Prop. 37 will trigger ‘flood of lawsuits’

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Three major law firms, with offices in California and worldwide, have come out to warn their grocer, food company and farmer clients that if Prop 37 passes it will set off a flood of lawsuits to the benefit of trial lawyers, much like Prop 65.

Prop. 65 involved chemicals and drinking water. "Prop 65 has led to 16,000 lawsuits and close to $500 million in settlements, much of which has gone directly to plaintiffs' lawyers for fees and costs," the firm Alston + Bird warned its clients. "Similarly, Prop 37 will likely impact many California businesses and may create an atmosphere favorable to private enforcers, leading to frequent litigation and settlements," the firm said in a website posting "Is California set to pass another Proposition 65?"

Prop. 37 outlines certain labeling requirements for food products sold in California that are produced through the use of genetic engineering (GE). The ballot initiative will be presented to California voters on Nov. 6. Both proponents and opponents see it as a stepping stone to eventual broader labeling for genetically modified (GMO) applications in food production.

A trio of national firms with large California clienteles are bracing for the onslaught of lawsuits that they expect will result from Prop. 37. They have warned that the measure will expose grocery retailers, food companies, farmers and others to “predatory, shakedown lawsuits.” All three firms have significant experience defending against Prop. 65 lawsuits and view Prop. 37 as possibly worse than Prop. 65.

Continued Alston+Bird: "The proponents of Prop 37 are the same plaintiffs' attorneys that have been litigating Prop 65 since it was enacted by California voters in 1986. It is highly likely that they will employ the same litigation techniques and activities to enforce Prop 37 that they have used in Prop 65 these many years."

Similar to Prop. 65, Prop. 37 allows trial lawyers to file a lawsuit against anyone and everyone associated with any food product that does not have a label -- even without evidence, testing or research showing the unlabeled product contains GE ingredients. California's independent Legislative Analyst concludes that Prop. 37 would allow trial lawyers "to sue without needing to demonstrate that any specific damage occurred as a result of the alleged violation."

“Yes on 37” has attempted to deflect claims of lawsuits by emphasizing that the measure gives grocery retailers and others sued an easy "out" if they merely produce sworn statements that there was no "knowing or intentional" use of GE.

However, several "Client Alerts" on Morrison & Foerster's Prop. 37 webpage warn clients about Prop. 37. "Accordingly, in order to take advantage of this exemption, the defendant would first have to submit to discovery on the question of knowledge and intent. In the context of Proposition 65, this is how plaintiffs' attorneys have made their livings; the threat of expensive and time-consuming discovery—depositions, interrogatories, document production, and more—drive settlements that do little more than enrich bounty-hunting lawyers. Only if the defendant could get past this hurdle would the sworn statement come into play as an additional burden that must be met in order to establish the defense."

On its website, law firm Downey Brand makes clear that the sworn statements will hit everyone on the food production chain. "This sworn statement exemption will set in motion a series of certifications and indemnity agreements that will stretch from the grocery stores all the way back down the chain of production to the nursery or seed company, and will require a sworn statement from the farmer, the trucker, the packer, the processor, the wholesaler/distributor and finally the retailer. While this Proposition is directed at the retailer, this exemption will mean that everyone in the food supply chain will be responsible for compliance."

Most of California's daily newspapers have urged voters to "Vote no on Prop. 37" on Nov. 6, including the Los Angeles Times, San Francisco Chronicle and Sacramento Bee. Many papers warn that Prop. 37 will be a boon to trial lawyers without benefits to consumers. Said the Santa Cruz Sentinel: "And who would this benefit? Lawyers."


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