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Attendees get overview of Prop 65 law

Amy LallyAmy Lally, a California attorney with Sidley Austin LLP, spoke at the Leadership Conference about the controversial California law known as Proposition 65.
NAPLES, Fla. - Attendees of Furniture/Today's Dec. 3-5 Leadership Conference who wanted to know more about California's Proposition 65 law came away with a timely and up-to-date overview, thanks to an expert who understands the controversial law inside and out.
     Amy Lally, an attorney with Sidley Austin LLP, provided an overview of the law, how it evolved and how it works in practice. Most importantly, she aimed to dispel misinformation about the law, while providing attendees an idea of what to expect in Prop 65 lawsuits.
     "These are questions I get asked a lot and I know that you get asked a lot," she said.
     Prop 65, she said, is a disclosure and right-to-know law that notifies California citizens of the presence of chemicals in consumer products that are known to cause cancer or reproductive problems. There are currently more than 900 chemicals on the list and more are added each year.
     She emphasized that this is not a personal injury law, nor is it a notice that the product is harmful. Based on lifetime exposure at the levels in question, there is no risk of cancer, and there is also no observable effect on reproduction at 1,000 times the levels cited in the law.
     "It is not a law that labels products as safe or not safe," she said.
      Lally went on to describe key statutory terms and definitions of the law, which applies to businesses with 10 or more persons, including out-of-state companies that sell in California.
     To avoid being subject to enforcement, companies that sell in California must post a contextual warning label on the product that informs customers that the product contains one or more chemicals on the state's list. It must be placed prominently on the product and must be easily understood by ordinary customers, she said, adding that each person in the distribution chain has an independent duty to make sure the consumer is warned of the presence of these chemicals.
     Warnings can be place on product labels, external packaging, hangtags on the retail store shelf or on signs at the point of sale or store entrance, she said. They also can be in the form of a symbol on the product such as a yellow triangle, a warning on an invoice or an onscreen pop-up that appears before the sale is finalized.
     "The Prop 65 notices are everywhere (in California) because there are a lot of chemicals," she said. Furniture is primarily affected by chemicals such as TDCPP and TCEP, flame retardants used in foam, and DEHP, also known as phthalates, that mostly affect the texture and composition of various plastics.
     The law is enforced by the state attorney general or any district attorney. It also can be enforced by private individuals who discover violations.
     Companies are typically informed they are in violation when they don't place a label on a product that contains certain chemicals.
     Notification comes in the form of a letter issued 60 days before a public or private party intends to sue.
     "It is enforced exclusively through litigation, and that is why there is so much of it," Lally said, adding that 98% of Prop 65 cases settle out of court. In 2012, there were a total of 437 settlements ranging from $5,000 to $757,000, she said.
     Her presentation also gave an overview of civil penalties, burdens of proof for plaintiffs and defendants, key dates involving furniture litigation and common pitfalls to avoid. Her presentation was followed by a question and answer session that had many attendees sharing their thoughts on the issue. The concerns ranged from identifying the chemicals to test for, to figuring out which products one should reformulate so that chemicals fall below what are considered "safe harbor limits."
     Keith Koenig, president of Fort Lauderdale, Fla.-based retailer City Furniture, said he encouraged his suppliers to test all products before shipping to his stores, which are all in Florida and thus not required to abide by the Prop 65 labeling standards.
     "I don't want labels on my product," he said, noting that Florida consumers, unlike California consumers, aren't used to such pervasive labeling. However, if a certain chemical was determined to be in its product by a consumer advocacy group, he would take action.
     "In that situation, I will send it back (to the supplier)," he said.
    To receive a copy of the presentation, contact Lally at (213) 896-6642. Copies also can be obtained from Furniture/Today by calling (336) 605-3815.

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