BILL ANALYSIS Ó
SB 465
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Date of Hearing: August 13, 2013
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Susan A. Bonilla, Chair
SB 465 (Correa) - As Amended: August 7, 2013
SENATE VOTE : 37-0
SUBJECT : Packaging and labeling: containers: slack fill.
SUMMARY : Revises the definition for "nonfunctional slack fill"
prohibited in packaged goods to require that nonfunctional slack
fill be substantially less than the allowed capacity, and
clarifies a particular exemption to require the actual size of
the product be clearly and conspicuously depicted on any side of
the exterior packaging, except the bottom. Specifically, this
bill :
1)Amends the definition of "nonfunctional slack fill" as it
relates to packaged commodities under the Fair Packaging and
Labeling Act (FPLA) to specify that the nonfunctional slack
fill in the empty space must be substantially less than its
capacity for reasons other than any one or more of fifteen
existing exemptions, as specified.
2)Specifies that, for purposes of an existing exemption for
nonfunctional slack fill under the FPLA, the dimensions of the
product or immediate product container must be visible through
the exterior packaging or where the actual size of the product
or immediate product container is clearly and conspicuously
depicted on any side of the exterior packaging, excluding the
bottom.
3)Amends the definition of "nonfunctional slack fill" as it
relates to food containers under the Federal Food, Drug and
Cosmetic Act (FDC Act) to specify that the nonfunctional slack
fill in the empty space must be substantially less than its
capacity for reasons other than any one or more of six
existing exemptions, as specified.
4)Amends the definition of "nonfunctional slack fill" as it
relates to containers under the Sherman Food, Drug and
Cosmetic Law (Sherman Law) to specify that the nonfunctional
slack fill in the empty space must be substantially less than
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its capacity for reasons other than any one or more of
fourteen existing exemptions, as specified.
5)Specifies that, for purposes of an existing exemption for
nonfunctional slack fill under the Sherman Act, the dimensions
of the product or immediate product container must be visible
through the exterior packaging or where the actual size of the
product or immediate product container is clearly and
conspicuously depicted on any side of the exterior packaging,
excluding the bottom.
6)Makes other technical and clarifying amendments.
EXISTING LAW:
1)Establishes certain packaging requirements for containers used
for distribution or sale of commodities under the FPLA,
including:
a) Prohibiting a container in which commodities are packed
to have a false bottom, false sidewalls, false lid or
covering, or to be constructed or filled as to facilitate
the perpetration of deception or fraud;
b) Prohibiting a container from being made, formed, or
filled as to be misleading, and declares that a container
that does not allow a consumer to fully view its contents
violates this provision if it contains nonfunctional slack
fill; and,
c) Defining "nonfunctional slack fill" as the empty space
in a package that is filled to less than its capacity for
reasons other than fifteen specified exemptions. (Business
and Professions Code (BPC) Section 12606)
2)Establishes certain packaging requirements for food containers
subject to the FDC Act, including:
a) Prohibiting food containers from being made, formed, or
filled as to be misleading, as specified;
b) Providing that a food container that does not allow a
consumer to fully view its contents violates this provision
if it contains nonfunctional slack fill;
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c) Defining "nonfunctional slack fill" as the empty space
in a package that is filled to less than its capacity for
reasons other than six specified exemptions; and,
d) Provides that these state provisions regarding food
containers are operative only to the extent they are
identical to specified federal requirements. (BPC 12606.2)
3)Establishes certain requirements for the packaging and
labeling of foods, drugs, devices, and cosmetics under the
Sherman Law, including:
a) Prohibiting a container in which commodities are packed
to have a false bottom, false sidewalls, false lid or
covering, or to be constructed or filled as to facilitate
the perpetration of deception or fraud;
b) Prohibiting a container from being made, formed, or
filled as to be misleading, and declares that a container
that does not allow a consumer to fully view its contents
violates this provision if it contains nonfunctional slack
fill; and,
c) Defining "nonfunctional slack fill" as the empty space
in a package that is filled to less than its capacity for
reasons other than fifteen specified exemptions. (Health
and Safety Code (HSC) Section 110375)
4)Defines "slack fill" as the difference between the actual
capacity of a container and the volume of product contained
therein. (BPC 12606 (b); BPC 12606.2 (c); and HSC 110375 (b))
5)Authorizes any sealer to seize a container in violation of
these provisions of law, and provides that by order of the
Superior Court the containers seized shall be condemned and
destroyed or released upon conditions imposed by the court
against their use in violation of the Act. (BPC 12606 (c);
BPC 12606.2 (f); HSC 110375 (d))
FISCAL EFFECT : None. This bill has been tagged non-fiscal by
the Legislative Counsel.
