Judge Teresa A. Beaudet, Case 19STCV27357 2022-08-03 Tentative Ruling

This is an action brought under California’s Proposition 65 (California’s Safe Drinking Water and Toxic Enforcement Act of 1986). Enacted by the voters in 1986, Proposition 65 (Health & Saf. Code, § 25249.5 et seq.) was designed to prevent the contamination of drinking water with, and generally protect the public from unknowing exposure to, harmful chemicals. Section 25249.5 provides in part: “No person in the course of doing business shall knowingly discharge or release a chemical known to the state to cause cancer or reproductive toxicity into water or onto or into land where such chemical passes or probably will pass into a source of drinking water.” (Health & Saf. Code, § 25249.5.)

Plaintiff Consumer Advocacy Group, Inc. (“Plaintiff”) filed this action against Defendant Gaju Market Corporation dba California Market (“Defendant”) on August 5, 2019. Plaintiff alleges that Defendant violated Proposition 65 by manufacturing, distributing, and/or selling tongs with plastic handles that contain the chemical Bis(2-ethylhexyl) phthalate (“DEHP”), without first providing any type of clear and reasonable warning of such to the exposed persons before the time of exposure. (Compl., ¶¶ 16, 25-26, 29.) Plaintiff alleges that DEHP is known to cause developmental, female, and male reproductive toxicity. (Compl., ¶ 17.)

Plaintiff and Defendant have entered into a Proposed Consent Judgment. Plaintiff now moves for court approval of the Proposed Consent Judgment. The motion is unopposed.

Health and Safety Code section 25249.7(f)(4) requires court approval of all Proposition 65 settlements (other than voluntary dismissals) of actions brought by a person in the public interest. The court can approve the settlement only if it finds that:

Health and Safety Code section 25249.6 provides, “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.” Pursuant to California Code of Regulations, title 27, section 25601, subdivision (a), “[a] warning is ‘clear and reasonable’ within the meaning of Section 25249.6 of the Act if the warning complies with all applicable requirements of this article.”

“Unless otherwise specified in Section 25607 et seq, a consumer product exposure warning meets the requirements of this subarticle if it complies with the content requirements in Section 25603 and is provided using one or more of the following methods:…(3) A warning on the label that complies with the content requirements in Section 25603(a)…” (27 Cal. Code Regs., § 25602(a)(3).) California Code of Regulations, title 27, section 25603, subdivision (a), provides in pertinent part, “[u]nless otherwise specified in Section 25607.1 et seq., a warning meets the requirements of this subarticle if it is provided using one or more of the methods required in Section 25602 and includes all the following elements:

(1) A symbol consisting of a black exclamation point in a yellow equilateral triangle with a bold black outline. Where the sign, label or shelf tag 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”.

(D) For exposures to a chemical that is listed as both a carcinogen and a reproductive toxicant, the words, “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.”

In addition, “[c]onsumer product exposure warnings must be prominently displayed on a label, labeling, or sign, and must be displayed with such conspicuousness as compared with other words, statements, designs or devices on the label, labeling, or sign, as to render the warning likely to be seen, read, and understood by an ordinary individual under customary conditions of purchase or use.” (27 Cal. Code Regs, § 25601(c).)

Moreover, “[r]eformulation of a product, . . . or other changes in the defendant’s practices that reduce or eliminate the exposure to a listed chemical, in lieu of the provision of a warning, are presumed to confer a significant benefit on the public.” (11 Cal. Code Regs., § 3201(b)(2).)

Here, Section 3.1 of the Proposed Consent Judgment provides, “After the Effective Date, Defendant shall not sell, offer for sale, or order for sale any Covered Products unless the level of DEHP in the Covered Products does not exceed more than 0.1% (1,000 parts per million) by weight.” (Yeroushalmi Decl., ¶ 4, Ex. A.) “Effective Date” means the date that the Proposed Consent Judgment is approved by the Court. (Proposed Consent Judgment, § 2.2.) “Covered Products” are identified as “Tongs with Plastic Handles, which includes but is not limited to: ‘LXD;’ ‘MADEIN CHINA;’ ‘14;’ HQ S/S TONG (J0189);’ ‘893483703304’ sold by or supplied by Defendant.” (Proposed Consent Judgment, § 2.1.) Plaintiff asserts that CAG’s test results on the Covered Product revealed DEHP levels as high as 46.9 percent, such that the reformulation level significantly reduces the presence of these chemicals compared to CAG’s test results. (Yeroushalmi Decl., ¶ 7, Ex. D.)

