CALIFORNIA’S INNOVATIVE LAWSUITS
Proposition 65, the originally well-intentioned law, enacted in 1986, is now one of the plaintiffs’ bar’s favorite tools to exploit. Baseless Prop-65 litigation unjustly burdens companies that do business in California. The money spent by companies on compliance and litigation unnecessarily drives up the cost of goods for California consumers. It also subjects consumers to Henny Penny-like warnings declaring that everything from brass knobs to Disneyland cause cancer.
Under Prop-65, businesses are required to place ominous warning signs on products where tests reveal the presence of even the slightest, non-threatening trace of close to 1,000 listed chemicals that state environmental regulators deem carcinogenic or otherwise toxic. A troublesome part of the law allows private citizens, advocacy groups and attorneys to sue on behalf of the state and collect a portion of the monetary penalties and settlements, creating an incentive for the plaintiffs’ bar to create these types of lawsuits. Each year, they send thousands of notices to companies threatening Prop-65 litigation and demanding a settlement. Food and beverage companies are among the prime targets.
According to the California Attorney General’s website, businesses settled 829 Prop-65 claims in 2018 totaling $35,169,924 – that’s nearly $9.5 million more than the amount in 2017. Three-quarters of this money, $27,250,534, went to the attorneys who brought the lawsuits to cover their fees and costs. Proposition 65 bounty hunter actions have nearly doubled since 2015 and quadrupled over the past decade. In the first ten months of 2019, plaintiffs’ lawyers and advocacy groups filed 2,039 60-day Notices of Violations, indicating their intent to pursue a lawsuit. This puts the state on pace for another record high.
The state might see an onslaught of litigation targeting products that contain polyfluoroalkyl substances (PFAS) after the state added them to its ever-growing Prop 65 list in November 2017. For decades, per-and polyfluorinated substances, PFAS (pronounced PEE-fas) were commonly used in nonstick cookware, electronics, and a wide range of household products, such as stain-repellent carpets and fast-food packaging. Firefighting foams incorporating PFAS were also standard use at airports and in the military because of their effectiveness in suppressing fuel fires. Over time, PFAS made their way into the water table and were detected in drinking water, raising public health concerns, particularly with respect to two substances in this group, PFOA (perfluorooctanoic acid) and PFOS (perfluorooctane sulfonate). Once California adds a chemical to its Prop-65 list, businesses have just one-year to add cancer warnings to products with any trace of the substance. As a result, any company that makes or sells products with any trace of PFOA or PFOS that has not added a warning is now an easy target for the plaintiffs’ bar.
The entrepreneurial plaintiffs’ bar is a significant factor behind the sudden flood of PFAS lawsuits in California and across the country. As an article in the ABA Journal observed, “there appears to be little new scientific support that justifies newfound concern regarding this class of chemicals. Indeed, some of the new data appear to indicate that PFAS pose a lower risk to human health and the environment than previously believed.” Several studies conducted before the lawsuits were filed found no statistically significant adverse health effects from PFAS exposure.
California did have a moment of sanity when it removed the Prop-65 labeling requirement from coffee in June 2019. The regulatory regime acknowledged the scientific consensus that coffee is not harmful and may even be beneficial to one’s health. Not surprisingly, the plaintiffs’ bar was upset. Raphael Metzger, who has made more than $700,000 suing coffee companies, has promised to challenge the new rule in court and seek retroactive penalties. He has sought up to $2,500 in civil penalties for each cup of coffee sold over the last decade.
The most infamous Prop-65 case working its way through the judicial system involves Bayer’s Roundup® products. California added the popular weed killer’s active ingredient, glyphosate, to the Prop-65 listing in July 2017. The following year, Judge William Shubb of the U.S. District Court for the Eastern District of California halted a Prop-65 requirement that Bayer place warning labels on its Roundup® products, ruling that there was “insufficient evidence” that glyphosate causes cancer. He wrote that the required warning “conveys the message that glyphosate’s carcinogenicity is an undisputed fact, when almost all other regulators have concluded that there is insufficient evidence that glyphosate causes cancer.” He continued, “As applied to glyphosate, the required warnings are false and misleading.”