COMMENTS :
1)Purpose of this bill . This bill is intended to provide
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manufacturers and retailers with greater clarity and certainty
regarding the various requirements for product and food
packaging - specifically, the prohibited empty space in
packages known as "slack fill" and the multiple exemptions to
that prohibition referred to as "safe harbors". Supporters
claim that this lack of clarity has led to unnecessary
packaging redesigns and nuisance litigation. SB 465 would
provide protection against de minimus levels of nonfunctional
slack fill and clarify the placement of actual size depictions
on compliant packaging. The measure is sponsored by the
Personal Care Products Council and the Grocery Manufacturers
Association.
2)Author's statement . According to the author, "[Existing law]
prohibits product containers from being misleading,
particularly through the use of 'nonfunctional slack fill' -
the empty space between the actual container capacity and the
volume of the product contained therein. In 1997, the
California Legislature identified a variety of reasons
manufacturers should be permitted to have extra space in their
packaging, and accordingly [existing law] was amended to
include certain exemptions.
"Fifteen years after the codification of the slack fill
exemptions, companies face renewed and inconsistent
enforcement actions in California for their product packaging,
even though such packaging meets one of the enumerated
statutory exemptions. The purported reason for the current
enforcement efforts is that, despite meeting an exemption, the
packaging is nonetheless misleading and thus violates the
statute. This is a clear misreading of the plain language of
the statue, and completely ignores the purpose of the
exemptions placed into law."
3)Understanding current slack fill laws . Slack fill in product
packaging is generally thought of as the empty space between
the actual container capacity and the volume of the product in
the container. Slack fill can be functional in cases where,
for example, it is needed to protect the product, to allow a
product to settle over time, or to accommodate machinery in
the manufacturing process. Nonfunctional slack fill, however,
is generally treated as misleading to the consumer, who might
wrongly believe that the larger container suggests a greater
amount of product being purchased.
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California has three statutes in place that provide slack fill
restrictions for three different types of packaging: 1)
non-food commodities regulated under the state's FPLA; 2)
containers that hold foods, drugs, devices, and cosmetics
regulated under the state's Sherman Law; and, 3) food
containers, in compliance with the FDC Act.
The statutes dealing with products regulated by the FPLA and
Sherman Law generally prohibit the use of containers that have
false bottoms, sidewalls, lids, or coverings, or are otherwise
presented in a way that facilitates deception or fraud, or are
otherwise misleading. A container that does not allow the
consumer to view its contents is considered misleading if it
contains nonfunctional slack fill, which is treated as any
slack fill that does not meet specified exemptions. Examples
from the FPLA are:
1) protection of the contents of the package; 2) the
requirements of machines used for enclosing the package; 3)
unavoidable product settling during shipping and handling;
4) the need to use a larger package or for the legible
presentation of mandatory and necessary labeling
information; 5) packaging in a decorative or
representational container where the container is part of
the presentation of the product and has value independent
of its function; 6) where minimum package size is necessary
to accommodate required labeling, discourage pilfering,
facilitate handling, or accommodate tamper-resistant
devices; 7) the container bears a reasonable relationship
to the actual amount of product inside, and the dimensions
of the container, the product, or the amount of product
inside is visible to the consumer; 8) the dimensions of the
product or product container can be seen through the
exterior packaging, or where the actual size of the product
or product container is shown on the exterior packaging,
accompanied by a clear and conspicuous disclosure that the
representation is the "actual size" of the product or the
product container; 9) the presence of any headspace within
a product container necessary to facilitate mixing, adding,
shaking, or dispensing by the consumer prior to use; 10)
the exterior packaging contains a product delivery or
dosing device; 11) the packaging or product container is a
kit that consists of multiple components if the purpose of
the kit is clearly and conspicuously disclosed on the
exterior packaging; 12) the packaging of the product is
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routinely displayed using tester units or demonstrations to
consumers in retail stores, so that customers can see the
container of the product being sold or the actual size of
the product; 13) the packaging consists of one or more
presentation boxes of holiday or gift packages if the
purchaser can adequately determine the quantity and sizes
of the product container when sold; 14) the packaging is
for the purchased product, together with a free sample or
gift, a specified, if both products and their quantity are
clearly and conspicuously disclosed on the exterior
packaging; and, 15) the packaging or product container is
for computer hardware or software, and if the function of
the hardware or software is clearly and conspicuously
disclosed on the exterior packaging.
