Alert: Strategies for Resolving Claims of Failure to Warn of Exposure to Lead in Decorative Ceramicware and Glassware Coatings

March 21, 2006

In recent years, plaintiffs attorneys have sent notices to hundreds of manufacturers, importers and distributors of ceramicware and glassware products for alleged “failure to warn” of exposure to lead and cadmium in products sold in California.  Many of these claims have targeted wineries and other wine businesses that distribute “logo” glassware at tasting rooms, shops or through online sales.  The plaintiffs contend that exterior coatings used for artwork and designs on the products contain levels of lead and/or cadmium requiring warnings under Proposition 65. 

The claims are based on a California law called “Proposition 65” that requires a “clear and reasonable warning” on products that contain, and cause people to be exposed to, lead, cadmium, or any one of more than 750 other chemicals listed as “known to the state of California to cause cancer, birth defects or other reproductive harm.”  Private plaintiffs are required to provide companies with a “60-day notice” of intent to file a lawsuit, and a resolution of the threatened claims can sometimes be reached during the notice period.  Companies found liable for violations of Proposition 65 may be ordered by a court to provide specified warnings or to “reformulate” to reduce levels of lead and cadmium, to pay civil penalties of up to $2,500 per day for each violation, and to pay plaintiff’s attorney’s fees and costs. 

Last year, the Boelter Companies, facing such claims relating to lead and cadmium in exterior coatings on glassware and ceramicware products, agreed to a settlement with the plaintiff that provides other companies with an opportunity to “opt-in.”  Under the Boelter settlement, manufacturers, distributors/importers and retailers which have sold fewer than 350,000 consumer product units of ceramicware and/or glassware products in California during calendar year 2004 are eligible to opt-in.  The monetary terms for opting into the settlement depend on the company’s status as a manufacturer, importer/distributor or retailer, and the total number of glassware and ceramicware products with coatings containing lead and/or cadmium that were distributed in California during 2004. 

The settlement also provides for a release of the settling company and its “downstream” customers.  The release does not extend, however, “upstream” to the covered products’ manufacturers, suppliers, or distributors.  The settlement agreement also requires that if the company cannot show that the lead and cadmium levels of the coatings satisfy specific reformulation standards, that company will have to provide warnings on these products to comply with Proposition 65 on a going forward basis. 

Once a company opts into the Boelter settlement, not only is it required to implement the specified warnings as to all covered products distributed in California, it must also take steps to reformulate 80% of such products to reduce lead and cadmium content to meet Boelter standards by December 31, 2006, and undertake “all commercially reasonable efforts” for 100% of the products to meet these standards after January 1, 2007.

The Boelter opt-in period expires on March 31, 2006.  However, we can expect plaintiffs’ counsel to continue to serve 60-day notice letters and pursue claims relating to alleged Proposition 65 violations for glassware and ceramicware products with exterior decorative coatings, and to take the position that Boelter establishes a framework for other settlements involving these products in the future.  Therefore, it is important for businesses distributing such products in California to take proactive measures to reduce the risk of liability, and to take prompt and effective steps to defend or resolve such claims if and when they arise.

Companies should survey their product line to determine whether they sell glassware or ceramicware that features exterior decorative coatings.  If so, they should contact their supplier to determine – and document – whether the coatings contain lead or cadmium, and if so, at what levels.  The Boelter settlement provides specific testing protocols for determining lead and cadmium content, and testing should be conducted by a qualified technical consultant in coordination with legal counsel.  Glassware and ceramicware products with coatings exceeding the lead and cadmium standards set by Boelter require reformulation or Proposition 65 warnings for distribution in California.

In the event a business is served with a 60-day notice, prompt independent product testing should be considered if it has not already been performed.  Again, this should be performed using a qualified technical consultant under the direction of counsel. 

It will also be important to identify:

1. all glassware or ceramicware products with exterior artwork or designs that it imports, sells or distributes;
2. the total number of such products distributed in California during the past year;
3. the supplier(s) from whom it imports or otherwise obtains the products, to determine whether any of these suppliers have already opted in to Boelter or obtained a release from Proposition 65 liability that would benefit the company; and
4. the customers to whom it distributes such products for sale (or possible sale) in California, to coordinate defense or compliance measures. 

If undertaken promptly, these and other measures can reduce the risk of litigation and liability for alleged violations of Proposition 65.