- Greenberg Glusker partners examine California's new PFAS laws
- Product line audits, accredited testing help companies comply
Two landmark California laws, AB 1817 and AB 2771, regulating a group of chemicals known as PFAS, will have far reaching impacts to consumer products when they take effect Jan. 1.
Companies must fully understand their regulatory requirements and exemptions, because the difference between a compliant product and one that exposes a company to liability and loss of consumer confidence could hinge on nuanced distinctions.
PFAS, or per-and polyfluoroalkyl substances, are human-made chemicals that for decades were added to products such as apparel, food packaging, carpets, and personal care products. These so-called "forever chemicals" don't break down easily in the environment and have been linked to a variety of health and safety issues.
Both laws seek to reduce PFAS in certain products—AB 1817 focuses on textiles such as clothing and AB 2771 pertains to cosmetic products. Companies should consider the following steps to meet the significant challenges in complying with these laws.
Identify PFAS in products and materials. Determining which products, components, finishes, or materials in the supply chain may contain PFAS may be difficult and costly for companies with multiple product lines and global supply chains. PFAS could present in very low concentrations, requiring highly sensitive methods for detection, and advanced testing methods is expensive, especially for non-targeted analysis.
Different testing methods can assess whether PFAS are present, depending on whether the product is a solid or liquid matrix. It's important that companies use only accredited labs certified to test for PFAS.
Companies may want written assurances from their upstream suppliers that PFAS aren't present in their products or materials. Many companies rely on global supply chains, so regulating what chemicals are in the products is potentially difficult.
It's important for companies to establish clear communications with their suppliers early on about the regulatory requirements and expectations for compliance.
Businesses shouldn't assume that all parties in their supply chain are familiar with California's regulatory requirements, nor should they rely on verbal assurances from suppliers that products or materials don't contain PFAS. They also shouldn't assume that past lab sheets indicate future compliance, as ingredient substitutions are common given supply chain shortages.
Formulate a compliance strategy. Companies with PFAS in their products can avoid liability under the two new laws by reformulating or ceasing to sell non-compliant products in California. The latter option is non-viable to many companies due to California's large market share—it's the fifth largest economy in the world—so not selling products in California would mean significant revenue losses.
Due to costs and logistical concerns, many companies will opt to adopt California's PFAS standards for all products sold in the US, rather than separating product lines exclusively for California. As a result, many companies will need to reformulate product lines nationwide to comply with California's PFAS bans.
Product reformulation presents its own challenges, such as potentially reduced product performance, failure to meet consumer expectations compared to prior formulations, higher manufacturing and compliance costs, and supply chain complexity.
Audit product lines for compliance. Periodic product line audits ensure continued compliance with the laws. This audit should include an evaluation of existing and new product lines.
Factors such as changes in the supply chain and materials can cause a company to inadvertently fall out of compliance. Legal and product development teams should work closely throughout this process.
Be prepared for consumer claims. Even with a robust compliance plan in place, companies should prepare for frivolous claims. It's prudent for companies to have a plan in place if they receive a threatened consumer claim.
There has been a recent increase in consumer claims and threats of class actions for alleged violations of consumer protection laws such as the Consumer Legal Remedies Act, and Unfair Competition Law, consumer protection laws that prohibit unfair business practices. Many of these pre-suit claims provide a short response window and a specific response protocol.
Failure to comply with these laws exposes companies to significant risks, ranging from private lawsuits, public lawsuits, government enforcement actions, and reputational damage.
As with other recent consumer product laws, such as California's Proposition 65, we can expect a heightened awareness from the plaintiffs' bar seeking to monetize a company's lack of compliance.
For these reasons, companies should be diligent in their compliance efforts and seek legal and expert assistance as necessary.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Originally published by Bloomberg Law .
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.
