Judge: Jill Feeney, Case: 22STCV32843, Date: 2023-07-10 Tentative Ruling
Case Number: 22STCV32843 Hearing Date: July 10, 2023 Dept: 78
Superior Court of California
County of Los Angeles
Department 78
ALEX MARTINEZ,
Plaintiff,
vs.
VMV COSMETIC GROUP D/B/A SALERM COSMETICS, et al.,
Defendants. Case No.: 22STCV32843
Hearing Date: July 10, 2023
[TENTATIVE] RULING RE:
PLAINTIFF ALEX MARTINEZ’S MOTION TO APPROVE PROPOSITION 65 SETTLEMENT AND CONSENT JUDGMENT
Plaintiff Alex Martinez’s Motion to Approve Proposition 65 Settlement and Consent Judgment is GRANTED.
FACTUAL BACKGROUND
This is an action for civil penalties and injunctive relief to enforce Health & Safety Code § 25249.7 (“Prop. 65”). Plaintiff Alex Martinez (“Plaintiff”) brings this action in the public interest of the citizens of the State of California.
Defendants VMV Cosmetic Group D/B/A Salerm Cosmetics and VMV Cosmetic Group South California, Inc. (“Defendants”) develop, manufacture, market, distribute, and/or sell a shampoo gel (the “Subject Product”) that exposes California consumers to Coconut Oil Diethanolamine Condensate (“CODC”). (Compl. ¶ 10.) The Office of Environmental Health Hazard Assessment (“OEHHA”) has identified CODC as a chemical that can increase the risk of cancer. (Compl. ¶ 22.) For years, Defendants have been exposing California consumers to CODC without providing any type of warning as required by Prop. 65. (Compl. ¶ 26.)
PROCEDURAL HISTORY
On October 6, 2022, Plaintiff filed the Complaint asserting two causes of action:
1. Violation of Section 25249.6 of the Health and Safety Code; and,
2. Declaratory Relief.
On December 16, 2022, Defendants filed an Answer.
On May 22, 2023, Plaintiff filed the instant Motion for Final Approval of Proposition 65 Settlement.
On July 3, 2022, Plaintiff filed a Supplemental Declaration.
No Opposition has been filed.
DISCUSSION
I. MOTION FOR ENTRY OF STIPULATED CONSENT JUDGMENT
Plaintiff moves to approve and enter consent judgment between Plaintiff and Defendants per Health & Safety Code § 25249.7(f)(4).
Section 25249.7(f)(4) states:
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).
(5) The plaintiff subject to paragraph (4) has the burden of producing evidence sufficient to sustain each required finding. The plaintiff shall serve the motion and all supporting papers on the Attorney General, who may appear and participate in a proceeding without intervening in the case. (Health & Safety Code § 25249.7, subd. (f)(4)–(5).)
The terms of the Settlement Agreement are as follows.
1. Beginning on June 1, 2023, Defendants agree to either manufacture, import or purchase for sale in California only products that either contain no CODC or are accompanied by the following warning:
WARNING: This product can expose you to Coconut Oil Diethanolamine Condensate, which is known to the State of California to cause cancer. For more information, go to htttps://www.p65warnings.ca.gov/.
2. For any product sold over the internet, the above warning shall be prominently displayed on the primary display page for the product, as a clearly marked hyperlink using the word “WARNING”, or by otherwise prominently displaying the warning to the purchaser prior to completing the purchase.
3. In satisfaction of all potential civil penalties, Defendants shall make a total payment of $25,000.00 to Plaintiff within ten business days of the effective date. That amount shall be apportioned as follows:
a. $5,000 as a Civil Penalty pursuant to California Health and Safety Code section 25249.7(b)(1), with 75% of that amount remitted to OEHHA and the remaining 25% remitted to Plaintiff.
b. $20,000 to Plaintiff’s Counsel, KJC Law Group, A.P.C. as a complete reimbursement of Plaintiff’s attorneys’ fees and costs.
(Cole Decl., Exh. C at pp. 6-7.)
