Washington State’s Toxic Free Cosmetics Act (the “Act”) was signed into law on May 15, 2023. It has since been described by industry stakeholders as the “strictest” and/or “most aggressive” state cosmetic-ingredient ban enacted to-date.¹  While true that the Act appears to prohibit more substances than any of the analogous state laws enacted prior,²  it may ultimately have more bark than bite (compared to its analogous predecessors) in terms of its practical impact and risk, as applicable to retailers, in particular. As detailed below, there are some seemingly minor nuances within the Act’s text that, subject to the enforcing agency’s interpretation, may make a major difference with regard to the extent of a cosmetic retailer’s obligations and enforcement risk thereunder.

What actions are prohibited under the Act?

The Act prohibits any person (individual or entity) from manufacturing or knowingly selling, offering for sale, or distributing for sale or for use any cosmetic product³  containing (i) lead or lead compounds at or above one part per-million (ppm) or (ii) any of the following intentionally added chemicals or chemical classes (collectively, the “Banned Ingredients”) in the State of Washington (emphasis added):⁴

(1) Ortho-phthalates;⁵
(2) Perfluoroalkyl and polyfluoroalkyl substances (PFAS);⁶
(3) Formaldehyde (CAS 50-00-0) and chemicals determined by the Washington State Department of Ecology (“WSDE”) to release formaldehyde;
(4) Methylene glycol (CAS 463-57-0);
(5) Mercury and mercury compounds (CAS 7439-97-6);
(6) Triclosan (CAS 3380-34-5);
(7) m-Phenylenediamine and its salts (CAS 108-45-2);
(8) o-Phenylenediamine and its salts (CAS 95-54-5); and
(9) Lead or Lead Compounds (CAS 7439-92-1).⁷

When is compliance required?

Compliance is required by January 1, 2025 (the “Compliance Date”).

The Act contains a narrow extension for in-state retailers, to the extent any cosmetic product containing a Banned Ingredient remains in their then-existing inventories on January 1, 2025, in which case, they can continue to sell such existing stocks for one additional year. Note, however, that this extension likely only applies to “brick and mortar” retailers whose stores are physically located in Washington. No similar exception is currently available for online retailers or any other parties subject to the Act.

What are retailers’ likely compliance obligations under the Act?

Unlike the analogous California Toxic-Free Cosmetic Act (enacted in September 2020), for example, which has the same compliance date as the Act, the Act’s prohibition of (in relevant part) the sale, offering for sale, and distribution (for sale or use) of cosmetics containing any Banned Ingredient(s) is limited by a knowledge qualifier.⁸  To illustrate, as of the compliance date, a retailer will violate the California Act by “selling, delivering, holding, or offering for sale” a cosmetic containing any of the 24 (intentionally added) ingredients prohibited thereunder, without regard to whether the retailer knew that the product in question contained such ingredient(s).⁹  As a result, to ensure compliance with the California Act, retailers may ultimately need to conduct or procure finished product testing or otherwise verify, by reliable means, that each cosmetic product it intends to sell, deliver, hold, or offer for sale in California is free of all such 24 ingredients.

Alternatively, the Act only prohibits the knowing sale, offering for sale, and distribution (for sale or use) of cosmetics containing a Banned Ingredient in Washington. As a result, retailers likely have less of an affirmative obligation under the Act (vs. under the California equivalent) to ensure that none of the cosmetic products it sells contain any banned ingredients. However, because the Act does not define “knowingly,” as used therein, the extent of any such retailer obligations thereunder is currently unclear.

For example, if WSDE, which is expressly authorized to adopt any rules necessary to implement, administer, or enforce the Act, interprets “knowingly” to refer to actual knowledge, a retailer could likely comply with the Act without taking any affirmative steps unless/until it becomes aware that a cosmetic product it sells or markets contains one of the above-listed ingredient(s), at which point, it would likely have to stop selling such product in Washington to remain in compliance with the Act. However, a “wait and see” approach would likely not be sufficient if WSDE applies a standard of constructive knowledge under which a retailer would be responsible for violating the Act where it knows, or should have [reasonably] known, that it is selling a product that contains a Banned Ingredient(s).

