Environment

OAKLAND – Attorney General Edmund G. Brown Jr. today announced a settlement with Sottera, one of the country’s largest electronic cigarette producers, to prevent the company from targeting minors and claiming that electronic cigarettes are a safe alternative to smoking.

"Electronic cigarette companies have targeted minors with fruit-flavored products and misleading claims that their products are safe,' Brown said. 'This settlement will stop Sottera from marketing these dangerous and addictive products to kids.”

Brown and Sottera reached the settlement without litigation based on Sottera’s willingness to adopt measures that address Brown’s concerns about the dangers of its electronic cigarettes. In January this year, Brown filed suit against the nation’s other leading e-cigarette retailer, Smoking Everywhere. That lawsuit is proceeding in Alameda County Superior Court.

Electronic cigarettes, or e-cigarettes, are battery-operated devices with nicotine cartridges designed to look and feel like conventional cigarettes. Instead of actual smoke, e-cigarettes produce a vapor from the nicotine cartridge that is inhaled by the user. Sottera and other electronic cigarette makers have claimed in advertisements and other marketing materials that the e-cigarettes have no carcinogens, no tar, no second-hand smoke, and are therefore safe.

However, the U.S. Food and Drug Administration (FDA) has determined that electronic cigarettes contain a variety of dangerous chemicals, including nicotine, carcinogens such as nitrosamines and, in at least one case, diethylene glycol, commonly known as antifreeze.

The products are often marketed with advertisements, and flavors like strawberry, chocolate, mint, banana and cookies-and-cream, that are designed to appeal to a youthful target audience.

Today’s settlement prohibits Sottera from marketing to minors and from making false or misleading claims about electronic cigarettes. Specifically, the company has agreed that it will not:

• Sell electronic cigarettes to minors. Its website will be age-restricted, and a customer will need to provide a government ID before making a purchase. Retail products will be behind a counter. Any advertising will note the age restriction.
• Sell flavored electronic cigarette cartridges, such as strawberry, mint or bubblegum, that could appeal to minors.
• Advertise its product as a smoking cessation device unless the FDA approves it as such.
• Sell cartridges that contain vitamins unless the company obtains competent and reliable scientific evidence to support an implied health claim.
• Claim that the product is safer than cigarettes, contains no tobacco, no tar, no carcinogens or no second-hand smoke unless there is competent reliable scientific evidence to support the claims.

Sottera also agreed to adopt and implement quality control standards for its products to preclude the presence of harmful substances. The company will regularly be subject to independent audits.

Sottera will also provide a Proposition 65 warning that its products contain nicotine, a chemical known by the State of California to cause birth defects or reproductive harm. The warning will include additional information about risks associated with nicotine, including that it is addictive and toxic if swallowed. The warning will appear on product packaging, Sottera’s website and at retail sites.

Sottera will also pay $85,000 in penalties and fees.

A copy of the consent judgment is attached.

OAKLAND – Continuing his fight to reduce children’s exposure to lead, Attorney General Edmund G. Brown Jr. today announced a settlement that requires two of the largest makers and installers of artificial turf to eliminate nearly all lead from their products.

“Because schools, public parks and daycare centers use artificial turf, it’s critical that we minimize the amount of lead it contains,” Brown said. “Today’s agreement will get the lead out of artificial turf in playgrounds and ball fields around the state.”

The settlement requires Georgia-based Beaulieu, LLC, the country’s largest supplier of artificial turf to retailers, and Field Turf, USA, the nation’s largest maker and installer of artificial turf fields, to reformulate their products to reduce lead levels to negligible amounts.

The agreement follows a landmark settlement last year with AstroTurf, LLC. Collectively, the three companies control most of the artificial turf market, and their settlements with Brown’s office establish the nation’s first enforceable standards applicable to lead in artificial turf.

Brown brought the case in 2008 against these companies for excessive lead levels after testing by the Center for Environmental Health found high concentrations of lead in their products. Brown’s office confirmed these findings in independent tests.

Today’s settlement requires Beaulieu and FieldTurf to change their products so that they contain less than 50 parts per million lead. Lab results found some artificial turf products with more than 5,000 parts per million, which is more than 10 times state and federal guidelines for content in children’s products. Lead is added to the products to keep colors vibrant.

