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AG Determines Private Settlement is Void

AG Determines Private Settlement is Void

Author: Jack Schatz/Friday, April 28, 2017/Categories: Prop65, Litigation, Settlements, Attorney General

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California Attorney General Xavier Becerra has taken action against two San Diego law firms that entered into a private settlement agreement prior to the completion of Proposition 65's 60-day notice period.  Deputy Attorney General Harrison Pollack in his letter to the law firms strongly objected that the settlement did not include any type of injunctive relief to correct the alleged violations.

Pollak's letter was sent to Noam Glick of the Glick Law Group and Craig of Nicholas & Tomasevic, LLP which both have their offices in the same building.

The private settlement pertains to Proposition 65 citizen enforcer Kimberly Embry who alleges that Lambro Industries and True Value Company failed to warn consumers about potential exposures to phthalates in white flexible vinyl vent hoses in a 60-day notice dated February 13, 2017.  The settlement was executed on March 27 and 29--approximately two weeks before the statutory 60-day period for Proposition 65 notices of violation was to expire.

Pollak objected to the premature settlement but was more concerned that it did not contain any provisions for injunctive relief or corrective action to remedy the alleged Proposition 65 violation.

He observed that the defendant Lambro Industries was not represented by counsel, but agreed to pay the two law firms 14,900 in Attorney fees, and earmark an additional $100 for Embry.   

There are significant problems with the Settlement, which is, in our view, contrary to the public interest," Pollak wrote.

Pollak observed that the Settlement purports to be on behalf of Kimberly Embry "and all similarly situated individuals and entities," however, Embry has no authority to settle Proposition 65 claims in a private, out-of-court settlement on behalf of anybody but herself. Since Embry executed the settlement prior to the expiration of the 60-day notice period, she lacks any authority to settle in a representative capacity.

Pollack also objected that Nowhere in the settlement did it state how Lambro would comply with Proposition 65 in the future. There was no commitment to provide warnings that allegedly or to reformulate the vinyl hoses to reduce or eliminate the phthalate content in the products.

Lambro's only obligation under the settlement is to pay Embry $100 and to pay the law firms $14,900. Without any evidence that Lambro will remedy the alleged violations, the Settlement appears simply to be a payment to the enforcer and her counsel in exchange for the agreement not to sue, Pollak wrote.

Pollak also determined that there is no statutory authority for the settlement payments, as the $100 payment to Embry cannot be considered a civil penalty because it does not provide that Embry will submit 75 percent of the payment to the Office of Health Hazard Assessment (OEHHA).  Nor can Embry's payment cannot be considered Additional Settlement Payment," it does not comply with any of the Attorney General's recently updated guidelines for such payments. Those guidelines state that state that Additional Settlement Payments "should not be included in any Settlement that is not subject to judicial approval and ongoing judicial oversight."

Pollack wrote that the $14,900 in attorneys' fees is not justified because there is no public benefit to the Settlement because does not require any corrective action on the part of Lambro to comply with Proposition 65.  He also refuted claims that the settlement was confidential because Embry is required by law to report the 60-day notice and the settlement to the Attorney General's office.  Pollak notes that the Attorney General's office, in turn, must make this information available to the public, which we do by posting them on a website.

Based on the many deficiencies in the settlement agreement, the Attorney General's office determined it is void.

 

 

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Jack Schatz

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