WSDE is expected to issue implementing regulations in 2024, which may (or may not) provide clarity on the knowledge standard and/or what a retailer must do to prove its compliance with the Act.

What are the potential consequences for noncompliance with the Act?

Per its express penalty provisions, noncompliance with the Act could give rise to fines of up to $5,000 per-violation for first offenses and up to $10,000 per-violation for any subsequent offenses.¹⁰  However, unless expanded in WDEC’s implementing regulations, such penalties may only be enforced against a noncompliant “manufacturer,” which includes any individual or entity “that produces a product or is an importer or domestic distributor of a product sold or offered for sale in or into [Washington].”¹¹  Accordingly, a retailer would have a valid argument that it is not subject to direct penalties under the Act because it does not meet the definition of “manufacturer” thereunder, provided that such retailer:

(1) is not also involved in the production of any cosmetic products;

(2) does not market, sell, or distribute any cosmetic products under its own brand (e.g., private label or otherwise); and

(3)  is not the importer of record for any cosmetic products it markets or sells in Washington.This text is indented.

Notwithstanding the above limitation on certain retailers’ direct enforcement risk under the Act, such retailers could still be subject to other (more indirect) sources of liability for noncompliance, such as, for example (among others):

• Under other laws or regulations that require compliance with applicable state laws;

• Pursuant to contracts under which the retailer is obligated to comply, or makes representations or warranties regarding its compliance with, applicable laws; and

• In connection with litigation based on another cause(s) of action, such as an alleged violation of one or more consumer-protection or other similar laws, in which case noncompliance with the Act could be used to support the consumer’s allegations, whether based in product liability, negligence, breach of warranty, false/deceptive advertising or otherwise.
 

What should retailers do in advance of the compliance deadline?

While the limitations outlined above may provide more flexibility for certain retailers who will be required to comply with the Act by the compliance deadline, it is, nonetheless, important for all retailers to carefully compare each aspect of its operations involving a cosmetic product(s) to the activities described under the Act (whether in the prohibition, itself, the definition of “manufacturer” or otherwise) to assess the extent to which it will be subject to, and may (or may not be) subject to direct enforcement of, the Act.

In addition, any retailer who may be subject to the Act should take inventory of its current cosmetic vendors and the policies, standards, and/or agreements in-place in connection therewith and consider whether any updates may be needed between now and the Act’s compliance deadline to ensure compliance and/or mitigate any (direct or indirect) associated risks. For example, questions like the following (among others) may inform a given retailer’s pre-Compliance Date actions:

• To what extent are you aware, or would your existing records indicate your actual or constructive knowledge, that one or more cosmetic products you currently offer may contain a banned ingredient?

• Do you currently have sufficient documentary evidence to demonstrate that none of the cosmetic products you sell contain any ingredients prohibited under the Act or assurances from the applicable vendor(s) to that effect (e.g., representations and warranties in supply agreements; supplier standards, codes of conduct, or other written policies addressing compliance with laws and/or the banned ingredients)?

• Are your existing vendor contracts sufficient to ensure that you will be fully indemnified in the event that you incur a loss of any kind in the future in connection with an actual or alleged violation of the Act?

 

As noted above, six other states have instituted similar cosmetic-ingredient bans prior to Washington’s enactment of the Act, and it is likely that other states will follow suit in the foreseeable future. It is, thus, important for retailers to be aware of the changing landscape and to update internal policies, vendor standards, and/or supply agreements as-needed to ensure that they adequately account for all applicable state ingredient restrictions and other related laws and regulations. With regard to the Act, in particular, retailers should be on the lookout for implementing regulations or other instructive guidance from WSDE, as such may not only clarify current areas of uncertainty and/or retailers’ affirmative compliance obligations, but also, will ultimately establish additional obligations and/or add additional substances to the current list of Banned Ingredients.¹² 


