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California Governor Proposes Prop 65 Reforms

Manufacturers selling products in California, including food and dietary supplement manufacturers, are subject to the state’s Safe Drinking Water and Toxic Enforcement Act of 1986, which is commonly referred to as Prop 65.

Prop 65 was enacted as a ballot initiative, and it was intended to protect California’s drinking water sources from chemicals known to cause cancer, birth defects, or other reproductive harm, and to inform Californians about their exposure to such chemicals.  If a chemical is on the Prop 65 list, which California’s governor publishes annually, a manufacturer whose product contains that chemical must warn consumers about the chemical, e.g., “WARNING: This product contains a chemical known to the state to cause cancer.”  The Prop 65 warning is not required, however, if the exposure to the chemical is less than a safe harbor level, which includes No Significant Risk Levels for cancer causing chemicals and Maximum Allowable Dose Levels for chemicals causing reproductive toxicity.  Only some of the chemicals on the Prop 65 list have safe harbor levels.   Small businesses with fewer than 10 employees are also exempt from Prop 65’s requirements.

Although Prop 65 was enacted with good intentions, some have used it for their personal gain.  Over the years, a bevy of private lawsuits, some frivolous, have been filed against companies that failed to give warnings.  Such lawsuits are usually an easy financial boon for attorneys because businesses often prefer to settle for an amount that is less than what it would cost to defend the suit in court.  In 2011 alone, 338 Prop 65 cases resulted in $12 million in attorney fees.  A significant number of those cases, 61, were filed by one firm.

California’s governor, Edmund G. Brown, Jr., has vowed to stop the abuse of Prop 65.  He proposed the following reforms:  (1) cap or limit attorney’s fees in Proposition 65 cases; (2) require stronger demonstration by plaintiffs that they have information to support claims before litigation begins; (3) require greater disclosure of plaintiff’s information; (4) set limits on the amount of money in an enforcement case that can go into settlement funds in lieu of penalties; (5) provide the State with the ability to adjust the level at which Proposition 65 warnings are needed for chemicals that cause reproductive harm; and (6) require more useful information to the public on what they are being exposed to and how they can protect themselves.

Short of repeal of Prop. 65, Governor Brown’s proposals are helpful revisions.  Proposals one through four, if adopted, should reduce the number of unscrupulous lawsuits by reducing financial incentives and increasing the evidentiary burden.  The fifth and sixth proposals will help ensure that consumers are not needlessly exposed to a warning, and that when a warning is required, it will be meaningful.

In the meantime, companies that sell products in California should strive to ensure that they comply with Prop 65, lest they find themselves named in a private lawsuit.


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