Consumer Protection

SACRAMENTO – California Attorney General Edmund G. Brown Jr. today joined with 32 other state attorneys general in announcing a landmark $7 million settlement with Airborne, Inc. that forces the company to stop advertisements that “dramatically misrepresented” its dietary supplements as cold remedies.

“Airborne dramatically misrepresented its products as cold remedies without any scientific evidence to back up its claims,” Attorney General Brown said. “Under this agreement, the company will stop advertisements that suggest that its products are a cure for the common cold.”

Airborne began selling its products as a cold remedy on the Internet around July 2000 and on television in 2004. In its advertisements, Airborne featured people suffering from cold and flu symptoms and made unsupported statements suggesting its products were a cure for the common cold. This included:

• “Airborne Cold Remedy”
• “A Miracle Cold Buster!”
• “Sick of Catching Colds?”
• “Take at the first sign of a cold symptom.”

The company also requested that retailers sell Airborne products in the cold/cough aisle.

To substantiate their claims, Airborne relied upon studies that claimed the major ingredients in their products -- Vitamin C, Vitamin E, Selenium, and Zinc -- prevent colds. However, subsequent definitive studies found that these ingredients do not have any discernable effect to prevent colds. Despite the information, Airborne continued to market its products as cold remedies.

Investigators also raised concerns about the levels of Vitamin A in Airborne products. In older formulations, Airborne contained 5,000 International Units of Vitamin A. If the product was taken as instructed, consumers would ingest up to 15,000 International Units of Vitamin A daily.

This amount of Vitamin A poses potential health risks to vulnerable populations, including children and pregnant women. During the negotiation process, Airborne reformulated its product to contain only 2,000 International Units of Vitamin A.

Under today’s agreement, Airborne Inc. agreed:
• Not to make any claim concerning the health benefit, performance, efficacy or safety of its dietary supplements.
• Not to make any claims that imply that Airborne can diagnose, mitigate, prevent, treat, or cure colds, coughs, the flu, an upper respiratory infection or allergies.
• Not to require, demand, or otherwise influence where a retailer places Airborne, Inc. products, such as in the cold and cough aisle.
• Not to market any product that contains directions for use that would, if followed, result in an individual ingesting 15,000 International Units of Vitamin A per day.
• Pay a total of $7 million to 33 states.

Today’s settlement covers all Airborne products including:
• Airborne- Original
• Airborne- Pink Grapefruit
• Airborne- Lemon Lime
• Airborne- Nighttime
• Airborne- Jr. On-The-Go
• Airborne- Seasonal Relief
• Airborne- Sore Throat Gummi Lozenges
• Airborne- Soothing Throat Gummi Lozenges
• Airborne- Power Pixies

The states involved in today’s settlement include Alaska, Arkansas, Connecticut, Delaware, The District of Columbia, Florida, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Washington, and Wisconsin.

California will receive $460,000 under the settlement.

SACRAMENTO – California Attorney General Edmund G. Brown Jr. and Los Angeles City Attorney Rocky Delgadillo have reached a settlement with Mattel, Inc. – and several other toy makers – that will “safeguard California’s children” from lead-contaminated toys this Christmas.

Even though a new federal law ratcheting down standards for lead in toys won’t go into effect until February 10, 2009, Mattel and its subsidiary Fisher-Price, RC2 (which makes Thomas the Tank Engine toys), A&A Global Industries, Cranium Inc., Eveready Battery Company, Marvel Entertainment, Toy Investments, Kids II, and Amscan, have agreed to adopt the tough new federal standards immediately. By this agreement, the companies have pledged not to sell any toys they know contain lead, and in addition will pay $550,000 for lead testing and improved consumer notification.

“These consumer protection agreements will safeguard California’s children from lead-contaminated toys this Christmas,” Attorney General Brown said.
“Putting these agreements into effect immediately is absolutely critical because so many toys are sold between Thanksgiving and Christmas, months before new federal standards go into effect.”

In the wake of disturbing revelations about lead-contaminated toys imported from China over the past two years, Attorney General Brown and City Attorney Delgadillo filed suit against 17 toy manufacturers and retailers on November 19, 2007. Nine months later, Congress passed landmark consumer product safety legislation, the Consumer Product Safety Improvement Act.

