Enhancing enforcement through community support and technology
Ten Years After: How Proposition 64 Changed Environmental Enforcement
“Hain’t we got all the fools in town on our side? And ain’t that a big enough majority in
any town?”
Mark Twain, Huckleberry Finn
“Big business lobbies have put an initiative on the November ballot to eviscerate
citizens' ability to enforce environmental safeguards. Proposition 64, ‘Limitations on
Enforcement of Unfair Business Competition Law,’ would leave California's air, water,
food, forests and lands much more vulnerable to attack by polluters.”
Bill Magavern, former California Sierra Club Executive Director and CASE board
member (2004)
“Today, any business act or practice in California which violates state law (and federal
law or common law, as well) constitutes ‘unfair competition’ under California law and
triggers liability and the resulting remedies of Business and Professions Code section
17200. ‘The unlawful practices prohibited by section 17200 are any practices forbidden
by law be it civil, federal, state, or municipal, statutory, regulatory, or court-made.’
Sanders v. Superior Court (1994) 27 Cal.App.4th 832, 839”
Thomas Papageorge and Robert Fellmeth, California White Collar Crime (3rd
ed., 2010)
NO event in California history has had the impact on environmental enforcement as has
the 2004 passage of Proposition 64, “Limits on Private Enforcement of Unfair Business
Competition Laws.” Proposition 64 was presented to voters as a measure to stop the
abuse of “shakedown” lawsuits under Business and Professions Code section 17200,
California’s Unfair Competition Law (“UCL”). Proposition 64 not only abolished “private
attorney general” representative actions to the UCL, but it also served as the catalyst for
dramatic changes in how our environmental laws are enforced.
Much has been written about how Proposition 64 eliminated the use of Business and
Professions Code § 17200 in citizen suits to enforce environmental safeguards.1
Shortly after Proposition 64 took effect, lawyers from the Paul Hastings firm stated: “The
immediate impact of the (Proposition 64) amendments will be to reduce the exposure of
California businesses to meritless UCL actions. Now, only a truly aggrieved plaintiff may bring a
UCL action, and it will be far more difficult for UCL plaintiffs to use the threat of a representative
action to leverage settlement of weak claims.” Gornick, Meier and Unger, Proposition 64: Its
1
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Enhancing enforcement through community support and technology
Today, except for the Attorney General and local public prosecutors, no person can
bring a lawsuit for unfair competition unless the person has suffered injury and lost
money or property. Also, except for the Attorney General and local public prosecutors, a
person pursuing such claims on behalf of others would have to meet the additional
requirements of class action lawsuits.
Most Californians know little about environmental enforcement and even less about how
environmental enforcement has changed over the past 10 years. Much of this change
is directly attributable to the passage of Proposition 64. For more than 80 years the
UCL has been the mainstay of prosecutors in consumer protection and unfair business
practices cases. Over the past ten years the UCL has also become a mainstay for
prosecutors in environmental cases. The UCL is now a principal tool and Swiss army
knife for environmental prosecutions.
California’s UCL, Business and Professions Code §§17200 et seq., and the False
Advertising Law, Business and Professions Code § 17500, are the primary laws used
by California’s prosecutors to protect consumers and honest businesses from deceptive
advertising and unfair and unlawful business practices. Business and Professions Code
§ 17200 was purposely designed to protect competitors and consumers from "unfair"
business practices, and broadly prohibits “unfair competition.” It protects consumers by
defining as unfair competition those business acts or practices that are: “unlawful,”
“unfair,”or “fraudulent.”
The UCL is unique in that the statute is defined to encompass a wide variety of claims.
By proscribing “any unlawful business practice,” the UCL “borrows” violations from other
laws and treats them as unlawful under Business and Professions Code § 17200. Thus,
a violation of any law, whether it be a federal, state or local law can support a cause of
Impact on 17200 Cases and Why it Should Apply Retroactively (November 2004) at
paulhastings.com.
Prior to Proposition 64, UCL actions could be prosecuted as class actions. The UCL was
enforced by the Attorney General, local public prosecutors, OR a person acting in the interest of
itself, its members, or the public. A person initiating a lawsuit under the UCL was not required
to show that he/she suffered injury or lost money or property.
Proposition 64 amended Business and Professions Code § 17204 to: “Action for relief pursuant
to this chapter shall be prosecuted exclusively in a court of competent jurisdiction by the
Attorney General or any district attorney … or by any person who has suffered injury in fact and
has lost money or property as a result of such unfair competition.”
The Attorney General and local public prosecutors can bring an unfair competition lawsuit
without demonstrating an injury or the loss of money or property of a claimant.
