What is California’s Proposition 65?
California’s Proposition 65 known as The Safe Drinking Water and Toxic Enforcement Act of 1986. The law is intended to warn California consumers when they may be exposed to chemicals known to the state to cause cancer or reproductive harm. All sellers of consumer products to California residents – including ecommerce sellers (such as Amazon Sellers) – must comply with the law. Frequently, compliance with this law require specific warnings to be provided to California consumers about their exposures to these chemicals. There are now more than 1,000 chemicals on the Proposition 65 list and more are added every year.
Who is responsible for Enforcing Proposition 65?
Although the California Attorney General can enforce the law, Amazon sellers are almost always targeted by private lawyers and law firms. Under Proposition 65, these private entities are empowered to test consumer products and issue 60 Day Notices on their own. Although there are many private firms that pursue these types of claims, some of the common ones are: California Citizens Protection Group LLC, Center for Environmental Health, The Chanler Group, Ecological Alliance LLC, Shefa LMV LLC, Brodsky & Smith, and others.
What happens if Amazon and I receive a Proposition 65 Notice for one of my products?
First, you should know that you are not alone. This happened to over 7 Amazon sellers in 2020 and has substantially increased from prior years. The lawyers will buy a product on Amazon, have it tested for Proposition 65 chemicals, and issue a 60-Day Notice to both the seller and Amazon. Amazon reviews each Proposition 65 notice and makes an initial determination. If Amazon determines that you may be selling a dangerous product or banned substance on its platform, such as lead or mercury, they will most likely delete the listing. If the substance is more common in nature, and is not one that is ingested or applied topically, Amazon is less likely to delete or suspend the listing immediately. In such cases, Amazon will remind the seller of its duty to comply with Proposition 65 and direct the seller to their content about providing warnings: Amazon will also encourage seller to resolve the complaint, as pursuant to the Business Solutions Agreement on Amazon, the sellers have a duty to indemnify Amazon if they are named in a Proposition 65 lawsuit. If the seller does not address Amazon’s concerns, the product listing can be suspended, and further this can affect your account health, and subsequently in some instances the sellers selling privileges may be suspended while Amazon conducts a safety review of your product.
Prop 65 has an exception for businesses with less than 10 employees. Do I still have to comply with the law?
Most third-party sellers on Amazon are small businesses with just a few employees. Unfortunately, although the seller may have less than 10 employees and are, therefore, exempt from Prop 65, Amazon has more than 10 employees and the Business Solutions Agreement the seller entered requires the seller to indemnify Amazon. Amazon has successfully made arguments in court that it is immune from Prop 65 because it is just an online platform that facilitates transactions between independent sellers and buyers. However, those arguments have not yet been decided definitively in Amazon’s favor and determinations on these are still outstanding. The private attorneys who make test buys from Amazon almost always sue both the seller and Amazon when they file Prop 65 lawsuits.
In practice, this means that even if you are technically exempt from Prop 65 requirements due to having fewer than 10 employees, you are still not off the hook when selling on Amazon. Amazon expects sellers to play it safe and comply with Proposition 65 requirements, regardless of the number of employees they have. They require you—the seller—to take on the responsibility of ensuring compliance: conducting lab tests, determining whether a warning is necessary, knowing which warning applies to your product, and communicating to Amazon exactly what is being done to provide the required warning.
Essentially, Amazon’s position is that it is your duty as a seller to know and comply with all Prop 65 regulations, and to keep them informed each step of the way. If you don’t, you risk not only your product listings, but also your standing as a seller on the platform.
What if I’m not based in California or I am outside of the U.S ? Do I still need to comply?
If you are selling products into California on Amazon, the law potentially applies to you.
How much does it cost to settle a Prop 65 Complaint?
First, your California attorney should negotiate a settlement. This is not something non-attorneys should try to do on their own.
The price of private settlements varies greatly. There is no fixed amount, and the settlement varies based on the facts of the case. In Prop 65 cases involving consumer products sold on Amazon, most attorney-negotiated settlements typically fall in the $10,000 to $20,000 range. It’s important to note that in many cases, the “bounty hunters” who bring these claims often receive the majority—sometimes up to 90%—of the settlement amount. As part of the settlement, you may be required to comply with the warning law or reformulate your product within a specified timeframe.
It’s noteworthy, however, that if the matter is not resolved, or settled, and a lawsuit is filed, the settlement costs generally increase substantially, including any attorney fees and court costs which the seller incurs. Once litigation begins, average settlement costs can jump to the $40,000 to $90,000 range, not including your own legal fees to defend the lawsuit and related expenses.
The primary strategy to minimizing Prop 65 expense is having a competent lawyer licensed in California to defend you as early as possible. Your attorney can investigate and respond promptly to a Prop 65 Notice. Amazon sellers should not try to settle Prop 65 cases on their own.
What can I do to avoid any problems with Proposition 65? Should I just put the warning on everything?
Prop 65 only requires the warning when one of the 900 “chemicals that are known to cause cancer” is present. You should not just indiscriminately slap a warning label on everything. In fact, Amazon discourages this kind of behavior. The best practice is to have your products tested periodically using a reputable third-party lab. Keep a record of the test results. Your supplier(s) should be just as invested in Prop 65 compliance as you are, so if you have many different products and suppliers, start discussing your expectations about documenting Prop 65 compliance.
If your test results are positive for low-levels of one or two of the chemicals, you should use different materials or eliminate components so that nothing tests positive for Prop 65 chemicals. Only if that’s not possible should you resort to using the warnings on your product packaging and on Amazon’s site.
How to Approach Testing and Warnings
- Test First, Warn Second: Always prioritize removing or reducing Prop 65 chemicals over simply applying a warning label. The law is designed to encourage safer products, not just more warning stickers.
- Material Substitution: If a product fails a Prop 65 test, look into sourcing alternative materials or redesigning the component before defaulting to a warning.
- Safe Harbor Warnings as a Last Resort: Only use the “safe harbor” warning language when you’ve exhausted safer design or material options. Overusing warnings can dilute their meaning and may undermine consumer trust—not to mention, Amazon may flag excessive or blanket warnings as non-compliant.
By proactively testing and maintaining documentation, you not only protect your business but also demonstrate to both regulators and Amazon that you’re taking compliance seriously. This approach helps avoid unnecessary warnings, protects your brand reputation, and can be a decisive factor if a Prop 65 complaint ever arises.
Being proactive can save you tens or even hundreds of thousands of dollars in attorney fees and settlement costs – not to mention the damage to your listings and seller reputation with Amazon. Furthermore, if Amazon gets a 60-Day Notice of a Prop 65 violation, they may decide to suspend your listing and/or your selling privileges while they investigate the allegations and make sure your products are safe. If you have received a Proposition 65 Notice of Violation, do not wait to contact LA Law Group at [email protected] for a free initial consultation. We encourage our clients to review additional information regarding Amazon’s Policies and Agreements.
