The swirling, often heated, debate about whether Proposition 65 negatively impacts California’s business climate is often short of concrete examples. One feature of Prop 65 the lack of an established methodology for determining whether an exposure had occurred or would occur that would trigger the Prop 65 warning requirement may, in fact, contribute negatively to real business choices and outcomes. In short, the vagueness of Prop 65 and its associated regulations regarding that which constitutes compliance and that which is a prohibited breach because of exposure in excess of the warning requirement imposes a real uncertainty on companies impacted by its requirements.
Few if any other laws that businesses must deal with are so vague on such a key regulatory aspect. Yet ignorance or a misunderstanding of the law’s requirements can result in a penalty of $2,500 per day, albeit rarely imposed at that maximum level. There is no question that large firms may have the financial resources to hire consultants who can make informed guesstimates about exposures resulting from the firm’s products, so that the firm can hopefully avoid Prop 65 liability, but unfortunately that is not realistic even for large business entities. Moreover, the often flawed methods used by plaintiffs to determine exposure create the illusion of violations (and thus yield lawsuits and greenmail) even when a firm in good faith believes no violation exists.
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