CJAC: Civil Justice Association of California

CJAC Provides Business Perspective At Prop 65 Legislative Overview Hearing

Posted on 08/25/2017 @ 09:30 AM

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Civil Justice Association of California President and CEO John Doherty joined other business representatives, panelists from the Office of Environmental Health Hazards Assessment (OEHHA), academic leaders, as well as labor and consumer attorney representatives to provide testimony at a Proposition 65 oversight hearing on Wednesday in the Assembly Environmental Safety and Toxic Materials Committee.

Titled, “Proposition 65 Update: Toxic Chemical Exposure: Protecting and Informing the Public,” panelists covered the history and process of the Proposition, the 2016 amended warnings regulations and perspectives from business, consumers and labor.

“Some of the flaws of Proposition 65 have been a source of concern for honest and fair businesses across the country for many years and a current review is certainly timely,” Doherty said in his remarks.

Prop 65 was a ballot initiative known as the Safe Drinking Water and Toxic Enforcement Act of 1986 and requires the State to publish a list of chemicals that have been found to cause cancer, birth defects or reproductive harm. Businesses are then required to notify consumers of these chemicals in their homes, workplaces and in the products they purchase. While well-intentioned and leading to some successes, since its inception, businesses have struggled with ensuring they meet these requirements due to the proposition’s lack of clarity, overly broad limitations and unwarranted exposure to shakedown lawsuits.

To provide a business perspective on the effects of Prop 65, Doherty spoke to its original purpose and the misalignment of the current administrative and enforcement mechanisms to that purpose, which he stated was a focus on the prevention of knowing discharge of hazardous chemicals into water or onto land that may likely pass into a source of drinking water.

“Very few of the concerns you will see raised about the Act are related to its most significant purpose as conveyed during its passage,” said Doherty. Instead, businesses have become defendants against a constant propagation of settlements through Proposition 65’s inclusion of a private right of action provision that has led to an artificially high level of lawsuits involving warnings postings rather than its original intent of protecting the public from harmful chemicals.

“In 2016, businesses paid out over $30 million in settlements, all of which resulted from actions brought by private plaintiffs; 72 percent went to attorneys’ fees and costs and private plaintiffs got 4.5 percent…California governmental entities only account for just 2.8 percent of those settlements despite the original intent that they were the primary enforcement agencies.” Doherty went on to explain that due to each private or public entity’s enforcement actions and individual standards, the simple presence of a listed chemical without a warning is enough to trigger a lawsuit by a private party, at which point it is less costly for businesses to settle. With no ability to remedy the problem in current statute, this situation becomes especially egregious and, “it seems clear that the legal ability exists to do more to focus on bad actors and education, rather than relying so heavily on a private enforcement system with problematic fiscal incentives,” said Doherty.

Anthony Samson, Senior Attorney and Policy Advisor at Arnold & Porter Kaye Scholer highlighted the almost impossible situation that Proposition 65 leaves conscientious businesses regarding the decision to warn, and how that is impacted by the ever-present threat of litigation. Jeff Margulies, representing the California Retailers Association, addressed the serious concerns remaining regarding the new warning regulations. His testimony raised significant questions regarding the functionality and fairness of the new regulations, specifically addressing a potential burden-shifting inherent in the soon to be implemented policies.

The hearing also exposed a deeply concerning issue regarding the entire Proposition 65 process. As passed by the voters the initiative was meant to prevent discharge of chemicals into our public waterways, and warn people when they are being exposed to dangerous chemicals. Many of the presenters spoke of a major modification in the purpose of Proposition 65 – utilizing it as a method of banning harmful chemicals. This may be a laudable goal, but as University of California School of Public Health Dr. Megan Schwarzman stated in her testimony on Tuesday, the science is lagging behind the reality in terms of reaching that objective. California must make sure that, if the intent of Proposition 65 is to ban chemicals instead of its original purpose, the science behind the process is extremely solid to ensure that the process doesn’t unintentionally cause more harm than good.

While no action was taken by the E.S.&T.M. Committee at the overview hearing, CJAC sincerely believes in the good intentions of the Chairman, and hopes he will accept the challenge of championing a serious reform of Proposition 65 that preserves its original intent, protects families and children from harmful exposure to unnecessary chemicals, provides a fair and clear process for businesses and remains fully rooted in sound scientific principles.

CJAC stands ready to work towards this goal.

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