Proposition 65 alive at 25

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					WWW.THERECORDER.COM | THE RECORDER                                                                                                                                             WEEK OF APRIL 9, 2012        | 15

EnvironMEntAL LAw
                                                                                                                                                                               A case for
                                                                                                                                                                               early mediation . . . . . . . .16
                                                                                                                                                                               Richard J. McAdams

                                                                                                                                                                               Renewable energy — it’s
                                                                                                                                                                               about location . . . . . . . . . .18
                                                                                                                                                                               Mathew J. Swain and
                                                                                                                                                                               Ashley E. Breakfield

                                                                                                                                                                               uncertainty . . . . . . . . . . . .19
                                                                                                                                                                               Robert Lawrence

                                                                                                                                                                               Court sets aside recent
                                                                                                                                                                               GHE limits . . . . . . . . . . . .20
                                                                                                                                                                               Todd Williams

                                                                                                                                                                               See more In Practice articles
                                                                                                                                                                               online at

                                                                                                                                                                               Supreme Court weighs

                                                                                                                                                                               Resolving arbitrability

                                                                                                                                                                               Second District creates
                                                                                                                                                                               conflict in appellate

                  Proposition 65 alive at 25                                                                                                                                   ADR hits Europe

                                                                                                                                                                               Offshore investment
    A quarter century after passage, the California law still helps consumers make                                                                                             New way of doing business

                           informed choices about products affecting their health                                                                                              Chevron fails to stall
                                                     occupational, environmental or consumer-               pertise used in developing regulations.
                                                     product exposures they may experience every               The office has adopted regulations in Title 27                  UCL standing
                                                     day.                                                   of the California Code of Regulations that pro-
                                                                                                            vide compliance assistance via voluntary “safe                     The right to ‘stay put’
                 Carol J. Monahan-Cummings                      A sELf-ExECutinG LAw                        harbor” provisions setting no significant risk
                                                        A unique aspect of the law, which can be very       levels for carcinogens and maximum allowable                       What in-house counsel want
                                                     confusing to businesses and their counsel, is          dose levels for developmental or reproductive
Environmental Law                                    the way in which the law was structured to be          toxins. These safe harbor levels can help busi-                    Shedding light on
                                                     self-executing. Efforts were made by the authors       nesses determine whether a warning is required                     ‘Prometheus’

                                                     of the initiative to limit the potential for govern-   for exposures to listed chemicals.
             wenty-five years ago, California vot-   mental interference or foot-dragging in the list-         Businesses must still quantify the anticipated                  A new group faces
             ers overwhelmingly passed an ini-       ing of chemicals or enforcement of the statu-          level of exposure from a given activity or prod-                   disenfranchisement
             tiative called “The Safe Drinking       tory mandates. Rather than establish a tradi-          uct before they can apply the safe harbor level.
             Water and Toxic Enforcement Act         tional regulatory program, Prop 65 requires the        Other regulations provide exceptions to the                        Decisions that shape
             of 1986” (Health and Safety Code        governor to publish a list of chemicals known          warning requirements for certain exposures                         the workplace
§25249.5). The initiative is commonly known          to cause cancer or developmental or reproduc-          (see for example, §25501 — exposures to natu-
as Proposition 65. This unique law requires          tive harm. Twelve months later, businesses are         rally-occurring chemicals in foods), suggested                     Path for generics open
businesses with 10 or more employees to pro-         automatically prohibited from knowingly and            content and methods for providing warnings                         in biotech
vide warnings when they expose people to             intentionally causing an exposure to those             (§25601 et seq.), scientific methodologies for
chemicals known to cause cancer or develop-          chemicals without an adequate warning.                 calculating exposures that require a warning,                      So your paralegal is
mental or reproductive harm. It also prohibits                                                              and procedures for requesting technical advice                     applying to law school
the discharge of these chemicals into sources          thE LEAd AGEnCy And its rEGuLAtory                   concerning the application of the law to various
of drinking water. In part, Prop 65 is a “right to                 funCtions                                situations (§25204). The office provides a variety
know” law. Unlike many other federal or state          Since 1991, California’s governors have del-         of helpful information on its website (www.oe-
laws, it does not directly regulate the use, emis-   egated their listing duties to the Office of Envi-, including the current
sion or exposure to any chemical. Instead, it        ronmental Health Hazard Assessment, within             list of chemicals, the statute, regulations and
simply requires businesses to inform consum-         the California Environmental Protection Agen-          case law relating to the act, along with scien-
ers when they are being exposed to the chemi-        cy. This office is staffed by scientists and physi-    tific information and fact sheets for individual
cals, providing essential information that allows    cians rather than traditional regulators. These        listed chemicals.
people to make informed choices regarding the        professionals comb the scientific literature on
                                                     chemicals, determine whether sufficient evi-                             wArninGs
  Carol J. Monahan-Cummings has been the             dence exists for listing and provide support to          Businesses can be sued by state and local
chief counsel for the state Office of Environ-         the state’s “qualified experts,” a group of Cali-      prosecutors or private individuals acting in the
mental Health Hazard Assessment since 2003.          fornia experts who independently determine             public interest for failing to warn about chemi-
She spends about 80 percent of her time on is-       whether a chemical causes cancer or develop-           cal exposures related to their products or ser-
sues related to Proposition 65.                      mental effects. They also provide scientific ex-              See MONAHAN-CUMMINGS page 21
16 | WEEK OF APRIL 9, 2012                                                                                                                           THE RECORDER | WWW.THERECORDER.COM

                                       A case for early mediation
              Coming to the table at the outset of the dispute often leaves parties with broader options
                                for negotiations and mutually acceptable resolution
                                                  does not mandate mediation, but allows the      diation are set to expire on Jan. 1, 2016.          successful negotiations in environmental
                                                  court to “invite the parties to consider” al-      There is little evidence that these proce-       cases, including the following:
                                                  ternative dispute resolution, and addresses     dures are extensively used or widely suc-              1. A forum recognizing equality: The set-
                                                  such potential issues as statutory time lim-    cessful. While many experienced land use            ting for early stage mediation must be one
                 richard J. McAdams               its and “open meeting law” requirements         attorneys achieve results outside the court-        of mutual respect and equally-shared com-
                                                  that could arise during negotiations pursu-     room, it seems more a product of direct pro-        munication. All involved must have confi-
                                                  ant to the statute.                             fessional relationships developed over              dence in the process from the outset. Un-
Environmental Law                                                                                 time, rather than the result of the codified        fortunately, many attempts at early meet-

