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June 7, 2011

California Appellate Court Affirms Decision Supporting Proposition 65 Labor Code Listing Mechanism

Bergeson & Campbell, P.C.

On June 6, 2011, the California Court of Appeal for the First Appellate District affirmed the 2009 decision by the Alameda County Superior Court upholding the Office of Environmental Health Hazard Assessment’s (OEHHA) use of the Labor Code mechanism to add chemicals to Proposition 65. California Chamber of Commerce v. Schwarzenegger (Div. 1, No. A125493). This effectively means that the so-called Labor Code mechanism is a viable listing mechanism for Proposition 65 purposes. This memorandum briefly summarizes the decision.

The case concerns the methods by which Proposition 65 can be updated, and specifically whether OEHHA can add chemicals to the list by use of a methodology set forth in Section 25249.8(a) of the Health and Safety Code. The California Chamber of Commerce (CalChamber) contended this listing method is no longer operable and applied only to the creation of the initial Proposition 65 list. According to CalChamber, further changes to the list must be made using one of the three methods set forth in Section 25249.8(b) — the Expert Review method, the Authoritative Body method, or the Formally Required to be Labeled method. The trial court concluded the language of Section 25249.8 is unambiguous and the listing method set forth remains operable. While the appellate court did not agree the statutory language is completely unambiguous, it agreed “the Proposition 65 list not only can, but must be, updated by the method used here by the OEHHA and set forth in” Section 25249.8(a). The decision is available online.

According to OEHHA, Section 25249.8(a) of the Health and Safety Code incorporated certain provisions of the California Labor Code into Proposition 65. These provisions, OEHHA argued, require that certain substances identified by the International Agency for Research on Cancer (IARC) or the National Toxicology Program (NTP) be listed as known to cause cancer under Proposition 65. These provisions also require that certain substances identified as causing reproductive toxicity in 29 C.F.R. Part 1910, Subpart Z, Toxic and Hazardous Substances, Occupational Safety and Health Administration (OSHA), or in the Threshold Limit Values (TLV) for Chemical Agents in the Work Environment, American Conference of Governmental Industrial Hygienists (ACGIH) (latest edition), be listed as known to cause reproductive toxicity under Proposition 65.

CalChamber challenged OEHHA’s use of the Labor Code mechanism to update Proposition 65, arguing that the statute provided for the use of the Labor Code mechanism only to create the initial list of Proposition 65 chemicals. CalChamber raised two issues on appeal: (1) can OEHHA use the Labor Code mechanism in annually revising and republishing the Proposition 65 list; and (2) if OEHHA can do so, whether chemicals identified by reference to Labor Code Section 6382(d) include chemicals identified on the ACGIH list.

The court reviewed the statutory language of Proposition 65 and concluded that it is ambiguous. The court then examined the legislative history and concluded that the ballot materials “more strongly support the construction urged by OEHHA than by CalChamber,” and that “[n]o distinction was made in the ballot materials between an ‘initial’ Proposition 65 list and subsequent, revised lists.” The court also reviewed the implementation history of the Proposition 65 list, characterizing it as “problematic” and not weighing strongly in favor of either CalChamber or OEHHA. Specifically, the court noted that while OEHHA during the first 15 years following the enactment of the proposition updated the list of Proposition 65 chemicals via the Expert Review, Authoritative Body, and Formally Required to be Labeled methods, it had also, for the past decade, used the Labor Code mechanism in limited circumstances to make changes to the Proposition 65 list. OEHHA first used this method in 2001 to de-list saccharin, without objection. Since then, OEHHA has periodically used this mechanism to both list and de-list chemicals. While OEHHA has received objection when using the Labor Code mechanism to list chemicals, it has received no objections when using it to de-list chemicals. It should be noted that the current suit began in part based on OEHHA’s perceived expansion of its use of the Labor Code listing mechanism by proposing in 2009 to add 30 chemicals to Proposition 65 based on this mechanism and its commencement of a process to adopt regulations pertaining to OEHHA’s use of the Labor Code mechanism to list or de-list chemicals, which OEHHA had not previously proposed.

The court determined that Proposition 65 is a “remedial statute” and therefore should be broadly construed to accomplish its protective purposes. The court thus concluded that the Labor Code mechanism is to be used in revising the Proposition 65 list, and the three other listing methods are additional means by which OEHHA can revise the list. According to the court, this construction ensures the Proposition 65 list of chemicals always includes, at a minimum, those substances identified by reference to Labor Code Section 6382(b)(1) and (d) — “i.e., those chemicals that already must be treated as carcinogens or reproductive toxins for the purpose of [the Hazardous Substances Information and Training Act (HSITA)] (Lab. Code, § 6360 et seq.) and the federal [Hazard Communication Standard (HCS)] (29 C.F.R. § 1910.1200 (2010)).”

The court acknowledged CalChamber’s fundamental concern — “that given the significant costs attendant to listing, several key assurances were made with respect to Proposition 65, including that listing would be based on solid science and the list would include only chemicals ‘known to the state to cause cancer or reproductive toxicity’ and not ‘only suspect.'” In this regard, the court notes, “the saccharine episode is, indeed, cause for pause.” OEHHA listed saccharine as “known to the state to cause cancer” for 15 years pursuant to the Labor Code mechanism, and, when IARC and NTP ultimately concluded otherwise, de-listed saccharine. The court states: “However, through the millennium, science has never been static, and what is ‘known’ is necessarily defined by the state of the art at the time.” While CalChamber singles out the Labor Code mechanism as scientifically deficient due to a lack of independent analysis by OEHHA, let alone, the state’s experts, the court points out that two of the listing methods also include little or no independent review. Under the Authoritative Body method, OEHHA reviews listings to determine if they are supported by “sufficient evidence” as defined in the regulations, but does not “substitute its scientific judgment for that of the authoritative body.” The Formally Required to be Labeled method also entails no review by OEHHA or the state’s experts.

Regarding CalChamber’s contention that, even if the Labor Code mechanism specifies the minimum content of all iterations of the Proposition 65 list, it should not be construed to reach chemicals identified as reproductive toxins on the “current” ACGIH list, the court “drill[s] down through several layers of statutes and regulations to identify the sources embraced by the Labor Code” mechanism. According to the court, Section 6382(d) “provides a clear roadmap as to the listing sources it embraces.” Subpart (d)(3) of the federal HCS requires chemical manufacturers, importers, and employers to treat as hazardous chemicals identified by two sources: (1) OSHA Subpart Z (29 C.F.R. § 1910.1200(d)(3)(i) (2010)); and (2) the ACGIH list (29 C.F.R. § 1910.1200(d)(3)(ii) (2010)). CalChamber points out that Proposition 65 does not require the listing of all hazardous substances, but only those known to the state to cause cancer or reproductive toxicity. The court states that it “can be readily determined, however, which substances have been identified as reproductive toxins in the ACGIH list,” which includes a “Basis” column that identifies the particular adverse effect(s) upon which a listing is based. ACGIH also provides documentation describing the scientific information and data on which ACGIH relied in identifying the basis for listing. Accordingly, according to the court “OEHHA can as readily identify reproductive toxins on the ACGIH list referenced by subpart (d)(3) of the HCS as it can carcinogens on the lists prepared by the three sources identified by subpart (d)(4).”

The availability of the Labor Code listing mechanism sets a dangerous precedent. Because of the ease with which chemicals can be listed under Proposition 65, this mechanism could easily become OEHHA’s listing mechanism of choice. As of this writing, it is unclear whether OEHHA intends to propose regulations to implement the Labor Code listing process.