CALIFORNIA: A VENUS FLY TRAP FOR BUSINESS
California’s thirty-seven million residents, one tenth the population of the entire United States, form a tempting market for businesses worldwide. Many enter the California market only to discover that having done so may well cost them their livelihoods. Like an enormous Venus Fly Trap, California lures into the state business with its enormous consumer market only to crush it periodically with abusive litigation. Is it any wonder, then, that over 204 companies left California in 2010 to relocate their operations in other states and that unemployment in the state is now 12.5%? That dire circumstance is destined to continue.
In 1986 California voters unwittingly began the movement toward their state’s economic implosion. In that year, through a direct voter initiative, they adopted by 63% to 37% “the Safe Drinking Water and Toxic Enforcement Act of 1986” (Proposition 65). Under that initiative, California maintains a list of chemicals believed by the state’s regulatory scientists to cause cancer or birth defects at some undefined dose level. Failing to identify the dose at which cancer or birth defects will be caused by the chemicals, the state’s environmental regulators violate the basic principle of toxicology derived from the teaching of Paracelsus from the Sixteenth Century: “All things are poison and nothing is without poison, only the dose permits something not to be poisonous.” In other words, dose determines toxicity. Many substances we commonly consume are carcinogenic or mutagenic if consumed at high enough doses; it is therefore unremarkable that those things can cause cancer or birth defects. Rather, the critical point of distinction, of true interest to consumers, lies in ascertaining the dose at which harm occurs.
California has replaced the Paracelsian Principle, a bedrock of toxicology, with what is known as the Precautionary Principle, a creature of the political realignment of science. Under the Precautionary Principle if at some level a chemical would increase the risk of cancer or birth defects, the state will place the chemical on its list of carcinogens and mutagens without defining the dose at which harm actually occurs. Once a chemical is on the list, every entity doing business in the state that owns anything exposing consumers to the chemical becomes legally obliged to post a prominent warning to consumers akin to the following: ”WARNING: This product contains chemicals known to the State of California to cause cancer and birth defects or other reproductive harm.” The warning must be posted even if the chemical is believed by most, if not all, toxicologists to be present at a level that does not cause cancer or birth defects. The only escape for a company is if it proves conclusively, and, thus, at enormous expense, that the chemical does not cause cancer or birth defects in any person at the exposure dose. Ordinarily (in every other state in the union and in California before Proposition 65), the burden of proof is on the government to establish that a chemical is hazardous to health at the dose level sold before it can be banned at that dose level. That approach, consistent with the Paracelsian Principle, is based on the concept of innocence until guilt is proven. It too is derived from the bedrock of our jurisprudence, the very foundation of Anglo-American law in favor of individual rights.
California’s harm to industry does not end with the requirement that a warning be posted prominently before consumers even if what they sell in fact does not cause cancer or birth defects. Rather, if a company unwittingly enters business in the state and fails to post the warning, it can be attacked by what we charitably call “bounty hunters.” The law permits private lawyers to act as if they are attorneys general and sue on behalf of consumers against companies for failing to post the warning. These lawyers prey upon those unsophisticated about California law, often out-of-state companies doing business in California. They threaten suit and extort settlement sums from those so threatened. If the money is not paid, they file suit and then the law embraces them by placing the burden of proof on the company sued. The costs for settlement and for litigation can enter into the millions.
Proposition 65 has led to the placement of the warning signs on everything from public beaches (silica in sand can cause cancer) to hotel lobbies (the chemicals inside the walls and beams may cause cancer) to gas stations, hardware stores, retail stores of all kinds, apartment complexes, banks, and restaurants. The warnings are so common that few Californians take them seriously or even notice them anymore. They disregard them with abandon because were they to take them seriously, they would live in a perpetual state of fear. Believe the warnings and you come to the inevitable conclusion that virtually everything in California will kill you or kill or maim your unborn child. There may be much sun in California but the light from it reveals all those splendid Proposition 65 warnings. There are literally millions of warnings throughout the state and more to come.
Proposition 65 together with very liberal unfair competition laws have made California litigation central, the most inhospitable place to do business in the United States. Businesses are persona non grata in California. Many flee the state or elect not to do business in it, shutting down companies and causing many employees either to go on welfare or to leave the state in search of new jobs. The hardy souls who remain in business in California operate in trepidation of being hit by a bounty hunter or an aggressive county DA. Still others minimize their business involvement in the state to reduce their risks of liability.
The exaggeration of cancer and birth defects in California bewilders and confuses citizens of the state because it misleads them. It falsely warns them that cancer and birth defects will be caused when the fact is to the contrary. Moreover, it creates an ideal means for bounty hunters to terrorize company executives, bilk from them money, and enable aggressive county District Attorneys to do the same. Consequently, while the state of California hyperventilates to its citizens that the sunshine state is going to kill them and their babies, they drive the sane to less sunny but more hospitable states and produce a new and very real threat to Californians’ health and safety: unemployment.
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While it is unlikely that most things sold in California will cause anyone to experience cancer or birth defects when used according to instructions, it is very likely that unemployment will increase the incidence of depression, starvation, disease, and death. The reality is California’s aggressive anti-business environment is killing far more Californians than the chemicals it lists as carcinogens and mutagens on its Proposition 65 list.
© 2011 Jonathan W. Emord - All Rights Reserved