Judge: Maurice A. Leiter, Case: 19STCV16843, Date: 2023-05-10 Tentative Ruling

Case Number: 19STCV16843    Hearing Date: May 10, 2023    Dept: 54

Hearing Date: May 10, 2023

Department 54, Judge Maurice A. Leiter

Motion to Approve and Enter Consent Judgement

Moving Party: Plaintiff Consumer Advocacy Group, Inc.

Responding Party: None

T/R:     THE MOTION TO APPROVE AND ENTER CONSENT JUDGMENT IS GRANTED.

PLAINTIFF TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing. 

The Court considers the moving papers. No opposition has been received.

            Plaintiff moves to approve and enter consent judgment between Plaintiff and Defendants GP De Silva Spices, Inc. and Miravalle Foods, Inc. per Health & Safety Code § 25249.7(f)(4). Health & Safety Code § 25249.7(f)(4) provides, “[i]f 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).”

            The terms of the settlement are as follows: (1) Defendants will not sell in California, offer for sale in California, or ship for sale in California any Covered Products unless the level of Lead does not exceed 550 parts per billion (“ppb”), and the level of Arsenic does not exceed 20 ppb unless it provides a Proposition 65 compliant warning; (2) Defendants will pay $14,900.00 in civil penalties; and (3) Defendants will pay $104,000.00 for attorneys' fees and costs.

1. 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).) 

            Defendant Miravalle Foods, Inc., agrees it shall not sell in California, offer for sale in California, or ship for sale in California any Covered Products unless the level of Lead does not exceed 550 parts per billion (“ppb”), and the level of Arsenic does not exceed 20 ppb. Any remaining inventory will contain the following warning on the label or other conspicuous area: “WARNING: "This product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause cancer and birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov/food.”

            These warnings and reformulation requirements comply with Proposition 65.

2. 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 $14,900.00 in civil penalties, 75% ($11,175.00) of which will be paid to the Office of Environmental Health Hazard Assessment. Defendants’ products significantly exceeded the permissible levels of lead and arsenic. Based on the size of the corporation, the settlement will have a sufficient economic effect. Defendants made good faith efforts to comply, and the penalties will deter Defendants and the regulated community as a whole.

            Defendants will pay $11,100.00 to Plaintiff as an “Additional Settlement Payment” per 11 CCR § 3203(b). The ADS may not exceed the total amount of the civil penalty and must be used to fund activities that address that the same public harm as those cause by Defendant. (11 CCR § 3204(b)(1)-(2).) The ADS complies with these requirements, as it does not exceed $14,900.00 and will be used to fund investigation and testing for the listed chemicals in Proposition 65.

3. Attorney’s Fees

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 $104,000.00 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.) 

            Plaintiff contends that $104,000.00 in attorneys’ fees and costs is reasonable compared to a lodestar amount of $142,201.00 for 306.6 hours spent by various attorneys at rates between $980.00 per hour and $95.00 per hour. This case required extensive investigation, testing, scientific expert consolation, discovery, and settlement negotiation. In light the of the complexity of the case, the Court finds that Plaintiff’s attorney’s fees are reasonable.

4. Public Interest

If “Proposition 65 litigation . . . [is] necessarily brought to vindicate the public interest, the trial court almost must ensure that its judgment serves the public interest.” (Consumer Advocacy Group, Inc., 141 Cal.App.4th at 62.) In order for the Court “[t]o stamp a consent agreement with the judicial imprimatur, the court must determine that the proposed settlement is just.” (Id. at p. 61.)

            Plaintiff’s action resulted in warnings on existing products and a requirement that Defendants sell future products with permissible levels of lead and arsenic. These serve the public interest. The civil penalties and ADS will deter future harm.

            The motion to approve and enter consent judgment is GRANTED.