In a second landmark ruling, the San Francisco Superior Court held on October 19, 1998 that a Proposition 65 bounty-hunter's right of action as to workplace chemicals is limited to claims against "employers" who fail to warn their employees of "exposures" that occur in their workplaces. The asserted failure of a chemical manufacturer to provide warnings on its labels and MSDSs that would satisfy Proposition 65 cannot support a claim against the manufacturer under Proposition 65, except as to "exposures" to the manufacturer's employees. Even if a manufacturer's labels and MSDSs fail to satisfy the California Hazard Communication Standard, the right to enforce the requirements under the Standard belongs to the State, and does not create a bounty-hunter claim under Proposition 65. Further, to prove a violation of Proposition 65, a bounty hunter must prove an actual exposure and the lack of an adequate warning.
This decision follows the Court's April 28, 1998 ruling that Proposition 65 may not be enforced at all against manufacturers or distributors of products manufactured "out-of-state." See Proposition 65 Advisory 98-II. With the scope of its claims so restricted, plaintiff As You Sow alleged that Material Safety Data Sheets ("MSDSs") and labels for certain Shell products "manufactured" at a California bulk terminal failed to comply with requirements of the California Hazard Communication Standard ("State Standard"), and thus cause or threaten to cause violations of Proposition 65. Such allegations, the court held, fail to state a claim for a violation of Proposition 65, as it is incorporated into the Standard, because such claims are limited to "occupational exposures," i.e., exposures that occur "in the workplace of the employer causing the exposure." As to those exposures, moreover, the Standard provides that warnings by any of the "safe-harbor" methods allowed under Proposition 65 are a complete defense.
In ruling for Shell, the Court rejected contentions by As You Sow (and by the State, in an amicus brief) that "a chemical manufacturer who sells a [workplace] chemical . . . without an adequate label or MSDS may be said to cause the exposure of . . . employees to the chemical in violation of Proposition 65 if the user . . . fails to first provide any of the other acceptable forms of warning." The Court noted that the express intent of the Occupational Safety and Health Standards Board, when it incorporated Proposition 65 into the Standard, was to "prohibit[ employers] from knowingly and intentionally exposing their employees."
This ruling, if followed by other courts, will be important to all California employers, including California manufacturers of workplace chemicals, limiting their potential liability for "occupational" exposures under Proposition 65 to exposures that occur at their California facilities. Proposition 65 bounty-hunters may sue such companies only in their role as "employers" under the California Standard. As long as such employers comply with any of the safe-harbor warnings, including appropriately placed workplace warning signs, no bounty-hunter claims can be brought against them, even if their MSDSs and labels do not satisfy the requirements for manufacturers under the Standard.
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