Judge David S. Cunningham, Case 19STCV02668 2023-03-16 Tentative Ruling

Judge: David S. Cunningham, Case: 19STCV02668, Date: 2023-03-16 Tentative Ruling

The hearing on CEH’s motion for approval and entry of consent judgment is continued.

“Defendants operate a ‘lead-acid battery recycling facility’ in Industry, California.” (3/2/22 Tentative Ruling Re: Defendants’ Motion for Summary Adjudication, p. 1.)[1] “The facility allegedly emits airborne lead and arsenic that ends up in the soil of neighboring properties.” (Ibid.) “Plaintiffs contend Defendants violated, and continue to violate, Proposition 65 by failing to warn the neighbors about the alleged emissions and soil contamination (Plaintiffs claim some of the alleged soil contamination came from ‘historical emissions dating all the way back to 1959’).” (Ibid.)[2]

On 3/2/22, the Court denied the parties’ cross-motions for summary adjudication.

In late December 20222 and early January 2023, the parties signed a consent judgment.

3.1.1. Within 30 days of the Effective Date and once annually thereafter Settling Defendants will mail or cause to be delivered the Proposition 65 warning attached as Exhibit A, in English, Spanish, and Chinese, to all residences Settling Defendants can, to the best of their ability, determine to be within the outlined portion of the map in Exhibit A.

3.1.2. Within 30 days after the Effective Date, and once quarterly thereafter, Quemetco will publish the Proposition 65 warning attached as Exhibit A in the main news section or in the local news section of one English language daily newspaper and in one Spanish language daily newspaper consistent with the Spanish language publication’s Proposition 65 notice placement policy.

3.1.3. The warnings identified in Sections 3.1.1 and 3.1.2 comply with the requirements of Proposition 65 and will fully satisfy any warning obligations Proposition 65 may impose on Quemetco arising out of emissions from the facility located on the Quemetco Site. For the avoidance of doubt, those warnings constitute “clear and reasonable” warnings under Health and Safety Code § 25249.6.

3.2.1. Quemetco will develop enhanced community engagement and transparency efforts that will include the public release of (a) emissions data, including stack test results and fence line monitor data, which Quemetco will make publicly available as soon as practicable and not later than 30 days after receiving the data, and (b) an annual report providing an update on the facility’s operations, a summary of the yearly emissions data, and other relevant operational updates. The public release of information required under this section will include a plainly visible link to this information on the “Health, Environment, and Safety” section of Quemetco’s website or the equivalent section of Quemetco’s future website, which section will be conspicuous on the main page of the website.

3.2.2. Quemetco will notify CEH when it releases the information identified in Subsection 3.2.1 above and will include CEH on any mailing list generated as part of these community engagement efforts. Quemetco will engage in good faith discussions with CEH to address and resolve any issues CEH raises based on those disclosures. CEH will make best efforts to raise any concerns in an aggregated way so that they can be efficiently addressed on a bi-annual basis. Both CEH and Quemetco will identify a liaison for these purposes.

4.1.1. Based on the most recent reported emissions data, which are attached as Exhibit B to the judgment, Quemetco’s emissions do not require a Proposition 65 warning for airborne exposures.

4.1.2. Based on the most recent reported emissions data, which are attached as Exhibit B to the judgment, Quemetco’s emissions do not contribute recognizably to the concentration of Proposition 65-listed substances on the ground or in the residential soil within 0.25 miles of the facility.

4.1.3. Defendants did not conduct business on the Quemetco Site until 1972, when RSR Corporation purchased the then-existing facility from St. Joe Minerals Corporation.

4.1.4. Defendants have made substantial changes to and upgrades on the property since RSR Corporation purchased the then-existing facility from St. Joe Minerals Corporation in 1972 and the land from Western Associates in 1986.

4.1.5. The issues covered by this settlement agreement, including, but not limited to, the stipulated findings in Sections 4.1.1 through 4.1.4, were actively litigated and resolved by this judgment.

5.1. Within 30 days of the Effective Date, Settling Defendants shall pay to Plaintiff the total sum of $2,500,000, which shall be allocated as follows:

5.1.1. $500,000 as an Additional Settlement Payment (“ASP”) pursuant to California Code of Regulations, Title 11, § 3204 payable to the Center for Environmental Health. These funds shall be placed in CEH’s City of Industry Community Fund (“Community Fund”). The payments to this fund shall be used exclusively for the purpose of reducing exposures to lead and arsenic in the neighborhood located within 0.25 miles of Quemetco’s facility. The Community Fund will not be used to conduct soil remediation. CEH, with input from community members, will use the funds from the Community Fund to implement measures designed to identify, mitigate, and reduce exposures to lead and arsenic at residences located within 0.25 miles of the facility. Plaintiff shall obtain and maintain adequate records to document that ASP is spent on these activities and Plaintiff agrees to provide such documentation to the Attorney General within thirty days of any request from the Attorney General.

