Prop 65 Occupational Litigation Update

• AYS v. Turco
• AYS v. Shell
• Shell v. Becker
• ITA v. Henry
• Carbonless Paper

ITA v. Henry (Federal Preemption)

On September 24, 1997, the Ninth Circuit issued its opinion in Industrial Truck Assn v. Henry (no. 95-56405), finding that Prop 65 was partially preempted by the federal Occupational Safety and Health Act. The court ruled that the OSH Act preempted any state occupational law that was not incorporated into a state occupational safety plan and approved by OSHA was preempted.Since not all of the Prop 65 regulations governing occupational exposure were included in the Title 8 regulations conditionally approved by OEHHA, the court held that Prop 65 was preempted as applied to a claim that the manufacturers and distributors of diesel forklifts had failed to provide clear and reasonable warning for occupational exposures. The court specifically held that the state could not enforce Prop 65 through the Prop 65 regs for such workplace exposures, unless and until the state submits those regulations to OSHA as part of the state plan.

On October 10, 1997, the state moved for a limited rehearing before the Ninth Circuit. While not challenging the main preemption holding, the state argued that the issue of whether forklift manufacturers were required to give warning under the State Plan was not before it, and not briefed by the parties, and that requiring the District Court to enter summary judgment in plaintiffs' favor was improper. The opposition to the petition for rehearing argued that these issues were properly before the Court of Appeals and should be rejected.

As You Sow v. Turco Products, Inc.

Cal/OSHA, for the first time, weighed in over the adequacy of warnings under Prop 65 and the California Hazard Communication Standard (HAZCOM). This was the first case in which a court has deferred to Cal/OSHA regarding warnings for products used in the occupational setting. AYS alleged that Turco violated Prop 65 by failing to provide clear and reasonable warnings for various listed chemicals. Turco moved for summary judgment, which the court denied, finding that there was a triable issue of fact as to whether its warnings met the requirements of Prop 65 and Hazcom.

AYS moved for summary adjudication on its third cause of action, alleging that violation of Prop 65 constituted a violation of Cal OSHA, enforced through the California Unfair Competition Act. Judge Wasserman denied summary adjudication, invoking the doctrine of primary jurisdiction. Reasoning that the lawsuit raised issues "within the special competence of the administrative body," the court stayed all judicial proceedings until the administrative process before Cal OSHA has been invoked and completed. Crucial to the court's ruling was its determination that this procedure "will help assure uniform application of regulatory laws and will allow the Court to take advantage of administrative expertise."

In a lengthy ruling issued May 15, 1997, Cal/OSHA for the first time offered a written opinion regarding HAZCOM compliance with respect to Prop 65. One of the initial rulings by Cal/OSHA&emdash;that out-of-state manufacturers must comply with Prop 65&emdash;is likely to be immediately revoked, in light of the June 5, 1997 ruling of OSHA.

Among the rulings issued by Cal/OSHA was a finding that "overwarning" (i.e., providing a cancer warning where no listed carcinogen was present in a product) violated HAZCOM. The agency ruled that there was no need to specifically identify listed chemicals on product labels even though the material safety data sheets must contain chemical specific warning information. It ruled that identifying carcinogens by their IARC or NTP classifications (e.g., "potential carcinogen," "human carcinogen"), was acceptable on the product label. It also approved of such language as "over exposure will increase cancer hazard," and "risk of cancer depends on level and duration of exposure." While the agency found a number of violations by Turco, all were considered to be "minor" violations, subject to correction.

On October 28, 1997, the California Superior Court, County of Los Angeles, granted Turco's motion for summary judgment. The court relied exclusively upon the preemptive effect of the OSHA conditional approval of Prop 65 into the state plan, where the undisputed evidence established that Turco was an out-of-state manufacturer according to OSHA's definition. The court rejected AYS's argument that Turco was subject to Prop 65 prior to the OSHA approval based on case law that held that pre-approval enforcement of a State Plan is not precluded, since, according to the court, the preemption of enforcement against out-of-state manufacturers was "complete."

As You Sow v. Shell

On May 27, 1997, Judge Stuart Pollak of the San Francisco Superior Court denied cross-motions for summary adjudication over the adequacy of Shell's material safety data sheet warnings, but granted AYS's motion for preliminary injunction, reasoning that AYS was likely to prevail at trial on this issue. Shell had provided warnings regarding the reproductive toxicity of toluene, stating that birth defects in humans were associated with "abuse" levels creating maternal toxicity, but As You Sow claimed that there were studies indicating the effect could occur at occupational exposure levels. The court held that this violated HAZCOM, in that at least one study conducted in accordance with established scientific principles supported AYS's claim. The court also found fault with the "technical" language in the MSDSs ("developmental toxin" and "maternal toxicity"), stating that it should contain "commonly used words" ("birth defects," "reproductive harm"). Finally, the court held that Shell's practice of providing warning information in three separate sections of the MSDS was inherently unclear and confusing. As with the Turco case, this decision will likely be significantly impacted by the federal OSHA decision. Shell's request to lift the injunction after that ruling was denied.