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Enhancing enforcement through community support and technology
action under the UCL. Over the years application of “unfair competition” in UCL cases
includes: sale of cigarettes to minors (violation of the Penal Code), sale of canned
whale meat (violation of California’s endangered species laws), unlawful conditions at
nursing homes (violation of the Health and Safety Code), unlawful personnel practices
at a restaurant (violation of the Labor Code), unlawful timber cutting activities (violation
of the Public Resources Code), discrimination in violation of state fair employment law
(California Fair Employment and Housing Act), etc.2
However, the UCL does more than just borrow other laws. The statutory language
referring to “any unlawful, unfair practice” makes clear that a practice may be deemed
unfair even if not specifically proscribed by some other law. As a result, a practice may
be found “unfair” or fraudulent,” even if not “unlawful” and vice versa. Cel-Tech
Communications & Cel-Communications, Inc. v. Los Angeles Cellular Telephone Co.
(1999) 20 Cal.4th 163, 180.
Proposition 64 passed with 59% of the vote. Proponents of Proposition 64 touted the
initiative as the means to close “shakedown” lawsuits3 by eliminating the § 17200
loophole “that allows private lawyers to file frivolous lawsuits against small businesses
even though they have no client or evidence that anyone was damaged or misled.
Shakedown lawyers ‘appoint’ themselves to act like the Attorney General and file
lawsuits on behalf of the people of the State of California, demanding thousands of
dollars from small businesses that can't afford to fight in court.”4 Attorney General Bill
Lockyer advised voters, “The proponents try to disguise Prop. 64 as a small-business
protection measure needed to eliminate ‘shakedown’ lawsuits. But the initiative’s
primary backers hardly qualify as a coalition of mom-and-pop enterprises. They rank
2
Papageorge and Fellmeth, California White Collar Crime: Criminal Sanctions and Civil
Remedies (2010, 3rd ed.) pp. 275 and 356.
3
The flaw in Section 17200, as Proposition 64 proponents saw it, allowed private attorneys to
file lawsuits on behalf of the general public against businesses for unfair business practices.
Attorneys did not need a victim to file a suit nor show actual personal damage had occurred.
There were cases of Los Angeles attorneys abusing 17200 by filing numerous suits for
countless normal business practices that amounted to minor technical violations where no harm
could be shown. These cases became known as “shakedown lawsuits.”
The shakedown occurred when plaintiff attorneys sent form letters to the alleged wrongdoer
seeking settlement money for minor technical violations. Many small businesses like nail salons,
travel agents, small auto dealers and restaurants were extorted by these abusive lawsuits.
Trying to avoid the high cost of litigation, many small businesses capitulated and paid the
extortionists to settle these sham lawsuits as quickly as possible.
One Beverly Hills law firm, the Trevor Law Group, filed 2,200 “shakedown lawsuits.” Eventually,
the California attorney general filed suit against this firm and the attorneys involved surrendered
their law licenses in order to avoid disbarment.
4
Voter Information Guide, Proposition 64 Arguments and Rebuttals at
http://vote2004.sos.ca.gov/voterguide/propositions/prop64-arguments.htm
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Enhancing enforcement through community support and technology
among the largest companies in the world, with annual profits in the hundreds of billions
of dollars.”5
Support for Proposition 64 came from Governor Arnold Schwarzenegger,6 oil
companies, banks, chemical companies, HMOs, tobacco, insurance and credit card
companies.7 Seventy-five public interest groups formed the coalition opposing
5
Voter Information Guide, Proposition 64 Arguments and Rebuttals at
http://vote2004.sos.ca.gov/voterguide/propositions/prop64-arguments.htm
6
In Unfair Competition: Big Business Succeeds in Gutting California's Landmark Consumer
Protection Law, Carmen Balber notes: “Early in the election season, environmental
organizations called on Governor Schwarzenegger to ‘meet your promise to Californians who
care about the quality of our air and water … and oppose [Proposition 64’s] direct assault on
environmental protection.’ Meetings with the governor’s office led them to understand that he
would stay out of the Proposition 64 debate.
The reversal of his position in mid-September (2004) shocked environmental leaders, including
the legislative director of Sierra Club California, who said Schwarzenegger ‘double-crossed us’
when the governor announced his endorsement of the initiative. The decision was no doubt
influenced by the campaign supporters the governor shared with the Yes on 64 campaign. By
Election Day, Schwarzenegger had received $4.8 million from donors that also gave $4.8 million
to Proposition 64, among them Anheuser Busch, Pfizer, Blue Cross and ChevronTexaco.
Schwarzenegger’s support was highlighted in proponents’ television ads, mailed in the form of a
voter guide to 5 million Californians, and added to a campaign-style bus tour the governor made
during the weekend before the election.
