This case was last updated from Los Angeles County Superior Courts on 06/10/2019 at 07:47:17 (UTC).

CONSUMER ADVOCACY GROUP INC VS VALU MART CO

Case Summary

On 10/10/2017 CONSUMER ADVOCACY GROUP INC filed an Other lawsuit against VALU MART CO. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are RICHARD FRUIN, RUTH ANN KWAN and ELIZABETH ALLEN WHITE. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****9776

  • Filing Date:

    10/10/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Other

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

RICHARD FRUIN

RUTH ANN KWAN

ELIZABETH ALLEN WHITE

 

Party Details

Plaintiffs and Petitioners

CONSUMER ADVOCARY GROUP INC

CONSUMER ADVOCACY GROUP INC.

Defendants and Respondents

DOES 1 TO 20

VALU MART CO

K. V. MART CO.

BUY LOW MARKET CORP.

MERCADO LATINO INC.

ROYAL DELUXE ACCESSORIES LLC

SOOFER CO. INC.

VALU MART CO.

ROYAL ITEMS INC.

Attorney/Law Firm Details

Plaintiff and Petitioner Attorneys

YEROUSHALMI REUBEN ESQ.

YEROUSHALMI REUBEN

Defendant Attorneys

STILES MICHAEL J.

SMITH CHRISTOPHER W.

CORTEZ ANTHONY J

BROPHY CAROL

 

Court Documents

PROOF OF SERVICE SUMMONS

2/14/2018: PROOF OF SERVICE SUMMONS

Minute Order

3/12/2018: Minute Order

NOTICE OF RULING RE: CONTINUED CASE MANAGEMENT CONFERENCE

4/23/2018: NOTICE OF RULING RE: CONTINUED CASE MANAGEMENT CONFERENCE

DECLARATION OF TIFFINE E. MALAMPHY IN SUPPORT OF PLAINTIFF CONSUMER ADVOCACY GROUP, INC.'S MOTION FOR A PROTECTIVE ORDER AGAINST BUY LOW MARKET CORP.

5/3/2018: DECLARATION OF TIFFINE E. MALAMPHY IN SUPPORT OF PLAINTIFF CONSUMER ADVOCACY GROUP, INC.'S MOTION FOR A PROTECTIVE ORDER AGAINST BUY LOW MARKET CORP.

DECLARATION OF TIFFINE E. MALAMPHY IN SUPPORT OF PLAINTIFF CONSUMER ADVOCACY GROUP, INC.'S MOTION FOR A PROTECTIVE ORDER AGAINST VALU MART CO.

5/3/2018: DECLARATION OF TIFFINE E. MALAMPHY IN SUPPORT OF PLAINTIFF CONSUMER ADVOCACY GROUP, INC.'S MOTION FOR A PROTECTIVE ORDER AGAINST VALU MART CO.

Minute Order

5/8/2018: Minute Order

REQUEST FOR REFUND

5/22/2018: REQUEST FOR REFUND

PLAINTIFF CONSUMER ADVOCACY GROUP, INC.?S OBJECTIONS TO RETAIL SELLER DEFENDANTS? MOTION FOR SUMMARY JUDGMENT

8/27/2018: PLAINTIFF CONSUMER ADVOCACY GROUP, INC.?S OBJECTIONS TO RETAIL SELLER DEFENDANTS? MOTION FOR SUMMARY JUDGMENT

RETAIL SELLER DEFENDANTS' RESPONSE TO CAG?S OBJECTIONS TO RETAIL SELLER DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

8/31/2018: RETAIL SELLER DEFENDANTS' RESPONSE TO CAG?S OBJECTIONS TO RETAIL SELLER DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

Minute Order

1/10/2019: Minute Order

Notice of Change of Address or Other Contact Information

1/30/2019: Notice of Change of Address or Other Contact Information

Motion to Quash

3/20/2019: Motion to Quash

Declaration

3/20/2019: Declaration

Opposition

5/8/2019: Opposition

Request for Judicial Notice

5/8/2019: Request for Judicial Notice

Substitution of Attorney

6/6/2019: Substitution of Attorney

Minute Order

12/18/2017: Minute Order

SUMMONS

10/10/2017: SUMMONS

112 More Documents Available

 

Docket Entries

  • 06/06/2019
  • Substitution of Attorney; Filed by Royal Items Inc. (Defendant)

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  • 06/06/2019
  • Substitution of Attorney; Filed by Royal Deluxe Accessories, LLC (Defendant)

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  • 05/21/2019
  • at 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Hearing on Motion to Quash (Summons for Lack of Personal Jurisdiction) - Held - Continued

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  • 05/21/2019
  • at 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Hearing on Motion to Quash (Summons for Lack of Personal Jurisdiction) - Held - Continued

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  • 05/21/2019
  • Minute Order ( (Hearing on Specially Appearing Defendant Royal Items, Inc., i...)); Filed by Clerk

