Tight Knit Group Of Trial Lawyers Backing Proposition 37 Made Millions Suing Businesses Under Prior Ballot Measure They Helped Write

Deceptively Being Sold as a Simple Measure, Prop. 37 Is Really About Giving Lawyers New Rights to Sue Farmers, Grocers and Food Companies

Sacramento, CA – An interconnected web of trial lawyers – with a history of working together to champion and sue under a ballot measure that has made them millions from shakedown lawsuits – is at the heart of the campaign for California’s Proposition 37, according to public records.

These trial lawyers helped write and have made millions suing under California’s Proposition 65, which has resulted in nearly $500 million in legal fees and settlements against California businesses since it was enacted.  Like Prop 65, Proposition 37 contains a provision that would create a new category of lawsuits, allowing trial lawyers to sue grocers, family farmers and food companies to enforce the measure’s labeling provisions – even when there is no proof of damage or violation. According to the independent, non-partisan Legislative Analyst, suits could be filed “without needing to demonstrate that any specific damage occurred as a result of the alleged violation.”

“What we have is a well-connected pool of trial lawyers who have a long track record of lining their pockets from California ballot measures,” said Tom Scott, executive director of California Citizens Against Lawsuit Abuse. “Now they are joining forces again to try to hoodwink voters and slip in another proposition that will provide them with countless new opportunities for shakedown lawsuits.”

Research of Secretary of State, IRS and Attorney General records reveals:

  • Proposition 37’s author and main proponent is trial lawyer James Wheaton. Wheaton is founder and president of the Environmental Law Firm (ELF) in Oakland, California.
  • Wheaton claims to have been part of the team that helped write Proposition 65 in 1986 and he’s made millions from its provisions.
  • Since 2000, Wheaton and ELF generated 29 settlements from Prop 65 cases that total more than $12.6 million.
  • Wheaton, ELF and other attorneys in those settlements raked in more than $10 million (about 80%) of the total amount. By contrast, only $267,667 or 2.12% of the settlement fees have gone towards civil penalties – the intended enforcement mechanism of Prop 65.

Source:  California Attorney General Annual Summaries of Private Settlements.

  • Recently, Michelle Lerach, a trial lawyer herself, who is the wife of notorious trial attorney Bill Lerach, contributed $25,000 to the Yes on Prop 37 campaign.
  • IRS form 990 tax filings show that the Lerach’s firm – Milberg Weiss Bershad Hynes & Lerach – was hired by Wheaton’s ELF in 1998, 2001 and 2002 to help sue businesses under Proposition 65.
    • In 2008 alone, ELF paid the Lerach firm $324,567.
  • Class action attorney Mary Blasy, another former employee of Milberg Weiss Bershad Hynes & Lerach, also recently contributed $5,000 to Yes on 37.
  • According to the New York Times, Bill Lerach has made tens of millions from class action lawsuits and, in 2008, he was convicted of concealing illegal payments to a plaintiff in a class-action lawsuit and was sentenced to two years in federal prison.

“We knew this was a measure for trial lawyers written by trial lawyers. But the paper trail makes it even more crystal clear,” Scott said. “Those behind this measure aren’t being forthright when they say they are looking out for consumers. They are looking for a fresh source of income for their own bottom lines.

How does the Prop 37 shakedown work?

According to the nonpartisan California Legislative Analyst, under Prop 37, in order to bring a lawsuit, the lawyer “would not be required to demonstrate any specific damage from the alleged violation” (emphasis added).

An unscrupulous lawyer would walk the grocery aisles looking for unlabeled products with ingredients for which GE varieties exist (corn starch, corn syrup, soybean oil, or canola oil). Prop. 37 allows the lawyer to file suit alleging that the product is mislabeled without any testing and even without any proof that the food contains a GE ingredient.

It doesn’t matter if the product has no GE ingredients and the farmer or grocer is completely innocent. The decision then comes down to simple math: Spend tens of thousands of dollars to engage lawyers and testing labs to fight in court to prove innocence; or settle with the plaintiffs’ attorney for less.

It’s a shakedown, pure and simple.

About Prop. 37

Proposition 37 would ban the sale of tens of thousands of perfectly-safe, common grocery products only in California unless they are specially repackaged, relabeled or remade with higher cost ingredients. Prop 37 is a deceptive, deeply flawed food labeling scheme that would add more government bureaucracy and taxpayer costs, create new frivolous lawsuits, and increase food costs by billions — without providing any health or safety benefits. That’s why Prop 37 is opposed by a broad coalition of family farmers, scientists, doctors, business, labor, taxpayers and consumers.

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