Two New Developments in Proposition 65 Practice: Positive Signs of Things to Come for Defendants?
Sedgwick News Flash
As defense attorneys in Proposition 65 practice, we are often in the unenviable position of having to explain to our clients the "bad news" about what seems to be an uneven playing field for companies doing business in California when faced with the strict, and oftentimes seemingly unfair, compliance requirements of Prop 65. That is why we are delighted to report about two new developments that seem to signal a step toward evening the playing field for defendants.
New Appellate Decision Tightens Notice RequirementsThe California Court of Appeals, Second District, has handed down a rare but favorable decision in the Prop 65 realm. In Consumer Advocacy Group v. Kintetsu Enterprises of America, the plaintiff sent a Prop 65 Notice of Violation to hundreds of hotels and retail stores alleging that they were violating the statute by failing to provide warnings of various types of exposures to secondhand smoke, tobacco and tobacco products. Plaintiff filed suit and the defendants demurred on the grounds that the notices were invalid because they were overly broad.
In a lengthy decision, the Second Appellate District in Kintetsu upheld the lower court's holding that the 60-day notice of violation must be "specific and must inform the targeted hotels and retail establishments and the public prosecution of the nature of the alleged violation. ... Notice that is so broad it renders the specific violation impossible to discern fails to achieve its function. It neither affords hotels and retail establishments an opportunity to cure a violation nor provides the public prosecutor the means to meaningfully investigate the alleged violations."
The appellate court reviewed each of the notices contested, and outlined in detail whether and how the notice was defective. The key factors the court looked to were: satisfaction of the applicable regulations (22 C.C.R. §12903), whether the notice was sufficient to permit the attorney general and the alleged violator a meaningful opportunity to investigate, and whether the notice was sufficient to allow the alleged violator an opportunity to cure the alleged violation.
Because of its fact-intensive analysis, the Kintetsu decision brings much-needed clarity to the issue of adequacy of notice, while providing a useful resource to defendants in deciding whether to challenge the adequacy of a Prop 65 notice.
Optimistic Signals From New State Attorney General On the prosecution front, California's new attorney general, Jerry Brown, has revealed what hopefully will become this administration's approach to Prop 65 prosecution—closer scrutiny of unwarranted attorneys' fees demands, and improper prosecution of retail defendants who do not know they are violating Prop 65, and hence do not satisfy the "knowing and intentional" requirement of the statute.
The attorney general has written to prolific Prop 65 plaintiff's lawyer Clifford Chanler warning him to change his tactics or face government action. Chanler's firm has collected more than $9 million in attorney fees alone from more than 200 Prop 65 complaints through 2006. In his May 11, 2007, letter to Chanler, the attorney general expressed his "concern about the manner in which you and your clients have pursued Proposition 65 matters," and advised that "it needs to change."
Supervising Deputy Attorney General Ed Weil noted two main concerns: first, that Prop 65 plaintiff attorneys are collecting fees from retailers who do not know that their products allegedly violate the statute, acknowledging that lack of knowledge and intent is a defense to a Prop 65 complaint. In the letter, the attorney general asked Chanler to explain how it was in the public interest to pursue retailers who do not know their products violate Prop 65.
Second, the letter expressed concern that plaintiffs are collecting fees for settlements with defendants who are not challenging the complaint. Fees should go down, the attorney general reasoned, not increase or remain constant, with the more complaints that are filed, because there is less work to be done as most of the work is boilerplate, and the attorneys should become more efficient over time.
The letter was personally signed by Jerry Brown, and will hopefully signal some positive move toward reining in the Prop 65 plaintiff's bar.