                                                                                                  procedures. Where such trust does not ex-           ings involve only a developer’s staged slide-
            or many years, the California Leg-          Early-stage mediation                     ist between disputants, there are unan-             show attempting to persuade an invited
            islature has sent strong e ncour-                                                     swered questions about the newest statute           audience or an uninterrupted barrage of
            agement to opposing litigants in           offers the advantage of                    with one side concerned about delay and             criticisms from citizen groups aimed at the
            land use disputes to resolve their          an open, more global                      frivolous claims and the other uncertain            project proponents. Compare such unpro-
            issues through mediation. It has                                                      about the tolling of limitation periods. In         ductive events to a facilitated roundtable
been the declared intent of several statu-                framework for the                       addition, there is shared concern over the          discussion free of any power imbalance.
tory enactments that matters broadly la-
beled “environmental disputes,” such as
                                                       exchange of positions,                     short time for the lead agency to respond
                                                                                                  and the fact that the law is silent as to any
                                                                                                                                                         2. Motivated parties: Whether arising
                                                                                                                                                      from developed trust, time pressure from
CEQA challenges, contested planning and                  thus broadening the                      role of the project proponent.                      external sources, including public agencies,
zoning decisions, and disputed permit ap-                                                            Perhaps these doubts could be overcome           or other factors, a gathering of strongly mo-
plications could benefit from negotiations             chances for a creative                     by such measures as (1) a request, not just         tivated parties gives impetus to results. It is
among the parties and resolution outside               and mutually beneficial                    a “demand”— for mediation that contains             a truism that participants who enter into
of the courtroom.                                                                                 a suggested framework for negotiations —            mediation with a desire to resolve a dispute
  California Government Code §66030 et                        resolution.                         truly an “invitation” to mediate; (2) the lead      and who are open to a creative exchange of
seq., set forth what the Legislature described                                                    agency’s willingness to allow a response            ideas have the most productive negotia-
as “formal mediation processes for land use          More recent enactments (California Pub-      from the real party in interest; (3) the real       tions.
disputes” brought in superior court, recog-       lic Resources Code §21167, et seq.) have        party’s participation; (4) a mediator’s abil-          3. Involvement of key decision makers:
nizing the delay, uncertainty and cost of         been specifically directed to CEQA cases.       ity to work with the parties to establish a         The mediation needs to include the major
such contentious litigation. The legislation      Section 21167.8 mandates a “settlement          framework of issues, a time table for nego-         players — people with the authority to
                                                  meeting” in the nature of a “meet and con-      tiations and resolution of any issues con-          speak and act on behalf of their constitu-
   Hon. Richard J. McAdams (Ret.) brings          fer” after service of a petition or complaint   cerning statutory time limits.                      ents, or at least with a minimum of outside
more than 40 years of legal knowledge and         and within certain time limits. The latest                                                          consultation and advice.
experience in his approach to ADR. He is          enactment, §21167.10, effective July 1, 2011,         A CAsE for EArLy MEdiAtion                       4. A carefully structured process: From
recognized as one of the most accomplished        provides a method for a prospective peti-          In spite of well-intentioned statutes and        the outset, a comprehensive framework for
judges on California’s appellate bench for        tioner to make a pre-litigation mediation       the commendable efforts of many attorneys           mediation should be established. Such a
his engagement and leadership in judicial         request to the lead agency which the agen-      and parties who voluntarily and indepen-            “memorandum of understanding” serves
education and administration. He can be           cy may accept and “proceed with media-          dently engage in alternative processes,             as a set of ground rules and can include pro-
reached at                  tion” or deny. Key provisions affecting me-     there is a strong argument to be made for           visions for such matters as the anticipated
                                                                                                  bringing stakeholders together much ear-            issues for discussion, time deadlines (with
                                                                                                  lier than the courthouse steps. This model          freedom to extend by agreement), the role
                            Cox, Castle & Nicholson LLP congratulates                             envisions a forum to be held at the earliest        of the mediator, the need and mechanism
                                                                                                  possible time — long before positions have          for gathering and exchanging critical infor-
                            our Northern California Environmental,                                hardened, emotions and tempers have                 mation, including necessary scientific data
                            Land Use & Natural Resources lawyers on                               flared, heavy financial commitments have            or other expert-generated materials, confi-
                                                                                                  been made, and before the involvement of            dentiality, anticipated implementation is-
                            being selected as one of the Leading                                  a decision making board or agency. Inter-           sues and allocation of mediation costs.
                            Northern California Environmental Law                                 ested parties and potential adversaries                5. Confidentiality: Although the final
                                                                                                  would convene to listen and learn, ex-              product of most environmental settlements
                            Practice Groups.                                                      change views, and most importantly, seek            should best be open and subject to public
                                                                                                  a path toward a mutually beneficial out-            scrutiny, absolute confidentiality should
                                                                                                  come through structured negotiations.               govern the process of mediation. Any ques-
                            Cox, Castle & Nicholson LLP handles                                   Greater support needs to be given to such           tion of keeping constituent groups informed
                            environmental, land use and natural                                   early-stage mediation — support from the            should be resolved in the ground rules.
                            resources matters throughout the state.                               Legislature as well as the legal profession,           6. Perseverance: The parties must be will-
                                                                                                  the government and the business and en-             ing to commit the necessary time for nego-
                            Our 25 attorneys focused in these practice                            vironmental/citizen advocacy communi-               tiations, commensurate to the nature of the
                            areas are leaders in nearly every aspect of                           ty.                                                 dispute, and to persevere. Experience
                                                                                                     Early-stage mediation offers many ad-            shows that even if initial sessions do not
                            environmental law, including regulatory                               vantages. There are, of course, the financial,      achieve full resolution, participants who are
                            compliance, transactional counseling and                              emotional and control-over-outcome ben-             open to the opportunity to engage in further
                                                                                                  efits inherent in all mediations, as well as        mediation are able to break off, re-examine
                            litigation matters. They also regularly                               the advantage of confidentiality. In envi-          positions, and return to overcome what
                            represent developers and providers of                                 ronmental cases, there is a vital additional        once seemed to have been an unbreakable
                                                                                                  advantage to an early gathering: the ability        impasse.
                            renewable energy, including work on some                              to consider broad issues. One of the prima-            Across the nation and around the world,
                            of the largest renewable energy projects in                           ry limitations with mediation during or on          there are stunning examples of mediated
                            California.                                                           the eve of litigation is that the topics “on the    environmental disputes, including some
                                                                                                  table” tend to focus on specific issues as          that seemed incapable of commencing, let
                                                                                                  framed by the litigation — e.g., whether            alone resolving. From New York’s Hudson
                                                                                                  proper CEQA procedures were followed or             River to Port Townsend, Wash., citizen
                                                                                                  whether the record sustains a finding of a          groups, developers, utilities and public
                                                                                                  project’s conformity with an ordinance or           agencies have successfully resolved seem-
                                                                                                  a general plan. It is difficult — and often         ingly intractable differences through me-
                                                                                                  impossible — to move the parties beyond             diation.
                                                                                                  the narrow issues. Early-stage mediation               Perhaps no better pre-litigation example
                                                                                                  offers the advantage of an open, more glob-         exists than one closer to home, the Tejon
                                                                                                  al framework for the exchange of positions,         Ranch Conservancy, described as the “Holy
                                                 WWW.COXCASTLE.COM                                thus broadening the chances for a creative          Grail of conservation in California” by Joel
                                                                                                  and mutually beneficial resolution.                 Reynolds of the Natural Resources Defense
                                                                                                     Of course, it is overly idealistic to believe    Council. This dispute arose out of the po-
                                                                                                  that by merely gathering, a settlement will         tential development of the largest privately
                             SAN FRANCISCO LOS ANGELES ORANGE COUNTY                              be magically created. There are many fac-           owned property in the state, involving four
                                                                                                  tors at play that provide a foundation for                              See McADAMS page 21
                                 LEADING ENVIRONMENTAL PRACTICES                                                                                                                       | 17

                                         o create our list of leading environmental practices      Editor Liz Enochs and Substantive Law Editor Vitaly Gashpar
                                         in the San Francisco Bay Area, we asked law firms to      also surveyed lawyers knowledgeable about environmental
                                         submit nominations that included up to five key play-     law for their confidential assessments and suggestions of
                                 ers and some of their recent notable results. Recorder Projects   practices that ought to be included in a go-to list.

