Prop 65 Lawsuits: How to Protect Yourself

Expo East 2012 Wrap Up

Gretchen DuBeau, executive director of Alliance for Natural Health USA (ANH-USA)

Written By:
WholeFoods Magazine Staff
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California Proposition 65 was passed in that state by voters in 1986, to protect the safety of drinking water and reduce toxic substance exposure in consumer products by requiring companies to place warning labels when these toxins are present. According to Gretchen DuBeau, executive director of Alliance for Natural Health USA (ANH-USA), Prop 65 is not playing out exactly as it was intended.

For one thing, consumers pay special attention to these warnings in the case of dietary supplements because they are something ingested, and not merely interacted with. But the larger issue according to DuBeau, and one that faces the supplement industry, are the “incentivized, opportunistic and abusive lawsuits” that the law has generated.

A low evidentiary bar is set for a lawsuit to be filed based on Prop 65. If a lawyer decides to sue a company on behalf of what is often a contrived, or “straw plaintiff,” all they must do is file a “notice of violation” that a toxic substance like lead may be present in a product, and 60 days later a lawsuit can be filed.

With the cost of litigation so high and the burden of proof on the defendant, many companies simply choose to settle by paying inflated attorney fees for the plaintiff. Certain entities, like the Environmental research Center, have filed dozens of such lawsuits, often using the same “plaintiff” over and over again. Since April 2010, more than 350 60-day notices have been filed related to Prop 65 overall, and supplement cases are on the rise, with a recent focus on greens products, said DuBeau. At least 61 of those recent cases have been settled for nearly $2 million, with over 100 notices withdrawn when companies choose to defend themselves. DuBeau noted that 132 supplement companies received notices in 2011.

Of particular note, there is the issue of manufacturers hanging retailers out to dry in spite of indemnity agreements. When a manufacturer has less than 10 employees, they are exempt from Prop 65 completely. When a lawsuit comes and a retailer then asks the manufacturer to defend them as promised, some manufacturers have recently claimed that this exemption gets them off the hook. Finally, it helps to note that many contaminants listed under Prop 65 are natural in the environment. Some of these are exempt from enforcement, but a company must prove they are not present in a product due to human activity.

Ultimately, DuBeau argues that Prop 65 as currently enforced is not good for consumers, but she noted that it is hard to amend such a well-entrenched law.

 

Published in WholeFoods Magazine, November 2012 (online 9-26-12)