5.1.2. The Community Fund will not be used in any way to interfere in any way with the facility’s ongoing operations through, for example, litigation, picketing, lobbying, seeking to influence regulators or government officials, or otherwise pressuring Quemetco to stop conducting or to change the way it conducts business.

5.2. $2,000,000 as a reimbursement of a portion of Plaintiff’s reasonable attorneys’ fees and costs. This amount shall be divided into three checks: (1) a check for $1,810,000 shall be made payable to Lexington Law Group; (2) a check for $80,000 shall be made payable to Boucher LLP, and (3) a check for $110,000 shall be made payable to the Center for Environmental Health.

6.1. Plaintiff may, by motion or application for an order to show cause before the Superior Court of Los Angeles County, enforce the terms and conditions contained in Section 3.1 of this Consent Judgment. Prior to bringing any motion or application to enforce the requirements thereof, Plaintiff shall meet and confer regarding the basis for Plaintiff’s anticipated motion or application in an attempt to resolve it informally, including providing Settling Defendants a reasonable opportunity of at least thirty (30) days to cure any alleged violation. Should such attempts at informal resolution fail, Plaintiff may file its enforcement motion or application after the cure period has elapsed. The prevailing party on any motion to enforce this Consent Judgment shall be entitled to its reasonable attorney’s fees and costs incurred as a result of such motion or application.

6.2. Any dispute arising under this Consent Judgment other than an alleged violation of Section 3.1 that the Parties are unable to resolve through mutual, good faith negotiations will first be mediated by a mutually selected mediator with each party bearing its own costs. If the Parties cannot select an agreeable mediator, then the matter will be referred to the American Arbitration Association for assignment to a mediator. If such dispute between the Parties cannot be resolved by mediation, either party may submit the dispute to arbitration in accordance with the arbitration rules of the American Arbitration Association then in effect. The dispute will be heard by a panel of three neutral arbitrators, with each side selecting an arbitrator and those two arbitrators selecting the third. The parties will bear their own costs.

8.1. Plaintiff’s Release on Behalf of Public Interest. This Consent Judgment is a full, final, and binding judgment between CEH, acting on behalf of itself and in the public interest pursuant to Health and Safety Code § 25249.7(d), and Settling Defendants regarding any allegations, violations, actions, damages, costs, penalties, causes of action, or claims made, or which could have been made, in the Notice and/or the Complaint, arising out of emissions of lead and/or arsenic from the Quemetco Site up to and including the Effective Date, including any Proposition 65 claims related to exposures to lead and arsenic from the air, soil, water, or any other manner alleged to have resulted, in whole or in part, from any emissions from the facility that occurred before the judgment date.

8.2. Plaintiff’s Release on Behalf of Itself. Plaintiff also agrees to the broadest possible release and waiver of claims available under California Law. Plaintiff, on behalf of itself only, hereby waives any and all rights and benefits which it now has, or in the future may have, conferred upon it with respect to claims arising from any violation of Proposition 65 or any other statutory or common law regarding the emissions from the Quemetco Site. Plaintiff acknowledges that it is familiar with the provisions of section 1542 of the California Civil Code, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

CEH waives and relinquishes all of the rights and benefits CEH has, or may have, under California Civil Code section 1542. CEH acknowledges that it may discover facts in addition to, or different from, those which they now know or believe to be true with respect to the subject matter of this Consent Judgment. Nevertheless, this release will be and remain in effect as a full and complete general release, notwithstanding the discovery or existence of any additional or different facts.

8.3. Compliance with the terms of this Consent Judgment resolves any issue, now and in the future, concerning compliance by Quemetco or its affiliates, parent or subsidiary corporations, divisions, successors, officers, directors, or assigns with the requirements of Proposition 65 with respect to any emissions from the Quemetco Site that occurred up to and including the Effective Date. Quemetco shall not be liable for, and the Consent Judgment shall extinguish and preclude, any Proposition 65 claims related to past or future exposures to lead and arsenic from the air, soil, water, or any other manner alleged to have resulted, in whole or in part, from any emissions from the facility that occurred before the judgment date.

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. Health and Safety Code section 25249.7, subdivision (f)(4) provides: “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 ... to the court for approval ... and the court may approve the settlement only if the court makes all of the following findings: [¶] (A) Any warning that is required by the settlement complies with this chapter. [¶] (B) Any award of attorney's fees is reasonable under California law. [¶] (C) Any penalty amount is reasonable. . . .” Settlement without consideration of the public interest eviscerates the purpose of Proposition 65, and the plain language of the statute contradicts respondents' argument that the public interest is “not one of the three findings stated by the legislature to be required.”

(Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America (2006) 141 Cal.App.4^th 46, 61-62, emphasis in original.)