ALLEn MAtkins LECk GAMBLE MALLory & nAtsis                                                          MEyErs nAvE riBACk siLvEr & wiLson

                Sandi Nichols, (pictured) James Burroughs, David Cooke, James                                       Amrit Kulkarni (pictured), Kenton Alm, Julia Bond, Timothy
                Meeder, Robert Wyatt                                                                                Cremin, Steve Mattas

   Competitors say the firm has one of the best environmental practices, with industrial               A household name among governmental entities, the firm routinely scores wins for
clients relying on it to ensure business as usual. Active in compliance, permitting and             its municipal clients at trial and on appeal. It also advises on CEQA, water rights and
litigation. The firm is also an annual sponsor of the State Bar Environmental Law Con-              land use issues, and represents municipalities in multimillion-dollar development proj-
ference in Yosemite.                                                                                ects in Northern California and across the state.

                                                                                                    Morrison & foErstEr
BArG Coffin LEwis & trApp

                                                                                                                    Christopher Carr (pictured), Michele Corash, David Gold, Zane
                John Barg (pictured), Richard Coffin, Stephen Lewis, R. Morgan                                      Gresham, Michael Jacob Steel
                Gilhuly, Brian Haughton
                                                                                                       Its lawyers are shaping the look of the Bay Area. Partner David Gold leads the firm’s
  Barg Coffin gets props from competitors, and has secured big wins in the Supreme                  team in its permitting work in CEQA and natural resources in development of a 3.1 mil-
Court, as well as federal and state appellate courts. Barg Coffin attorneys are also very           lion-square-foot campus for one of the Bay Area’s largest tech companies. And partner
active in the Bar Association of San Francisco’s environmental law section, with attor-             Zane Gresham heads a team in planning, entitlements and infrastructure development
neys serving in executive roles.                                                                    in the $1.5 billion Oyster Point Marina project. On the litigation front, in 2011, the firm
                                                                                                    successfully defeated two class actions consolidated as MDL cases on behalf of 19 mem-
                                                                                                    bers of the Grocery Manufacturers Association.

Cox CAstLE & niChoLson

                                                                                                    nAturAL rEsourCEs dEfEnsE CounCiL

                R. Clark Morrison (pictured), Stuart Block, Robert Doty, Anne
                Mudge, Michael Zischke

   Cox Castle prides itself on being at the forefront of climate change, helping clients                            Michael Wall (pictured), Johanna Wald, Kate Poole, Selena Kyle
navigate alternative energy frontiers. The firm represents the builder of the world’s larg-
est wind energy project. It also represents clients in CEQA and environmental cleanup                  The NRDC has fought many of California’s most critical environmental battles. Michael
litigation. Cox Castle is cited by peers as among the best.                                         Wall, who heads the litigation team, forced a cleanup of the Suisun Bay “ghost fleet,” won
                                                                                                    a landmark environmental justice victory in Tennessee, and led a trial to safeguard the
                                                                                                    delta smelt. Johanna Wald protects wild places, steering renewables away from sensitive
                                                                                                    lands. Kate Poole leads the group’s delta protection work. Selena Kyle recently had the
fArELLA BrAun & MArtEL                                                                              Legislature’s $150 million raid on energy efficiency programs held unconstitutional.

                                                                                                    shEppArd, MuLLin, riChtEr & hAMpton

                James Colopy (pictured), James Bruen, Christopher Locke,
                Paul “Skip” Spaulding III, David Lazerwitz

  The firm’s work ranges from environmental and permitting work for an alternative
energy company to defending a railroad in a mass tort. Its lawyers represent some of the                            Robert Uram (pictured), M. Elizabeth McDaniel, Judy Davidoff,
top players in the alternative energy market in the development of two solar photovol-                              Arthur Friedman, Neil Popovic
taic facilities. In 2010, the firm as plaintiffs counsel brought to a successful resolution a
pair of complex cases on behalf of a real estate developer. Many of Farella’s environmen-              The group combines top-level talent with a breadth of expertise in the field. It assists
tal lawyers serve in leadership roles at Bay Area bar associations.                                 clients in getting alternative energy projects off the ground, while also doing CEQA-re-
                                                                                                    lated work on behalf of private and municipal clients. On the litigation side, the firm
                                                                                                    recently scored a win on appeal, affirming a dismissal of a putative class action.

LozEAu drury

                                                                                                    wEndEL, rosEn, BLACk & dEAn

                Michael Lozeau (pictured), Richard Drury, Douglas Chermak,
                Christina Caro
                                                                                                                    Greggory Brandt (pictured), Bruce Flushman, Stephen McKae,
  With just five attorneys, this small Oakland firm punches above its weight, thanks to                             Christine Noma, Jonathan Redding
name partners Michael Lozeau and Richard Drury’s years of expertise in CEQA, as well
as clean air and water laws. Its lawyers have won a unanimous California Supreme Court                The firm boasts a broad practice, serving clients ranging from individual landowners
ruling requiring CEQA review for a ConocoPhillips diesel project, secured a precedent               to multinational corporations. Partner Bruce Flushman was involved in the exchange
that the state Department of Water Resources must abide by the California Endangered                and sale of the Port of Oakland public trust land as part of a $35 million development.
Species Act, and used the courts to force the state’s two largest school bus companies to           Attorneys Stephen McKae and Christine Noma are founders and officers of the Alameda
curb emissions.                                                                                     County Bar Association’s environmental, land use and sustainability section.
18 | WEEK OF APRIL 9, 2012                                                                                                                               THE RECORDER | WWW.THERECORDER.COM

          Renewable energy — it’s about location
    When it comes to wind and solar farms, suitable, unencumbered land is California’s scarce resource
                                                  mented by local governments, typically             but the courts have not resolved whether this        or council to make five mandatory findings,
                                                  counties. It authorizes local governments to       extends to utility-scale renewable energy            including that there is no noncontracted
                                                  establish agricultural preserves and offer         projects or is limited to facilities that support    land nearby that is suitable and available for
                                                  contracts to landowners that provide prop-         existing agricultural uses.                          the project, and that cancellation will not re-
                                                  erty tax reductions in exchange for long-term         Wind farms appear amenable to a com-              sult in the removal of adjacent land from ag-
Mathew J. swain and Ashley E. Breakfield          restriction on the use of their land to agricul-   patibility finding. While the size of the over-      ricultural use or cause discontiguous pat-
                                                  tural or compatible open space uses. Until         all project site may be several thousand             terns of urban development.
                                                  recently, these contracts had a 10-year initial    acres, each wind turbine can be separated               The second, and more promising option
Environmental Law                                 term, and contracted land in Farmland Se-          by hundreds of feet, depending on height             for renewable energy developers, is where