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  • 05/21/2019
  • Notice ( OF COURT'S TENTATIVE RULING CONTINUING THE HEARING DATES ON SPECIALLY APPEARING DEFENDANTS MOTIONS TO QUASH TO JULY 22, 2019); Filed by Royal Deluxe Accessories, LLC (Defendant); Royal Items Inc. (Defendant)

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  • 05/21/2019
  • Certificate of Mailing for (Minute Order (Hearing on Specially Appearing Defendant Royal Items, Inc., i...) of 05/21/2019); Filed by Clerk

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  • 05/21/2019
  • Order (- Ruling: (1) & (2) Motion to Quash Service of Summons for Lack of Personal Jurisdiction); Filed by Clerk

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  • 05/15/2019
  • at 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Hearing on Motion to Quash (Summons for Lack of Personal Jurisdiction) - Not Held - Rescheduled by Party

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  • 05/14/2019
  • Reply (Specially Appearing Defendant Royal Items, Inc., In Dissolution's Reply in Support of Its Motion to Quash Summons for Lack of Personal Jurisdiction); Filed by Royal Items Inc. (Defendant)

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227 More Docket Entries
  • 11/16/2017
  • Notice of Case Management Conference; Filed by Clerk

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  • 11/16/2017
  • NOTICE OF CASE MANAGEMENT CONFERENCE

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  • 10/23/2017
  • at 00:00 AM in Department 15; Unknown Event Type - Held - Motion Granted

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  • 10/23/2017
  • Minute order entered: 2017-10-23 00:00:00; Filed by Clerk

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  • 10/23/2017
  • Minute Order

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  • 10/19/2017
  • PEREMPTORY CHALLENGE TO JUDICIAL OFFICER

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  • 10/10/2017
  • SUMMONS

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  • 10/10/2017
  • Summons; Filed by Plaintiff/Petitioner

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  • 10/10/2017
  • COMPLAINT FOR PENALTY AND INJUNCTION

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  • 10/10/2017
  • Complaint; Filed by Consumer Advocacy Group, Inc. (Plaintiff)

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Tentative Rulings

Case Number: BC679776    Hearing Date: October 01, 2020    Dept: 48

[TENTATIVE] ORDER RE: MOTION FOR TERMINATING SANCTIONS

On February 2, 2018, Plaintiff Consumer Advocacy Group, Inc. (“Plaintiff”) filed its first amended complaint (“FAC”) alleging that Defendant Soofer Company, Inc. (“Defendant”) and others violated Proposition 65 through their manufacture, distribution, promotion, or sale of ginger powder, whole ginger, ground clove, and ground anise. On August 12, 2020, Defendant filed this motion for terminating sanctions seeking dismissal of the action with prejudice.

REQUEST FOR JUDICIAL NOTICE

Defendant requests that the Court take judicial notice of 15 items. The Court grants the requests.

EVIDENTIARY OBJECTIONS

Plaintiff’s objections to the Declaration of Dariush Soofer and its exhibits are overruled. Plaintiff’s objections to the Declaration of Amanda Soofer and its exhibits are overruled. Plaintiff’s objections to the Declaration of Carol Brophy are overruled. Plaintiff’s objections to the motion and reply brief are overruled.

Defendant’s objections to Plaintiff’s Opposition are overruled. Defendant’s objections to the Declaration of Reuben Yeroushlami and its exhibit are overruled. Defendant’s Objection Nos. 1-11 and Exhibits A-D, K, L to the Declaration of Michael Marcus are overruled. Defendant’s Objection Nos. 12-14 and Exhibits I-J to the Declaration of Michael Marcus are sustained. The Court did not rely on Plaintiff’s Declaration of Robert Kehr.

Objections to briefs are not proper, exacerbates the large number of filings, and creates inefficiencies as it requires the Court to spend time on improper objections. Objections are to be made to evidence. (See Cal. Rule of Court rule 3.1354.) Parties should use arguments in their opposition and reply briefs to express their disagreement with the arguments in the other side’s briefs.

DISCUSSION

As an initial matter, at the prior hearing, the Court asked whether the hearing on this motion should be continued to allow the Attorney General to be heard on the motion, as occurred in the Rice Litigation. Plaintiff and Defendant agreed that that was not necessary.

Defendant seeks dismissal pursuant to the analysis and holding in Stephen Slesinger, Inc. v. Walt Disney Co. (2007) 155 Cal.App.4th 736 (Slesinger).) “[W]hen the plaintiff has engaged in misconduct during the course of the litigation that is deliberate, that is egregious, and that renders any remedy short of dismissal inadequate to preserve the fairness of the trial, the trial court has the inherent power to dismiss the action.” (Slesinger, supra, 155 Cal.App.4th at p. 764.) “The decision whether to exercise the inherent power to dismiss requires consideration of all relevant circumstances, including the nature of the misconduct (which must be deliberate and egregious, but may or may not violate a prior court order), the strong preference for adjudicating claims on the merits, the integrity of the court as an institution of justice, the effect of the misconduct on a fair resolution of the case, and the availability of other sanctions to cure the harm.” (Ibid.)

