LA Times: Brown signs law amending state's anti-toxins law, Proposition 65

California Gov. Jerry Brown, center, signed a law giving businesses that are in violation of Proposition 65 two weeks to post the required notices before they are subject to lawsuits or steep fines. (Rich Pedroncelli, Associated Press / January 24, 2013)

By Melanie Mason - October 5, 2013

SACRAMENTO -- Gov. Jerry Brown on Saturday signed into law changes to Proposition 65, the state's landmark anti-toxins law, that aim to reduce lawsuits and fines for businesses.

The initiative, which voters approved in 1986, requires businesses to post notices about the presence of possibly dangerous chemicals, which include alcohol, carcinogens found in parking garages and byproducts of coffee roasting.

Some business owners, particularly owners of bars and coffee shops, complained the law had spawned a wave of frivolous lawsuits and excessive fines over improper signage.

The measure by Assemblyman Mike Gatto (D-Los Angeles) gives businesses that are in violation of the law two weeks to post the required notices before they are subject to lawsuits or steep fines.

Gatto said he was in a "state of disbelief" that his bill, AB 227, had become law, particularly because making changes to the initiative required two-thirds approval in the Legislature.

"Nobody has been able to do this since 1986," he said...

You can read this article and more by visiting the Los Angeles Times HERE

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Mike Gatto is the Chairman of the Appropriations Committee in the California State Assembly.  He represents Burbank, Glendale, La Cañada Flintridge, La Crescenta, Montrose, and the Los Angeles neighborhoods of Atwater Village, East Hollywood, Franklin Hills, Hollywood Hills, Los Feliz, and Silver Lake.  www.asm.ca.gov/gatto

[VIDEO] CBS2 Investigates: Customers Pay The Price For Prop. 65 Lawsuits Against LA Restaurants

LOS ANGELES (CBSLA.com) — Customers are ultimately paying the price for lawsuits against some Los Angeles-area restaurants, according to CBS2 investigative reporter David Goldstein.

In the past six months, artist Raphael Delgado has had his attorney write letters to 20 restaurants, including California Pizza Kitchen, Maria’s Italian Kitchen and Big Daddy’s Fire Grill, in which he claims he’s documented violations of Proposition 65, which requires businesses to warn residents about possible exposures to chemicals...

...In January, the owner of Big Daddy’s, Dennis Constanzo, said he was threatened with legal action for supposedly not posting warning signs.

“(Delgado) indicated he wanted to settle the matter. And that is what it’s all about,” he said.

Three restaurants have settled with Delgado, paying penalties and legal fees that added up to more than $15,000, according to the California Attorney General’s website. Those costs could end up being passed on to customers in the form of higher food prices...

...When confronted by Goldstein, Delgado claimed he isn’t making any money and quickly called his attorney, Miguel Custodio.

Custodio, who has written 67 threatening letters to restaurants on behalf of just five clients, admitted he’s known Delgado since high school and they even had a business together, but said the Prop. 65 violations are valid.

Asked how Delgado found 20 restaurants in violation of Prop. 65, Custodio said, “You know, he goes to eat out just like, I think, anybody else does and he finds that these establishments don’t have these notices.”

State Assemblyman Mike Gatto, of Burbank, said the lawsuits have led to higher food costs and restaurants are being forced to leave California.

He’s authored a bill that would give restaurants a 14-day grace period to correct any problems.

“If the goal of Prop. 65 was to make sure that warning signs were put up in businesses, then let’s give businesses two weeks or so to put up a warning sign without facing very, very punitive lawsuits,” said Gatto.

Gatto’s proposed legislation is making its way through the state Senate and should be on the governor’s desk in a few weeks.

You can see this investigative report and more at CBS2LA.com by clicking HERE

LA Times Business Beat: Limiting Lawsuits

A restaurant owner was threatened with a lawsuit for not posting enough of these warning signs. (Stephen Osman / Los Angeles Times / December 12, 2005)

Limiting lawsuits

Brett Schoenhals thought he was following the law by putting one of California's all-too-familiar warnings in the bar of his Coffee Table restaurant in Eagle Rock.

Soon after he posted the sign, "This facility contains chemicals known to the state of California to cause cancer and birth defects or other reproductive harm," he got a letter from a lawyer saying he was representing an irate patron who wanted to see more warnings.

Invoking the Safe Drinking Water and Toxic Enforcement Act of 1986, or Proposition 65, the lawyer threatened a lawsuit. The restaurant owner was told he faced fines of $2,500 a day for violations.

Infuriated, the Coffee Table owner decided to fight. "I plastered my whole place with signs everywhere," he said.

Afterward, he confronted the lawyer, who dropped his complaint. But Schoenhals did not stop there. Convinced he and other business owners were too often being extorted, he took his frustrations to Assemblyman Mike Gatto (D-Los Angeles). The lawmaker introduced a bill to help businesses avoid fines for minor violations, if they promptly fix problems, and it is set to get its first legislative committee vote Tuesday.

