Litigation

A Modest Proposal For Fixing Proposition 65

By Bruce Nye

This week, we're looking at CBL's proposed tweaks to California laws to make them more business friendly without hampering those laws' overall purposes.  For starters, take Proposition 65. Please.

To a green and environmentally/politically correct group of California voters, Proposition 65 seems like a great idea:  if a business is going to "expose" people to carcinogens or reproductive toxicants, it ought to at least give a "clear and reasonable warning."  And when you tell Californians that this is what the statute does, they are overwhelminginly in favor of it.

About a year ago, we undertook an informal and unscientific survey at gas stations, fast food stores and in front of UCLA law school (home of future Proposition 65 bounty hunter lawyers) to ask people what they thought.  Here are some examples of what we heard:

I have to wonder what would have happened if we had asked citizens this question:

Do you favor a California law that requires small, non-California businesses to pay small penalties and large attorney fee awards for failing to give Proposition 65 warnings even if they had never heard of the statute before?

The issues posed by this question have a huge impact on little businesses from outside of California with small amounts of internet, catalogue or distributor sales in this state.  At least once a month, CBL gets a call from the owner of a mom and pop company in some remote state, with 11 employees,  who sells maybe 1,000 widgets a year in California and has just been served with a sixty day notice.  Here are the typical first questions: 

• What in the hell is this "Proposition 65?"
• Can't I just immediately start warning and avoid the lawsuit?
• Are you people crazy?

If you're a regular reader, you already know what Proposition 65 is.  If not, there's plenty of information here. And if you spend any time around this world, you know that the answer to the second question is "sorry, no way." Once the bounty hunter has caught you, you can't make him go away by starting up a sixty day notice program.  In other words, by the time many non-California business first hear about Proposition 65, it is too late to implement a compliance program.

So here's the first proposal:  Why not make the sixty day notice a meaningful notice to the company?  Have the law provide that if a company receives a sixty day notice, it may, within the ensuing sixty days, implement a compliance program and then certify that it does not expose any person in California to a listed chemical without first giving clear and reasonable warning.  And if it can do so within sixty days, the implementation of the compliance program will be a complete defense to an enforcement action.

This will accomplish what the statute sets out to do:  increasing public awareness of exposure to toxins.  In fact, it will do more than the litigation does.  Right now, if a bounty hunter goes shopping and buys a widget containing excess amounts of lead, and no warning,he can force compliance only as to widgets.  If the company also sells blidgets, and hasn't been giving warnings, the bounty hunter can't usually add blidgets to the case. 

But under CBL's proposal, the company would have to broadly certify to no unwarned exposures of any kind from any product within sixty days in order to avoid suit.  And if we wanted to put some teeth in the "certification," we could add double penalties for subsequent violations.

Can anyone think of a single policy reason why this would be a bad idea?

Full post as published by CalBizLit on January 04, 2011 (boomark / email).