Prop 65 Litigaton--Res Judicata

Sears Prevails in Arbitration

In June 1999, Michael DiPirro settled with Century Manufacturing over claims that Century's welding equipment exposed users to Prop 65 chemicals.  The settlement stated that it released all of Century's "distributors and retailers," and Sears contended that it included Craftsman welding equipment (Sears' private label products) manufactured by Century.  DiPirro disagreed, claiming that Century had never disclosed the existence of the Craftsman products, and Sears was excluded from the settlement as it held itself out as the manufacturer.

In an October 5, 2000 binding arbitration, Sears argued that the Century settlement was res judicata, barring DiPirro's claims, and also argued that it was a third party beneficiary of the original settlement agreement.  The arbitrator agreed with Sears, holding that the Century settlement released Sears from any liability related to the Craftsman welding equipment manufactured by Century.

Grecian Formula Settlement Bars Subsequent Action

On February 26, 1999, the Second Appellate District, Division Three, held that a settlement with one private enforcer over Prop 65 violations can bar subsequent actions. In American International Industries v. Superior Court, the court was faced with the question of whether a settlement between the Center for Environmental Health and the defendant over lead acetate in Grecian Formula barred a subsequent enforcement action by plaintiffs, which included class action allegations.

The court noted that the terms of the prior settlement included reformulation, alteration of warnings, and payment of civil penalties, restitution, and attorney's fees, and had been approved by the Attorney General's office. The court found that the consent judgment was a final judgment deserving of res judicata, that there was privity of interest between the current plaintiffs, CEH and the Attorney General, and that the issues were largely identical.

The court held that claims arising under the Consumers Legal Remedies Act, fraud, concealment, and products liability were not barred by the prior judgment. The court did hold that the CLRA and fraud claims were barred because they sought to indirectly enforce the Federal Food Drug and Cosmetic Act, and "the FDA is far better equipped than the superior court to evaluate the scientific evidence on lead acetate."

Following the initial publication of the opinion, the plaintiffs moved for reconsideration in the Court of Appeal, which was granted.   Following briefing, the court, on June 16, 1999, reissued its opinion, largely agreeing with its previous decision.

Creating even more confusion (in light of the opinion in EWW v. Cummins, below), the Supreme Court recently ordered the opinion depublished, meaning that it is not citeable as precedent in other cases.

Diesel Case Not Barred by Prior Action, at Least on Summary Judgment . . .

On September 21, 1999, Division Two of the Second District Court of Appeal issued its unpublished opinion in Environmental World Watch v. Cummins Engine.   The Los Angeles Superior Court had sustained a demurrer to claims against diesel equipment manufacturers based on the settlement reached between the same defendants and Mateel Environmental Justice Foundation in 1994.  The Court of Appeal reversed the order sustaining the demurrer, finding that res judicata did not apply.

The court raised two main issues which it believed distinguished the Mateel and EWW actions.  First, it held that the Mateel action had focused on "operators of diesel equipment and those working near the equipment," while the EWW action was directed to "anyone in the surrounding environment or anyone who could be affected by contaminated sources of water or air."  The court believed that the cases invoked two different "primary rights," and that Mateel was therefore not in privity with EWW.

Second, the Court believed that the defendants might have a no significant risk defense in the EWW litigation which was not present in the Mateel action, since it would require different proof (different levels of exposure for environmental as opposed to occupational).

The court concluded that res judicata was inappropriate as a defense at the demurrer stage, but left open the possibility of its use "in future proceedings."

. . . But Barred at Trial?

On November 18, 2001 a Los Angeles Superior Court judge entered judgment in favor of the defendants following trial. The judgment was based on a finding that the Mateel settlement did in fact bar the EWW case as res judicata. Read more.

Cigar Cases Barred

A consolidated action brought by the cities of San Jose and Los Angeles against cigar manufacturers have been held to be barred by a 1988 settlement between the manufacturers and the Attorney General.  For more on the tobacco litigation, follow this link.

Portions of New Nail Polish Litigation Barred by Prior Action

A new enforcement action filed against nail polish manufacturers who were sued in 1993 has been held to be barred, in part, by the prior actions.  As Yow Sow sued Nailtiques in 1993 over toluene exposures, and then sued again in 1999 over toluene and formaldehyde exposures.  The San Francisco Superior Court held that the action was barred as to toluene exposures only.  There remains a claim by AYS that Nailtiques did not comply with the 1993 settlement.

This page last updated 2/23/02