Ok, now for the Prop 65 story...
What is Proposition 65: A 1986 California exclusive law requiring businesses to warn consumers about potential exposure to chemicals that may cause cancer or birth defects.
Hey, that sounds pretty reasonable to the average person. The issue is the lengths they've taken it to and the parasitic enforcement strategies in place.
Who Prop 65 Effects: Any company that is selling products in CA or to CA residents that allegedly contain any one of the 900+ chemicals they list in the law. Pretty much everything you touch has at least one of these chemicals. Companies with less than 10 employees, or any government agency is exempt from this law, of course.
California's Enforcement Strategy and our First Hand Experience: ~8 years ago California amended the law to allow California private attorneys to "enforce" this law. These private attorneys scour retail and online marketplaces, purchase products, and if there is no Prop 65 label or an incorrectly labeled product, they issue a Violation Letter of intent to sue after 60 days if the matter is not settled prior.
These attorneys do NOT need to allege any harm or injury occurred. They only are required to allege that a violation of the law occurred.
Virtually no company takes these alleged violations to court because the cost to litigate them is upwards of 100K and even if you somehow did win, you do not get to recoup your attorney fees. So it's a net loss anyway you look at it.
The private enforcers know this, and that is why the average final settlement for these "violations" is ~$33,000. Enough to heavily pad the attorney's pockets, but not quite enough to entice a company to take it to court.
Upon settlement, there is nothing preventing any other attorney or private enforcement company to go after you for the EXACT SAME THING. There is also nothing preventing the same private attorneys from coming after you for any other product you offer. If they want to destroy you, they have every ability to run you into the ground.
Who Benefits: Prop 65 requires that 75% off the "settlement" goes to CA and 25% goes to the private enforcer who issues the violation letter. BUT, the private attorneys pad the "settlement" with "Attorney Fees" which are exempt from the portion of money required to go to CA.
***Below is a breakdown of the full settlement we had to agree upon for the violation we received for our Brass Magnus Utility Knife:
Civil Penalty Payment (This is the portion that CA gets 75% of and private attorney's get 25% of): $2000
Attorney Fees (all goes straight into attorney's pockets): $20,500
Total Settlement: $22,500
So, CA got $500 lol. This exemplifies the disgusting joke that this entire Prop 65 enforcement is. Furthermore, this settlement was in regards to selling a measly ~600 units of the Magnus to CA residents.
The real question is why are the 49 other States in America allowing California to harm small businesses with this non-sense law and private enforcement tactics. We know absolutely nobody takes the warning labels seriously because it has got to the point that it is on legitimately every product you purchase anymore to try and avoid these enforcers from coming after them, so we don't have any issues putting it on our products as we know it doesn't impact sales.
We just never considered it for the Magnus because we would never expect people to eat it, lick it, rub it in their eyes, stick it in their butts, or whatever else. But apparently CA knows their residents are prone to doing these things and this is their heartfelt attempt at protecting them.
Moral of the story: Put a Prop 65 warning on everything, if/when they come for you just bend over, enjoy it, and say "thank you may I have another."
If you want to see all the settlements and companies that have been affected by this, go to this
LINK. They are required to publicly disclose all settlements. You won't find ours there yet, because I signed the settlement moments before crafting this email.
I'd love to hear your thoughts on this from an outside perspective. Happy to answer any questions you may have on the matter as well.
- Dana Peters, Founder
www.nbc26.com
