Legislation

LOS ANGELES – California Attorney General Edmund G. Brown Jr. today sued PacifiStaff, a Southern California corporation that trained construction companies to violate workers’ compensation laws by the use of “fake corporations with phantom executives.” Today’s lawsuit comes on the heels of an underground economy lawsuit filed last week against Brinas Corp., a Los Angeles drywall company.

Commenting on the lawsuit, Attorney General Brown said, “PacifiStaff developed a sophisticated scheme whereby companies would fire their workers and rehire them in fake corporations with phantom executives. These illegal maneuvers enabled construction companies to avoid state laws which require all employers to provide workers’ compensation insurance.”

The California Department of Justice opened an investigation into PacifiStaff after receiving reports that a growing number of Southern California construction companies were starting to drop workers’ compensation for their construction workforce. These companies improperly labeled their employees as shareholding corporate executives to take advantage of Labor Code Section 3351 which does not require workers’ compensation insurance for such executives.

During the investigation, undercover agents attended PacifiStaff sales meetings where representatives pitched an illegal scheme to help construction companies avoid paying workers’ compensation to their employees. On print advertising, Internet promotions and during these sales pitches, the company falsely stated that their scheme was approved by a government agency.

Undercover investigators found that construction companies were directed, under advice from PacifiStaff, to fire their construction workers and rehire them as corporate officers of a sham corporation. These construction workers were then given executive titles and a single share of worthless stock in the new corporation. This sham corporation then sent the new fake executives back to construction sites—without the required workers’ compensation insurance.

Investigations revealed that PacifiStaff brushed off questions about what might happen if a construction worker were actually injured on the job. Investigators also found that staff representatives engaged in the unauthorized practice of law by offering legal advice without a license.

State law requires employers to provide workers with the no-fault protection of workers' compensation insurance. Workers' compensation provides benefits such as medical care for work-related injuries, disability payments while injured, and death benefits for the families of employees. Companies who evade workers’ compensation costs gain an unfair advantage over competitors who protect their workers by following the law.

According to the California Department of Industrial Relations, there were nearly 49,000 nonfatal injuries and illnesses among California construction workers in 2006. 30,000 of these cases resulted in missed days at work, transfers, or restrictions of duty. In 2005, there were 102 construction industry fatalities due to transportation accidents, falls, or exposure to harmful substances. There were approximately 935,000 Californians employed in the construction industry in 2006.

“Construction work can be extremely dangerous and those workers injured on the job deserve and depend upon the benefits afforded by California law,” Attorney General Brown said. “Today’s lawsuit sends a strong message that employers who try to short-circuit the system will be prosecuted to the full extent of the law,” Brown added.

PacifiStaff, using the trade name “Workforce Solutions,” has billed itself as the “Antidote to Workers’ Compensation.” PacifiStaff continues to market its services to its prospective clients through trade shows, print advertising and over the Internet at: www.theworkforcesolutions.com. PacifiStaff also conducts direct sales meetings with prospective client employers. PacifiStaff maintains an office at 2125 E. Katella Avenue, Suite 330, in Anaheim, California.

The lawsuit against PacifiStaff was brought under Business & Professions Code, Section 17200, which expressly prohibits unlawful or unfair business practices.

The state’s lawsuit is attached.

LOS ANGELES – Citing the “threat of global climate disruption,” California Attorney General Edmund G. Brown Jr. today joined three national environmental organizations in petitioning the United States Environmental Protection Agency to adopt strict greenhouse gas regulations for ocean-going vessels. The petition asks the EPA to make specific findings that ships significantly contribute to global warming.

At a news conference at the attorney general’s headquarters in Los Angeles, Brown said: “The U.S. EPA has the authority to curb greenhouse gas emissions and our petition today asks the agency to exercise that authority without delay.”

Ocean-going vessels, in total, emit more CO2 emissions than any nation in the world except the U.S., Russia, China, Japan, India and Germany. Ominously, these emissions are projected to increase nearly 75% during the next 20 years.

“International law guarantees a right of ‘innocent passage’ for all ocean-going vessels, but this right does not include polluting the air or water near our coastal cities,” Brown said. “If the U.S. is to do its part in reducing the threat of global climate disruption, then EPA must limit the global warming emissions from ships that enter the ports of the United States,” Brown added.