Defendant seeks dismissal of this action with prejudice due to a consulting arrangement between Defendant and Reuben Yeroushalmi and his firm Yeroushalmi & Yeroushalmi, LLP (collectively “Yeroushalmi”), memorialized in a Memorandum of Understanding (“MOU”). (Motion at p. 10.) The Court already discussed and ruled on issues surrounding the MOU in its order granting the motion to disqualify Yeroushalmi and incorporates that discussion and those rulings here.

Defendant argues that the MOU is an admission of improper concurrent representation by Yeroushalmi,, which is grounds for terminating sanctions. (Motion at pp. 10-11.) In addition, Defendant argues: the MOU’s consultant provision improperly converted the settlement’s Proposition 65 enforcement fees, 75 percent of which must be provided to the state’s Office of Environmental Health Hazard assessment, into consulting fees for Yeroushalmi (id. at p. 11); the MOU allowed Yeroushalmi to establish injunctive provisions unilaterally and to keep them secret because the MOU permitted Yeroushalmi to establish permissible levels of lead in Defendant’s products that would not trigger Proposition 65, avoiding public disclosure (id. at pp. 11-12); the MOU was an improper “protection for hire scheme on behalf of Yeroushalmi, in which [Plaintiff] was a willing and crucial participant” (id. at p. 12); the MOU is impermissibly overbroad, covering spice that were not withing Plaintiff’s two Proposition 65 notices, and violates the law and public policy (id. at p. 12); and the MOU is “part of both Yeroushalmi’s and [Plaintiff’s] pattern and practice to shut the Attorney General and the Court out of their statutorily required Proposition 65 oversight functions.” (Id. at p. 13.) According to Defendant, this conduct necessitates terminating sanctions.

The complained-of conduct primarily concerns Yeroushalmi as Plaintiff’s attorney. The evidence of Plaintiff’s involvement is Michael Marcus’ signature on the MOU as CEO of Plaintiff. The only time representatives of Plaintiff, apart from Yeroushalmi, met with Defendant was on November 18, 2015, long before the MOU. (D. Soofer Decl. ¶ 12; A. Soofer Decl. ¶ 13; Marcus Decl. ¶ 17.) At that time the parties were discussing a tolling agreement and settlement, and there is no evidence the topic of the MOU or Yeroushalmi’s consulting services had arisen. (D. Soofer Decl. ¶¶ 12-14.) The wrongful aspects of the MOU about which Defendant complains benefited Yeroushalmi as the intended recipient of the $125,000 in consulting fees, but not Plaintiff nearly as much if at all. The evidence is slim that Plaintiff was involved directly (as opposed to through Yeroushalmi) in developing the strategy that resulted in the MOU, negotiating the MOU, drafting the MOU, or providing the consulting services described in the MOU. The Court cannot conclude that the MOU proves Plaintiff engaged in the type of egregious and deliberate conduct justifying termination.

Defendant also contends that Plaintiff is not litigating this matter in the public interest but rather for its own financial benefit, and therefore does not have standing to prosecute a Proposition 65 violation. (Motion at p. 13.) A plaintiff may bring an action based on Proposition 65 only in the public interest, as the statutory scheme is “intended to create a mechanism for vindicating public rights.” (Consumer Advocacy Group, Inc. v. ExxonMobil Corp. (2008) 168 Cal.App.4th 675, 692-693; see Health & Saf. Code, § 25249.7.) According to Defendant, the MOU is evidence that Plaintiff needed quick cash and settled the Rice Litigation and spice dispute to get that cash. (Motion at p. 14.) But there is insufficient evidence that Plaintiff was planning on pocketing $125,000 or $250,000 without obtaining a consent judgment in the Rice Litigation, or that Plaintiff was going to keep the $125,000 in consulting fees that were to be paid to Yeroushalmi.

Finally, Defendant argues that because Plaintiff obtained Defendant’s confidential information, no sanction less than termination will be effective. (Motion at p. 15.) Defendant cites to paragraph 13 of the Amanda Soofer Declaration as evidence that Plaintiff obtained Defendant’s confidential information. That paragraph only mentions a November 18, 2015 meeting at which Plaintiff’s CEO, Marcus, was present. The declaration does not state Defendant transmitted confidential information to Plaintiff. Defendant does not cite evidence substantiating its contention that Plaintiff received Defendant’s confidential information, and there is insufficient evidence that Yeroushalmi transmitted Defendant’s confidential information to Plaintiff. Therefore, this is not a situation where, even with the disqualification of Yroushalmi, Plaintiff will have the unfair advantage in the continued litigation of access to Defendant’s confidential information.