Section 3.2 of the Proposed Consent Judgment provides, “For any Covered Products whose DEHP content exceeds .1 % still existing in Defendant inventory as of the Effective Date, Defendant shall place a clear and reasonable warning [sic] Proposition 65 compliant warning on them, consistent with 27 CCR section 25600 et seq. In consideration of the fact that Defendants have agreed to only order for manufacture reformulated Covered products, parties agree to the following language for Covered Products in existing inventory that contain more than 0.1% DEHP by weight:

phthalate (DEHP) which is known to the State of California to cause Cancer, birth defects or other reproductive harm. For more information go to www.P65Wamings.ca.gov.”[1]

Section 3.3 provides, “Any warning provided pursuant to this section shall be affixed

to the packaging or hangtag of, or directly on, the Covered Products, and be prominently placed with such conspicuousness as compared with other words, statements, designs, or devices as to render it likely to be read and understood by an ordinary individual under customary conditions before purchase or use. The equilateral triangle pictogram shall be in yellow with a black exclamation mark; provided however, the pictogram may be in white instead of yellow if the Covered Product label does not contain the color yellow.”

The Court finds that the injunctive relief required by the Proposed Consent Judgment complies with Proposition 65.

The Proposed Consent Judgment requires Defendant to reimburse Plaintiff for attorneys’ fees and costs incurred in prosecuting this action in the amount of $52,000.00. (Proposed Consent Judgment, § 4.1.3.) This motion is accompanied by a declaration from Plaintiff’s counsel justifying the amount of the fee award. Plaintiff’s counsel sets forth the experience and skill of each of the attorneys who billed on this case, as well as the requested hourly rate for each attorney. (Yeroushalmi Decl., ¶¶ 11-16.) Plaintiff’s counsel also sets forth the experience and skill of nonattorney support staff who billed on this case, as well as the requested hourly rate for each support staff member. (Yeroushalmi Decl., ¶ 17.) Plaintiff’s counsel attests to the fact that his firm has incurred approximately $82,073.50 in attorney’s fees from the inception of this case (beginning in August 2019) through the present. (Yeroushalmi Decl., ¶ 20.) No time records are included, but Plaintiff’s counsel does provide a detailed review of the work performed by the attorneys. (Yeroushalmi Decl., ¶ 27-31.)

The Court finds that the amount allocated for attorney’s fees in the Proposed Consent Judgment is reasonable.

The Consent Judgment provides that Defendant will pay civil penalties in the amount of $7,440.00. (Proposed Consent Judgment, § 4.1.1.) In compliance with Health and Safety Code section 25249.12, the Consent Judgment provides that 75% ($5,580.00) of the civil penalty shall be disbursed to the California Office of Environmental Health Hazard Assessment (the “OEHHA”), and the remaining 25% ($1,860.00) shall be paid to Plaintiff. (Ibid.) An additional $5,560.00 will be paid to Plaintiff as an additional settlement payment. (Proposed Consent Judgment, § 4.1.2.)

(D) Whether the violator took good faith measures to comply with this chapter and the time these measures were taken;

(F) The deterrent effect that the imposition of the penalty would have on both the violator and the regulated community as a whole; and

Significantly, the Proposition 65 regulations explicitly state that “[a] settlement with little or no penalty may be entirely appropriate or not, based on the facts or circumstances of a particular case.” (11 Cal. Code Regs., § 3203(a).)

Plaintiff asserts that Defendant’s violations are sufficiently significant and severe, as the subject chemicals are highly toxic and the amount of the chemicals found represents a severe violation. (Yeroushalmi Decl., ¶ 7, Ex. D.) Plaintiff asserts that Defendant’s willingness to provide warnings if the DEHP levels exceed certain low thresholds exhibits less willfulness for the alleged violations. (Yeroushalmi Decl., ¶ 9.) Defendant has agreed to act immediately, upon approval of the Proposed Consent Judgment. Lastly, Plaintiff asserts that the total payment to settle this case ($65,000.00) should be a sufficient deterrent against future violations. The Court finds that the civil penalty amount provided for in the Proposed Consent Judgment is reasonable.

