Cal Biz Lit

HERE ARE THE 2019 PROPOSITION 65 CONSENT JUDGMENT SETTLEMENTS

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As we do every year, CalBizLit has reviewed all of the 2019 Proposition 65 settlements, which are posted on the Attorney General’s web site. Today, we will be posting summaries of the court approved consent judgment settlements. In the next few days, we will do the same thing as to out of court settlements.
Almost all of the consent judgment settlements involving products and alleged failure to warn of chemical exposure include the following elements:

• Agreement by the defendant, and a court order, to either reformulate a product category or to provide warnings that comply with the Office of Environmental Health Hazzard Assessment’s (“OEHHA’s”) “Safe Harbor Warning Regulations.”
• Payment by the defendant of an agreed penalty amount, with 25% going to the plaintiff and 75% to OEHHA, as required by Proposition 65; and
• Payment by the defendant of the plaintiff attorney’s fee and cost claim, in an amount agreed to by the parties.

Our calculation of the number of settlement judgments is slightly different than the Attorney General’s. That office’s calculation is 284, we calculate 281. The total amount of settlement payments for 2019 in court approved settlements was $17,059,870, meaning that the average payment per settlement was $60,711. Of the $17 million+, $3,003,490 was for penalties, $1,572,592 was for “additional settlement payments” which must meet certain requirements, must be approved by the Court, and need to be shared with OEHHA. And $12,483,788, or more than 73% of the total settlement amounts went to attorneys’ fees and costs. The entitlement to attorneys’ fees does not appear in Proposition 65, but is permitted under California Code of Civil Procedure section 1021.5, permitting an award of attorney’s fees to attorneys prevailing in a matter serving the public interest. Proposition 65 having been enacted by the voters in 1986, it is generally deemed by the courts to serve the public interest.

The following chart shows the number of consent judgment settlements, average amount of settlement, highest and lowest settlement for 18 of California’s Proposition 65 Plaintiffs (also known as “Private Party Enforcers”):

To see information on the 2019 settlements by other plaintiffs, click right below:

REMOTE MEDIATION DURING THE PANDEMIC SHELTER IN PLACE PERIOD

 

 

 

By Bruce Nye, www.BruceNyeMediation.com

During this current era, in many parts of California (and in many parts of the United States) arranging court appearances, live discovery, group meetings and mediations ranges from difficult to impossible.  Many courts have used telephone participation or website appearance programs for the parties’ appearances.  Some attorneys have used Zoom or a few other video services for depositions.  And some mediators have been using Zoom or other video services to lead mediations.

I am happy to state that three times in two weeks I have successfully used BlueJeans.com to lead mediations that resulted in settlements.  This helped to continue my success rate in mediations to above 80%, and as a guy to whom statistics are essential, that is great news to me.  Here is what I have learned:

1. It is still important to have pre-mediation conferences separately with each side before the mediation itself. This provides an essential opportunity to make sure that both the lawyers and their clients get a chance to meet the mediator and gain a full understanding of the process before it takes place. Before the pandemic crisis, when mediations were all conducted live and face-to-face, we often conducted the pre-mediation meetings by conference call.  We can still do that, but it sometimes works to conduct them by Zoom or another type of remote video. It is absolutely best to have the parties present for the pre-mediation conference, and not just the lawyers, so that the parties have a full understanding in advance. Also, this is a good time for the mediator to get a commitment when possible  that the individuals attending will be those with full settlement authority.

2. When, as is currently the case, the mediation is conducted by remote video, the pre-mediation meetings are even more important. It will normally be my practice to first send a letter to the parties explaining the remote on-line process and how they should connect once they receive the link I will send them by e-mail.  A part of the pre-mediation conference that is unique to the current situation involves teaching the parties and lawyers the technical aspects of participating in the mediation. For this, a conference call may be better than a Zoom meeting.

3. It is not uncommon for mediations to take place when a party’s principle with full authority is not present. While the mediator will always prefer having the decision-makers present, the mediator will understand that the in lawsuit world because of distance away, schedule, or other matters, sometimes not everyone will be able to attend.  In those instances, it is not unusual to speak with decision-makers by telephone during the process.  However, during the Shelter in Place Era, with nobody attending the mediation live and in person, Zoom or another remote video program makes it easier for all parties and their decision-makers to attend.  Recently, I have successfully helped settle a case where a primary decision-maker attended via remote video from across the country. 

