Judge: Alison Mackenzie, Case: 24STCV02895, Date: 2024-08-27 Tentative Ruling

Case Number: 24STCV02895    Hearing Date: August 27, 2024    Dept: 55

Background

Plaintiff Berj Parseghian (Plaintiff) filed a complaint against Defendants, Fly by Jing Inc, Costco Wholesale Corporation, and Doe defendants 1 to 100, alleging violations of Proposition 65, Health and Safety Code, section 25249.5 et seq. (Proposition 65). Plaintiff claims that Defendants failed to provide required warnings for chemicals listed on a product they manufacture or sell.

Costco demurs to the complaint. Plaintiff opposes.   

Judicial Notice

The Court grants Costco’s RJN regarding both Office of Environmental Health Hazard Assessment’s (OEHHA) Final Statements of Reasons, Plaintiff’s pre-suit notice of violation and Plaintiff’s complaint.

The Court denies Costco’s RJN regarding another trial court’s ruling.

Legal Standard

Demurrers are to be sustained where a pleading fails to plead adequately any essential element of the cause of action. Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879-880.

Analysis

1. Whether Pre-suit Notice Must State the Basis of Costo’s Liability as a Retail Seller of Consumer Products.

Under Proposition 65, retail sellers are only responsible for providing a warning of consumer product exposure when at least one of five enumerated circumstances exist. Cal. Code Regs., tit., 27, § 25600.2, subd. (e).

Private persons may bring suit for failure to warn of chemical exposure under certain circumstances. Health & Saf. Code, § 25249.7, subd. (d)(1). To do so they must give notice to the Attorney General and any local prosecutor in whose jurisdiction the violation occurred sixty days before filing the action. Ibid. Such notice must “provide adequate information from which to allow the recipient to assess the nature of the alleged violation, as set forth in [California Code of Regulations, title 27, section 25903, subdivision (b)(2)].” Section 25903, subdivision (b)(2), establishes general notice requirements which must be included regardless of the type of violation and specific requirements for consumer product, environmental and occupational violations. These requirements “shall not be interpreted to require more than reasonably clear information, expressed in terms of common usage and understanding, on each of the indicated topics.” Cal. Code Regs., tit. 27, § 25903.

Additionally, Health and Safety Code section 25249.7, subdivision (d)(1), requires the notice to include a certificate of merit from the noticing party or their attorney, stating that the they consulted with at least one expert who “reviewed facts, studies, or other data regarding the exposure to the listed chemical that is the subject of the action, and that, based on that information, the person executing the certificate believes there is a reasonable and meritorious case for the private action.” If a court subsequently “determines that there was no actual or threatened exposure to a listed chemical, the court may, upon the motion of that alleged violator or upon the court’s own motion, review the basis for the … certificate of merit… .” Health & Safety Code, § 25249. 7, subd. (h)(2). However, it “shall be disclosed to the court in an in-camera proceeding at which the moving party shall not be present.” Ibid. “If the court finds that there was no credible factual basis for the certifier’s belief that an exposure to a listed chemical had occurred or was threatened, then the action shall be deemed frivolous.” Ibid.

Notice is a “condition precedent to establishing a citizen's right to proceed in the public interest on that matter, and to collect funds for the public treasury, the notice requirement should not be dismissed as a mere technicality.” Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America (2007) 150 Cal.App.4th 953, 963 (quoting, Off. of Environ. Health Hazard Assessment, Final Statement of Reasons Adopting Section 12903, Notices of Violation (1997)).

The parties do not dispute that Plaintiff’s pre-suit notice did not identify the basis for Costco’s liability as a retail seller under California Code of Regulations, title 27, section 25600.2, subd. (e). Rather, they dispute whether the Plaintiff was required to do so.

This is an issue of first impression. “When no reported California decision or administrative interpretation of a regulation exists, courts ‘interpret the regulation in accordance with applicable rules of statutory construction.” Baker v. Pacific Oaks Education Corp. (2024) 99 Cal.App.5th 77, 91 (quoting Manriquez v. Gourley (2003) 105 Cal.App.4th 1227, 1235). Courts “give the regulatory language its plain, commonsense meaning” and “[i]f possible … must accord meaning to every word and phrase in the regulation, and we must read regulations as a whole so that all of the parts are given effect.” Id. (quoting Butts v. Board of Trustees of California State University (2014) 225 Cal.App.4th 825, 83).

After considering the parties arguments, and the relevant statutory and regulatory language, the Court concludes that Plaintiffs were not required to identify an applicable 25600.2, subdivision (e), provision in their pre-suit notice.

Section 25903, subdivision (b), is the regulation that establishes the requirements for pre-suit notice. Nothing in that section references section 25600.2, subdivision (e), or the conditions under which a retail seller may be responsible for warning for consumer product exposure.

While Defendants are correct that section 25903, subdivision (b)(2), requires the notice “provide adequate information from which to allow the recipient to assess the nature of the alleged violation” the adequacy of the information is determined in reference to the enumerated notice requirements in section 25903. Furthermore, the regulation specifically states that the description of the violation requirement “shall not be interpreted to require more than reasonably clear information, expressed in terms of common usage and understanding, on each of the indicated topics.” Because the provisions of section 25600.2, subdivision (e), are not among those indicated topics, they are not required as part of the description of the violation in the notice. See Cal. Code. Regs., tit. 27, § subd. (b)(2).  

Likewise, the certificate of merit is not required to articulate an applicable 25600.2, subdivision (e), provision. See Health & Saf. Code, § 25249.7, subd. (d)(1), (describing the requirements of the certificate of merit). The certificate of merit requires the person executing it to consult with an expert “regarding the exposure to the listed chemical.” Ibid. The certificate speaks to the merit of claim in terms of a “credible factual basis for the certifier’s belief that an exposure … occurred or was threatened. Health & Saf. Code, § 25249.7 subd. (h)(2). Moreover, the certificate is not required to include the factual basis, and the alleged violator is not entitled to see them, even if the court determines there was no actual or threatened exposure. Health & Saf. Code, § 25249.7, subd. (h)(2).

Because no statute or regulation requires the pre-suit notice or certificate of merit to identify an applicable section 25600.2, subdivision (e), provision, Costco’s demurrer on that basis is overruled.

2. Whether the Basis for A Retailer’s Liability is an Essential Element of the Cause of Action.

Costco also argues that the complaint fails to allege facts establishing one or more of section 25600.2, subdivision (e)’s, five situations imposing Proposition 65 liability on the retailer.

Plaintiff acknowledges that the complaint does not allege facts establishing 25600.2, subdivision (e), applies, but argues that it should be allowed discovery to establish these facts and that this issue should be addressed at summary judgment.

The Court disagrees. Retail sellers have no liability for failing to warn of chemical exposure in consumer products under Proposition 65, except under the specific circumstances enumerated in 25600.2(e). Therefore, a cause of action against a retailer under Proposition 65 must allege facts sufficient to establish that one or more of the section 25600.2, subdivision (e), circumstances apply.

Because establishing at least one of the 25600.2 , subdivision (e), scenarios is an essential element of the cause of action, the Court sustains the demurrer with leave to amend.

Conclusion

The Court sustains the demurrer with 20 days leave to amend.