Because of the existence of the FDC Act, California law has
slightly different requirements for food containers in order
to keep state law in line with federal law. California's law
prohibits misleading food containers generally, treats food
containers that do not permit full visibility of the product
as misleading if they contain nonfunctional slack fill, and
provides for six different exemptions from the definition of
nonfunctional slack fill:
1) protection of the contents of the package; 2) the
requirements of machines used for enclosing the package; 3)
unavoidable product settling during shipping and handling;
4) the need for the package to perform a specific function
in the preparation or consumption of food; 5) the fact that
the product consists of a food packaged in a reusable
container where the container is part of the presentation
of the food and has value that is significant, as
specified; and 6) where minimum package size is necessary
to accommodate required labeling, discourage pilfering,
facilitate handling, or accommodate tamper-resistant
devices. California law also states that its state
provisions regarding food containers are operative only to
the extent they are identical to specified federal
requirements.
4)Differing accounts of the underlying need for this bill .
According to the sponsors, this bill is necessary because
"Fifteen years after the codification of the slack fill
exemptions, companies are facing inconsistent enforcement
actions in California for their product packaging. Such
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actions are being pursued in violation of the statutory
exemptions agreed to by all relevant parties under [AB 1394
(Figueroa), 1997]."
Conversely, according to the Office of the District Attorney of
Contra Costa County, "the proponents stated that they were
concerned with the number of enforcement actions brought over
the past five years, which they considered abusive. When asked
how many actions were brought and what about them were
abusive, they replied about eight (8) cases were brought and
they could not prove any details of abuse. Additionally, all
the cases resolved by way of stipulated judgments, which in
effect is an abdication of any challenge the industry had to
challenging the application of the law."
5)The question of federal preemption . The slack fill provisions
pertaining to food containers under the FDA Act (BPC
12606.2(e)) state that if the requirements of that section are
not the same as those contained in the Federal Food, Drug and
Cosmetic Act or any regulation promulgated thereunder, then
this statute would not be operative to the extent that it is
not identical with the federal requirements.
As noted by opponents, the addition of the word
"substantially" and the phrase "any one or more" would appear
to be in conflict with these provisions, and thereby be
preempted. The sponsor counters that these changes would be
considered clarifying and consistent with federal law and
regulation. Furthermore, even if a court were to find that
these statutory changes are not consistent, and therefore
preempted, any party could seek a variance for this section
through the FDA, if the FDA finds that the statute would not
unduly burden interstate commerce, and would address a
particular need for information not met by the Federal
requirement.
6)Questions regarding the use of the term "substantially" . As
noted by opponents below, the FDA chose not to use the term
"substantially" in its own regulations. Proponents of the
bill counter that California's own slack fill laws previously
contained that term from 1969 to 1997, and that its removal
was an unintended drafting error. They also contend that ten
other states have enacted definitions of nonfunctional slack
fill for non-food packaging that use the word "substantially."
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7)Recent amendments by the author . On August 7, 2013, the author
significantly amended the bill to, among other things, remove
language tying the presence of nonfunctional slack fill to
more general prohibitions against deceptive, fraudulent and
misleading packaging. These recent amendments were intended to
return those provisions to existing law consistent with the
historical guidelines discussed above. According to the
author, the amendments were taken to address the concerns
previously raised by opponents sufficient to remove their
opposition, although no letter removing opposition has yet
been received by the Committee.
In its current form, this bill qualifies the definition of
nonfunctional slack fill with the word "substantially", which
is intended to exclude de minimus amounts of slack fill only.
It also clarifies that slack fill need only meet one of the
enumerated exemptions to achieve safe harbor protection.
Finally, SB 465 revises one of the safe harbor exemptions to
make clear that manufacturers have the flexibility to depict
the actual size of the product or its immediate container on
any side of the exterior packaging except the bottom. The
Committee has not yet received any updated letters of
opposition or support for the August 7, 2013 version of this
bill.
8)Technical amendments . Based on concerns raised by proponents
that the most current version of this bill still may not fully
clarify the confusion over the extent of the protection
provided by the existing "safe harbor" language, the author
may wish to consider the following technical and clarifying
amendment:
Amend BPC 12606 and HSC 110375 to add:
"(d) Slack fill in a package shall not be used as grounds
to allege a violation of this section based solely on its
presence unless it is nonfunctional slack fill."
