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Gov. Brown Announces Proposition 65 Reform Proposal

U.S. News, California, CalEPA, OEHHA, DTSC, Proposition 65, Pending Legislation, Free Content, Non-Sub  

By Jack Schatz

Wednesday, May 8, 2013 

Governor Edmund G. Brown Jr. yesterday proposed reforms to strengthen and restore the intent of Proposition 65, which he said “has been abused by some unscrupulous lawyers driven by profit rather than public health. “

The administration, through the California Environmental Protection Agency, will work closely with the Legislature and stakeholders to revamp Proposition 65 by ending frivolous “shake-down” lawsuits, improving how the public is warned about dangerous chemicals and strengthening the scientific basis for warning levels, Gov. Brown said in a statement.

“Proposition 65 is a good law that’s helped many people, but it’s being abused by unscrupulous lawyers,” said Governor Brown. “This is an effort to improve the law so it can do what it was intended to do – protect Californians from harmful chemicals.”

The package of reforms will build on legislative efforts already underway, including Assemblyman Mike Gatto’s proposal to reform Proposition 65 (AB 227).

“Proposition 65 serves a vital public interest. It provides the public with information about carcinogens and toxins that may be present in the products we use in our everyday lives. But for Prop 65 to be effective, this information must be clearly stated and we need to work with the Legislature to prevent groups from exploiting or misconstruing this information for their own personal gain,” said California EPA Secretary Matt Rodriquez.  Secretary Rodriquez announced the Governor’s proposal on a press call yesterday afternoon, briefly describing the plan.

According to Secretary Rodriguez, the Brown administration, stakeholders and the Legislature will discuss reforms to:

•             Cap or limit attorney’s fees in Proposition 65 cases.

•             Require stronger demonstration by plaintiffs that they have information to support claims before litigation begins.

•             Require greater disclosure of plaintiff’s information.

•             Set limits on the amount of money in an enforcement case that can go into settlement funds in lieu of penalties.

•             Provide the State with the ability to adjust the level at which Proposition 65 warnings are needed for chemicals that cause reproductive harm.

•             Require more useful information to the public on what they are being exposed to and how they can protect themselves.

The Chanler Group, the largest and most active law firm representing Prop. 65 citizen enforcers said in a statement that it “supports the reforms proposed by Gov. Brown to strengthen and restore the intent of Proposition 65 to protect Californians from exposures to harmful chemicals found in consumer products (…) and agrees there is a need to deter frivolous lawsuits, and to improve how the public is warned about dangerous chemicals.  The effectiveness and efficiency of Proposition 65 depends on the ability to screen out meritless suits.”

“Our clients have consistently offered to exchange test results with companies selling goods with hidden toxicants.  Often, they don't have anything to share since most of their goods are made in China and ‘no knowledge’ of the ingredients seems to be a convenient defense,” said Clifford Chanler.  “The companies should have been testing from the get go; hopefully, one part of the amendment will be to impose more significant civil fines for companies that believe in reckless indifference to the toxic exposure and don't test their items before selling them to citizens.”

While some of the Governor’s proposals, such as requiring Proposition 65 warnings to identify the chemicals referenced by the warning and provide information about how to avoid exposure to those chemicals are straightforward and would clearly further the purpose of the statute,  other parts of the proposal were not explained in detail, raising questions about how they would be implemented.

Prop 65 News discussed how some of these parts of Gov. Brown’s proposal would be implemented with Jim Marxen, Communication Director for the Department of Toxic Substances Control (DTSC) .

Marxen prefaced his comments by saying “ a lot of the details will need to be worked out in the actual bill language, as well as in any subsequent regulation(s).  With that disclaimer he shared with us the current thinking behind the proposal.

When asked how Gov. Brown proposed to curtail what he called “abusive lawsuits, Marxen said that the proposal would:

·          Cap or limit attorney fees;

·         Require plaintiff’s counsel to submit a statement of all fees collected over the past five years for Prop. 65 enforcement over the same chemical

·         Require supporting information to include test results and other information to demonstrate likely or actual exposure.

Marxen said that changes to the law would impose a fee cap, but the criteria for limiting the fees would have to be “worked out in the regulations.”

