One of my legal reform wishes for 2012 was that our Attorney General, Kamala Harris, would take action to stop the lawyers who are running around the state of California suing businesses for violations of Proposition 65. Proposition 65 is the Safe Drinking Water and Toxic Enforcement Act of 1986 passed by the voters and it is administered by the Office of Environmental Health Hazard Assessment (OEHHA), which is part of the California Environmental Protection Agency.
Prop. 65 provides that persons doing business in California may not expose individuals to chemicals known to cause cancer and/or reproductive toxicity without first giving clear and reasonable warning, nor discharge such chemicals into drinking water. Prop. 65 requires that the State of California publish a list of chemicals known to cause cancer or reproductive harm or birth defects. This list has more than 800 chemicals listed.
If a business uses any of these chemicals and does not provide a warning to consumers, it can be sued by “any individual acting in the public interest.” Violating Prop. 65 causes fines of $2,500 per day. The people suing businesses “in the public interest” know most small businesses can’t afford these costs, and instead hope for quick settlements in the thousands of dollars to make the lawsuit go away.
Here’s how the shakedowns work: a party acting in the public interest (sure…) must first send a business a notice of violation 60 days prior to filing a lawsuit. In this period, the Attorney General may take over the case. However, from what I can tell, that does not happen too often. Those notices are accessible to the public and can be found here.
When I look over these 60-day notices, I see the same old game occurring. We have a group of ten or twenty lawyers and groups that are traveling throughout the state of California suing businesses under the guise of environmental protection. In December of 2011, parties “acting in the public interest” filed 49 lawsuits against California businesses, and in January of 2012 they filed another 52.
The targets of these lawsuits range from large retail chains such as Whole Foods and Amazon to smaller companies and businesses. I won’t get into the specific chemicals because I do not want this to seem like a Chemistry 101 class, but some of the items that are listed as having dangerous chemicals are sandals, dietary supplements, pencil cases, key chains, fitness exercise balls, tools with vinyl grips, costumes and food drinks containing caramel coloring. The list seems endless.
The voters in 1986 passed Prop. 65 to be protected from chemicals that would hurt them. They did not intend to green light a bunch of lawyers to shakedown businesses all over the state. And at $2,500 a day per violation these suits can bring huge dollars. The legal fees these lawyers are taking are huge. They often walk away with 80% to 90% of the settlement in additional to staggering legal fees.
And what is most distressing is no one is doing a thing about it. Just like ADA shakedown lawsuits, everyone in authority is just watching. These lawsuits are hurting small businesses, costing jobs and putting our state at a competitive disadvantage. CALA is calling on the Attorney General to stop the madness and go after these predators. Prop. 65 lawsuits are about greed, not environmental protection!