There is no safe exposure to lead. In lengthy or high exposures, it is toxic to many organs and tissues including the heart, bones, intestines and kidneys. Since excessive exposure can interfere with development of the nervous system, it is particularly dangerous in children and can cause permanent learning and behavior disorders.

Lead in artificial turf usually enters the human body hand-to-mouth. Children playing on it get lead onto their hands and stick them into their mouths. Hand washing is a good way of reducing exposure.

In addition to reformulating their products, Beaulieu agreed to pay for wipe-testing of products in California daycare facilities, schools and playgrounds that were purchased after October 2004. FieldTurf took action in 2003 to reduce lead in its turf products. This settlement requires it to replace turf fields installed in California before November 2003 at a discount if they test high for lead, and also to reduce the lead content of its new products.

The Los Angeles City Attorney and Solano County District Attorney joined Brown in the case against the three companies. AstroTurf paid $170,000 in penalties, grants and fees, and agreed to improve its products. Beaulieu will pay $285,000 and FieldTurf will pay $212,500.

In the past year, Brown has initiated several enforcement actions against manufacturers and retailers for lead in products designed for children.

In June, Brown demanded that Rainbow and 5-7-9 stores remove from their shelves jewelry with parts containing as much as 97% lead. Earlier this year, Target removed teddy bears from its stores after Brown notified the company that lead was found in the bears. In November 2009, Brown warned several retailers, including Walmart, Sears and Walgreens, to remove from their store shelves several products designed for children found to contain excessive levels of lead.

Copies of the artificial turf settlements are attached.

SAN DIEGO – Attorney General Edmund G. Brown Jr. today filed a lawsuit against mortgage giants Fannie Mae and Freddie Mac for blocking an innovative California clean energy program that was designed to create tens of thousands of jobs, promote energy independence and lower utility bills.

“As the nation struggles through the worst recession in modern times, California is taking action in federal court to stop the regulatory strangulation of the state’s grass-roots program that is spreading across the country,” said Brown.

The PACE (Property Assessed Clean Energy) program stimulates the economy and promotes energy independence by assisting homeowners and small businesses in securing funding to make their properties more energy efficient. Property owners repay the costs of energy improvements through assessments spread out over a decade or more. Under California law, these costs are classified as tax assessments.

Ignoring California law, Fannie Mae and Freddie Mac have effectively shut down the program by wrongly characterizing PACE assessments as loans that must be subordinate to their own mortgages. The Federal Housing Finance Agency affirmed Fannie and Freddie’s decision on July 6 over the objections of Attorney General Brown and congressional leaders.

For California, the stakes are high. Almost half the counties in California have developed PACE programs or plan to start one. The mortgage giants’ actions have stopped these programs dead in their tracks, destroying job creation, stifling energy independence and hampering California’s economic recovery. Clean energy companies have had to lay off workers, and California risks losing more than $100 million in federal stimulus money.

“Fannie Mae and Freddie Mac received enormous federal bailouts,” Brown said, “but now they’re throwing up impermeable barriers to bank lending that creates jobs, stimulates the economy and boosts clean energy.”

One example of the effects of this: San Diego planned to launch a PACE program this summer but it has now been suspended indefinitely, leaving more than 100 people trained in energy retrofits without jobs.

“I believe that the PACE program is critical to stimulating our local and statewide economy,” said San Diego Mayor Jerry Sanders. “I’m glad to see this lawsuit filed so that this novel program can continue.”

In his lawsuit, Brown asks the court to apply California law, require Fannie Mae and Freddie Mac to recognize PACE assessments for what they are, and allow PACE to move California’s economy forward.

The lawsuit is attached to this release. A letter from Attorney General Brown to President Obama is also attached. For a copy of the Attorney General’s letter sent to federal housing regulators in May, please see http://ag.ca.gov/newsalerts/release.php?id=1920&

OAKLAND — Attorney General Edmund G. Brown Jr. today issued a consumer alert warning of a “serious health hazard” after he demanded that retail stores Rainbow and 5-7-9 remove from their shelves jewelry with parts containing as much as 97% lead, a potentially fatal health hazard, especially for young children.

“This jewelry represents a serious health hazard,” Brown said, “and it is especially dangerous if a child gets a hold of it and puts it in his or her mouth. Some of these bangles are almost solid lead. The jewelry must be banished from retailers’ shelves once and for all.”

