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About the Story: This story is about a long-standing soda-pop store in Highland Park, Calif., that was hit with a legal notice telling them that they are selling hazardous products. The owner says that they don't make the product, but that they have informed the public according to the Proposition 65 law. But the law allows them to be sued anyway. Their only choice? Settle or go to court. As Val Zavala reports, some attorneys are making millions abusing Proposition 65. (TRT: 10:10)

: Galco’s Soda Pop Stop; CNNMoney.com’s “You Do What? Purveyor of Exotic Sodas” Article; DavisEnterprise.com’s “Davis Attorney Celebrates Win Against Pepsi-Co” Article; Food Law Org’s Food Law News Website; The Huffington Post’s “Benzene in Your Fanta, Anyone?” Blog; McKenna Long & Aldridge’s Proposition 65: Description Website; Morrison Foerster’s Practices & Industries Website; Overlawyered’s “California’s Prop. 65: Protecting Us from the Evils of Cooked Chicken” Blog; SlashFood.com’s “Burger King and Other Charbroilers May Be Singed by Carcinogen Suits” Blog; TV Cocktail’s “The View’s New Mug” Blog

Public Good or Legal Extortion?

Publish date: February 28, 2007
Last updated: August 27, 2008

Reporter's NOTES

Val Zavala
This story wins the prize for taking the longest. I’ve been working on it off and on — mostly off — since September 2006.

But I finally got it finished. Part of the problem was waiting for an attorney in Connecticut and his client in Berkeley, Calif., to respond to my request for an interview.

They said no. I’ve asked them to at least answer my email questions.

They did not. The story is about a proposition passed back in 1986, aimed at making our water cleaner and our products safer.

But it’s also being used by a few attorneys to rake in some big bucks — at the expense of small businesses, like Galco’s Old Work Grocery, a very cool store in Highland Park that sells old-time sodas and goodies. It’s too complicated to explain here, so check out the video here on our blog.

Insider Viewpoints

In practice, many would argue, the law [Proposition 65] has done more to help plaintiffs' attorneys than consumers by creating an enormous list of allegedly dangerous substances and permitting a lawsuit whenever warnings of those substances are not posted — whether or not there is any realistic risk of harm under the particular circumstances. Here's a good example.

Those listed chemicals include heterocyclic amines (HCAs), which are formed by cooking meat, the highest concentration occurring in cooked chicken. According to the National Cancer Institute, while HCAs may have some association with increased risks of cancer, there is currently "no good measure of how much HCAs would have to be eaten to increase cancer risk" — more research is needed.

In fact, the NCI cited to one study that specifically covered fast-food restaurants and concluded that those companies' products had low levels of HCAs. According to that study, home cooking was a greater danger. But that's the beauty of laws like Proposition 65 — evidence tends to be optional.

--Excerpt taken from Overlawyered’s “California’s Proposition 65: Protecting Us from the Evils of Cooked Chicken” Blog By Kevin Underhill

…Coke and Pepsi have been…proponents of pre-empting Proposition 65 and stripping the states of food safety authority…On March 4, 2006, Knight-Ridder revealed that the FDA has found that soft drinks can have levels of benzene three to four times as high as the allowable levels in drinking water…

The industry clearly is trying to quash public concern about benzene contamination. Since Proposition 65 would require labels on contaminated drinks, one tactic is to pre-empt it.

Another is to reassure consumers that even though the levels exceed allowable drinking-water standards, it’s not a problem because we drink “so little” of soft drinks compared to water. The American Council on Safety and Health, an industry-front group, is already putting out soothing propaganda along this line.

The next step in the campaign to strip states of their food-safety labeling authority is the Senate. Maybe if senators are aware that the industry has something very, very ugly it is hiding, they will show more backbone than the House did and stand up for the public…

--Excerpt taken from The Huffington Post’s “Benzene in Your Fanta, Anyone?” Blog By Carl Pope

COMMUNITY VIEWPOINTS

03.30.2007 | 7:37 pm
On Friday, 3/30/07, I watched your piece about the unintended effects of Proposition 65’s enforcement. While the plaintiffs and their lawyers are blameworthy, in my opinion, it would have been very helpful to show that they have secondary roles related to this issue.

Consider that the legislature has had ample time and cause to amend Proposition 65 and that judges are the referees of this enforcement activity. I can think of no good reason why the reporters ignored these roles in this story.

Although I notice that this hole in reporting when it comes to the role of plaintiff’s lawyers is pretty widespread. This signifies to me how far-reaching the effects of propaganda can be.

Of course, it could very well be that the reporters believe that the legislature and the courts have no role. I hope not!

Michael Usher - Culver City, California

03.30.2007 | 7:20 pm
This exerpt from the overlawyered site should help any companies who are charged with this violation. I am glad that someone around here — specifically Professor Shaun Martin of California Appellate Report — has the time to keep up with the newest decisions because, otherwise, I might have missed out on Justice Sills’ virtuoso performance in Consumer Defense Group v. Rental Housing Industry Members.

If anything, Professor Martin is understating the case when he observes: “Rarely have I read something as unceasingly bitter and visceral as this.” The object of visceral bitterness is the law firm of Graham & Martin and the Consumer Defense Group, an organization that Justice Sills concludes is little more than a front for the law firm of Graham & Martin, a self-styled collection of “bounty hunters” aiming to collect large awards of attorneys’ fees for obtaining largely meaningless settlements in dubious toxic-substances claims under California’s Proposition 65.