                                                  curity Zones had 20-year initial terms. Under      and rotor diameter, and each tower’s foun-           the city or county finds that cancellation is
      n the current renewable energy boom,        Assembly Bill 1265, passed in 2011, local gov-     dation occupies a relatively small footprint         in the public interest. Specifically, the local
      developers of utility-scale solar and       ernments may reduce the contract term from         within the project boundary. Because the             government must find that other public con-
      wind projects share a common need:          10 to nine years and from 20 to 18 years.          turbines are widely spaced and the rotors are        cerns substantially outweigh the objectives
      large tracts of relatively flat, undevel-      As of 2009, there were approximately 15         far above the ground, agricultural activities        of the act and there is no noncontracted land
      oped land. California possesses an          million acres across 54 counties under Wil-        can continue to be carried out within the            nearby that is both available and suitable for
abundance of such land with high solar and        liamson Act contracts — about half of all          project area. In fact, many counties, such as        the alternative use. Indeed, the Department
wind resource potential, but more than 30         farmland in California. Because utility-scale      Kern County, have made general findings              of Conservation has noted that “because it
million acres are already under agricultural      renewable energy developers need large             that wind farms are compatible under the             is the policy of the state to require that a por-
production. One of the principal hurdles fac-     tracts of contiguous land, typically hundreds,     act.                                                 tion of its energy is generated using renew-
ing development on much of this agricul-          if not thousands, of acres, they frequently           Compatibility findings for solar farms            able sources, it is logical to expect that a local
tural land is the California Land Conserva-       encounter parcels under Williamson Act             prove more difficult. These projects consist         jurisdiction could find that the siting of a so-
tion Act, commonly known as the William-          contracts, restricted to agricultural uses. Par-   of dense installations of energy generating          lar energy project makes the public interest
son Act.                                          ties interested in utilizing contracted land for   equipment (e.g., arrays of photovoltaic pan-         findings required for cancellation of a Wil-
   Passed in 1965, the Williamson Act seeks       such projects have four options to move for-       els) mounted close to the ground. This makes         liamson Act contract.” The same can be ex-
to stave off the loss of agricultural land to     ward.                                              it difficult for the land underneath the arrays      pected for wind farms, although because
urban development. The act is overseen by                                                            to support active agriculture use, and im-           they have a greater chance of succeeding un-
the Department of Conservation and imple-            option 1: CoMpAtiBiLity findinG                 practical for the use of agricultural equip-         der the compatibility option, they are more
                                                     The first option is to obtain a finding from    ment. Therefore, in most cases, such inten-          likely to avoid seeking cancellation.
   Mathew J. Swain is an associate in Farel-      the local government that the renewable en-        sive development may be incompatible with               Cancellation removes the agricultural use
la Braun & Martel’s San Francisco office,           ergy project is compatible with the act. Gen-      agricultural or open space uses.                     restriction, but at significant expense. The
where his practice emphasizes strategic           erally, a use is compatible so long as it does        The act provides a fallback option for proj-      landowner is assessed a fee equal to 12.5 per-
environmental permitting and compliance           not significantly compromise, displace or          ects that cannot obtain a compatibility find-        cent of the fair market value of the property,
advice on renewable energy projects. Ashley       impair the current or future agricultural use      ing. The local government may issue a con-           which reduces this option’s appeal.
E. Breakfield is an environmental litigation       and capability of the land, or result in sig-      ditional use permit allowing the project to
associate in Farella’s San Francisco office.        nificant removal of adjacent contracted land       be built on contracted land if, among other                   option 4: nonrEnEwAL
The authors would like to thank Farella real      from agricultural or open space use. In ad-        things, the conditions will avoid or mitigate           Nonrenewal is the last option for develop-
estate associate Navjot Athwal for his con-       dition, the act provides that “electrical facil-   impacts to on- and/or off-site agriculture, the      ing a renewable energy project on land un-
tributions to this article.                       ities” are compatible uses as a matter of law,     use is consistent with the purposes of the act,      der Williamson Act contract. The process is
                                                                                                     and the findings consider the productive ca-         straightforward: The landowner files a notice
                                                                                                     pability of the land.                                of nonrenewal and waits out the remaining
                                                                                                                                                          term of the contract, a minimum of eight
                                                                                                                  option 2:                               years. The use restrictions remain in effect
                                                                                                         soLAr EAsEMEnt undEr AB 618                      until the contract expires and the property
                                                                                                        In recognition of its competing policy di-        taxes gradually increase to a fair market val-
                                                                                                     rectives to preserve agricultural land and           ue assessment during the term of the cancel-
                                                                                                     open space on the one hand, and achieve a            lation. Although this is a relatively straight-
                                                                                                     33 percent renewable portfolio standard on           forward option, it is the least viable from a
                                                                                                     the other hand, and perhaps in recognition           project development standpoint. The expi-
          Kent          Julia         Tim          Amrit          Adam          Steve                of the “compatibility barrier” noted above,          ration period is simply too long for project
          Alm           Bond          Cremin       Kulkarni       Lindgren      Mattas
                                                                                                     California enacted a solar easement program          developers to invest capital, lock down fi-
                                                                                                     last year under Assembly Bill 618.                   nancing or meet energy delivery deadlines
                  Congratulations to our                                                                AB 618 authorizes parties to a Williamson
                                                                                                     Act contract, after approval by the Depart-
                                                                                                                                                          under power purchase agreements.

