Prop 65 California

Axway, Inc. has agreed to pay the United States $6.2 million to settle allegations under the False Claims Act that it and its predecessors  provided the General Services Administration (GSA) with defective pricing information in order to obtain and maintain a contract permitting them to sell software licenses and related services to federal agencies at inflated prices, the Department of Justice announced last week.

Axway, Inc. allegedly provided GSA with commercial pricing information that was not current, accurate and complete during the initial negotiation of the contract. As a result, the United States alleges that the contract that was awarded contained pricing that was less advantageous to the government than would have been negotiated had accurate and complete disclosures been made. In addition, the United States alleges that when the contract was renewed, Axway Inc. failed to provide GSA with accurate and complete commercial pricing disclosures. Finally, Axway Inc. failed to comply with the price reduction clause of the contract resulting in allegations from the United States that the contract contained inflated prices, and that numerous government agencies relied on these inflated prices and overpaid for their purchases of software and related services.

The lawsuit was originally filed by Kenneth Marcus, a former employee, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Marcus will receive $1.2 million as his portion of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who uncover fraud of every kind perpetrated against our government including, health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

According to new studies, the chemicals Bispehnol A (“BPA”) and Di(2-ethylhexyl)phthalate (“DEHP”) have been linked to obesity and insulin resistance in adolescents.  DEHP is a phthalate chemical that has been designated by the State of California as known to cause reproductive toxicity.  Products offered for sale in California containing DEHP must be accompanied by a health hazard warning.  BPA was previously designated by the State of California as known to cause reproductive toxicity as well, but as a result of a lawsuit brought by the American Chemistry Council, BPA has been de-listed as a reproductive toxicant for the time being.

In one study, the researchers measured the level of DEHP in the urine of 766 adolescents ages 12 to 19.  The results showed that teens with higher amounts of DEHP in their urine had increased rates of insulin resistance, a condition that can lead to Type 2 diabetes.  The results did not hold when testing was done for other kinds of phthalates more commonly found in cosmetics and personal care products. 

Another study, examining the relationship of BPA and obesity in children ages 6 to 18, showed that children with the highest amounts of BPA in their urine had double the risk of being obese compared to those with lower levels of BPA in their urine. 

The researchers from NYU School of Medicine acknowledged that the results did not allow them to definitively take the position that BPA was causing adolescent obesity, but the findings added to a growing body of research being conducted about the effects of BPA in humans and animals.

The study provides further support for the theory that certain chemicals are “obesogens” that alter the body’s metabolism, making it harder for people to lose weight regardless of their diet or levels of exercise. 

The study, which consisted of surveys of 2,893 youths ages 6 to 18, found that more than 22% of those with the highest levels of BPA in their urine were obese compared to 10% of those with the lowest levels.

Researchers in yet another study found that children with higher levels of BPA in their urine were more likely to have an abnormal waist circumference-to-height ratio.  Surprisingly, there was no association between high levels of BPA and increased risk of cardiovascular and diabetes in youths, which had been established in adults.  It is possible that the adverse effects of BPA compound over time with health effects that only later manifest in adulthood.

The Chanler Group represents citizen enforcers who, acting in the public interest, commence actions against businesses offering products for sale in California that contain chemicals known to cause cancer or reproductive harm without first providing the health hazard warning required by Proposition 65. Citizen enforcers bringing Proposition 65 actions in the public interest may obtain a Court Judgment imposing civil penalties, an injunction requiring reformulation of products, and/or provision of health hazard warnings. The Chanler Group has represented citizen enforcers of Proposition 65 for more than twenty years.

The Chanler Group, an environmental law firm, reached a settlement on behalf of its client Whitney Leeman, Ph.D. with food service company Farmer Bros., which serves products to over 60,000 hospitality, healthcare, gaming and retail establishments in the United States.  Dr. Leeman claimed that Farmer Bros. violated California’s Proposition 65 by selling a food extract, flavor and coloring alleged to contain the carcinogenic toxin 4-methylimidazole, commonly known as 4-MEI, to California consumers without providing the requisite health hazard warning to consumers.  The Honorable Marla J. Miller of the San Francisco County Superior Court approved the settlement on October 22, 2013.

“This case sets an important precedent for manufacturers, distributors and suppliers all over the United States,” said Clifford Chanler, the founder of The Chanler Group.  “They must take responsibility for their products or face legal consequences.  We are proud that our clients continue to improve consumer safety and protect our bodies from dangerous chemicals.”

As a result of the settlement, Farmer Bros. has agreed to reformulate the extract to virtually eliminate 4-MEI.  After September 1, 2013, Farmer Bros. may manufacture, distribute, or sell the extract in California only if meets reformulation specifications.  Farmer Bros. is additionally responsible for paying a civil penalty of up to $30,000, 75 percent of which is paid to the State of California.  This is the first time that a manufacturer, distributor, or supplier has ever been successfully held responsible for selling products in California containing 4-MEI.  Dr. Leeman and The Chanler Group anticipate yet more settlements and reformulations in the coming months.

The Chanler Group represents citizen enforcers and whistleblowers to promote awareness of toxic chemicals found in our everyday environment and to enhance the health of the general public by advocating for the removal of chemicals known to cause cancer or reproductive harm from consumer products.  For more information, please visit: www.chanler.com.