Prop. 37 will trigger flood of lawsuits, law firms warn
At least three major law firms, with offices in California and worldwide, are warning their grocer, food company, and farmer clients that if Prop 37 passes it will set off a flood of lawsuits to the benefit of trial lawyers, much like Prop 65.
In 1986, California voters approved Prop 65, an initiative to address their growing concerns about exposure to toxic chemicals. That initiative became the Safe Drinking Water and Toxic Enforcement Act of 1986.
"Prop 65 has led to 16,000 lawsuits and close to $500 million in settlements, much of which has gone directly to plaintiffs' lawyers for fees and costs," the firm Alston + Bird warned its clients. "Similarly, Prop 37 will likely impact many California businesses and may create an atmosphere favorable to private enforcers, leading to frequent litigation and settlements," the firm said in a website posting "Is California set to pass another Proposition 65?"
A trio of respected national firms with large California clienteles are bracing for the onslaught of lawsuits that will result from Prop. 37. They have warned in client alerts and web pages dedicated to the measure's potential impacts that it will expose grocery retailers, food companies, farmers and others to predatory, shakedown lawsuits.
All three firms have years of experience defending against Prop. 65 lawsuits and view Prop. 37 as possibly worse than Prop. 65.
Continued Alston+Bird: "The proponents of Prop 37 are the same plaintiffs' attorneys that have been litigating Prop 65 since it was enacted by California voters in 1986. It is highly likely that they will employ the same litigation techniques and activities to enforce Prop 37 that they have used in Prop 65 these many years."
The author of Prop. 37, James Wheaton, also helped draft Prop. 65. Since 2000, his law firm has raked in at least $10 million in settlements for filing Prop. 65 actions against businesses. Source: California Attorney General Annual Summaries of Private Settlements.
Similar to Prop. 65, Prop. 37 allows trial lawyers to file a lawsuit against any and everyone associated with any food product that does not have a label -- even without a shred of evidence, testing or research showing the unlabeled product contains GE ingredients. California's non-partisan, independent Legislative Analyst concludes that Prop. 37 would allow trial lawyers "to sue without needing to demonstrate that any specific damage occurred as a result of the alleged violation."
Yes on 37 has attempted to deflect claims of a flood of shakedown lawsuits by asserting that the measure gives grocery retailers and others sued an easy "out" if they merely produce sworn statements that there was no "knowing or intentional" use of GE.
This false claim is exposed in one of several "Client Alerts" on Morrison & Foerster's Prop. 37 webpage designed to warn clients about Prop. 37. "Accordingly, in order to take advantage of this exemption, the defendant would first have to submit to discovery on the question of knowledge and intent. In the context of Proposition 65, this is how plaintiffs' attorneys have made their livings; the threat of expensive and time-consuming discovery—depositions, interrogatories, document production, and more—drive settlements that do little more than enrich bounty-hunting lawyers. Only if the defendant could get past this hurdle would the sworn statement come into play as an additional burden that must be met in order to establish the defense."
On its website, law firm Downey Brand makes clear that the sworn statements will hit everyone on the food production chain. "This sworn statement exemption will set in motion a series of certifications and indemnity agreements that will stretch from the grocery stores all the way back down the chain of production to the nursery or seed company, and will require a sworn statement from the farmer, the trucker, the packer, the processor, the wholesaler/distributor, and finally the retailer. While this Proposition is directed at the retailer, this exemption will mean that everyone in the food supply chain will be responsible for compliance."
Nearly every single daily newspaper across California has urged voters to reject Prop. 37 on November 6, including the Los Angeles Times, San Francisco Chronicle, U-T San Diego, San Jose Mercury News, La Opinion and Sacramento Bee. Many papers warn that Prop. 37 will be a boon to trial lawyers without benefits to consumers. Said the Santa Cruz Sentinel: "And who would this benefit? Lawyers."
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