Judge: Thomas D. Long, Case: 22STCV01596, Date: 2023-09-07 Tentative Ruling

Case Number: 22STCV01596    Hearing Date: September 7, 2023    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On January 13, 2022, Plaintiff Consumer Advocacy Group Inc. filed this action against Defendants The TJX Companies Inc. and Wildfare Inc. for civil penalties and injunctive relief based on violations of Health & Safety Code section 25249.6 et seq.

On April 11, 2023, Plaintiff filed this motion to approve a consent judgment entered into with Defendant Wildfare Inc. (“Defendant”).  Plaintiff asserts that the consent judgment is fair and reasonable to the parties, serves the public interest, has been submitted for review to the Office of the Attorney General of California, and fully complies with the statutory and regulatory requirements of Proposition 65.  (See Motion at pp. 5-6; Yeroushalmi Suppl. Decl. ¶¶ 5-7.)

LEGAL STANDARD         

The Safe Drinking Water and Toxic Enforcement Act of 1986, colloquially known as Proposition 65, was passed as a ballot initiative by the California voters, and was designed to prevent the contamination of drinking water with, and generally protect the public from unknowing exposure to, harmful chemicals.  (See generally 12 Witkin, Summary of California Law 10th (2005) Real Property, § 894, p. 1075.)  Proposition 65 has both public and private enforcement mechanisms.  (See Health & Saf. Code, § 25249.7 subds. (c), (d).)  Violations are punishable by injunction and civil penalty.  (Health & Saf. Code, § 25249.7, subds. (a), (b).)  In private enforcement actions, parties may also recover attorney fees, pursuant to the provisions in Code of Civil Procedure section 1021.5.

A court may approve a settlement in a Proposition 65 action only if the court makes all of the following findings: (1) the warning that is required by the settlement complies with Proposition 65’s requirements as set forth in section 25249.6; (2) the award of attorney’s fees is reasonable under California law; (3) the penalty amount is reasonable based on the criteria set forth in section 25249.7, subdivision (b)(2).  (Health & Saf. Code, § 25249.7, subd. (f)(4).)  “To stamp a consent agreement with the judicial imprimatur, the court must determine the proposed settlement is just. . . . In the context of Proposition 65 litigation, necessarily brought to vindicate the public interest, the trial court also must ensure that its judgment serves the public interest.”  (Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America (2006) 141 Cal.App.4th 46, 61.)

DISCUSSION

A.        The Warning Is Compliant.

Health & Safety Code section 25249.6 states, in relevant part: “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 & Saf. Code, § 25249.6.)  For a warning to be clear and reasonable, the manner of transmission must be reasonable, and the message employed must be sufficiently clear to communicate the warning.  (Environmental Law Foundation v. Wykle Research, Inc. (2005) 134 Cal.App.4th 60, 67, fn. 6.)

Plaintiff submitted a copy of the proposed consent judgment.  The Covered Products are Ground Sage identified as “Wild Fare,” “Organic Sage,” and “Ground Spices” distributed and sold to consumers in California.  (Consent Judgment, §§ 1.2.1, 2.1)  Under the Consent Judgment, after the effective date, Defendant shall not sell in California, offer for sale in California, or ship for sale in California any Covered Products unless the level of arsenic does not exceed 20 parts per billion, unless Proposition 65 compliant warnings are used.  (Consent Judgment, §§ 3.1, 3.2.)  The warning will state: “WARNING: Consuming this product can expose you to Inorganic Arsenic, a chemical known to the State of California to cause birth defects or other reproductive harm.  For more information go to www.P65Warnings.ca.gov/food.”  (Consent Judgment, § 3.2.)  For any Covered Product that includes consumer information in a language other than English and where the Defendant uses a consumer product sign, label, or shelf tag to provide a warning, the warning must also be provided in that foreign language in addition to English.  (Consent Judgment, § 3.4.)  This satisfies the warning requirement set forth in Health and Safety Code section 25249.6.

The Court finds the warning proposed by the settlement is clear and reasonable and complies with the Health and Safety Code.

B.        The Attorney Fees Are Reasonable.

The fees setting inquiry in California ordinarily begins with the “lodestar” method, i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.  The lodestar figure may then be adjusted, based on consideration of factors specific to the case, to fix the fee at the fair market value of the legal services provided.  (Serrano v. Priest (1977) 20 Cal.3d 25, 49.)  After the 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, 1095-1096.)

Plaintiff seeks to recover $85,000.00 in attorney fees and costs, and Defendant has agreed.  (Consent Judgment, § 4.1.3.)  The Court finds that the amount of $85,000.00 represents reasonable attorney fees for the work performed as set forth in the summary of actions undertaken in investigating, litigating, and settling this action, and it is less than the $88,337.90 actually incurred to date.  (See Yeroushalmi Decl. ¶¶ 17, 20-28.)

Based on this, the Court finds that the amount of attorney fees and costs provided to Plaintiff in the settlement is reasonable.

C.        The Civil Penalty Is Reasonable.

The civil penalty is not to exceed $2,500 per day for each violation.  (Health & Saf. Code, § 25249.7, subd. (b)(1).)  In assessing the amount of a civil penalty, the court must consider (1) the nature and extent of the violation, (2) the number and severity of the violations, (3) the economic effect of the penalty on the violator, (4) whether and when the violator took good faith measure to comply with regulations, (5) the willfulness of the violator’s misconduct, (6) the deterrent effect on the violator and the regulated community as a whole, and (7) “[a]ny other factor that justice may require.”  (Health & Saf. Code, § 25249.7, subd. (b)(2).)

Defendant will pay $25,720.00 to the State of California Office of Environmental Health Hazard Assessment (“OEHHA”) and Plaintiff as civil penalties.  (Consent Judgment, § 4.1.1)  Of this amount, 75% ($19,290.00) will be paid to OEHHA and 25% ($6,430.00) will be paid to Plaintiff.  (Ibid.)

The Court finds that $25,720.00 in civil penalties is reasonable.

D.        The Additional Settlement Payments Are Permissible.

Under the Consent Judgment, Defendant will pay $19,280.00 as an Additional Settlement Payment to Plaintiff, an entity, as an “offset” to the civil penalty.  (Consent Judgment § 4.1.2; see Cal. Code Regs., tit. 11, § 3203, subd. (d).)

Plaintiff will use the Additional Settlement Payments for investigation fees, purchasing and testing for Proposition 65 listed chemicals in various products, expert fees for evaluating exposures through various mediums, hiring consulting and retaining experts who assist with scientific analysis for files in litigation, administrative costs of investigation, and litigation to reduce the public’s exposure to Proposition 65 listed chemicals by notifying responsible persons/entities.  (Consent Judgment § 4.1.2; Marcus Decl. ¶ 6.)

The Court therefore finds that the settlement serves the public interest, and the Additional Settlement Payments are permissible.

E.        The Release Provision Is Permissible.

Plaintiff purports to release claims arising from any violation of Proposition 65 or any other statutory or common law regarding the failure to warn about exposure to arsenic from the Covered Products.  (Consent Judgment, § 5.2.)

This release is specifically limited to Defendant’s Covered Products and claims presented in this lawsuit.  The scope of this release is therefore proper.  Plaintiff also individually waives rights under Civil Code section 1542, which is appropriate because it does not purport to release claims on behalf of the public.  (Consent Judgment, § 5.2.)

The release provision is permissible.

CONCLUSION

The Motion for Order to Approve Proposition 65 Settlement and Consent Judgment is GRANTED.  The Court will sign the Proposed Judgment, filed on April 11, 2023.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit.  If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

         Dated this 7th day of September 2023