In 1986 the voters of California adopted an initiative known as Proposition 65 (colloquially “Prop. 65.”). If you live in California—or if you have visited recently—you see Prop. 65 warnings everywhere you go. The Act requires businesses to prominently display information warning consumers of the existence of specific chemicals known to the State of California to cause cancer. And indeed there is a list of chemicals that business owners are presumed to be aware of.
As a result, everywhere you go in the Golden State—whether in a parking garage, an auto-repair shop, a coffee shop, office buildings, etc.—you are likely to run into little signs warning you that you might be exposed to chemicals that might be cancerous. Of course, these signs are so pervasive that it is easy to ignore them. But if you are a small business owner in California, you can’t ignore Prop. 65—not without risking big-time legal claims.
As has been widely reported, there is a major problem in California with Prop. 65 lawsuit abuse because the Act allows environmental organizations—or trawling plaintiffs attorneys—to act as private attorney generals, bringing lawsuits against any business that is out of compliance. There are some individuals and groups who literally go searching for businesses that have neglected to put up a Prop. 65 warning. And instead of a little warning, they are hit with a costly lawsuit. Usually small business owners are in the greatest peril because they simply don’t realize when they are required to put up a Prop. 65 warning.
This has become such a problem that even Jerry Brown’s Administration has been contemplating potential reforms. This is an issue NFIB has been heavily involved with in California, as part of NFIB’s on-going mission to curb on lawsuit abuse.
But now we are observing a new troubling trend. Environmentalists have apparently decided to begin using Prop. 65 lawsuits as leverage to coerce businesses into agreeing to change business practices that are completely unrelated to Prop. 65. In a lawsuit currently pending in Alameda County Superior Court environmentalist plaintiffs are seeking to force businesses to agree to stop using chemicals that have nothing to do with Prop. 65.
Prop. 65 simply requires businesses to post a warning when they use specifically listed chemicals. But, here the plaintiffs are seeking to go beyond that list to use the threat of a lawsuit to force businesses to stop using chemicals that were never on the list. From our perspective this is a blatant abuse of the legal system. Accordingly, NFIB recently joined with the American Chemistry Council in an amicus brief opposing environmentalist efforts to force a settlement that goes beyond the scope of what Prop. 65 ever intended.
Here the lawsuit—predicated on an alleged violation of Prop. 65—has been used to force the business to stop using chemicals that are beyond the scope of the Act. And of course small business owners simply lack the resources to fight back. When hit with a lawsuit like this, they will usually have little choice but to seek a settlement, and to capitulate to terms that—if allowed—would go beyond anything Prop. 65 was ever intended to reach.
Unfortunately the Court declined to consider NFIB and ACC’s policy concerns—as the Court issued an order rejecting our amicus brief this morning. As such, NFIB remains gravely concerned over these sue-and-settle practices and continued Prop. 65 abuse. Indeed, if this settlement is approved, it will only emboldened environmentalists and trawling plaintiffs to continue these abusive practices. This only underscores the need for reform.