Amazon, which controls over 41% of online commerce in the United States, must now comply with a California law that protects consumers by informing them when the products it sells contain chemicals that cause cancer or reproductive harm. The ruling said federal law will not exempt Amazon, nor does the e-commerce giant have to have actual knowledge that the products sold on its website contain hazardous chemicals.

In a case involving several brands of skin-lightening or whitening creams that contain mercury, a known “reproductive toxin,” a unanimous three-judge panel of Division Two of the First Appellate District of the California Court of Appeal ruled that Amazon must comply with California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65 (Prop 65). Amazon is a third-party seller of creams that contain mercury.

The opinion, written by J. Anthony Kline, a former senior appellate justice now retired but sitting on assignment, reversed the decision of Hon. Robert McGuiness of the Alameda County Superior Court and remanded it for further proceedings that will follow up on product testing results.

Kline’s opinion in Lee v. Amazon.com begins with an explanation of Prop 65. Enacted in 1986, the law prohibits businesses from “knowingly and intentionally exposing any individual to certain chemicals without first providing a warning.” He explained that the trial court erred when it found Amazon immune from liability under the Communications Decency Act (CDA). That Act preempts conflicting state laws and reads, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information by another information content provider.”

The Court of Appeal agreed that Congress had established a “general rule that providers of interactive computer services are liable only for speech that is properly attributable to them.” However, it disagreed that Amazon is entitled to this immunity because Prop 65 only requires that a warning be given. It does not require Amazon to “monitor, modify or remove” the listings of the skin-lightening creams as is the case with precedents that gave immunity to other web services under the CDA.

The primary issue in the appeal centered on the adequacy of plaintiff Dr. Larry Lee’s testing of the various chemical components that he believed required Prop 65 warnings. Kline explained that all cosmetics containing 0.0001% of mercury are prohibited under federal law. Lee’s case named four out of 21 such creams sold on Amazon by four different manufacturers. His laboratory analyses of these products found varying levels of mercury in each. Previous California tests on similar creams (not purchased from Amazon) led the California Department of Public Health to issue a health risk warning about certain skin-lightening creams in 2014.

After his testing, Lee provided Amazon with a Notice of Violation and a bench trial followed. The trial court found in favor of Amazon because Lee generalized his mercury content findings. He failed to prove that each of the products at issue contained mercury and that test results in his units “should be generalized to other units of that product.” In addition, he did not show that creams sold by Amazon were actually used by consumers or that Amazon had “actual knowledge” that the products they sold without Prop 65 warnings contained mercury.

The trial featured a battle of expert witnesses. Lee’s first expert, Dr. Gina Soloman, a clinical professor of medicine at the University of California, San Francisco and former deputy director of the Environmental Protection Agency, detailed the “serious harm” mercury can do not only to developing fetuses but to others due to the release of “mercury vapors.” She said that homes where vapors are found would need to dispose of common items like toys and towels. She also noted that the primary users of skin-lightening creams are women of color.

Another of Lee’s experts, David Steinberg, president of a cosmetic consulting company, concluded that all skin-lightening creams sold on Amazon would contain mercury. Also, he was “very certain the products tested here contained mercury without analyzing every package.”

Amazon’s expert witness, Dr. Patrick Sheehan, a risk management expert, agreed that mercury was a component of each tested sample, but said that Lee’s results “could not be generalized beyond the units tested” because of the “variability between units resulting from uneven distribution of chemicals.”

Another Amazon expert explained Amazon’s business practices. The company, he said, gives third-party sellers the “ability to list their product for sale, provide a title, description and image,” and collect payment. He said Amazon “never takes title” of products posted by third-party sellers, including the skin-lightening cream producers at issue here. He explained that while creating their product-description pages, sellers “have the ability to flag whether the product they are selling requires a Proposition 65 warning for California residents.” Another Amazon product safety supervisor said that European products “flagged by Amazon safety teams” would be removed from the web. One of them was.

After this extensive background, Kline turned to the trial court’s main reason for ruling in Amazon’s favor-- Lee’s failure to prove that each of the products in his complaint contained mercury because he had purchased and tested only one unit of each product, then generalized the alarming mercury levels that would be found in each purchase.

Kline distinguished this case from others that centered on dangerous product levels, concluding that the question here is not about the “precise amount” of mercury that was present, but “just about whether it was present at all.” He concluded that Prop 65 ‘imposes a duty to warn…without requiring uniformity across individual units…It is a ‘right to know statute’ requiring companies that expose consumers to carcinogens or reproductive toxins to provide a reasonable and clear warning.”

The next issue was whether the trial court erred when it ruled that Lee had to prove Amazon had “actual” rather than “constructive knowledge” that the creams on its website contained mercury. He quoted the Prop 65 section that says, “[n]o person in the course of doing business shall knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and reasonable warning to such individuals”

After a lengthy discussion of relevant precedents and the notices that were given to Amazon about the hazards in European skin-lightening creams, Kline concluded that Amazon was not required to have actual knowledge. He highlighted the public policy aims on Prop 65 and said they “mitigate in favor” interpreting the law to include constructive knowledge. “Constructive knowledge” is defined on a legal website as “knowledge that a person is presumed by law to have, regardless of whether it actually does, since knowledge is obtainable by the exercise of reasonable care.”

Amazon’s argument that Lee had to prove consumers actually used the creams was also rejected. The California Attorney General was quoted, saying, he “always assumed that people who buy cookies eat them…and people who buy skin creams apply them to their skin.”

Finally, Kline compared Amazon to retail sellers in stores. He wrote, “If a skin-lightening cream is sold in a brick-and-mortar drug store that was aware the product contained mercury, there is no question that a retail seller would have some obligation to provide Proposition 65 warnings…” He concluded, “Insulating Amazon from liability for its own Proposition 65 obligations in these circumstances would be anomalous.”

The court’s disposition thus reversed the trial court’s judgment and remanded it for additional proceedings. It specifically requires Lee to “establish all the elements of his claims” as proven by further testing of products purchased from Amazon and tested for mercury content.

Several times during the court’s 80-page opinion, Kline refers to the public policy behind California’s Proposition 65. With Amazon’s huge share of internet sales that exceed $386 billion in 2020 and an inventory that exceeds 350 million items, it is important to remember Prop 65 requires that consumers “be informed about exposures to chemicals that cause cancer, birth defects, or other reproductive harm.” More and more, this goal cannot be accomplished without Amazon’s cooperation and compliance.