By Catherine W. Johnson, Partner, Environmental General Counsel LLP
July 8, 2020 -- While the vast majority of Proposition 65 claims involve consumer products, Proposition 65 also applies to environmental exposures. On July 3, 2020, a Proposition 65 notice of intent to sue was filed against a consulting firm and a national home builder for alleged exposures (via both inhalation and ingestion) of Proposition 65 chemicals associated with the presence of contaminated dirt and use of heavy equipment for excavation activities at a contaminated property. The facts of the case are unique – two former employees of the consulting firm were convicted of falsifying documents about the contamination at the site – but nonetheless serve as a warning about the possibility of Proposition 65 claims at contaminated properties.
Although compelling arguments can be made that Proposition 65 was not intended to apply to releases unrelated to current exposures (e.g. vapor intrusion resulting from historical releases) or to exposures resulting from remedial activities, there is no published case authority that resolves these issues. Nor is there case authority addressing Proposition 65 warnings associated with grading, excavation or other activities at contaminated properties that could result in exposures – or how such Proposition 65 warnings, if required, should be provided.
Companies that provide Proposition 65 warnings associated with exposures from contaminated properties face significant challenges. Proposition 65 warnings – and the safe harbor warnings promulgated under Proposition 65 – are not designed to address the various contingencies and fact scenarios that arise in the context of contaminated properties. While the safe harbor warnings are not mandatory, the safe harbor warnings are intended to provide companies with assurances the warning complies with Proposition 65.
Among other things, Proposition 65 warnings may be required for exposures to some contaminants at levels that may not require remediation by California regulatory agencies overseeing contaminated sites. For listed carcinogens, the standard for risk under Proposition 65 is generally consistent with other risk-based standards; however, the “no significant risk” level for reproductive toxicants (e.g., trichloroethylene or “TCE”) is more conservative than risk-based standards adopted by other
Consequently, some Proposition 65 warnings may have to continue to be given even after the agency-directed cleanup is complete, which may be confusing or alarming to those who receive the warning – at least without some explanation of why some warnings (associated with carcinogens) have been discontinued but others (associated with reproductive toxicants) continue to be provided. Moreover, the different risk standards can complicate coordination with regulatory agencies about when notices/warnings should be provided and what they should say.
The safe harbor warnings prohibit any additional language in the warning itself other than the prescribed safe harbor language except to provide information about the source of the exposure and how to avoid or minimize an exposure. In most cases involving contaminated properties, however, Proposition 65 warnings may need to be supplemented to provide more meaningful information. For example, there may be short-term or special risks associated with an exposure that are not included in the standard safe harbor language. Businesses may also want to couple warnings with information about remedial steps that are being discussed with or required by regulatory agencies. Additional information can and should be provided as appropriate; however, care should be taken to provide supplemental information separately rather than within the Proposition 65 warning.
Another complicating factor with the safe harbor warnings in the context of contaminated properties is the requirement that the warning identify the affected area – either by a sign posted before entry to an affected area or by publishing a newspaper announcement with a map of the affected area. In many cases involving contaminated sites, the affected area may either be unknown or (in the case of vapor intrusion) without clear borders. In addition, any map of the affected area will require some legend or explanatory note regarding what the map depicts to make sense of the map; yet, as noted above, the safe harbor language precludes use of any additional language in the warning.
Although Proposition 65 only applies to exposures when there is knowledge of the exposure, some support exists for the proposition that knowledge may be
constructive.  Thus, determining what exposures are known or unknown could implicate regulatory standards that extrapolate the level of indoor air contaminants from concentrations of the chemical in soil vapor, soil, or groundwater.
In conclusion, unless necessary, it is preferable to make appropriate warnings and disclosures about exposures associated with contaminated properties and vapor intrusion outside the Proposition 65 framework – or evaluate whether it is possible to achieve Proposition 65 compliance by making Proposition 65 warnings unrelated to the subsurface contamination.
When a business decides Proposition 65 warnings are necessary or appropriate, however, providing Proposition 65 warnings for actual or potential environmental exposures associated with a contaminated site requires careful planning and coordination to ensure Proposition 65 warnings are not confusing or inconsistent with other information that may be provided by regulatory authorities – and Proposition 65 warnings may need to be supplemented and modified as necessary to ensure information provided to the public is accurate and meaningful.
 California’s Proposition 65 law requires businesses to notify persons before exposing them to chemicals identified as carcinogens or reproductive toxins. Cal. Health & Safety Code § 25249.6. Business may avoid the warning requirement if they can establish the exposure does not present a significant risk (by using Proposition 65 methodology for what constitutes a significant risk). Cal. Health & Safety Code § 25249.10.  Notice of Intent to Sue filed by residents of Bayview Hunters Point against various Tetra Tech entities and the Lennar Corporation in connection with the development at Bayview Hunters Point, Letter to Noticed Parties from the law firm of Bonner & Bonner, July 3, 2020.  In addition, two year ago, The Center for Environmental Health, a leading Proposition 65 plaintiffs’ law firm, filed a Proposition 65 claim alleging a failure to warn about vapor intrusion associated with historical releases at a contaminated property. CEH v. Senior Operations, San Diego County Sup. Ct., Case No. 37-2018-00005835-CU-MC-CTL (Feb. 1, 2018).  See Consumer Defense Group v. Shell Oil, No. G034935, 2006 Cal. App. Unpub. LEXIS 7885 (Cal. Ct. App. August 31, 2006)( court reasoned that an initial release or discharge to the subsurface is the only act relevant for Prop 65 analysis; if no Prop 65 exposure occurred at that time, then there is no Prop 65 liability for subsequent passive migration of the contaminants to another area,) see also, Hernandez v. Whitman, No. A108245, 2006 Cal. App. Unpub. LEXIS 1324 (Cal. Ct. App. February 14, 2006) (court reasoned exposures occurring as a result of pollution abatement activities were not exposure in the course of “doing business” for purposes of Proposition 65).  Under the Proposition 65 standard, assuming lifetime exposure at the level in question, the chemical would result in one excess cancer case in an exposed population of 100,000. 27 CCR § 25703(b).  Under the Proposition 65 standard, assuming lifetime exposure at the level in question, exposures at 1,000 times the level in question must have no observable effect. Cal. Health & Safety Code § 25249.10(c); 27 CCR § 25801.  TCE is listed under Proposition 65 as both a carcinogen and a reproductive toxicant.  Id. § 25601(e).  See, e.g., Final Statement of Reasons Revised (November 4, 1988) (pursuant to former Cal. Code Regs. tit. 22 § 12601).This provision was cited in the recent complaint filed in the CEH v. Senior Operations litigation alleging a Prop 65 violation for failure to warn about TCE vapor intrusion. See supra, n. 3.