In its submission in the Rice Litigation, the Attorney General stated that Plaintiff violated Proposition 65 reporting requirements when it did not report the MOU settlement within five days. Defendant does not cite legal authority that such a violation is grounds for terminating sanctions.

In its reply, Defendant argues that terminating sanctions will prevent Defendant from having to spend hundreds of thousands of dollars to prove that a warning is not required on the spice products. Defendant states the products are safe and Defendant has an ongoing obligation to comply with Proposition 65. Saving a defendant from spending litigation costs is not a basis for terminating sanctions. Many defendants will think their products are safe and should not be required to carry warnings, and many defendants will insist that they will comply with the law. The Court cannot conclude as a matter of law, and without sufficient evidence as to the merits of the case, that Defendant is in compliance with the applicable state and federal regulations and that no Proposition 65 warning is warranted. A motion for terminating sanctions is not a mechanism for ruling on the merits in that fashion. And the fact that Defendant believes it has not violated Proposition 65 is not grounds to terminate the litigation.

Plaintiff’s FAC alleges that Defendant and others knowingly and intentionally exposed consumers to lead without providing a clear and reasonable warning. (SAC ¶¶ 72, 82, 92, 102.) Plaintiff seeks, in part, a permanent injunction mandating Proposition 65-compliant warning and statutory penalties. The Court cannot conclude as a matter of law that if Plaintiff proves its allegations and obtains the requested relief, the public will not benefit. Defendant has not shown by sufficient evidence that Plaintiff is unable to continue this action for the public benefit. Nor did Defendant show that the integrity of the court as an institution of justice requires terminating sanctions.

Defendant did not suggest other sanctions to cure the harm. The disqualification of Yeroushalmi can be considered another sanction.

CONCLUSION

Accordingly, the motion for terminating sanctions is DENIED.

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. Parties intending to appear are STRONGLY encouraged to appear remotely.

Case Number: BC679776    Hearing Date: September 25, 2020    Dept: 48

[TENTATIVE] ORDER RE: MOTION TO DISQUALIFY PLAINTIFF’S COUNSEL

On February 2, 2018, Plaintiff Consumer Advocacy Group, Inc. (“Plaintiff”) filed its first amended complaint (“FAC”). The FAC alleges that Defendant Soofer Company, Inc. (“Defendant”) and others violated Proposition 65 through their manufacture, distribution, promotion, or sale of ginger powder, whole ginger, ground clove, and ground anise. Defendant seeks to disqualify Reuben Yeroushalmi and the law firm Yeroushalmi & Yeroushalmi (collectively “Yeroushalmi”) as Plaintiff’s counsel.

REQUEST FOR JUDICIAL NOTICE

Defendant requests that the Court take judicial notice of 10 items. The requests are granted, except for Exhibit M which was blank.

EVIDENTIARY OBJECTIONS

Yeroushalmi’s objections to the Declaration of Dariush Soofer and its exhibits are overruled. Yeroushalmi’s objections to the Declaration of Amanda Soofer and its exhibits are overruled. Yeroushalmi’s objections to the Declaration of Carol Brophy are overruled. Yeroushalmi’s objections to the Request for Judicial Notice are overruled.

Defendant’s objections to the Declaration of Reuben Yeroushalmi and its exhibit are overruled. Defendant’s Objection Nos. 1-11, and 14, and Exhibits A-H, K-M to the Declaration of Michael Marcus are overruled. Defendant’s Objection Nos. 12-13 and Exhibits I-J to the Declaration of Michael Marcus are sustained. The Court did not rely on the Declaration of Robert Kehr.

FACTUAL BACKGROUND

In February 2017, Plaintiff issued Proposition 65 notices to Defendant alleging that Defendant’s spice products contained lead and lead compounds. (D. Soofer Decl. ¶ 15.) Defendant contacted Yeroushalmi, and they met in May 2017 and then on or about June 30, 2017. (D. Soofer Decl. ¶¶ 16-18, 21.)

Yeroushalmi presented a settlement structure and terms that would resolve both the dispute concerning the spice products and the Rice Litigation. (D. Soofer Decl. ¶ 21.) Defendant contends Yeroushalmi proposed acting as Defendant’s attorney to facilitate the settlement and to provide Proposition 65 counseling services going forward, and that the terms should be memorialized in a confidential Memorandum of Understanding (“MOU”). (D. Soofer Decl. ¶ 22; A. Soofer Decl. ¶ 27.) According to Defendant, Yeroushalmi promised that if Defendant signed the MOU, he would not issue notices to retailers or vendors of Defendant’s products because Defendant would be protected as Yeroushalmi’s client. (D. Soofer Decl. ¶ 30.)