The federal legislation:
• Lowers the standard for lead in paint and surface coatings from 600 parts per million currently to 90 parts per million after August 14, 2009.
• Establishes increasingly tight restrictions for lead in other materials used in toys – such as plastics, metals and fabrics. These restrictions are phased in over time.

February 10, 2009 – 600 parts per million
August 14, 2009 – 300 parts per million
August 14, 2011 – 100 parts per million

By the terms of the settlement agreement announced today, the companies will:
• Implement the federal lead standards on December 1, 2008, instead of February 10, 2009.
• Meet the 90 parts per million lead in paint standard by December 1, 2008, instead of by August 14, 2009, except for Kids II and Amscan, which will adhere to the federal timeline.

• Meet the 300 parts per million standard for lead in plastics, metals, and fabrics by December 1, 2008, instead of August 14, 2009, except for Kids II and Amscan, which will adhere to the federal timeline.
• If the companies find toys in excess of the lead standard, they will stop selling and distributing those toys, regardless of when the toy was made. This will be in effect this holiday season.
• Pay into a $550,000 fund to test toys for lead and improve outreach about future recalls. They will pay another $460,000 for the Attorney General’s and Los Angeles City Attorney’s Proposition 65 enforcement activities and $548,500 in civil penalties.
• Implement a Quality Assurance System that is designed to identify and to segregate toys with lead during and after the manufacturing process.
• Send direct notice of a recall to consumers of the product for whom they possess address or email contact information.

If the companies violate the lead standard in the future, the Attorney General can obtain penalties through an expedited enforcement process.

This agreement settles a lawsuit filed by the State of California and the LA City Attorney in November 2007, after receiving notices of violation from the Center for Environmental Health, As you Sow, and the Environmental Law Foundation.

The lawsuit alleges that Mattel and 16 other companies knowingly exposed individuals to lead—a chemical known to the State of California to cause cancer and reproductive harm—and failed to provide any warning about this risk.

Other defendants not part of this settlement are: Costco, KB Toys, Kmart, Michaels, Sears, Target, Toys ‘R’ Us, and Wal-Mart.

Background on Proposition 65

During the last year and a half, there have been frequent recalls of toys imported from China due to lead in the paint. Subsequently, the Attorney General’s Office began an investigation under Proposition 65, which ensures that businesses cannot expose individuals to hazardous chemicals without posting a clear and reasonable warning.

Proposition 65 is enforced through lawsuits brought by the Attorney General, district attorneys and city attorneys in cities with a population exceeding 750,000. Lawsuits may also be brought by private parties, but only after these parties notify the Attorney General of the alleged violation. Businesses that violate Proposition 65 are subject to civil penalties of up to $2,500 per day for each violation.

Proposition 65 requires the Governor to publish a list of chemicals that are known to the State of California to cause cancer, birth defects or other reproductive harm. Lead has been listed since 1987 as a chemical that can cause reproductive harm and birth defects, and has been on the list of chemicals known to cause cancer since 1992.

For more information about Prop 65 and to view the private party notices please visit: http://ag.ca.gov/prop65/index.php.

SAN DIEGO—California Attorney General Edmund G. Brown Jr. and San Diego District Attorney Bonnie Dumanis today announced a settlement with Wal-Mart Stores, Inc. that will “help consumers as the holiday season approaches” by giving customers $3 back at the cash register for price-scanning errors.

“We found price-scanning errors in Wal-Mart stores across California,” Attorney General Brown said. “Consumers saw one price in the aisles, but were charged a higher price at the cash register. With this agreement, Wal-Mart will give customers $3 back when pricing mistakes are found at the cash register. In these tough times, this will help consumers as the holiday season approaches.”

In December 2005, the California Attorney General’s Office began an investigation into allegations that Wal-Mart stores in California were scanning items at a higher price than the prices advertised on store shelves and signs. Through random price-checking, county Departments of Weights and Measures across the state found that 164 Wal-Mart Stores in 30 counties had made scanning errors. On average, customers who were overcharged paid an extra $8.40 at the checkout.

