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Targeting Proposition 65’s ‘bounty hunter’ provision

Proposition 65 in California is the perfect example of a well-intentioned public policy initiative in desperate need of common-sense reform.  California voters passed Prop 65 – which is officially titled The Safe Drinking Water and Toxic Enforcement Act – more than two decades ago to safeguard the state’s drinking water supply and prevent human exposure to cancer-causing substances and toxins.  Now an accepted part of California’s legal fabric, some aspects of Prop 65 must be reexamined and reformed in order to ensure the law continues to work for the public, rather than a few well-connected special interests.

 

In an extraordinary step, Prop 65 included an enforcement mechanism that empowered ordinary citizens to hold violators of the law accountable. Under a so-called bounty hunter provision, lawyers and private organizations may file suits against businesses. Those who win their suits are also entitled to “reasonable” attorney fees and a portion of the civil penalties otherwise owed to the state.

 

The architects of Prop 65 did not have the benefit of hindsight, but today, it is clear that this provision of the law has gone terribly awry.

Under regulatory guidance issued by a former state attorney general, the private organization bringing the lawsuit can enter into an agreement to keep all of the civil penalties meant for the state treasury, diverting the funds from the state’s own enforcement efforts. After reviewing all the lawsuits settled over the past decade, however, we find that only 38 percent of the penalties ended up in the state’s coffers to fight environmental problems. The rest went to the private organization that filed the lawsuit. This does not include the many millions of dollars that were awarded to the private organizations’ attorneys. This amounts to millions of dollars of lost revenue for California’s general fund.

 

Simple changes would create a fairer system not overrun by incentives for private organizations to collect exorbitant fees and should provide more money for the state to use to inform and protect the public as the law clearly set out to do.

 

That commonsense reform would earn the support of public health advocates who, for years, have endured cuts to public health programs as a result of declining revenues. But it would also be applauded by the state’s small businesses, who have complained for years that current law incentives frivolous shakedowns by trial lawyers that amount to legalized extortion.

 

Current state Attorney General Kamala Harris’ recently took the first steps towards reform on this issue. Harris filed objections to an outrageously high proposed settlement in one case and has issued a letter to the defense bar saying some Prop 65 lawsuits have become too complex and, in some cases, deliberately misleading. While these are commendable first steps, they are just that – only the first steps. Californians now have every reason to hope for and demand that current state leadership will align the enforcement of Prop 65 with its original intentions.

Ed’s Note: Tom Caso, Associate Clinical Professor of Law at Chapman University School of Law, recently published “Bounty Hunters and the Public Interest – A Study of California Proposition 65.”


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