Last month, the Court of Appeal of California, Second Appellate District, Division Four, issued an opinion in Charles v. Sutter Home Winery, Inc. (2018 Cal. App. LEXIS 418*; 2018 WL 2126987). The court considered the Plaintiffs’ appeal of their dismissed putative class action complaint brought under the Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65. The appeal challenged the adequacy of the warning label that the Defendants, a group of wine suppliers, provided on wines that contained allegedly unsafe levels of inorganic arsenic, a chemical listed by the State of California as a carcinogen and a reproductive toxicant (a “listed chemical”). In a win for the wine industry, the Court of Appeal upheld the dismissal of the case.

Proposition 65 requires that any person who knowingly and intentionally exposes another person to a “listed chemical” in the course of doing business must provide a “clear and reasonable” warning before the exposure. California’s Office of Environmental Health Hazard Assessment (OEHHA), the lead agency responsible for implementing Proposition 65, has adopted several “safe harbor” warning provisions deemed to satisfy Proposition 65’s requirements, including a safe harbor warning for general consumer products and one for alcohol beverages, specifically.

The wines in question in Sutter Home Winery displayed the safe harbor warning for alcohol beverages. The Plaintiffs argued that the alcohol beverage safe harbor warning was insufficient, and that Proposition 65 required the Defendants to provide an additional, specific warning which disclosed the presence of the inorganic arsenic. The Plaintiffs sought injunctive relief and restitution of the purchase price paid for the arsenic-containing wines, but did not allege any personal injury or physical harm resulting from consumption of the wines in question.

Citing OEHHA’s determination that consuming 10 micrograms of inorganic arsenic per day (except through inhalation) poses “no significant risk” of cancer, the Plaintiffs argued that wines containing more than 10 micrograms of inorganic arsenic per liter should bear an arsenic-specific warning. The Defendants countered that applying the “no significant risk” standard to wines would be inappropriate because the OEHHA estimate is based on drinking water consumption and assumes that a person consumes two liters of water daily for a lifetime. To match that level of exposure for wines, the Defendants contended, would require a person to consume roughly 13.5 glasses of wine a day for life.

While there is no federal or state maximum acceptable daily exposure level for inorganic arsenic in wine in the United States, the court took judicial notice of such standards that currently exist in 47 other countries. Canada, for example, allows 100 micrograms of arsenic per liter of wine. And 46 countries that are members of the International Organization of Vine and Wine allow 200 micrograms of arsenic per liter of wine. Even using the Plaintiffs’ allegations that wines contain inorganic arsenic levels that are roughly 500 percent more than the drinking water standard (meaning one liter of wine would contain about 50 micrograms of inorganic arsenic), the alleged inorganic arsenic content of the wines in question would still fall well below the maximum allowable levels in the 47 countries that have established exposure limits for wines.

Several of the Defendants in Sutter Home Winery were also party to a consent judgment in a 2014 Proposition 65 class action case, Bonilla v. Anheuser-Busch. The Bonilla consent judgment, which preceded the filing of the Sutter Home Winery complaint by several months, effectively barred subsequent action against the Defendant-parties for violations of Proposition 65 that could have been asserted in the public interest in the Bonilla case and which arise out of exposure to “covered products.” The consent judgment defined “covered products” as alcohol beverages that expose consumers to listed chemicals, including alcohol beverages when associated with alcohol abuse, and ethyl alcohol and ethanol in alcohol beverages. The Bonilla Defendants argued that res judicata barred the new Proposition 65 claims against them. The Sutter Home Winery Defendants who were not party to the Bonilla settlement argued that the alcohol beverage safe harbor warning satisfied Proposition 65.

The Court of Appeal affirmed the trial court’s dismissal of the class action suit, reasoning that:

  1. The purpose of the safe harbor warnings is to provide businesses with reasonable certainty that they will not be subjected to enforcement actions over the warnings they provide. OEHHA determined that warnings given in accordance with the safe harbor provisions are “clear and reasonable.” OEHHA also determined that the Bonilla Defendants could continue to provide the warning described in their consent judgment.
  2. The purpose of Proposition 65 is to warn consumers of the two health risks associated with exposure to a listed chemical, namely cancer and reproductive harm. The alcohol beverage safe harbor warning achieves this objective.
  3. Even under the new version of the alcohol beverage safe harbor warning (which becomes effective in August 2018 and largely retains the language of the old provision), winemakers would not be required to list chemical ingredients on or adjacent to the alcohol beverage.
  4. The new safe harbor warning for foods and beverages–which winemakers could elect to use, if they did not use the alcohol beverage safe harbor warning–only requires the producer to disclose one of the “listed chemicals” for products that contain more than one listed chemical. Effectively, listing alcohol alone would be sufficient, and winemakers would not be required to list inorganic arsenic separately.
  5. The Plaintiffs’ theory that Proposition 65 imposed a duty on the Defendants to disclose the presence of inorganic arsenic in their wines is inviable. Because many of the Plaintiffs’ remaining claims derived from this Proposition 65 claim, the trial court correctly dismissed those claims without leave to amend.
  6. Because the Plaintiffs did not allege any personal injury from unknowing consumption of inorganic arsenic in the wines, their additional claims under consumer protection laws would not compel a different result.

Concluding, the court restated that providing the safe harbor warning for alcohol beverages was a complete defense in this case. The adequacy of the safe harbor warnings was a matter for OEHHA and the California legislature to consider, not the courts.

Lauren Knizner, a summer associate in the Washington, DC office, also contributed to this article.