More Foreign Firms Could Settle Under Prop. 65

Two recent Proposition 65 settlements with Chinese companies are likely the beginning of a trend, in which foreign firms get taken to court over the products they sell in the US, according to an attorney familiar with such cases.

In September, the Chanler Group reached a settlement with China’s Hangzhou GreatStar Tool Company, in the first example of California’s Prop. 65 being used for international prosecution. And last month, Chinese manufacturer DAP Inc. agreed to pay civil penalties of up to $65,000 and reformulate consumer products to comply with Prop. 65, under a settlement with Chanler Group reached in Santa Clara County Superior Court.

In fact, founder Clifford Chanler says his law firm has settled three such cases, and that the settlements are enforceable through a special tribunal in Hong Kong.

His firm achieved those results even though there was no legal requirement for the Chinese companies to come to the bargaining table, according to Corporate Crime Reporter. Instead, Chanler says, the companies responded to “pressure,” which included information about the content of their products, a 60-day legal notice and similar notices to US companies selling the items – retailers like Lowe’s, Target and Costco.

Takeaway: Given the increasing pressure on retailers to monitor chemicals in their supply chains, foreign manufacturers will likely continue to settle cases under California’s Prop. 65 – even though they have no legal obligation to do so.

Tamar Wilner is Senior Editor at Environmental Leader PRO.

Picture credit: The Chanler Group