                                                                                                                                                                     furthEr ChALLEnGEs
                    Environmental Law                                                                ment of Conservation and in consultation
                                                                                                     with the Department of Food and Agricul-                Other than nonrenewal, each option for
                                                                                                     ture, to mutually agree to rescind the con-          developing a renewable energy project on
                        Attorneys                                                                    tract in order to simultaneously enter into a        land currently under Williamson Act con-
                                                                                                     temporary solar-use easement. The term of            tract bears the risk that it could be undone
                     Recognized by the Recorder as one of the ‘Top 10’                               the easement must be no less than 20 years.          by the courts. The act provides that compat-
                 Environmental Law Practice Groups in Northern California                            In addition, the local government must               ibility findings may be challenged in court
                                                                                                     charge the landowner a 6.25 percent fee              by any owner of land that is under William-
             CEQA & NEPA                               Tidelands Trust                               based upon the fair market value of the prop-        son Act contract in the local jurisdiction, as
                                                                                                     erty at the time of rescission.                      well as all landowners within one mile of the
             Clean Water Act                           Climate Change                                   This program is not applicable to all agri-       subject land. In addition, any person that has
             & Water Rights                            Development Agreements                        cultural land, however. The subject land             participated in the public process may chal-
             Airport Land Use                          & Vested Rights                               must not be designated as prime or unique            lenge the issuance of a conditional use per-
             Compatibility Plans                                                                     farmland, or of national importance, unless          mit or contract cancellation by petitioning
                                                       Development Fees                              the Department of Conservation determines            the court for a writ of administrative man-
             Brownfields                                & Exactions                                   otherwise. In addition, the land must consist        damus. How smoothly the new AB 618 solar
             CERCLA/RCRA                               General & Specific Plans                       of soils with significantly reduced agricul-         easement program functions and is inter-
                                                                                                     tural productivity due to synthetic or natural       preted by the courts also remains to be seen.
             Coastal Act                               Wetlands & Endangered                         chemical contamination or other physical             Without a doubt, given the environmental
             Energy                                    Species                                       reasons.                                             and financial stakes at issue, we can expect
                                                                                                                                                          each option to be tested, challenged and in
             Solid Waste                                                                                      option 3: CAnCELLAtion                      many cases successfully utilized in the years
                                                                                                        The third option is for the landowner to          to come.
                                                                                                     cancel the Williamson Act contract, which               Moreover, obtaining adequate land is but
                                                       800.464.3559               is both difficult and expensive, and disfa-          one hurdle a renewable energy project de-
                                                                                                     vored by the courts.                                 veloper faces. Obtaining the necessary per-
                                                                                                        There are only two circumstances under            mits and entitlements is another, as is finding
                                                                                                     which a local government may approve can-            a buyer for the power and obtaining suffi-
                                                                                                     cellation of a contract. The first is where can-     cient financing. Then there’s building the
                                                                                                     cellation is deemed consistent with the pur-         darn thing and connecting it to the grid. But
                                                                                                     poses of the act. This requires the local board      it all starts with finding the right spot.
WWW.THERECORDER.COM | THE RECORDER                                                                                                                          WEEK OF APRIL 9, 2012      | 19

                                     Cap-and-trade uncertainty
                            Implementation of AB32 is bogged down by delays every step of the way,
                                               creating a climate of speculation
                                                 2008, ARB revised its projected 2020 emis-       comments. Most of the comments from             ated a rulemaking in March 2011
                                                 sion levels downward to 507 million              regulated utilities oppose the purchase         (11-03-012) to determine how to distrib-
                                                 tonnes equivalent, and revised the annu-         limitations, arguing that these added lim-      ute the proceeds of the auctions. In its
                                                 al caps accordingly. This 15 percent re-         itations on purchasing and trading are not      original proposal on this topic, the CPUC
                robert Lawrence                  duction in the projected emissions reflects      necessary or protective of ratepayers.          asked interested parties to comment on
                                                 the difficulty in predicting the appropriate     Without assurances of cost recovery for         ways to rebate proceeds taking into con-
                                                 cap even when data are available.                their purchases, and without free access        sideration the goals of the program and
Environmental Law                                   Without current data, the task is even        to allowance markets, utilities will be un-     consumer fairness. The majority of utili-

                                                 more difficult. Since 2008, ARB has not          able to purchase allowances in the most         ties and consumer groups recommended
            alifornia’s Air Resources Board      posted data regarding aggregate green-           cost-effective manner.                          paying rebates to electric ratepayers. En-
            has missed a series of deadlines     house gas emissions in California. Al-              The CPUC is also considering another         vironmental groups and renewable ener-
            in its greenhouse gas cap-and-       though a mandatory reporting rule will           thorny issue involving independent gen-         gy developers urge continuing subsidies
            trade program, and has delayed       improve the situation going forward, the         erating entities from which utilities pur-      for alternative energy and conservation.
            implementation again. On             data for 2011 emissions have not been re-        chase substantial amounts of electricity.       A modified schedule issued in November
March 27, Air Resources Board Chair Mary         ported yet. No one knows whether the             These sales usually take place pursuant to      2011 projected June 2012 as the date of
Nichols announced that the allowance             2013 cap of 162.8 million tonnes of CO2          purchase agreements, and some of these          issuance of a proposed decision on reve-
auction scheduled for Aug. 15 would be           equivalents will generate high or low al-        purchase agreements do not allow some           nue allocation. Until the nature of any re-
postponed to the Nov. 14 auction. With a         lowance prices.                                  generators to recover their allowance           bate program is understood, the net price
compliance date of Jan. 1, 2013, the exten-         The result of this uncertainty is that bid-   costs from their utility customers. The         effects of the auction program will remain
sion exacerbates uncertainties relating to       ders in the November auction will not            problem occurs with pre-AB32 contracts,         unclear.
program implementation.                          have adequate information upon which             as well as post-AB32 contracts, because            The allowance auctions will be run by
   AB32, California’s Global Warming So-         to base their bids. The August auction           the parties subject to surrender require-       a third-party private contractor selected
lutions Act enacted in 2006, authorized          would have assisted businesses in under-         ments were first identified years after         by ARB pursuant to a procurement pro-
ARB to implement a range of actions to           standing the market price for allowances,        AB32 was enacted. The CPUC is consider-         cess. The engagement of the contractor
reduce greenhouse gas emissions in Cal-          and in planning their businesses for 2013.       ing whether and how to ensure that these        and development of auction procedures
ifornia to 1990 levels by 2020. A central        Now, the first point at which businesses         costs get paid. Failure to do so may mean       are behind schedule. The original sched-
component of the program was “market-            will be able to understand the potential         that operating some generation facilities       ule called for the engagement of the auc-
based” alternatives for regulating emis-         financial impact of the cap-and-trade pro-       will become uneconomical to operate,            tion administrator and completion of the
sions. ARB identified “cap-and-trade” as         gram is when the results of the November         which can result in blackouts and price         auction procedures by February 2012. The
the preferred market-based alternative in        auction are released, approximately a            spikes for electricity in periods of high de-   auction procedures have not been pro-
2008. ARB adopted “final” regulations im-        month before the compliance require-             mand.                                           posed yet. Since the auction procedures
plementing the program in October 2011,          ments start. At that point, regulated enti-         The use of auction revenues is another       have to be final by June for a rehearsal auc-
after delaying the scheduled start date          ties will be unable to plan investments to       unresolved issue that could affect imple-       tion in August, it is not clear that they can
from Jan. 1 of this year to Jan. 1, 2013. In     reduce emissions. If allowances are priced       mentation. Allowances auctions will cost        be completed in time. Elements of the
its adopting resolution, ARB acknowl-            too high, the only compliance alternatives       California consumers and ratepayers a           auction procedures may need to be issued
edged then that there were some remain-          will be moving business activities out of        minimum of $650 million in the first year.      by ARB for public review and comment,
ing open issues that could require addi-         California or reducing operations.               The governor’s 2012 budget identifies $1        resulting in further delays.
tional regulatory changes.                          Utilities may be in a better position gen-    billion of revenues to be raised from cap-         The cap-and-trade program is current-
   The basic elements of the cap-and-trade       erally than regulated industries. Although       and-trade auctions, $500 million of which       ly being finalized for its debut in a Novem-
program are by now familiar to Califor-          utilities receive allowances “for free,” most    is earmarked to offset governmental costs       ber auction, after ARB recently delayed
nians following AB32. ARB has established        utilities return the allowances to ARB for       associated with climate change. The re-         the original August date. Several uncer-
an annual cap on greenhouse gas emis-            auction. In theory, the utilities bidding at     mainder could be allocated to energy con-       tainties affecting the program make it dif-
sions for selected segments of the Califor-      the upcoming auction can bid whatever            servation, renewable energy investment          ficult to predict whether the program can
nia economy. The right to emit green-            they want, because they are required by          and other related programs. According to        be successfully launched this year or to
house gases will be represented by regula-       law to serve their customers and comply          the Legislative Analyst’s Office in a report    plan for the consequences in 2013. In the
tory “allowances,” each of which will au-        with ARB’s requirements. As a result, they       on Cap-and-Trade Auction Revenues is-           remainder of 2012, AB32 watchers should
thorize holders to emit one metric ton           would normally be entitled to recovery           sued on Feb. 16, the total revenues could       anticipate multiple cap-and-trade devel-
(tonne) of greenhouse gases (in carbon           from ratepayers of costs incurred for com-       be billions of dollars more than project-       opments that will either help resolve these
dioxide equivalents). Allowances will be         pliance with law. But there is uncertainty       ed.                                             uncertainties or require further delays in
allocated by ARB to regulated entities           facing the utilities as well.                       By agreement with ARB the CPUC initi-        the planned schedule.
through a variety of mechanisms, includ-            The California Public Utilities Commis-
ing free distribution of most allowances         sion clarified in August 2011 that it would
and auctions of 65 million other allow-          use the ongoing procurement rulemaking
ances.                                           (10-05-006) to address utilities’ cost recov-
                                                                                                      Stay current on the latest California legal develop-
   The most significant uncertainty facing       ery from ratepayers for the acquisition of
regulated entities is the cost of allowanc-      allowances. In a proposed decision issued
                                                                                                      ments and decisions with exclusive, daily News and
es allocated by auctions. ARB established        Feb. 21, the CPUC expressed concerns that
a minimum price for auctioned allowanc-          utilities might purchase an incorrect num-           Case alert emails.
es of $10/tonne, escalating by 5 percent         ber of allowances. If utilities purchase too
per year. But the price of allowances will       many allowances, or purchase too few,
also be driven by supply and demand. If          they may incur unnecessary costs or loss-
ARB establishes the cap on allowances            es that would be borne by ratepayers. To
above normal demand, then the allow-             mitigate this risk, the CPUC has proposed
ances should not cost much more than the         purchase limitations on utilities, includ-
$10 minimum. If ARB establishes the cap          ing minimum and maximum purchase
at a level below the otherwise ordinary de-      obligations for each auction.
mand, then the scarcity of allowances               The CPUC has also expressed concern
should drive up the price of allowances.         about the types of purchases utilities
If ARB underestimates demand by a wide           might make. Based on the perceived po-
margin, allowance prices could spike dra-        tential for abuse or mistakes, the CPUC
matically.                                       has proposed to regulate bilateral pur-
   There is no assurance that ARB has set        chases, and prohibit some other forms of
the cap at a level that will result in reason-   procurement. In short, the CPUC has pro-
able allowance prices. In December 2007,         posed additional limitations on market
ARB projected that 2020 emissions of             participation (above and beyond those
greenhouse gases would reach 596 million         imposed by ARB) on which the cap-and-
tonnes of CO2 equivalents. As a result of        trade markets depend for efficient opera-
the economic downturn that began in              tion.
                                                    The CPUC proceedings on these issues
  Robert Lawrence is a partner at Marten         do not yet appear to be near resolution.
Law in San Francisco and focuses on en-          At this point, the CPUC has made concep-
ergy and environmental matters.                  tual proposals and received extensive
20 | WEEK OF APRIL 9, 2012                                                                                                                        THE RECORDER | WWW.THERECORDER.COM

