Proposition 65: How to exploit a good-intentioned law to divert money to shadowy, litigious environmental groups

Q: What do all of the above companies have in common ?

A: They were among the 39 corporations sued by Humboldt County’s Mateel Environmental Justice Foundation in 2008 for product warnings and reformulations under the Safe Drinking Water and Toxic Enforcement Act of 1986.

Proposition 65, which was referenced in a recent T-S My Word, was passed by Californians in 1986 because of toxic chemical concerns related to cancer, birth defects or other reproductive harm. The initiative, for all the right reasons, asked that businesses notify consumers and residents about significant levels of cancer causing compounds in products, their homes and….workplaces, or other bad stuff released into the air, ground or water.

Without a doubt, the world is a better place since Prop. 65 was passed and people are indeed safer thanks to some companies’ voluntary label warnings and products changes, as well as the court-mandated changes that came as a result of the numerous lawsuits brought by the government. But the law also opened the door for some of the biggest abuses by predatory and litigious “environmental” groups.

With a legal loophole on their side, 2008 was a spectacularly profitable year for the Mateel Environmental Justice Foundation. Never heard of the Mateel Environmental Justice Foundation? That’s not surprising. Mateel is a quiet little operation based out of Eureka that targets big businesses whose corporate headquarters are mostly far away from California in places like Maryland, Illinois and Ohio. According to California’s Attorney General’s Office, which tracks Prop. 65 lawsuits, Mateel settled 39 lawsuits in 2008 for over $1.7 million. Kudos to local lawyer William Verick for representing Mateel and raking in a hefty $1.06 million in attorney fees — roughly 60 percent of the total money awarded in the settlements.

But it’s not just warning labels, product reformulations and excessive attorneys fees that Mateel is after. Through Prop. 65 lawsuit settlements, Mateel also pilfered a shit load of additional dollars through “other distributions” that was handed over to other environmental groups, left-leaning radio stations and other interesting folks. How much? Well, just a paltry $619,850 in 2008.

So, just where did all that extra cash go from the Prop. 65 bonanza payouts?

Payout of "other distributions" from Mateel's Prop. 65 lawsuits in 2008.

So we know what CATs and the Environmental Protection Information Center does, but we’re fuzzy on what exactly the Ecological Rights Foundation does and why they are so cozy with Mateel to get so much cash from the lawsuits. But more on that later.

The academics Clifford Rechtschaffen and Patrick Williams at the Golden Gate University School of Law admit Proposition 65 is “quirky,” but paint a rather rosy picture in their paper published in 2005 titled “The Continued Success of Proposition 65 in Reducing Toxic Exposures:”

Nearly 20 years have passed since California residents overwhelmingly voted to enact Proposition 65, the Safe Drinking Water and Toxic Enforcement Act…The statute remains as controversial—if not more so—than when it was first enacted. Media attention in recent years often focuses on some of the quirkier or more sensational enforcement actions—such as suits about acrylimide in bread products and French fries, or lead in chocolate—and on the statute’s perceived excesses—such as suits by profiteering lawyers that result in large fee recoveries relative to the penalties imposed. The less frequently told story, however, is one of continued success in removing toxic chemicals from consumer products and industrial activities.

So it also shouldn’t come as any surprise that the Golden Gate University’s Environmental Litigation Clinic was named as one of the recipients of more than $309,000 in “other distributions” from the 40 Prop. 65 lawsuits Mateel filed in 2004—a year before the paper was published. Go figure.