Lawyers Cash In on California's Proposition 65

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Prop 65 warning imageHindsight is always 20/20. It's easy to look back after a mistake and pinpoint what went wrong. But there's something to be said for heeding warning signs ahead of time too - to avoid the blunder all together. And often times, when we look back, we realize those warning signs were everywhere. We simply ignored them.

More than two decades ago voters in California were fooled when Proposition 65 - "The Safe Drinking Water and Toxic Enforcement Act of 1986" - was passed into law. Prop 65 was advertised as a means to protect California's drinking water and exposure to chemicals in consumer products from dangerous toxic substances that cause cancer and birth defects. Sometimes all the law required were warning labels in advance of those exposures. And who would argue with that?

The trouble is that's not the end of the story. Experts from across the political spectrum warned the public that certain provisions of the law would result in potentially serious unintended consequences for both small businesses and consumers alike. Just like the old adage says, the devil is always in the details.

Criticism focused on Prop 65's so-called Bounty Hunter provision, which allows private individuals and non- government organizations to sue manufacturers, suppliers, retailers, effectively taking matters into their own hands when the Attorney General opts not to pursue alleged violations.

Twenty-five years ago, the California Chamber of Commerce warned that the law entitles bounty hunters not only to 25 percent of the potential settlement or court appointed fine, but also to any legal fees and expenses incurred. That's where the dollar figures really start to skyrocket. Fines easily start at around $20,000 for an initial settlement, and they routinely climb into the hundreds of thousands of dollars for anyone who dares to fight back. The monetary award creates more than enough motivation for opportunistic lawyers to ruthlessly prey on companies that are in compliance with the law but have little knowledge of Prop 65 guidelines.

The Los Angeles Times in 1986 urged readers not to support Prop 65 noting the "questionable" inclusion of the Bounty Hunter provision, warning it was not the proper mechanism to achieve cleaner water. In one editorial, the Times went so far as to call the provision "frontier justice."

It turns out the Times' warning was a prescient one. The Bounty Hunter provision has indeed created a system of frontier justice in which self-appointed law enforcers - trial lawyers motivated by quick and often obscene profits - routinely behave like the vigilantes of the Wild West, effectively trying, convicting and imposing punishment on companies.

The problem with vigilantes, of course, is that they are rarely capable of meting out justice with integrity. In the case of Prop 65, attorneys are not only blackmailing businesses into signing consent decrees under the threat of costly and protracted litigation, but increasingly, the consent decrees themselves impose restrictions on businesses that go far beyond the regulations mandated by Prop 65.

This imposes unreasonable and unfair burdens on businesses - in California, across the country and internationally.

As it turns out, the experts were right. The good intentions of Proposition 65 have been undermined by aggressive attorneys motivated by money, not a cleaner environment, in their never-ending pursuit of lawsuits against unwitting business owners and manufacturers.

The solution to this inherent unfairness in the way The Safe Drinking Water and Toxic Enforcement Act of 1986 is enforced is as simple as it is reasonable: law enforcement should be left to the authorities, not to individuals. The changing of the guard in California's state government presents an opportune time to correct these glaring shortfalls.

Governor Jerry Brown should lead on this issue, and ultimately Attorney General Kamala Harris should close this loophole in the Bounty Hunter provision and take back her office's authority to enforce the law fairly and with integrity.

Ken Boehm is NLPC Chairman. This op-ed appeared in the Sacramento-based Capitol Weekly, a publication aimed at California lawmakers and officials.