Lawyers Debate Potential Aftermath of Prop 37 Passage

By Josh Long, Legal and Regulatory Editor

Justifiable reliance and damages.

These are often crucial and necessary elements that must be proven in order to win a civil lawsuit.

Proposition 37, California's proposed measure requiring the labeling of genetically engineered foods like varieties of corn and soybeans, doesn't require either.

Lawyers who vigorously oppose Prop 37 worry that the food industry will get murdered with a mountain of unsubstantiated suits, and they gripe one of the primary benefactors of a similar proposition that became state law years ago actually drafted the measure: James Wheaton of the Environmental Law Foundation.

Not only does Prop 37 exclude a requirement to prove actual damages, it doesn't include many of Prop 65's preconditions prior to filing suit. This matters, a legal opponent of the measure indicates, because it makes it easier for private citizens to sue.

"Unlike Proposition 65, Proposition 37 permits a lawsuit alleging a violation of the labeling law, without providing any notice to the defendant, without providing any 'cure period,' and without giving a public prosecutor the first opportunity to enforce the law," writes Thomas W. Hiltachk, an attorney whose law firm is counsel to the No on 37 campaign and who served as legal counsel to former California Governor Arnold Schwarzenegger. "As with other bounty-hunter statutes, the defendant in such a case has to weigh the cost of defense versus the cost of settlement. California businesses make this calculation every day. Under Prop 65, attorneys like Mr. Wheaton have made a pretty good living settling cases for $10,000 per lawsuit filed."

Hiltachk's implication: If California voters approve Prop 37, the food industry might opt to settle a number of frivolous suits rather than incur burdensome legal expenses mounting a vigorous defense.

James C. Cooper, a law professor with the George Mason University Law School, has a different perspective on the legal consequences of Prop 37.

In a paper, he distinguishes Prop 37 from Prop 65, which requires companies to provide warnings to consumers if their products or actions will expose individuals to certain levels of chemicals that the State of California has found to cause cancer or harm reproductive health.

At least $482 million has been shelled out by companies settling Prop 65 lawsuits between 1989 and 2011, according to the No on 37 campaign, citing as its sources the California General Attorney website and a 1999 hearing before the U.S. House Committee on Small Business. Tom Scott, executive director of the California Citizens Against Law Abuse, wrote last month in FlashReport that Prop 65 has resulted in more than 16,000 legal actions against California businesses.

Cooper, however, cites a number of differences between the propositions that he contends "substantially reduce the potential that Label GMO will result in the epidemic or abusive private litigation associated with Proposition 65."

For instance, he argues Prop 37 will apply to a significantly more narrow economic sector than Prop 65, the new measure is easier for businesses to determine whether they are in compliance with its requirements and Prop 37 provides for a number of exceptions from its provisions.

But Hiltachk claims Cooper is understating the breadth of Prop 37, including the fact that it provides for the recovery of costs and attorneys' fees. Wheaton of the Environmental Law Foundation has done quite well collecting these fees thanks to Prop 65 litigation, according to the No on 37 campaign. Citing California Attorney General Annual Summaries of Private Settlements, Hiltachk asserts Wheaton's firm has collected more than $3 million in attorneys' fees and costs since 2000 in connection with Prop 65 lawsuits.

Wheaton did not immediately respond this week to an email seeking comment on Prop 37, and a representative at his office indicated to us that calls to him from the media are being forwarded to the Yes on 37 campaign.

In the growing realm of genetically engineered food, those in favor of Prop 37 maintain Californians need to be aware of the potential harms. Citing the journal Food and Chemical Toxicology, the Yes on 37 campaign stated Wednesday that genetically engineered corn has been "linked to mammary tumors, kidney and liver damage and other serious illnesses". The campaign cited a study of rats conducted by researchers from the University of Caen.

The study bolsters support for the idea that Californians need to be aware of the potential hazards of genetically engineered food, and that they should have the right to hold corporations accountable for failure to disclose such dangers.

A "citizen right of action is a common way of holding corporations accountable," remarks Stacy Malcan, a spokesperson with the Yes on 37 campaign.

The Legislative Analyst's Office, California's nonpartisan fiscal and policy advisor, notes Prop 37 grants consumers the right to sue for a violation of its provisions under the state's Consumer's Legal Remedies Act.

"In order to bring such action forward," the LAO writes, "the consumer would not be required to demonstrate any specific damage from the alleged violation."

By November 6, California voters should make up their minds whether that's a good idea.

For more information on the current GMO debate, including Californias Proposition 37, see: