Regulatory & Compliance

Over the past 10 years, the number of private Proposition 65 actions against businesses have nearly quadrupled from 604 in 2009 to 2,364 in 2018. Additional Prop 65 regulations on “safe harbor” warnings and online retailers took effect last August, clarifying the duties of online retailers regarding warnings, which may have caused a decrease in new Prop 65 actions against online retailers.

In light of the new rules and litigation trends, we examine which products are likely to face litigation and offer two ways companies might avoid liability, including by (1) considering the use of “safe harbor” warnings and (2) staying up to date with Prop 65 litigation and the regulations promulgated by the California Office of Environmental Health Hazard Assessment’s (OEHHA) regulations.
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A few years ago, hoverboards drew a lot of attention from the U.S. Consumer Product Safety Commission (CPSC). Formally known as self-balancing electric scooters, hoverboards became an instant success because they combined practical mobility and enjoyment. But that success was not without some setbacks. When news stories in 2015 linked hoverboards to fires (which we wrote about here), the same popularity that drove sales also attracted public and government scrutiny.

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When California enacted SB 327 last year, it became the first state to regulate Internet of Things (IoT) devices, which refer to physical devices that are connected to the internet. Beginning next January, the new law will require manufacturers of IoT devices sold in California to implement reasonable security features that protect the software, data, and information contained within them. While the law regulates only the minimum security standards for IoT devices, its definition of a “connected device” (i.e., an IoT device) may impact product liability claims because “connected devices” are physical objects and not technology. SB 327’s definition suggests that manufacturers of the software in IoT devices may not be held strictly liable for software defects, because the law aligns with and reinforces the view of most courts that software is not a product, but a service.
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Slack fill litigation can be frustrating for businesses – at times even infuriating. For companies yet to find themselves on the wrong side of a slack fill lawsuit, the claim often boils down to, “I thought there was more in the package even though the label said exactly what I was buying.” Slack fill claims have proliferated in recent years, driven in large part by how easy it has been for class action plaintiffs’ lawyers to plead a claim that will at least survive to the discovery phase – the expense of which causes many businesses to settle even frivolous cases. Yet in a rare breath of fresh air, Governor Jerry Brown recently signed California Assembly Bill 2632, which will amend California’s slack fill statutes to give companies a new tool for avoiding slack fill claims.
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As the partial federal government shutdown enters its second week, businesses both large and small should be aware of the shutdown’s implications for the U.S. Consumer Product Safety Commission (CPSC) and for product safety. Companies should be aware that their obligations under CPSC continue, despite that their partner in product safety is absent until its funding is restored.

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This summer President Obama signed a new federal law requiring food manufacturers to disclose information regarding genetically modified organisms (GMO). The new law is different from the 2015 proposed GMO legislation which restricted states from enacting GMO labeling laws but didn’t contain federal labeling requirements.

The law represents a compromise between consumer groups and food manufacturers: it gives consumers access to information, and manufacturers flexible means of compliance and the benefit of a uniform federal standard.

The federal law, titled The National Bioengineered Food Disclosure Standard, leaves many issues unsettled. Two areas are attracting the most attention: the law’s digital disclosure methods and the definition of bioengineered food.
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After considering them for more than a year, California’s Office of Health Hazard Assessment (OEHHA) has finally issued new “Safe Harbor” warning regulations for Proposition 65. The new regulations intend to provide consumers “more specificity” about the chemical content of products sold in California.  They take effect on August 30, 2018 and are set forth in California Health and Safety Code sections 25600, et seq.
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Earlier this month, the Food and Drug Administration (FDA) banned 19 chemicals found in antibacterial hand and body washes. Included in this list is triclosan, a widely used ingredient in antibacterial soap.

The FDA’s new rule has been in the works for nearly four decades. The FDA proposed its first triclosan regulation in 1978 but never moved forward. Then, in 2013, the FDA called for a re-evaluation of over-the-counter antibacterial products. It asked companies to conduct additional studies and provide information on the safety and effectiveness of their antibacterial products containing any of one of 22 different ingredients.
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Airing dirty laundry. The CPSC has made public its internal dispute over civil penalties. On July 20, 2016, Consumer Product Safety Commission Chairman Elliot Kaye and Commissioner Robert Adler issued a joint statement addressing the diverging views among the CPSC commissioners over the agency’s recent settlements. The joint statement responded to other commissioners who had criticized CPSC’s higher civil penalty settlements.
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On June 22, 2016, President Obama signed the Lautenberg Chemical Safety Act into law.  The Act is the first significant change to the 1976 Toxic Substances Control Act in 40 years and amends the Environmental Protection Agency’s (EPA) methods for reviewing chemical substances before they are marketed and allowed to be used in consumer products.

The Act has several new key features:
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