Under the Clean Air Act, California has the authority to file a petition asking the EPA to establish CO2 emissions standards. In the petition filed today, Brown asks the EPA to:

• Make a finding that carbon dioxide emissions from ocean-going vessels contribute to air pollution and endanger human health and welfare.
• Set standards for reducing such carbon dioxide emissions.

Brown said that under the reasoning of the United States Supreme Court’s holding in Massachusetts v. EPA, the Environmental Protection Agency has the authority to adopt standards for greenhouse gas emissions from vessels that enter U.S. territorial waters.

The United Nations International Maritime Organization (IMO) has authority under international treaties to establish pollution standards for vessels but to date has failed to adopt controls on greenhouse gas emissions. At a recent meeting of the IMO Marine Environment Protection Committee, it was agreed to inventory greenhouse gases by 2009, but no commitment was made to regulate such emissions.

The state’s petition to EPA is attached.

For more information, please visit http://www.oceana.org/climate/solutions/oceana/no-more-free-ride/

SACRAMENTO - Charging that the auto industry is working to “sabotage California's landmark greenhouse gas law,” California Attorney General Edmund G. Brown Jr. today attacked a proposed energy bill amendment and called upon the House to reject any effort to block state authority to regulate greenhouse gas emissions.

Attorney General Brown joined 13 states and the City of New York in sending a letter to House Speaker Nancy Pelosi, voicing strong opposition to “troublesome language that may be used to eliminate existing Clean Air Act authority to address global warming, including California's landmark greenhouse gas emissions standards.”

In a statement explaining why he opposes the Hill-Terry Amendment, commonly referred to as H.R. 2927, Brown said: “California could be crippled by this brazen attempt to pre-empt our state emissions standards. The auto industry is working to sabotage California’s landmark greenhouse gas law.”

Under the Clean Air Act, California can adopt standards stricter than federal rules by requesting a waiver from EPA. Congress expressly allowed California to impose stricter environmental regulations in recognition of the state's “compelling and extraordinary conditions,” including topography, climate, high number and concentration of vehicles and its pioneering role in vehicle emissions regulation.

In the letter, the Attorney General points out that “while providing only modest increases in federal fuel economy standards, the bill includes language that has the potential to disrupt the statutory framework for controlling carbon dioxide emissions that was endorsed by the U.S. Supreme Court.”

Brown supports the Markey-Platts proposed amendment which sets aggressive but technologically feasible fuel economy standards that promote energy independence and advanced automobile technologies. Brown said that unless the Hill-Terry Amendment explicitly defends the right of California and other states to regulate greenhouse gas emissions, the Speaker should block its consideration and the House should vote to defeat it.

A vote on amendments to the bill is expected this Friday. The letter from Attorney General Brown to the Honorable Nancy Pelosi is attached.

# # #

SACRAMENTO—In response to Republican demands that major provisions of California’s environmental law be gutted as the price for approving this year’s state budget, California Attorney General Edmund G. Brown Jr. issued the following statement:

“It is an outrage that a small group of Republican Senators would gut California’s Environmental Quality Act as the price of their voting—a month late—on this year’s budget. Their proposal would profoundly undercut the positive efforts of cities and counties to reduce greenhouse gases and fight global warming.

It is the constitutional responsibility of the Attorney General to enforce all the laws of California, including our ground breaking environmental laws. California has a proud history as being the unquestioned leader in the fight to control global warming. We should not let a few Republican state Senators—all of whom opposed the Global Warming Solutions Act--turn back the clock with this misguided and retrograde maneuver. It represents global warming denial at its worst.”

# # #

California Attorney General Edmund G. Brown Jr. today called on Rep. Rick Boucher, D-Virginia, to scrap his assault on the Clean Air Act and drop his proposed legislation to repeal current U.S. EPA authority to curb greenhouse gases.

Brown said that Boucher’s proposal would be “a death blow to California’s pioneering efforts to restrict tailpipe greenhouse gas emissions and a blatant assault on the Environmental Protection Agency’s ability to fight global warming.”