The parties signed the MOU in early July 2017. (D. Soofer Decl. ¶, 31; A. Soofer Decl. ¶ 31.) At the top, the document is entitled “Confidential Binding Memorandum of Understanding and Settlement.” (D. Soofer Decl., Ex. A at p. 1.) The first paragraph states, “The effective date of this Memorandum shall be the date upon which all Parties have signed this Memorandum.” (Ibid.) The parties signed the MOU on July 5 and 6, 2017. (Id. at pp. 5-6.)

According to the MOU, Defendant would pay $250,000 in six installments in the form of $125,000 to resolve the Rice Litigation and $125,000 to Yeroushalmi “for attorneys’ fees for Consulting Services Rendered at Sec. 2.2. below.” (D. Soofer Decl. ¶¶ 25, 37, Ex. A at p. 1.) Section 2.2. stated Defendant would pay $125,000 “to Attorney for consulting services rendered” and that the payment was for “reimbursement for past and current consultant services rendered advising Soofer on compliance issues related to Proposition 65 and environmental laws in the interest of the public.” (Id. at ¶ 32, Ex. A at p. 2.) Plaintiff and Yeroushalmi agreed not to pursue any alleged Proposition 65 allegations against Defendant so long as it agreed to monitor its food products. (Ibid.) Plaintiff “acknowledge[d] that concurrent consultant services provided by Reuben Yeroushalmi to Soofer constitute the representation of potentially conflicting interests, to the extent that Soofer’s interests and those of [Plaintiff] are potentially adverse. [Plaintiff] nevertheless knowingly and voluntarily consents to such concurrent consultant services by Reuben Yeroushalmi to Soofer.” (Id. at Ex. A at p. 3.)

Defendants states that between mid-May 2017 and early July 2017, Yeroushalmi requested and Defendant provided information related to the products that were the subject of the Proposition 65 notices, Defendant’s customers and distribution network, Defendant’s vendors and supply network, Defendants’ manufacturing, Defendant’s testing of the product and general compliance strategy, Defendant’s defenses and strategy, and Defendant’s general finances and financial status. (D. Soofer Decl. ¶ 23; A. Soofer Decl. ¶ 29.) Defendant discussed with Yeroushalmi which products it was concerned might lead to future suits against Defendant and its vendors and the financial impact of the litigation and MOU on Defendant’s viability, among other topics at issue in the disputes between Plaintiff and Defendant. (D. Soofer Decl. ¶ 35.)

Defendant continued to meet with Yeroushalmi and gave him more confidential information, with the understanding that he was acting as Defendant’s attorney. (D. Soofer Decl. ¶¶ 34-36.) When Yeroushalmi did not receive immediate payment under the MOU, he informed Defendant that the MOU was void. (Id. at ¶ 39; A. Soofer Decl. ¶¶ 38.) Plaintiff then proceeded with this lawsuit against Defendant.

DISCUSSION

As an initial matter, this motion is similar to Defendant’s motion to disqualify Yeroushalmi filed in Consumer Advocacy Group, Inc. v. Mateo Rice Processing (Pvt.) Ltd., Case No. BC556594 (“Rice Litigation”), which was granted on July 21, 2020. (RJN, Exs. I, J.) Yeroushalmi argues that that ruling is not precedent and does not collaterally estop a different decision here. While that is correct, the ruling in the Rice Litigation was a detailed and convincing discussion of the same or similar arguments and evidence at issue here. This Court is not bound by that ruling. Nor is it prohibited from adopting analysis and conclusions in that ruling. Having independently reviewed and considered all of the papers filed in this case in support of and in opposition to the motion, and for the reasons discussed below, as well as the reasons discussed in more detail in the ruling in the Rice Litigation where applicable, the Court grants Defendant’s motion.

“‘A trial court’s authority to disqualify an attorney derives from the power inherent in every court “[t]o control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto.”’” (Ontiveros v. Constable (2016) 245 Cal.App.4th 686, 694, quoting People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1145.) “‘[D]isqualification motions involve a conflict between the clients’ right to counsel of their choice and the need to maintain ethical standards of professional responsibility.’” (Id. at 694-695.) “When deciding a motion to disqualify counsel, ‘[t]he paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar. The important right to counsel of one’s choice must yield to ethical considerations that affect the fundamental principles of our judicial process.’ [Citation.]” (O’Gara Coach Co., LLC v. Ra (2019) 30 Cal.App.5th 1115, 1124.)

Disqualification

Defendant contends that Yeroushalmi’s representation of both Plaintiff and Defendant requires disqualification of him and his law firm. (Motion at p. 10.) California Rules of Professional Conduct rule 1.7(d)(3) prohibits representation that “involve[s] the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal.” In such a case, disqualification is automatic with only few exceptions. (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1147 (SpeeDee Oil).) Defendant argues it and Plaintiff had interests directly adverse to each other when the MOU was executed because Soofer was engaged in the Rice Litigation against Plaintiff and had conflicting interests concerning spices, which had already been the subject of the Proposition 65 notices and which ultimately turned into this litigation.