4. There are typically two meeting elements of mediations: Joint mediation meetings, and separate caucuses.  Under California State laws, all information exchanged during the joint meeting is confidential, meaning that mediation communications made may not be offered in evidence at trial. And by terms of the Agreement to Mediate that the parties and their attorneys sign, communications by a party during the caucus is also confidential, meaning that it cannot be communicated to the other side, or to anyone, without the permission of the party in the caucus.   Remote video programs work very well for both.  They are, of course, set up to allow everyone to be present on line and on either their cell phones or computer monitors for the joint programs.  Most of them also permit establishing “breakout rooms,” meaning electronic online rooms to which individuals can only participate if I invite them.  These work perfectly for the mediation caucuses, ensuring participation and confidentiality.

5. Finally, so far the remote video mediation process has been very effective. The parties just about always seem comfortable speaking to all participants in the joint sessions, and talking to the mediator during the caucuses. We all look forward to the complete end of the Covid-19 pandemic and the Shelter in Place requirements.   When they end, I suspect that some attorneys and parties will want to continue with the remote video approach.  If that is possible and desirable, I will continue to make that available. My best bet is it will be both.

And Now, Here are the 2019 Out of Court Proposition 65 Settlements

Last week, we provided a summary of the 2019 court-approved Proposition 65 settlements.  The consent judgment settlements are generally more expensive than the out of court ones in two respects.  If the parties immediately negotiate and agree to the filing of a suit, a consent judgment and a motion for court approval, the attorneys' fee element will just about always be somewhat more.  If suit is filed and served, and the case prosecuted to some extent before settlement, the attorneys' fee element of the settlement be much more. So while the average amount paid pursuant to a consent judgment settlement last year was $60,711 (penalties, attorneys' fees and costs, and a few additional payments), the average cost of an out of court settlement (fees and costs and penalties only) was $20,102.  Here are the two charts (as in the last post, you can see these larger by clicking them):

 

AND NOW, HERE’S CBL’S REPORT ON 2018 CONSENT JUDGMENT SETTLEMENTS

Settlements of Proposition 65 cases can take the form of “out of court settlements,” such as those we reported on last month, or consent judgments. The latter are agreements between the parties that are in the form of judgments, that go to trial court for approval (after the Plaintiff files a Complaint and the Defendant an Answer). With rare exceptions, these are approved by the Court, and become both settlements and judgments.

Some bounty hunters mostly insist on consent judgment settlements for several reasons. One is that while agreed penalties are divided between the bounty hunter and OEHHA 25% / 75%, in a consent judgment, the parties can agree to additional payments -- “payments in lieu of penalty” -- that go 100% to the bounty hunters.

And some defendants insist on consent judgments as complete bars to other actions involving the same companies, the same products and different bounty hunters. California law establishes that a consent judgment entered into by a Plaintiff acting in the public interest against a Defendant company is res judicata protection for that company against others acting in the public interest so long as the same “primary rights” are at issue in both cases. Consumer Advocacy Group, Inc. v. ExxonMobil Corporation (2008) 168 Cal.App.4th 675, 688. While some bounty hunter lawyers resist these res judicata claims, some defendants are adamant that their settlements, for greater protection, should be in the form of consent judgments.

However, consent judgment settlements can be quite a bit more expensive than out of court settlements. By way of example, the average cost of an out of court Proposition 65 settlement in 2018 was $20,718, while the average cost of a bounty hunter consent judgment was $70,841.

And here’s something else that shouldn’t be too much of a surprise: Of the $30,385,439 in consent judgment settlements in 2018, about 14.5% went toward penalties, 6.35% to payments in lieu of penalties, and 79.15% to attorneys’ fees and costs.

As we mentioned in our February 11 post, the Attorney General’s data is available here. But we had some disagreements with some of the AG’s report. In some instances, its numbers don’t match the actual consent judgments. In others, they treated settlements and payments by multiple parties as if they were made by just one. So we did our best to unwind that, and we also took the Attorney General’s one settlement out, leaving for this reporting the 406 consent judgment settlements between private party enforcers / bounty hunters and companies..

And with that said, our entire report is right here. And as before, if you have trouble reading either half of the chart, click it and it will pop up bigger in a larger window.

 

 

HERE'S CBL'S REPORT ON 2018 OUT OF COURT PROPOSITION 65 SETTLEMENTS

The Attorney General has finished posting the data on all of 2018's Proposition Settlements.  As Cal Biz Lit often does, we've begun summarizing, and our summary of the out of court settlements is now complete. It's long been the case that out of court settlements are for lower amounts than settlements involving consent judgments, and last year was no different:  As is usually the case, the out of court settlements were all by private part enforcers / bounty hunters, none involving the Attorney General.  And of the 467 2018 out of court settlements, the average amount was $20,718.  By comparison, of the 367 2018 settlements with private part enforcers resulting in consent judgments, the average amount was $82,492. 

