Coffee, the saying goes, makes the world go round. It's a hug in a mug. Everything gets better with coffee. Take life one cup at a time.

Oh also, it causes cancer.

Or so a California judge would have the state's 40 million residents be told in a ridiculous lawsuit—with a ridiculous price tag.

The actual penalty against dozens of coffee companies including Starbucks and Keurig for failure to warn consumers that coffee contains the carcinogen acrylamide has yet to be calculated. But in theory it could be $2,500 for every cup of coffee consumed in California since 2010. And Californians drink millions of cups of coffee every day.

Even if it's a penny a cup, it could still bankrupt the industry. And for what? So there's a sign in the corner of every Dunkin Donuts or Peet's or 7-Eleven that coffee contains a chemical known to the State of California to cause cancer? And plaintiffs lawyer Raphael Metzger can buy his own private island?

That study after study has shown coffee also has health benefits—reducing your risk of cardiovascular disease, type 2 diabetes, Parkinson's disease, uterine and liver cancer, cirrhosis and gout, per Harvard Medical School's newsletter, that the World Health Organization in 2016 took coffee off its list of carcinogens, that drinking coffee is actually associated with a longer lifespan, for goodness sake—is not mentioned in the decision.

Instead, Los Angeles County Superior Court Judge Elihu Berle penned an unpersuasive tentative opinion that's woefully lacking in analysis or explanation. Given that it's an issue of first impression, such lazy jurisprudence is inexcusable.

It's not that the industry wasn't well-represented. Lawyers from Morrison & Foerster and Skadden, Arps, Slate, Meagher & Flom took the lead on the defense, but other firms listed in court papers include Arnold & Porter Kaye Scholer; Cooley; Foley & Lardner; Shook Hardy & Bacon; Norton Rose Fulbright; Nixon Peabody and Troutman Sanders.

How did things go so terribly wrong?

The suit is based on Proposition 65, a 1986 voter initiative that sounds appealing on paper.

“No person in the course of doing business shall knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and reasonable warning to such individual.”

Great, right? At least tell us before you poison us.

But there are a few problems. First, the list is more than 900 chemicals long, and Californians see the warning signs and labels all over the place—parking garages, dental offices, restaurants, gas stations, hardware stores, you name it.  (In August, new regulations go into effect that will require the warning label to specify at least one chemical prompting the disclosure.)

The law has a bounty hunter provision.  Private parties may bring actions, and successful plaintiffs lawyers are entitled to attorney's fees and 25 percent of the penalty.

According to the California Department of Justice, 760 suits invoking Prop 65 were settled in 2016, with total payments of $30 million. Plaintiffs lawyers got 72 percent of the money, most of it for attorney fees and costs.

As Kelley Drye & Warren's Joseph Green noted in a client alert, “When confronted with a lawsuit from a plaintiffs group, these businesses often rationally decide to settle the case by agreeing to provide a warning and paying a penalty, typically in the range of $20,000-$150,000 or more, instead of facing the costs during litigation of establishing that an exposure is exempt from warning requirements. Hence, historically, the statute has encouraged over-warning, as businesses may provide warnings even where an exemption may apply simply to avoid costs.”

But here, the coffee companies did something different: They went to trial.

In retrospect, it's looking like a bad decision, but you can see why they wanted to fight.

Some products are unequivocally toxic. If you make paint thinner, you add a warning label and move on. But coffee, once regarded as an unhealthy vice, has only recently taken on the “healthy” mantle. A label stating that it causes cancer would be a big step backward.

True, a few of the 91 defendants settled, among them BP West Coast and Yum Yum Donuts, but most banded together. They agreed the case would be litigated by Green Mountain Coffee Roasters Inc., the J.M. Smucker Company, Kraft Foods Global, and Starbucks; and all other defendants would be bound by the court's final rulings.

The lead lawyers—MoFo partner James Schurz and Skadden of counsel Raoul Kennedy (who just retired)—declined comment.

They faced off against Raphael Metzger of the Metzger Law Group, a four-lawyer firm based in Long Beach, California that bills itself as “California's Toxic Tort Law Firm.”

Credit must be given. This was a David-and-Goliath battle, and David clobbered Goliath. But Berle's opinion does a poor job explaining why.

Consider his treatment of one of the defense's expert witnesses, David Kessler, who was appointed to head the U.S. Food and Drug Administration by President George Bush in 1990, and re-appointed by President Bill Clinton four years later. He was the one who instituted the standardized nutrition labels for food and led the FDA's attempt to regulate tobacco. He went on to serve as dean of the University of California at San Francisco Medical School.

(Also—seriously—he got his medical degree from Harvard at the same time that he got a law degree from the University of Chicago, which is not something you'd think humanly possible.)

The defense tapped Kessler to provide a rationale for setting an alternative risk level for coffee, akin to what the FDA has done with fish—a food which is both good for you (omega-3s), but also bad (mercury).

And this is the sum total of what Berle had to say about his testimony: “These rationales lack scientific support, are not based on sound considerations of public health, and provide inadequate grounds for an alternative risk level.”

That's it.

But why? Because David Kessler doesn't know what he's talking about? Because there was a flaw in his analysis? What exactly made his testimony worthless? Berle doesn't say.

He also rejected testimony from the defendant's risk assessment expert, Lorenz Rhomberg, who has a PhD in population biology and is a principal at environmental and risk sciences consulting firm Gradient.

“Although Dr. Rhomberg performed a quantitative risk assessment of acrylamide, he did not undertake a quantitative risk assessment for acrylamide in coffee,” Berle wrote, without explaining why it made a difference.

Berle also noted that Prop 65 “provides an express exemption from liability for chemicals that occur naturally in food. However, such exemption does not apply to carcinogens that are formed during the cooking process of natural food.”

In coffee, acrylamide is produced at the beginning of the roasting process.

“Although evidence showed that roasting coffee beans is necessary to make coffee palatable and roasting coffee beans reduces microbiological contamination in coffee, defendants' proffered evidence that coffee itself confers some benefit to human health was not persuasive and was refuted by plaintiffs' evidence,” Berle wrote.

But again, he doesn't discuss what that evidence was or why it was no good. He just says, “Defendants failed to satisfy their burden of proving by a preponderance of evidence that consumption of coffee confers a benefit to human health.”

But, but…all those other studies? And the WHO's conclusion?

That's not addressed.

“Defendants did not present a quantitative risk assessment that quantitatively compared any alleged health benefits with any adverse effects of coffee consumption,” Berle wrote.

It's not entirely clear what that means. A double-blind, placebo-controlled study, probably. But realistically, how do you give test subjects a placebo for coffee without them noticing? Not decaf/ caffeinated, or Folger's Crystals versus “the fine coffee they normally serve” at Arnaud's world-famous restaurant, but coffee itself?

You can't.

Berle's decision is not final yet. The parties now can file objections—and I'm sure the defendants will. But there's nothing in the decision to indicate the judge will change his mind.

On appeal, the coffee companies might have a good shot at winning, but you've got to wonder if they'll take it that far. The potential penalty is so huge—almost un-bondable. The incentive to settle is enormous.

But it also means any company or industry in the future that wants to fight an unfair Prop 65 shakedown will be left will little judicial guidance—and strong sense that these cases are unwinnable.

 

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