In 2004, the California Supreme Court issued its decision in Dowhal v. SmithKline Beecham Consumer Healthcare, holding that when a Proposition 65 warning directly conflicts with requirements under federal law, the federal requirement prevails. Dowhall involved nicotine replacement therapy, including gum and nicotine patches, that are regulated by the Food and Drug Administration (FDA). The Supreme Court held that the FDA could prohibit Proposition 65 warnings where they were misleading or could frustrate federal objectives. Courts have also found Proposition 65 warnings to be pre-empted by Cal-OSHA and federal OSHA requirements in the workplace. But preemption of Proposition 65 has been rejected by California courts where certain other federal statutes were invoked.
Against this backdrop of Dowhall and other court rulings, companies doing business in California have wondered how far federal preemption of Proposition 65 will reach.
There may soon be an opportunity for new guidance: a Proposition 65 plaintiff has recently turned its attention to the meat industry - specifically, supermarkets and meat packers - to pursue violations of Proposition 65 based on the alleged presence of dioxins and PCBs in ground beef and liver. On November 3, 2004, frequent Proposition 65 litigant Whitney Leeman sent nine 60-day notices to supermarkets and meat companies, asserting that such meat products should carry Proposition 65 warnings. Dioxins and PCBs are both listed under Proposition 65 as carcinogens and reproductive toxins.
Although no lawsuit has yet been filed, counsel for the U.S. Department of Agriculture (USDA), apparently acting on the 60-day notice, sent a letter to the California Attorney General (AG) warning that federal laws preempt state laws such as Proposition 65. The AG has intervened in similar lawsuits involving mercury in fish, and point-of-sale warnings alerting people to this issue are now common in California supermarkets. The AG responded to the USDA letter by citing published decisions in which point-of-sale warnings were required under Proposition 65 even when labels on the products themselves were preempted by federal statute.
In the beef cases, however, the USDA has cited federal meat inspection laws that prohibit states from imposing "marking, labeling, packaging or ingredient requirements" that differ from federal standards, which would include materials that "accompany" the products. The USDA letter also specifically referenced the likelihood that point-of-sale warnings would confuse the public as to the wholesomeness and safety of meat and poultry products. In fact, several federal cases have already held that other state laws that conflict with the federal law regarding marking, labeling or packaging of meat are preempted. On the other hand, at least one federal court has rejected the USDA's argument that the term "labeling" includes materials "accompanying" the product.
Thus, while there may be language in the federal statute that distinguishes meat products from those that were the subject of earlier Proposition 65 preemption rulings, and that make them more similar to the nicotine patches at issue in Dowhall, it is not clear whether the cases involving the meat industry are more similar to Dowhall or prior unsuccessful arguments that Proposition 65 was preempted.
Background on Proposition 65
California's Safe Drinking Water and Toxic Exposure Act, popularly known as Proposition 65, was enacted by the voters in 1986. The statute requires businesses with 10 or more employees to provide a warning of exposure to any chemical "known to the State of California" to cause cancer or birth defects (commonly referred to as "listed chemicals"), and prohibits discharge of any such chemical to a source of drinking water.
Actions for alleged violations of Proposition 65 may be brought by government enforcement agencies, or by "private attorneys general" following notice to the businesses and to the government. Most Proposition 65 litigation is brought by private attorneys, environmental groups and consumer groups. Courts are authorized by the statute to impose injunctive relief, order civil penalties of up to $2,500 per day of each violation, and award attorney’s fees under California law. Proposition 65 plaintiffs are also allowed to retain 25 percent of civil penalties that are imposed, the so-called "bounty hunter" provision.
Proposition 65 actions frequently include claims of "unfair competition" under California Business & Professions Code § 17200. In such claims, plaintiffs contend that businesses that fail to comply with Proposition 65 obtain an unfair competitive advantage over compliant businesses. The Business & Professions Code provides additional remedies to a prevailing party, including restitution, injunctive relief and recovery of legal fees and costs.
Preemption of Proposition 65
Like other state statutes intended to protect health and safety, the warning requirements of Proposition 65 are also addressed by federal statutes. In such circumstances, the doctrine of preemption may apply: Federal law may override state law based on:
- explicit congressional statutory preemption;
- implicit preemption, where the federal government occupies the entire field of regulation; and
- conflicts between state and federal laws.
Dowhall was the first case in the 17-year history of the statute in which the highest court in California addressed federal preemption of Proposition 65. In the past, most California courts have declined to find Proposition 65 warnings preempted by federal statutes, including the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), the Federal Hazardous Substances Act (FHSA), and the Medical Device Amendments (MDA) under the FDCA. As a result, a broad range of products have been the subject of both federal labeling requirements and sometimes conflicting Proposition 65 warnings.
The recent 60-day notices sent to members of the meat industry involve federal laws that have not been challenged under Proposition 65. The resolution of these claims may provide further insight into the potential scope of preemption of Proposition 65 following Dowhall.