Judge: Anne Richardson, Case: 21STCV14401, Date: 2023-12-14 Tentative Ruling

DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call. 

Case Number: 21STCV14401    Hearing Date: December 14, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Plaintiff Public Health and Safety Advocates, LLC sued Defendants Hong Chang USA, Inc., Hong Chang Corporation, Hong Chang Corporation dba California Food International, Hong Chang Corporation dba Galleria Foods Wholesale, and Does 1 through 50 pursuant to an April 15, 2021 Complaint alleging 21 claims of “Violation of Proposition 65, The Safe Drinking Water and Toxic Enforcement Act of 1986 (Health & Safety Code §25249.5, et seq.).”

The claims arose from allegations that Hong Chang, its owners, and their other companies produce and distribute into the stream of commerce food products containing lead and cadmium in violation of California’s Proposition 65. The Complaint seeks (1) penalties under Health & Safety Code section 25247, subdivision (b) of $2,500 for each of 21 causes of action in the Complaint, (2) an injunction requiring a Prop. 65 warning on Defendants’ products, (3) attorneys’ fees and costs, and (4) any other recovery the Court may so award.

On October 18, 2023, Plaintiff filed a notice of settlement with the Court.

On October 19, 2023, the Court set an Order to Show Cause Hearing re Dismissal (Settlement) for January 11, 2024. The Court also advanced and vacated all previously scheduled hearings in Department 40.

On November 20, 2023, Plaintiff dismissed Defendants Hong Chang Corporation, Hong Chang Corporation dba California Food International, and Hong Chang Corporation dba Galleria Foods Wholesale, leaving Hong Chang USA, Inc. as the only Defendant in this action.

That same day, Plaintiff filed a motion to approve its proposition 65 settlement and consent judgment, which is premised on Health and Safety Code section 25249.7, subdivision (f)(4) and Code of Civil Procedure section 664.6. The motion attaches a declaration from counsel, which includes a copy of the settlement, as well as copies of the testing for the products challenged in the Complaint. The motion also attaches a proposed order and a proposed judgment.

Plaintiff’s motion is unopposed and now before the Court.

Motion to Approve Proposition 65 Settlement

Legal Standard

The Safe Drinking Water and Toxic Enforcement Act of 1986, colloquially known as Proposition 65, was passed as a ballot initiative by the California voters, and was designed to prevent the contamination of drinking water with, and generally protect the public from unknowing exposure to, harmful chemicals. (See generally 12 Witkin, Summary of California Law 10th (2005) Real Property, § 894, p. 1075.) Health & Safety Code section 25249.7 governs the enforcement of Proposition 65. Proposition 65 has both public and private enforcement mechanisms. (See Health & Safety Code, § 25249.7(c), (d).) Violations are punishable by injunction (Health & Safety Code § 25249.7(a)) and civil penalty (Health & Safety Code § 25249.7(b)). In the case of private enforcement actions, parties may also recover attorney’s fees, pursuant to the provisions in Code of Civil Procedure section 1021.5, which governs actions concerning important rights affecting the public interest.

Health & Safety Code section 25249.7, subdivision (f) governs the role of the court in approving settlements and consent judgments for private actions to enforce Proposition 65, and provides that:

“If there is a settlement of an action brought by a person in the public interest under subdivision (d), the plaintiff shall submit the settlement, other than a voluntary dismissal in which no consideration is received from the defendant, to the court for approval upon noticed motion, and the court may approve the settlement only if the court makes all of the following findings:

(A) The warning that is required by the settlement complies with this chapter.

(B) The award of attorney’s fees is reasonable under California law.

(C) The penalty amount is reasonable based on the criteria set forth in paragraph (2) of subdivision (b).”

(Health & Saf. Code, § 25249.7, subd. (f)(4)(A)-(C).)

“To stamp a consent agreement with the judicial imprimatur, the court must determine the proposed settlement is just …. In the context of Proposition 65 litigation, necessarily brought to vindicate the public interest, the trial court also must ensure that its judgment serves the public interest.” (Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America (2006) 141 Cal.App.4th 46, 61.)

Motion to Approve Proposition 65 Settlement: GRANTED.

I.

Compliance of Warning

Health & Safety Code section 25249.6 states, in relevant part: “No person in the course of doing business shall knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and reasonable warning to such individual, except as provided in Section 25249.10.” (Health & Saf. Code, § 25249.6.) “Health and Safety Code section 25249.6 (the central warning provision) requires that there be no ‘knowing and intentional’ exposure ‘without first giving clear and reasonable warning.’” (Consumer Defense Group v. Rental Housing Industry Members (2006) 137 Cal.App.4th 1185, 1214.) In order for a warning to be clear and reasonable, the manner of transmission must be reasonable, and the message employed must be sufficiently clear to communicate the warning. (Environmental Law Foundation v. Wykle Research, Inc. (2005) 134 Cal.App.4th 60, 67, fn. 6.)

