Prop 65 Settlement

Fri, 02/14/14
By: John Mackie, Partner

THIS EMAIL IS ONLY RELEVANT TO THE WINE INDUSTRY AND OTHER ALCOHOLIC BEVERAGE PRODUCERS

A number of producers of alcoholic beverages in California received Notices under Proposition 65 of an intent to sue based on an alleged failure to require retailers to post the required “Prop 65” signs at retail establishments where the producer’s brands are sold. Clients of this firm were among those who received these Notices. In some cases, litigation was actually filed. Various trade organizations for wine, beer, and spirits collaborated to defend against these lawsuits or threatened lawsuits. That effort has been going on for some time and has also involved the California Attorney General. In most cases where our clients received a Notice, we referred them to the relevant trade group, including the Wine Institute.

The cases have now been settled in a manner that is intended to cover the entire alcoholic beverage industry in California. The attached letter from Wendell Lee of the Wine Institute explains the settlement in more detail. (If anyone would like to read the actual settlement in its entirety, we can provide it upon request.)

Wendell tells us that it is not necessary for a party to be a member of the Wine Institute or the other trade organizations in order to participate (called “Opt-In.”) HOWEVER:

(1) you must be a manufacturer or distributor of alcoholic beverages in the State of California; and

(2) you must have received the Notice of intent to sue regarding posting signs in retail outlets.

Please also note that there is an exemption for producers who employ fewer than ten persons; for such producers, they shall remain exempt from the obligation to provide retailers with Prop 65 signage (so long as they remain under 10 employees).

We know that some of our clients qualify. If you do, please consider the Opt-In and Wendell’s directions in that regard. He requests that he be notified of your election to Opt-In by August 15, 2014. However, see Wendell’s later e-mail to us, as set forth below, in response to our question about clients who would otherwise “qualify” and want to Opt-In but have never received the Notice. This adds a bit of mystery and confusion to this process.

If you have any questions on this or about your obligation to post Prop 65 warnings in your tasting rooms, retail outlets, or other buildings where alcoholic beverages are sold (which are not affected by the settlement), please do not hesitate to contact us. Many of the attorneys here are familiar with the settlement and the Prop 65 requirements in general.

Wendell’s Email:

“Plaintiffs have not sent out any new 60-day notices since their original ones to wineries were withdrawn. Now that the consent judgment has been issued, we wanted to give our members the opportunity to opt in to the terms of the consent judgment. So there’s no outstanding 60-day notices currently, but the purpose of our letter to members was to give them an opportunity to opt in.

If a winery chooses to opt in, we’d communicate that information to plaintiffs, who will generate a new 60-day notice to that winery. The certificate of merit will have to allege a violation and the notice will be posted to the AG website, and we’ll work on locating a signless retailer to assist plaintiff.

Wineries would continue to post signs at tasting rooms.”

For more information, please contact John Mackie – jmackie@cmprlaw.com