California’s Governor Jerry Brown has proposed reforms to strengthen and restore the intent of the California Safe Drinking Water and Toxic Enforcement Act of 1986, better known by its original name of Proposition 65. Proposition 65 requires the state to publish a list of chemicals known to cause cancer or birth defects or other reproductive harm. It also requires businesses to provide a "clear and reasonable" warning before knowingly and intentionally exposing anyone to a listed chemical. This warning can be given by a variety of means, such as by labeling a consumer product, posting signs at the workplace, distributing notices at a rental housing complex, or publishing notices in a newspaper.1 The Proposition 65 list of chemicals is available at http://www.oehha.ca.gov/prop65/prop65_list/Newlist.html.
Proposition 65 is enforced by the California Attorney General’s Office, district attorneys and city attorneys, but the law also permits any individual acting in the public interest to file suit against a business alleged to be in violation of this law. Penalties for violating Proposition 65 by failing to provide notices can be as high as $2,500 per violation per day. In an official statement, the Governor’s Office notes that while Proposition 65 has motivated businesses to eliminate or reduce toxic chemicals in consumer products, it is also abused by some individuals who bring nuisance lawsuits to extract settlements from businesses with little or no benefit to the public or the environment.2 According to the California Office of Environmental Health Hazard Assessment (OEHHA), since 2008, nearly 2,000 complaints have been filed by such "citizen enforcers." In 2009-2010, one Proposition 65 plaintiff filed hundreds of such suits against dietary supplement manufacturers, most of which were settled for significant sums. Similar "shake down" law suits have been brought against cosmetic, consumer product, food, drug, and medical device businesses.
An example from the financial world provided in the Governor’s statement names the Consumer Defense Group Action, which brought forty-five Proposition 65 notices of violation against banks based on second-hand smoke near bank entrances or ATMs. The group claimed that the banks had failed to post warnings, and alleged that the banks controlled the behavior of smokers in those areas. In responding that there was no basis for the claim and misrepresentations within the notices, the Attorney General warned that the group’s notices could "constitute unlawful business practices."
Proposals under discussion to reform Proposition 65 would:
- Cap or limit attorney’s fees in Proposition 65 cases.
- Require stronger demonstration by plaintiffs that they have information to support claims before litigation begins.
- Require greater disclosure of plaintiff’s information.
- Set limits on the amount of money in an enforcement case that can go into settlement funds in lieu of penalties.
- Provide the State with the ability to adjust the level at which Proposition 65 warnings are needed for chemicals that cause reproductive harm.
- Require more useful information to the public on what they are being exposed to and how they can protect themselves.
Such reforms would be a welcome change for companies that often face a Hobbesian choice of settling with plaintiffs before suit is filed, despite dubious claims to violation of Proposition 65, or of contesting charges that may be dubious, but are nevertheless expensive and time-consuming to defend.