Judge: Teresa A. Beaudet, Case: 22STCV36183, Date: 2024-03-11 Tentative Ruling

Case Number: 22STCV36183    Hearing Date: March 11, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff Tamar Kaloustian (“Plaintiff”) filed this Proposition 65 action on

November 16, 2022 against Defendants Baker’s Breakfast Cookies, Inc. (“Baker’s) and Sprouts Farmers Market, Inc. The Complaint alleges one cause of action for violations of Health and Safety Code section 25249.6.

            In the Complaint, Plaintiff alleges that “[t]his Complaint seeks to remedy Defendants’ continuing failure to adequately warn individuals in California that they are being exposed to lead, a chemical known to the State of California to cause birth defects and other reproductive harm. Such exposures have occurred, and continue to occur, through the manufacture, distribution, sale and consumption of Defendants’ Erin Baker’s - Grain-Free Better Cookie - Salted Chocolate Cashew; UPC 7 08875 00601 0 (the ‘Product’). The Product is available to consumers in California through a multitude of retail channels including, without limitation (a) third-party traditional brick-and-mortar retail locations; (b) via the internet through Defendants’ website; and (c) via the internet through third-party retail websites. Consumers are exposed to lead when they consume the Product.” (Compl., ¶ 1.) Plaintiff further alleges that “Defendants have failed, and continue to fail, to provide clear and reasonable warnings regarding the reproductive toxicity of lead to users of the Products.” (Compl., ¶ 33.)

In his supporting declaration, Plaintiff’s counsel states that “the parties have agreed to terms of a settlement, embodied within a stipulated form of [Proposed] Consent Judgment, true and correct copy of which is attached hereto as Exhibit C.” (Krikorian Decl., ¶ 10.) The [Proposed] Consent Judgment (herein, “Proposed Consent Judgment”) attached as Exhibit C to Plaintiff’s counsel’s declaration is entered into between Baker’s and Plaintiff. (Krikorian Decl., ¶ 10, Ex. C.)[1]

Plaintiff now moves “for an order to enter judgment pursuant to the terms of the stipulated settlement of this case executed by all parties on or about January 24, 2024.” The motion is unopposed.

Discussion

Under Health and Safety Code section 25249.6, “[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, except as provided in Section 25249.10.”

 “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).” (Health & Saf. Code § 25249.7, subd. (f)(4).) The plaintiff “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 & Saf. Code § 25249.7, subd. (f)(5).)

Here, the proof of service attached to the Declaration of Tro Krikorian states that the moving papers were served on Defendants’ counsel and “Office of the Attorney General” on January 26, 2024.

The Warning’s Compliance

Health and Safety Code section 25249.6 provides, “[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, 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.”

Under the Proposed Consent Judgment, Baker’s agrees to discontinue “Distributing into the State of California” the “Covered Product,” which is defined as “Erin Baker’s - Grain-Free Better Cookie - Salted Chocolate Cashew; UPC 7 08875 00601 0.” (Krikorian Decl., ¶ 10, Ex. C., ¶¶ 1.3, 3.1.) Such injunctive relief does not apply to any “Covered Product” that “was manufactured, distributed or supplied, contracted to be distributed or supplied, or sold prior to the Effective Date…” (Id., ¶ 3.1.)[2]

The Proposed Consent Judgment further provides that “[i]n the event Baker’s decides to sell the Covered Product in the Stale of California again in the future, any Covered Product sold in the State of California shall not expose a person to a ‘Daily Lead Exposure Level’ of more than 0.5 micrograms of lead per day unless it meets the warning requirements under Section 3.2.” (Krikorian Decl., ¶ 10, Ex. C., ¶ 3.1.) Paragraph 3.2.1 of the Proposed Consent Judgment provides that “[i]f Baker’s is required to provide a warning pursuant to Section 3.1, one of the following warnings must be utilized (‘Warning’):

Option 1:

WARNING: Consuming this product can expose you to chemicals, including lead,

which is 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.

Option 2:

WARNING: [Cancer and] Reproductive Harm – www.P65Warnings.ca.gov/food.” (Krikorian Decl., ¶ 10, Ex. C., ¶ 3.2.1.)

Pursuant to California Code of Regulations title 27, section 25607.2, subdivision (a),  “[a] warning for food exposures, including dietary supplements, meets the requirements of this subarticle if it is provided via one or more of the methods specified in Section 25607.1 and includes all the following elements: (1) The word ‘WARNING:’ in all capital letters and bold print…(4) For exposure to both listed carcinogens and reproductive toxicants, the words, ‘Consuming 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 [name of one or more chemicals], which is [are§ known to the State of California to cause birth defects or other reproductive harm. For more information go to www.P65Warnings.ca.gov/food.’ (5) For exposure to a chemical that is listed as both a carcinogen and a reproductive toxicant, the words, ‘Consuming 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.’”

