Judgment Date:
05/17/2017
Settlement reported to AG:
Case Name:
Environmental Research Center, Inc. v. Skoop, LLC
Court Name:
Alameda County Superior Court
Plaintiff:
Environmental Research Center, Inc.
Injunctive Relief:
Pursuant to Section 3 of the Consent Judgment: 3. INJUNCTIVE RELIEF, REFORMULATION, TESTING AND WARNINGS 3.1 Any Covered Products that are manufactured six (6) months after the Effective Date (the “Compliance Date”) that SKOOP therafter distributes into the the State of California, offers for sale to a third party for retail sale in California, or directly sells in the State of California, shall either (1) contain no more than 0.5 micrograms of lead per day (“Daily Lead Exposure Level”) and/or more than 4.10 micrograms of cadmium per day (“Daily Cadmium Exposure Level”) as calculated pursuant to Section 3.1.2, excluding allowances pursuant to Section 3.3, and as validated by the quality control methodology described in Section 3.4; or (2) meet the warning requirements under section 3.2. 3.1.1 As used in this Consent Judgment, the term “Distributing into the State of California” shall mean to directly ship a Covered Product into California for sale in California or to sell a Covered Product to a distributor that SKOOP knows or has reason to know will sell the Covered Product in California. 3.1.2 For purposes of this Consent Judgment, the “Daily Lead Exposure Level” and “Daily Cadmium Exposure Level” shall be measured in micrograms, and shall be calculated using the following formula: micrograms of lead or cadmium per gram of product minus the amounts of lead listed in Table 3.1.2 below, multiplied by grams of product per serving of the product (using the largest serving size appearing on the product label), multiplied by servings of the product per day (using the largest number of servings in a recommended dosage appearing on the product label), which equals micrograms of lead or cadmium exposure per day. TABLE 3.1.2 INGREDIENT NATURALLY OCCURRING AMOUNT OF LEAD Calcium (Elemental) 0.8 micrograms/gram Ferrous Fumarate 0.4 micrograms/gram Zinc Oxide 8.0 micrograms/gram Magnesium Oxide 0.4 micrograms/gram Magnesium Carbonate 0.332 micrograms/gram Magnesium Hydroxide 0.4 micrograms/gram Zinc Gluconate 0.8 micrograms/gram Potassium Chloride 1.1 micrograms/gram Cocoa-powder 1.0 microgram/gram If, at any time after the Compliance Date, ERC tests a Covered Product and the test results indicate that the Daily Lead Exposure Level is greater than 0.5 micrograms per day, SKOOP agrees to confidentially supply to ERC within 30 days a list of ingredients, including the percentage of each ingredient (“Ingredient List”), of that particular covered product so that ERC may be able to calculate the daily exposure based on the allowances in the table above. In the event that a dispute arises with respect to compliance with the terms of this Consent Judgment as to any contribution from naturally occurring lead levels under the Section, the Parties shall meet and confer as set forth in Section 15. 3.2 Clear and Reasonable Warnings If SKOOP is required to provide a warning pursuant to Section 3.1, the following warning must be utilized (“Warning”): WARNING: This product contains chemicals known to the State of California to cause [cancer and] birth defects or other reproductive harm. SKOOP shall use the phrase “cancer and” in the Warning only if the “Daily Lead Exposure Level” is greater than 15 micrograms of lead as determined pursuant to the quality control methodology set forth in Section 3.4. The Warning shall be securely affixed to or printed upon the container or label of each Covered Product. In addition, for any Covered Product sold over the internet, the Warning shall appear on the checkout page when a California delivery address is indicated for any purchase of any Covered Product. An asterisk or other identifying method must be utilized to identify which products on the checkout page are subject to the Warning. The Warning shall be at