The Bee’s editorial board got it half right and half wrong in its editorial about proposed reforms to Proposition 65 (“Brown seeks shift in toxic warnings,” Dec. 8). Yes, Proposition 65 warning signs are ubiquitous and vague to the point of being useless. Any reform, though, must also eliminate the lawsuit abuse associated with the law that has forced too many California businesses to close and eliminated too many California jobs.
The real reason why Proposition 65 was put on the ballot has nothing to do with giving Californians information regarding chemical exposure. Its true purpose was to give lawyers another opportunity to sue businesses and extract enormous paydays through quick settlements.
How does this work?
The law allows “citizen enforcers” – i.e., attorneys who want to make a quick buck – to file lawsuits against and extract penalties from businesses they suspect of noncompliance.
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Because the cost of mounting a legal defense can be ruinous, even if it is successful, many businesses simply choose to settle rather than fight these lawsuits. And because violations can bring penalties of as much as $2,500 per day, the costs of settling add up quickly. Since 1986 more than 16,000 lawsuits have been filed, resulting in more than $500 million in settlement payments.
It is shockingly easy to sue businesses for violating Proposition 65. In 2014, a single law firm sent 60-day notice letters (which are a required first step before a lawsuit) to more than 300 businesses in just a two-month period. In a span of just three days, the law firm sent these notices to 41 businesses.
Many supporters of California Citizens Against Lawsuit Abuse own small businesses and have been victims of Proposition 65 lawsuits. The average settlement, I’m told, can average about $60,000.
Every dollar these business owners spend on litigation and settlements is a dollar they can’t spend hiring new workers and expanding their businesses. Sadly, when businesses close their doors for good because of the lawsuits, communities are deprived of jobs and local jurisdictions lose out on sales and property tax revenue.
So, yes, we need to reform Proposition 65. But any reform must include provisions to end the lawsuit abuse that has lawyers cashing in while businesses shut down.
Tom Scott is executive director of California Citizens Against Lawsuit Abuse.