Friday, March 15, 2013

Press Enterprise Editorial: End the legal shakedowns over chemical warnings

Legislators should back a bill that would curb abusive lawsuits over warnings about harmful chemicals. Businesses would have the chance to correct violations promptly, and avoid lawsuits and fines.  Photo: The Press Enterprise
THE PRESS-ENTERPRISE - March 14, 2013; 05:47 PM

California should not confuse bounty hunting with consumer protection. Predatory legal shakedowns under Prop. 65 burden businesses while doing nothing to safeguard the public. Legislators should back a bill that would curb abuses while ensuring compliance with the law.

Assemblyman Mike Gatto, D-Los Angeles, has a sensible proposal that would protect the goals of Prop. 65 while combating abusive lawsuits. His AB 227 would give businesses that receive notice of a Prop. 65 violation 14 days to correct the issue — and thus avoid costly lawsuits and fines of up to $2,500 per day.

Prop. 65, approved by voters in 1986, requires businesses to notify customers about harmful chemicals in the products they purchase. The state maintains a list of more than 800 chemicals that compel the warning notices, ranging from well-known health threats such as lead and asbestos to obscure chemicals such as dibromoacetonitrile, a byproduct of drinking water disinfection. Many prescription drugs are on the list, which also includes such commonplace items as diesel exhaust, tobacco smoke and unleaded gasoline.

But the measure allows enforcement through private lawsuits, leading to a thriving practice of threatening unsuspecting businesses with fines and litigation unless they agree to a settlement. Businesses can easily run afoul of Prop. 65, given the broad range of chemicals involved. Some are common ingredients in manufactured products, while others — such as diesel exhaust — are nearly inescapable in populated areas.

The legal threats do little besides earning money for lawyers and adding to the already high cost of doing business in California. The violations usually consist of failure to post proper warnings about hazardous chemicals, rather than any immediate hazard to public health. And Prop. 65 notices are so ubiquitous that most people pay little attention, anyway.

The lack of a proper posted warning, however, can cost big money. The state attorney general’s office reports than in 2011, Prop. 65 lawsuits led to settlements totaling $16.3 million. Nearly three-quarters of that amount, almost $12 million, went to attorneys’ fees — and not fines or corrective actions.

But voters did not approve Prop. 65 with the idea of making attorneys wealthy. Allowing businesses to correct violations instead of saddling them with huge payouts advances the goal of the measure — without also harming the state’s economy.

The Legislature has a ready precedent for this approach: Last year, legislators approved a bill that protected businesses from abusive lawsuits under the Americans with Disabilities Act, by cutting any potential damages if businesses correct violations promptly.

Likewise, AB 227 would refocus Prop. 65 enforcement on compliance, rather than on exploiting trivial violations for monetary gain. That approach serves the public’s interest in both environmental safety and economic progress. Californians’ desire to know about the presence of hazardous chemicals does not justify the bane of excessive, greedy litigation.

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This editorial can be read in its entirety at the Press Enterprise, by clicking HERE

Mike Gatto is the chairman of the Appropriations Committee of the California State Assembly. He represents Burbank, Glendale, La Cañada-Flintridge, La Crescenta, Montrose, and the Los Angeles neighborhoods of Los Feliz, Silver Lake, Atwater Village, and portions of the Hollywood Hills and East Hollywood.

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