A. Warning Compliance
Proposition 65 provides that “[n]o 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 . . .” (Health & Safety Code § 25249.6.) Further, to be “clear and reasonable,” the warning must be displayed “with such conspicuousness, as compared with words, statements, designs, or devices in the label, labeling or display as to render it likely to be read and understood by ordinary individual under customary conditions of purchase or use.” (27 CCR § 25601(b)(3).) “The message must clearly communicate that the chemical in question is known to the state to cause cancer, or birth defects or other reproductive harm.” (Id.) “Reformulation of a product, changes in air emissions, or other changes in the defendant's practices which reduce or eliminate the exposure to a listed chemical, in lieu of the provision of a warning, constitute a sufficient showing of public benefit.” (11 Cal. Code. Regs., tit. 11, § 3201(b)(2).)
Here, the Settlement Agreement requires that Defendants affix a warning stating that “This product can expose you to Coconut Oil Diethanolamine Condensate, which is known to the State of California to cause cancer. For more information, go to https://www.p65warnings.ca.gov/” on any non-compliant product. Additionally, the Settlement Agreement requires that the Warning be in a type size no smaller than the largest type size used for other consumer information on the product. Finally, a symbol consisting of a black exclamation point in a yellow equilateral triangle with a bold black outline must be placed to the left of the text of the Warning.
The Court finds that the warning scheme required by the Settlement Agreement complies with the requirements of Prop. 65.
B. Civil Penalties
After ensuring that the consent judgment complies with Proposition 65's terms, the Court must determine whether the assessed penalty is reasonable per Health & Safety Code § 25249.7(b)(2). Health & Safety Code § 25249.7(b)(2) provides, “[i]n 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.”
Defendants will pay $5,000 in civil penalties, 75% of which ($3,750) will be paid to the OEHHA and the remaining 25% ($1,250) to Plaintiff.
Plaintiff argues that this civil penalty is reasonable as Defendants violation of Prop. 65 was not willful, and Defendants took immediate good faith measures to change the labeling of the Subject Product. Additionally, Plaintiff argues the amount is appropriate as the settlement negotiations lasted over the course of months, evincing the good faith nature of the negotiations.
The Court finds that the proposed civil penalties are reasonable.
C. Attorney’s Fees
Finally, the Court must decide whether the proposed consent judgment’s award of attorney’s fees is reasonable under California law. (Health & Safety Code § 25249.7(f)(4)(B).) The proposed consent judgment provides for payment of $20,000.00 in attorney’s fees and costs.
In Consumer Defense Group v. Rental House Industry Members (2006) 137 Cal.App.4th 1185, the court reversed the trial court’s approval of consent judgments, finding the requested attorneys’ fees objectively unconscionable. (Id. at p. 1220.) The court considered the “traditional factors used to gauge attorney fee awards in private attorney general cases in making its determination.” (Id. at p. 1219.) Specifically, the court considered such factors as: (1) the novelty and difficulty of the questions involved; (2) the extent to which the litigation precludes other employment by the attorneys; (3) the contingent nature of the fee award; (4) the fact that an award might ultimately fall on the taxpayers; and (5) the fact that the monies awarded would inure not to the individual benefit of the attorneys involved but the organizations by which they are employed. (Id. at p. 1220.)
Here, Plaintiff’s Counsel attests that he has been practicing law since 2014. (Cole Decl. ¶ 3.) In the course of his representation, Plaintiff’s Counsel attests that he he had to familiarize himself with CODC, analyze prior Proposition 65 actions involving similar chemicals, prepare, file, and serve the 60-Day Notice of Proposition 65 Violation, discuss resolution with defense counsel, and prepare the instant consent judgment and motion. (Id. ¶ 4.)
Plaintiff’s Counsel attests that he spent a total of 62 hours on this matter. (Id. ¶ 6.) Plaintiff’s Counsel attests that his hourly rate is $500, which is similar to amounts approved for attorneys with similar experience. (Ibid.) Accordingly, Plaintiff’s lodestar amount is $31,000.00. (Ibid.) Plaintiff’s Counsel attests that he accepted a lower amount in agreement with defense counsel. (Ibid.)
The Court finds that the requested attorney’s fees are reasonable.
CONCLUSION
Plaintiff Alex Martinez’s Motion to Approve Proposition 65 Settlement and Consent Judgment is GRANTED.
DATED: July 10, 2023
________________________________
Hon. Jill T. Feeney
Judge of the Superior Court