                    Court sets aside recent GHE limits
                      Alameda County judge sided with plaintiff’s argument that BAAQMD thresholds
                               were themselves a CEQA project requiring impact analysis
                                                 Ironically, the reason the thresholds were       se significant impact necessitating prepa-          He ordered BAAQMD to not dissemi-
                                                 struck down was that the air district itself     ration of an environmental impact report         nate the existing or any new thresholds
                                                 failed to analyze the potential environ-         and adoption of mitigation measures.             until it fully complies with its obligations
                                                 mental impact of the thresholds pursuant            During the approval process for the           under CEQA, including studying their po-
                todd williams                    to CEQA before their adoption.                   thresholds, several typically divergent in-      tential effect on future development in the
                                                   Adoption of thresholds: CEQA requires          terest groups found common ground. Cit-          region.
                                                 public agencies to analyze and consider          ies, as well as development, transit, afford-       BAAQMD has not indicated if it will ap-
Environmental Law                                the environmental effects of their pro-          able housing and economic growth advo-           peal, but invalidation of the thresholds in

                                                 posed actions and avoid or reduce signif-        cates, joined together to criticize the          their entirety presents uncertainty for cur-
            fter years of debate, analysis       icant environmental impacts when feasi-          thresholds on the grounds that they would        rent Bay Area project applicants and local
            of greenhouse gas emissions          ble. In March 2010, the California Natural       be so easily exceeded that EIRs would be         agencies regarding proper evaluation of
            is now an accepted part of re-       Resources Agency adopted updated CEQA            required for even small infill projects in       air quality (including greenhouse gas) im-
            quired review under the Cal-         guidelines that included a requirement           scenarios where an EIR would not have            pacts in CEQA documents. While the deci-
            ifornia Environmental Qual-          that agencies determine the significance         been required previously. For example,           sion is not precedential, it may serve as a
ity Act. However, determining what               of greenhouse gas emissions prior to ap-         under the thresholds, relatively modest          warning to other air districts considering
amount of greenhouse gas emissions               proving projects. 14 Cal. Code Regs              projects such as an 8,000-square-foot su-        quantitative greenhouse gas thresholds
would result in a significant impact re-         §15064.4. In order to determine whether          permarket, a 78-unit apartment complex           that a CEQA analysis of the impact of such
mains in flux.                                   an impact is significant (and requires mit-      or a 19,000-square-foot shopping center          standards should be conducted.
   The question of the proper threshold          igation), the agency approving a project         would all trigger a significant greenhouse          CEQA encourages local agencies to
was thrown into further disarray on March        generally compares the project’s impact          gas emission impact.                             adopt thresholds of significance to evalu-
5, when Alameda County Superior Court            (e.g., traffic, noise, air quality) against an      The added time and cost involved in           ate environmental impacts so long as
Judge Frank Roesch ordered that the Bay          adopted threshold.                               preparing such reports, and the ensuing          those thresholds are supported by sub-
Area Air Quality Management District set           In June 2010, BAAQMD — the agency              legal exposure, would, they argued, make         stantial evidence and adopted through a
aside CEQA air quality thresholds it ad-         charged with primary responsibility for          infill “smart growth” development less fea-      public review process. Thus, Bay Area cit-
opted in 2010. (California Building Indus-       control of air pollution in the Bay Area for     sible. The impact of the thresholds, they        ies and counties may adopt their own
try Association v. Bay Area Air Quality          all sources other than vehicles — adopted        claimed would be to discourage infill            greenhouse gas thresholds as long as it
Management District, RG10-548693.)               new air quality thresholds of significance       growth in favor of sprawl.                       comports with CEQA’s requirements.
                                                 for use in CEQA analyses. Their adoption            The BAAQMD thresholds were also crit-         Courts have upheld reliance on such
   Todd Williams is a partner at Wendel,         was controversial.                               icized because they introduced a new re-         thresholds, for example where the thresh-
Rosen, Black & Dean in Oakland. He rep-            BAAQMD became the first California air         quirement for projects proposed within           old is based on compliance with AB 32.
resents public and private clients, including    district to set numeric significance thresh-     1,000 feet of existing pollution sources in-     Citizens for Responsible and Equitable En-
landowners and developers of residential,        olds for evaluating the environmental ef-        cluding most freeways. Such projects were        vironmental Development v. City of Chula
commercial and industrial property, as           fects of greenhouse gas emissions. (Other        asked to perform a risk and hazard assess-       Vista, 11 C.D.O.S. 8619.
well as local agencies, in land use, real es-    regional air districts have set more quali-      ment to determine the potential health              As for BAAQMD’s requirement for new
tate and environmental litigation matters        tative standards.) Under the BAAQMD              impacts on new project residents from ex-        projects to perform a risk and hazard risk
and administrative proceedings. He can be        thresholds, if a project’s emissions exceed-     isting, background pollution. This require-      assessment, since Judge Roesch invalidat-
reached at                ed the thresholds, it would result in a per      ment further discouraged infill develop-         ed the thresholds in their entirety, he opt-
                                                                                                  ment, critics claimed.                           ed to not specifically reach the issue.
                                                                                                     Traditionally, CEQA examines a proj-          Clearly, the requirement is on hold while
                                                                                                  ect’s impacts on the surrounding environ-        the thresholds are invalidated. Further, in-

