California Code of Regulations
Title 11 - Law
Division 4 - Proposition 65 Private Enforcement
Chapter 3 - Settlement Guidelines
Section 3204 - Additional Settlement Payments
Universal Citation: 11 CA Code of Regs 3204
Current through Register 2024 Notice Reg. No. 38, September 20, 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.
1. New section
filed 1-17-2003; operative 1-17-2003 pursuant to Government Code section
11343.4
(Register 2003, No. 3).
2. Renumbering of former section 3204 to section
3205 and new section 3204 filed
8-30-2016; operative 10-1-2016 (Register 2016, No.
36).
Note: Authority cited: Sections 25249.7(f)(4) and 25249.7(f)(5), Health and Safety Code. Reference: Sections 25249.7(b)(2), 25249.7(f)(4) and 25249.7(f)(5), Health and Safety Code.
Disclaimer: These regulations may not be the most recent version. California may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
