Proposition 65 feels the ache of middle age

Every year, the California Legislature passes a bill under the innocuous title "Claims against the state."

The annual bill settles legal "claims, settlements, or judgments" against the state -- usually totaling a few million dollars at most -- and passes with little debate.

The bill is also a scorecard: It catalogs a subset of California's courtroom losses.

This year's payments -- $7.4 million -- might sound like a lot, but that is merely on the high end of normal. It is the kind of line item that insiders like to call "budget dust" compared with the $352 billion state budget recently signed by Gov. Gavin Newsom.

The current, still-pending bill, AB 2597, is notable for a different reason: More than half of the total is allocated to pay for a pair of Proposition 65 cases.

Proposition 65 is familiar, at least subliminally, to anyone who has entered a building or bought a product in California in recent decades. Passed by voters in 1986 as the Safe Drinking Water and Toxic Enforcement Act, Proposition 65 requires warnings about exposure to chemicals known to cause cancer or reproductive harm.

It has long been considered one of the most influential environmental laws in the country. But that could be changing, said Dennis E. Raglin, who defends companies in Proposition 65 cases as a shareholder with Carlton Fields in Los Angeles.

"We're kind of at a turning point with Prop. 65," Raglin said.

The usual suspects

There is a certain regularity to the annual claims bill.

The amounts seesaw: $6.8 million in 2023, just $523,000 in 2024 and $1.2 million last year.

But there is remarkable consistency in the kinds of cases for which the state gets dinged. Attorney and lobbyist Chris Micheli said most of the items on this year's list involve "actions by either the executive branch or the legislative branch that were overturned by the courts."

Micheli, who tracks legislation as a partner with Snodgrass & Micheli LLC in Sacramento, recently flagged AB 2597 in his email bulletin. He noted that most of this year's payments involved failed attempts to defend state gun and environmental laws.

All standard. But Proposition 65 cases rarely make the list -- let alone account for most of the costs.

Sunscreen and popcorn

The two settlements stem from the state's efforts to require warnings for titanium dioxide in cosmetics and personal care products, costing $1.5 million, and acrylamide in food, costing $2.8 million.

"I don't believe the State has previously paid settlements of this nature under Prop 65," said Will Wagner, who was not involved in either case but has been involved in other recent Proposition 65 litigation with the state. "These two settlement payments are a very significant development."

The acrylamide case featured an intervention by the Council for Education and Research on Toxics, an environmental organization specializing in Proposition 65 cases. The council's attorney, Raphael Metzger, had a terse answer when asked whether his firm is still taking Proposition 65 cases, whether it is harder for environmental advocates to win them and whether he had any comment on the California Chamber of Commerce's win last year.

"The answers to your questions are no, yes, and nothing that can be printed," the founder of Metzger Law Group in Long Beach said in an email.

You don't say

One thing the winning plaintiffs had in common in both cases was that they framed Proposition 65 as a free-speech issue -- specifically, compelled speech.

"What has become clearer through the First Amendment litigation is that the State cannot compel Prop. 65 warnings where the science does not support an actual risk to humans," said Wagner, who defends companies against Proposition 65 claims as a shareholder with Greenberg Traurig LLP in Sacramento, in an email.

"This seems intuitive, but there was not legal precedent establishing this principle until the recent First Amendment industry wins."

Lately, those wins have been coming -- and not just in the Eastern District of California. Raglin said four federal courts have recently found "Prop 65 warnings unconstitutional" when applied to certain chemicals, creating "probably the biggest challenge the law has ever faced."

"There are many chemicals on the Prop 65 list that were listed on shaky science, or with no human data, and/or without EPA finding the chemical hazardous," Raglin said in an email. "Many chemicals on the list are now candidates to challenge."

Out of right field

Raglin added that more difficulties might be coming for supporters of the law -- from a U.S. Supreme Court decision that does not mention California or Proposition 65.

In June, a 7-2 court, with a cross-ideological lineup, ruled in Monsanto Co. v. Durnell that federal law bars states from imposing cancer-warning requirements on glyphosate-based herbicides, such as Roundup, that differ from labeling approved by the U.S. Environmental Protection Agency.

That case is part of a larger turf war over the right to set policy. The court decided it on federal preemption grounds rather than the First Amendment. But in a recent blog post for his firm, Raglin wrote that the preemption defense is "only half of a two-pronged attack" against Proposition 65 that can be used with First Amendment claims.

The art of dissuasion

Proposition 65 relies on someone sticking their neck out to enforce it. Raglin said the "AG only takes on a few cases - sometimes none for a few years," and usually only if it is a "big deal" like potentially toxic baby formula.

If the cost of these cases shoots up at a time when the attorney general has a lot of other litigation commitments, companies could end up seeing far fewer cases under the law. Raglin said the settlements show the state paying court costs and attorney fees of up to $1,500 an hour.

"It shows the staggering amount it costs the state taxpayers to fight these uphill cases," he said.