February 29, 2016

Crying for Federal Micromanagement — Complying with Conflicting Federal, State and Local Microbead Laws has Personal Care Products Companies in Need of Relief

4 min

Originally published in Venable's Advertising Law Blog, www.allaboutadvertisinglaw.com.

Given the increasingly national scope of commerce, consumer products companies find it difficult to deal with issues regulated at the state level, particularly if states adopt differing and sometimes conflicting solutions to a common problem. As a result, industry often turns to the federal government for help in creating a common federal solution. The FTC's Green Guides were originally born out of concern for conflicting state regulation of claims such as recyclables, while today manufacturers are concerned about efforts by states such as Vermont to regulate GMOs in food products. Recently industry participants utilizing microbeads also appeared to have successfully supplanted numerous state regulations for a uniform federal regulation. [Microbeads, by the way, are plastic microspheres that are commonly used in personal care products. Because they are so small they tend to end up back into the ecosystem, raising concerns about pollution.]

The Microbead-Free Waters Act of 2015, imposes a ban on manufacturing products with the beads as of July 1, 2017, followed by product-specific distribution bans in 2018 and 2019. Additionally, as industry participants had hoped, the Act also preempts state laws but the statute's specific wording cracks the door to the enforcement of earlier-in-time state and local microbead restrictions.

The Act addresses microbeads according to the following schedule:

  • July 1, 2017: Prohibition on the manufacture of rinse-off cosmetics that are not "drugs."
  • July 1, 2018: Prohibition on the introduction or delivery for introduction into interstate commerce of rinse-off cosmetics that are not "drugs." Prohibition of the manufacture of rinse-off cosmetics that are "drugs."
  • July 1, 2019: Prohibition on the introduction or delivery for introduction into interstate commerce of rinse-off cosmetics that are "drugs."

Coupled with this tiered applicability scheme, the Act preempts state laws regarding the manufacture and sale of microbeads "that are not identical to the restrictions under [the Act] that have begun to apply . . . ."

The Act's preemption provision thus lends itself to competing interpretations. Under one reading, the Act preempts any contrary state or local restrictions, setting all states and industry participants to the same schedule (a single-prong analysis). This interpretation is consistent with Congress' stated goal of providing a uniform implementation timeframe and avoiding the "patchwork of differing laws" noted in the bill's House Report.

An alternative reading of the statute, however, is that the preemption provision is tied to the tiered "applicability" of the prohibitions. Thus, the Act only preempts state or local laws that contradict a prohibition that has "begun to apply"—beginning with the prohibition on the manufacture of rinse-off cosmetics that are not drugs.

Erie County, New York has embraced this second reading. The County, along with several other New York Counties, passed a local law that prohibits microbeads effective February 2016, well before the federal ban. The County Attorney issued an opinion to the County Legislature that found no preemption until at least July 2017, because the federal law's preemption provision applies only to restrictions that are "presently applicable"—and states that since no such restrictions are presently applicable, there is no preemption.

Industry participants quickly responded with their own letter, discussed here, supporting the single-prong analysis and arguing for immediate preemption. To date, however, the issue in Erie County remains unresolved.

The position taken by the Erie County Attorney could have significant near-term impact, if the argument proves successful. States and counties with existing microbead laws would be free to enforce those laws over the next 18 months (for manufacturing) and longer for other restrictions. Moreover, states with laws close to passing may decide to pursue their own legislative restrictions in the interim, eventually phasing out restrictions that are not identical to those in the federal Act.

Where a state or local law may impact the manufacture or sale of products containing microbeads, industry participants would be served by determining whether such laws will be enforced notwithstanding the federal Act, as well as following the contest between the competing preemption interpretations.