Some pieces of the lead-infested jewelry were labeled “KIDS” and one piece was marked “lead free” although its clasp contained more than 80% lead.

There is no safe level of lead exposure. In 2006, a four-year-old Minnesota boy died after he swallowed a pendant from jewelry that was more than 90% lead, and it became stuck in his intestinal tract.

In a letter to the stores’ corporate parent, Rainbow Apparel, Brown said, “Some of the jewelry had components that would be highly toxic, and potentially lethal, if ingested, and all of it contains sufficient lead to contribute to long-term health risks.”

California law bans the sale of jewelry that fails to comply with strict limits on the amount of lead it contains. The law was the result of a 2006 settlement of a lawsuit brought by the Attorney General and two environmental groups, Center of Environmental Health and As You Sow.

In that settlement, Rainbow and other retailers agreed to stop selling jewelry containing more than traces of lead. But four times in a little more than a year, the Attorney General has sent notices of violation to Rainbow for breaking the law and the terms of the settlement by selling jewelry made of lead.

Using a fund created in the 2006 settlement, the Center for Environmental Health monitors the stores. In May, it purchased 16 items containing lead from Rainbow stores in Northern California. Fifteen of the pieces contained more than 50% lead. One was 97% lead, and one labeled “KIDS” and “lead free” had a clasp that contained 81% lead. It’s all inexpensive costume jewelry made in China.

Brown’s letter to Rainbow Apparel follows:

June 24, 2010

RE: NOTICE OF VIOLATION to Rainbow Apparel of America, Inc.

This is a Notice of Violation to Rainbow Apparel of America, Inc., Rainbow Apparel Distribution Center Corp., A.I.J.J Enterprises, Inc., and The New 5-7-9 and Beyond, Inc. (collectively, “Rainbow Parties”). I am writing to you about jewelry purchased at Rainbow and 5-7-9 stores in northern California that exceeds the lead standards established in a consent judgment that applies to the Rainbow Parties, and that violates California Health and Safety Code section 25214.2(b)(3). This letter constitutes a Notice of Violation pursuant to Section 4.2 of the consent judgment. A copy of the consent judgment is available on our web site, at http://ag.ca.gov/prop65/pdfs/amendedConsent.pdf.

Using a grant from the Jewelry Testing Fund created under the consent judgment, the Center for Environmental Health purchased sixteen different pieces of jewelry with excess lead at your stores. Most of the pieces contained plated metal components with more than 80 percent lead, and two of the pieces had more than 95 percent lead. The consent judgment prohibits plated metal components with more than six percent lead. (§ 3.2.2.1.) One of the violations is for a plastic faux leather bracelet with 955 parts per million lead, which is nearly five times above the standard of 200 ppm. (§ 3.2.2.3.) Similarly troubling is the fact that one of the necklaces is labeled “lead free” even though its pendant contains 80 percent lead, and several of the pieces are marked “KIDS” below the bar code.

Enclosed with this letter is a table that lists the reference number for each piece of jewelry, a description of the jewelry, the date and location where the jewelry was purchased, the component with lead, and the lead level. Photographs of each piece of jewelry and the test results also are enclosed. We will provide additional documentation from the lab upon request.

This is the fourth notice of violation for illegal jewelry we have sent the Rainbow Parties in little over a year. Previously we sent notices of violation on May 22, 2009, October 5, 2009, and January 29, 2010. Each time the company has responded that it shares the Attorney General’s concern regarding the sale of jewelry with excess lead, but each time more jewelry is discovered that violates the consent judgment and California’s ban on lead-containing jewelry. We understand that the Rainbow Parties have instructed their vendors to provide compliant jewelry, and after each notice of violation it has addressed the violation with the vendors involved. But clearly that is not enough. Some of the jewelry at issue here has components that would be highly toxic, and potentially lethal, if ingested, and all of it contains sufficient lead to contribute to long-term health risks. Moreover, labeling jewelry as “lead free” when it contains a component with 80 percent lead raises additional concerns about false and misleading advertising. The company must do more to stop selling jewelry that is potentially dangerous and that violates the law.

