Judge Jill Feeney, Case Number: 23STCV10942, Date: 2023-10-13 Tentative Ruling

This is an action for civil penalties and injunctive relief to enforce Health & Safety Code § 25249.6 et seq. Plaintiff Berj Parseghian (“Plaintiff”) brings this action in the public interest of the citizens of the State of California.

Defendant JFC International, Inc. manufactures, distributes, sells, and/or offers for sale products that contain hazardous levels of lead on accessible surfaces. (Compl. ¶14.) Defendant manufactured, distributed and sold these products for one year without warnings required by California Health and Safety Code section 25249.6, et seq. (“Proposition 65”). (Compl. ¶ 15.)

On May 16, 2023, Plaintiff filed the Complaint asserting a single cause of action for Violations of Health & Safety Code Section 25249.6, et seq., against Defendant JFC International, Inc.

If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.

“Section 664.6 permits the trial court judge to enter judgment on a settlement agreement without the need for a new lawsuit. [Citation.] It is for the trial court to determine in the first instance whether the parties have entered into an enforceable settlement. [Citation.] In making that determination, ‘the trial court acts as the trier of fact, determining whether the parties entered into a valid and binding settlement. [Citation.] Trial judges may consider oral testimony or may determine the motion upon declarations alone. [Citation.] When the same judge hears the settlement and the motion to enter judgment on the settlement, he or she may consult his [or her] memory. [Citation.]’ [Citation.]” (Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1359–1360.)

The stipulated consent judgment here includes the following. Defendant agrees to discontinue distributing into the state of California or manufacturing the Covered Product. (Consent ¶ 3.1.) The injunctive relief in Section 3 does not apply to any Covered Product that was manufactured, distributed, or sold prior to the Effective Date. (Consent ¶ 3.1.)

Defendant will pay $5,000 in civil penalties, to be apportioned as $3,750 for the State of California Office of Environmental Health Hazard Assessment (“OEHHA”), and the remaining $1,250 for Plaintiff. (Consent ¶4.) Defendant is to pay Plaintiff’s counsel $40,000 in attorneys’ fees, expert and investigation fees, and related costs. (Consent ¶5.)

Plaintiff argues that Defendant acted creditably throughout the matter and that there is nothing to suggest Defendant acted willfully or maliciously in connection with the sale or distribution of the product. “Because Defendant has demonstrated a commitment to ensuring that it will comply with Proposition 65 with regard to the Products by agreeing to the reformulation standard or specific warning requirements related to lead in products, and that it will provide some compensation to the State of California for the violations alleged in the Complaint, it is reasonable to conclude that the settlement confers a significant benefit to the public.” (Motion, p.7.)

The Court thus finds that the parties have entered into a valid settlement agreement. However, Health & Safety Code § 25249.7 provides for additional criteria to approve a settlement of a Proposition 65 lawsuit, as follows:

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:

(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.

The code states, “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.)

Here, the Settlement provides that Defendant is required to provide a warning pursuant to Section 3.1 stating: WARNING: Consuming this product can expose you to chemicals including lead, which is known in the State of California to cause cancer and birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov/food. (Consent ¶3.2.1.) The warning will be affixed to the label of each Covered Product and set off from other surrounding information. (Id.) It will also be placed on the checkout page, or prominently displayed to the purchaser prior to completing the purchase. (Id.) The Court finds that the agreement complies with the Proposition 65 warning requirement.

The attorneys’ fees and costs requested in this action are $40,000 for 81 hours of time spent on the case. (Krikorian Decl., ¶6.) The calculation is based on the following: 49 hours at a rate of $400 per hour for attorney Krikorian; 24 hours at a rate of $550 per hour for attorney Thomassian; and 8 hours at a rate of $550 per hour for attorney Jicalagian. (Krikorian Decl., ¶¶1, 5.)

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 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 award so that it is a reasonable figure. (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095-96.)

Here, Although Counsels’ rates are reasonable according to their experience, the Court finds that the hours expended are excessive. The case here was not particularly complex. Moreover, the case was resolved very quickly without litigation. Additionally, although the case was successful, the amount of penalties is quite small. Counsel are seeking attorney’s fees that are eight times the amount of the civil penalties awarded in the case. The Court also considers the fact that Counsel advanced $3,000 in costs. Considering all these factors, the Court finds that fees in the amount of $25,000 are reasonable plus the reimbursement of the $3,000 in costs.

The penalty amount requested in this action is $5,000, with $3,750 (75%) payable to California’s Office of Environmental Health Hazard Assessment and $1,250 payable to Plaintiff. (Consent ¶ 3.1.)

(b) (1) 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. That civil penalty may be assessed and recovered in a civil action brought in any court of competent jurisdiction.

The Court thus finds this penalty amount reasonable. The amount payable to the Office of Environmental Health Hazard Assessment is 75% as required by 11 C.C.R. § 3203. Further, offset payments to a third party, such as a plaintiff, are authorized pursuant to 11 C.C.R. § 3203(d).

The Court finally finds that this suit promotes the public interest. As a result of this suit, Defendant shall not manufacture or distribute the produce in California. The case is thus “presumed to confer a significant benefit on the public.” (11 C.C.R. § 3201, subd. (b)(1).)