Todd Harrison & Erin Seder, Venable04.01.13
This article intends to clear up recent confusion regarding suggestions that the industry had won a significant Proposition 65 case. I have had several inquiries whether the recent decision in Gillette vs. Garden of Life, et al., regarding “naturally occurring” means that dietary supplements like food do not require a Prop 65 warning if they contain a listed chemical that exceeds the safe harbor for that chemical.
The idea that food is exempt from Prop 65 is an urban myth. Rather, food labels are required to bear a Prop 65 warning unless the listed chemical is naturally occurring and it is not technologically feasible to lower the level of the listed chemical. This defense has always been available to dietary supplement companies. Indeed, it is why there is a “naturally occurring” provision built into the Warner-Lambert consent decrees. Regardless, for some un-explicative reason, the Plaintiff in Gillette attempted to argue that dietary supplements are not food and cannot rely on the natural occurring defense. The court rightfully rejected this argument and ruled in favor of the defendants on this narrow issue. The defendants now have the burden of establishing that the levels of the listed chemical in their products are not only naturally occurring but also at the lowest feasible levels. In this regard, the California Attorney General’s (AG) recent objection to the proposed Second Amended Settlement in Nasseri v. CytoSport should raise significant concerns for the industry, as it will require dietary supplement companies to understand their supply chain more fully in order to prevail on a “naturally occurring” defense to a Prop 65 notice.
More specifically, as will be discussed later, the AG has taken the position that a defendant must prove that the chemical is not present in the product due to any human activity and that it has used “good agricultural or good manufacturing practices” in order to reduce the chemical to the “lowest level currently feasible.” In other words, a company that cannot trace its herbal ingredients back to a particular field will have a difficult time establishing “naturally occurring.” Thus, dietary supplement companies should seriously consider developing traceability standards that reach back to the fields if they wish to avoid potential liability under Prop 65. Those companies that only use organic ingredients or wild-crafted ingredients are already far ahead in this game, as they know their fields. The rest of the industry should hold it breath and hope the judge in Nasseri disagrees with the AG.
Prop 65 & Lead ‘Safe Harbor’ Levels
The Safe Drinking Water and Toxic Enforcement Act of 1986 (Prop 65), requires that “clear and reasonable” warnings appear on products that expose the public to chemicals known to cause cancer or reproductive toxicity. The regulations implementing Prop 65 provide a safe harbor for three different levels of certain chemicals: levels posing “no significant risk” for the chemical as a carcinogen; levels that have “no observable effect,” assuming exposure at one thousand times that level, for the chemical as a reproductive toxicant; and levels that are “naturally occurring,” if they have been reduced to the “lowest level currently feasible.”
According to California regulations, lead poses no significant risk at 15 mcg/day and exposure has no observable effect at 0.5 mcg/day. Thus, a cancer warning is required for any product that contains more than these thresholds, unless the levels of lead are “naturally occurring” and have been reduced to the “lowest level currently feasible.”
Naturally occurring lead levels have been established in various consent agreements and one California Attorney General letter (the “Chocolate Letter”). For more than a decade, many regarded the naturally occurring allowances in these documents as de facto regulation. However, today some plaintiff attorneys allow non-parties to employ the allowances; others do not. In addition, in 2011 the California AG insisted that only parties to a consent judgment may rely on the lead allowances therein. Hence, it has become evident that informal reliance on the lead allowances in past consent agreements may not stave off an enforcement lawsuit.
The alternative to using past consent agreements is to prove that lead is naturally occurring in all of a company’s products. This undertaking is not only time consuming and costly, but also logistically and legally very difficult. As the law currently stands, the only permissible way to establish naturally occurring lead levels, according to the AG, is through comprehensive analysis of the natural background levels of lead in the areas where ingredients are harvested.
Under the naturally occurring regulation, the company providing a food product is not responsible for the “naturally occurring chemicals” in food if certain criteria are met. This regulation was designed to avoid ubiquitous warnings on many foods due to the existence of small quantities of some chemicals in the air, ground and water, which results in their presence in the food. To fall within the terms of this regulation, however, the chemical cannot be present in the food as a result of any “known human activity,” and it must be reduced to the “lowest level currently feasible” through processing, handling or other techniques. Never stationary, the lowest level currently feasible continually evolves with technological advancement.
