Judge: Colin Leis, Case: 22STCV34988, Date: 2024-10-21 Tentative Ruling

Case Number: 22STCV34988    Hearing Date: October 21, 2024    Dept: 74

Consumer Protection Group, LLC v. House of Spices (India) Inc. et al.

Plaintiff Consumer Protection Group, LLC’s Motion to Approve and Enter the Stipulated Consent Judgment.

BACKGROUND 

             Plaintiffs Consumer Protection Group, LLC (Plaintiffs) issued a 60-Notice to defendants House of Spices (Indian), Inc, Pioneer Cash & Carry, Inc. and Does 1-30 (collectively Defendants) for lead contaminated Garlic Powder.  The parties reached an agreement as to a Consent Judgment on April 22, 2024.

            On August 08, 2024, Plaintiffs filed the Motion to Approve and Enter the Stipulated Consent Judgment as required by California Health and Safety Code, section 25249.5, et seq..

LEGAL STANDARD

¿¿            The Safe Drinking Water and Toxic Enforcement Act of 1986 (Health & Saf. Code §§¿25249.5, et seq.) known as Proposition 65 requires any person who, in the course of doing business, knowingly and intentionally exposes an individual to a chemical known to the state to cause cancer or reproductive toxicity, to first give a clear and reasonable warning. (Health & Saf. Code, § 25249.6.) Proposition 65 has both public and private enforcement mechanisms. (See Health & Saf. Code, §§ 25249.7(c), (d).) Violations are punishable by injunction and civil penalties. (See id. at (a), (b).) In private enforcement actions, parties may also recover attorney’s fees pursuant to Code of Civil Procedure section 1021.5. (See 11 CCR §¿3201.)  

A court may approve a settlement in a Proposition 65 action only if the court makes all of the following findings: (1) the warning that is required by the settlement complies with Proposition 65’s requirements as set forth in Chapter 6.6; (2) the award of attorney’s fees is reasonable under California law; and (3) the penalty amount is reasonable based on the criteria set forth in section 25249.7(b)(2). (Health & Saf. Code section 25249.7, subd. (f)(4).) “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, 61-62.) 

DISCUSSION 

Compliance of Warning

Pursuant to Health & Safety Code section 25249.6: “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.)  

“In a case alleging failure to warn, 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.” (11 CCR § 3201(b)(1).) “Reformulation of a product, changes in air emissions, or other changes in the defendant's practices that reduce or eliminate the exposure to a listed chemical, in lieu of the provision of a warning, are presumed to confer a significant benefit on the public.” (Id. at (b)(2).) 

            Plaintiff has submitted a copy of the proposed consent judgment. Pursuant to the Consent Judgment, after the Effective Date, Defendant shall not sell Garlic Powder (Covered Product) “unless the Covered Product contain no more than 10 parts per billion (ppb) or contain a warning as described in Section 2.3.”  (Consent Judgement, ¶ 2.1.)

            Section 2.3 requires a warning of potential exposure to lead to be affixed to the packaging of the Covered Product and to be “prominently placed with such conspicuousness as compared with other words, statements, designs or devices as to render it likely to be read and understood….”  (Consent Judgement, ¶ 2.3.)  It also includes two example warnings that would substantially comply.  (Consent Judgement, ¶ 2.3.)  If the Covered Product is sold on the internet, the warning message is to be made in compliance with 27 CCR section 25601 and 25602.  (Consent Judgement, ¶ 2.3.)  When the product is sold in brick-and-mortar stores in California, the warning must be “provided directly on each Product or its label, labeling, package shelf tag or sign with such conspicuousness as compared with other consumer information” or “provided on each Product or its label or package” if the Defendant uses a Short-Form warning.  (Consent Judgement, ¶ 2.3.)

            The foregoing warning is clear and reasonable.  The warning satisfies the warning requirement under Health and Safety Code, section 25249.6.

Reasonableness of Attorney’s Fees

In awarding fees, a court ordinarily begins with the “lodestar” method, i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate, which may then be adjusted based on consideration of factors specific to the case to fix the fee at the fair market value of the legal services provided. (Serrano v. Priest (1977) 20 Cal.3d 25, 49.) After the court has performed the lodestar calculations, it shall consider whether the total award so calculated under all of the circumstances of the case is more than a reasonable amount and, if so, shall reduce the award so that it is a reasonable figure.  (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095-1096.) 

            Although Plaintiff has filed a Declaration stating a lodestar fee of $142,250.00, Plaintiff agrees to recover only $138,000.00 in attorney’s fees and costs.  Defendant has consented to this amount. (Genish Decl., ¶ 19; Consent Judgement ¶ 3.1.2.)  This amount represents 152.01 hours for three attorneys whose hourly rate ranges from $1,150.00 to $295.00.  (Genish Decl., ¶ 19.)  These fees were incurred between March 2022 to the present, including investigation and notice, post-notice investigation and informal discovery, transition from litigation to final settlement, and settlement to approval.  (Genish Decl., ¶¶ 20-28.)  Plaintiff’s counsel is not requesting costs or a fee enhancement.  (Genish Decl., ¶¶ 19, 29.)  The Court finds that $138,00.00 is reasonable.  Accordingly, the attorney’s fees and costs are approved. 

Reasonableness of Penalty Amount

Civil penalties are not to exceed $2,500 per day for each violation. (Health & Saf. Code § 25249.7(b)(1).) In assessing the amount of a civil penalty, the court must consider:  

(A) The nature and extent of the violation. 

(B) The number of, and severity of, the violations. 

(C) The economic effect of the penalty on the violator. 

(D) Whether the violator took good faith measures to comply with this chapter and the time these measures were taken. 

(E) The willfulness of the violator's misconduct. 

(F) The deterrent effect that the imposition of the penalty would have on both the violator and the regulated community as a whole. 

(G) Any other factor that justice may require. 

(Health & Saf. Code, § 25249.7(b)(2).) 

            Under the Consent Judgement, Defendant has agreed to pay civil penalties of $12,000.00.  (Consent Judgement, ¶ 3.1.1.)  75% of the penalty is apportioned to the California Office of Environmental Hazard Assessment and 25% to Plaintiff.  Plaintiff has provided evidence that the amount of civil penalties is reasonable based on the factors in Health & Safety code, section 25249.7.  (Motion pp. 9-11; Genish Decl., ¶¶ 4-6.)

Release

The Court notes that the Consent Judgment provides for the release by Plaintiff against Defendant, all entities to which Defendant Releasees directly or indirectly have distributed or sold the Product to, and all the successors and assigns of any of them.  (Consent Judgement ¶¶ 4.1, 4.2, 4.3.) 

CONCLUSION 

The court grants Plaintiff’s motion to approve and enter the stipulated consent judgement.

Plaintiff shall give notice.