Welcome to another episode of “Setting Precedent” where every week, we bring you the latest legal news and forecasting trends on a variety of litigation, compliance, and regulatory topics.

My name is Ali Fraher, and I am an Attorney at CMBG3 Law, a law firm headquartered in Boston with offices in San Francisco and Irvine California. We represent clients nationally in a variety of areas, including environmental, compliance, products liability, toxic torts, property and construction, insurance matters, government affairs and many types of litigation.

Today, I am joined by one of the Shareholder Attorneys of our firm and the Chair of the firm’s Environmental Committee, John Gardella. John will provide his thoughts on a recently passed cosmetics bill in California that will have impacts on both the PFAS regulatory climate and compliance planning for the cosmetics industry.

Welcome to the show, John!

Good morning and thanks for having me!

So as I understand it, the bill out of California that’s causing quite the stir in the legal and regulatory communities is the Toxic Free Cosmetics Act. What does this bill aim to do?

 That’s the one, Ali, and it was just passed by the California legislature on August 30, 2020, so it’s basically hot off the presses. The basic framework of the bill is that it will ban 12 chemicals from being used in any cosmetics or personal care products that are either made or sold in California. Of the 12 chemicals, two are pretty well known to anyone even if you don’t follow the cosmetics industry – mercury and endocrine disruptors. But the chemical in the bill that is drawing the most attention in the legal and regulatory world are PFAS chemicals, which would also be banned from cosmetics and personal care products pursuant to this bill.

 Why is the inclusion of PFAS such a big deal?

I think there are a couple of reasons. First, the bill is kind of landmark bill in the United States because it bans the use of so many prominent chemicals that have historically been used in cosmetics and personal care products. State level bills in the past have aimed to ban one, or perhaps two, chemicals from these products – not 12 at the same time. So it is really a far-reaching bill, akin to legislation many have seen out of the European Union, which is historically more aggressive than the United States in banning chemical substances.

 But with respect to PFAS specifically, this is a completely unique piece of legislation in the United States, as California is poised to become the first state in the country to ban PFAS in these types of products. States have focused almost exclusively to date on passing legislation that sets drinking water limits for PFAS, with some states passing bans on the use of PFAS in food packaging. But the cosmetics industry is such a huge industry unto itself that including PFAS in the bill language will really have a significant impact on this industry’s practices.

 Well how did this bill get passed? Was it the result of years of prolonged legislative battles and negotiations?

 That’s a great question and the surprising answer I think to many is – NO! This bill passed relatively quietly through the legislative process, had bipartisan support, and in fact received support from the Personal Care Products Council – the largest representative council for cosmetics and personal care products companies in the country.

 How did things possibly go so smoothly and what was behind the support for the bill from the Personal Care Products Council?

 Well, the support surprised many, to be honest. But the clue to the reasoning for the support most likely can be found in the statement that the Council released after the bill passed. In it, they said that their support was due to the fact that its passing would bring a certain degree of harmony to regulations that already exist.

But you said that this was a landmark bill and had never been seen before in the U.S., so where’s the harmony?

True! But I also mentioned that the EU has for years heavily regulated chemicals that the United States has not, and that includes chemicals often found in cosmetics. The EU in fact banned most of the chemicals that are the subject of the California bill years ago. The Council therefore saw supporting the California bill as a way to unify their compliance and manufacturing processes,  rather than attempting to come into compliance with a multitude of varying regulations globally.

Do you think that this new law will have any impact outside of California?

Definitely.  Both national and global effects actually.

Why?

Well, for the simple fact that California has historically been sort of a trend setter when it comes to regulations and laws in the environmental and chemical realms. Time and again, we have seen California take action and other states gradually come into line with steps California has taken. This will take time, for sure, but with the attention that endocrine disruptors and PFAS are receiving nationally, I see it happening in the next three years or so.

Globally, from an economic standpoint, California is the fifth largest economy in the world.  That means that it ranks just below Germany (that’s the entire economy of all of Germany!) in terms of gross national product. For a bit more context, India is often seen as the next big emerging market, akin to China 20-30 years ago. California’s economy is currently larger than all of India! So, the fact that cosmetics and personal care products manufacturers have willingly fallen into line and supported this bill suggests that they would be willing to do so on a global scale, even in countries that do not have aggressive or even significant chemical regulations. This benefits consumers from a health standpoint and it benefits the industry because they can now adjust product design, manufacturing, and distribution in a much more globally uniform manner, which will result in cost savings to manufacturers.

Going back to the PFAS component of this bill, which PFAS does this bill specifically ban?

Well, that’s a great question, Ali, and the answer is almost a great subject for another podcast because the simple answer to your question is that it bans them all. But there are over 7,000 PFAS compounds that exist, with thousands of them only invented in the last decade. Really, virtually all PFAS, with the exception of two that are very prominent in PFAS litigation – PFOA and PFOS – have very little scientific data or epidemiology for any regulatory agency, or even the scientific community, to conclude that they do or do not pose a risk. They just don’t know yet.

Even with this uncertainty, though, we’ve seen a push in the United States recently to simply lump all PFAS together as one type of chemical class for regulatory purposes, regardless of whether they have different toxicities, or in fact may not be harmful to human health. Part of this is a practical reasoning – it would take several of my lifetimes to test and draw conclusions for over 7,000 chemical substances. But the subject of one of my future podcasts will take a deeper dive into this very issue and look at whether a sweeping regulatory move for PFAS follows how the scientific method must be carried out. Many say that it would not, and that’s sort of the counter argument to the proponents of the “regulate them all at once” stance.

This is another reason why this bill is so important for those who do follow the PFAS developments closely. As I mentioned earlier, many states mimic California, so in a few years, we could end up with states enacting sweeping “ban all types of PFAS” regulations, which is basically what this California bill does. It is tailored specifically to one industry, but still, it’s a pretty significant potential catalyst for what may come.

For the PFAS issue, does this bill give manufacturers any exemptions at all? Or is this just an all out ban? 

The bill does permit for “unavoidable trace amounts” of the various banned chemicals, including PFAS.  This is a nod and recognition to the fact that the end products may inevitably and inadvertently be contaminated with chemicals after the manufacturing process – for example, from leaching from product packaging. So they do have that protection built in for the cosmetics industry.

So where does this bill go from here?

The bill was sent to Governor Gavin Newsom and he has until September 30, 2020 to either sign the bill into law or veto it. If passed into law, the ban on the chemicals in these products would take effect January 1, 2025. I haven’t seen any indication out of the Governor’s office suggesting that he will not sign this bill and I expect him to on or right before September 30.

Well, that concludes our time for today.  Thank you for joining me today, John. There’s definitely more to this bill than one might initially think, so I know that our listeners appreciate your insights on the language and impact of the bill.

Thank you again for having me! If any of our listeners are interested in talking about this bill a bit more, or they have any PFAS related questions at all, I’m more than happy to talk.  The best way to reach me is my email, which is jgardella@cmbg3.com.  Thanks again.

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