The governing regulations require the warning to “compl[y] with the content requirements” of title 27, section 25605. (Cal. Code Regs., tit. 27, § 25604, subd. (a).) Per section 25605, the warning must state:

For exposures to both listed carcinogens and reproductive toxicants, the words, “Entering this area can expose you to chemicals known to the State of California to cause cancer and birth defects or other reproductive harm, including [name of one or more chemicals known to cause cancer and name of one or more chemicals known to cause birth defects or other reproductive harm], from [name of one or more sources of exposure]. For more information go to www.P65Warnings.ca.gov.”

In addition, the governing regulations require the warning to be provided by: (1) posting warning signs “at all public entrances to the affected area in no smaller than 72-point type[;]” (2) noticed mailings, electronic or otherwise, “to each occupant in the affected area[;]” or (3) publishing the warning “in the mail or local news section of a newspaper with the largest circulation in the area . . . at least once every three months.” (Cal. Code Regs., tit. 27, § 25604, subds. (a)(1)-(3).)

Entering the outlined area in the map below, located near the intersection of 7th Street and Salt Lake Avenue in the City of Industry, California, can expose you to chemicals known to cause cancer and birth defects or other reproductive harm, including lead and arsenic, from ingestion of and contact with soil. Lead and arsenic are present in the soil in this area due to historical and ongoing industrial operations, lead paint, vehicle emissions, and naturally occurring lead and arsenic. Visit www.P65Warnings.ca.gov for more information.

The parties intend to mail the warning to all people living within a quarter mile of the facility and to publish it in English and Spanish newspapers “[w]ithin 30 days after the Effective Date, and once quarterly thereafter[.]” (Todzo Decl., Ex. A, §§ 3.1.1-3.1.2.)

* The warning fails to include the “known to the State of California” language.

* The parties fail to explain how they plan to obtain resident names, check addresses, and verify reception of the mailings. (Id. at Ex. A, § 3.1.1.)

* The consent judgment fails to identify the newspapers, and there is no mandate that the newspapers have the largest circulation.

* The warning will be printed in English, Spanish, and Chinese for all residents, yet it is only required to be published in English and Spanish newspapers. Residents who read Chinese newspapers may miss the warning.

* A Google map of the warning area is included in the warning. (See id. at Ex. A, p. 13.) The radius is 0.25 miles. It is unclear how the parties reached this radius and what percentage of the affected area it encompasses.

The Court finds that the hearing should be continued to give the parties an opportunity to address these points.

The consent judgment provides $2 million for attorney fees and costs. (See id. at Ex. A, § 5.2.)

CEH contends the amount is reasonable because it is less than the $2.13 million lodestar.

* The parties failed to submit billing records from CEH, Lexington Law Group, and Boucher, LLP.

* The attorney-made charts show vague summaries and block billing instead of specific charges for specific tasks. (See id. at Exs. C, D; see also id. at Ex. E, ¶ 14.)

* The record lacks evidence regarding the work experience levels of the CEH attorneys and staff.[3]

* Raymond Boucher’s rate of nearly $1,200 per hour appears excessive given the limited work he and his firm did in the case (they associated into the case on 7/1/22, after the Court denied the motions for summary adjudication). (See id. at Ex. E, ¶¶ 12, 14.)

Under the consent judgment, Defendants must pay CEH an additional settlement payment (“ASP”) of $500,000 in lieu of civil penalties. (See id. at Ex. A, § 5.1.1.)

(Id. at Ex. A, §§ 5.1.1-5.1.2.) The language is vague and fails to list examples of how the money might be used. While CEH’s representative declares that CEH may purchase “sod or bark chips as ground coverings to reduce possible soil exposures” (Sugerman Decl., ¶ 14), there is no guarantee that the money will, in fact, be spent on such materials or that such a use would be effective and beneficial to residents. Moreover, there is no obligation for the parties to get approval from the Attorney General or the Court for future expenditures. As currently drafted, CEH has unfettered discretion to spend the money however it wants on matters it, alone, deems remedial. Amending the consent judgment to add a stronger oversight component may be appropriate.

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[1] “Plaintiffs” are CEH and Clean Air Coalition of North Whittier & Avocado Heights (“CAC”). On 9/19/22, “the Court dismissed CAC’s claims with prejudice” pursuant to the parties’ stipulation. (1/27/23 Todzo Decl., ¶ 15.)

[1] The Todzo and Boucher declarations discuss the work experience levels of the Lexington Law Group and Boucher, LLP personnel.

[1] “Defendants” are Quemetco, Inc., Quemetco West, LLC, and RSR Corp.

[2] “Plaintiffs” are CEH and Clean Air Coalition of North Whittier & Avocado Heights (“CAC”). On 9/19/22, “the Court dismissed CAC’s claims with prejudice” pursuant to the parties’ stipulation. (1/27/23 Todzo Decl., ¶ 15.)

[3] The Todzo and Boucher declarations discuss the work experience levels of the Lexington Law Group and Boucher, LLP personnel.