9)Arguments in support . According to a coalition of supporters,
"Fifteen years after the codification of the slack fill
exemptions?companies are facing inconsistent enforcement
actions in California for their product packaging. Such
actions are being pursued in violation of the statutory
exemptions agreed to by all relevant parties under the 1997
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legislation?.
"Enforcement actions levied against a manufacturer can result in
harsh monetary penalties and force manufacturers to spend
millions modifying packaging for products sold in California
and around the world. For packaging that clearly violates the
statute and fails to qualify for one of the enumerated
exceptions, this is just. However, those companies who were
in compliance with the law should not be subjected to
frivolous enforcement actions?thereby increasing product costs
and compromising product availability for a product that was
on the right side of the law to begin with."
10)Arguments in opposition . Writing in regards to the April 23,
2013 version of the bill, the California District Attorneys
Association state, "This proposal would seriously weaken
existing law that prohibits the use of unnecessarily large
containers to mislead consumers into believing that they are
receiving more product than is actually the case?.The current
proposal would?add an additional burden in establishing the
existence of nonfunctional slack fill. These modifications to
existing law will reduce protection for consumers, frustrate
legitimate law enforcement efforts, and lead to endless
uncertainties for honest businesses? In particular, the FDA
expressly rejected the approach proposed in SB 465 of adding
the word 'substantially' to modify nonfunctional slack fill.
The FDA recognized that the use of 'substantially' in the
parallel federal statute would create serious uncertainty and
problems of interpretation?Use of this term would place an
additional and unnecessary burden on regulatory officials to
prove 'significant' or 'substantial' slack fill. The FDA
responded to these concerns by rejecting the addition of
'substantial' to its regulation."
11)Prior legislation . AB 1394 (Figueroa) (Chapter 711, Statutes
of 1997) revised the Fair Packaging and Labeling Act to expand
the existing exceptions for slack fill in non-food commodities
packaging from two exemptions to fifteen (based in large part
on the "Slack Fill Enforcement Guidelines" agreed to in 1988
by the Attorney General, the Department of Food and
Agriculture and the California Association of Weights and
Measures Officials). AB 1394 aimed to reduce frivolous
lawsuits against manufacturers and retailers while maintaining
reasonable advertising protections for consumers.
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AB 1295 (Caldera) of 1997 proposed major changes to the Unfair
Practices Act
(BPC 17000, et seq.) to restrict the ability of private
plaintiffs to bring lawsuits alleging unfair competition or
false advertising and seeking monetary recovery for a number
of product manufacturers, including software manufacturers who
package computer software in containers larger than necessary
to hold the disk. AB 1295 failed passage in the Assembly
Judiciary Committee.
SB 735 (Marks) (Chapter 849, Statutes of 1995) prohibited food
containers from being made, formed or filled as to be
misleading, defined the term "nonfunctional slack fill" as the
empty space in a package filled to less than capacity for
reasons other than those six specified, and provided that
these provisions be interpreted as consistent with the US Food
and Drug Administration's (FDA) comments in the Code of
Federal Regulations, as specified, and thus adopts by
reference provisions of the federal Food, Drug and Cosmetic
Act. SB 735 was jointly sponsored by the Los Angeles and
Venture County District Attorneys to conform California law to
federal law.
12)Double-referral . This bill was previously heard in the
Assembly Agriculture Committee on July 3, 2013 and was passed
out on a 7-0 vote.
REGISTERED SUPPORT / OPPOSITION :
Support
Advanced Medical Technology Association (AdvaMed)
American Cleaning Institute
BAYBIO
BIOCOM
California Chamber of Commerce
California Farm Bureau Federation
California Healthcare Institute (CHI)
California Manufacturers & Technology Association
California Retailers Association
Consumer Healthcare Products Association
Consumer Specialty Products Association
Grocery Manufacturers Association
Personal Care Products Council
Pharmaceutical Researchers and Manufacturers of America (PhRMA)
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Opposition (Based on April 23, 2013 version)
California District Attorneys Association
California Public Interest Research Group (CALPIRG)
County of Alameda District Attorney's Office
County of Contra Costa District Attorney's Office
County of Fresno District Attorney's Office
County of Monterey District Attorney's Office
County of Riverside District Attorney's Office
County of San Diego District Attorney's Office
County of San Mateo District Attorney's Office
County of Santa Clara District Attorney's Office
County of Solano District Attorney's Office
Analysis Prepared by : Hank Dempsey / B.,P. & C.P. / (916)
319-3301