The Hidden Recall Risk In Your Licensing Agreement: What California’s Assembly Bill 2462 Could Mean For Your Business

A new bill introduced in the California legislature proposes to overhaul the state’s product recall liability framework—and depending on where you sit in the supply chain, the consequences could be far-reaching. Assembly Bill 2462 would amend the state’s Product Recall Safety and Protection Act to redefine who qualifies as a “manufacturer,” broaden the scope of cost-free recall obligations, and dramatically increase penalties for violations. Introduced by Assembly Member Pellerin on February 20, 2026, the bill’s provisions would apply across the consumer product supply chain, touching manufacturers, importers, distributors, wholesalers, retailers, and, most notably, brand licensors.

The bill has not yet become law, and it remains to be seen whether it will clear the legislature in its current form. That said, given California’s track record of proactive consumer product safety regulation, the direction of travel is clear, and businesses would be well-served to understand what is being proposed now.

The following briefly summarizes some of the bill’s key proposed changes:

Redefines “Manufacturer” to Include Brand Licensors. Under existing law, a “manufacturer” is a person or entity who makes a product and places it into the stream of commerce. AB 2462 would purport to substantially broaden that definition to include “any person who manufactures a product and who owns or is the licensee of the brand or trademark under which that product is sold, offered for sale in, or into the state.” In practical terms, this means that a brand licensor, even one that may have played no role in the design, production, or distribution of a product, might be classified as a “manufacturer” simply because its name or trademark appears on the product. That classification triggers a full range of manufacturer obligations under the Act, including the obligation to fund and manage recalls of products bearing the brand. For companies that license their intellectual property broadly for use with products sold, offered for sale, or distributed in California, this exposure could be substantial.

Expands the Scope of Cost-Free Recall Obligations. Under current law, generally speaking, manufacturers are required to provide for the safe return or disposal of recalled products at no cost to the end consumer or retailer. AB 2462 would extend that obligation considerably, requiring manufacturers to absorb recall costs for a much wider set of entities, including recycling centers, municipal facilities accepting the product for recycling or disposal, permitted solid waste facilities, household hazardous waste collection facilities, and thrift retail stores. This broader cost-absorption obligation is broader still given the bill’s enlarged definition of “manufacturer.”

Dramatically Increases Penalties. The existing penalty structure caps civil liability at $1,000 per occurrence, with a maximum of $20,000. AB 2462 would replace that framework entirely, authorizing the Department of Resources Recycling and Recovery to administratively impose penalties of $2,500 per day for violations of the Act, or $5,000 per day if the violation is intentional or knowing. The bill would also establish a new Product Recall Penalty Account in the State Treasury to receive collected penalties, with funds directed toward recycling-related activities and enforcement. For products classified as hazardous waste, enforcement authority may be referred to the Department of Toxic Substances Control, with penalties deposited into a separate Hazardous Product Recall Penalty Account. The shift from a one-time per-occurrence cap to a daily accrual model could in many cases significantly increase exposure for business non-compliance.

Establishes a Formal Administrative Enforcement Process. The bill would require the Department of Resources Recycling and Recovery to establish, through regulation, a formal process for assessing penalties, including an informal hearing mechanism. The bill specifies that in assessing penalties, the department or a court must consider factors including the nature and severity of the violation, its economic effect on the violator, the violator’s good faith efforts to comply, and the deterrent effect of the penalty. Existing remedies are preserved and are not superseded by the new administrative penalty framework.

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