Proposition 65 Advisory

In a landmark decision, the Court of Appeal for the Second District of California ruled on December 17, 2002 that the "passive migration" or "continued presence" of Proposition 65-listed substances in soil or groundwater does not constitute a violation of Proposition 65's discharge prohibition. In Consumer Advocacy Group, Inc. v. ExxonMobil Corporation, No. B153817, the Court affirmed that former service station owner/operators cannot be held liable under Proposition 65 for alleged discharges at stations which were sold or closed many years prior to the initiation of litigation.

The appeal arose from an interlocutory decision in one of the so called Proposition 65 "gas station cases," Consumer Advocacy Group v. ARCO, et al., Los Angeles Superior Court Case No. BC 240465. The plaintiff sued five major petroleum refiners and distributors, identifying hundreds of service stations where contamination from leaking underground storage tanks ("USTs") has been or is being remediated under the supervision of state agencies pursuant to state and federal laws. In these "bounty-hunter" suits, the plaintiffs seek civil penalties under Proposition 65 and attorneys fees, claiming that the "continued presence" and "passive migration" of chemicals at and from the service stations are continuing violations of Proposition.

San Francisco Superior Court Judge Stuart Pollak rejected this theory in a similar case, Communities for a Better Environment, et al. v. Tosco Corporation, et al, but that decision was not binding on other trial courts. See Proposition 65 Advisory 01 - I, January 22, 2001. In order to streamline the litigation in this case, the parties entered into a "Norgart" stipulation, whereby the parties agreed to the facts and application of a controlling case, but disputed the validity of the controlling case. See Norgart v. Upjohn Co., 21 Cal.4^th 383 (1999). The parties stipulated that all of the sites attributed to one defendant had been closed or transferred to other companies more than four years before the lawsuit was filed and that any claim of civil penalties under Proposition 65 at those sites was barred by the statute of limitations under CBE v. Tosco. The Court of Appeal adopted the logic of CBE v. Tosco and affirmed. Unless the decision is overturned by the California Supreme Court, it promises to narrow the claims that may be brought under Proposition 65 against companies that have ceased the discharge or release of chemicals at their facilities. Although Court of Appeal did not address the question whether claims for injunctive relief still may survive, that issue likely is moot where remediation is required under UST laws.

For further information regarding this decision, please contact one of the attorneys below:

McKenna Long & Aldridge, L.L.P., distributes its Proposition 65 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 contact Nina MacLeay at 213-243-6063 or nmacleay@mckennalong.com.