With respect to the additional settlement payment, Plaintiff contends that it may be viewed as an offset to the civil penalty under California Code of Regulations, title 11, section 3203(d). Per section 3203, “[t]he plaintiff must demonstrate to the satisfaction of the court that it is in the public interest to offset the civil penalty required by statute.” (11 CCR § 3203(d).) Here, section 4.1.2 of the Proposed Consent Judgment provides that “eighty-five percent (80% [sic])” of the additional settlement payment will be used for “fees of investigation, purchasing and testing for the Proposition 65 Listed Chemical in various products, and for expert fees for evaluating exposures through various mediums…and the cost of hiring consulting and retaining experts who assist with the extensive scientific analysis necessary for those files in litigation and to offset the costs of future litigation enforcing Proposition 65 but excluding attorney fees; “fifteen (20% [sic]) of the additional settlement payment will be used for “administrative costs incurred during investigation and litigation to reduce the public’s exposure to the Proposition 65 Listed Chemical by notifying those persons and/or entities believed to be responsible for such exposures and attempting to persuade those persons and/or entities to reformulate their products or the source of exposure to completely eliminate or lower the level of the Proposition 65 Listed Chemical.…” (Proposed Consent Judgment, § 4.1.2.)

The Court notes that the additional settlement payment does not exceed the 75% of the civil penalty paid to the OEHHA (11 CCR § 3204(b)(1)); it will be used for activities that have a nexus to the violations (11 CCR § 3204(b)(2)); Plaintiff is an accountable entity (11 CCR § 3204(b)(3)); the activities are sufficiently described (11 CCR § 3204(b)(4)); and the activities will be sufficiently documented as Plaintiff will provide to the Attorney General copies of documentation demonstrating how the funds have been spent within 30 days of a request from the Attorney General. (11 CCR § 3204(b)(5)). Plaintiff will track expenditures of the additional settlement payments to ensure that the funds are used solely for those categories of expenditures identified in the Proposed Consent Judgment. (Marcus Decl., ¶ 10.)

The identity of Plaintiff as a business qualified in California has been disclosed, and Plaintiff does not intend to make grants to other entities. (11 CCR § 3204(b)(6); see Marcus Decl., ¶¶ 3, 7.) However, the Court notes that pursuant to California Code of Regulations, title 11, section 3204, subdivision (b)(6)(B), “…any settlements providing for Additional Settlement Payments, or their supporting papers, should provide the following information:…[a] disclosure of any economic interest that a party to the settlement or its counsel, or a spouse or dependent child thereof (collectively, “Disclosers”), has in any individual or entity, besides itself, that is designated in the Settlement to receive all or part of any Additional Settlement Payment (“Recipient Individual or Entity”)…If no Discloser has an economic interest in any Recipient Individual or Entity, then the settlement or the supporting papers shall expressly state that no party to the settlement or counsel of record, or spouse or dependent child thereof, has an economic interest in any individual or entity, besides itself, that is designated in the Settlement to receive all or part of an Additional Settlement Payment.” The Court notes that it is unable to locate any information in the Proposed Consent Judgment or the supporting papers concerning economic interests for purposes of 11 CCR § 3204(b)(6)(B).

Based on the foregoing, the Court continues the hearing on the motion to _______________ at 10:00 a.m. in Dept. 50.¿The Court orders Plaintiff to file with the Court and serve a declaration that satisfies the requirements of California Code of Regulations, title 11, section 3204, subdivision (b)(6)(B).

[1]The warning appears to be accompanied by a symbol consisting of a black exclamation point in a yellow triangle with a black outline. (See Proposed Consent Judgment, § 3.2.)

consumer advocacy group, inc., Plaintiff, vs. GAJU MARKET CORPORATION DBA CALIFORNIA MARKET, et al. Defendants.	Case No.:	19STCV27357
	Hearing Date:	August 3, 2022
	Hearing Time:	10:00 a.m.
	[TENTATIVE] ORDER RE: MOTION TO APPROVE AND ENTER CONSENT JUDGMENT BETWEEN PLAINTIFF CONSUMER ADVOCACY GROUP, INC., AND DEFENDANT GAJU MARKET CORPORATION DBA CALIFORNIA MARKET

Superior Court of California

County of Los Angeles

Department 50