April 2. 2019
By Dennis Raglin
1. Forced Prop 65 Warnings
Can you be forced to slap language on a product you sell that not only do you not agree with but which can be false or misleading – and scare your customers? In California the answer is yes. But that may be finally changing. California’s Proposition 65 requires specific warning language be placed on products sold here if they contain any one of hundreds of chemicals listed on a state list known as carcinogens or reproductive toxicants. (California Health & Safety Code section 25249.5, et seq.) We’ve all seen the warnings. They are on buildings, in stores and on hundreds of products. They are even posted in Disneyland. Over the years many defendants have argued that being required to place such warnings amounted to a violation of their freedom of speech under the First Amendment and constitute compelled commercial speech because, in some cases, forcing these warnings on products that do not require them contains misleading or false information. This is a big deal because trying to prove a product contains a chemical in levels that do not require a warning can be prohibitively expensive, forcing many to place warnings just to avoid the risk of violation notices while providing customers with inaccurate information, if not scaring them off.
2. Prop 65 Warnings Meet First Amendment Rights
Unlike with individual speech, commercial speech is entitled to limited First Amendment protection. The agency seeking enforcement is only required to establish that the warning requirement is reasonably related to an underlying state interest. (Zaruderer v. Office of Disciplinary Counsel (1985) 471 U.S. 620, 651.) So, a rational basis – the most liberal – test applies. To meet this requirement the government must show that the mandated speech is (1) purely factual, (2) noncontroversial, and (3) not unjustified or unduly burdensome. (Zaruderer continues to apply even though the Supreme Court recently decided another compelled speech case, National Institute of Family & Life Advocates v. Becerra, 138 S. Ct. 2361 (2018) (“NIFLA”).)
This defense has been frequently argued but rarely successful in court. Courts have almost always found Prop 65 warnings to be constitutional compelled speech. The most recent example is the big Prop 65 acrylamide-in-coffee case where the court considered this defense and rejected it, holding that the Prop 65 warning passed the “reasonably related” test for a number of reasons, including that it fulfilled a legitimate state interest of informing the public of risks from exposure to certain chemicals in brewed coffee and that requiring such warnings was reasonably related to getting health and safety information to the public. The court also held that a warning that a specific chemical listed on the Prop 65 list known to cause cancer was neither false nor misleading. (CERT v. Starbuck Corp., et al. Los Angeles County, 2015, No. BC435759.)
3. Turning of the Tide for a Dormant Defense?
a. The Sugary Soda Warnings Decision
Recent court decisions give new hope that the tide may be turning on the First Amendment defense. If so, we have soda and Round Up to thank. First, at the end of January the Ninth Circuit Court of Appeal invalidated a law imposed by San Francisco on soda makers that required a boxed warning regarding the risks of drinking sugar-containing beverages, agreeing that is was unconstitutional. The court found significant the fact that the law required there be a black box warning placed on the ads and that it take up twenty per cent of the advertisement space with no basis for requiring it be that large. Under the above Zaruderer analysis the court ruled that the city failed to show that such a large warning was not unjustified or not unduly burdensome. (American Beverage Association v. City and County of San Francisco, Opinion, 16-16072, US Court of Appeals, 9th Circuit, filed January 31, 2019.) An en banc panel of the court held that the city’s ordinance was unconstitutional. The court ruled that, though government can require a warning or disclosure as part of commercial speech, because the city’s stated goal of reducing consumption of sugary drinks could be met by other, less intrusive means (such as a warning consuming 10 per cent of the advertisement), the city had not demonstrated the ordinance could defeat the third prong of Zarudrerer – that the law was not unjustified or unduly burdensome.
b. The Round Up Injunction
A second example of renewed life for this defense involves the chemical glyphosate. The agency charged with enforcing Proposition 65, the Office of Environmental Health Hazard Assessment (OEHHA), previously listed this chemical (the main ingredient in the herbicide Round Up) as a chemical known to cause cancer. As is allowed by the law OEHHA relied on just one international organization’s conclusion that the chemical was a “probable” carcinogen based on testing in rats, a conclusion the U.S. EPA disagrees with. Major agriculture groups and Monsanto, Round Up’s manufacturer, sued the state claiming that warnings would violate their First Amendment free speech protection by forcing “false, misleading and highly controversial statements” on the products in the form of a Prop 65 warning. (National Association of Wheat Growers v. Zeise, et al., Memorandum and Order 2:17-cv-02401-WBS (E.D. Cal. June 6, 2018.) The judge hearing the matter granted and upheld a temporary injunction in 2018 and noted that such a warning would be “misleading at best,” given that “a reasonable consumer would not understand that a substance is ‘known to cause cancer’ where only one health organization had found that the substance in question causes cancer and virtually all other government agencies and health organizations that have reviewed studies on the chemical had found there was no evidence that it caused cancer.” Using the same analysis as in the Zaruderer case he held that a Prop 65 warning was neither purely factual or uncontroversial given most of the other regulating bodies had concluded that there was insufficient evidence of carcinogenity.
Glyphosate remains on the Pop 65 list as a carcinogen. OEHHA argued to the court that it has since established a safe harbor level under which a warning is not required, and argued that if a safe harbor were established companies could avoid warnings if they established exposure below a the safe harbor level. The judge rejected OEHHA’s position noting that, even if the chemical were properly listed as a carcinogen, a company would incur expense to test and perform exposure assessments to defend and prove the exposure level was under the safe harbor and that no warning would be required, a lengthy and expensive process. In other words, OEHHA argues that even if the warning were improper compelled commercial speech, no harm no foul if a defendant goes to the time and expense of conducting an exposure assessment does not expose a consumer to glyphosate above the set safe harbor level. The judge disagreed. He subsequently stayed further proceedings in the case to wait and see how the Ninth Circuit resolved two other commercial speech cases applying the Zaruderer test. One of those cases was the American Beverage case discussed above. That would suggest the Round Up judge has precedent on his side if he chooses to make permanent his injunction. And if he does this could signal a tectonic shift in defending Prop 65 claims.
4. A New Day for the First Amendment Defense?
So, what does all this mean for the future of Prop 65 and the issue of the frustrating warnings companies have to deal with? For so long defendants have been unsuccessful in arguing a free speech defense. Some, including the author, have been resigned to the idea that no court would agree that the warnings are unconstitutional. There are already so few defenses to Prop 65 claims other than the expensive process of proving exposure compliance. This places a heavy burden on small business saddled with this burden, causing many to place warnings on products as a prophylactic measure when their products may not be in violation, causing confusion – or worse – with their customer base. With the above recent cases injecting signs of life in this defense it seems there is renewed hope to level the playing field.
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