Is California set to pass another Proposition 65?

This November, California voters might make history through Proposition 37 (“Prop 37”) by requiring labels on all food products sold within the state with genetically engineered (GE) origins or ingredients. If passed, Prop 37 will be the first of its kind at the state or national level. Prop 37 will cover a wide range of food products and allow private citizens to file suits against alleged violators, and thus has the potential to parallel the course of the now-famous Proposition 65 that has left its mark on the California business and legal worlds for more than 25 years.

Proposition 37: The California Right to Know Genetically Engineered Food Act

With the purpose of informing California consumers about the foods they purchase, Prop 37 will:

  • mandate a front package label of “Genetically Engineered” on raw or processed foods if produced from plants or animals with genetically altered material;
  • prohibit labeling or advertising GE foods as “natural” (under the measure’s proposed language, courts may apply this prohibition to any processed foods even if such foods are not genetically engineered);
  • exempt certain foods from the labeling requirements, including foods unknowingly and unintentionally produced with GE material, certified as organic, certified by an independent organization following specified procedures as not being GE, made from animals fed or injected with GE material but not genetically altered themselves, sold for immediate consumption, for medical purposes, and alcohol;
  • exempt processed foods until July 1, 2019, that contain 10 or fewer GE ingredients and do not contain a single GE ingredient that accounts for more than 0.5 percent of the food’s total weight; and
  • require retailers be principally responsible for ensuring products comply with the labeling requirements. Each producer at every level in the food chain may also be responsible for documenting GE ingredients to protect against exposure to litigation.

See the official title and summary of the labeling initiative prepared by the California attorney general here.

Proposition 65: The Safe Drinking Water and Toxic Enforcement Act of 1986

Designed to protect Californians from chemicals known to California to cause cancer, birth defects or reproductive harm, Proposition 65 requires businesses and landlords to warn consumers if products or environments will lead to exposure levels above certain thresholds. The state maintains a list of about 800 chemicals subject to Prop 65 warnings.

Proposition 37 as the Next Proposition 65

Prop 37’s potential to cover a vast array of food products and to elicit many citizen enforcement suits is reminiscent of Prop 65’s impact in California.

Similar to the 800 chemicals under Prop 65’s purview, Prop 37 will cover countless food products sold in California stores. In 2011, GE seeds produced 88 percent of all corn and 94 percent of soybeans produced in the United States. Under some estimates, between 40 and 70 percent of food products sold in grocery stores in California have some GE ingredients. If Prop 37 passes, all such foods will be subject to the labeling requirements.

Second, Prop 37 and Prop 65 have similar enforcement mechanisms. Under both, state or local prosecutors and private citizens can prosecute potential violations. Through the citizen suit provisions, citizens can sue for injunctive relief and recover reasonable attorney’s fees and costs incurred from the private enforcement.

To file lawsuits under Prop 65, private enforcers do not have to show they suffered damages; they need only show a product was sold in California without a Prop 65 warning that contains a listed chemical and has a foreseeable use that would cause an exposure to that chemical. Prop 65 private enforcers must, however, give the California attorney general and accused violator 60-days notice before filing suit. Prop 65 violators are subject to penalties up to $2,500 per violation per day and for court costs and reasonable attorney’s fees.

Similarly under Prop 37, private enforcers do not have to show an inadequate remedy at law, irreparable damages, or a unique or special individual injury. To file a claim, private enforcers need only show that a food product sold in California without appropriate labeling is genetically engineered or contains a genetically engineered ingredient. The court can award the plaintiff reasonable attorney’s fees and costs for prosecuting the action. Unlike under Prop 65, private enforcers of Prop 37 are not required to give the attorney general or potential violator notice. Prop 37 violators will be liable for attorney’s fees and court costs.

Private citizens can also pursue Prop 37 violations under the California Consumers Legal Remedies Act (CLRA). In a claim under the CLRA, private enforcers will not have to show specific damages, but must give the alleged violator 30 days to cure the violation. Under the CLRA, Prop 37 violators may also be liable for actual, restitutionary and punitive damages.

As California businesses have already experienced under Prop 65, Prop 37 will likely touch a large number of products in the California economy and lead to financial incentives for frequent private enforcement actions that are difficult for businesses small and large to litigate. Since taking effect, the attorney general’s records show Prop 65 has led to 16,000 lawsuits and close to $500 million in settlements, much of which has gone directly to plaintiffs’ lawyers for fees and costs. Similarly, Prop 37 will likely impact many California businesses and may create an atmosphere favorable to private enforcers, leading to frequent litigation and settlements.

The proponents of Prop 37 are the same plaintiffs’ attorneys that have been litigating Prop 65 since it was enacted by California voters in 1986. It is highly likely that they will employ the same litigation techniques and activities to enforce Prop 37 that they have used in Prop 65 these many years. Alston & Bird has been helping clients with ensuring compliance and avoiding potential pitfalls under Prop 65, as well as defending clients against Prop 65 lawsuits since 1986. Just as businesses have taken precautions pursuant to Prop 65, implementing compliance procedures under Prop 37 will be essential to keep from running afoul of the latest labeling requirements.