Governor Vows to End Prop. 65 'Shake-down' Suits

Dan Brekke

Proposition 65 warning in front of a San Francisco Starbucks cafe

You've seen the signs, posted everywhere from gas stations to convenience stores, warning that a site contains chemicals “known to cause cancer and birth defects.”

Since California voters passed Proposition 65 in 1986, these signs have become both ubiquitous and a target for thousands of lawsuits.

On Tuesday, Gov. Brown – a longtime critic of the Proposition 65 law – threw his support behind plans to give it an overhaul.

“Proposition 65 is a good law that's helped many people, but it's being abused by unscrupulous lawyers,” Brown said in a press release.

The governor proposed changes to limit fees for plaintiff's attorneys, require stronger demonstrations of plaintiffs' claims, and make the signs more "useful" with specific information about the kinds of chemicals present, among other changes.

Brown also suggested a review of the chemicals the law covers, in order to set threshholds below which warning signs wouldn't be necessary.

Proposition 65 makes business owners post warning signs anywhere consumers could be exposed to chemicals such as lead or car exhaust. Each year, dozens of lawsuits are filed, accusing businesses of failing to notify consumers of possible exposure to chemicals that might cause cancer or birth defects, like car exhaust or lead.

According to the state attorney general's office, nearly 2,000 complaints have been filed under the toxins law since 2008.

Critics say the law has created a cottage industry for attorneys and individuals who seek out minor infractions of the law, then make money on attorney fees.

In a press briefing on Tuesday, California Environmental Protection Agency chief Matt Rodriguez singled out two cases that he said illustrate the ways Proposition 65 can be used for good or ill.

On the positive side, Rodriguez pointed to a 2012 case in which Attorney General Kamala Harris used Proposition 65 to force makers of Brazilian Blowout products to notify consumers that the product exposed them to formaldehyde, a known carcinogen.

As an example of the “unscrupulous lawsuits” that the governor seeks to prevent, Rodriguez pointed to a 2006 case in which attorneys with the law firm Graham & Martin alleged that banks were violating the law by failing to inform customers that secondhand smoke ingested near ATM machines could harm their health.

At the time of the ATM allegations, Attorney General Bill Lockyer wrote a letter to Graham & Martin objecting to the claims, on the grounds that banks cannot reasonably be held liable for people smoking in the vicinity of their ATM machines.

“It is not clear whether the recipients have sufficient control over the premises to be liable for the alleged violations,” he wrote.

Reached Tuesday on his cell phone, Graham & Martin attorney Anthony Graham objected to the characterization of that suit as frivolous or profit-driven.

“We collected not a single, solitary penny," Graham said. “(Lockyer) thought there was no danger from cigarette smoke in bank locations where they allowed smoking. Now, does everyone agree with that?”

Trenton Norris, an attorney with the San Francisco firm Arnold & Porter, represents businesses that have been hit with Proposition 65 lawsuits. He said defendants are often forced into settlements unfairly because it's too hard to prove that the chemicals are not there.

“You have to prove a negative, and it's incredibly expensive,” says Norris. “So rather than do that, when the plaintiff is offering a settlement that costs less than it would cost you to prove it, settlement seems to be a good path to take.”

In 2011, the most recent year listed on the attorney general's website, attorneys reached settlements with business owners in 338 cases alleging Proposition 65 infringement, resulting in just under $12 million in attorneys fees. Sixty-one of those cases were filed by one man, Russell Brimer, a client of the Chanler Group, a law firm with offices in San Francisco and Silicon Valley, as well as on the East Coast.

Josh Voorhees, a spokesman for the Chanler Group, said in a statement that the group “supports Governor Brown’s proposed amendments to Proposition 65, which as outlined today, will strengthen the law and tighten private enforcement practices.” Voorhees characterized the firm's work as seeking “to promote the public interest by investigating and uncovering consumer products containing hidden carcinogens and reproductive toxicants in significant amounts.”

In 2011, 107 settlements were reached by the Center for Environmental Health, a group that has sued manufacturers after finding lead in candy, among other cases. Those settlements resulted in $3 million in attorneys fees.

A bill currently in the state legislature, AB 227, sponsored by Assemblyman Mike Gatto, D-Los Angeles, also seeks to reform Proposition 65. In his statement to the press on Tuesday, CalEPA's Rodriguez said the state hasn't decided yet whether to support Gatto's bill, or to find legislative sponsors for a new bill.

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