Following the ruling on the injunction, Shell removed the action to federal court, alleging that federal jurisdiction existed in light of the OSHA ruling on Prop 65. On August 15, 1997, Judge Susan Illston of the US District Court for the Northern District of California ruled that there was not complete prremption of AYS's claims, and thus remanded the case to state court.

Subsequently, Federal OSHA sent a letter to California disagreeing with the ruling that an out-of-state manufacturer can be required to modify its MSDSs to comply with Prop 65 where it does not actually manufacture the product in California.
In its opening trial brief, AYS has taken issue with OSHA's "out of state" manufacturer ruling, which it terms "clearly erroneous." The Attorney General filed a brief, however, indicating the state's acceptance of the OSHA ruling. Writing as amicus curiae, the AG concluded that two of the Shell products at issue (bulk transfer toluene and resiners and hardeners distributed by another company) are manufactured outside the state of California, and two other products (Tolu-Sol 5 and Epi-CUre Y) are manufactured inside the state.The highlights of the AG's first public interpretation of the OSHA ruling are significant:

Bulk transfer toluene which is produced in Texas, but enters California in rail cars and is blended in California with other batches of toluene, and then loaded on customer's tanker trucks is not in-state manufacturing subject to Prop 65.

In the case of Tolu-Sol 5, where two separate chemicals are combined in California, the product is manufactured in the state. However, since the product is only sold to industrial users in Oregon, there would appear to be no Prop 65 violations.

EpiCure Y, which is manufactured for Shell by a contractor, to Shell's specification and with Shell's labeling and MSDS, is considered a Shell product manufactured in California, and is subject to Prop 65. The AG disagreed with a contrary finding in AYS v. Turco.

The out-of-state exemption applies to conduct occurring prior to the OSHA approval in June 1997.

Private enforcement of the non-Prop 65 portions of the California Hazard Communication Standard through the California Unfair Competition Laws is not permitted. The AG reasoned that private enforcement of the non-Prop 65 portions of HAZCOM had not been approved by OSHA, and were thus barred.

In April 1998, following the AG's amicus brief, Judge Pollak reversed his prior rulings and dissolved a portion of the preliminary injunction. The court's ruling was in line with the AG's conclusions regarding bulk transfer toluene, Tolu-Sol 5, and Epicure 5. Pollak rejected Shell's argument that Prop 65 did not apply to Tolu-Sol 5 because it was sold in Oregon by noting that if the California HAZCOM did not apply for products manufactured in California, then, according to the OSHA ruling, no state plan would apply. Pollak also agreed that the preemptive effect of OSHA's ruling was retroactive to actions occurring prior to the June 6, 1997, approval of the incorporation of Prop 65 into the state plan.

In the most recent ruling in this litigation, Judge Pollak has held that Shell cannot be required by the private enforcer to provide warnings for "downstream" workers beyond the warnings required for its own employees in California. AYS had argued, and was supported by the Attorney General's office, that Shell should be required to provide Prop 65 warnings by labeling and MSDS for products manufactured in California. Judge Pollak rejected this argument, agreeing with Shell that violation of the MSDS and labeling requirements were not violations of Prop 65, and could not be enforced by AYS. The court also rejected AYS's claim for restitution, and its allegation that Shell's Spanish language MSDSs did not provide clear and reasonable warning.

An expanded report on the Shell litigation is provided by Shell's counsel, Stan Landfair and Evelyn Heidelberg.

AYS v. Shell Settles

On August 27, 1999, AYS and Shell entered into a consent judgment finally resolving this long-standing litigation.  The judgment incorporated the April 1998 ruling, and AYS voluntarily dismissed all claims which were not resolved by the prior rulings in the case.  The settlement did not contain any provisions for payment of attorney's fees to AYS.

Shell v. Becker

On July 19, 1997, Shell filed an action for declaratory relief in the US District Court for the Northern District of California against Richard Becker, Director of OEHHA, John Howard, Chief of the California Division of Occupational Health & Safety, Attorney General Dan Lungren, and As You Sow. Shell's complaint seeks a declaration that Prop 65 is preempted for occupational exposures as to Shell, which is an out-of-state manufacturer, and therefore not subject to the provisions of Prop 65 in the California Hazard Communication Standard. The complaint also named As You Sow, and sought the same declaratory relief, and an injunction against further proceedings in AYS v. Shell.

On November 5, 1997, the District Court granted the state defendants' motion to dismiss the complaint. The court agree with the state defendants that there was no "case or controversy" between Shell and the state, because the state had not sued Shell, and that Shell had no standing to pursue its action. The court denied AYS's motion to dismiss, holding that Shell's preemption claim provided sufficient jurisdiction. The court did grant AYS's motion to dismiss Shell's claim for injunctive relief against AYS, reasoning that the federal Anti Injunction Act precluded such a claim. It also stayed further proceedings against AYS, pending the outcome of AYS v. Shell.

Carbonless Paper

In August 2000, a San Francisco court dismissed claims regarding workplace exposure to listed chemicals in carbonless paper.  Read more.

This page last updated December 2000