We therefore request, in addition to responding to this notice under section 4.2.3 of the consent judgment, that you and your client meet with our office to discuss what steps the company will take to ensure that it stops selling jewelry with excess lead. Please contact me to schedule a meeting. Further, in your written response to the notice of violation, we ask that you provide specific data about the amount of the each kind of jewelry offered for sale, sold, and removed from shelves in California stores.

Sincerely,

EDMUND G. BROWN JR.
Attorney General

Photos of some of the pieces of jewelry found to be in violation are attached.

OAKLAND — Attorney General Edmund G. Brown Jr. announced today that he has asked to intervene in a lawsuit in order to protect newly adopted motor vehicle emission standards that would save nearly two billion barrels of oil and reduce greenhouse gas emissions by approximately one billion tons.

Brown filed a motion to intervene in the U.S. Court of Appeals in support of the federal Environmental Protection Agency (EPA) in a suit brought by energy companies and other industries challenging the EPA’s authority to enforce the tough emission standards beginning in 2012.

“The thousands of barrels of oil spilling in the Gulf of Mexico each day are a graphic reminder that we need to cut oil consumption in America,” said Brown. “These regulations would do that, as well as vastly reducing pollution from tailpipe emissions.”

The EPA’s new vehicle emissions standards are the first significant reduction in federal fuel consumption standards in more than 30 years. Over the lifetime of the vehicles sold in the first five years, the national program is projected to reduce U.S. greenhouse gas emissions by 2.1 billion tons and save 1.8 billion barrels of oil. Consumers can expect the new standards to save them between $130 and $180 a year in fuel costs.

EPA estimates the lifetime savings under the program for 2012 through 2016 model-year vehicles at $240 billion. The benefits include fuel savings, carbon dioxide reductions, improved air quality, and enhanced energy security.

California has long set the pace in enacting tough pollution standards, and it has been active in attempting to protect its right to impose those standards and in encouraging other states and the federal government to adopt similar standards.

In Massachusetts v. EPA, 549 U.S. 497 (2007), the Supreme Court ruled that the greenhouse gases that cause global warming are air pollutants under the Clean Air Act and that EPA’s evaluation of whether those emissions from motor vehicles endanger public health or welfare had to be based solely on science. Brown’s office took a lead role in that case.

EPA has now made that endangerment finding. As the Supreme Court noted, such a finding triggers a mandatory duty on EPA to adopt motor vehicle regulations. EPA adopted those regulations on April 1 in a joint rulemaking with the National Highway Traffic Safety Administration. Those regulations set greenhouse gas emission standards and fuel economy standards that will achieve a fleet-wide fuel economy for new cars and trucks of roughly 35 miles per gallon in model year 2016.

These motor vehicle regulations are the rough equivalent of California’s regulations. As part of a nationwide deal announced at the White House in May 2009, California agreed that compliance with national standards of equivalent stringency would also constitute compliance with California’s established regulations, and the automobile manufacturing industry agreed not to challenge those standards (through model year 2016.) If these EPA vehicle standards were successfully challenged, that nationwide deal would fall apart.

Brown’s filing today is in a lawsuit challenging the motor vehicle rule brought by industrial concerns plus politicians and other opponents of EPA action on global warming. Plaintiffs include Massey Energy Company, Rosebud Mining Company, National Cattlemen’s Beef Association and the Industrial Minerals Association of North America. The challenge was not joined by the automobile manufacturing industry, the only party directly affected by the EPA regulations.

Brown filed the motion on behalf of himself, Governor Schwarzenegger and the state Air Resources Board, plus 12 other states – Delaware, Illinois, Iowa, Maine, Maryland, Massachusetts, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington – as well as the Pennsylvania Department of Environmental Protection and the City of New York.

A copy of the Motion to Intervene is attached.

OAKLAND — Attorney General Edmund G. Brown Jr. today demanded that federal authorities keep their hands off a popular California program that allows property owners to install solar panels and other energy efficiency improvements and repay the cost later on their property taxes.

The voluntary program known as PACE (Property Assessed Clean Energy) has the ability to assist thousands of California homeowners and businesses from Berkeley to Palm Desert in securing billions of dollars to make their structures greener, reduce energy waste and shrink their utility bills.

“This is an enormously popular and powerful program that helps to drive the state’s green economy and creates thousands of jobs,” Brown said.

