Firm Settles Complaint on Carcinogen : Health: Under Prop. 65 action, company will contribute $50,000 to environmental groups who said it failed to state that a product contained a cancer-causing chemical.

A Dow Chemical Co. subsidiary, acknowledging it used a cancer-causing chemical to manufacture a popular spot remover, has agreed to contribute $50,000 to help environmentalists pursue violations of the state’s toxic chemical laws, two environmental groups announced Wednesday.

In an unprecedented settlement of a Proposition 65 enforcement action, DowBrands Inc. agreed to remove the hazardous chemical from its product and to contribute the $50,000 to an enforcement fund set up by the Environmental Defense Fund and the Sierra Club.

Environmentalists said the money will be used to help individuals bring complaints under Proposition 65 similar to the case brought against DowBrands by the two organizations.

“The settlement money from Dow will feed directly into more Proposition 65 enforcement and makes citizen power under the law even stronger,” said David Roe, an attorney with the Environmental Defense Fund.

The two environmental groups filed an enforcement action last July charging that DowBrands had violated the warning requirements of Proposition 65 by selling the K2r Spotlifter without telling the public it contained perchloroethylene, a chemical known to cause cancer.

Under Proposition 65, which was approved by the voters in 1986, businesses must provide a warning when exposing the public to a “significant risk” from chemicals that cause cancer or birth defects.

The DowBrands enforcement action charged that K2r Spotlifter contained amounts of perchloroethylene about 3,000 times higher than the level considered by the state to be safe.

The company, however, has consistently maintained that the amount of perchloroethylene in its spot remover would not pose a significant risk to those who used the product.

Even so, Richard Parry, vice president of public affairs for DowBrands, said the firm was in the process of reformulating K2r Spotlifter when the Proposition 65 enforcement action was filed.

Parry said the company agreed to the settlement only to prevent costly litigation, not because the product was unsafe.

“There was a cloud on the name perchloroethylene,” he said. “We weren’t going to get into a squabble with someone over a small product.”

If the company had not settled, it could have faced fines of up to $2,500 per day for each case of exposure to the cancer-causing chemical.

Roe, the principal author of Proposition 65, said the case illustrates that companies doing business in California have a special incentive to remove hazardous chemicals from their products.

“Proposition 65 is having a major effect on company attitudes toward toxic chemicals,” he said. “If you can protect your customers from a chemical risk, it’s good business now just to do it instead of arguing about it.”

The $50,000 from DowBrands is the first contribution to a trust fund that will be used to help conduct lab tests or collect evidence in Proposition 65 enforcement cases. Environmentalists hope to add to the fund through successful prosecution of other cases.

The action against DowBrands was one of 14 cases brought simultaneously against manufacturers of spot removers, paint strippers and water repellent products. Manufacturers of other spot removers and water repellents have already agreed to reformulate their products, but no settlement has been reached in the cases against the manufacturers of paint strippers.

There also have been major settlements in other industries, including an agreement by eight chain stores and a coalition of manufacturers to pay $750,000 in fines for not warning consumers that cigars and pipe tobacco can cause cancer and birth defects.