Court to Consider Permanent Injunction on Arbitration Law; Prop. 65 Acrylamide Lawsuit Pending

On Friday, U.S. District Judge Kimberly J. Mueller is expected to hear arguments on whether to permanently stop a new California law banning arbitration agreements made as a condition of employment from taking effect.

Mueller issued a temporary restraining order on the arbitration law, AB 51, on December 30, 2019, thus preventing it from taking effect on January 1.

U.S. Chamber of Commerce v. Becerra

The lawsuit on AB 51 (Gonzalez; D-San Diego), U.S. Chamber of Commerce v. Becerra, was filed by a business coalition led by the California Chamber of Commerce last December. Set to take effect on January 1, 2020, AB 51 forbids employers from offering and entering into arbitration agreements with their workers, even if the workers may opt out of arbitration.

The law sets substantial civil enforcement mechanisms, providing possible avenues for investigation and enforcement action by California state departments, and for lawsuits by individuals.

Especially problematic is that the law establishes the extraordinary burden of criminal penalties as well, making it a misdemeanor to violate any part of AB 51’s restrictions, which is punishable by imprisonment not exceeding six months, a fine not exceeding $1,000, or both.

The complaint points out that AB 51 is preempted by the Federal Arbitration Act (FAA), which precludes any state from limiting, interfering with, or discriminating against the use of arbitration agreements to resolve claims.

In granting the temporary restraining order, Mueller echoed similar concerns, stating: “plaintiffs have raised serious questions regarding whether the challenged statute [AB 51] is preempted by the Federal Arbitration Act as construed by the United States Supreme Court.”

For more information on the U.S. Chamber of Commerce v. Becerra complaint, see:

Acrylamide Warning Lawsuit Still Pending

In October 2019, the CalChamber filed a lawsuit on behalf of its members to stop the multitude of Proposition 65 warnings for the presence of acrylamide in food. Litigation is still pending.

Currently, Proposition 65 requires any business that produces, distributes or sells food products containing acrylamide to provide a warning unless the business can prove in court, with scientific evidence, that the level poses no significant risk of cancer. Many businesses have chosen to forgo the expense and uncertainty of litigation and settled with private enforcers while providing warnings for acrylamide.

The CalChamber’s complaint argues that these warnings are misleading because “neither OEHHA [California Office of Environmental Health Hazard Assessment] nor any other governmental entity has determined that acrylamide is a known human carcinogen….”

The lawsuit has two goals: to protect companies’ First Amendment rights while also protecting the rights of consumers to receive truthful information.

The CalChamber argues that companies should not be forced to provide unsubstantiated and highly controversial acrylamide warnings or face potentially costly enforcement actions initiated by the Attorney General or private enforcers. Moreover, the CalChamber argues, by mandating warnings for acrylamide in food, Proposition 65 is forcing individuals and businesses to say something false and misleading.

Acrylamide is not a chemical that is added intentionally to food products. Rather, it forms naturally in many types of foods when they are cooked at high temperatures, whether at home, in a restaurant or in a factory. Common sources of acrylamide in the diet (and subjects of Proposition 65 litigation) include baked goods, breakfast cereal, black ripe olives, coffee, grilled asparagus, French fries, peanut butter, potato chips, and roasted nuts.

Acrylamide has been present in food as long as humans have cooked food, but was discovered to be present in food only in 2002.

A copy of the CalChamber’s complaint can be found at https://advocacy.calchamber.com/wp-content/uploads/2019/10/CalChamber-v.-Becerra-Complaint.pdf.