Half the counties in the state either have such a program or are in the process of starting one. Sonoma County alone has already financed more than 800 solar and other projects worth more than $30 million.

PACE is designed to encourage property owners to make energy efficiency improvements to their buildings, such as installing solar panels or better insulation, through a 20-year tax assessment that is paid back through their property taxes. If the property is sold before the bill is fully paid, the new owner takes over the remaining payments as part of the property’s annual tax bill.

Federal officials have sent mixed signals about federal support for the program, which was launched in California. In a letter today, Brown insists that the Federal Housing Finance Agency must pledge it will not interfere with California’s successful operation of PACE.

“California’s program creates reliable markets for new green technologies,” Brown said. “It has put Californians back to work installing and maintaining energy efficient equipment up and down the state.”

Brown’s letter follows:

Edward DeMarco
Acting Director
Federal Housing Finance Agency
1700 G Street, N.W.
Washington, DC 20552-0003

Dear Acting Director DeMarco:

Property Assessed Clean Energy (PACE) programs authorize local governments to finance energy efficiency and renewable energy improvements to the benefit of homeowners and small businesses. In California, PACE financing is not accomplished through loans in the traditional sense, but rather through local governments’ long-standing and well-recognized powers to assess and tax. PACE programs in California can assist thousands of individual participants statewide, help to drive the State’s green economy, and create thousands of jobs.

On May 5, 2010, Fannie Mae and Freddie Mac issued short, somewhat cryptic lender and industry advice letters concerning PACE programs. While the advice letters do not expressly mention California PACE programs, they have nonetheless caused confusion and concern among California PACE stakeholders. By this letter, we request that the Federal Housing Finance Authority (FHFA) immediately confirm in writing that the advice letters do not affect PACE in California.

As you are likely aware, the California Attorney General’s Office at the end of last year began a discussion with FHFA staff about PACE in California. During these discussions, your staff assured this Office that we would continue to work together on issues related to PACE. Relying in part on this assurance, California has invested substantial resources in PACE programs, consistent with the White House’s “Recovery Through Retrofit” policy document and with the express support of the Department of Energy. A substantial portion of the approximately $300 million in Energy Efficiency and Block Grant funding, and a substantial portion of the over $220 million in additional American Recovery and Reinvestment Act funds administered by the California Energy Commission through its State Energy Program, have been dedicated to PACE programs. Moreover, California recently passed legislation creating a $50 million state reserve fund that will allow participating local governments to obtain financing for PACE on more favorable terms.

The disruption caused by Fannie Mae and Freddie Mac’s recent actions may have serious financial implications for participating local governments and the thousands of homeowners and small businesses currently participating in these programs in California. To take just one example, Sonoma County, through its PACE program, already has financed over 800 energy improvement projects. But the repercussions will be wider still. PACE programs in California create reliable markets for new technologies in energy efficiency, renewable energy, and water efficiency. They thus support green manufacturing jobs and thousands of additional jobs associated with installation and maintenance of energy efficiency and renewable energy projects. Now is not the time to create unnecessary uncertainty in these important emerging businesses and industries.

Based on our recent conversation with your General Counsel, Alfred Pollard, we understand that the May 5, 2010, letters were not intended in any way to signal a change in the position of FHFA, Fannie Mae or Freddie Mac regarding PACE in California. Accordingly, we request that FHFA immediately confirm in writing that participants in California PACE programs are not in violation of Fannie Mae/Freddie Mac Uniform Security Instruments prohibiting loans that have a senior lien status to a mortgage. We are open to discussing with you what form that confirmation should take, including, but not limited to, withdrawal of the May 5, 2010, letters.

We would prefer not to have to pursue some form of declaratory relief to resolve the confusion, but, because of the importance of the issue to California, we certainly reserve that as an option if a clear and unequivocal response is not forthcoming.

Once this immediately pressing matter is resolved, we look forward to discussing with you what longer-term solutions may be warranted to foster the continued responsible development of PACE programs in California.

Sincerely,

EDMUND G. BROWN JR.
Attorney General

SACRAMENTO – Attorney General Edmund G. Brown Jr. announced today that special agents with the Department of Justice, working closely with the Department of Resources Recycling and Recovery (CalRecycle), have shut down three beverage-container recycling fraud rings in which rogue entrepreneurs trucked millions of cans and bottles from Arizona and Nevada to illegally claim California Redemption Value (CRV) refunds.

