Companies Warned About “Bounty-Hunter Lawsuits” in California

Settlement data from the last four years reveals the financial implications for companies, operating in the US State of California, who are not compliant with California Proposition 65.

Companies operating in the US State of California are being warned about the risk from “bounty-hunter lawsuits” issued under California Proposition 65 (Prop 65). This is because the primary enforcement mechanism for Prop 65 is civil law suits, which often result in monetary settlements or consent decrees.

A review of settlements from 2012 to 2015, shows the cost to business of non-compliance with Prop 65 was 2,034 settlements, at a cost of $95,677,819 – excluding legal fees incurred by defense teams.

Calendar Year Number of Settlements Settlement Dollars Awarded
2012 437 $22,560,022
2013 352 $17,409,756
2014 663 $29,482,280
2015 582 $26,225,761

Proposition 65, the “Safe Drinking Water and Toxic Enforcement Act of 1986, is a consumer “right-to-know law” which requires the state to maintain and update a list of chemicals known to cause cancer, birth defects or other reproductive harm. The law states that, unless exempted, a business must not expose individuals to the chemicals on the list without giving a “clear and reasonable warning”, referred to as a Prop 65 warning. In addition, companies must also refrain from discharging listed chemicals into sources of drinking water. The list was first published in 1987 and now covers approximately 800 chemicals.

Because Prop 65 does not limit the scope of commodities covered and applies to the product, the physical location of the business, and discharges from the business into the water supply, it has become a ‘target-rich environment’ for “bounty-hunter lawsuits”. The broad aspect of the law means that it applies to products brought from ‘bricks-and-mortar’ businesses, catalogue businesses and internet sales channels.

In addition to the financial cost of reaching settlements under Prop 65, companies need to also be aware of the implications to brand image and loyalty. Companies operating in the US State of California are advised to make sure they are compliant with Prop 65 regulations. SGS offers businesses a complete range of analytical testing and consultancy services to help a company remain compliant with Prop 65.

SGS Prop 65 Services
California Proposition 65 (Prop 65) services offer your organization analytical testing and consultancy services to evaluate your products for composition and to recommend a pathway to Prop 65 compliance. Learn more about SGS’s Prop 65 Services. (www.sgs.com/en/consumer-goods-retail/hardgoods/diy-tools-and-hardware/california-proposition-65)

SGS SafeGuardS keep you up to date with the latest news and developments in the consumer goods industry. Read the full California Proposition 65 Settlement Update SafeGuardS. (www.sgs.com/en/news/2016/06/safeguards-10416-california-proposition-65-settlement-update)

Subscribe here: www.sgs.com/subscribesg, to receive SGS SafeGuardS direct to your inbox.

For further information contact:

Kenneth Stanvick
Technical Manager CRS
Tel: (+01) 603 305 4103
Email: cts.media@sgs.com
Website: www.sgs.com/cgnr

About SGS
SGS is the world’s leading inspection, verification, testing and certification company. SGS is recognized as the global benchmark for quality and integrity. With more than 85,000 employees, SGS operates a network of over 1,800 offices and laboratories around the world.

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This release was published on openPR.