For the past eight years, a collection of coffee brewers and retailers have been embroiled in a legal battle with Council for Education and Research on Toxics (CERT) over whether certain coffee products sold in California must include a Proposition 65 warning. The litigation, which was divided into two phases, proceeded to trial on the second phase in September 2017 before Judge Elihu Berle in the Superior Court for the County of Los Angeles. The trial on Phase II ran until November 2017 and post-trial briefs were filed in December 2017 and January 2018.
In phase I, which addressed Defendants’ affirmative defenses, Judge Berle ruled against the defendants. Judge Berle’s Proposed Statement of Decision After Trial (Phase II) likewise found the Defendants had failed to meet their burden. If his proposed decision is adopted as final, a Proposition 65 warning will accompany every brewed coffee drink sold, or offered in California to consumers. This outcome will have a far-reaching impact on coffee manufacturers, retailers and other businesses offering ready-to-drink coffee, including potential exposure to Proposition 65 litigation and penalties, and a clear obligation to provide warnings.
California’s Proposition 65, also known as the Safe Drinking Water and Toxic Enforcement Act of 1986—or “Prop. 65”—prohibits businesses from exposing people to chemicals on the Proposition 65 List without providing “clear and reasonable” warnings. Proposition 65 violations carry substantial legal implications as Proposition 65 authorizes monetary penalties of up to $2,500 per day per violation. In the consumer product context, each sale or each exposure to a Proposition 65-listed chemical in a product can be considered a violation. In addition, alleged violators are also required to pay the reasonable attorney’s fees of private plaintiffs who bring Proposition 65 actions on behalf of the general public.
The chemical involved in the coffee litigation is acrylamide, which California’s Office of Environmental Health Hazard Assessment (OEHHA) originally added to the Proposition 65 List in 1990 as carcinogenic. Later, in 2011, OEHHA identified developmental toxicity and male reproductive toxicity as endpoints for acrylamide. Acrylamide forms in certain plant-based foods when they are cooked or roasted under high temperatures. Apart from coffee beans, acrylamide is also commonly found in starchy foods such as French fries and some potato chips.
CERT filed a Proposition 65 action against several representative coffee merchants including Starbucks Corporation, 7-Eleven Incorporated and Peet’s Coffee & Tea Incorporated in 2010. CERT argued that the defendants failed to provide Proposition 65 warnings when selling “ready-to-drink” coffee to consumers in California. In addition, CERT contended that the defendants committed a Proposition 65 violation “every moment” an individual consumed ready-to-drink coffee without first receiving a Proposition 65 warning. Thus, according to CERT, the defendants are liable for a civil penalty of $2,500 for each and every sip of or exposure to coffee of an individual in California without first providing a Proposition 65 warning. CERT’s allegations amount to many millions of violations, and likewise, potentially millions of dollars in civil penalties.
Because of the substantial financial penalties at stake, some of the named defendants opted to negotiate a settlement with CERT rather than fight the allegations. The remaining defendants continued to fight in Phase II of the trial. In the second phase of the trial, the defendants argued that Proposition 65 warnings are not required for the ready-to-drink coffee products the defendants sell in California. They argued that an alternative significant risk level should apply to ready-to-drink coffee because acrylamide is produced in the process of cooking coffee to make it palatable and to avoid microbiological contamination.
Judge Berle’s proposed ruling found that, to prevail on their alternative risk level defense, Defendants were required to prove that (1) sound considerations of public health support application of a less strict risk level for exposure to acrylamide in ready-to-drink coffee, (2) that alternative level is derived from a valid quantitative risk assessment, and (3) assuming lifetime exposure to the products, the exposure to acrylamide from ready-to-drink coffee is below the alternative level. Judge Berle found that Defendants had failed to show that consumption of coffee confers a benefit to human health, and, therefore, failed their burden of showing sound considerations of public health support an alternative risk level for acrylamide in coffee. In addition, Judge Berle found Defendants failed to present a scientifically valid quantitative risk assessment from which an alternative risk level for acrylamide in ready-to-drink coffee could be derived.
Defendants have until April 10, 2018 to file objections to Judge Berle’s proposed decision. Unless the Judge revises his decision, coffee retailers and anyone offering ready-to-drink coffee to consumers will be required to provide a Proposition 65 warning or face Proposition 65 enforcement actions for past and future exposures to ready-to-drink coffee without a warning. Unless Defendants appeal Judge Berle’s final decision, the court action will proceed to assessing penalties against each Defendant. In the interim, businesses selling or offering ready-to-drink coffee should consider whether to begin providing a Proposition 65 warning now.
For assistance in understanding how this proposed decision or other new developments in Proposition 65 impact your business, please contact us.
Leila Bruderer is a Counsel and Patrick Veasy is an Associate in the Sacramento offices of Downey Brand LLP. Both attorneys practice in the areas of environmental litigation, environmental compliance and Proposition 65.