Warner-Lambert & Chocolate Letter
In 1998, California’s Attorney General completed a series of Prop 65 settlements, referred to as the “Warner-Lambert” settlements, governing multivitamins, antacids and calcium supplements in which the naturally occurring lead allowances for ingredients used in these products were fixed. Those eight ingredients are: calcium, ferrous fumarate, zinc oxide, magnesium oxide, magnesium carbonate, magnesium hydroxide, zinc gluconate and potassium chloride. In April 1999 and November 2011, the naturally occurring lead allowances were, as authorized in the stipulated consent judgment, modified down. The 2011 allowances are about 20% lower than the original 1998 allowances.
Additionally, in the uncommon 2001 Chocolate Letter, the California AG declared that lead levels falling under 1 ppm for cocoa powder, 1 ppm for chocolate liquor and 0.1 ppm for cocoa butter in Hershey Foods Corp. and Mars, Inc. products qualified as naturally occurring. In the letter, however, the AG explained his review of this particular Prop 65 matter was unusual and such public statements would continue to be “extremely rare.” These naturally occurring allowances for chocolate have yet to be revised and a second AG letter deeming naturally occurring lead levels has never been sent.
Nasseri v. CytoSport
When current California Attorney General Kamala Harris signed off on the 2011 Warner-Lambert naturally occurring lead allowance modifications, she made it clear that the allowances only apply to the settlement parties. Further evidence of her hardline view can be seen in the July 2012 challenge of the Nasseri v. CytoSport Second Amended Settlement Agreement.
In 2011, Nasseri and Cytosport submitted their first settlement agreement, but the AG concluded it was inconsistent with California law because it simply instructed Cytosport to lower lead levels to the lowest level feasible without determining what that level was. They then submitted an agreement that set a single “naturally occurring” lead level for all finished products, regardless of the ingredients or the amount of ingredients in each product. This, too, was denied. The parties eventually submitted their Second Amended Settlement Agreement, which set a “naturally occurring” lead level for specific ingredients. This version of the proposed settlement agreement has garnered the most attention.
In the Second Amended Settlement Agreement, the parties agreed to caps on the amount of “naturally occurring” lead in the products at issue. The cap is set at 6.5 mcg/RDV for products containing cocoa and 5.5 mcg/RDV for those without. Further, the agreement defines the amount of “naturally occurring” lead as the level of lead in the product after all Section 3.05 remedial actions have been taken. The lead reduction plan in Section 3.05 creates an oversight policy that monitors all Cytosport ingredient suppliers and obligates them to reduce lead to the lowest feasible amount by reviewing manufacturing process, alternative formulation and product sourcing.
The AG found the agreement inadequate, taking issue with the high naturally occurring lead allowance cap (i.e., more than 10 times the 0.5 mcg/day Prop 65 safe harbor) and argues that the lowest feasible levels after the application of quality control measures are not properly demonstrated. The AG suggested the only way to establish the “naturally occurring” exception for lead or any other listed chemical is to undertake a comprehensive analysis of the “background levels” of the listed ingredient at the site from which each product constituent was obtained. She added, “in order to claim the [naturally occurring] exemption, [Cytosport] must prove that the chemical is not present in the product due to any human activity, and that it has used ‘good agricultural or good manufacturing practices’ in order to reduce the chemical to the ‘lowest level currently feasible.’”
In response, Nasseri and Cytosport contended the AG’s analysis of their settlement “glosses” over the lead reduction plan in Section 3.05 and ignored the fact that using that particular method of establishing lead is naturally occurring is not a violation of the regulations. They argued, she “cherry picks” from the regulation and “attempts to argue that one possible way to establish that a chemical is naturally occurring is the only way to do so.” The regulation does not provide an exclusive or even preferred method to do so; rather, it states that naturally occurring lead levels “may be established by determining the natural background level of the chemical in the area in which the food is raised, or grown, or obtained, based on reliable local or regional data.”
There has been no successful challenge of the AG’s interpretation. Her stance on the required methodology to determine lowest feasible lead allowances is significant and likely foreshadows the narrowing interpretation of Prop 65 regulations and settlement structures to come. In other words, it is time to develop real traceability standards for the industry or suffer the consequences.
Todd Harrison is partner with Venable, which is located in Washington, D.C. He advises food and drug companies on a variety of FDA and FTC matters, with an emphasis on dietary supplement, functional food, biotech, legislative, adulteration, labeling and advertising issues. He can be reached at 575 7th St. NW, Washington, D.C. 20004, Tel: 202-344-4724; E-mail: taharrison@venable.com.