least the same size as the largest of any other health or safety warnings also appearing on its website, at the point of display, or on the label or container of SKOOP’s product packaging and the word “WARNING” shall be in all capital letters and in bold print. No statements intended to or likely to have the effect of diminishing the impact of or contradicting the Warning shall accompany it. SKOOP shall display the above Warning with such conspicuousness, as compared with other words, statements, design of the label, container, or on its website, as applicable, to render the Warning likely to be read and understood by an ordinary individual under customary conditions of purchase or use of the product. 3.3 Reformulated Covered Products A Reformulated Covered Product is one for which the “Daily Lead Exposure Level” is no greater than 0.5 micrograms of lead per day after subtracting the lead deemed naturally occurring for purposes of the Consent Judgment as set forth in Section 3.1.2 and/or “Daily Cadmium Exposure Level” is no more than 4.10 micrograms of cadmium per day as determined by the quality control methodology described in Section 3.4. 3.4 Testing and Quality Control Methodology 3.4.1 Beginning within one year of the Effective Date Date, SKOOP shall arrange for lead and/or cadmium testing of the Covered Products at least once a year for a minimum of three consecutive years by arranging for testing of three randomly selected samples of each of the Covered Products, in the form intended for sale to the end-user, which SKOOP intends to sell or is manufacturing for sale in California, directly selling to a consumer in California or “Distributing into the State of California.” The testing requirement does not apply to any of the Covered Products for which SKOOP have provided the Warning specified in Section 3.2. If tests conducted pursuant to this Section demonstrate that no Warning is required for a Covered Product during each of three consecutive years, then the testing requirements of this Section will no longer be required as to that Covered Product. SKOOP shall retain all test results and documentation for a period of five years from the date of each test. 3.4.2 For purposes of measuring the “Daily Lead Exposure Level” and/or “Daily Cadmium Exposure Level,” the highest lead and/or cadmium detection result of the three (3) randomly selected samples of the Covered Products will be controlling. 3.4.3 All testing pursuant to this Consent Judgment shall be performed using a laboratory method that complies with the performance and quality control factors appropriate for the method used, including limit of detection, qualification, accuracy, and precision that meets the following criteria: Inductively Coupled Plasma-Mass Spectrometry (“ICP-MS”) achieving a limit of quantification of less than or equal to 0.010 mg/kg or any other testing method subsequently agreed to in writing by the Parties and approved by the Court through entry of a modified consent judgment. 3.4.4 All testing pursuant to this Consent Judgment shall be performed by an independent third party laboratory certified by the California Environmental Laboratory Accreditation Program or an independent third-party laboratory that is registered with the United States Food & Drug Administration. 3.4.5 Nothing in this Consent Judgment shall limit SKOOP’s ability to conduct, or require that others conduct, additional testing of the Covered Products, including the raw materials used in their manufacture. 3.4.6 Beginning on the Compliance Date and continuing for a period of three years, upon demonstration by ERC of test results showing a “Daily Lead Exposure Level” of more than 0.5 micrograms of lead per day and/or “Daily Cadmium Exposure Level” of more than 4.10 micrograms of cadmium per day for a product that SKOOP has not provided the warning specified in Section 3.2, SKOOP shall deliver lab reports obtained pursuant to Section 3.4 to ERC within thirty (30) days of ERC’s written request.
