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AHFA: Communication key to avoiding Prop 65 penalties

CHARLOTTE, N.C. — Good communication between industry suppliers and retailers in California is a key to not getting "dinged" with a Proposition 65 notice.

That was the advice of Bill Perdue, vice president of regulatory affairs for the American Home Furnishings Alliance, at the trade group's recent Sustainability Summit here.

He sought to answer questions about Prop 65, a state law requiring point-of-sale notification by manufacturers to consumers of chemicals known to the state to cause cancer, birth defects or from reproductive harm.

So far this year, about 90 notices for violations with a 60-day response period have been filed by citizens and professional plaintiffs for upholstered furniture items containing the flame retardant TDCPP, according to the California attorney general's website.

A group of four or five furniture manufacturers and importers that have received the notices is moving toward paying settlements in the case, "but we have nothing firmly on the table," said Robert Kirchmeyer of Emerald Home Furnishings, whose company is part of the group. He said there are still questions regarding what will be acceptable to California officials and the amount of any settlements.

TDCPP, commonly found in foam, was added to the Prop 65 list in 2011, allowing a year for suppliers and retailers to sell old inventory and floor samples.

The law isn't a finished product labeling requirement, Perdue said, but one that requires consumer warning prior to purchasing a finished good. Citations are issued for the lack of notice of the presence of TDCPP, he added.

Proposition 65 - passed in 1986 - doesn't require elimination of the chemical, he said.

More than 70 of 800 Prop 65 chemicals listed are related to furniture, Perdue said, adding that penalties can range up to $2,500 per day per violation. The large number of listed chemicals makes the law difficult for suppliers to avoid.

"I've been asked: ‘Oh, so I'm a case goods supplier so this doesn't apply to me.' The answer to this question is false. It's all consumer products that are offered for sale in the state of California are subject to the requirements of California Prop 65 whether it's a case goods or an upholstery item," Perdue said.

Companies often settle Prop 65 cases. In 2011, Perdue said the average settlement total was about $65,000 for a total of $17 million collected in litigation and settlements. The money goes to the plaintiffs who file the complaints.

"We have been told this is a cost of doing business in the state of California," Perdue said.

He said that avoiding a Proposition 65 notice is largely dependent on good communication between suppliers and retailers, with a focus on controlling items like floor samples and legacy inventory.

"You need to tell them that it is part of their responsibility to communicate this adequately to the consumer," Perdue said

Manufacturers also should communicate to retailers what the requirements would be in displaying their products, he said. While the regulation doesn't specify where warnings should be, consumers must be able to read and understand them before purchasing. There can be warning signage in stores - signage hung from ceilings, for example.

The AHFA is recommending that product warning labels jointly cite on cancer, birth defects and reproductive harm as opposed to singling one out.

Perdue suggested that suppliers use their law labels to include Prop 65 warnings when necessary, along with stating compliance with other state regulations as required.

"If we're in a situation where we're showing our due diligence we can at least say we did at least label the product and show we have gone through those steps," he said.

Some ready-to-assemble furniture suppliers label boxes for compliance with Proposition 65, he said, adding that some also place labels on shelving or platforms on which items sit in stores.

While warnings are prevalent on the doors of stores in California, they don't suffice as a point-of-sale warning for furniture suppliers. Those serve as a general warning to consumers that they are entering an environment with articles for sale that could potentially contain a Proposition 65 chemical, he said.

Another area of concern is discount and closeout inventory. Perdue said even if a discount retailer buys decade-old existing inventory from a supplier, the need for a Prop 65 violation notice still applies.

For out-of-state and online purchases, there is still a responsibility to warn consumers, he said, adding that for online purchases, having consumers enter ZIP codes when items are sold could be a way to determine when to issue warnings.

On the Proposition 65 horizon is a warning for Bisphenol A, known as BPA, which a state agency has said it intends to add to the list, Perdue said. In the furniture industry, the material is used in synthetic laminates, and producers that use foils or paper in construction or powder or UV coatings will need to look their at ingredients for the presence of BPA, he said.

Perdue also noted that TDCPP is not the only item suppliers have been cited for this year. Items containing DEHP, using in clear coatings for faux, vinyl and bicast leather items, have also been cited.

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