"The voters passed Proposition 65 to be protected from chemicals that could hurt them," Gatto said. "They did not intend to create a situation where shakedowns of California's small business owners would cause them to want to close their doors."

marc.lifsher@latimes.com

You can read this article and more at the Los Angeles Times HERE

Mike Gatto is the Chairman of the Appropriations Committee of the California State Assembly.  He represents the cities of Burbank, Glendale, La Cañada-Flintridge, the Los Angeles neighborhoods of Los Feliz, Silver Lake, Atwater Village, and portions of the Hollywood Hills and East Hollywood.  www.asm.ca.gov/gatto 

Gatto introduces bill to protect businesses from 'shakedown' lawsuits

Assembly Bill 227 would give businesses 14 days to fix Proposition 65 violations, protecting them from so-called "shakedown" lawsuits, proponents say. Above, Le Comptoir in Glendale. (Tim Berger/Staff photographer / February 6, 2013)

Assemblyman Mike Gatto (D-Silver Lake) introduced a bill Monday to protect businesses from “shakedown” lawsuits that are filed with the intent of extracting settlements to make the litigation go away.

Business owners told Gatto at his Small Business Advisory Commission’s meeting last month that Proposition 65 – which allows the public to sue businesses for up to $2,500 for each day signs aren’t posted about the dangers of chemicals known to cause cancer or birth defects -- is easily abused by lawyers who file claims with the sole purpose of extracting settlements...

...Gatto’s bill, AB 227, would allow a business owner who receives notice of a Prop. 65 violation to avoid retrospective fines by fixing the violation within 14 days, according to a statement released on Tuesday.

“The voters passed Prop. 65 to be protected from chemicals that would hurt them,” Gatto said in his statement. “They did not intend to create a situation where shakedowns of California’s small-business owners would cause them to want to close their doors.”

-- Daniel Siegal, Times Community News

Follow Daniel Siegal on Google+ and on Twitter: @Daniel_Siegal

You can read this entire article and more at the Glendale News Press HERE

Mike Gatto is the Chairman of the Appropriations Committee of the California State Assembly.  He represents the cities of Burbank, Glendale, La Canada-Flintridge, La Crescenta, Montrose, the Los Angeles neighborhoods of Los Feliz, Silver Lake, Atwater Village, and portions of the Hollywood Hills and East Hollywood.   www.asm.ca.gov/gatto

PRESS RELEASE: Small Business Advisory Commission Generates Legislation to Help Small Businesses Avoid Shakedown Lawsuits

FOR IMMEDIATE RELEASE                                      Contact: Justin Hager: (818) 558-3043

February 5, 2013                                                                                 Cell: (415) 889-9762

Assemblyman Gatto’s Business Advisory Commission

Generates Legislation to Help Small Businesses Avoid Shakedown Lawsuits

SACRAMENTO – On Saturday, February 2, members of Assemblyman Mike Gatto's (D-Los Angeles) Small Business Advisory Commission voted to ask him to introduce legislation to address a new breed of shakedown lawsuits plaguing small businesses in Southern California.  On Monday, February 4, Assemblyman Gatto did what the Commission asked, introducing legislation that allows a business owner who receives notice of a Proposition 65 violation to remedy a violation, and achieve compliance within 14 days, without facing exorbitant retrospective fines.  

Prop. 65, the Safe Drinking Water and Toxic Enforcement Act, was passed by voters in 1986 and provides that a business in California may not expose individuals to chemicals known to cause cancer and/or reproductive toxicity without first giving clear and reasonable warning.  The State of California publishes a list of more than 800 chemicals known to cause cancer, reproductive harm, or birth defects.  Originally intended for serious exposures or failures to warn, Prop. 65 lawsuits have recently been abused by unethical attorneys.  A coffee shop owner in Gatto's district was sued for hundreds of thousands of dollars for failing to notify his customers that beer could cause cancer.

Such suits exist because the law allows for fines of $2,500 per day, enforced by any plaintiff.  Most people suing businesses expect that a small business, wary of litigation costs, will opt for a quick settlement to make the lawsuit go away. 

As introduced, AB 227 would further the original intent of Prop. 65, which was obtaining compliance with warnings for chemicals present on a site.  It would therefore allow a business that receives a notice of a private action to correct the violation, i.e., post the Prop. 65 warning, within fourteen days without being subject to the retroactive $2,500 per day fine. 

“The voters passed Prop. 65 to be protected from chemicals that would hurt them.  They did not intend to create a situation where shakedowns of California’s small-business owners would cause them to want to close their doors,” said Gatto.   

Assemblyman Gatto formed the Small Business Advisory Commission this year to advise him on challenges facing local small-business owners.  The eight member commission discussed a variety of concerns impacting small businesses and voted unanimously for Gatto to introduce the bill to reform Prop. 65 so that the law’s intent is not undermined.

 

“I had the opportunity to listen to concerns of local business owners on the Small Business Advisory Commission.  The severe negative impact of shakedown lawsuits under Prop. 65 was immediately apparent,” said Gatto.  “Most business owners work hard to protect customers so that the customers return.  This is especially true with small-business owners whose customers are neighbors, friends, and relatives.  This common-sense bill will help small businesses avoid costly litigation while ensuring that the public has the proper warnings about potentially dangerous chemicals.”

Mike Gatto is the Chairman of the Appropriations Committee of the California State Assembly.  He represents the cities of Burbank, Glendale, La Canada-Flintridge, La Crescenta, Montrose, the Los Angeles neighborhoods of Los Feliz, Silver Lake, Atwater Village, and portions of the Hollywood Hills and East Hollywood.  www.asm.ca.gov/gatto

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