Erin Seder is an associate in Venable’s Regulatory practice group, where she advises clients on legislation and rulemaking proceedings that impact a broad range of industries. Ms. Seder also assists clients on a variety of ongoing regulatory compliance matters before the FTC, FCC and other federal and state agencies and commissions.
The idea that food is exempt from Prop 65 is an urban myth. Rather, food labels are required to bear a Prop 65 warning unless the listed chemical is naturally occurring and it is not technologically feasible to lower the level of the listed chemical. This defense has always been available to dietary supplement companies. Indeed, it is why there is a “naturally occurring” provision built into the Warner-Lambert consent decrees. Regardless, for some un-explicative reason, the Plaintiff in Gillette attempted to argue that dietary supplements are not food and cannot rely on the natural occurring defense. The court rightfully rejected this argument and ruled in favor of the defendants on this narrow issue. The defendants now have the burden of establishing that the levels of the listed chemical in their products are not only naturally occurring but also at the lowest feasible levels. In this regard, the California Attorney General’s (AG) recent objection to the proposed Second Amended Settlement in Nasseri v. CytoSport should raise significant concerns for the industry, as it will require dietary supplement companies to understand their supply chain more fully in order to prevail on a “naturally occurring” defense to a Prop 65 notice.
More specifically, as will be discussed later, the AG has taken the position that a defendant must prove that the chemical is not present in the product due to any human activity and that it has used “good agricultural or good manufacturing practices” in order to reduce the chemical to the “lowest level currently feasible.” In other words, a company that cannot trace its herbal ingredients back to a particular field will have a difficult time establishing “naturally occurring.” Thus, dietary supplement companies should seriously consider developing traceability standards that reach back to the fields if they wish to avoid potential liability under Prop 65. Those companies that only use organic ingredients or wild-crafted ingredients are already far ahead in this game, as they know their fields. The rest of the industry should hold it breath and hope the judge in Nasseri disagrees with the AG.
Prop 65 & Lead ‘Safe Harbor’ Levels
The Safe Drinking Water and Toxic Enforcement Act of 1986 (Prop 65), requires that “clear and reasonable” warnings appear on products that expose the public to chemicals known to cause cancer or reproductive toxicity. The regulations implementing Prop 65 provide a safe harbor for three different levels of certain chemicals: levels posing “no significant risk” for the chemical as a carcinogen; levels that have “no observable effect,” assuming exposure at one thousand times that level, for the chemical as a reproductive toxicant; and levels that are “naturally occurring,” if they have been reduced to the “lowest level currently feasible.”
According to California regulations, lead poses no significant risk at 15 mcg/day and exposure has no observable effect at 0.5 mcg/day. Thus, a cancer warning is required for any product that contains more than these thresholds, unless the levels of lead are “naturally occurring” and have been reduced to the “lowest level currently feasible.”
Naturally occurring lead levels have been established in various consent agreements and one California Attorney General letter (the “Chocolate Letter”). For more than a decade, many regarded the naturally occurring allowances in these documents as de facto regulation. However, today some plaintiff attorneys allow non-parties to employ the allowances; others do not. In addition, in 2011 the California AG insisted that only parties to a consent judgment may rely on the lead allowances therein. Hence, it has become evident that informal reliance on the lead allowances in past consent agreements may not stave off an enforcement lawsuit.
The alternative to using past consent agreements is to prove that lead is naturally occurring in all of a company’s products. This undertaking is not only time consuming and costly, but also logistically and legally very difficult. As the law currently stands, the only permissible way to establish naturally occurring lead levels, according to the AG, is through comprehensive analysis of the natural background levels of lead in the areas where ingredients are harvested.
Under the naturally occurring regulation, the company providing a food product is not responsible for the “naturally occurring chemicals” in food if certain criteria are met. This regulation was designed to avoid ubiquitous warnings on many foods due to the existence of small quantities of some chemicals in the air, ground and water, which results in their presence in the food. To fall within the terms of this regulation, however, the chemical cannot be present in the food as a result of any “known human activity,” and it must be reduced to the “lowest level currently feasible” through processing, handling or other techniques. Never stationary, the lowest level currently feasible continually evolves with technological advancement.
Warner-Lambert & Chocolate Letter
In 1998, California’s Attorney General completed a series of Prop 65 settlements, referred to as the “Warner-Lambert” settlements, governing multivitamins, antacids and calcium supplements in which the naturally occurring lead allowances for ingredients used in these products were fixed. Those eight ingredients are: calcium, ferrous fumarate, zinc oxide, magnesium oxide, magnesium carbonate, magnesium hydroxide, zinc gluconate and potassium chloride. In April 1999 and November 2011, the naturally occurring lead allowances were, as authorized in the stipulated consent judgment, modified down. The 2011 allowances are about 20% lower than the original 1998 allowances.