The nature of the claims is reflected in the pre-litigation notice served by the firm:

“The first notice was literally predicated on only two things: One, each apartment had . . . parking facilities! Thus, the apartment allegedly ‘exposed’ tenants and visitors to carcinogens in auto exhaust without giving them a Proposition 65 warning.

Two, each apartment did not prohibit tobacco smoking everywhere on the premises. Hence, somewhere on the property, the apartment allegedly ‘exposed’ its tenants and visitors to second-hand tobacco smoke, again, without posting a Proposition 65 warning.”

[Emphasis by Justice Sills.]

The meat of the opinion concludes that the settlements under consideration — nearly all of the proceeds of which went to the attorneys or those closely tied to them — must be set aside because of the attorneys’ failure to give meaningful notice to the offices of the state Attorney General prior to filing suit. The concluding portion, however, focuses on the reasons why the $540,000+ attorney fee award that arose from the settlements was objectively beyond the pale.

In that segment, Justice Sills provides this valuable, step-by-step guide for attorneys who find themselves with time on their hands and mischief on their minds:

“Let’s illustrate. . .just how simple it is for a hypothetical unemployed lawyer, eager to cash in on Proposition 65, to extract money from businesses using the initiative. . .: First, go on the internet and find some common objects (e.g., furniture, paper, carpeting), which may ‘contain’ a substance on the regulatory carcinogen list.

“As we have just noted, a commonplace item, like a chair, doesn’t have to contain any significant amount either, even a few molecules will do. Next, call up a local chemistry professor who will tell you that, at least in sufficient quantities, substances in those common objects will cause cancer and are, in fact, on the list…

“[I]t will be particularly helpful if your chemistry professor opines that as any substance ‘degrades’ over time (and it can be a very long time, indeed, given that Proposition 65 puts the burden on any issue of amounts on the defendant), it will emit a few molecules of its constituents into the air — that will allow you to claim ‘exposure’ by inhaling or touching. Then, extrapolate your results to some ‘target’ business.

As we have seen in this case, businesses which are centered around structures make easy targets because, at the very least, they are going to have paint and furniture inside and a place to park outside…Third, develop (as here) a plenary omnibus ‘macro’ notice form, which guarantees that yes, somewhere on the premises, there will be a molecule of a substance listed as carcinogenic.

Then send your notice in the stentorian Wizard-of-Oz-berates-Dorothy legal style of an indictment. (’You (hereinafter “Violator,”) are hereby informed that you have exposed the following [a long list of categories of sorts of people who might happen onto your property] to Designated Chemicals’.) This notice will be intended to frighten all but the most hardy of targets (certainly any small, ma and pa business) into a quick settlement when they get it.”

* * *
Given the ease with which it was brought and the absolute lack of any real public benefit from telling people that things like dried paint may be slowly emitting lead molecules or that parking lots are places where there might be auto exhaust, instead of $540,000, this legal work merited an award closer to a $1.98.

[Italics by Justice Sills; boldface by Decs&Excs.]

An opinion well worth reading for pure entertainment value, but also as an illustration of how well-intentioned (if overreaching) legislation can be put to less than laudable use in the wrong hands.

Jason Cao - Riverside, California

03.01.2007 | 12:35 am
That was an interesting piece on Proposition 65 last night, but to me, it seemed a little unbalanced for a PBS presentation. The focus of the piece seemed to be on how ambulance-chasing lawyers were going after the little guy.

This is a popular topic and one that will resonate with a lot of viewers. However, I think a more significant fraction of the show should have been spent on how people and/or businesses could use Proposition 65 warnings to ensure that they are not unknowingly exposing themselves or their children to potentially dangerous products.

At the end of the show, I did not really have a good idea as to whether handling items decorated with lead paint was a bad idea or just a hoax. Is drinking soda with lead in it dangerous for children?

Was there no expert on this matter available in L.A.? Why would a major corporation, like Pepsi, settle a lawsuit on a similar matter if this is not an important health issue?

As a small-business owner, I empathize with the small business portrayed in your piece. However, I am much more concerned about my family’s safety than I am about the profitability of business owners, no matter what size they are. I don’t want to have to bring a chemistry book to the grocery store to try and figure out what my kids should be eating!

Frank Waturi - Los Angeles, California

02.28.2007 | 3:07 pm
This story upset me in a way that few stories do. It’s this kind of action that gives lawyers a bad image and makes the average American citizen lose faith in the legal system.

This practice is nothing short of abuse & extortion. If there is any honor or validity in the American Bar Association, these lawyers should be disbarred.

Even if what they do falls within the boundaries of the law, this practice is unethical & immoral and *certainly* violates the spirit of justice.

Mike Han - Los Angeles, California

02.28.2007 | 2:57 pm
What California needs is a law that prevents law agencies outside of the state of California from suing for anything other than copyright infringement or personal suffering from a product sold in another state. Otherwise, state law should prevent lead-based products from being sold entirely.

I loved the cucumber comparison. But nobody is getting sued for using lead weights in California drinking-water reservoirs while fishing, so what’s the big deal if a bottle has lead paint on the outisde if anyone’s kid can go fishing and handle lead weights?

Joseph Pipkin - Apple Valley, California

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