                                                                                                  ment, rather than the existing environ-          clusion of such an obligation pursuant to
                                                                                                  ment’s impact on a project and its resi-         CEQA is in serious doubt. Two CEQA cas-
                                                                                                  dents.                                           es decided last year reject the assertion
                                                                                                     While the BAAQMD thresholds are not           that a project must evaluate impacts of the

                                                                                                  strictly binding on other Bay Area agen-         surrounding environment on project res-
                                                                                                  cies, BAAQMD’s stated policy was that all        idents, calling into question the basis for
                                                                                                  public agencies in the Bay Area apply the        a requirement to do a such a risk assess-
                                                                                                  thresholds. In practice, Bay Area cities and     ment under CEQA.
                                                                                                  counties widely use the thresholds in part          In Ballona Wetlands Land Trust v. City
      Tank Leaks  Commercial Vehicle Accidents                                                   due to BAAQMD’s expertise and concern
                                                                                                  over legal challenges by project opponents
                                                                                                                                                   of Los Angeles, 201 Cal.App.4th 455 (2011),
                                                                                                                                                   the Second District Court of Appeal reject-
               Fires  Natural Disasters                                                          if they are not followed.
                                                                                                     Following the thresholds’ approval, the
                                                                                                                                                   ed a challenge to an EIR on the basis that it
                                                                                                                                                   failed to address sea level rise impacts on
                                                                                                  California Building Industry Association         the project and invalidated a Resources
      When they do, you need experienced legal help.                                              sued, claiming BAAQMD neglected to an-
                                                                                                  alyze the thresholds themselves as a “proj-
                                                                                                                                                   Agency CEQA Guideline (14 Cal. Code
                                                                                                                                                   Regs. §15126.2(a)) to the extent it required
         Call the Environmental Law Offices Of                                                    ect” under CEQA, including failure to            otherwise. In South Orange County Waste-
                                                                                                  study the impacts of the thresholds on fu-       water Authority v. City of Dana Point, 196
                                Hans W. Herb                                                      ture development patterns. CEQA defines
                                                                                                  a project to include any activity undertak-
                                                                                                                                                   Cal.App.4th 1604 (2011), the Fourth District
                                                                                                                                                   rejected a petitioner’s request that an EIR
                                        (REA No. 01675)                                                                                            be prepared to analyze the impact of an ex-
                                                                                                  en by a public agency which may cause
                                                                                                  either a direct physical change in the en-       isting sewage treatment plant on a pro-
                Experienced and trained legal teams                                               vironment or a reasonably foreseeable in-        posed zoning amendment that would allow
                                                                                                  direct physical change in the environ-           a mixed use project on adjacent land.
                      available 24 hours a day                                                    ment.                                               Taken together, these recent court of ap-
                                                                                                     BAAQMD argued that the thresholds             peal decisions as well as the BAAQMD de-
                                                                                                  were not a “project” for CEQA purposes           cision suggest that courts may take a hard-
              Full-service professional environmental                                             and that even if they were, no adverse en-       er line against arguments that CEQA re-
                          services available                                                      vironmental impacts would result.
                                                                                                     Roesch agreed with the CBIA and or-
                                                                                                                                                   quires analysis of impacts on the residents
                                                                                                                                                   and users of a project. In addition, as agen-
                                                                                                  dered BAAQMD to vacate the thresholds            cies develop thresholds to address emerg-
         When spills happen, call us at (800) 767-9562                                            entirely. He found that at the time the
                                                                                                  thresholds were adopted, BAAQMD had
                                                                                                                                                   ing impacts such as greenhouse gas emis-
                                                                                                                                                   sions and global climate change, they must
                                                                         evidence that the thresholds could cause         take steps to consider whether the thresh-
                                         SBN 136018                                               a reasonably foreseeable indirect change         olds themselves may have environmental
                                                                                                  in the environment and might discourage          consequences.
                                                                                                  urban infill development, encourage sub-            It is not yet known how BAAQMD will
     Phone: (707) 576-0757                                                                        urban development or change land use             address the court’s ruling, including
                                                                                                  patterns, but did not engage in any CEQA         whether it intends to prepare an EIR, or
     Fax:   (707) 575-0364                                                                        analysis. He rejected BAAQMD’s conten-           appeal. BAAQMD is required to report
                         A great place to take a leak!                                            tion that adoption of the thresholds qual-
                                                                                                  ified for CEQA’s “common sense” exemp-
                                                                                                                                                   back to Roesch within 90 days regarding
                                                                                                                                                   compliance with his writ of mandate. Stay
                                                                                                  tion. 14 Cal. Code Regs §15061(b)(3).            tuned.
WWW.THERECORDER.COM | THE RECORDER                                                                                                                                         WEEK OF APRIL 9, 2012             | 21

MONAHAN                                          read and dismissed by others, and result in
                                                 changed behavior for still others, which all
Continued from page 15                           accomplishes the primary goal of the law:          environmental                               land use    real estate    construction   green building   litigation

