learn more and take action!
    PPAI LAW:
       Proposition 65 Legislative Alerts
       Letter sample and template
       March 2006 PPB President’s Perspective
       May 2006 PPB Article Indecent Proposition
       Proposition 65 Q&A

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