Examples of price-scanning errors include:

• From late August to November 2006, customers were overcharged $1.00 on sports bras in Ventura, San Diego, Los Angeles, San Bernardino, Stanislaus, Siskiyou and Tuolumne Counties.
• In January and February 2007, customers were overcharged $2.00 for woven shirts in San Diego, Sacramento, Ventura, Los Angeles and San Bernardino Counties.
• In December 2007, customers were overcharged $2.00 on S/S Polo in San Diego County.
• In November 2003, customers were overcharged $5.16 on a Journey CD in Ventura and Los Angeles Counties.
• From December 2004 to February 2005, customers were overcharged $5.02 on Hanes underwear in Los Angeles County.
• In October and November 2006, customers were overcharged $2.00 on a pair of men’s pants in San Diego and Tuolumne Counties.
• In March and April 2006, customers were overcharged $1.00 on Kellogg’s Special K cereal in Los Angeles and Santa Clara Counties.
• Also in March and April 2006, customers were overcharged $.46 on Kellogg’s Rice Krispies cereal in Madera, King and Ventura Counties.

In the settlement agreement, Wal-Mart agreed to implement a pricing accuracy program in California for at least four years. The program will include:

• A designated person (or group of people) who will receive and address customer complaints from Wal-Mart stores in California.

• An employee (or group of employees) in every Wal-Mart Store who will scan items on a weekly basis and confirm price accuracy.

• An automatic refund program. Whenever an employee becomes aware that a customer has been or is being charged a price higher than the lowest price currently listed, Wal-Mart will give the customer a $3.00 reduction on the item. If the item is less than $3.00, the customer will receive that item for free.

• A sign, in English and Spanish, will be posted at every check-out stand in every Wal-Mart Store clearly outlining the new store refund policy.

In settlement of the case, Wal-Mart has agreed to pay $1.4 million in restitution, civil penalties and reimbursement for investigative costs, and $50,000 to the State Consumer Protection Prosecution Trust Fund.

The case is People vs. Wal-Mart, Inc, San Diego Superior Court case number 37200800096757-CU-BT-CTL. A copy of the Complaint and Settlement Agreement are attached.

LOS ANGELES—In an ongoing crackdown on worker abuses at California’s two busiest ports, California Attorney General Edmund G. Brown Jr. today sued three trucking companies operating at the Ports of Long Beach and Los Angeles that deny their workers benefits and protections entitled to them under state workers’ compensation and disability laws.

“These companies take advantage of their workers by failing to provide them with state-mandated protections and benefits,” Attorney General Brown said. “Truck drivers at the ports work long hours under tough conditions. By unlawfully classifying workers as ‘independent contractors,’ these companies deny their employees important worker protections.”

Today’s three lawsuits follow two similar lawsuits filed in September and are part of the Attorney General’s ongoing crackdown on trucking companies operating at California’s ports that deliberately misclassify workers to gain an unfair competitive advantage. Moreno Trucking, owned by Noel A. Moreno and his wife Emma R. Moreno, Guasimal Trucking, and Edmund Jose Lira, are accused of employing cost-cutting schemes to avoid California taxes.

The three trucking companies misrepresent their workers as independent contractors to avoid paying state-mandated workers’ compensation and other disability benefits. Under their working conditions, the employees should have employee status and its legal protections and benefits. The companies control all aspects of the drivers’ work and own and maintain the trucks that the workers drive. Drivers are paid by the hour and often forced to work 60 hours or more a week.

Beginning in February 2008, the Attorney General authorized a task force to investigate trucking companies at Long Beach and Los Angeles Ports. The investigation uncovered numerous state labor law violations committed by several trucking companies operating at the ports.

Today’s lawsuits allege that the trucking companies named in the suits have an unfair advantage over their competitors in violation of California Business and Professions Code 17200 by depriving employees of benefits and protections entitled to them under California law. These companies are also cheating the State of California out of thousands of dollars in state payroll taxes.

The three complaints are attached.

LOS ANGELES –Attorney General Edmund G. Brown Jr., announced today that the State of California and several local agencies, including the Los Angeles Unified School District and Los Angeles County, won a refund of $160 million for “illegal and unjustified overcharges” that the Los Angeles Department of Water and Power charged during a 10 year period between 1997 and 2007.

“The Los Angeles Department of Water and Power had been imposing illegal and unjustified overcharges on their governmental customers for several years,” said Attorney General Brown. “The L.A. school district and the other governmental agencies desperately need every available dollar in these hard economic times.”

The agreement stems from a case filed in San Bernardino County in 2000, State of California et al. v. Los Angeles Department of Water and Power, et. al, in which the Los Angeles Department of Water and Power knowingly overcharged State and local governmental agencies for electricity.