Based on the foregoing, only “Option 1” of the warnings set forth in Paragraph 3.2.1 of the Proposed Consent Judgment appears to comply with California Code of Regulations title 27, section 25607.2, subdivision (a). “Option 2” does not appear to comply with this provision. (Krikorian Decl., ¶ 10, Ex. C., ¶ 3.1.) The Court also notes that Plaintiff’s motion does not appear to contain a discussion of the legal authority applicable to the subject warnings.

Pursuant to California Code of Regulations title 27, section 25607.1, subdivision (b), “[w]here the warning is provided on the food product label, it must be set off from other surrounding information, enclosed in a box and comply with the content requirements specified in Section 25607.2.” Here, Paragraph 3.2.1 of the Proposed Consent Judgment provides that “[t]he Warning shall be securely affixed to or printed upon the label of each Covered Product and it must be set off from other surrounding information,” however, there does not appear to be any requirement that the warning be enclosed in a box. (Krikorian Decl., ¶ 10, Ex. C., ¶ 3.2.1.)

Based on the foregoing, the warnings required by Paragraph 3.2.1 of the Proposed Consent Judgment do not appear to entirely comply with California Code of Regulations title 27, sections 25607.1 and 25607.2.

Reasonableness of Award of Attorneys’ Fees and Costs

The Proposed Consent Judgment requires Baker’s to pay Defendants’ counsel $55,500.00 for all attorneys’ fees, expert and investigation fees, and related costs associated with this matter and the Notice. (Krikorian Decl., ¶ 10, Ex. C, ¶ 5.) The Court finds that Plaintiff’s counsel’s supporting declaration justifies the fee award. Plaintiff’s counsel sets forth the experience and background of each of the attorneys who worked on this case, as well as the requested hourly rate for each attorney. (Krikorian Decl., ¶¶ 1-5, pp. 4-5.) Mr. Krikorian’s hourly rate is $450/hour, Mr. Thomassian’s hourly rate is $550/hour, and Mr. Jivalagian’s hourly rate is $550/hour. (Krikorian Decl., ¶¶ 1, 4, 5, pp. 4-5.) The Court finds that these requested hourly rates are reasonable.

            Plaintiff’s counsel attests to the fact that “a total lodestar of $55,500” has been expended on this case. (Krikorian Decl., ¶ 6, pp. 5-6.) No time records are included, but Plaintiff’s counsel does provide a detailed review of the work performed by the attorneys. (Ibid.) In addition, Plaintiff’s counsel states that his firm has advanced approximately $4,000.00 in unreimbursed expenses in this matter. (Krikorian Decl., ¶ 6, p. 6.)

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

Reasonableness of Penalty Amount

Under Health and Safety Code section 25249.7, subdivision (b)(2), the Court shall consider the following factors in assessing the amount of the civil penalty: “(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.”

The Proposed Consent Judgment provides that Baker’s will pay a civil penalty in the amount of $7,000.00. (Krikorian Decl., ¶ 10, Ex. C., ¶ 4.) In compliance with Health and Safety Code section 25249.12, the Proposed Consent Judgment provides that 75% ($5,250.00) of the civil penalty shall be disbursed to the California Office of Environmental Health Hazard Assessment, and the remaining 25% ($1,750.00) shall be paid to Plaintiff. (Ibid.) Plaintiff’s counsel asserts that the “penalty is appropriate given a number of mitigating factors, including, without limitation: (1) Defendant’s willingness to agree, pursuant to the terms of the Consent Judgment, to discontinue the manufacturing of the Covered Product, or to maintain an appropriate warning to consumers directly on the label of the packaging or container of the Covered Product that it contains Lead, and to warn of its reproductive toxicity and carcinogenic potential; (2) the relatively low lead levels contained in the Subject Product which, while well in excess of the safe harbor Maximum Allowable Dosage Level of 0.5 micrograms per grams of product, were nonetheless well below the thousand-fold level known to cause reproductive toxicity.” (Krikorian Decl., ¶ 13, pp. 3-4.)

Plaintiff asserts that “the nature and severity of the subject violation is best described as moderate,” and that “Defendant has been very cooperative in providing Plaintiff with any information requested, and, consistent with the aims of the Act, has been amenable to crafting an appropriate resolution.” (Mot. at p. 8:1-7.)

The Court finds that the civil penalty amount provided for in the Proposed Consent Judgment is reasonable.

Conclusion

Based on the foregoing, it does not appear that the “[t]he warning that is required by the settlement complies with this chapter.” (Health & Saf. Code, § 25249.7, subd. (f)(4)(A).) Thus, the Court denies Plaintiff’s motion without prejudice.

Plaintiff is ordered to provide notice of this ruling. 

DATED:  March 11, 2024                              ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court