CJAC: Civil Justice Association of California

Mar 13, 2013

Lawsuit Abuse Victims, Legal Reform Advocates Announce Support For AB 227 to Stop Shakedown Prop. 65 Lawsuits

SACRAMENTO - The Civil Justice Association of California (CJAC), California Citizens Against Lawsuit Abuse (CALA), and victims of abusive Proposition 65 lawsuits convened at the State Capitol today to announce their support for AB 227, authored by Assemblymember Mike Gatto (D-Burbank). The bill would give businesses 14 days to fix alleged Prop. 65 violations, protecting small businesses from shakedown lawsuits. Many Prop. 65 lawsuits are filed with the hope that small businesses, wary of litigation costs, will opt for a quick settlement to make the lawsuit go away.

Designed to protect Californians from chemicals known to cause cancer, birth defects or reproductive harm, Prop. 65 requires businesses and landlords to warn consumers if products or environments will lead to exposure levels above certain thresholds. The state maintains a list of about 800 chemicals subject to Prop. 65 warnings.

"When my business was sued under Proposition 65, it was clear that the lawyer was far more interested in collecting attorneys' fees than protecting the environment," said Joe Derian, owner of Party Warehouse in Montebello, CA and a CALA supporter. "When small business owners like me can so easily become the victims of shakedown lawsuits, it hurts California's business climate and makes it more difficult for our state to attract businesses and create jobs."

The law allows the public to sue businesses or landlords for up to $2,500 for each day signs aren't posted about the presence of these chemicals, and is subject to abuse by lawyers who file lawsuits with the sole purpose of extracting settlements from businesses.

"Each dollar extorted from businesses in shakedown Prop. 65 lawsuits is a dollar that can't be spent hiring new workers or otherwise growing California's economy," said Tom Scott, Executive Director of California Citizens Against Lawsuit Abuse, a nonpartisan grassroots movement advocating for legal reform. "AB 227 is a common-sense measure that will help protect small businesses in California from abusive lawsuits while continuing to pursue the goals of Prop. 65."

Since it was passed in 1986, Prop. 65 has resulted in more than 16,000 lawsuits and more than $500 million in settlements. In 2011 alone, of the $16 million collected in Prop. 65 settlements, over $11 million - almost 75 percent - went to attorneys' fees.

"There once was a worthy goal behind Prop. 65, but it has ended up doing far more to enrich a small number of lawyers than to protect the public from toxic substances," said Kim Stone, President of CJAC. "Unfortunately, the Prop. 65 warning signs have become so commonplace that they are generally discounted. We have become so over-warned that the warnings have become meaningless. The generic warning signs tell us nothing about what substance might be present, how prevalent it is, how we are exposed or how to mitigate the risk."

After announcing their support for AB 227, Derain and more than 100 other advocates for legal reform from across California joined CALA and CJAC for their third annual Day at the Capitol. They met with legislators to discuss the need for legal reforms such as AB 227 to stop lawsuit abuse and help California's economy grow and create jobs.

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