A law firm representing an environmental organization called the Environmental Law Foundation (ELF) recently sent a letter to Dr Soda Co., a Pacoima, Calif.-based refreshment services provider, giving them the option to pay $60,000 to resolve a potential liability for a certain type of potato chip or face possible legal action.
An attorney for the law firm, Rose, Klein & Marias LLP of Los Angeles, said the letter was sent because it believes Dr Soda has violated the California Safe Drinking Water and Toxic Enforcement Act of 1986, also known as Proposition 65.
In 2005, ELF claimed its test showed that single servings of popular potato chips have acrylamide levels hundreds of times what Proposition 65 allows.
Proposition 65 requires businesses to post warnings of any cancer-causing chemicals in their products unless they can prove that they do not pose a significant health risk.
Dr Soda is one of 50 to 100 companies that recently received letters advising them of the chance to "Opt In" to a settlement, according to David Rosen, an attorney with the law firm. The companies have been notified for failing to provide clear and reasonable warnings that ingestion of certain products would expose consumers to acrylamide.
The notice says the company has until June 16, 2011 to "Opt In" and pay the $60,000, thereby affirming they sold the covered products during a certain time period.
The letter notes the company is free to decline to opt in to the settlement, in which case the plaintiff can initiate a new enforcement action. "You will not have the option to join the Opt-In if you are sued in a new action or any time after June 16, 2011," the letter states.
Contacted by VendingMarketWatch, attorney Rosen said the Opt-In settlement is the result of a consent judgment of an earlier case ELF filed against a group of manufacturers and retailers. He said the consent judgment with Opt-In provisions gives manufacturers and suppliers a way to resolve their liability.
The law firm determined whether or not the product contains dangerous amounts of acrylamide by independent testing.
"He (Dr Soda) is not compelled to opt in," Rosen said. "We were compelled (by the court) to tell him about his opportunity to do so."
Rosen said companies receiving the letter have been given the chance to give reasons why they should not be considered liable. He said some companies have responded that they don't sell chips with high levels of acrylamide.
Rosen said Dr Soda did not contact his firm to discuss the matter. He said a Dr Soda representative sent an email that he thought was ill tempered.
Asked by VendingMarketWatch which of Dr Soda's products contained a dangerous amount of acrylamide, Rosen said Jensen's Orchard Veggie Chips.
Asked if Dr Soda would not be considered liable if the company no longer carried the product, Rosen said it would depend how long they have not carried it.
Rosen said Dr Soda was identified as a supplier of these products by Smart & Final, a retailer involved in the earlier acrylamide-related lawsuit.
Don Rubenstein, owner of Dr Soda, said his company no longer carries Jensen's Orchard Veggie Chips. He said he has no intention of paying any money.