Defendant also argues Yeroushalmi violated California Rules of Professional Conduct rule 1.9 prohibiting a lawyer from representing a person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of a former client unless the former client gives informed written consent and from using confidential information learned in the course of the representation of the former client.

In opposition, Yeroushalmi argues that no attorney-client relationship existed between Yeroushalmi and Defendant, the MOU was only a “settlement in principle” and never went into effect, Yeroushalmi did not receive any confidential information from Defendant, and the information Yeroushalmi did receive was publicly available.

“An attorney represents a client – for purposes of a conflict of interest analysis – when the attorney knowingly obtains material confidential information from the client and renders legal advice or services as a result.” (SpeeDee Oil, supra, 20 Cal.4th at p. 1148.) The MOU is evidence that an attorney-client relationship existed between Yeroushalmi and Defendant. The MOU expressly stated that it was binding and effective upon the last signature. Section 2.2.1 expressly stated that Soofer was to pay Yeroushalmi “for consulting services rendered” – in the past tense referring to services already rendered – and not for consulting services to be rendered. (D. Soofer Decl., Ex. A at p. 1.) Section 2.2.2 states that the payment is “reimbursement for past and current consulting services,” again referring to past services rendered by Yeroushalmi. (Ibid.) Section 4 contained the conflict waiver in which Plaintiff acknowledged “concurrent consultant services” provided by Yeroushalmi to Defendant “constitute the representation of potentially conflicting interests.” (Id. at p. 4.) This provision is evidence that Yeroushalmi was providing services at the same time to both Defendant and CAG and that Defendant’s and CAG’s interests were potentially conflicting and adverse. Yeroushalmi’s argument that the MOU does not mean what it says is not convincing. Thus, whether the representation was considered past or current at the time of the MOU, Yeroushalmi violated the Rules of Professional Conduct prohibiting representation of two clients with adverse interests.

Yeroushalmi states that he did not receive confidential information from Defendant, which he confirmed through searching his firm’s records and email. (Yeroushalmi Decl. ¶ 22.) However, Dariush Soofer and Amanda Soofer identified the types of confidential and private information they shared in conversations with Yeroushalmi. (D. Soofer Decl. ¶ 35; A. Soofer Decl. ¶ 29.) While Yeroushalmi’s declaration states that he did not find any confidential information from Defendant in the firm’s records or email, he does not expressly state that he never discussed with Dariush Soofer and Amanda Soofer the types of information they identified in their declarations. Also, Yeroushalmi did not show that information about Defendant’s financial concerns and litigation strategy and defenses were publicly available.

And, there is written evidence that Yeroushalmi provided what can be construed as advice or consulting services to Defendant. On July 3, 2017, Yeroushalmi’s office shared with Defendant the results of testing it conducted on some of Defendant’s products and informed Defendant, “Please refer to the attached test results. These results show very high levels of lead in your spices, and in various varieties of spices. As you can see, this is a serious health issue which we need to address through the Agreement. Hopefully, we can finalize very soon so that the public benefits immediately. Thank you.” (Yeroushalmi Decl. ¶ 15 & Ex. F.)

There is no evidence that Defendant waived any conflict in writing, and it is undisputed the matters both involved the Rice Litigation and the issues that became this litigation, meaning there was a substantial relationship between the matters.

In sum, Defendant established an attorney-client relationship between Yeroushalmi and Defendant at a time when Yeroushalmi also represented Plaintiff and when Plaintiff and Defendant had adverse interests. During that relationship, Yeroushalmi received material confidential information from Defendant. The evidence is sufficient to require the disqualification of Reuben Yeroushalmi and the law firm Yeroushalmi & Yeroushalmi

Delay

Yeroushalmi argues that Defendant waived its right to seek disqualification because it waited over two and a half years after the alleged conflict arose. (Opposition at p. 19.) After one party makes a prima facie showing of unreasonable delay, the party seeking disqualification must justify the delay by addressing “(1) how long it has known of the potential conflict; (2) whether it has been represented by counsel since it has known of the potential conflict; (3) whether anyone prevented the moving party from making the motion earlier, and if so, under what circumstances; and (4) whether an earlier motion to disqualify would have been inappropriate or futile and why.” (River West, Inc. v. Nickel (1987) 188 Cal.App.3d 1297, 1309.)

Defendant knew at that time it executed the MOU in July 2017 that Yeroushalmi also represented Plaintiff. (See, e.g., D. Soofer Decl. ¶ 7; A. Soofer Decl. ¶ 9.) Defendant retained counsel in connection with the Rice Litigation in 2014 (D. Soofer Decl. ¶ 8), and Defendant has also been represented by counsel in this action since at least when it filed its first answer on March 2, 2018.