According to state law, municipal power authorities can only charge governmental customers a percentage of what it took to build the power generator and the grid based on the amount of power the governmental customer consumed. For instance, if a governmental customer used 5% of the electricity generated by a power facility, then it should be charged, over a period of time, 5% of what it took to build that facility. The state alleged that the Los Angeles Department of Water illegally charged its governmental customers a percentage far in excess of what they actually used.

At trial, the court found that the Department of Water and Power overcharged the State and the local governmental agencies and buried the charges in its monthly bills dating back to 1997, in violation of California law and the state Constitution.

Since 1997, the Department overcharged local and county agencies, including the County of Los Angeles, the Los Angeles County Metropolitan Transportation Authority, the Los Angeles Unified School District and the Los Angeles Community College District. Several state agencies were also overcharged by the utility, including UCLA, Cal State Los Angeles, Cal State Northridge, Caltrans, the California Highway Patrol, the Department of Corrections, Department of Motor Vehicles, Employee Development Department, the State Teachers Retirement System, Department of Parks and Recreation and the Department of General Services.

The agreement includes a cash award to state agencies of more than $6 million, plus more than $1.7 million in electricity rate credits and $11.8 million to fund projects that will reduce electricity consumption in state buildings. The remainder of the $160 million settlement will go to local governmental agencies in Los Angeles. The money they receive will be used in part to fund projects that will reduce electricity consumption at their facilities.

The money from the agreement will be distributed to the agencies as follows:

• $25.3 million to the Los Angeles Unified School District.
• $11 million to the Los Angeles County Metropolitan Transit Authority.
• $12.4 million to Los Angeles County.
• $1.3 million to the Los Angeles Community College District.
• $6.1 million to the State of California.

In addition to the aforementioned cash award, the Department of Water and Power will also deposit the following amounts into accounts setup by the state and local agencies to fund projects that will reduce energy consumption.

• $28 million to the Los Angeles Unified School District.
• $11 million to the Los Angeles County Metropolitan Transit Authority.
• $13 million to Los Angeles County
• $4 million to the Los Angeles Community College District
• $11.8 million to the State of California

After the case was filed by a whistle-blower under California’s False Claims Act, the Attorney General intervened and pursued several claims against the utility. The False Claims Act authorizes the Attorney General to prosecute an entity for knowingly submitting fraudulent claims for state funds.

SACRAMENTO—California Attorney General Edmund G. Brown Jr. today announced a record $62 million multi-state settlement with Eli Lilly and Company for improperly marketing the antipsychotic drug Zyprexa for use beyond the drug’s Food and Drug Administration (FDA)-approved uses.

“Eli Lilly put profits ahead of patients when it marketed Zyprexa for a use that had not been properly tested or approved, in many cases, putting young people at risk for weight gain, hypoglycemia and even diabetes,” Attorney General Brown said.

The settlement is the largest ever multi-state consumer protection-based pharmaceutical settlement. California will receive $5.6 million, the largest share of the award.

In his original complaint, Attorney General Brown alleged that Eli Lilly engaged in unfair and deceptive practices when it marketed Zyprexa for off-label uses and failed to adequately disclose the drug’s potential side effects to healthcare providers. As a result of the settlement, Eli Lilly agreed to change its marketing strategies and to cease promotion of its “off-label” uses. Off-label uses are those not approved by the FDA when it approves the sale and use of a particular drug. Physicians are allowed to prescribe drugs for off-label uses, but federal law prohibits pharmaceutical manufacturers from marketing products for off-label uses.

Zyprexa is the brand name for the prescription drug olanzapine. In 1996, Zyprexa was first marketed for use in adults with schizophrenia and belongs to a class of drugs commonly referred to as “atypical antipsychotics,” which are traditionally used to treat schizophrenia. The FDA has approved Zyprexa for the treatment of acute mixed or manic episodes of bipolar I disorder and for maintenance treatment of bipolar disorder. Zyprexa carries serious side-effects, including weight gain, hyperglycemia and diabetes.

Beginning in 2001, Eli Lilly launched an aggressive marketing campaign called “Viva Zyprexa!” As part of the campaign, the company marketed Zyprexa for off-label uses including pediatric care, high-dosage treatment, treatment of symptoms rather than diagnosed conditions and treatment of elderly patients suffering from dementia.

