If the thought of doing business in California strikes fear of a Notice of Violation into the hearts of compounders and vinyl processors alike, companies need to look no further than Orlando and NPE 2015 for relief.
The Society of the Plastics Industry Inc. will unveil its new, unique liability insurance coverage offering this week at the show, with an overview of the program 9:30 a.m. March 24 in Room W314.
The Prop 65 Protection Program is aimed at companies using any of the six phthalates named under California's Proposition 65 — BBP, DBP, ERHP, DIDP, DINP and DnHP — anywhere in the country. The insurance program will provide experienced counsel to defend compounders, processors, flexible vinyl processors and their clients against lawsuits and NOVs.
“Compounders and processors live in a world bound by regulation,” said Terry Peters, SPI's senior director of technical and industry affairs, one of the masterminds behind the new program. “Responsible business people work with their customers to assure safe and dependable formulations and supply the necessary information, including universal Material Safety Data Sheets. This is sufficient in all states and local governments except California with Prop 65.”
California's Proposition 65, approved by voters there in 1986, requires businesses to notify citizens when significant amount of chemicals are present in products, workplaces, public spaces or released into the environment — usually by posting signs in public places or workplaces and labeling products. The state's Office of Environmental Health Hazard Assessment administers the Prop 65 program, including managing the list of potentially harmful chemicals, though the California Attorney General's office enforces it.
However, the law says any district attorney or city attorney may also bring a Prop 65 lawsuit, along with “any individual acting in the public interest.” Thus, the California regulation has spawned its own brand of lawsuit, brought by attorneys who seek out violations, taking to court not just an in-state retailer who failed to add a label, but companies all the way up through the supply chain and across the country.
Fines for a retailer can mount quickly at $2,500 per day. But things get worse the further up the supply chain the legal action travels. Even if a supplier opts to settle a Prop 65 suit, costs can skyrocket to $50,000 to $80,000. Fighting it out in court can easily run up a legal tab of $250,000 or more.