Prop. 65 Relief for Small Business Awaits Gubernatorial Signature

The California Legislature has approved a bill (A.B. 227) that would impose a number of restrictions on private parties seeking to enforce the Safe Drinking Water and Toxic Enforcement Act of 1986 (Prop. 65) and provide relief for small businesses that have been litigation targets since its enactment. If approved by the governor, who has until mid-October to do so, the law would require a person bringing a matter in the public interest to prepare a certificate of merit stating that the person or her attorney “has consulted with one or more persons with relevant and appropriate experience or expertise who has reviewed facts, studies, or other data regarding the exposure to the listed chemical” and, on the basis of that information, the person executing the certificate “believes there is a reasonable and meritorious case for the private action.”

If a court concludes that “there was no actual or threatened exposure to
a listed chemical,” it would be permitted to review the information in the
certificate of merit and deem the action “frivolous” if it “finds that there was
no credible factual basis for the certifier’s belief that an exposure to a listed
chemical had occurred or was threatened.” To approve a Prop. 65 settlement,
a court would be required to find that the warning required complies with the
law, the attorney’s fee award is reasonable and the penalty is reasonable.

The bill would also give an alleged violator an opportunity to correct an
alleged transgression and, further, would forbid the filing of a Prop. 65 action
or any recovery if it has done so and if the violation involves exposure to (i)
alcoholic beverages consumed on the alleged violator’s premises; (ii) a listed
chemical “in a food or beverage prepared and sold on the alleged violator’s
premises” to the extent “the chemical was not intentionally added” or formed
by cooking “necessary to render the food or beverage palatable or to avoid
microbiological contamination”; (iii) “environmental tobacco smoke caused by
entry of persons (other than employees) on premises owned or operated by the
alleged violator where smoking is permitted at any location on the premises”;
or (iv) listed chemicals in engine exhaust, “to the extent the exposure occurs
inside a facility owned or operated by the alleged violator and primarily
intended for parking noncommercial vehicles.”

Issue 498