Amanda Soofer told Defendant’s current counsel about the MOU only on December 2, 2019. (D. Soofer Decl. ¶ 43; A. Soofer Decl. ¶ 45; Brophy Decl., ¶ 4; Brophy Suppl. Decl. ¶ 4.) Before then, Defendant was unaware that the MOU was evidence of unethical conduct because Yeroushalmi had stated that the MOU was void. (A. Soofer Decl. ¶ 45.) Defendant was also afraid of personal and professional repercussions from Yeroushalmi if it told anyone about the MOU. (D. Soofer Decl., ¶ 42; A. Soofer Decl. ¶ 45.) Yeroushalmi had emphasized to Defendant that the MOU’s confidentiality clause could be used against Defendant if it discussed the MOU with anyone, including outside counsel. (D. Soofer Decl., ¶ 41; see A. Soofer Decl. ¶ 35.) Defendant did not authorize counsel to use the MOU in legal proceedings until January 28, 2020. (Brophy Decl., ¶ 7; Brophy Suppl. Decl. ¶ 7.) Counsel initially received a hearing date in April 2020, which the Court continued multiple times due to the pandemic. (Brophy Decl., ¶¶ 9-11; Brophy Suppl. Decl. ¶ 9-10.) Under these circumstances, Defendant did not unreasonably delay in bringing a motion to disqualify Plaintiff’s counsel.

Yeroushalmi argues the delay is prejudicial for Plaintiff because Plaintiff will face exorbitant costs in bringing another attorney up to speed, Yeroushalmi has a long term relationship with Plaintiff, and it is difficult to find another attorney with a similar level of experience who is willing to take this case on a contingent fee basis. The last two points are not made worse by the delay. As for the first point, Yeroushalmi did not present evidence that the cost of bringing a new attorney up to speed will be more now than if Defendant had made this motion two years earlier.

CONCLUSION

The motion to disqualify Reuben Yeroushalmi and the firm Yeroushalmi & Yeroushalmi from representing Plaintiff is GRANTED.

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. Parties intending to appear are STRONGLY encouraged to appear remotely.

Case Number: BC679776    Hearing Date: June 30, 2020    Dept: 48

[TENTATIVE] ORDER RE: MOTION TO APPROVE AND ENTER CONSENT JUDGMENT

On February 2, 2018, plaintiff Consumer Advocacy Group, Inc. (“Plaintiff”) filed its first amended complaint against defendant Mercado Latino, Inc. (“Defendant”) and others for civil penalties and injunctive relief based on violations of Health & Safety Code section 25249.6 et seq. On January 30, 2020, Plaintiff filed this motion to approve a consent judgment entered into with Defendant. Plaintiff asserts that the consent judgment is fair and reasonable to the parties, is in the interest of and provides a benefit to the general public, 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.

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’s 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 section 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

Compliancy of Warning

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. (Yeroushalmi Decl., Ex. A [“Consent Judgment”].) Under the Consent Judgment, after the effective date, Defendant shall not sell in California any ground sage and ground ginger (“Covered Products”) unless the level of lead in the ground sage and ground ginger does not exceed 375 parts per billion and 720 parts per billion, respectively. (Consent Judgment § 3.1.) For any Covered Products that exceed the permissible level of lead as of the effective date, Defendant must provide a Proposition 65-compliant warning. (Id. § 3.2.) For any Covered Products still existing in Defendant’s inventory as of the effective date, Defendant must provide a Proposition 65-compliant warning, unless these Covered Products do not exceed the 375 parts per billion lead in ground sage and 720 parts per billion lead in ground ginger. (Id. § 3.3.) The warning language will state: “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.” (Id. § 3.2.) 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.

Reasonableness of Attorney Fees

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 $65,000 in attorney fees and costs, and Defendant has agreed. (Consent Judgment § 4.1.3.) This is less than the $89,127.50 lodestar amount for 202.9 hours at various billing rates. (Yeroushalmi Decl. ¶ 21.) The Court finds that the amount of $65,000 represents reasonable attorney fees for the work performed as set forth in the detailed summary of actions undertaken in investigating, litigating, and settling this action. (Yeroushalmi Decl. ¶¶ 22-30.)

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

Reasonableness of Civil Penalty

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 $8,572 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% ($6,429) will be paid to OEHHA and 25% ($2,143) will be paid to Plaintiff. (Ibid.)

The Court finds that $8,572 in civil penalties is reasonable.

Public Benefit Through “Offset”

Under the Consent Judgment, Defendant will pay $6,428 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.

Additionally, Plaintiff’s counsel served this motion on the Attorney General, who has not objected, and Plaintiff’s counsel will also report the entered judgment to the Attorney General. (Yeroushalmi Decl. ¶ 29.)

Release Provision

Plaintiff purports to release claims arising from actual or alleged violations of Proposition 65 or any other statutory or common law claim regarding the Covered Products manufactured, distributed, or sold by Defendant through the effective date regarding any actual or failure to warn about exposure to the listed chemicals in the Covered Products. (Consent Judgment § 5.1.)

