Proposition 65 Advisory

October 5, 2000

Proposition 65 Advisory 00-VI

Tiny Company Wins Big in Proposition 65 Lawsuit

San Francisco Superior Court Judge Alex Saldamando entered judgment in favor of art material manufacturer Activa Products, Inc. on September 8, 2000, in the case of DiPirro v. Activa Products, Inc (Case No. 306146). Plaintiff Michael DiPirro, who has initiated hundreds of Proposition 65 "bounty-hunter" actions, claimed that Activa, a Texas-based company with approximately twenty employees, failed to provide clear and reasonable warnings with respect to crystalline silica in an art material product manufactured by Activa. DiPirro also claimed that Activa engaged in unfair business practices in violation of Business & Professions Code section 17200, and in misleading advertising practices in violation of Business & Professions Code section 17500.

The Activa product at issue in the litigation is known as "Scenic Sand," which is simply colored sand used for artist's drawings, sand-in-the-bottle paintings, and other hobby uses. Activa labels its products, including Scenic Sand, in full compliance with the federal Labeling of Hazardous Art Materials Act (also known as the "LHAMA," codified at 15 U.S.C. section 1277). LHAMA requires art materials manufacturers undertake a toxicological evaluation of each art material product prior to placing it on the market. Among the chronic health hazards that must be evaluated are carcinogenicity and reproductive toxicity, the same health hazards addressed by Proposition 65. If the results of the evaluation reveal chronic health hazards, the art material must be labeled in accordance with a standard mandated by Congress. Activa complied with these requirements, as well as even more stringent labeling requirements imposed by the Art and Creative Materials Institute, a voluntary certification organization that implements the requirements of LHAMA, of which Activa is a member. Based on all of the necessary toxicological evaluations, which Activa undertook in compliance with federal law, Scenic Sand was deemed to be safe and non-toxic, and did not require a Proposition 65 warning.

This case has attracted significant attention from Congress which held a hearing on abusive Proposition 65 lawsuits on October 28, 1999. Appearing before the U.S. House of Representatives Committee on Small Business, Activa President Frank Strauss testified about his company's experience with Proposition 65 and the Scenic Sand lawsuit. On November 23, 1999, DiPirro dismissed his claims under Proposition 65 and under Business & Professions Code section 17200. On December 30, 1999 Deputy Attorney General Ed Weil sent Ann Grimaldi, counsel for Activa, a letter stating that there was "no duty to provide a warning for crystalline silica under Proposition 65 for [Scenic Sand], nor is there a reasonable basis upon which it could be concluded that such a duty exists." Nevertheless, DiPirro continued forward on the remaining misleading advertising claim.

Two weeks before trial, the parties agreed on the critical terms of settlement, which stipulated that judgment would be entered in favor of Activa. The settlement terms did not require any payment by Activa to Mr. DiPirro or his attorneys. The settlement terms also required that the Attorney General's letter be attached to the judgment. This is complete vindication for Activa, and for all the other companies that label their products in compliance with the LHAMA and ACMI standards.

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 e-mail Nina MacLeay at nina_macleay@mckennacuneo.com or call 213-243-6063.

For more information, please contact: