Last month, California Governor Jerry Brown unveiled his proposed reforms to Proposition 65, the 27-year-old law passed by voter initiative to protect Californians from harmful chemicals. Gov. Brown directed the California Environmental Protection Agency (“Cal/EPA”) to work with the legislature to improve the law and put an end to the proliferation of abusive “shakedown” lawsuits. Prop. 65 is best known for requiring clear warnings about chemicals known to the state to cause cancer or reproductive harm, often seen in retail stores and restaurants and on many consumer products. Like several other landmark environmental laws, Prop. 65 permits private citizens acting in the public interest to enforce the law by suing violators. Under the current law, unscrupulous lawyers are incentivized to bring Prop. 65 lawsuits because they may be able to recover all attorneys’ fees plus damages of up to $2,500 per day, or otherwise extract settlements with little proof of a meritorious claim.
The governor’s reform package includes:
- capping attorney’s fees;
- requiring plaintiffs to make a stronger showing of a violation before bringing suit, as well as other disclosures;
- limiting the amount of money from an enforcement action that can go into settlement funds (as opposed to penalties);
- authorizing the state to adjust the level at which warnings about reproductive harm are required; and
- making more useful information available to the public on chemical exposure and protection.
The governor’s announcement adds to growing momentum in the legislature to reform Prop. 65. Assemblyman Mike Gatto introduced legislation this session which would allow business owners to avoid a costly lawsuit or settlement by paying a $500 fine and correcting the violation within 14 days after receiving a notice of violation. The bill, AB 227, has passed the state Assembly and this week was approved by the Senate committee on environmental quality; the Senate judiciary committee will consider it on Tuesday, June 25.