He also said that any fee restrictions imposed would be in harmony with Calif. Code of Civil Procedure Section 1025, which governs attorneys’ fees awarded in litigation promoting the public interest.

In Gov. Brown’s press statement, he cited a 2007 case where Consumer Defense Group Action (CDGA) served 45 Proposition 65 notices of violation against banks based on second-hand smoke near bank entrances or ATMs as an example why reform is needed. In its notices CDGA claimed that the banks had failed to post warnings, and alleged that the banks controlled the behavior of smokers in those areas. In responding that there was no basis for the claim and misrepresentations within the notices, the Attorney General warned that the group’s notices could “constitute unlawful business practices.”

It was the Attorney General’s close supervision of the organization’s activities that later caused it to decide to pursue its activities elsewhere. The same close supervision, and some cases, the filing of  enforcement actions on citizen enforcement groups resulted in similar outcomes for groups such as Consumer Cause, California Community Health Advocates,  and Citizens for Responsible Business.

When asked why this issue needs to be addressed by the legislature, since the Attorney General’s office has been successful in stopping abusive practices in the past, Marxen said “the changes will codify the ‘bar’, serve notice to those who wish to file a notice of violation. And “it allows for the creation of regulations that actually establish a criteria” for what constitutes abusive litigation.

Gov. Brown’s proposal also seeks to limit the use of in lieu of civil penalty payments, which are used to fund enforcement activities of advocacy groups, but also have been misused to divert funds normally earmarked for civil penalties back to plaintiffs’ att0rneys.

The misuse of in lieu of payments is a problem the Attorney General’s office has proposed to address, as well.  Marxen said Gov. Brown’s proposal “is consistent with what the Attorney General has been considering.”

The proposal also seeks to require a stronger demonstration by plaintiffs that they have a claim—which according to Marxen would add additional requirements to the existing Certificate of Merit that must accompany all new 60-day notices.

Marxen said that courts will decide whether cases are meritorious, and the specifics concerning Certificates of Merit would be part of an amended regulation.

The specifics of the proposal with regard to the COM are listed below:

·         Where a certificate of merit (COM) alleges exposures to chemicals in consumer products, it would require supporting information to include test results and other information to demonstrate that users would be likely to actually be exposed to the listed chemical(s). It would also require that the COM be disclosed when the lawsuit is filed.

·         For alleged consumer product violations, the COM would require the noticing party to provide supporting information for the COM to the alleged violator if the violator agrees to provide any test results for the noticed products at the same time.  Parties must agree to keep information confidential, and the information is not admissible unless obtained by other means or by mutual agreement.  Exchange under this provision would not result in waiver of any privileges (e.g., attorney-client, attorney work product).

·         Amend the requirement for the Attorney General to maintain supporting information in confidence (Health & Safety Code, § 25249.7(i)) to expressly allow the Attorney General to lodge the supporting information for a court’s in camera review.

Marxen said the details of these provisions will be worked out in discussions with stakeholders and legislators, but the intent is to require two things: (1) that plaintiffs provide to the Attorney General’s  office information that goes beyond the suspected presence of a Prop 65 chemical in an area, and actually includes information showing that the chemical actually is detectable, and that human exposure to the chemical is likely to occur; and (2) that plaintiffs must provide this information to the businesses, on the condition that the business then also provides any test results that they have to the plaintiff (i.e. An equal exchange of information).

Finally, the reform package seeks to reduce the 1,000 fold safety factor for No Observable Effect Levels (NOELs) for reproductive and developmental toxicants, to a 100 fold safety factor, when a Maximum Allowable Dose Level is based upon a human study.  The reduction would not apply to NOELs not meeting this criteria.

According to Secretary Rodriguez, the 1,000 fold safety factor is not consistent with “current risk assessment practices” used by authoritative bodies such as the U.S. Environmental Protection Agency. 

Because the current legislative session is well underway, a legislative proposal would have to be introduced soon to reach a vote on the Assembly floor this year.  Gov. Brown’s proposal to reform Proposition 65 would require a 2/3 majority in the state Assembly and Senate to be enacted.  

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