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Proposition 105 (1988)

Disclosures to Consumers, Voters, Investors

By
Mark Leonard

Copyright© 2000 By McGeorge School of Law, University of the Pacific

J.D. McGeorge School of Law, University of the Pacific, to be conferred May 2001
B.A., History and Political Science, University of California at Irvine, 1993

 

Election Date: November 8, 1988
Percentage voting for Initiative: 54.5%

Synopsis: The "Public's Right to Know Act," Proposition 105, requiring various disclosures to consumers, voters and investors, was struck down in its entirety for violating the California Constitution's single-subject rule.

The "Public's Right to Know Act," Proposition 105, was a general attempt to require disclosure of a wide array of unrelated information to certain classes of consumers, voters, and investors. The provisions of Proposition 105 were originally five separate bills that failed passage in the state legislature. (Chemical Specialties Manufacturers Association, Inc. v. Deukmejian, (1991) 227 Cal. App. 3d 663, 672.) Specifically, Proposition 105 covered five areas.

First, it required advertisers of household toxic products to warn consumers that the products should not be placed in the trash or poured down the drain. (Disclosures to Consumers, Voters, Investors. Initiative Statute, California Voter Pamphlet, p. 107 (1988) (hereinafter Voter Pamphlet).)

Second, providers of supplemental Medicare health insurance for seniors had to place disclosures in their policies warning consumers about the possibility of duplicative coverage and to include a toll-free number to contact the Department of Insurance for information about buying supplemental Medicare policies. (Id.)

Third, nursing home operators were to include in their advertisements and admission contracts a toll-free informational number for the State Ombudsman's Office and any operators with a record of serious Department of Health Services violations had to post a record of these violations at their facility. (Id.)

Fourth, Proposition 105 also required proponents and opponents of statewide ballot initiatives to disclose their major funding sources. (Id. at 157.)

Last, corporations selling stock in California had to disclose the extent of any business dealings in South Africa. (Id. at 158.)

Proposition 105 was authored by Jim Rodgers, a former vice chairman of California Common Cause, and was endorsed by a number of consumer, senior citizen, and environmental activist groups. (John McLaren, Variety in 'Public's Right to Know Act' Draws Assorted Supporters, San Diego Union-Tribune, October 10, 1988 at A3.) Rodgers stated that the purpose of the initiative was to protect consumers from deceptive advertising. (Marc Lifsher, 'Right-to-Know' Initiative Seeks Broad Changes, Orange County Register, October 9, 1988 at A3.) Rodgers said he turned to the initiative process because the legislature was unable to pass the five reforms because of reliance on campaign contributions from special interests. (Id.) Proposition 105's main opponents were chemical manufacturers and nursing home operators who argued that the measure was unnecessary and would create expensive new bureaucracies. (Id.)

Legal action by Proposition 105's opponents was a virtual certainty due to the belief that they could invalidate the proposition for violating the California Constitution's single-subject rule. (Consumer Group Hails High Court's Upholding of Prop. 105, San Diego Union-Tribune, November 23, 1989 at A3.) The single-subject provision of the California Constitution states that "an initiative measure embracing more than one subject may not be submitted to the electors or have any effect." (Cal. Const. art. II, § 8(d) (West 2000).) In addition to the proposition's opponents, the State Legislative Counsel expressed the opinion that Proposition 105 would likely not survive a constitutional challenge. (William Trombley, Legal Test Expected if Prop. 105

Passes: Does it Attempt Too Much?, Los Angeles Times, October 25, 1988 at Metro 1.)

In fact, Proposition 105 survived its first legal challenge on single-subject rule grounds when a Court of Appeal declined to exercise original jurisdiction over a petition filed by the proposition's opponents. (Chemical, 227 Cal. App. 3d at 667.) However, a later single-subject rule challenge was upheld by California's First District Court of Appeal. (Id. at 663.) The Chemical court, applying a test established by the California Supreme Court, stated that in order for an initiative to comply with the single-subject rule its provisions must be "functionally related to one another or are reasonably germane to one another or the objects of the enactment." (Id. at 667.) Proponents of Proposition 105 relied on the Black's Law Dictionary definition of "advertise" in their argument that the provisions were reasonably germane to the object of requiring "truth-in-advertising." (Id. at 670.) The court instead found that the offered definition was excessively general and that the number of topics germane to "advertising" is virtually unlimited. (Id. at 671.) Whether the provisions of Proposition 105 are functionally related or reasonably germane to one another, the court stated that the lack of such a relationship was "readily apparent." (Id.)

The proposition's supporters additionally argued that the opponents' constitutional challenge was barred by laches. (Id. at 672.) Laches is an equitable defense, which holds that neglect in asserting a claim, taken together with lapse of time and other circumstances causing prejudice to an adverse party, operates as a bar to the claim. (Black's Law Dictionary 875 (6th ed. 1990).) Specifically, the proponents argued that they were prejudiced by the opponents' delay because state agencies responsible for implementing the measure had begun to draft regulations to implement the new initiative. (Chemical, 227 Cal. App. 3d at 672.) The court rejected this argument, finding both that an unreasonable length of time had not passed since the initiative's approval by California voters and the time the lawsuit was filed, and that the "overriding public interest" in complying with the single-subject rule outweighed any prejudice suffered by the proposition's supporters. (Id. at 673.)

When the California Supreme Court declined to review the Chemical court's holding, Proposition 105 became the first voter approved initiative to be found unconstitutional under the single-subject rule. (Claire Cooper, Supreme Court Throws Out '88 'Public's Right-to-Know' Initiative, Los Angeles Daily News, April 26, 1991 at N11.)

Proposition 105's failure to survive a constitutional challenge did not significantly impact public policy in California. Its provisions were relatively modest and it is unlikely they would have resulted in either significantly increasing consumer awareness, as the proponents claimed, or creating expensive new government bureaucracies, as the opponents charged. In addition to being a footnote in California's initiative history as the first voter approved measure to fall to the single-subject rule, perhaps the most lasting impact of Proposition 105 is a lesson in political strategy. Given that Proposition 105 survived its first post-election legal challenge, it is unlikely that opponents of future initiatives will wait until the votes have been tallied before claiming a single-subject rule violation.