California's Prop. 37 will open litigation floodgates

California's Prop. 37 will open litigation floodgates

Attorneys warn that an upcoming food labeling ballot initiative could generate a bumper crop of litigation. Prop. 37's impact could be sweeping. The measure authorizes shoppers to sue under the Consumer Legal Remedies Act, which doesn't require plaintiffs to show that they suffered any damages.

According to a new article in California’s premiere legal paper, The Daily Recorder, the consensus among defense attorneys is that November’s Prop. 37 will result in a “bumper crop of litigation.” The story can be found here.

"When I used to go and talk about Prop. 65 when it was on the ballot, I would say the biggest beneficiaries would be lawyers. I think that goes double for Prop. 37," said an attorney quoted in the story.

This view should surprise no one. The official proponent of Prop. 37, James Wheaton, also helped draft Proposition 65, a labeling measure from 20-plus years ago that has generated more than 16,000 actions against businesses and nearly $500 million in settlements, attorney fees and costs. Wheaton and the associations he represents have collected more than $3 million in legal fees and settlements suing under Prop. 65 in the last 10 years.

(For more, see: Junkyard dog mentality will defeat food label initiative)

Prop. 37 would essentially ban thousands of common food products that contain ingredients made from modern varieties of corn, soybeans, canola, sugar beets and other crops produced with the benefit of biotechnology in California unless they are specially labeled as "genetically engineered." In addition, it would prohibit any food that is pasteurized, heated, dried, juiced or otherwise processed from being labeled or advertised as "natural." No such labeling requirements exist in any other state.

The overwhelming majority of the scientific community, including the World Health Organization and the National Academy of Sciences, agrees – foods made using biotech ingredients are safe. The US Food and Drug Administration has concluded that requiring special labels for foods that contain ingredients from biotech crops would be "inherently misleading" to consumers, since they are nutritionally the same as, and just as safe as food made from non-biotech crops.

In June, the American Medical Association stated: "There is no scientific justification for special labeling of bioengineered foods."

Prop. 37’s private bounty-hunter lawsuit enforcement provisions are nearly identical to Prop. 65’s. According to the non-partisan, independent Legislative Analyst, Prop. 37 allows trial lawyers “to sue without needing to demonstrate that any specific damage occurred as a result of the alleged violation.”

Under Prop. 37, trial lawyers can file a lawsuit against everyone in the food chain associated with a food product alleging that a non-labeled product contains GE ingredients. The suit can be filed without any testing or research on the product to determine whether or not it contains GE content.

Nevermind that the product is unlabeled because the product is GE free. Those hit with lawsuits are forced into a choice between proving themselves innocent by spending tens of thousands of dollars on lawyers and tests, or settling out of court to make the lawsuit go away.

Litigation floodgates

Defense Lawyers Say Prop 37 Will Bring Bumper Crop of Litigation

Cheryl Miller, The Recorder

With recent polling suggesting Californians want labels on genetically modified food, defense attorneys warn that an upcoming ballot initiative could generate a bumper crop of litigation.

Proposition 37, also known as the Right to Know Genetically Engineered Food Act, would require labels on edibles containing ingredients whose DNA was tweaked to increase yield, to fight off disease or for any other reason. If voters approve the initiative in November, California would become the first state in the nation to employ such a far-reaching consumer alert system.

Proponents say their measure has a simple rationale: Californians should know what's in the food they buy and eat. But legal critics say compliance would be a far more complex task. And they point to an enforcement provision authorizing private consumer lawsuits, something defense lawyers compare less than flatteringly to Prop 65, the 1986 law that requires businesses to warn consumers about chemicals they use.

"When I used to go and talk about Prop 65 when it was on the ballot, I would say the biggest beneficiaries would be lawyers. I think that goes double for Prop 37," said Michele Corash, an environmental defense partner with Morrison & Foerster.

James Wheaton, the Oakland attorney who helped draft Prop 37, said such claims amount to scare tactics.

Comparing Propositions 65 and 37 "is like comparing apples and hot dogs," Wheaton said. "Both food, but [then] no resemblance."

The Prop 37 campaign is shaping up into a multimillion-dollar battle between a team of grocers and food science companies like Monsanto and DuPont and a coalition of organic growers and natural food activists. Legal arguments surrounding the measure have generally taken a backseat to public talk about the contents of tomatoes and toasted oats.

But defense attorneys say the measure's impacts could be sweeping.

"Go into a grocery store. That is the landscape that is available," said Thomas Hiltachk, the managing partner of Bell, McAndrews & Hiltachk who's working on the campaign to defeat Prop 37.

The initiative exempts a range of products from the labeling requirement, including meats from animals that ate genetically modified feed, alcohol and restaurant-served meals. Retailers and others in the food-supply chain could also shield themselves from fail-to-label lawsuits by providing sworn statements from producers indicating that the item wasn't knowingly or intentionally altered.

Record-keeping nightmare

That's a potential record-keeping nightmare, Hiltachk said. What's more, he said, many retailers will feel pressured to settle claims when threatened with litigation.

"It's in my mind unquestionably going to happen because it already happens every day in California," Hiltachk said. "And Prop 37 creates an entirely new opportunity for that to occur."

Hiltachk and others in the defense bar cast a w a ry eye toward Wheaton, who is legal director of the Oakland-based Environmental Law Foundation. The organization has filed a number of Prop 65 lawsuits andsecured two settlements totaling $660,000 last year, according to the attorney general's office.

Wheaton said he wasn't the principal author of Prop 37 and, in fact, wasn't brought into the process until late in the drafting. He is listed as the official proponent, "but only as a conduit," he said, for a diverse group of campaigners who wanted a single registered California voter for the job.

The measure authorizes shoppers to sue under the Consumer Legal Remedies Act, which doesn't require plaintiffs to show that they suffered any damages. Wheaton defended the initiative's use of the CLRA, not as a dodge of the plaintiff restrictions in California's Unfair Competition Law as critics have alleged, but as a better mechanism for enforcing the law.

"The CLRA was written to deal with the precise situation here, where hundreds or thousands of consumers each are duped in a small way to a cheater's large benefit," Wheaton said.

Backers say the public has little reason to worry the measure will unleash a wave of lawsuits, as critics complain Prop 65 has done. In fact, the Yes on 37 campaign commissioned a study comparing the two initiatives.

James Cooper, an adjunct professor at Virginia-based George Mason University School of Law, concluded that Prop 37 would cover a smaller number of products than Prop 65. And it would provide more legal protections to defendants, he said.

"Accordingly, there is reason to believe that these important differences substantially reduce the potential for [Proposition 37] to foster the type of abusive private litigation associated with Proposition 65," Cooper wrote.

Hiltachk said Cooper underestimated the potential reach of Prop 37. Almost all U.S.-grown corn and soybeans, which comprise the base ingredient in many products, are genetically engineered. In its studyof Prop 37, California's legislative analyst cited estimates that 40 to 70 percent of food sold in the state contains some genetically modified ingredients.

A July poll of 800 likely voters conducted by the California Business Roundtable and Pepperdine University found that almost 65 percent of respondents supported Prop 37.

For more on mandatory food labeling, see:

Campaign to label biotech foods a waste of time and money

California food labeling bill piles on financial burden

Sanders labeling amendment killed by common sense

Time to take on anti-biotech crowd over GMO labeling

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