Free speech and trivial lawsuits

Everyone knows that the Constitution protects free speech under the First Amendment.

But many may not realize that the First Amendment also protects commercial speech, such as advertisements. Even though the level of protection afforded to commercial speech is less than that given to other kinds of speech, especially political speech, businesses still have rights about what they say.

The First Amendment is also implicated when laws require labeling for commercial enterprises. For example, it is entirely legal for government to require fast food businesses to post the calorie count on the products they serve to the public. There are innumerable other examples of required disclosures, such as gas mileage and safety ratings for automobiles and whether a newly constructed home is subject to Mello-Roos taxes.

One infamous example of “forced speech” in California was imposed via Proposition 65, passed by voters in 1986. Commercial enterprises are required to post warning labels that their products or place of business may contain substances known to cause cancer. But Prop. 65 warnings are so ubiquitous in California that they have become meaningless. They are found on everything from bread to potato chips to chocolate chip cookies. In California, it appears, everything causes cancer.

But a recent court ruling over acrylamide, a naturally occurring substance that is formed in the process of baking goods, may have reined in the absurdity of Prop. 65 warnings just a bit. The Ninth Circuit Court of Appeals ruled that because scientific evidence couldn’t come to a single conclusion over whether acrylamide in food and beverages can cause cancer in humans, the Prop. 65 warning signs for these products were “likely misleading.”

Turns out that government itself was violating “truth in advertising” laws.

But perhaps the greater benefit from the ruling has to do with inhibiting nuisance lawsuits that cost businesses millions of dollars. That’s because the Prop. 65 has a “private right of action” provision allowing attorneys to sue businesses on behalf of the state. Prop. 65 essentially deputizes private trial lawyers to search for evidence of noncompliance.

The elimination of the misleading Prop. 65 warning for acrylamide might be a welcome step in reducing false or unproven claims that confuse consumers and cause adverse market effects. This not only would help businesses but also consumers who end up paying more for goods and services when businesses face shakedown lawsuits.

Lawsuit abuse is a huge problem for California and has resulted in the state having the worst rating in the nation from the Americans for Tax Reform Foundation as a “Judicial Hellhole.” Prop. 65 lawsuits are a major reason for that dubious designation since they can result in fines of up to $2,500 per day, not to mention the costs for their own attorneys as well as those of the plaintiff. Given that there are approximately 900 chemicals on the Proposition 65 list, the law presents a great temptation for unscrupulous lawyers looking to make a fast buck.

But Californians are waking up to the absurdity of Prop. 65.

A few years ago there was a push to put a Prop. 65 warning on coffee, again because of the presence of acrylamide. But the blowback from the public, as well as ridicule from late-night TV hosts, may have been a factor in a legal victory for sanity.

We’re all for transparency.

But Prop. 65 has long outlived its usefulness in providing consumers with reliable information. In fact, it has done just the opposite.