*Non-Contingent Civil Penalty:
$ 25,366.00
Attorney(s) Fees and Costs:
$ 25,610.00
Payment in Lieu of Penalty:
$ 19,024.00 (Pursuant to Section 4 of the Consent Judgment: 4. SETTLEMENT PAYMENT 4.1 In full satisfaction of all potential civil penalties, additional settlement payments, attorney’s fees, and costs, SKOOP shall make a total payment of $70,000.00 (“Total Settlement Amount”) according to the following payment schedule: • Payment 1 -- $11,666.66 within 10 days of the Effective Date (“Due Date”) • Payment 2 -- $11,666.66 with 40 days of the Effective Date • Payment 3 -- $11,666.66 within 70 days of the Effective Date • Payment 4 – $11,666.66 within 100 days of the Effective Date • Payment 5 – $11,666.66 within 130 days of the Effective Date • Payment 6 – 11,666.67 within 160 days of the Effective Date 4.2 . SKOOP shall make this payment by wire transfer to ERC’s escrow account, for which ERC will give SKOOP the necessary account information. The Total Settlement Amount shall be apportioned as follows: 4.3 $25,365.53 shall be considered a civil penalty pursuant to California Health and Safety Code section 25249.7(b)(1). ERC shall remit 75% ($19,024.15) of the civil penalty to the Office of Environmental Health Hazard Assessment (“OEHHA”) for deposit in the Safe Drinking Water and Toxic Enforcement Fund in accordance with California Health and Safety Code section 25249.12(c). ERC will retain the remaining 25% ($6,341.38) of the civil penalty. 4.4 $1,687.41 shall be distributed to ERC as reimbursement to ERC for reasonable costs incurred in bringing this action. 4.5 $19,024.12 shall be distributed to ERC as an Additional Settlement Payment (“ASP”), pursuant to California Code of Regulations, title 11, sections 3203, subdivision (d) and 3204. ERC will utilize the ASP for activities that address the same public harm as allegedly caused by Defendant in this matter. These activities are detailed below and support ERC’s overarching goal of reducing and/or eliminating hazardous and toxic chemicals in dietary supplement products in California. ERC’s activities have had, and will continue to have, a direct and primary effect within the State of California because California consumers will be benefitted by the reduction and/or elimination of exposure to lead and/or cadmium in dietary supplements and/or by providing clear and reasonable warnings to California consumers prior to ingestion of the products. Based on a review of past years’ actual budgets, ERC is providing the following list of activities ERC engages in to protect California consumers through Proposition 65 citizen enforcement, along with a breakdown of how ASP funds will be utilized to facilitate those activities: (1) ENFORCEMENT (65-80%): obtaining, shipping, analyzing, and testing dietary supplement products that may contain lead [and/or cadmium] [and/or arsenic] and are sold to California consumers. This work includes continued monitoring and enforcement of past consent judgments and settlements to ensure companies are in compliance with their obligations thereunder, with a specific focus on those judgments and settlements concerning lead and/or cadmium. This work also includes investigation of new companies that ERC does not obtain any recovery through settlement or judgment; (2) VOLUNTARY COMPLIANCE PROGRAM (10-20%): maintaining ERC’s Voluntary Compliance Program by acquiring products from companies, developing and maintaining a case file, testing products from these companies, providing the test results and supporting documentation to the companies, and offering guidance in warning or implementing a self-testing program for lead and/or cadmium in dietary supplement products; and (3) “GOT LEAD” PROGRAM (up to 5%): maintaining ERC’s “Got Lead?” Program which reduces the numbers of contaminated products that reach California consumers by providing access to free testing for lead in dietary supplement products (Products submitted to the program are screened for ingredients which are suspected to be contaminated, and then may be purchased by ERC, catalogued, sent to a qualified laboratory for testing, and the results shared with the consumer that submitted the product). ERC shall be fully accountable in that it will maintain adequate records to document and will be able to demonstrate how the ASP funds will be spent and can assure that the funds are being spent only for the proper, designated purposes described in this Consent Judgment. ERC shall provide the Attorney General, within thirty days of any request, copies of documentation demonstrating how such funds have been spent. 4.6 $6,580.00 shall be distributed to William F. Wraith as reimbursement of ERC’s attorney’s fees, while $17,342.94 shall be distributed to ERC for its in-house legal fees. Except as explicitly provided herein, each Party shall bear its own fees and costs. 4.6 In the event that SKOOP fails to remit the Total Settlement Payment owed under Section 4 of this Consent Judgment on or before the Due Date, SKOOP shall be deemed to be in material breach of its obligations under this Consent Judgment. ERC shall provide written notice of the delinquency to SKOOP via electronic mail. If SKOOP fails to deliver the Total Settlement Payment within five (5) days from the written notice, the Total Settlement Payment shall accrue interest at the statutory post-judgment interest rate provided in the California Code of Civil Procedure section 685.010. Additionally, SKOOP agrees to pay ERC’s reasonable attorney’s fees and costs for any efforts to collect the payment due under this Consent Judgment.)
Total Payments:
$ 70,000.00
Is Judgment Pursuant to Settlement?
Address:
24422 Avenida de la Carlota, Suite 400
City, State, Zip:
Laguna Hills, CA 92653
Phone Number:
(949) 452-1234