Schwarzenegger carried the day with most of his initiative picks. Although Proposition 64 was
not his most high-profile endorsement, his popularity in November had not suffered the dive that
currently finds him with approval ratings below 50 percent. Schwarzenegger brought his
celebrity spotlight to shine on Proposition 64’s “frivolous lawsuit” message, and undoubtedly
turned heads toward the Yes campaign’s small business message.” See Multinational Monitor
(March/April 2005; Vol. 26, No. 3) at
http://www.multinationalmonitor.org/mm2005/032005/balber.html
The initiative’s proponents included 43 companies and industry groups that had legal troubles
under the Unfair Competition Law. “Bad actor” contributions to Proposition 64 included:
•
The Oil Industry — $465,000 to the support of Prop. 64, was forced to clean up
groundwater polluted with the gasoline additive MTBE, and stop air pollution from an oil
refinery that was causing health hazards;
•
Big Tobacco — $200,000 donor to Prop. 64, was held responsible for lying to the public
about the health effects of cigarettes;
•
Auto Manufacturers and Car Dealers — $2,116,100 donors to Prop. 64, had faced suits
to stop dealers from charging illegal finance mark-ups, often to minority buyers;
•
The Financial Industry — $365,000 donors to Prop. 64, has been charged with illegally
seizing Social Security money from elderly and disabled clients, and predatory lending
practices;
•
Insurance Companies — $450,000 donors to Prop. 64, had to repay customers they
fraudulently denied earthquake insurance benefits; and,
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Proposition 64, including the American Civil Liberties Union, the Sierra Club, AARP,
Consumers Union, the California Labor Federation — AFL-CIO, the California Nurses
Association, Consumer Attorneys of California, the American Lung Association and the
Foundation for Taxpayer and Consumer Rights. Campaign spending on Proposition 64
was lopsided: proponents spent $20.5 million on the campaign, while the "No on 64"
side spent $3.2 million.8
State and local prosecutors were divided on Proposition 64. On one hand, Attorney
General Bill Lockyer campaigned against Proposition 64, calling the proposal to limit the
state's UCL an attempt "to crack a cornerstone of California's environmental protection
structure.”9 On the other, former Ventura County District Attorney and California District
Attorneys Association President Michael Bradbury supported Proposition 64, saying,
"Public Prosecutors have a long, distinguished history of protecting consumers and
honest businesses. Proposition 64 will give those officials the resources they need to
increase enforcement of consumer protection laws by designating penalties from their
lawsuits to supplement additional enforcement efforts, above their normal budgets.”10
Environmental Prosecutions Prior to Proposition 64
California District Attorneys have both civil and criminal jurisdiction. Prior to Proposition
64, particularly in the 1980s and 1990s, District Attorneys relied on criminal sanctions in
environmental cases and rarely resorted to civil proceedings, especially the UCL. For
example, in the 1990s the Los Angeles District Attorney’s office used civil proceedings
only when criminal remedies were unavailable. The office’s Environmental
Crimes/OSHA Division attorneys emphasized that criminal prosecution was more
effective as a deterrent than administrative or civil proceedings. A former head deputy
of the division noted that if the desired outcome is to obtain cleanup or remediation of
an environmental problem, the prosecutor could use the threat of a prison sentence to
motivate a defendant to act, a strategy not available in civil proceedings.11
When I became an environmental prosecutor in the early 1990s, the message was loud
and clear: environmental crime is real crime. California has some of the toughest
environmental protection laws in the nation. Those laws need to be enforced.
•
Health Care Giants— $979,500 donors to Prop. 64, including pharmaceutical companies
accused of illegally using consumers’ private medical information, and HMOs who
denied approval of medically necessary care to delay or avoid payment. See
Multinational Monitor (March/April 2005; Vol. 26, No. 3), supra, footnote 6.
8
PROPOSITION 64: Unfair Business Practice Limits at
http://www.followthemoney.org/database/StateGlance/ballot.phtml?m=248
9
Marc Lifsher, ”Lockyer Joins Prop. 64 Fray, Los Angeles Times (October 1, 2004)
”http://articles.latimes.com/2004/oct/01/business/fi-prop641
10
Voter Information Guide, Proposition 64 Arguments and Rebuttals at
http://vote2004.sos.ca.gov/voterguide/propositions/prop64-arguments.htm
11
Theodore M. Hammett and Joel Epstein, Prosecuting Environmental Crime: L.A. County
(1993) at http://www.lectlaw.com/files/env19.htm
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The California District Attorneys Association (CDAA) is the primary source of continuing
legal education and legislative advocacy for its membership. In the early years of my
career nearly all of the formal training I received on environmental prosecutions was
provided by CDAA. Again, the message in all of these trainings was clear and
consistent: our environmental laws need to be enforced.
From 1999 - 2007 I worked for CDAA; the first four years as the organization’s
environmental project director, the second four years as its deputy executive director.
