SAN DIEGO (KGTV) — Some business owners are speaking out to warn others after being threatened with lawsuits over the type of receipt paper their stores use.
“We feel strong about taking a stand,” said Adam Zack, owner of Jensen’s grocery store in Point Loma, who was served with a Prop 65 violation notice in May.
The notice, signed by attorney Noam Glick of Entorno Law, is on behalf of Environmental Health Advocates, which alleges a Jensen’s receipt had BPS, a chemical California has linked to cancer and listed as a reproductive toxin.
BPS is almost like an invisible ink that’s used to make words appear on thermal receipt paper.
In 2023, California added it to the list of over 900 chemicals covered by Prop 65, the law that requires stores to warn consumers before they could be exposed to toxic chemicals.
A grace period ended last December and private enforcers, who are allowed to file civil lawsuits, started sending violation notices to businesses in January.
“They can be an individual. They can be a nonprofit. It really can be anybody looking to enforce Proposition 65,” Michael Gleason, a business attorney who represents companies hit with Prop 65 notices, said.
Zack, whose independent grocery store sells many organic products, said his paper supplier has assured him their receipt paper is BPS-free.
600+ businesses hit with violation notices
“They provided some testing results that our attorneys presented to the Entorno Law group, and (on) our part, we check the boxes, and the boxes say BPS/ BPA-free, and so we feel we're in compliance,” Zack said.
Jensen’s is one of over 600 California businesses that have received Prop 65 violation notices from Entorno Law this year, alleging the use of BPS, according to state records reviewed by Team 10.
The letters, which have been sent to local restaurants like Filippi’s Pizza, Swami’s and bigger chains like Ralphs and In-N-Out, state that a notice and intent to sue shall be provided 60 days before a complaint is filed.
“This letter provides notice of the alleged violation to the parties listed and the appropriate government authorities.”
$20,000 to settle
State records reviewed by Team 10 show some businesses have settled the violation notices by writing checks for $20,000.
In one case, women’s clothing store Princess Polly agreed to pay $18,000 to Environmental Health Advocates for attorney fees and costs and another $2,000 in state civil penalties; $500 of that penalty will go directly to Environmental Health Advocates.
Zack said he does not want to settle simply to make the issue go away and questioned the motivation behind the notices.
“Are they doing this really for the public's benefit, or are they doing it to reach settlements and make money? I don't see where the public really is benefiting from these,” he said.
One small business owner who spoke to Team 10 on the condition of anonymity said they initially mistook the violation notice from Entorno Law as a scam.
“I was completely blindsided by it, and I wish that I knew it was a thing so that I could take action and I could protect my business and, most importantly, protect my consumers and my staff,” the owner said.
The entrepreneur’s supplier confirmed their receipt paper doesn’t contain BPS, but that didn’t matter to the Entorno Law group, the owner said.
“They told us it wasn't their problem. They could go after both the supplier and us for it,” the owner, who fears repercussions for speaking out, said.
The business owner had to weigh paying a settlement against the price of a court fight, which could total hundreds of thousands of dollars in legal fees.
Attorney listed as Environmental Health Advocates CEO
“I had talked to other small business owners who had also gotten this notice. Most of them would just give them $20,000 to go away because it would cost more money to fight it.”
The violation letters local businesses have received state that Environmental Health Advocates is an organization “acting in the interest of the general public.”
Team 10 could not find a website for the group.
State records show Environmental Health Advocates is registered as a corporation at the same downtown San Diego address as Entorno Law, and documents list La Jolla attorney Allan Cate as the company’s CEO. Cate did not return requests for comment.
Team 10 went to the downtown office to try to get answers.
Shortly after leaving, attorney Glick sent us a written statement. You can read the entire statement here or below:
In it, he said after California listed BPS as a toxic chemical, Environmental Health Advocates sent receipts out for lab testing to determine if companies were complying.
Retailers exposing unwitting customers: attorney
“Unlike some other Proposition 65 enforcers, EHA primarily seeks to get companies to reformulate their products to eliminate reproductive toxicity and carcinogens, rather than posting Proposition 65 warnings,” Glick said.
He added that for years, California restaurants and retailers have been exposing unwitting customers to BPS—despite the widespread availability of BPS-free alternatives.
“To comply with the law, retailers should be testing their own receipts to confirm they are indeed BPS-free. Whether retailers or suppliers are pointing fingers at each other is between them. Through EHA’s efforts, the issue will be resolved and receipt paper will no longer pose a threat to reproductive health in California,” he said.
Gleason, who is representing several businesses hit with violation notices, said many mom-and-pop shops have been caught off guard by the letters.
“It can be very frustrating for the businesses, because there's 900 chemicals on the Proposition 65 list. It's hard to know. You're not going to test every product for 900 chemicals,” Gleason, partner at the San Diego office of Hahn Loeser & Parks, said.
Penalties under Prop 65 can be as high as $2,500 per day. The state collects 75% of a civil penalty, while the private enforcer receives the remaining 25%. On top of that, the enforcer can recover attorney fees.
Compliance is key: Attorney
Gleason said business owners can take steps to protect themselves, including putting up clear warning signs consumers can see before being given a paper receipt.
“Probably the safest way is to be right at the point of where the cash register might be," he said.
While business owners who are hit with a notice may want to fight it in court, Gleason said taking a case to trial could end up costing $200,000 to $300,000 with no guarantee of winning.
“Litigating it all the way to trial will incur additional attorney’s fees on your end, as well as hiring experts in the field of the particular chemical that might be in your product. And we're talking about experts in court and getting ready for trial. That's really expensive," Gleason said.
He recommends that any businesses served with a Prop 65 violation notice contact an experienced attorney to evaluate their options.