For the out of court settlements, 87.12% of the payments were for attorneys' fees and costs, with nearly all of the balance being for penalties. 

The Attorney General's out of court settlement data posting shows a total of 36 private party enforcers, plus, in two instances, bounty hunters who paired up. In this post, for each we will show the total number of out of court settlements, the predominant chemical, the average settlement, and lowest and highest settlements.  This makes for a rather long "summary." Someday soon, we will provide a similar report for the 2018 consent judgments. It won't be short either. 

If you have trouble reading this, just click it and it will pop up bigger in a larger window.  And the second half and totals appear after the break.

SUMMARY OF 2018 OUT OF COURT SETTLEMENTS

 

More after the break.

 

CALIFORNIA'S CHANGE TO THE LAW ON RELEASES AND UNKNOWN CLAIMS TAKES EFFECT

Going back to 1872, California Civil Code section 1542 has held that "A general release does not extend to claims that the creditor does not know or suspect to exist. . . ."  Case law going back many years establishes that this provision applies not just to monetary claims, but to workers' compensation, personal injury employment and just about all other cases.  Most significantly, also for many years, in releases and settlement agreements, the releasing party almost always explicitly waives this provision, typically with a precise quotation of the statute followed by language along the lines of "Plaintiff acknowledges that she has read this Civil Code Section and understands it. Claimant waives all rights and benefits which she may now have or may have in the future under this Section." 

Last summer, the legislature passed Senate Bill 1431, and it was signed by Brown.  The Bill took effect on January 1 of this year, and modifies the language of section 1542.  A red-lined showing of the changes is as follows:

A general release does not extend to the claims which that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release, and that, which if known by him or her, must would have materially affected his or her settlement with the debtor or released party.

It seems fairly clear that the purpose of this is to avoid confusion as to parties, particularly self-represented, who might not understand that the terms "creditor" and "debtor" applied to everyone in litigation.  But most importantly is the fact that when the statute is quoted in releases and settlement agreements, the updated version of the statute must be used. 

 

Attorney General Releases 2015 Proposition 65 Settlement Data

Every year about this time, the Attorney General posts and summarizes all of the Proposition 65 settlements from the preceding year, providing information about which settlements require reformulation of products, which require warnings, which require both, and, most importantly the dollar amounts. This year's 104 page report is here, and the summary is here. And since 2009, Cal Biz Lit has been digging into the AG's report, providing its own analysis (and to cut to the chase, this year's analysis is after the jump of this blog post). 

There is much to blog about here, but so as not to bury the lede, let's start with a chart showing, for all bounty hunters settling more than one matter, the highest settlement, the lowest settlement, the average and the number of settlements. (Note that for attorneys/law firms representing more than one client, we have itemized by bounty hunter and totalled for the attorneys/law firms. Those law firm totals are highlighted in yellow. And also note the chart will pop out if you click it, becoming much easier to read.)

More information -- and another complicated chart -- after the jump.

Attorney General Posts 2010 Proposition 65 Settlements

All Proposition 65 settlements are supposed to be reported to the California Attorney General at least 45 days before going to court for approval, and all are posted on the Attorney General's web site.  Then, once a year, the AG posts a compilation of the settlements on her web site here.

CalBizLit spent some time looking at this year's settlements to see what we could detect in the way of trends.  And we now have our own compilation showing the average penalty, attorneys' fee / costs allocation and other payment for each bounty hunter private party enforcer.  But first, some caveats:

First, what the AG herself says about this data is true: 

Settlements generally include injuctive relief . . . such as product reformulation, emission reduction or warnings.  This injunctive relief is often complex, cannot be presented in summary form, and requires reference to the actual settlement documents to accurately assess.  This report should not be used by itself to evaluate Proposition 65 settlements.

Fine.  Now another thing.  The AG's counting of numbers of settlements isn't always accurate.  For example, the AG shows 37 settlements by Center for Environmental Health for a thumping total of $6,933.300.  That would average $187K per settlement, seemingly suggesting we should have all become bounty hunter private party enforcer lawyers when we got out of law school.  But that's not right.  Several of these were large opt-in settlements where scores of companies chose to join in.  Since CBL doesn't have the time to wade through these settlement documents to get an actual count, we left these out of our analysis.

