California Code of Regulations › Title 11 - Law › Division 4 - Proposition 65 Private Enforcement › Chapter 3 - Settlement Guidelines › Section 3204 - Additional Settlement Payments

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Additional
				Settlement Payments should not be included in any Settlement that is not subject to
				judicial approval and ongoing judicial oversight.
(b) The Attorney General will consider settling
				parties' adherence to the following guidelines in determining whether to object to
				any Additional Settlement Payments in a proposed in-court settlement:
(1) The total amount of Additional Settlement
				Payment(s) should not exceed the amount of any noncontingent civil penalty to be
				deposited pursuant to Health and Safety Code section
				25249.12(c)(1).
				A "noncontingent" civil penalty is the civil penalty that must be paid pursuant to a
				settlement, regardless of future events or actions of the defendant.
(2) The activities funded by Additional Settlement
				Payments should have a clear and substantial nexus to the violation alleged,
i.e.,
the activities should address the same public harm as that
				allegedly caused by the defendant(s) in the particular case. For the purposes of
				this paragraph, a "clear and substantial nexus" requires that the funded activity be
				designed to have a direct and primary effect within the State of
				California.
(3) The recipient should be
				an entity that is accountable,
i.e.,
is able to demonstrate how the
				funds will be spent and can assure that the funds are being spent only for the
				proper, designated purposes described in the settlement. A statement supporting the
				recipient entity's accountability should be included in the settlement or in its
				supporting papers.
(4) The settlement
				should describe with specificity the activities to be funded and the amount of
				funding for each activity. It is not sufficient simply to state broadly that the
				Additional Settlement Payments will be used for future Proposition 65 enforcement,
				or to reduce exposure to toxic chemicals.
(5) The settlement should require the plaintiff to
				obtain and maintain adequate records to document that the funds paid as an
				Additional Settlement Payment, whether to the plaintiff or to a third party, are
				spent on the activities described in the settlement. The settlement should require
				the plaintiff to provide to the Attorney General, within thirty days of any request,
				copies of all documentation demonstrating how such funds have been spent.
(6) To enable the Attorney General and the Court
				to evaluate settlements that provide for Additional Settlement Payments, and to
				promote transparency in how such payments will be spent, any settlements providing
				for Additional Settlement Payments, or their supporting papers, should provide the
				following information:
(A) The identity of the
				entity receiving the payments, including whether it is a tax-exempt organization
				operating under section
				501(c)(3) of the
				Internal Revenue Code.
(B) A disclosure
				of any economic interest that a party to the settlement or its counsel, or a spouse
				or dependent child thereof (collectively, "Disclosers"), has in any individual or
				entity, besides itself, that is designated in the Settlement to receive all or part
				of any Additional Settlement Payment ("Recipient Individual or Entity"). For
				purposes of this subparagraph, a Discloser has an economic interest in a Recipient
				Individual or Entity if (i) the Discloser has received income in the prior 12 months
				or expects to receive income in the next 12 months from the Recipient Individual or
				Entity, or (ii) a Discloser is a director, officer, partner, trustee, employee, or
				holds any position of management of or for the Recipient Individual or Entity, or
				(iii) a Discloser has received or has been promised a gift or gifts amounting to a
				total of at least $460 in the prior 12 months from the Recipient Individual or
				Entity. If no Discloser has an economic interest in any Recipient Individual or
				Entity, then the settlement or the supporting papers shall expressly state that no
				party to the settlement or counsel of record, or spouse or dependent child thereof,
				has an economic interest in any individual or entity, besides itself, that is
				designated in the Settlement to receive all or part of an Additional Settlement
				Payment.
(C) The mechanism by which the
				plaintiff will track any expenditures of Additional Settlement Payments to ensure
				that the money is spent consistent with the requirements of the
				settlement.
(D) If the settlement
				provides that the recipient entity will in turn make grants of funds to other
				entities to carry out the funded activities, the method of selection of the grantee.
				This may be set forth in the settlement or in a separate public document referenced
				in the settlement. The grantee selection procedure may vary depending on the facts
				of the particular case, but should give significant weight to a prospective
				grantee's ability to perform the funded activities in an accountable
				manner.