References:
1. Wash. L. C 455 (2023) (enacted via HB 1047 in Washington’s 68^th Legislative Session (2023 Regular Session)).
2. Analogous laws were enacted in California, New York, Maryland, Minnesota, Maine, and Colorado prior to the Act.
3. Under the Act, “cosmetic product” has the same meaning as “cosmetic” under the federal Food, Drug & Cosmetic Act, which includes “(1) articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and (2) articles intended for use as a component of any such articles, except that such term shall not include soap.”
4. This extends to retailers and distributors physically located within Washington, as well as those located in other states that market cosmetic products online or, otherwise, sell, offer for sale, or distribute cosmetics to individuals or entities in Washington. 
5. Defined under the Act as “esters of ortho-phthalic acid.”
6. Defined (by reference to RCW 70A.350.010(8)) as “a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom.”
7. Wash. L. C 455, § 3 (2023).
8. The Maryland Toxic-Free Cosmetics Act (HB 643), enacted in May 2021, also has the same Compliance Date as the Act and the California Act. The text of the prohibition under the Maryland Act, and its list of banned ingredients, is almost identical to that of the California Act, except that the Maryland version added a (similarly undefined/ambiguous) knowledge qualifier (e.g., “A person may not knowingly manufacture, sell, deliver, hold, or offer for sale in this State a cosmetic product that contains [the enumerated] intentionally added ingredients” (emphasis in original)).
 9. AB 2762 (2020).
10. Wash. L. C 455, § 4(4) (2023).
11. Id.; RCW 70A.350.010(6).
12. In addition to providing that WSDE “may adopt rules as necessary for the purpose of implementing, administering, and enforcing this chapter,” the Act also mandates that WSDE must identify a list of formaldehyde-releasing chemicals used in cosmetics, which will be subject to similar prohibitions on January 1, 2026 (for an “initial set of no more than 10 of the listed chemicals”) and on January 1, 2027 (for all other listed chemicals).


About the Authors
As co-chair of Haynes Boone’s Food, Beverage and Restaurant Practice Group, Suzie Trigg leads a team of business-focused FDA attorneys who serve as trusted advisors who generate practical solutions to prevent problems, reduce risk, or provide course-correction. Trigg helps companies lawfully market FDA regulated consumer products, including foods, dietary supplements, cosmetics, and over-the-counter drugs. She reviews the use of specific ingredients and product claims to reduce potential challenges. Trigg also frequently advises on strategies intended to reduce the risk of a product recall or potential enforcement. In addition to providing prevention-focused regulatory guidance, Trigg leads a range of sophisticated commercial transactions. She helps retailers, restaurant chains, and consumer products companies to structure, negotiate, and document transactions, tackle critical supply-chain challenges, and pursue strategic growth opportunities. She also provides focused support for securities offerings and mergers and acquisitions.

Kayla Cristales is an associate in Haynes Boone’s FDA Practice Group. Her practice focuses on transactional and regulatory matters for FDA-regulated clients, with particular expertise in the beauty/wellness and life sciences spaces. For example, Cristales regularly counsels cosmetic and OTC drug brand owners, retailers, and distributors in connection with packaging and label compliance and claim-related risk assessments; substantiation reviews; product classification analyses; manufacturing, development, commercialization, and/or supply agreement negotiation; and advertising, marketing, and other promotional communications, among many other areas involving the wide range of often complex and overlapping federal and state laws and regulations governing cosmetics, drugs, and medical devices, respectively. Cristales also has substantial experience in conducting diligence, negotiating key contractual terms, assisting with post-closing transitions, and other key elements of mergers and acquisitions involving FDA-regulated parties, as well as in advising issuers and underwriters on material regulatory matters and related considerations in connection with securities offerings and SEC filings in the life sciences space. In addition, Cristales has recently devoted significant efforts to helping cosmetic clients understand the federal Modernization of Cosmetic Regulation Act (MoCRA) and prepare for its upcoming effective date (December 29, 2023).

Haynes Boone is an American Lawyer top 100 law firm, with about 650 lawyers in 19 offices around the world, providing services for more than 40 major legal practices. Haynes Boone is among the largest firms based in the US. More info: www.haynesboone.com