Here, the settlement and the proposed judgment (which incorporates the settlement) show an agreement to, within 90 days of the Court approving the proposed judgment, affix a warning to the challenged products, and this warning complies with the format for warnings allowed under California Code of Regulations, title 27, section 25603. (Mot., Proposed Judgment, Ex. 1, § 2.4 at p. 5; see id. at §§ 2.5-2.6 at pp. 5-6; see also 27 Cal. Code Regs., tit. 27, div. 4, ch. 1, art. 6, sub-art. 2, § 25603, subd. (a)(2)(D).)

The proposed consent judgment accordingly satisfies Health and Safety Code, section 25249.7, subdivision (f)(4)(A).

Moreover, the Court notes that pursuant to 11 Cal. Code Regs. section 3201, subdivision (b)(1), “a settlement that provides for the giving of a clear and reasonable warning, where there had been no warning provided prior to the sixty-day notice, for an exposure that appears to require a warning, is presumed to confer a significant benefit on the public.”

Here, the warnings effect such a public benefit.

II.

Reasonableness of Attorney’s Fees

The fees setting inquiry in California ordinarily begins with the “lodestar” method, i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. A computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys’ fee award. The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value of the legal services provided. (Serrano v. Priest (1977) 20 Cal.3d 25, 49.) Such an approach anchors the trial court’s analysis to an objective determination of the value of the attorney’s services, ensuring that the amount awarded is not arbitrary. (Id. at p. 48, fn. 23.)

Here, the Court finds that the attorney’s fees sought are reasonable.

The motion is accompanied by a declaration from counsel, which explains that the parties negotiated a $37,000 award of fees and costs for Plaintiff under circumstances where counsel allegedly accrued $45,419.59 in lodestar fees and costs. (Mot., Kawahito Decl., ¶¶ 17, 27 [showing breakdown of alleged lodestar fees].)

A review of the Kawahito declaration also provides a background for Mr. Kawahito, which shows that he has litigated numerous class action lawsuits and lawsuits involving Proposition 65 warnings, and which details his other professional and academic background. (Mot., Kawahito Decl., ¶¶ 18-25; see Mot., Kawahito Decl., ¶ 26 [$800 per hour fee rate for Mr. Kawahito and $200 per hour fee rate for paralegal Sebastian Burnside].)

In light of this information, the Court determines that the $37,000 award for fees and costs contemplated in the settlement and proposed judgment is reasonable. (Mot., Proposed Judgment, Ex. 1, § 4 at pp. 7-8.)

The proposed consent judgment accordingly satisfies Health and Safety Code, section 25249.7, subdivision (f)(4)(B).

III.

Reasonableness of Civil Penalty

Health & Safety Code section 25249.7, subdivision (b)(1) states, in relevant part: “A person who has violated Section 25249.5 or 25249.6 is liable for a civil penalty not to exceed two thousand five hundred dollars ($2,500) per day for each violation in addition to any other penalty established by law.” Section 25249.7, subdivision (b)(2) states: “In assessing the amount of a civil penalty for a violation of this chapter, the court shall consider … (A) [t]he nature and extent of the violation,” “(B) [t]he number of, and severity of, the violations,” “(C) [t]he economic effect of the penalty on the violator,” “(D) [w]hether the violator took good faith measures to comply with this chapter and the time these measures were taken,” “(E) [t]he willfulness of the violator’s misconduct,” “(F) [t]he deterrent effect that the imposition of the penalty would have on both the violator and the regulated community as a whole,” and “(G) [a]ny other factor that justice may require.”

Here, the Court recognizes that penalties amounting to a total of $3,000 are somewhat low, particularly given the noncompliance alleged in the Complaint. However, the Court is satisfied with the analysis provided by Plaintiff for why five different factors support this penalty, i.e., the economic effect on Hong Chang USA, the good faith Hong Chang USA showed in attempting to rectify its noncompliance, the lack of willfulness on Hong Chang USA’s part, the purported lack of severity in noncompliance by Hong Chang USA, and the deterrence of the penalty on Hong Chang USA and the regulated community. (Mot., pp. 5-6.)

The proposed consent judgment accordingly satisfies Health and Safety Code, section 25249.7, subdivision (f)(4)(C).

Conclusion

Plaintiff Public Health and Safety Advocates, LLC’s Motion to Approve Proposition 65 Settlement and Consent Judgment is GRANTED.

Proposed order and consent judgment are to be signed by the Court.

Per the terms of the settlement therein, the Court retains jurisdiction to enforce the terms of the consent judgment. (Code Civ. Proc., § 664.6.)