People ex rel. Lungren v. Cotter & Co.

• Decision Date: 31 March 1997
• Docket Number: No. A070904,A070904
• Citation: 53 Cal.App.4th 1373,62 Cal.Rptr.2d 368
• Court: California Court of Appeals Court of Appeals
• Parties: , 97 Cal. Daily Op. Serv. 2462, 97 Daily Journal D.A.R. 4295, 97 Daily Journal D.A.R. 4395 The PEOPLE ex rel. Daniel E. LUNGREN, as Attorney General, etc., Plaintiff and Respondent, v. COTTER & COMPANY, Defendant and Appellant; As You Sow, Intervener and Respondent.

Page 368

62 Cal.Rptr.2d 368

53 Cal.App.4th 1373, 97 Cal. Daily Op. Serv. 2462,

97 Daily Journal D.A.R. 4295,

97 Daily Journal D.A.R. 4395

The PEOPLE ex rel. Daniel E. LUNGREN, as Attorney General, etc., Plaintiff and Respondent, v. COTTER & COMPANY, Defendant and Appellant;

As You Sow, Intervener and Respondent.

No. A070904.

Court of Appeal, First District, Division 2, California.

March 31, 1997.

Rehearing Denied April 24, 1997.

Review Denied July 9, 1997.

Haight, Brown & Bonesteel Jeffrey B. Margulies, Santa Monica, for Defendant and Appellant.

Thomas J. Graves, Charlottesville, VA, McDermott, Will & Emery, Nathalie F.P. Gilfoyle, Washington, DC, Thomas A. Ryan, Los Angeles, Amici Curiae on behalf of Defendant and Appellant.

Daniel E. Lungren, Attorney General of the State of California, Roderick E. Walston, Chief Assistant Attorney General, Theodora Berger, Assistant Attorney General, Craig Thompson, Supervising Deputy Attorney General, Edward G. Weil, Susan S. Fiering, Deputy Attorneys General, for Plaintiff and Respondent.

Clifford A. Chanler, Mark Todres, Jenny Cohn, Chanler & Somers, Intervener and Respondent.

LAMBDEN, Associate Justice.

Cotter & Company (Cotter) appeals the trial court's denial of its summary judgment motion and the granting of the People's cross motion for summary adjudication as to Cotter's affirmative defense alleging preemption. Cotter contends the Federal Hazardous Substances Act (FHSA) preempts California's Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65). We find the FHSA does not preempt the warning requirements of Proposition 65 and affirm.

BACKGROUND

As You Sow (AYS), a nonprofit organization, investigates and sometimes litigates possible Proposition 65 ¹ violations. HEALTH AND SAFETY CODE SECTION 25249.6² requires warnings for products causing cancer or reproductive toxicity. Toluene is a reproductive toxin which requires a warning pursuant to Proposition 65. ³

On December 10, 1992, AYS sent a 60 day notice pursuant to section 25249.7 to the Attorney General of the State of California alleging that Cotter and three other paint and coatings manufacturers failed to provide warnings of toluene exposure in violation of Proposition 65. ⁴ Cotter is a national member owned cooperative with 300 to 500 True Value Hardware stores in California.

On September 17, 1993, the Attorney General filed a suit against Cotter and three Cotter filed a motion for summary judgment alleging Proposition 65's regulations involved "cautionary labeling requirements" as defined by the FHSA. Consequently, Cotter argued, federal law has preempted Proposition 65. In addition, Cotter alleged it could only comply with Proposition 65 by labeling its products; therefore Proposition 65 constituted a de facto labeling requirement. The People responded by filing opposition to Cotter's motion and a cross-motion for summary adjudication to Cotter's fifth affirmative defense, which alleged preemption of Proposition 65 by the FHSA. On March 9, 1993, the court denied summary judgment to Cotter and granted summary adjudication to the People on the fifth affirmative defense.

other companies ⁵ alleging they violated Proposition 65 and Business and Professions Code section 17200 et seq. On July 23, 1994, Cotter and the People entered into a Permanent Injunction Pursuant to Stipulation requiring Cotter to take certain steps to provide warnings for its paint products.

Cotter and the People entered into a consent judgment on June 9, 1995, resolving the litigation and requiring Cotter to pay $275,000 as penalties and restitution for the Proposition 65 violations. The consent judgment permitted Cotter to appeal from the order on preemption.

Statutory Background

Proposition 65

Proposition 65 states, in part: "No person in the course of doing business shall knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and reasonable warning to such individual...." (§ 25249.6.) Twelve months after the statute designates a substance as toxic, products containing the listed toxic substance must have warnings about the health risks. (§ 25249.10, subd. (b).)

