Supply Chain Act Will Soak Businesses Like Drinking Water Act

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I had heard of the Transparency in Supply Chain Act, but until I read Charles Crumpley’s Comment column in the Jan. 30 issue (“Disclosures Legal, Financial Exposure”), I did not realize it had la mano nera of the trial lawyers all over it. It is a clone of Proposition 65 and any business can tell you how that thing has been bastardized into a racket that would make Al Capone jealous. You must understand how Proposition 65 has been tortured to know what will happen.

Proposition 65 is the Safe Drinking Water and Toxic Enforcement Act of 1986; it had the laudable purpose of getting toxic substances out of our environment. Lead in food products has come to be a favorite target of Proposition 65. The truth: lead, a heavy metal, is everywhere. Naturally. Anything grown in the ground, anything that eats anything grown in the ground, will contain minuscule amounts of it. Parts per billion. Always has, always will. All natural and organic. Nature’s little joke. How about that all you vegetarians? But before you panic, realize that it’s all about acceptable amounts. Iron in your diet, for instance, is essential. You will become anemic and die without some. Too much and you’re dead.

Proposition 65 says if you have any lead, you must put a notice on your label or on your door. Because of our warped legal system, devised by and for the benefit of lawyers, Proposition 65 allows citizens to file lawsuits as if they were the attorney general. That has led to an industry of lawyers filing suits against businesses; the lawyers make money when businesses pay settlements to get rid of the lawsuits. Even if a business fights and “wins” a Proposition 65 challenge, it can cost hundreds of thousands of dollars.

When something doesn’t make sense, look for the payoff. And who gets the payoff.

Although you probably pay no attention to them anymore, didn’t you ever wonder why warning signs are on the door of every building you walk into? Every market? Every restaurant? For crying out loud, even Starbucks? That’s how stupid Proposition 65 has gotten.

Here’s a profile of one legal abuser: A guy in Georgia got sued for selling a product that actually violated the true spirit of Proposition 65. But he learned. Since then he has filed more than 100 frivolous suits, making a tidy living. Do you really think he cares about California? The reality is it’s way cheaper for businesses to pay him off than fight him. Remember, only he can make money. A business only pays, either to him in a settlement or in legal costs. The difference is that’s his job.

Like Proposition 65, the new Transparency in Supply Chains Act has a purpose that is more righteous and true than Dudley Do-Right’s heart. It’s aimed at getting child labor and human trafficking out of products made for sale in California. Who can argue with that? But the little secret is it will be turned into another extortion racket on California business.

Bounty hunter provision

The act doesn’t say you can’t have enslaved 10-year-olds sewing your T-shirts, just that you must post about it on your website or in your store, just like Proposition 65. If you are targeted, you will be guilty until proved innocent, just like Proposition 65. It has, at its core, the bounty hunter provision. It will be impossible to extricate yourself from extortion without spending enormous amounts of money and resources. It’s like paying protection money to the mob so something bad doesn’t happen to you.

It is written for companies of $100 million-plus in revenue. Why? Because, the act’s proponents argue, the big company can make a difference and they have the money and resources to comply.

And how could they fight it? If they did, they’d be declared guilty by inference in the media. Catch-22. And there are way fewer companies with more than $100 million in revenues, which means there will be a much smaller number of objections.

Guess what? Who do you think big companies buy from? A lot of little guys. And on whom do you think they will push the burden of proof? The little guys who can’t afford it and can’t do it. I’m a small-business owner and do you think I’m going to effect socioeconomic political change in China? Please, the entire U.S. government can’t. I’m going to go overseas to investigate a manufacturer in India from whom I buy maybe $1,000 per year? 

Am I in favor of human trafficking and forced labor? That’s a “When did you stop beating your wife?” question. I’d be more than happy to throw the switch on any of those who do so. But that is not what this is about. Without the bounty hunter provision, the act would be an honorable endeavor. But mark my words, this is an insidious, evil law with a lot of lipstick on it. They will ruin business peoples’ lives and laugh about it.

And that sound you hear? It’s more businesses packing up and heading north and east. Anywhere but here. Stupid. Stupid. Stupid.

Michael Gorman is a small-business owner in Glendale.

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