In total, the fraud rings robbed the state of more than $3.5 million used to operate the state’s recycling program as well as to promote recycling throughout California. Thirty-one individuals have been arrested in connection with these fraudulent activities.

“These bands of thieves have been caught red-handed running tons of cans and bottles from across the state’s border and fraudulently collecting money through the California Redemption Value program,” Attorney General Brown said. “Defrauding the state’s recycling program is not a way to make easy money. We are looking for you and you will be caught.”

Conviction of redemption fraud and the importation of recyclable materials is a felony if the redemption amount is over $400.

In one case originating in Nevada, a ring imported to California 1.6 million pounds of cans and bottles – enough, if not compacted, to fill 464 18-wheelers.

In another case, cans were not only hauled from the Phoenix area to Moreno Valley for the CRV deposit, they were filled with sand to add weight for an increased deposit return.

In a third case, agents looking for one recycling fraud suspect along Interstate 8 observed yet another truck carrying thousands of cans. That observation spurred a two-month investigation, resulting in the arrest of the owner of a recycling center and three other suspects.

California is one of 11 states with a bottle and can redemption program. Among its neighbors, Oregon has a program, but Nevada and Arizona do not. When a person purchases a bottle or can in California, the CRV is paid at the checkout stand. When the container is redeemed at one of the state’s 2,000 recycling facilities, the CRV is returned to the consumer. For beverage containers weighing less than 24 ounces, the CRV is 5 cents; for containers 24 ounces and greater, the CRV is 10 cents. For aluminum, the CRV equals $1.57 per pound.

When an out-of-state can or bottle is fraudulently redeemed in California, the program loses money because money is paid out for a container for which the CRV was never paid. This robs the CRV program, which relies on unclaimed CRV to administer the program and support a variety of activities that promote recycling across the state.

"Recycling fraud is a crime against California consumers and we take it very seriously,' said CalRecycle Director Margo Reid Brown. 'Our inspectors work closely with state and local law enforcement to root out and prosecute criminals who steal the money used to repay Californians and support our state's recycling programs. These arrests are evidence that recycling fraud will not be tolerated.'

California’s program began in 1987, following legislation passed in 1986. Today, about 80 percent of bottles and 84 percent of aluminum cans purchased in the state are returned for recycling.

“Californians are doing a great job recycling their bottles and cans,” added Attorney General Brown. “We don’t want people intent on committing recycling fraud to harm a program that is working well.”

To combat recycling fraud, CalRecycle staff visits major recycling processors to inspect loads of beverage containers delivered for CRV reimbursement. In 2009, the department removed 25 recycling centers from the state program for submitting fraudulent claims. CalRecycle refers recycling fraud cases to the Department of Justice for criminal investigation and prosecution.

Here’s how the three recycling fraud rings were broken up in April by the Department of Justice:

1. Department of Justice special agents observed Mariano Dejesus-Solis collecting and storing recyclable materials at his Las Vegas residence, as well as at several storage facilities in North Las Vegas. Twice a week, Dejesus-Solis and his accomplices drove 16-foot and 24-foot rental trucks filled with approximately 5,000 pounds of aluminum cans and bottles to a storage facility in Montclair (San Bernardino County) where the loads were parceled out to accomplices who would take them to recycling centers. The group defrauded the CRV program an estimated $2.5 million by illegally importing more than 1.6 million pounds of cans and bottles. On April 8, 15 suspects were arrested in Riverside and San Bernardino counties, with assistance from local law enforcement.

2. In the Phoenix area, a group collected used beverage containers from consumers and purchased some from recycling centers at a reduced rate and then transported them to a residence in Moreno Valley (Riverside County). Daily, members of this group took multiple smaller loads to the Perris Valley Recycling Center (Riverside County) to redeem the CRV refund, defrauding the CRV fund an estimated $1 million. On April 20, a search warrant resulted in the seizure of 50,000 pounds of bottles and cans, with an estimated CRV value of $100,000. Many cans contained sand to add weight. Twelve people were arrested.

