As You Sow v. Orly International, Inc., et al.

On August 24, 1993, Proposition 65 private enforcer and whistleblower, As You Sow, entered a settlement agreement with seven cosmetic, beauty and salon service industry members: Essie Cosmetics, Inc., Creative Nail Design, Vital Nails, Inc./Develop 10, Jessica Cosmetics International, Inc., Orly International, Inc., OPI Products, Inc., and American International Industries. The parties submitted the settlement to the court for approval, and it was entered as a Judgment on October 4, 1996. Following the settlement entered by the initial settling defendants, a number of similarly situated beauty service industry members elected to join the settlement, and agreed to be bound by the San Francisco Superior Court's Judgment. These members include Cosmetic Center, Ltd., Forsythe Cosmetic Group, Ltd., OPI Products, Star Nail Products, Brucci, and International Nail Mfrs.

The judgment resolved AYS's allegations that the defendants violated Proposition 65 when they failed to warn consumers of the health hazard risks associated with exposures to toluene in nail enamel and other nail care products sold in California. Toluene is listed pursuant to Proposition 65 as a chemical that is known to cause birth defects or other reproductive harm. AYS instituted the private enforcement action on November 18, 1992, when the private enforcer began issuing 60-Day Notices of Violation of Proposition 65 to cosmetic industry members alleging violations relating to their unwarned sales of nail products containing toluene. On April 5, 1993, after no public enforcer chose to prosecute the whistleblower's allegations, AYS filed As You Sow v. Orly International, Inc., et al., Case No. 950767, a formal enforcement action brought to pursue the violations alleged in the 60-Day Notices of Violation.

In negotiating the settlement, AYS's attorneys obtained a commitment from the defendants to only sell reformulated, toluene-free products in California by March 1, 1994. The effects of the negotiated agreement were nationwide, as most, if not all, of these industry members undertook reformulation of all of their products, not only those offered in the California market. The agreement also required specific health hazard warnings for consumers and other individuals in California prior to the reformulation of the products. In exchange for the industry members' commitment to reformulate their nail products to be toluene-free, AYS agreed to forego the imposition of otherwise-available statutory fines. The settlement terms required that each of the seven initial settling defendants pay AYS $7,500. The industry members who elected to participate in the settlement each paid $2,500, $5,000, or $7,500, depending on their overall share of the California nail enamel and nail care products market. The settlement payments reimbursed AYS for a portion of the attorneys' fees and costs incurred investigating, litigating, and negotiating a settlement of the the private enforcement action in the public interest.