Proposition 37 Genetically Modified Food Fight 

Could spawn endless lawsuits against small shops

Thursday, Oct 25 2012

Whole Foods Market was in a pickle. As the nation's most prominent purveyor of natural foods, it has a lot to gain from the passage of Proposition 37, which would require food made from plants or animals that were genetically engineered to be labeled as such, and also would prohibit that food from being marketed as "natural."

But, as a large chain, Whole Foods could be a prime target for the tidal wave of litigation that the passage of Proposition 37 may bring. Under the law, if a retailer is caught selling a genetically engineered food that's not properly labeled, it could be on the hook for the full retail price — of every unit of every item it sold after the law went into effect.

For months, representatives of the natural-foods behemoth demurred from staking out a position, even as some of their biggest suppliers — companies like Nature's Path Foods, Amy's Kitchen, Clif Bar and Annie's — donated money in support of Proposition 37.

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On Sept. 11, it finally released a statement in big, bold letters: "Whole Foods Market supports California's Proposition 37."

But below those words, in much smaller type, the company listed its "reservations" about the law, reservations it hopes will be resolved if the legislation passes.

The company's biggest worry: "private plaintiff attorneys pursuing civil litigation."

Whole Foods added: "Manufacturers could be compelled to label products with 'May be Partially Produced With Genetic Engineering' even if it is not the case to avoid costly litigation and protect themselves."

Yes on 37 has based its campaign on Californians' "right to know" what's in their food. Michael Pollan and Mark Bittman, patron saints of the food movement, have penned editorials in support of the measure. Bittman calls Proposition 37 "unquestionably among the most important non-national votes this year." Pollan says that it could have the power to influence national food politics for years to come.

Just a few weeks ago, supporters outnumbered opponents by a margin of 3-to-1.

But a poll released Oct. 11 showed a sharp decline in support: 48.3 percent of likely voters now say they are in favor of the proposition, while 40.2 percent are opposed, according to the poll conducted by Pepperdine University School of Public Policy and California Business Roundtable. The remaining undecided voters could tip the outcome in either direction.

Supporters are being outspent 14-to-1 by "Big Food" — corporations like Monsanto and DuPont, who have contributed $12 million, not to mention Coca-Cola, Pepsi-Cola, ConAgra and Nestlé, who have donated $1 million to $2 million apiece.

No on 37 had raked in more than $34.3 million in donations by the end of September. Compare that with the meager $2.3 million raised by Yes on 37, and the fight over Proposition 37 has the hallmarks of a David-and-Goliath story.

A better biblical allegory for Proposition 37, though, might be the Plagues. Because if Proposition 37 passes, its controversial fine print could unleash an unprecedented scourge on farmers, processors, distributors and retailers — large and small.

Critics are comparing it to Proposition 65, approved by voters in 1986, which requires signage warning people about cancer-causing toxins present at businesses, apartment buildings, hospitals, parking garages — tens of thousands of places.

Proposition 65 brought with it an ugly aftermath: an avalanche of shakedown lawsuits by bounty-hunting lawyers, who squeezed money from people and businesses over what often amounted to technical and minor violations of the new law.

To tamp down such abuses, then–Attorney General Jerry Brown's office instituted stricter guidelines. In one 2007 letter, Brown informed a Connecticut attorney — who demanded money from 600 companies in just five years — that his behavior did not appear to be "in the public interest." Brown's office warned him that if he didn't stop, he would face state action.

That Connecticut lawyer was by no means alone. The office of Attorney General Kamala Harris says about 15,000 such notices threatening to sue over Proposition 65 have been filed in California. Only the tiniest sliver went to court; the majority were settled, many by small companies and shops targeted because they lacked powerful attorneys who could fight back.

Yet the Safe Drinking Water and Toxic Enforcement Act, as Proposition 65 was titled, sounded fair enough 26 years ago.

Voters were told it would forbid businesses from knowingly contaminating the water supply with cancer-causing chemicals or exposing anyone to cancer causers without a "clear and reasonable" warning.

Today, across California, shops and sites carry the cancer-warning placard widely ignored by consumers.

After Proposition 65 passed with 63 percent of the vote, it quickly spawned a species of lawyer devoted to enforcing the law — and collecting massive compensation.

Lawyers sue after identifying a business where one could come in contact with one of more than 800 chemicals known to cause cancer or reproductive problems. It can be a hotel patio where someone may light a cigarette, a parking garage that could contain exhaust, the office of a dentist who might use mercury fillings — almost anyplace.

If that place lacks a posted Proposition 65 warning, the owner can be held liable for a staggering $2,500 a day for every day the warning is not posted.

Clifford Chanler was the Connecticut attorney who raked in $15 million in five years. He came up with a gambit to serve more than 600 60-day notices to glassware and ceramicware companies whose product may have contained lead, according to a letter to Chanler by Jerry Brown.

One key problem with Proposition 37, says Paul Rosenlund, a lawyer who specializes in defending people from Proposition 65 litigation, is that it lacks objective criteria — just as Proposition 65 does.

So history could repeat itself. "Virtually anyone — even people who haven't been exposed, damaged or suffered any kind of a loss, they don't have to have purchased the product — almost anyone in the world can file an enforcement action," says Rosenlund, who is with the firm Duane Morris.

The Nov. 6 ballot measure requires that even foods that might contain genetically engineered food carry the label.

"I don't know how any food producer, even the most responsible one, is supposed to comply with that," Rosenlund says.

Moreover, under Proposition 65, attorneys had to file a 60-day notice before they could sue somebody. But Proposition 37 says enforcement actions can be filed without any warning. The law, if passed, could morph into "a litigation machine," Rosenlund warns.

"What you'll see is a lot of small, convenience-store owners, and bodegas, and mom-and-pops, getting tagged by lawyers who come to them and say, 'You don't have the necessary paperwork to show that you're in compliance,' " agrees Michael Steel, a lawyer with Morrison Foerster, who has spent years defending people and companies over Proposition 65 lawsuits.

Store owners may be so unnerved by the prospect of being ruined — the lawsuits can hold them liable for the full retail price of every unit of that item sold after the law takes effect — that foods they're uncertain about could vanish from shelves.

To proponents of the natural-food movement pushing Proposition 37, that would not be a bad thing.

Stacy Malkan, spokeswoman for Yes on 37, points to "numerous animal studies showing links to allergies and other health impacts" from genetically engineered foods — to say nothing of the fact that genetically engineered fruits and vegetables are designed to withstand the application of products like Monsanto's Roundup. This has encouraged the use of higher levels of pesticides on those crops.

That "greater good" argument is the same one employed by defenders of Proposition 65 to this day.

"What you don't hear is that Proposition 65 has caused literally thousands of products to be reformulated to get rid of deadly, toxic chemicals," says Reuben Yeroushalmi, of Los Angeles–based law firm Yeroushalmi and Associates, whose bread and butter is Proposition 65 litigation.

He sees the much-maligned Proposition 65 as a preemptive measure. "Had we stopped the Sept. 11 attacks, nobody would have known how great the action was," Yeroushalmi says. "If we can stop the exposure of toxic and deadly chemicals in the same way, you could never measure the amount of lives saved."

Reach the writer at tessastuart@gmail.com

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