Stipulations in the settlement agreement require Eli Lilly to:
• Refrain from making any false, misleading or deceptive claims regarding Zyprexa.
• Require its medical staff, rather than its marketing staff, to have ultimate responsibility for developing and approving content for all medical letters and references regarding Zyprexa.
• Require its medical staff to be responsible for the identification, selection, approval and dissemination of article reprints containing more than an incidental reference to off-label information regarding Zyprexa.
• Provide specific, accurate, objective and scientifically balanced responses to unsolicited requests for off-label information from a healthcare provider regarding Zyprexa.
• Contractually require continuing medical education providers to disclose Eli Lilly’s financial support of their programs and any financial relationship with faculty and speakers.
• Provide a list of healthcare provider promotional speakers and consultants who were paid more than $100 for promotional speaking and/or consulting by Eli Lilly.
• Only provide product samples of Zyprexa to healthcare providers whose clinical practice is consistent with the product’s current labeling.

Other states included in today’s settlement agreement include: Alabama, Arizona, Delaware, District of Columbia, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington and Wisconsin.

Attorney General Edmund G. Brown Jr. today announced a landmark, multi-state settlement with Countrywide Home Loans, Countrywide Financial Corporation and Full Spectrum Lending that is expected to provide up to $8.68 billion of home loan and foreclosure relief nationally, including $3.5 billion to California borrowers.

“With this settlement, homeowners will receive direct relief from the catastrophic damage caused by Countrywide,” said Attorney General Brown. “Countrywide’s lending practices turned the American dream into a nightmare for tens of thousands of families by putting them into loans they couldn’t understand and ultimately couldn’t afford.”

The Countrywide settlement will likely become the largest predatory lending settlement in history, dwarfing the nationwide $484 million settlement with Household Finance Corporation in 2002, under which California received approximately $91 million.

The settlement marks a swift resolution of the Attorney General’s June 30, 2008 lawsuit alleging that Countrywide, the nation’s largest mortgage lender prior to its July 2008 acquisition by Bank of America, deceived borrowers by misrepresenting loan terms, loan payment increases, and borrowers’ ability to afford loans.

In a nutshell, this settlement will enable eligible subprime and pay-option mortgage borrowers to avoid foreclosure by obtaining a modified and affordable loan. The loans covered by the settlement are among the riskiest and highest defaulting loans at the center of America’s foreclosure crisis. Assuming every eligible borrower and investor participates, this loan modification program will provide up to $3.5 billion to California borrowers as follows:

• Suspension of foreclosures for eligible borrowers with subprime and pay-option adjustable rate loans pending determination of borrower ability to afford loan modifications;

• Loan modifications valued at up to $3.4 billion worth of reduced interest payments and, for certain borrowers, reduction of their principal balances;

• Waiver of late fees of up to $33.6 million;

• Waiver of prepayment penalties of up to $25.6 million for borrowers who receive modifications, pay off, or refinance their loans;

• $27.9 million in payments to borrowers who are 120 or more days delinquent or whose homes have already been foreclosed; and

• Approximately $25.2 million in additional payments to borrowers who, in the future, cannot afford monthly payments under the loan modification program and lose their homes to foreclosure.

More specifically, the modification program covers subprime and pay-option adjustable-rate mortgage loans in which the borrower’s first payment was due between January 1, 2004 and December 31, 2007. The program will be available for loans in default that are secured by owner-occupied property and serviced by Countrywide Financial or one of its affiliates. In addition, the borrower’s loan balance must be 75% or more of the current value of the home, and the borrower must be able to afford adjusted monthly payments under the terms of the modification.

The terms of the modification will vary based on the type of loan, including:

• “Pay-option ARM loans,” in which loan balances increase each month if a borrower makes only a minimum payment. Borrowers may be eligible to have their principal reduced to 95% of their home’s current value and may also qualify for an interest-rate reduction or conversion to an interest-only payment.

• Subprime adjustable-rate loans, such as 2/28 loans. Borrowers may have their interest rate reduced to the initial rate. If the borrower still cannot afford it, the borrower may be eligible for further interest-rate reductions to as low as 3.5%.

• Subprime fixed loans. Borrowers may be eligible for interest-rate reductions.

• “Hope for Homeowners Program.” If they qualify, some borrowers may be placed in loans made through this federal program.

• Alt-A and prime loans. Borrowers who are in default, but have Alt-A and prime loans, may also be considered for modifications, depending on circumstances.

