A retailer can face a California Proposition 65 claim over a product it did not manufacture, package or label. Purchasing inventory from an established supplier does not resolve whether the business has its own warning obligations. The issue often comes to the owner’s attention through a 60-day notice alleging that customers were exposed to a listed chemical without an adequate warning.
Before agreeing to pay a demand or change its business practices, a retailer should evaluate whether the law applies, whether the alleged exposure requires a warning and whether the retailer is legally responsible for providing it. Those questions can materially affect both the defense and the cost of resolving the matter. They should also guide a business’s compliance efforts before a claim arises.
California Proposition 65 Warning Requirements
Proposition 65, formally the Safe Drinking Water and Toxic Enforcement Act of 1986, generally requires covered businesses to provide a clear and reasonable warning before knowingly and intentionally exposing individuals in California to chemicals listed as causing cancer, birth defects or other reproductive harm. The Office of Environmental Health Hazard Assessment (OEHHA) maintains the chemical list. The law also restricts certain discharges of listed chemicals into sources of drinking water.
The presence of a listed chemical does not, by itself, establish that a warning is required. Businesses must evaluate whether exposure occurs and whether it qualifies for an exemption. OEHHA has established safe harbor exposure levels for many chemicals, including No Significant Risk Levels for carcinogens and Maximum Allowable Dose Levels for reproductive toxicants. When a business relies on the statutory exposure exemption, it bears the burden of establishing that defense, which may require testing and a toxicologist’s assessment.
Businesses Subject to Proposition 65
Businesses with fewer than ten employees generally are exempt from Proposition 65. Full-time and part-time employees generally count toward that threshold, and an owner should not assume that staffing at one location determines whether the exemption applies to the business. Businesses operating through multiple entities should evaluate the relevant employment and ownership relationships before relying on the exemption.
A business does not need a California storefront to face a Proposition 65 claim. An out-of-state retailer, distributor or online seller may be subject to the law when its products cause exposures in California. Businesses shipping products into California should therefore evaluate their obligations even if their employees and physical operations are located elsewhere.
Providing Compliant Product and Online Warnings
OEHHA’s regulations establish safe harbor warning methods and content that are deemed clear and reasonable when their requirements are met. Although alternative warnings may satisfy the statute, departing from the prescribed language or delivery method can create a dispute over adequacy. The appropriate warning depends on the product and exposure, and a generic sign near the entrance should not be assumed to satisfy product-specific requirements.
For internet sales, applicable safe harbor rules require the warning to reach the purchaser before the purchase is completed. Depending on the method used, the warning may appear on the product page, through a clearly marked warning link or in another prominent location before checkout. A warning included only with the delivered product does not satisfy that online requirement, and a disclosure buried in general website terms is insufficient.
New Short-Form Warning Requirements and the 2028 Deadline
Amendments to the short-form warning rules took effect on January 1, 2025, with a transition period extending to January 1, 2028. The revised format requires identification of at least one listed chemical for each hazard being warned about, although one chemical can cover both cancer and reproductive harm if it is listed for both. Businesses should review their labels and online warnings together when implementing the changes.
Products manufactured and labeled before January 1, 2028, may continue to use the prior compliant short-form warning regardless of when those products are sold. Accordingly, an older short-form warning is not automatically defective. Businesses should preserve manufacturing and labeling records and confirm which requirements apply before replacing labels or accepting an allegation that their existing warnings violate the law.
Retailer Liability and Supplier Responsibilities
The regulations generally place responsibility for warning materials on manufacturers and other upstream businesses, but retailers have specific obligations. Under 27 California Code of Regulations section 25600.2, a retailer may be responsible when it sells a product under its own or an affiliated entity’s brand, obscures an existing warning or receives the required notice and warning materials but fails to display them. Responsibility may also arise when the retailer knowingly introduces a listed chemical into a product.
A further provision addresses retailers with actual knowledge of an exposure requiring a warning when no qualifying upstream business has a California place of business or designated agent for service. These conditions matter when evaluating a claim against a business that merely resells another company’s product. The fact that a retailer sold the product does not, by itself, establish every element of liability.
Retailers should retain supplier notices, warning materials and confirmations of receipt because those records may help establish who was responsible and what information was provided. Supplier agreements should address compliant warnings, prompt notice of changes, cooperation in defending claims and indemnification. Those provisions can help allocate costs between the parties, although they do not automatically prevent an enforcement action.
Proposition 65 Penalties and Enforcement
Proposition 65 authorizes enforcement by public prosecutors and qualifying private parties acting in the public interest. A private enforcer generally must serve a compliant 60-day notice on the alleged violator and the appropriate public authorities before filing suit. Private enforcement also depends on whether a public prosecutor has commenced and is diligently prosecuting an action against the violation.
Civil penalties can reach $2,500 per day for each violation, and courts may issue injunctions. That figure is a statutory maximum, not an automatic assessment for every product sold. Courts consider factors such as the nature of the violation, the business’s good-faith compliance efforts and the economic effect of the penalty.
Private enforcers generally receive 25 percent of civil penalties recovered in their actions and may seek attorneys’ fees and costs. For the business, the expense can also include defense counsel, scientific testing, label changes and continuing settlement obligations. Evaluating a proposed resolution, therefore, requires more than comparing the settlement payment with the maximum statutory penalty.
Responding to a Proposition 65 60-Day Notice
A business receiving a notice should promptly involve its own counsel and preserve the relevant records. Product samples, lot information, supplier communications, sales records, labels and dated screenshots of online listings may be important to evaluating the allegations. Payroll and employment records may also be necessary if the business intends to rely on the exemption for employers with fewer than ten employees.
A business should assess whether the notice identifies the correct entity and products, whether an exemption applies and whether the alleged exposure requires a warning. Other issues may include notice defects, retailer responsibility, existing warnings, exposure calculations and federal preemption. Laboratory results showing a chemical’s concentration may require further analysis to establish the exposure associated with actual product use.
The notice period should be used to investigate the claim and evaluate a response. Adding a warning may address ongoing conduct, but businesses should not assume that doing so eliminates liability for earlier exposures. A business should also review supplier indemnification rights and potentially applicable insurance notice requirements before the business makes admissions or agrees to settlement terms.
Settlement terms deserve attention beyond the payment amount. An out-of-court agreement generally does not prevent a different private enforcer from asserting the same alleged violations. Businesses should evaluate the scope of the release, covered products and chemicals, future testing or warning obligations and the consequences of an alleged breach before signing.
Practical Steps to Reduce Proposition 65 Risk
Retailers should assign responsibility for Proposition 65 compliance and incorporate it into purchasing and inventory review. That process should identify products requiring further assessment, obtain supplier information supporting warning decisions and confirm that required warnings reach customers through every relevant sales channel. Private-label products and changes in suppliers, formulations or packaging deserve particular attention.
Businesses should also retain records showing which warnings were received, when they were implemented and how subsequent changes were handled. Employees responsible for purchasing, website content and legal correspondence should know where to send supplier notices and enforcement demands. Periodic reviews should account for changes to the chemical list, warning regulations and the business’s own operations.
A Proposition 65 notice should prompt a careful legal and factual review. A business may have meaningful defenses, but evaluating them becomes more difficult when supplier records, prior labels or sales information are unavailable.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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