California’s legislature has moved closer to approving a measure that may significantly curb lawsuits filed against manufacturers and distributors under California Proposition 65 (“Prop. 65”). A California assemblyman, Mike Gatto, has spearheaded an effort to pass an amendment to Prop. 65 that would allow a manufacturer or distributor to avoid both lawsuits and governmental enforcement actions by effectuating a “cure” within two weeks after receiving a notice of a violation from a private party. The notice is a prerequisite to a private Prop. 65 lawsuit and typically comes from the lawyer who intends to represent the plaintiff or plaintiffs in the threatened lawsuit.
Here is the proposed text of the modification as it was introduced:
(k) A person who receives a notice [from a private party] that alleges the person is in violation of Section 25249.6 may, prior to the commencement of an enforcement action, correct the violation within 14 days after receiving that notice and demonstrate to the Attorney General, the city attorney, or the district attorney in whose jurisdiction the notice is filed that the violation has been corrected. An enforcement action shall not be commenced if the Attorney General, the city attorney, or the district attorney concurs that the violation has been corrected.
The bill has been unanimously approved by two legislative committees, including the judiciary committee last week.
Note the quote from the bill’s sponsor as reported in the Los Angeles Times:
“The voters passed Prop 65 to be protected from chemicals that would hurt them. . . . They did not intend to create a situation where shakedowns of California’s small-business owners would cause businesses to want to close their doors.”
Two immediate takeaways from this news:
- Be prepared for a wave of lawsuits: It is possible that plaintiffs’ lawyers will file a number of lawsuits before the bill is passed in hopes that the older law would apply.
- This is not a complete “cure”: For many manufacturers, the “cure” provision may be difficult to satisfy given that the violation must be “corrected” within 14 days. Clearly, many manufacturers (particularly of consumer products) would find it difficult to correct any violations across thousands of SKUs during that time period. The bottom line is that manufacturers and distributors should keep apprised of this development and begin to work on plans to take advantage of this law if passed.