In addition to the settlement’s direct relief to borrowers, Bank of America, who negotiated the settlement with the Attorney General following its acquisition of Countrywide, has agreed that it will suspend offering, under its own name or through Countrywide, subprime loans or loans that can negatively amortize. The bank has significantly restricted the circumstances under which it will make so-called “no doc” or low-documentation loans, in which borrowers do not fully document their ability to repay their mortgages.

In addition to California, attorneys general in 10 states, including Arizona, Connecticut, Florida, Illinois, Iowa, Michigan, North Carolina, Ohio, Texas and Washington, are participating in the settlement. Attorney General Brown’s office, along with the Office of the Illinois Attorney General, led the negotiations for the states. The Countrywide parties to the settlement include parent Countrywide Financial Corporation, Countrywide Home Loans and Full Spectrum Lending.

Attorney General Brown added, “Unlike last week’s congressional bailout, this loan-modification program provides real relief for borrowers at risk of losing their homes. Tragically, California and the other states have had to step in because federal authorities shamelessly failed to even minimally regulate mortgage lending.”

The settlement does not include Angelo Mozilo, the former Chairman and Chief Executive of Countrywide Financial Corporation or David Sambol, formerly the President of Countrywide Home Loans and the President and Chief Operating Officer of Countrywide Financial Corporation. Brown will continue to prosecute his case against Mozilo and Sambol.

The signed stipulated judgment and injunction is attached.

LOS ANGELES--California Attorney General Edmund G. Brown Jr. today announced a crackdown on rampant prescription drug fraud in California, including the top fifty abusers who average more than 100 doctor and pharmacy visits to collect massive quantities of addictive drugs like Valium, Vicodin, and Oxycontin.

“These prescription drug addicts are abusing the system, draining time and money from hundreds of doctors and pharmacies who are there to help real sick people, not con artists,” said Attorney General Brown. “On my order, California Department of Justice special agents launched a statewide search for the most aggressive prescription drug addicts. We want to end these dangerous cycles of fraud and abuse.”

Launched in June this year, the new crackdown has already led to the arrest of dozens of suspects, including Frankie Greer, 53, who visited 183 doctors and 47 pharmacies to feed a prescription drug habit that included some of the most dangerous painkillers in lethal combinations. In a one-year period, Greer sought out multiple doctors at hospital emergency rooms to prescribe her over 4,830 hydrocodone tablets, 2,210 oxycodone tablets, 156 Oxycotin, along with a variety of additional addictive painkillers.

Greer is not alone. The National Survey on Drug Use and Health estimates that 20 to 30% of the state’s drug abusers primarily use prescription drugs. In addition, the National Institute on Drug Abuse has estimated that 48 million Americans have used prescription drugs for non-medical reasons. A 2005 survey by the Drug Abuse Warning Network estimates the non-medical use of pharmaceuticals accounted for more than 500,000 emergency room visits in California, an enormous drain on the state’s healthcare system.

In addition to costing the state millions each year, prescription drug abuse can have serious public safety consequences, as many of the top abusers hold down regular jobs including truck drivers, transit operators and medical practitioners. The Attorney General has been working in cooperation with the Troy and Alana Pack Foundation, founded by Bob Pack, whose 7 and 10-year old children were killed by a driver who was under the influence of prescription drugs obtained from multiple doctors.

This initiative is part of the Attorney General’s comprehensive plan to address prescription drug abuse in the state and make it easier for doctors to keep track of prescription drug records. Earlier this year, Attorney General Brown unveiled a plan to provide doctors and pharmacies with real-time Internet access to patient prescription drug histories. Under Brown’s proposal, health professionals would have computer access to the drug histories of patients, replacing the current outdated system that required mailing or faxing written requests for information. Each year, more than 60,000 such requests are made to the California Department of Justice.

The state’s database, known as the Controlled Substance Utilization Review and Evaluation System, contains 86 million entries for prescription drugs dispensed in California, giving healthcare professionals the technology they need to fight the prescription drug abuse currently burdening California’s healthcare system.

“Doctors and insurance companies should be on the alert,” added Attorney General Brown. “We are aggressively pursuing the top prescription drug abusers, and we’re also making it easier for doctors to verify health history information provided by new patients. We encourage insurance companies to develop a similar system for protecting themselves against prescription drug fraud.”

