California’s Safe Drinking Water and Toxic Enforcement Act of 1986, enacted by voters and commonly known as Proposition 65, makes it unlawful for a business with ten or more employees to expose a person in California to a chemical “known to the State of California to cause cancer” or “reproductive harm” without providing a clear and reasonable warning. Nearly 1,000 chemicals are on the cancer list, the reproductive toxicity list, or both. The statute is primarily enforced by “private party enforcers” who sue violating companies, mostly manufacturers, distributors and retailers of consumer products, seeking and obtaining penalties, injunctive relief and attorneys’ fees.

The statute is primarily interpreted in regulations issued by California’s Office of Environmental Health Hazard Assessment (“OEHHA”). Last year, OEHHA began issuing a series of regulations establishing “safe harbor warnings” for products, some for specifically identified types of products, and others for all other products. “Safe harbor warning” means that, under the regulations, if the prescribed language, graphic image and method of transmission are precisely followed, the warning is deemed “clear and reasonable,” and no court could hold otherwise. One of the specific product warning regulations was for passenger vehicles and off-highway motor vehicles manufactured and sold on or after August 30, 2016, and required specific warning language to be placed on the driver’s side front window, or on a mirror hang-tag, and on the inside or outside of the front or back cover of the owner’s manual.

Now, it seems likely that a new vehicle warning regulation is on its way, and that the impact of these regulations together could be even broader than OEHHA intended. On March 8, OEHHA issued a new proposed regulation establishing safe harbor warnings for “rental vehicle exposure.” The regulation requires use of the following icon, as well as the word “warning” in bold, all-upper case letters (now a part of all the safe harbor warnings) and language:

WARNING: Operating a motor vehicle can expose you to chemicals including engine exhaust, carbon monoxide, phthalates, and lead, which are known to the State of California to cause cancer and birth defects or other reproductive harm. To minimize exposure, avoid breathing exhaust, do not idle the engine except as necessary, and assure adequate ventilation inside the car. For more information go to www.P65Warnings.ca.gov/passenger-vehicle.

The warning must be in a font size no less than the greater of that used for other “consumer information” (a phrase not adequately defined) or 6 point type, placed on or in one of the following:

• in the rental agreement or on the rental ticket jacket;
• a hang tag which is hung from the rear view mirror in the rental vehicle;
• a clearly marked hyperlink using the word “WARNING” on the on-line reservation page, or by otherwise prominently displaying the warning to the renter prior to completing the on-line reservation;
• an electronic rental contract; or
• a confirmation email that is sent to the renter’s email address.

The proposed regulations provide two other alternatives: First, “a sign, in no smaller than 22-point type size, that is posted at the counter or similar area of the rental facility where rental transactions occur, where it will be likely to be seen, read, and understood by the renter during the process of renting the vehicle.”

Second, the company may use the language in the motor vehicle sale safe harbor regulations (which is very similar but longer than the rental vehicle safe warning) and/or may use an owner’s manual and window label method prescribed by those earlier regulations.

As used in the regulations, what is the meaning of “rental vehicle?” There is no definition whatsoever. Might it include an automobile dealership loaner car? It might. But a critical matter is this: Proposition 65 itself does not limit warning requirements to any specific products. In fact, it is not a product statute. It is a statute requiring warnings to any means of exposure to listed chemicals. The meaning of these proposed safe harbor warnings is two-fold: They mean OEHHA is giving companies a way to protect themselves against Proposition 65 enforcement actions. But they also mean OEHHA is taking the position that there is a warning obligation for any company with ten or more employees, whether a manufacturer, a dealership, a rental company or any other that sells, rents or provides a vehicle in any way to a consumer.

While the new safe harbor regulation will probably not take effect until late this year, the warning requirement for exposure to the chemicals in question took effect decades ago, and the new regulations will make the obligations and potential enforcement vulnerability of automobile dealerships and rental companies clearer to private party enforcers almost immediately.

Accordingly, Scali Rasmussen’s Proposition 65 team strongly believes that any company with ten or more employees that places motor vehicles in the hands of California consumers in any way should adopt a Proposition 65 compliance program to protect itself against enforcement litigation. It is especially important for dealership service directors, rental department managers, and those that oversee any other borrowed car agreements to ensure that they are complying with Proposition 65 every time a vehicle is placed in the hands of a customer.