The California Attorney General’s Office has reached two settlement agreements with retailers regarding the use of lead and DEHP (a plasticizer used to soften polyvinyl chloride (PVC)) in adult accessories. Retailers nationwide should be aware of Proposition 65 and the recent agreements due to the fact that they affect any retailer that makes any sales — including Internet sales — to consumers in California. The first agreement has been approved and the second will go into effect pending the court’s approval. Both settlements revolve around the Attorney General’s actions brought against retailers under California Proposition 65, the “Safe Drinking Water and Toxic Enforcement Act of 1986.”

California Proposition 65 was passed to address consumer exposure to toxins through drinking water, the environment, occupations, and consumer products. It requires the State of California to maintain a list of carcinogenic and toxic chemicals. Where a business uses a listed chemical, it must provide a “clear and reasonable warning” to consumers that the chemical is present. The list of chemicals is available on the California Office of Environmental Health Hazard Assessment’s website. The only way that a retailer may avoid providing a warning to consumers where a listed chemical is present in its goods, is if the level of the chemical is below the “safe harbor” level — levels considered “no significant risk” for carcinogens and “maximum allowable dose levels” for toxins and teratogens. The recent settlements set levels for select listed chemicals that may be present in fashion accessories without the retailer being required to provide a warning. The agreements also set dates by which retailers involved in the agreements must comply.

The first settlement involved the lead levels in materials used in connection with fashion accessories such as totes, handbags, purses, wallets, footwear, and belts. The consent judgment requires all accessories sold after December 1, 2010 to meet specified lead levels for the lead in paint, leather, PVC, and all other accessible components (excluding crystal, glass, rhinestones, and cubic zirconia) used in their manufacturing. Further reduced levels are required by December 1, 2011.

The second settlement agreement, which is still awaiting court approval, involves the use of Bis(2-ethylhexyl)phthalate, commonly referred to as DEHP, in fashion accessories. Under the terms of the agreement, the retailers involved have agreed to limit DEHP content to 1000 parts per million (ppm). The accessories affected include wallets, handbags, jewelry, belts, footwear, apparel, key chains and holders, luggage and ID tags, bag charms and zipper pulls, electronic device cases, cosmetic bags, and toiletry cases and bags. Manufacturers and/or retailers of such goods who wish to join the settlement may opt-in. Companies interested in opting into the settlement must do so by January 31, 2011, however, the cost of opting in is less for most companies that do so by December 10, 2010. All retailers that opt-in to the agreement must comply with its terms by December 15, 2011.

All retailers should be aware of Proposition 65 and the above settlements. Proposition 65 requirements apply to any business with 10 or more employees. The required warnings and chemical levels apply to items sold in California, even if that sale takes place over the internet. Because California is such a large market and many businesses would be negatively affected if forced to cease business in the state, businesses and retailers operating in California should consider the following:

• Ensure that any chemicals listed on the Proposition 65 list, contained in a consumer product, are below the “safe harbor” levels required for a warning;
• Place a Proposition 65 warning on any product if there is any question regarding the levels of a listed chemical; and
• Require testing of all products and ensure that vendors comply with Proposition 65.

Businesses may desire to contact counsel with any questions regarding Proposition 65 and the recent settlements. Arent Fox is monitoring this issue. If you have any questions regarding Proposition 65 or any other advertising or compliance concerns, please contact Anthony V. Lupo.