OAKLAND – California Attorney General Edmund G. Brown Jr. yesterday sued five baby furniture manufacturers for failing to warn consumers about the dangerous levels of formaldehyde gas emitted by their products, including cribs and changing tables.

“We’re suing these companies because parents deserve to know if there’s a dangerous chemical in products for children,” Attorney General Brown said. “Over the past two years, we’ve brought other actions to ensure the safety of children’s products, such as lead in toys and phthalates in baby bibs. Increasingly, the wood and other materials in consumer products are produced globally, and the lack of tough safeguards and strict enforcement can lead to dangerous levels of exposure.”

Passed by voters in 1986, Proposition 65 requires manufacturers to provide “clear and reasonable warnings” of chemicals in their products that are known to cause cancer, birth defects or other reproductive harm. The state’s lawsuit alleges that Child Craft, Delta Enterprise Corp., Stork Craft, South Shore Industries and Jardine Enterprises manufactured baby furniture, such as cribs and changing tables, that emit formaldehyde—a chemical known to cause cancer—and failed to provide any warning about this risk.

In addition to being a carcinogen, formaldehyde has been shown to contribute to respiratory problems like asthma. The levels of formaldehyde gas emitted from the baby furniture, when combined with other potential sources of formaldehyde in the home, are high enough to cause respiratory irritation to children sleeping in the cribs.

The Environmental California Research and Policy Center, an organization that evaluates products for carcinogens, tested the companies’ baby furniture. Based on that testing and on his own test results, the Attorney General calculated that the furniture exposes children to formaldehyde gas at levels well above the Proposition 65 limit of 40 micrograms per day.

In addition to violating Proposition 65 standards for emission levels, the baby products exceed the recommendations for formaldehyde emission set by the Office of Environmental Health Hazard Assessment and the Department of Public Health. Formaldehyde is present in plywood, particle board (generally in the glues), fiberglass, paint and insulation. Concentrations can reach especially dangerous levels in rooms that are not well-ventilated.

Businesses that violate Proposition 65 are subject to civil penalties of up to $2,500 per day for each violation. In addition, courts may order businesses to stop manufacturing products that are in violation of the standards. Today’s lawsuit seeks to remedy past violations and to prompt manufacturers and retailers to prevent baby furniture containing formaldehyde from being sold without warning consumers about the risks of exposure.

The state is also suing the companies for violating the Unfair Competition Law, which prevents businesses from undertaking any action that gives them an advantage over other businesses. In this case, by not posting warnings about carcinogens on their products like other companies must do under the law, the five companies unfairly profited. The state is seeking $2,500 for each violation.

Proposition 65 is enforced through lawsuits brought by the attorney general, district attorneys and some city attorneys. Lawsuits may also be brought by private parties after notifying the attorney general of the alleged violation. Last November, Attorney General Brown and Los Angeles City Attorney Rockard Delgadillo sued twenty toy companies for manufacturing or selling toys with unlawful quantities of lead.

Although Proposition 65 only requires companies to post hazard warnings, many businesses choose to eliminate the toxic chemicals altogether. For more information about Prop 65, please visit http://ag.ca.gov/prop65/index.php.

The Attorney General’s lawsuit is attached.

SACRAMENTO-California Attorney General Edmund G. Brown Jr. today announced a $7.5million settlement with financial-services firm Edward Jones & Co. for the company's failure to inform its customers of its revenue-sharing agreements with various mutual-fund companies. In these revenue-sharing agreements, Edward Jones obtained payments from mutual fund companies in exchange for promoting their mutual funds to its clients.

"Since we brought suit in 2004, Edward Jones has agreed to change its disclosure policies,' Attorney General Brown said. 'That settlement requires Edward Jones to notify each of its customers of any payments it receives from mutual funds that Edward Jones recommends. This will make for better-informed customer decisions.'

In 2004, Edward Jones made an agreement with federal, state and self-regulatory authorities to pay $75 million in refunds and civil penalties to its customers. Edward Jones also agreed to disclose all its revenue-sharing payments on its public website and to hire independent consultants to review and make recommendations regarding the company's disclosures.

The California Attorney General filed his own lawsuit against the company to enforce the state's consumer protection laws. In settlement of this case, Edward Jones will pay $7.5 million in civil penalties, fees and costs.

The settlement agreement is attached.