Additionally, in the uncommon 2001 Chocolate Letter, the California AG declared that lead levels falling under 1 ppm for cocoa powder, 1 ppm for chocolate liquor and 0.1 ppm for cocoa butter in Hershey Foods Corp. and Mars, Inc. products qualified as naturally occurring. In the letter, however, the AG explained his review of this particular Prop 65 matter was unusual and such public statements would continue to be “extremely rare.” These naturally occurring allowances for chocolate have yet to be revised and a second AG letter deeming naturally occurring lead levels has never been sent.
Nasseri v. CytoSport
When current California Attorney General Kamala Harris signed off on the 2011 Warner-Lambert naturally occurring lead allowance modifications, she made it clear that the allowances only apply to the settlement parties. Further evidence of her hardline view can be seen in the July 2012 challenge of the Nasseri v. CytoSport Second Amended Settlement Agreement.
In 2011, Nasseri and Cytosport submitted their first settlement agreement, but the AG concluded it was inconsistent with California law because it simply instructed Cytosport to lower lead levels to the lowest level feasible without determining what that level was. They then submitted an agreement that set a single “naturally occurring” lead level for all finished products, regardless of the ingredients or the amount of ingredients in each product. This, too, was denied. The parties eventually submitted their Second Amended Settlement Agreement, which set a “naturally occurring” lead level for specific ingredients. This version of the proposed settlement agreement has garnered the most attention.
In the Second Amended Settlement Agreement, the parties agreed to caps on the amount of “naturally occurring” lead in the products at issue. The cap is set at 6.5 mcg/RDV for products containing cocoa and 5.5 mcg/RDV for those without. Further, the agreement defines the amount of “naturally occurring” lead as the level of lead in the product after all Section 3.05 remedial actions have been taken. The lead reduction plan in Section 3.05 creates an oversight policy that monitors all Cytosport ingredient suppliers and obligates them to reduce lead to the lowest feasible amount by reviewing manufacturing process, alternative formulation and product sourcing.
The AG found the agreement inadequate, taking issue with the high naturally occurring lead allowance cap (i.e., more than 10 times the 0.5 mcg/day Prop 65 safe harbor) and argues that the lowest feasible levels after the application of quality control measures are not properly demonstrated. The AG suggested the only way to establish the “naturally occurring” exception for lead or any other listed chemical is to undertake a comprehensive analysis of the “background levels” of the listed ingredient at the site from which each product constituent was obtained. She added, “in order to claim the [naturally occurring] exemption, [Cytosport] must prove that the chemical is not present in the product due to any human activity, and that it has used ‘good agricultural or good manufacturing practices’ in order to reduce the chemical to the ‘lowest level currently feasible.’”
In response, Nasseri and Cytosport contended the AG’s analysis of their settlement “glosses” over the lead reduction plan in Section 3.05 and ignored the fact that using that particular method of establishing lead is naturally occurring is not a violation of the regulations. They argued, she “cherry picks” from the regulation and “attempts to argue that one possible way to establish that a chemical is naturally occurring is the only way to do so.” The regulation does not provide an exclusive or even preferred method to do so; rather, it states that naturally occurring lead levels “may be established by determining the natural background level of the chemical in the area in which the food is raised, or grown, or obtained, based on reliable local or regional data.”
There has been no successful challenge of the AG’s interpretation. Her stance on the required methodology to determine lowest feasible lead allowances is significant and likely foreshadows the narrowing interpretation of Prop 65 regulations and settlement structures to come. In other words, it is time to develop real traceability standards for the industry or suffer the consequences.
Todd Harrison is partner with Venable, which is located in Washington, D.C. He advises food and drug companies on a variety of FDA and FTC matters, with an emphasis on dietary supplement, functional food, biotech, legislative, adulteration, labeling and advertising issues. He can be reached at 575 7th St. NW, Washington, D.C. 20004, Tel: 202-344-4724; E-mail: taharrison@venable.com.
Erin Seder is an associate in Venable’s Regulatory practice group, where she advises clients on legislation and rulemaking proceedings that impact a broad range of industries. Ms. Seder also assists clients on a variety of ongoing regulatory compliance matters before the FTC, FCC and other federal and state agencies and commissions.