The statute does not define "warning," but explains: " 'Warning' within the meaning of Section 25249.6 need not be provided separately to each exposed individual and may be provided by general methods such as labels on consumer products, inclusion of notices in mailings to water customers, posting of notices, placing notices in public news media, and the like, provided that the warning accomplished is clear and reasonable." (§ 25249.11, subd. (f).) The regulations describe four types of "safe harbor" warnings for consumer products: product labeling, "shelf labeling, signs, menus, or a combination thereof." (Cal.Code Regs., tit. 22, § 12601, subd. (b)(1)(B).)

The warnings must be "prominently placed upon a product's label or other labeling or displayed at the retail outlet with such conspicuousness, as compared with other words, statements, designs, or devices in the label, labeling or display as to render it likely to be read and understood by an ordinary individual under customary conditions of purchase or use." (Cal.Code Regs., tit. 22, § 12601, subd. (b)(3).) Thus, a merchant can comply with Proposition 65 by posting a sign stating the products are known to the state to cause cancer and/or are reproductively toxic.

The FHSA

Congress enacted the FHSA in 1960 and the Act itself does not contain a section stating its purpose. (See Lee v. Boyle-Midway Household Products, Inc. (W.D.Pa.1992) 792 F.Supp. 1001, 1008.) However, the House Committee on Interstate and Foreign Commerce stated, "The purpose of this bill is to provide nationally uniform requirements for adequate cautionary labeling of packages of hazardous substances which are sold in interstate commerce and are intended or suitable for household use." (Id., quoting H.R.Rep. No. 1861, 86th Cong., 2d Sess. 1 (1960), reprinted in 1960 U.S.Code Cong. & Admin. News, p. 2833.)

In 1966, Congress added a limited preemption provision to protect manufacturers from having to create different labels to comply with varying state regulations. It modified the preemption provision in 1976 to state: " 'Except as provided in paragraphs (2) and (3), if a hazardous substance or its packaging Although the FHSA does not define "cautionary label," it does define label as the following: "The term 'label' means a display of written, printed, or graphic matter upon the immediate container of any substance or, in the case of an article which is unpackaged or is not packaged in an immediate container intended or suitable for delivery to the ultimate consumer, a display of such matter directly upon the article involved or upon a tag or other suitable material affixed thereto; and a requirement made by or under authority of this chapter that any word, statement, or other information appear on the label shall not be considered to be complied with unless such word, statement, or other information also appears (1) on the outside container or wrapper, if any there be, unless it is easily legible through the outside container or wrapper and (2) on all accompanying literature where there are directions for use, written or otherwise." (15 U.S.C. § 1261(n).)

is subject to a cautionary labeling requirement under section 2(p) or 3(b) [subsec. (p) of this section or section 1262(b) of this title] designed to protect against a risk of illness or injury associated with the substance, no State or political subdivision of a State may establish or continue in effect a cautionary labeling requirement applicable to such substance or packaging and designed to protect against the same risk of illness or injury unless such cautionary labeling requirement is identical to the labeling requirement under section 2(p) or 3(b) [subsec. (p) of this section or section 1262(b) of this title].' " (15 U.S.C. § 1261 note (b)(1)(A) (hereinafter 15 U.S.C. section 1261 note).)

DISCUSSION

Cotter raises two issues on appeal: (1) Does the FHSA preempt Proposition 65 warnings because point of sale signs are labels as defined by the FHSA? (2) If point of sale signs are not labels, does the FHSA still preempt Proposition 65 because the state statute imposes a de facto labeling requirement? We address each of these issues separately.

I. Point of Sale Signs Are Not Labels Under the FHSA

Cotter contends the court erred in denying its summary judgment motion because Proposition 65 imposes a "cautionary labeling requirement" which is preempted by the FHSA. Since Cotter presents a facial challenge to Proposition 65, it must establish Proposition 65 would not be valid under any set of circumstances. (Chemical Specialties Mfrs. Ass'n, Inc. v. Allenby (9th Cir.1992) 958 F.2d 941, 943, cert. den. (1992) 506 U.S. 825, 113 S.Ct. 80, 121 L.Ed.2d 44 (Allenby ).) Thus, to find preemption, we " 'must determine that all possible consumer product warnings that would satisfy Proposition 65 conflict with provisions' " of the FHSA. (Comm. of Dental Amalgam Mfrs. & Distribs. v. Stratton (9th Cir.1996) 92 F.3d 807, 810 (Stratton ).)

The People claim Cotter could satisfy Proposition 65 by using point of sale signs. This method, they assert, does not conflict with the preemption provision of the FHSA. They rely on Allenby, supra, 958 F.2d 941, which held such signs are not labels under the FHSA. Cotter, however, claims the Ninth Circuit in Allenby misapplied and misinterpreted federal and state law and the trial court erred by following Allenby.

In deciding whether Allenby represents good law, we first review the federal preemption doctrine and examine the most recent United States Supreme Court decisions. We then explain why Allenby correctly found point of sale signs are not labels under the FHSA.

A. Standard of Review

The trial court denied Cotter's motion for summary...