                                                 informed choices.
vices. These lawsuits can result in agree-                                                          Few law firms can compete with the depth and breadth of legal                     ceqa
ments for reformulation or other actions to                  LitiGAtion issuEs                      talent, resources, experience and track record of Wendel Rosen’s
reduce or eliminate chemical exposures. For         Prop 65 cases can be difficult and expen-                                                                                         climate change
example, Prop 65 enforcement actions have        sive to defend because the law shifts the          Environmental Practice Group. Chalking up more than 150 years                     permitting
led businesses to reduce diesel exhaust emis-    burden of proof to the manufacturer, dis-          of combined experience, the attorneys in this practice have                       emissions reporting
sions from port facilities, lead exposures       tributor or retailer to prove that a warning       reputations as tireless advocates helping a variety of clients, from              clean ups
from calcium supplements, acrylamide in          is not required. (Health and Safety Code
                                                                                                    individual landowners to multinational corporations, navigate the                 cost recovery
certain snack foods, lead levels in Mexican      §25249.10(c)) Plaintiffs need only show that
candies and lead levels in children’s jewelry    the product causes an exposure to a listed         complex laws and regulations that govern environmental                            rcra/cercla
and other toys. All of these actions improve     chemical; they need not prove that the re-         practices, land use and sustainability.                                           endangered species
public health and protect the environment.       sulting exposure actually requires a warn-
                                                                                                                                                                                      tideland boundaries
   In some cases where reducing exposures        ing. Businesses, on the other hand, must
                                                                                                    As practice and industry leaders, Wendel Rosen’s attorneys                        stormwater
or reformulation of products is not feasible,    prove that the exposure does not occur at a
warnings are provided. Examples include          level sufficient to require a warning. Viola-      handle precedent setting cases, contentious litigation, compliance                bay preservation
warnings for lead in dishware and crystal,       tions of the act can result in penalties of up     and regulatory challenges, and complex transactions throughout                    water rights
acrylamide in French fries and coffee, form-     to $2,500 per day per violation, though they       California, in air, on land and at sea.
aldehyde gas exposures from hair-straight-       are seldom calculated on that basis. The
ening products, mercury in fresh fish and        penalty, as well as the likelihood that plain-
environmental exposures to airborne asbes-       tiffs will recover their attorneys fees and
tos. These warnings may be short and sim-        costs, creates a strong incentive for busi-
ple, consistent with the safe harbor regula-     nesses to settle rather than litigate the avail-
tory language, or longer and more nuanced.       able defenses under the statute.
In each case, the essential message must be         Recognizing the possibility that private
conveyed: The product or activity will expose    plaintiffs would abuse the statute, the Legis-
people to chemicals known to cause cancer        lature amended Prop 65 to permit the attor-
or developmental or reproductive harm.           ney general’s office to oversee private litiga-
   Because California is such a huge market,     tion and take actions to curb private abuses
the potential for product warnings can have      of the system. All private enforcers are re-
national and even global impacts on busi-        quired to provide a 60-day notice to the state
nesses. If a business provides a warning on      and local prosecutors as well as the alleged
a product, those products may end up being       violator prior to bringing an enforcement ac-
sold or transported outside California, which    tion. They must also provide a “Certificate of
in turn can require the business to answer       Merit” to the AG demonstrating the basis for
questions and explain why the warning is         the notice. Settlements are public records
provided. Further, when a business decides       and must be reviewed and approved by a
to reformulate its product to avoid a warning,   court to ensure they comply with the intent
it will often reformulate on a nationwide ba-    and purposes of the law. The attorney gen-
sis, not just in California alone.               eral’s office has adopted regulations that pro-
   Another unique way the law affects Cali-      vide guidance concerning Prop 65 settle- 
fornia businesses is by allowing them a          ments. (See Title 11, Cal. Code of Regs., §3000
“grace period” to reformulate or otherwise       et seq.)
reduce or remove listed chemicals to avoid
providing a warning. The 12-month grace                           suMMAry
period between the listing of the chemical         Prop 65 is alive and well at age 25, still

and the warning requirement allows time for      functioning as a deterrent to chemical dis-
a business to explore its options and deter-     charges and a vehicle for informed choices.
mine whether to provide a warning or take        Because it was approved as a voter initiative

                                                                                                                                             & E-PRINTS
other appropriate steps before any enforce-      and can only be substantially changed or re-
ment action can be taken. This can be par-       pealed by another initiative, it is likely to be
ticularly helpful for food manufacturers, per-   around for a long time. Because virtually all
sonal care product makers, food supplement       companies doing businesses in California or
manufacturers and other businesses whose         shipping into California could be affected by
customers may be concerned about warn-           this law, private attorneys need to become
ings for these types of products.                knowledgeable about its provisions to help
   While it has been said that Californians      their clients prevent problems or defend law-
suffer from “warning fatigue” due to a pro-      suits when they are filed. Public prosecutors                                               WHEN YOUR FIRM IS IN THE NEWS
liferation of warnings for certain types of      and potential plaintiffs should also be aware                                               SPREAD THE WORD WITH
chemical exposures, there is a segment of the    of the law so they can consider it as an im-
population that takes the warnings very seri-    portant tool to protect the public health and                                               PROFESSIONALLY PRODUCED
ously. Warnings may be ignored by some,          the environment from toxic chemicals.

McADAMS                                             There are of course limitations and chal-
                                                 lenges to the mediation of environmental
                                                                                                                                              Call us today for a professionally produced
                                                                                                                                              reprint or E-print of an article from today’s paper.
Continued from page 16                           disputes. For example, notwithstanding an
                                                 agreement among potential adversaries, a                                                     • A perfect piece to display in your office
ecosystems from the grasslands of the Mo-        public agency remains free to exercise its
jave Desert to the coastal mountain ranges       discretion concerning a matter before it;                                                    • A great leave behind at presentations
and areas critical to the California condor.     groups or individuals can splinter off and                                                   • Add this to your bio on your web site
Instead of a predicted 50 years of piecemeal     leave the negotiations; key public officials
proposals and litigation, the CEO and oth-       and agencies may not be willing or able to
er executives from the developer Tejon           participate (but it may be productive to                                                     For more information contact:
Ranch Co. and senior staff members from          keep them informed where possible and to                                                     Lauren Poeta,
a coalition of environmental groups, in-         look to them as a source of information); or                                                 Account Executive
cluding NRDC, the Sierra Club, the Plan-         the issues may involve unusually complex
ning and Conservation League and Audu-           technical issues (perhaps calling for a neu-
bon California, worked across the table for      tral expert adviser for the mediator). How-                                                  T: 347-227-3177
two years to achieve a settlement. As a re-      ever, none of these potential factors should                                                 F: 347-227-3747
sult, 90 percent of the property was con-        preclude the attempt to meet and negoti-
served, public access was guaranteed, and        ate.
the Tejon Ranch Conservancy was created             While the Legislature and the courts

to oversee and maintain the public lands.        could do more to strengthen the role of me-
The company remains free to pursue delin-        diation of environmental disputes, the op-
eated real estate and commercial develop-        portunity for successful early resolution will
                                                                                                                                              ESSENTIAL CALIFORNIA LEGAL CONTENT
ment in other portions, subject to all appli-    always rest within the control of motivated
cable federal, state and local rules and pro-    and creative parties and their counsel, fa-                                                  1035 Market Street, Suite 500, San Francisco, CA 94103
cesses. In return, the groups have agreed        cilitated by experienced and engaged me-
not to oppose these projects.                    diators.

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