Weak Anti-Proposition 65 Measure Gets Weaker

A California bill to open a narrow escape path from frontal assaults under Proposition 65 has faltered in the committee review process. A bill introduced by Los Angeles-based Assemblyman Michael Gatto would have given defendants a 14-day period during which they could “remedy” alleged violations and avoid threatened lawsuits by plaintiffs’ attorneys.

The bill passed the legislature’s Environmental Safety and Toxic Materials Committee in a unanimous, bipartisan vote. However, the political realities of confronting an uphill battle in the Judiciary Committee compelled Assemblyman Gatto to water down the bill. As presented for review by the Judiciary Committee, the bill is now restricted to allowing a 14-day remediation period where a listed substance is presented to the public in alcohol, tobacco smoke, or engine exhaust, or where formed on the premises in the process of food preparation.

Band-Aid Measure

To put the measure and its surrounding issues in perspective, here’s a typical scenario that the original bill was drafted to address. A plaintiffs’ attorney files a 60-day notice to sue, as required by law for private actions. (The state’s Attorney General does not have to give such advance notice.) The attorney then approaches the prospective defendant and proposes a settlement in lieu of filing the lawsuit. Particularly for small businesses, such as local coffee shops, the prospects of the cost of defending a lawsuit are unthinkable, and in many cases so are the sums demanded as a settlement. Moreover, the vendor is also typically required to comply with the “injunctive relief” of the statute, that is putting up a warning sign or labeling the product.

The Gatto bill, as originally drafted, would have given the prospective defendant 14 days to come into compliance by issuing a warning to customers along with paying a $500 fine. That would give a relatively easy out to the accused, saving the outlays of money that could make or break the business.

However, it should be noted that the relief would have been merely a temporary band-aid at best to provide a short-term “out” to the immediate, untoward circumstances. In many cases, such as with coffee, the industry maintains that no such “injunctive relief” – that is, posting a warning sign or label – is necessary at all. In the case of coffee, the traces of acrylamide formed from naturally occurring components in the roasting process do not trigger the statute’s requirements. That position is being put forward in the defense of two major lawsuits against the industry.

While the posting of signs or affixing of labels by some vendors does not create a legally binding precedent for others, it puts into play an unnecessary and unwarranted example that is out of step with the industry’s position. In other words, it muddies waters that should be clear. And, it subjects the defendants to burdens and costs associated with warning measures they should never have had to incur.

Toxic Climate

The scenario targeted by the Gatto bill is part of a larger, unfortunate picture. Proposition 65, or the Safe Drinking Water and Toxic Enforcement Act, was passed in 1986 to prevent businesses in the state from exposing individuals to certain chemicals without first giving warning. It was supported by a number of environmental groups, and passed as a public referendum garnering 2/3 of the popular vote.

However, the measure included a provision for private citizens and groups to bring suit under the statute. The reasoning was that the state may not have adequate resources to enforce the measure. This provision has given a green light to the plaintiff’s bar in the state to turn Proposition 65 into a cottage industry. Setting up shell organizations ostensibly devoted to environmental causes, they file suit against industries whose products contain trace amounts of Proposition 65-listed chemicals. (From the original 29, there are now over 800 chemicals on the list, designated by the state’s Office of Environmental Health Hazard Assessment, or OEHHA, as causing cancer or reproductive harm.) Most of the suits never go to trial, but are settled out of court. Historically, about 75% of the proceeds go to plaintiffs’ attorneys, rather than to the state for environmental uses as intended.

Alternatively, the plaintiffs’ attorneys approach prospective defendants, demanding out-of-court monetary and injunctive penalties, as described above. The Gatto bill aimed to give vendors an out, even though it did nothing for the industries struggling under such suits. The watered-down version will do even less, and nothing at all for coffee companies of any size, shape or form.