The California State Assembly on Friday passed a reform bill aimed at blocking “shakedown lawsuits alleging violations of Proposition 65.
The bill, AB 227, by Assemblyman Mike Gatto (D-Los Angeles) would allow small business owners receiving a 60-day-notice of violation from attorneys to post the required signs within 14 days and pay a small civil fine without fear of lawsuits. It passed the Assembly on a 71-0 vote and now heads to the state Senate.
“This is a common sense bill that will help California businesses avoid costly litigation, while ensuring that the public has prompt and proper warnings about potentially dangerous chemicals,” Gatto said in a statement.
The reform bill was prompted by complaints from Los Angeles area small businesses that received notice letters – most from a small group of attorneys – alleging they failed to post signs warning of toxic chemicals, as required under Proposition 65. Los Angeles area restaurants and bars have been specifically targeted over their sale of alcoholic beverages and the presence of certain chemicals formed by grilling meat products.
The notice letters invite the restaurant and other small business owners to contact the lawyers’ offices to discuss settlement terms. Many business owners elect to pay a $5,000 or $10,000 in attorneys’ fees and post warning signs to avoid a protracted lawsuit. However, enough business owners were outraged about the tactics of the law firm serving the 60-day notices, that they were able to convince Gatto to introduce his reform bill in February.
Gatto’s bill has gained enough traction in the state assembly to prompt Gov. Jerry Brown to jump on the reform bandwagon when he introduced earlier this month to introduce additional legislation to curb abuses of Proposition 65. Although Brown’s office has yet to introduce any legislation, according to his announcement the legislation would cap attorney fees and force plaintiffs to submit more proof of violations. California EPA Secretary Matthew Rodriquez, who announced Brown’s reforms to the media earlier this month, said that his reform package was inspired by Assemblyman Gatto’s success. According to the Governor’s office, it will release a white paper outlining the specifics of its proposal before drafting any legislation.
Because the earliest the Governor’s proposal could be introduced is midway through the legislative session, it is uncertain whether any bill introduced by his office would come to a final vote this year.