Amendment to Prop 65 Provides Businesses a Grace Period: AB 227 Aims to Reduce Frivolous Lawsuits and Excessive Penalties

more+
less-

Gov. Brown recently signed Assembly Bill 227 into law, which amends California's Safe Drinking Water and Toxic Enforcement Act of 1986, otherwise known as Proposition 65. Prop 65 provides that businesses may not expose Californians to chemicals known to cause cancer or reproductive toxicity without first providing a warning. In response to complaints from California business owners that Prop 65 has resulted in frivolous litigation and excessive penalties, the Legislature adopted AB 227 in an attempt to reduce lawsuits and penalties levied against businesses. AB 227 was signed as urgency legislation and went into effect immediately.

Prop 65 imposes civil penalties of up to $2,500 a day for violating the warning requirement. Further, Prop 65 allows people acting in the public interest to file lawsuits to enforce the warning requirements.

Assembly Bill 227 provides that prior to filing an enforcement action, the intended plaintiff must first provide the alleged violator with a notice of special compliance procedure and proof of compliance form. If the allegation is that the business failed to provide a clear and reasonable warning of chemicals known to cause cancer or reproductive toxicity, then AB 227 allows the business to correct the alleged violation within 14 days and agree to pay a nominal $500 civil penalty. To further reduce the possibility of frivolous litigation, AB 227 provides that only 25 percent of the $500 civil penalty will be given to the party bringing the enforcement action, with the remainder deposited in the Safe Drinking Water and Toxic Enforcement Fund.

Although AB 227 offers businesses accused of violating Prop 65 an opportunity to comply with Prop 65’s warning requirements before facing higher civil penalties, businesses should note that the bill does not prevent the Attorney General or a district attorney from bringing a subsequent action to enforce Prop 65.

Topics:  Chemicals, Frivolous Lawsuits, Grace Period, Penalties, Proposition 65, Warning Labels

Published In: Civil Procedure Updates, General Business Updates, Consumer Protection Updates, Environmental Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Best Best & Krieger LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »