Proposition 65 Advisory

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October 2, 2001

Proposition 65 Advisory 01-IX

The Amendments to Proposition 65 - An Overview

The California Legislature, in order to address wide-ranging concerns regarding the application of the State's Safe Drinking Water and Toxic Enforcement Act of 1986 - commonly referred to as Proposition 65 - overwhelmingly passed new legislation adding several provisions to the fifteen year old law. Senate Bill 471, which awaits only the Governor's signature to become effective, amends Proposition 65 to, among other things: (1) outline factors to be considered in assessing civil penalties under Proposition 65; (2) require that private parties seeking to enforce Proposition 65's warning requirement submit a certificate of merit; and (3) mandate Court approval for Proposition 65 settlements.

First, SB 471 identifies several factors which should be considered in determining the appropriate amount of civil penalties under Proposition 65. These include, but are not limited to: the nature, extent, number and severity of the violation(s); the economic effect of the penalty on the violator; the nature and extent of efforts undertaken by the violator to comply with Proposition 65; the willfulness of the violator's misconduct; and the deterrent effect that the penalty would have not only on the violator, but also on the regulated community at large. SB 471's list of factors is not all-inclusive, and courts are free to consider any other factor that justice may require.

Second, SB 471 requires that a certificate of merit accompany every private party notice of alleged violation of Proposition 65's warning requirement - a necessary condition to the filing of a Proposition 65 action by a private party. This certificate of merit, to be executed by the attorney for the noticing party, must attest to the fact that the noticing party has consulted with a least one expert who has reviewed the facts, studies or other data regarding the alleged exposure. Based on that consultation, the certificate of merit must state that the noticing party believes that the action is reasonable and meritorious.

Curiously, only the notice of alleged violation provided to the California Attorney General must contain sufficient factual information to establish the basis of the certificate of merit. SB 471 authorizes the Attorney General to share this information with other statutorily empowered public enforcers, as well as with any other state or federal government agency. The Attorney General may not, however, share the information with the alleged violator, nor may the alleged violator discover the information during any subsequent action under Proposition 65.

Although it provides little deterrence to the filing of frivolous Proposition 65 actions, SB 471 allows a defendant, under limited circumstances, to seek reimbursement of fees and costs incurred in defending the action, as well as an award of punitive damages. Specifically, SB 471 empowers a Court, upon finding that no actual or threatened Proposition 65 exposure occurred, to review the factual information which formed the basis for the certificate of merit. If that court determines that no credible basis for the action existed, then it shall deem the action frivolous under California law.

Third, SB 471 mandates court approval of any settlement of an action brought under Proposition 65. A court may approve a settlement only if each of the following exists: any required warning complies with Proposition 65; any award of attorneys' fees is reasonable under the circumstances; and the amount of civil penalty is reasonable, considering the factors outlined by SB 471. To obtain court approval, the plaintiff has the burden of establishing the reasonableness of the settlement.

While the ultimate impact of these amendments on the nature and number of party Proposition 65 actions will be a matter of debate for some time, SB 471 represents an unprecedented attempt by the Legislature to address some of the concerns surrounding Proposition 65 private party enforcement actions.

In addition to the those discussed above, SB 471 contains further amendments to Proposition 65. For example, SB 471 authorizes Proposition 65's public enforcers (i.e., the Attorney General, district attorneys, etc.) to recover attorneys fees and costs on behalf of private parties who provided notice of the alleged violations and rendered assistance in prosecution of the action. For a complete discussion of SB 471, or Proposition 65 generally, we encourage you to contact one of the attorneys listed below to discuss specific questions you may have.

McKenna & Cuneo, L.L.P., distributes its Advisories to clients and friends of the firm free of charge. If you would like to request additions (or deletions) to our distribution list, please call Nina MacLeay at 213-243-6063.

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