This release is specifically limited to Defendant’s Covered Products and claims presented in this lawsuit. The scope of this release is thus proper. Plaintiff also releases certain claims “on behalf of itself, its past and current agents, representatives, attorneys, successors, and/or assignees,” 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

Plaintiff’s Motion to Approve and Enter Consent Judgment is GRANTED.

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. Parties intending to appear are STRONGLY encouraged to appear remotely.

Case Number: BC679776    Hearing Date: December 19, 2019    Dept: 48

MOTION TO APPROVE AND ENTER CONSENT JUDGMENT

MOVING PARTY: Plaintiff Consumer Advocacy Group, Inc.

RESPONDING PARTY(S): No opposition filed.

PROOF OF SERVICE:

ANALYSIS

Motion to Approve and Enter Consent Judgment

Plaintiff Consumer Advocacy Group, Inc. moves to approve and enter consent judgment between Plaintiff and Defendants Royal Deluxe Accessories, LLC, Royal Items, Inc., Five Below, Inc. and 1616 Holdings, Inc.

Discussion

1. Re: Any warning that is required by the settlement complies with this chapter.

A copy of the Consent Judgment was presented to the Court. Pursuant to the Consent Judgment, after the Effective Date, Defendants RDA and RI shall not sell or ship in California any Covered Product unless the level of DEHP does not exceed 0.1% by weight (1,000 parts per million (ppm)) and shall not sell or ship in California any DBP Covered Products unless the level of DBP does not exceed 0.1% by weight (1,000 ppm). Also, after the Effective Date, Defendants FBI and FBM shall not sell or ship in California any Plastic Bags purchased from RDA or RI unless the level of DEHP does not exceed 0.1% by weight (1,000 ppm). Consent Judgment, § 3.1.

For any Covered Products still existing in Defendants’ inventory as of the Effective Date, Defendants must provide a Proposition 65-compliant warning. Consent Judgment § 3.2. The foregoing satisfies the warning requirement set forth in Health and Safety Code § 25249.6.

As such, this requirement is satisfied.

2. Re: Any award of attorney's fees is reasonable under California law.

Plaintiff seeks to recover $180,000.00 in attorney’s fees and costs, to which Defendant has agreed. Consent Judgment, § 4.1.3. The Court notes that there were some discovery motions, and also a motion for summary judgment brought by defendants which motion was denied. See October 15, 2018 minute order.

This is less than the $254,527.00 lodestar amount. Declaration of Reuben Yeroushalmi, ¶ 26. The Court finds that the amount of $180,000 represents a reasonable amount of attorney’s fees for the work performed as set forth in the Yeroushalmi Decl., ¶¶ 35 et seq.

This requirement is satisfied.

3. Re: Any penalty amount is reasonable based on the following criteria.

Defendant will pay $61,720.00 to the State of California Office of Environmental Health Hazard Assessment (“OEHHA”) and Plaintiff as civil penalties. 75% ($41,790.61) will be paid to OEHHA and 25% ($13,930.20) will be paid to Plaintiff. Consent Judgment at § 4.1.1(a).

The $61,720 penalty is appropriate under 11 CCR § 3203.

4. Payments to entity as “offset” to the civil penalty.

Under the Consent Judgment, Defendant will pay $46,280.00 as an Additional Settlement Payment (Consent Judgment § 4.1.2) to Plaintiff Consumer Advocacy Group, an entity, as an “offset” to the civil penalty pursuant to 11 CCR § 3203(d), which provides in pertinent part:

(d)  Where a settlement requires the alleged violator to make any Additional Settlement Payments to the plaintiff or to a third party, such Additional Settlement Payments are viewed as an "offset" to the civil penalty. The 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).

Plaintiff’s use of the Additional Settlement Payments will be toward fees of investigation, purchasing and testing for Proposition 65 listed chemicals in various products, expert fees for evaluating exposures through various mediums, the cost of 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. Declaration of Michael Marcus, ¶ 6.

The Court finds that the settlement serves the public interest.

The Attorney General has not objected to the Additional Settlement Payments, as it is instructed to do in consideration of the factors set forth in 11 CCR § 3204(b).

Release Provisions

Plaintiff purports to release claims arising from actual or alleged violations of Proposition 65 or any other statutory or common law claim regarding the Covered Products manufactured, distributed or sold by the Released Parties through the Effective Date regarding any actual or failure to warn about exposure to the listed chemicals in the Covered Products. Consent Judgment § 5.1.

This release is specifically limited to Defendant’s Covered Product and claims presented in this lawsuit; the scope of this release is proper. Plaintiff CAG also releases certain claims “on behalf of itself” 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.

In light of the foregoing, the motion to approve the Stipulated Consent Judgment is GRANTED.