3. On Interstate 8 near Winterhaven, Calif. and Yuma, Ariz. agents with the Imperial County and San Diego Major Crimes Teams were looking for a CRV fraud suspect when they encountered another suspected CRV fraud ring -- two men transporting a large quantity of aluminum cans in a truck. This observation launched a two-month investigation, with assistance from CalRecycle, which resulted in the April 23 arrests of four people, including Michael Barshak, the owner and operator of ACE Recycler, a recycling center in San Diego. Agents have initially estimated that the ring’s operation, which spanned four months, transported 40,000 pounds of cans with an approximate value of $135,000.

These investigations were conducted by the Attorney General’s Division of Law Enforcement/Bureau of Investigation and Intelligence (DLE-BII) Major Crimes Team and CalRecycle, with assistance from many other law enforcement agencies including the offices of the San Bernardino and Riverside County Sheriffs, the Riverside County District Attorney’s Office, the California Highway Patrol, Immigration and Customs Enforcement, the United States Marshals Service and other Dept. of Justice enforcement teams.

To learn more about CalRecycle and the California Beverage Container Recycling Program, visit http://www.calrecycle.ca.gov/. CalRecycle contact: Mark Oldfield (916) 319-9942 or mark.oldfield@CalRecycle.ca.gov.

Photos and a list of arrestees are attached.

SAN DIEGO — Attorney General Edmund G. Brown Jr. today announced settlements that will bring $400 million in refunds for California consumers who were victimized by market manipulation and exorbitant prices during the energy crisis of 2000-2001.

The two-part agreement with San Diego-based Sempra Energy will provide reimbursement of $270 million to California utility customers who each month pay off debt from the utility crisis on their gas and electric bills. Sempra will also pay $130 million to consumers to settle separate claims by the state Public Utilities Commission and the Department of Water Resources.

“The settlements,” Brown said, “will put hundreds of millions of dollars back into the pockets of California energy consumers who suffered blackouts and great economic harm during the energy crisis.”

Including the prior settlement of a class-action suit, Sempra has now paid more than $700 million for the benefit of state utility customers.

During the energy crisis, Enron, Sempra and other energy companies created phony energy shortages, blackouts and record high energy prices. As a result, California’s two largest utilities, PG&E and Southern California Edison, became insolvent, forcing the state to spend billions of dollars for huge amounts of emergency power to keep the lights on.

In legal documents, Sempra was accused of “Enron-style gaming” of the energy markets and “a pervasive pattern of market manipulation and abuse.” It was accused of entering “Enron-style partnerships” that had a destructive impact on the market, driving prices higher and reducing energy availability and reliability. It was accused of a variety of other exotic schemes called “False Import, Paper Trading and Circular Scheduling” to short-circuit the proper functioning of energy markets.

Customers of PG&E, Southern California Edison and San Diego Gas and Electric (a subsidiary of Sempra) continue to pay for the energy crisis in a line item on their utility bills labeled “DWR bond charge.” Funds received in the settlements will go toward reducing those costs to ratepayers.

For the past nine years, the Attorney General has investigated, litigated and negotiated with Sempra and other energy sellers whose misconduct caused the energy crisis.

The Sempra settlement is the latest of 39 settlements hammered out by the Attorney General, in co-operation with the Public Utilities Commission, Department of Water Resources, PG&E, and Southern California Edison, that will provide more than $3 billion in ratepayer relief. The Attorney General continues to press California’s claims for compensation to ratepayers for overpriced energy sold to the state.

Oakland—Attorney General Edmund G. Brown Jr. today announced a court judgment against Pro’s Choice Beauty Care, Inc., a New York-based hair care product distributor, blocking the company from selling “pollution-causing” products that also exacerbate respiratory illnesses.

The judgment also requires the retailers Rite Aid, Long’s Drug Stores, CVS Pharmacy, Walgreen Company, Ralphs Grocery Company, Kmart and Target to remove these products at all California stores.

“Pro’s Choice sold thousands of containers of pollution-causing hair products to consumers who unknowingly exposed themselves and the environment to harmful pollutants,” Brown said. “Today’s agreement will remove products from store shelves that pollute our air and exacerbate respiratory diseases such as asthma.”

Pro’s Choice, the largest distributor of professional hair care and nail products in the country, buys U.S. brand-name products overseas and re-imports the products to sell them below suggested retail value. The products are then redistributed to pharmacies, grocery chains, and wholesale clubs throughout the country.