So with those caveats, here are the numbers for 2010 (you can click the image to see it upclose and big):

  

As you can see, the major players for 2010 were Russel Brimer, Center for Environmental Health, Consumer Advocacy Group, Anthony Held and Mateel Environmental Justice.  CBL took a look at how their average settlement numbers compared over the last four years.  Again, you can click the graphic to get a larger version:

Finally, CBL compared allocation of all the settlements over the same four year period amongst penalties (75% of which go to the State of California, which can use the money), "other payments" (environmental organizations designated by the plaintiff, and often the plaintiff organization itself) and attorneys' fees and costs.  The more cynical among our readers will not be surprised at what we found:

Yes, that's right.  Looking just at bounty hunters with settlements in 2010, less than 10% of the more than $38 million paid to them in the past four years went to penalties.  64% went to attorneys' fees and costs.  And if you exclude the settlements by As You Sow and Center for Environmental Health, which are genuine environmental adocacy groups with missions far broader than Proposition 65 enforcement, seventy-six percent of all amounts paid to the remaining persons and organizations over the past four years went to attorneys' fees and costs.

Hmm, do we think this is what the voters had in mind twnty-five years ago when they went to the polls and enacted the "Safe Drinking Water and Toxic Enforcement Act of 1986?"  I'm thinking maybe not . . . . .

So What Exactly Did We Settle, Anyway?

Workers' compensation and workers' compensation liens are often an issue in personal injury cases and the settlement of personal injury cases.  But most of the time, when the 
tort defendant isn't a party to the workers' comp matter, the lien is really the plaintiff attorney's problem.  But what about when the tort defendant was also an employer?

In California as in most states, an employee can't sue his or her employer for injuries arising out of and in the course and scope of the employment (Labor Code §3601.)  But there are instances where an employee has parallel civil cases and workers' compensation claims against the same company:  for example, in a toxic exposure case where some of the exposure took place while working for the employer and some of it involved exposure to the employer's product while working for someone else (a surprisingly common fact pattern). 

Or, as in Steller v. Sears, Roebuck and Co. ( October 14, 2010) ___Cal.App.4th___ (Second App. Dist., No. B219935), there's the scenario where the employee files a worker's compensation case against the employer and a civil case for disability discrimination.  Here's a suggestion for employers in either scenario:  when you settle one case, settle them both.

In Stellar, the Defendant made an offer of judgment under Code of Civil Procedure § 998.  The offer stated that in exchange for payment of $95,000, the appellant / plaintiff would release:

all claims for, [appellant's] alleged damages, costs and expenses, attorneys' fees and interest asserted or that could have been asserted by [appellant] in this action, as well as all demands, actions, liabilities, obligations, damages and/or causes of action arising from this lawsuit or relating to [appellant's] employment with [respondent]." (Italics added.)

Then the parties went to a Superior Court settlement conference where the plaintiff announced she was accepting the offer.

And then the parties got into a kerfluffle over what was accepted.  According to the plaintiff, ""'the only legally permissible interpretation of the §998 Offer is that it did not include the settlement of the Workers['] Compensation proceeding within the dollar amount contained in the offer.'"  Of course, according to the employer, everything was settled.

The parties filed cross-motions, each seeking to enforce her or its own version of the deal.  They submitted declarations to help the court interpret the deal.  The trial court, however, held that the settlement unambiguously included the works comp claim.  Huh?  Really?  So, said the trial court, there's no need to even look at the declarations.

In a settlement where the subject of workers' compensation wasn't mentioned in the documents and where settlement would be invalid if not approved by the Workers' Compensation Appeals Board, the Court of Appeal wasn't prepared to go quite that far.  Instead, the Court said, well, yes, the settlement is ambiguous (ya' think?).  But once we look at the declarations, "the only plausible interpretation of the settlement agreement is that it encompassed both the disability discrimination and workers' compensation claims."  Well, ok, if you say so.

Advice for everybody on both sides:  don't lose sight of the ball.  Make it explicit what you're settling and what you aren't settling.   Skip the Court of Appeal part.  Save yourself some attorneys' fees.  Just sayin'.

Plaintiff Bar's Position On Medicare Set-Asides

    Even though it isn't strictly a California issue, we've been following developments in the MMSEA and Medicare Cost Recovery area, with earlier posts, links and white papers here, here, here, here and here.

    Now the American Association for Justice (fka "Association of Trial Lawyers of America") wants to get its two cents in.

More after the jump.