2. Product Liability for Musical Instruments and Accessories NAMM Webinar on Prop 65 James M. Goldberg

3. Why This Webinar? Because about two dozen companies received a 60-notice of violation of California’s “Proposition 65” To educate NAMM members on the provisions of this law and offer suggestions on compliance

4. What is “Proposition 65”? Safe Drinking Water and Toxic Enforcement Act of 1986 –Approved by voter initiative –Health and Safety Code §25249.5 Requires State to publish a list of chemicals known to cause cancer or birth defects or other reproductive harm

5. What Types of Chemicals Are on the List? More than 750 entries currently Naturally occurring and synthetics Additives or ingredients in pesticides, common household products, foods, drugs, dyes, solvents, etc. Used in manufacturing or construction or byproducts of chemical processes (e.g., automobile exhaust)

6. Some Examples, Please A-alpha-C through Zileuton Aflatoxin, alcohol beverages, aspirin, oral contraceptives, unleaded gasoline Nickel Lead and lead compounds

7. What Must Businesses Do? Provide a “clear and reasonable” warning before “knowingly and intentionally” exposing a person (e.g., a consumer) to a listed chemical Warning must (1) clearly make known that chemical is known to cause cancer, etc., and (2) be given in such a way that it will effectively reach a person before exposure

8. How Do I Reach Consumers? Signage (e.g., in restaurants) Product labeling, packaging

9. Are There Exemptions? Businesses employing nine or fewer employees If demonstrate that exposure occurs at a level that poses “no significant risk” –Specific “NSR” levels for 250 products For reproductive toxicants, no warning if exposure will produce no observable effects at 1,000 times the stated level

10. How is Prop 65 Enforced? No criminal penalties Civil lawsuits –By State Attorney General –By local district attorneys –By private parties Civil penalties up to $2,500/day for each violation

11. Who Are the Private Cops? So-called “Plaintiff’s lawyers” Defense attorneys call them “bounty hunters” engaging in “drive-by lawsuits”

12. What Should a Business Do? Conduct “due diligence” to see if products contain any of the listed chemicals If not, do nothing If so, consider an appropriate warning notice –Law is only applicable in California, but hard to keep separate inventories

13. Suppose I’m One of the Unlucky Two Dozen? Conduct “due diligence” on listed products Consult with knowledgeable counsel to plan a response strategy

14. Prop 65 - Comments and Q&A Elizabeth Weaver, Partner –Howrey, LLP

15. Questions? Moderated questions and answers You may also email your questions to MaryL@namm.org MaryL@namm.org Questions not addressed in the webinar will be answered via follow up email or phone call Thank you for your participation