A California appellate court recently determined that a consumer group’s failure to conduct required pre-litigation investigations of several restaurant chains’ alleged Proposition 65 violations warranted dismissal of the actions. Physicians Comm. for Responsible Med. v. Applebee's Intl., Inc., B243908, 2014 WL 772931 (Cal. App. 2d Dist. 2014). The court’s decision ends six years of litigation arising from the restaurants’ sale of grilled chicken that was allegedly grilled in a process that created a potentially carcinogenic chemical called PhIP.
In January 2008, a nonprofit organization called the Physicians Committee for Responsible Medicine (PCRM) – self-described as “committed to promoting a safe and healthful diet and to protecting consumers from food and drink that are dangerous or unhealthful” – filed a complaint in Los Angeles Superior Court against several restaurant chains, alleging that they sold grilled chicken that was grilled in a manner that created the chemical 2-AMINO-1-METHYL-6-PHENYLIMIDAZO[4,5-b]PYRIDINE (PhIP). PhIP appeared on California’s list of carcinogenic chemicals and required the restaurants to give a “clear and reasonable warning” to individuals under the California Safe Drinking Water and Toxic Enforcement Act of 1986, Health and Safety Code section 25249 et seq. (Proposition 65), which PCRM’s action alleged the restaurants had not done.
The trial court initially dismissed the suit against the McDonald’s defendants, deciding that three specific warnings proposed by PCRM were barred by federal conflict preemption. The trial court also concluded that the “Safe Harbor” warnings already found in the restaurants were presumptively “clear and reasonable” and required no additional signage.
In August 2010, Second District of the California Court of Appeal reversed the trial court’s decision, concluding that a federal law for cooking raw chicken could not preempt the Proposition 65 warning. Although the appellate court affirmed that the Safe Harbor warnings found in the restaurants were presumptively “clear and reasonable,” the case was remanded for determination of whether the manner in which the restaurants posted warnings complied.
On March 15, 2011, PCRM filed an amended complaint against the KFC defendants, alleging that KFC’s Safe Harbor Warnings were not properly placed in the restaurants because (a) they did not specifically relate to the sale of chicken, and (b) a reasonable consumer would be unaware that the chicken could contain PhIP.
The lower court dismissed both suits in August 2012, ruling that PCRM had not conducted a proper investigation during the statutory period with respect to the signage in the McDonald’s restaurants. The court also dismissed the KFC complaint for a number of reasons, including that the certificate of merit PCRM filed in 2009 to accompany its pre-suit notice as required under Proposition 65 was defective and did not demonstrate that the notice was supported by sufficient evidence, as the operative complaint made clear that PCRM did not visit the KFC restaurants until February 2012, long after filing the initial complaint against KFC in 2011.
On appeal, the Second District reasoned that PCRM’s failure to properly investigate the defendants’ warning signage in restaurants prior to filing the complaints in 2008 was fatal, as a Proposition 65 plaintiff cannot cure a defect in its notice and certificate of merit by later conducting discovery that should have been done before filing the suit. The court further reasoned that, if a plaintiff in a Proposition 65 case does not conduct adequate investigation and is allowed to continually amend its complaint, the defendants are susceptible to answering “conflicting and contradictory allegations in each successive iteration of the complaint.” The court reiterated that “[t]he statutory requirements of notice and a supporting certificate of merit are intended to prevent such improvident lawsuits.”