BILL ANALYSIS                                                                                                                                                                                                    






SENATE COMMITTEE ON                               BILL NO:  AB  
1394
BUSINESS AND PROFESSIONS                         AUTHOR:   
Figueroa and Senator Richard G. Polanco, Chairman      Escutia
                                             As Amended:  9/4/97


HEARING DATE:  September 5, 1997                    FISCAL:  Yes  



 SUBJECT:  Packaging and Labeling:  expansion of exemptions to  
         slack fill laws.


DIGEST:

Existing law, the Fair Packaging and Labeling Act of the  
Business and Professions Code (BPC), makes requirements to  
protect purchasers of commodities against deception or  
misrepresentation, and states that packages and their labels  
should enable consumers to obtain accurate information as to the  
quantity of the contents, and facilitate value comparisons.

Existing law prohibits commodities (i.e., non-food commodities)  
from being packed in containers that are constructed or filled  
to promote any deception or fraud.  The law prohibits containers  
from being "nonfunctionally slack filled" - which is described  
as "filled to substantially less than its capacity for reasons  
other than (a)  protection of the contents of the package or (b)  
the requirements of machines used for enclosing the contents in  
the package."

Existing law, prohibits food containers from being made or  
filled as to be misleading, and for those purposes, describes  
what constitutes "slack fill" and "nonfunctional slack fill." 

Existing law, the Health and Safety Code (HSC), authorizes the  
Department of Health Services (DHS) to prohibit the  
nonfunctional slack fill of packages containing any food, drug,  
device or cosmetic. 
 
This bill would repeal the "slack fill" requirements for  
containers of non-food commodities, and revise and recast them  
to be similar to the requirements for food containers.











Specifically, this bill would define "slack fill" as the  
difference between the actual capacity of a container and the  
volume of the product it contains, and "nonfunctional slack  
fill" as the empty space in a package filled to less than  
capacity for reasons other than those specified (see the 15  
specific provisions enumerated in the bill), including:

   1.   For unavoidable product settling during shipping and  
     handling
   2.   Where mandatory labeling requirements necessitate extra  
     packaging
   3.   To discourage pilfering or to accommodate  
     tamper-resistant devices 
   4.   Where extra space, such as head space, is needed for the  
     mixing or adding of liquids or powders prior to use
   5.   Where the contents are designed to serve a particular  
     function that is clearly disclosed on the exterior  
     packaging, such as computer hardware or software.






































This bill would make identical, conforming changes to the  
nonfunctional slack fill provisions of the Health and Safety  
Code.

FISCAL EFFECT:

Unknown.  This is a fiscal bill.


COMMENTS:

1.  Sponsorship and purpose

This bill is jointly sponsored by the Toy Manufacturers of  
America, The Cosmetic, Toiletry, and Fragrance Association,  
Association for California Tort Reform (ACTR), Hasbro, Lego,  
Mattel,  S. C. Johnson & Son, Sierra On-Line, and The Dial  
Corporation to address issues raised by a number of lawsuits  
against businesses such as computer software, cosmetic, and toy  
companies.  These lawsuits, filed under the Unfair Competition  
Act (BPC  17200 ff.), have been based upon alleged violations  
of the slack fill laws (BPC  12606; HSC  110375).   

According to the author, this bill reflects a compromise  
agreement between a range of business interests (the sponsors),  
district attorneys, consumer attorneys, and others.  The author  
states that the issue arose in the context of AB 1295 (Caldera)  
which proposed major changes to the Unfair Competition Act  
(UCA).  That bill was strongly opposed by the non-business  
parties noted above, and failed passage in the Assembly  
Judiciary Committee.  However, the author states, a number of  
committee members expressed sympathy that the slack fill law was  
used in connection with the UCA.  Specifically, numerous  
lawsuits have been filed against businesses such as computer  
software companies, cosmetic companies, and others alleging  
unfair competition because the packages were allegedly in  
violation of the slack fill laws (i.e., the packages were much  
larger than the product inside).  The author states that members  
of the committee suggested that the slack fill laws rather than  
the UCA, might be the problem, and urged the parties to work on  
a resolution by amending the slack fill law.  SB 1394 is the  
result of that process.

2.  Examples of slack fill cases under current law

The following are some of the numerous examples cited by the  










sponsors to illustrate the kinds of lawsuits which prompted this  
bill:

  A.  Toys.  Lego has been sued for slack fill on its "Aqua  
Zone" building sets.  The boxes which contain the sets are  
uniform in size, and contain from 29 to 33 pieces, depending on  
the set.  Each box contains an "actual size" representation of  
the pieces and a clear and conspicuous disclosure as to the  
number of pieces.

  B.  Cosmetics.  Eight fragrance and perfume manufacturers have  
been sued because of claims that the gift and holiday packages  
containing the fragrances were too large given the size of the  
perfume bottles.

  C.  Cleaning products.  Johnson Wax has been sued for its  
packaging of Glade Carpet and Room Freshener powder.  The  
container clearly indicates the weight of the contents and the  
expected number of uses.  It is unit priced for comparison  
purposes.

  D.  Software.  At least ten software makers have been sued  
because of claims that their retail software packages are "too  
large."  This is particularly egregious in the case of computer  
software because there is obviously no deception--any purchaser  
knows they are getting a CD-ROM or 3.5 or 5.25 inch disk and an  
instruction manual.

  E.  Non-prescription drugs.  Wieder Nutrition has been sued  
for its vitamin tablet packaging because the protective cotton  
ball allegedly constitutes empty space.

3.  Clarifying reasonable perameters rather than lowering  
consumer protections

The slack fill law defines certain types of packaging as  
misleading, and states that such packaging is illegal.   
Currently there are only two narrow exemptions to that law:  (1)  
 for protecting the contents of the package, and (2) for  
requirements of machines used to enclose the contents in the  
package.  However, according to the author, the district  
attorneys generally operate on the basis of 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.  











This bill's proposal to expand the two exemptions of current law  
to fifteen exemptions, might appear at first glance to be a  
lowering of standards, resulting in a lowering of consumer  
protections.  However, this bill maintains a strong stance  
against misleading and fraudulent packaging practices, yet it  
proposes reasonable parameters to the slack fill law which takes  
into account the needs of consumers as well as the wide range of  
product packaging needs for businesses.  

The author states that AB 1394 would essentially codify the  
enforcement guidelines, along with some concepts of federal law,  
and other reasonable proposals by prosecutors.

4.  Policy issue - should identical amendments be made in the  
Health and Safety Code?

This bill would place the same slack fill law perameters in both  
the Health and Safety Code (HSC) and the Business and  
Professions Code (BPC).  The current HSC slack fill provisions  
are found in the Sherman Food, Drug, and Cosmetic Law which  
pertains primarily to cosmetics, health related devices, and  
drugs, and is enforced by the Department of Health Services.

In that light the Business and Professions Committee may wish to  
have the proponents discuss whether it is necessary, or even  
appropriate to place in the HSC amendments which are identical  
to those placed in the BPC - especially those relating to  
computer hardware and software packaging ( 110375 (b) (15)),  
and those authorizing "sealers" to take action against  
violations 
( 110375 (c)).

























5.  Prior legislation - SB 735 (Marks, Chapter 849, Statutes of  
1995).

AB 1394 mirrors much of the language of SB 735 (Marks, Chapter  
849, Statutes of 1995).  However, SB 735 only pertained to food  
containers and not to other packaged commodities.  That bill was  
jointly sponsored by the Los Angeles District Attorney and  
Ventura District Attorney to conform California law to federal  
law (the federal Food, Drug and Cosmetic Act).  



Support and Opposition:

 Support: Toy Manufacturers of America
          The Cosmetic, Toiletry, and Fragrance Association
          Association for California Tort Reform (ACTR) 
          Hasbro
          Lego
          Mattel
          S. C. Johnson & Son
          Sierra On-Line 
          The Dial Corporation
          California District Attorneys Association (CDAA)
          California Retailers Association


 Opposition:None received.




Consultant:Glen V. Ayers