In late 2006, the California Air Resources Board (CARB) and several district attorneys notified Brown’s office that many products supplied by Pro’s Choice contained air contaminants well above the state’s limits on volatile organic compounds (VOCs.) Despite numerous tests and repeated violations and requests for compliance, Pro’s Choice continued to sell these products to retailers.

Brown’s office filed a lawsuit against the company in 2008. The company was charged with violating California’s Health and Safety Code 42400 et seq., which protects air quality and prevents companies from intentionally discharging pollutants into the air.

VOCs significantly contribute to the formation of smog. Under California law, depending on whether the product is a hair spray, mousse, gel or styling product, each must meet California’s stringent standards for VOC content. According to the American Lung Association’s 2009 State of the Air Report, California has five of the top-ten worst smog areas and the highest rate of asthma in the country.

Some of the non-compliant products Pro’s Choice resold to retailers include:

• Big Sexy Hair Dense at a Target in Modesto, CA;
• Redken Fabricate at a RiteAid in Modesto, CA;
• Sebastian Threads Microber Cream at a K-Mart in Lodi, CA;
• Sebastian Shaper Plus at Ralphs in Sacramento, CA;
• John Paul Mitchell Freeze and Shine Super Spray Firm Hold at Longs in Stockton, CA; and,
• Short Sexy Hair Hard Up Gel at Rite Aid in Torrance, CA.

Today’s judgment requires Pro’s Choice to:
• Stop selling or distributing products that violate the limits of VOCs;
• Pull all of the products found in violation;
• Identify and sort products that are non-compliant before distributing them for sale in California;
• Obtain written verification from the manufacturer that the product is compliant or test representative samples from the batch; and,
• Pay $1.25 million in penalties and costs.

A copy of the Stipulation for Entry of Judgment and Permanent Injunction is attached.

Los Angeles—Attorney General Edmund G. Brown Jr. today announced that his office has reached an agreement with Toyota Motor Sales USA, Inc. to provide California Toyota owners with at-home pickup and vehicle return and cost-free alternative transportation while their recalled vehicles are being repaired.

“This agreement goes a long way towards easing the burden caused by Toyota’s massive recall,” Brown said. “It will now be much easier for Toyota owners to get to work and take their kids to school while critical safety repairs are made on their cars.”

Under the terms of today’s agreement, Toyota will provide owners of recalled vehicles the following services:
• Pick-up and return of vehicles by the dealership;
• Transportation to the dealership and/or to the owner’s place of work;
• Alternative transportation, such as a rental car, loaner vehicle or taxi reimbursement for a reasonable period that the customer is unable or unwilling to use his or her car; and
• Expedited scheduling for repair services.

These services will be provided by Toyota through the dealers at no cost to either the owners or the dealer.

The following Toyota vehicle recalls are covered by today’s agreement:
• September 29, 2009 for floormat entrapment;
• January 21, 2010 for sticking accelerator pedals;
• February 8, 2010 for anti-lock brake system issues; and
• February 12, 2010 for drive-shaft failure.

The following vehicles are involved in the recent Toyota and Lexus vehicle recalls: 2005-2010 Avalon, 2007-2010 Camry, 2009-2010 Corolla, 2007-2010 ES 350, 2008-2010 Highlander, 2006-2010 IS 250 and IS350, 2009-2010 Matrix, 2004-2009 Prius, 2010 Prius, 2009-2010 RAV4, 2008-2010 Sequoia, 2005-2010 Tacoma, 2007-2010 Tundra, 2009-2010 VENZA, and 2010 HS 250h.

More information on the specific vehicles affected by the recalls can be found at www.nhtsa.dot.gov and www.toyota.com/recall.

Californians are encouraged to contact their local Toyota and Lexus dealers if they believe they are eligible for these accommodations. Consumers can also contact Toyota’s customer service center at 1-800-331-4331 or Lexus at 1-800-255-3987.

This agreement will remain in place until all Toyota vehicles subject to the recall have been repaired. If additional safety recalls arise, an extension of this agreement or other appropriate provisions will be pursued.

Toyota Motor Sales USA, Inc. is based in Torrance, CA.

A copy of Toyota's letter to Brown is attached.