Judge: Elaine Lu, Case: 21STCV25765, Date: 2023-09-07 Tentative Ruling

Case Number: 21STCV25765    Hearing Date: September 7, 2023    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Background

On July 13, 2021, Plaintiff Public Health and Safety Advocates, LLC (“Plaintiff”) filed the instant action against Defendant Hite USA, Inc. dba Sho International and Hite USA, Inc. (collectively “Defendants”) for civil penalties and injunctive relief.  Plaintiff alleges Defendants violated Proposition 65 by failing to provide clear and reasonable warnings about the risk of exposure to lead and cadmium in Arkshell and exposure to lead in Marsh Clam that Defendants sold and/or distributed in California.  (Complaint ¶¶ 5, 36-44, 46-54.)

On July 18, 2023, Plaintiff filed the instant motion to approve a Proposition 65 settlement and consent judgment.  Plaintiff has also served the instant proposed settlement in compliance with Title 11, California Code of Regulations § 3003.  (Kawahito Decl. ¶ 29.)  No opposition or reply papers have been filed.

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 § 24259.7(a)) and civil penalty (Health & Safety Code § 24259.7(b)).  In the case of private enforcement actions, parties may also recover attorney’s fees, pursuant to the provisions in CCP section 1021.5, governing actions concerning important rights affecting the public interest. 

Health & Safety Code § 24259.7(f) governs the role of the Court in approving settlements and consent judgments for private actions to enforce Proposition 65.  Section 24259.7(f)(4) provides, in relevant part, 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).

“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.)

Discussion

Plaintiff moves for a court order approving the consent judgment pursuant to Health & Safety Code § 25249.7(f).  By way of this consent judgment, Plaintiff and Defendants seek to settle violations for failing to warn individuals in California of exposures to lead from consuming Defendant’s seafood, Arkshell and Marsh Clam (jointly “Covered Products”). 

Adequacy of the Warning and Compliance with Health & Safety Code Section 25249.6

Health & Safety Code § 25249.6 provides 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 & Safety 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 Proposed Consent Judgment requires that with regard to Covered Products made after the consent judgment is approved, Defendant will be permanently enjoined from manufacturing for sale in California, distributing for sale in California, or directly selling in California, Covered Products that may expose a person to a daily lead exposure level of more than 0.5 micrograms of lead or 4.1 micrograms of cadmium per day – the maximum allowable without a warning – unless the Covered Products have a clear and reasonable warning.  (Kawahito Decl. ¶ 15, Exh. 1 [Proposed Consent Judgment, § 2.1.)  The proposed Consent Judgment requires a warning that consuming the Covered Products can expose the consumer to lead and cadmium, which is known to cause cancer and birth defects or other reproductive harm.  (Kawahito Decl. ¶ 4, Exh. 1 [Proposed Consent Judgment, § 2.4].)  The warning also directs the consumer to www.P65Warnings.ca.gov for more information.  (Kawahito Decl. ¶ 4, Exh. 1 [Proposed Consent Judgment, § 2.4].)  For any Covered Product sold through the internet, the warning is to be provided in a manner that complies with 27 C.C.R. § 25602(b).  (Kawahito Decl. ¶ 4, Exh. 1 [Proposed Consent Judgment, § 2.5].)  The Court finds the warning required by the settlement here is clear and reasonable and complies with the Health and Safety Code.

Reasonableness of Attorney’s Fees

The fee 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 for 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 48, n.23.)  After the trial 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 section 1717 award so that it is a reasonable figure.  (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095-96.)   

            Here, the settlement provides attorney’s fees and costs of $28,000.00.  (Kawahito Decl. ¶ 4, Exh. 1 [Proposed Consent Judgment § 4].)  Attorney James K. Kawahito is the founding partner of Kawahito Law Group APC – Plaintiff’s Counsel – with significant litigation experience and has been a practicing attorney for eighteen years.  (Kawahito Decl. ¶¶ 21-25.)  Krikorian bills at an hourly rate of $800 per hour which has been approved numerous times before.  (Kawahito Decl. ¶ 27.)  Paralegal Sebastian Burnside also worked on the instant action at an hourly rate of $200 per hour.  (Kawahito Decl. ¶ 27.)  Attorney James K. Kawahito spent approximately 48.7 hours on the instant action, and Paralegal Sebastian Burnside spent approximately 18.6 hours on the instant action including preparing pleadings, research, correspondence with Plaintiff and opposing counsel, and settlement negotiations.  (Kawahito Decl. ¶ 28.)  Plaintiff’s Counsel has also incurred unreimbursed litigation expenses and prelitigation fees in investigating the instant action. (Kawahito Decl. ¶ 28.)  The claimed time and hourly rate would support a lodestar amount of $50,409.59 – $22,409.59 more than what is requested.  The Court finds that the amount of attorney’s fees and costs allocated in the settlement agreement is clearly reasonable based on the history and length of the litigation for the instant action.  Accordingly, based on this evidence, the Court finds that the amount of attorney’s fees and costs provided to Plaintiff in the settlement is reasonable.

Reasonableness of Civil Penalty

Health & Safety Code § 25249.7(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(b)(2) states: “In assessing the amount of a civil penalty for a violation of this chapter, the court shall consider all of the following: (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.”

Here, the settlement provides for $2,000.00 in civil penalties, with 75% to be remitted to the State of California and the remaining 25% to be remitted to Plaintiff.  (Kawahito Decl. ¶ 4, Exh. 1 [Proposed Consent Judgment § 3.1].)  In light of the factors above, the Court finds $2,000.00 in civil penalties is reasonable given the number of items and violations.

Public Benefit

The Court notes that pursuant to 11 Cal. Code Regs. § 3201(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 consent judgment does exactly that as it prompts Defendant to provide a clear and reasonable warning on products that did not include such a warning previously.  As such, the proposed consent judgment serves the public interest in that it provides a warning for lead and cadmium exposure.

Conclusion and Order

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

The Court hereby signs the Proposed Stipulated Consent Judgment filed by the parties on July 18, 2023.

            The moving party is ordered to provide notice of this order and file proof of service of such within ten (10) days of this order.

DATED:  September ___, 2023                                 ___________________________

                                                                              Elaine Lu

                                                                              Judge of the Superior Court