Judge: Robert S. Draper, Case: 21STCV18431, Date: 2022-12-13 Tentative Ruling

Case Number: 21STCV18431    Hearing Date: December 13, 2022    Dept: 78

Superior Court of California 

County of Los Angeles 

Department 78 

Plaintiff APS&EE’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 § 25249.6 et seq. Plaintiff APS&EE, LLC (“Plaintiff”) brings this action in the public interest of the citizens of the State of California.

Defendant TMD Holdings, LLC (“TMD”) manufactures, distributes, sells, and/or offers for sale retail mugs that contain hazardous levels of lead on accessible surfaces. (Compl. ¶¶ 3-4.) TMD continues to manufacture, distribute and sell these mugs without warnings required by California Health and Safety Code section 25249.6, et seq. (“Proposition 65”). (Compl. ¶ 8.) Defendant Bed Bath & Beyond, Inc. (“BBB”) sells the TMD products containing hazardous levels of lead. (Compl. ¶ 11.)

PROCEDURAL HISTORY 

On May 17, 2021, Plaintiff filed the Complaint asserting a single cause of action for Violations of Health & Safety Code Section 25249.6, et seq., against TMD and BBB.  

On June 21, 2021, BBB filed an Answer.

On July 26, 2021, TMD filed an Answer.

On March 9, 2022, TMD’s Counsel was relieved.

On March 14, 2022, Plaintiff filed the operative First Amended Complaint asserting the same cause of action.

On May 9, 2022, BBB filed an Answer to the First Amended Complaint.

On June 6, 2022, the Court entered default as to TMD.

On October 10, 2022, Plaintiff filed the instant Motion to Approve Proposition 65 Settlement and Consent Judgment.

On October 24, 2022, Plaintiff filed for Default Judgment against TMD.

No Opposition has been filed to either motion.

DISCUSSION 

                          I. MOTION FOR ENTRY OF STIPULATED CONSENT JUDGMENT 

Code Civ. Proc. section 664.6 states that: 

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. First, BBB will not “manufacture, distribute, sell, offer for sale, or cause to have the Products sold in California unless: (A) the Product contains no more than 1.0 microgram of lead. . .; or (b) the Product is accompanied by a clear and reasonable warning as described [] in Section 2.2.” (Consent ¶ 2.1.) Section 2.2.1 requires that any product not meeting the aforementioned standard shall be accompanied by a clear and reasonable warning in compliance with Proposition 65. (Consent ¶ 2.2.1.)

Second, BBB will pay $1,000 in civil penalties, to be apportioned as $750.00 for the State of California Office of Environmental Health Hazard Assessment (“OEHHA”), and the remaining $250.00 for Plaintiff. (Consent ¶ 3.1.) Third, BBB is to pay $18,000 in attorneys’ fees and costs. (Consent ¶ 3.2.) 

Plaintiff argues that the Consent Judgment “was entered into in good faith, is fair and reasonable, and is in the public interest.” (Motion at p. 5.) Plaintiff notes that “the Consent Judgment provides that as of the effective date, BBB shall not manufacture, distribute, sell, offer for sale, or cause to have the products sold in California” unless they are in compliance with Proposition 65. (Ibid.) “Because BBB 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 the 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 at pp. 8-9.) 

The agreement has been signed by representatives from both parties, and no opposition to the present motion has been filed by either BBB or the Attorney General. 

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: 

(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 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 BBB is to place on the Products a Proposition 65 warning notifying the consumers of the chemicals contained in the products (lead, in this case) and directing the consumers to www.P65warnings.ca.gov for more information concerning such warnings. (Consent ¶ 2.2.) “The warning shall be accompanied by a symbol consisting of a black exclamation point in a yellow equilateral triangle with a bold black outline. Where the label for the product is not printed using the color yellow, the symbol may be printed in black and white. The symbol shall be placed to the left of the text of the warning, in a size no smaller than the height of the word ‘WARNING.’” (Consent ¶ 2.2.1) The Court finds that the agreement complies with the Proposition 65 warning requirement. 

The attorneys’ fees and costs requested in this action as to BBB are $18,000. (Novak Decl. ¶ 12.) Plaintiff contends that more than $45,000 has been actually incurred by Plaintiff in attorney’s fees and costs, at the investigator rate of $215, paralegal rate of $315, and attorney rate of $595 per hour. (Ibid.) Plaintiff bills 16.4 hours of investigator time, 14.3 hours of paralegal time, and 59.6 hours of attorney time. (Novak Decl., Ex. A.) However, Plaintiff agreed to accept the smaller amount through settlement. (Ibid.) The Court finds this amount reasonable. 

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

The statutory reasonableness for a penalty amount is analyzed as follows: 

(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. 

(2) 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. 

(Health & Safety Code § 25249.7, subd. (b)(1)–(2).) 

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, BBB shall either reduce the concentration of lead from the Products or post the required warning. The case is thus “presumed to confer a significant benefit on the public.” (11 C.C.R. § 3201, subd. (b)(1).) 

Plaintiff APS&EE’s Motion to Approve Proposition 65 Settlement and Consent Judgment is GRANTED. 

DATED:  December 13, 2022 

________________________________ 

Hon. Robert S. Draper 

Judge of the Superior Court