The proposed bill is the subject of a hearing scheduled for Thursday June 7, 2007, before the House Energy & Air Quality Subcommittee. Rep. Boucher, who chairs the subcommittee, proposed the legislation to remove the U.S. Environmental Protection Agency’s (EPA) authority to regulate greenhouse gas emissions from motor vehicles and bar California from setting its own global warming standards.

Brown joined 14 state attorneys general in voicing strong opposition, noting that the proposed bill would amend the Clean Air Act in “fundamentally short-sighted ways.” Under the Clean Air Act, California can adopt standards stricter than federal rules by requesting a waiver from EPA.

The letter is attached.

WHAT:

Tomorrow, 9:00 a.m. Eastern, California Attorney General Edmund G. Brown Jr. will urge the U. S. Environmental Protection Agency (EPA) to allow vehicle regulations passed by California and 11 states which would be the most comprehensive effort to combat global warming in United States history.

Brown will also brief the Senate Committee on Environment and Public Works following his EPA testimony.

Brown, California’s top law enforcement official, is supported by Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington, all of which have adopted the regulations and are ready to quit stalling on global warming.

WHEN/WHERE:

EPA Testimony: 9:00 a.m. Eastern, Tuesday, May 22, EPA Potomac Yard Center, 2777 Crystal Drive, Arlington, VA.

News Conference: 12:00 p.m. Eastern, Tuesday, May 22, Hyatt Regency Crystal City, 2799 Jefferson Davis Highway, Arlington VA. (Prince William Room)

Senate Testimony: 2:30 p.m., Eastern, Tuesday, May 22, 456 Dirksen Senate Office Building, Room 406, Washington DC.

Note to Editors:

On May 21 and May 22, Mr. Brown will be in Washington, D.C. Please e-mail Press Secretary David Kravets for additional press availability: AGPressOffice@doj.ca.gov

Updates forthcoming.

# # #

The California Supreme Court on Wednesday upheld California’s $3 billion stem cell agency, which was approved by voters under Proposition 71 in 2004. California Attorney General Edmund G. Brown Jr.’s office defended the measure’s legal challenge. Fifty-nine percent of voters approved the groundbreaking measure in 2004.

Wednesday’s decision frees $3 billion in funding for stem cell research that was stalled by opponents’ frivolous legal challenges. California voters adopted the measure in the wake of the Bush administration’s failure to support research that potentially help people with Parkinson’s disease, diabetes, spinal cord injuries and other serious conditions.

“I pledged to vigorously support stem cell research and today is a victory for California’s voters and medical science,” Brown said. “This decision allows California to take on the groundbreaking scientific research that the Bush administration ignored.”

The KFC Corp. agreed Tuesday to comply with a 1986 voter-approved initiative requiring companies that expose consumers to harmful substances provide a 'clear and reasonable warning.'

The company agreed to warn California customers that its fried or baked potatoes contain acrylamide, a chemical known to cause cancer. Acrylamide, a byproduct created by the reaction of chemicals in food and high heat, is found in French fries and potato chips at high levels. For example, a serving of fries or potato chips has approximately 82 times more acrylamide than is allowed in drinking water under U.S. EPA standards.

Proposition 65, the initiative demanding the exposure warnings, was approved by 63 percent of California voters.

The KFC Corp., in settling a lawsuit with California Attorney General Edmund G. Brown Jr., agreed to supply consumers with acrylamide warnings to comport with Proposition 65, the Safe Drinking Water and Toxic Enforcement Act. The company, without admitting wrongdoing, also agreed to pay $208,000 in civil penalties and $133,000 to fund Proposition 65 enforcement actions.

A hearing before Los Angeles County Superior Court Judge Wendell Mortimer Jr. is scheduled May 29, when the California Department of Justice and the KFC Corp. will request the court's approval.

The settlement was the first as part of an ongoing Proposition 65 enforcement action against major food and beverage producers. They include: Frito-Lay Inc., Pepsico Inc., H.J. Heinz Co., Kettle Foods Inc., Procter & Gamble Distributing Co., Procter & Gamble Manufacturing Co., Wendy's International Inc., McDonald's Corp., and Burger King Corp.

The settlement agreement is attached.