Feature
by Ted Kimball
Our firm has been defending an increasing number of commercial and residential property owners in Proposition 65 lawsuits. Proposition 65 is the law that requires all businesses that employ more than 10 persons to warn individuals before exposing them to even miniscule amounts of almost a thousand listed chemicals known to cause cancer and birth defects. This law is finding its way into the courts through private attorneys who are taking advantage of the “bounty hunter” provisions of its regulations. Their most recent target: commercial landlords. Attorneys’ fees and costs, as well as a bounty fee of 25 percent of the assessed penalties or fines, can be recovered if the suit prevails.
The law specifically prohibits any person, in the course of doing business, from knowingly and intentionally exposing any individual to a chemical known to the State of California to cause cancer or reproductive toxicity without giving a specified warning. The Act also requires any person bringing an action in the public interest to give the alleged violator (the subject of the action) at least 60-days’ notice before filing suit. A copy also must be sent to the California Attorney General, and the district attorney and city attorney in whose jurisdiction the violation is alleged to have occurred. The plaintiff must also inform the state’s Attorney General of any settlement or judgment and the final disposition of the case.
What Should Prudent Landlords Do? Warnings can be provided through letters to tenants. Also, signs can be positioned in conspicuous locations such as common areas including driveways, lobbies, parking structures and hallways. Although the state does not specifically require you to list each substance known to cause cancer, birth defects or reproductive harm, many settlements have required that warnings state the name(s) of the specific chemical(s). For instance, if the area in question contains second-hand The regulations require that the warning should be placed “in a conspicuous manner and under such conditions as make it likely to be read, seen or heard and understood by an ordinary individual in the course of normal daily activity, and reasonably associated with the location and source of exposure.” In other words, signage must be posted so that a reasonable person could read the warning and make a decision whether or not to enter. Warnings are also recommended for posting both at the entrance to, and also inside, any affected area and in any discrete areas accessible to the public or used by the staff. Interior signs should be in conspicuous locations within the affected areas.
Under the “right to know” portion of the Act, the law only applies to “knowing and intentional” exposures. However, “knowledge” can be constructive when it is proved that even though the owner/manger did not have actual knowledge, he/she should have known of the existence, for instance, of second-hand smoke or other chemical exposure. The measure of care is what a reasonably prudent commercial property owner or manger would have done.
There has also been a recent proliferation of Proposition 65 lawsuits filed against California residential landlords. Through the California Apartment Association, a “global settlement” was reached, which allows landlords to participate with the guarantee of not getting sued in exchange for compliance with the law. Proposition 65 is also unique in that the burden is on the defendant to prove he/she did not commit a violation. The burden of proof must show there was no significant risk to the public, and that the exposure will have no observable effect. All that a plaintiff must prove is that a detectable exposure occurred.
Proposition 65 Amendments Last year, Governor Davis signed legislation that amended the regulations of Proposition 65. This is not an easy task, for the Act requires that an amendment can only be made “to further its purpose,” and it must be approved by a two-thirds majority of the state legislature. Some of the amendments were an attempt to slow down the bounty-hunter atmosphere surrounding the enforcement of Proposition 65.
The new law contains two additional protections for defendants. First, in assessing penalties, the court is now required to consider the economic effect of the penalty on the violator, whether the violator took good-faith measures to comply with the Act, the willfulness of the defendant’s misconduct, and the deterrent effect that the penalty would have on the violator and community at large. As a prudent landlord, you should document your intent to follow all Proposition 65 requirements and record and preserve all documentation of your efforts to comply with the law.
Second, the notice to the Attorney General must now contain a certificate of merit that states the person signing the certificate has consulted with one or more persons with relevant and appropriate experience or expertise, and that this person(s) (1) has reviewed the facts, studies, or other data regarding the exposure and (2) believes there is a reasonable and meritorious case for private action. Proposition 65 claims must be brought within one year, because claims over one year are barred by the statute of limitations. The above discussion is general in nature and should not be construed as individualized.
The opinions expressed in this article are those of the author and do not necessarily reect the viewpoint of the SFAA or the SF Apartment Magazine. Ted Kimball is the senior partner of Kimball, Tirey & St.John, a firm that specializes in landlord/tenant law and represents clients throughout California. He may be contacted at 800.338.6039. Copyright © 2003 San Francisco Apartment Magazine