Aside from Prop 65 litigation involving glyphosate, there are also several personal injury lawsuits. Bayer was hit with a nearly $2.5 billion judgment in a California state court in May 2019, including $2 billion in punitive damages. In that lawsuit, a couple blamed Roundup® after they developed non-Hodgkin’s lymphoma (NHL) (the cause of NHL is unknown and has many common risk factors). This was the third verdict against Bayer, with both of the other verdicts also coming in California. The award came just days after the U.S. Environmental Protection Agency (EPA) reaffirmed that glyphosate is safe. The plaintiffs’ lawyer in the case urged the jury to send a clear message to Bayer and award $1 billion in punitive damages – the jury doubled it, awarding the couple $1 billion each. It should be pointed out, however, that Alameda County Superior Court Judge Winifred Smith later found the award excessive and unconstitutional, and reduced it to $86.7 million.
Prior to the verdict, Judge Smith, who oversaw the case, ruled that Bayer was not allowed to mention the EPA’s announcement that glyphosate, when used in accordance to its label, is not carcinogenic. Instead, the jury was allowed to rely solely on a “junk science” report by the International Agency for Research on Cancer (IARC), which found glyphosate was a “probable” carcinogen. IARC is a specialized cancer agency of the World Health Organization, known to be outmoded, heavily politicized, and sub-standard in the quality of its science.
In July 2019, in another Roundup® case, U.S. District Judge Vince Chhabria reduced a jury’s award of $75 million in punitive damages against Bayer to $20 million, finding the original award was “constitutionally impermissible.” “The jury’s punitive damage award was approximately 15 times the size of the compensatory damages award. Bayer’s conduct, while reprehensible, does not warrant a ratio of that magnitude, particularly in the absence of evidence showing intentional concealment of a known or obvious safety risk.”
This ruling comes after a juror in the case took the highly unusual step of sending the judge a letter, asking that he uphold the $75 million punitive damages award. The juror stated that the award was “no accident” and the result of “meticulous planning” by the jury. The letter is believed to be written by Juror No. 5, who also was seen hugging the plaintiff and his wife and talking with the plaintiff ’s lawyer during a hearing. During the trial, Juror No. 5 also alleged that one of the other jurors had made improper comments and succeeded in getting the juror dismissed without allowing Bayer a chance to argue against the dismissal.
Following these landmark verdicts, in August 2019, the EPA advised pesticide and herbicide registrants that it will no longer approve or permit labeling of glyphosate-containing products that include California’s Prop 65 warnings. The EPA disagreed with IARC’s 2015 classification of glyphosate. After conducting its own independent evaluation with a more extensive dataset, the EPA concluded that glyphosate is “not likely to be carcinogenic to humans.” For this reason, the EPA announced that it considers Prop 65 warnings regarding glyphosate, which is a federally-approved herbicide, to be “false and misleading.” A glyphosate-containing product bearing the Prop 65 glyphosate warning language would be “misbranded” in violation of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). EPA stated that registrants whose products include Prop 65 warnings must submit an amended label within 90 days of August 7 notice.
The California Environmental Protection Agency’s Office of Environmental Health Hazard Assessment (OEHHA) responded on August 13, defending its listing, noting its reliance on the IARC report, and ignoring the EPA’s findings. The IARC report is in stark contrast to more than 800 scientific studies as well as analyses by the U.S. Environmental Protection Agency, the National Institutes of Health, and Health Canada.
Closer scrutiny of the IARC process reveals that it was advised by an “invited specialist,” Christopher Portier, in its work on glyphosate. At the same time Mr. Portier was working for the agency, he was reportedly affiliated with the Environmental Defense Fund, an anti-pesticide group. Moreover, Mr. Portier received $160,000 from personal injury law firms that allege glyphosate is to blame for their clients’ cancer. When asked about this potential conflict of interest, Mr. Portier initially claimed to be advising firms on other IARC-related lawsuits and not glyphosate litigation. He later acknowledged that his statement was wrong. It is also worth noting that Mr. Portier had no experience with glyphosate prior to his work on the subject for IARC.
Following Mr. Portier’s arrival at IARC, the final glyphosate study was altered in at least 10 ways to remove or reverse conclusions finding no evidence of carcinogenicity. The agency removed multiple scientists’ conclusions that studies found no link between glyphosate and cancer in lab animals and statistical analyses of studies with negative findings were turned into positive ones. The determination that glyphosate was “probably carcinogenic” was based on “limited evidence” of carcinogenicity in humans and “sufficient evidence” in animal studies.
The shakiness of the scientific methods used by IARC in developing the glyphosate report are cause for grave concern given the importance of glyphosate in food production and in managing parkland, forests, and residential and commercial areas. Even more troublesome is the influence IARC’s classification has on litigation in the United States.