My responsibilities included serving as director of the Circuit Prosecutor and
Environmental Projects as well as the organization’s environmental and worker safety
legislative advocate. In each of these areas the emphasis was on the criminal
enforcement of our environmental laws.
In 2003, CDAA’s Circuit Prosecutor and Environmental Projects received the American
Bar Association’s (ABA) Award for Distinguished Achievement in Environmental Law
and Policy. The award recognized CDAA for its work on promoting uniformity,
consistency and fairness in environmental enforcement.
CDAA’s Environmental Circuit Prosecutor Project (the “Project”) was created in 1998 to
address the serious void in the enforcement of environmental laws in California’s rural
counties. The Project assists rural county district attorneys in prosecuting environmental
crime by providing skilled attorneys. Prior to the Project’s formation, the ability to
engage in comprehensive environmental enforcement in our rural counties was severely
hampered. Large numbers of criminal environmental violations under state law involving
air and water pollution, illegal solid waste disposal, and fish and wildlife issues went
unaddressed.12
During my tenure at CDAA the Circuit Prosecutor Project processed more than 2,000
environmental cases in an eight-year span. In 2003 the Project had 8 Circuit
Prosecutors, 2 investigators and a research attorney. More than 50% of the cases
processed by the Project were criminally prosecuted. The remaining cases were
prosecuted under the civil provisions of the state’s environmental laws. Few
prosecutions occurred under the UCL. At this writing, the Project is down to one Circuit
Prosecutor and one Statewide Circuit Prosecutor whose area of expertise is the UCL.
In 2004 CDAA’s Environmental Project published the Environmental Crimes
Prosecution Manual (the “Manual”). The Manual is a comprehensive environmental
enforcement-training guide and reference for prosecutors, investigators and regulators.
In 2009 the second edition of the Environmental Crimes Prosecution Manual was
published under the guidance of CDAA’s Environmental Project Director and CASE co
12
In 2003, the Project was codified into the Penal Code at section 14300, et seq. The findings
of the legislature included the following: 1) “Prosecuting violators of environmental laws often
requires special training to detect violations, understand complex laws, and prepare and present
complicated enforcement cases;” and 2) “There is a need to better integrate enforcement of
environmental laws into California's established criminal justice system.” (Emphasis added)
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Enhancing enforcement through community support and technology
founder John Fentis. Neither edition of the Manual discusses the use of the UCL in the
prosecution of environmental violations.
As CDAA’s legislative advocate on environmental enforcement the objective was
always to strengthen and protect our environmental laws. I never worked on any
legislation that did not support the prosecution of environmental crimes. For example,
in 2000 the Los Angeles District Attorney and CDAA were co sponsors of Senate
President pro Tem Don Perata’s Senate Bill 1865. The purpose of the bill was to
increase the existing civil and criminal penalties for air quality violations to make them
similar to penalties for water pollution and hazardous waste law. One legislative analyst
noted “The current penalties structure is so weak that some violators choose to break
the law and pay a fine rather than purchase new equipment or perform maintenance: it
simply becomes a cost of doing business.”13 As Senator Perata put it on more than one
occasion, “corporate polluters need to be punished.”
In a letter to the legislature the Los Angeles District Attorney's Office stated that SB
1865 was necessary because current air quality penalties have not been sufficient to
deter air quality violations. The letter cited a report by the Environmental Working
Group:
“Fully three-fourths of California's refineries, mills and other factories surveyed
have committed violations of federal or state clean air laws since 1996. That's
the same year a federal audit was conducted that blasted California's air pollution
enforcement efforts as inadequate to deter big polluters. Now an Environmental
Working Group analysis of the newest federal and state data shows that nothing
has changed: Major polluters who repeatedly violate the law get slapped on the
wrist with fines that constitute a ridiculously small fraction of their corporate
parents' multi-billion dollar profits.”14
Even though the bill faced strong opposition from industry, it was signed into law. Seven
years after the law was enacted I referred a case to the Los Angeles District Attorney for
criminal prosecution under one of SB 1865’s amended sections, Health and Safety
Code section 42400.2. Health and Safety Code § 42400.2(a) states: “Any person who
emits an air contaminant in violation of any provision of this part, or any order, rule,
regulation, or permit of the state board or of a district pertaining to emission regulations
or limitations, and who knew of the emission and failed to take corrective action within a
reasonable period of time under the circumstances, is guilty of a misdemeanor and is
subject to a fine of not more than forty thousand dollars ($40,000) or imprisonment in
the county jail for not more than one year, or both.” Health and Safety Code §
13
SB 1865 Bill Analysis, Senate Committee on Public Safety (May 23, 2000) at
ftp://www.lhc.ca.gov/pub/99-00/bill/sen/sb_18511900/sb_1865_cfa_20000523_152311_sen_comm.html
14
Ibid.
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42400.2(d) states: “Each day during any portion of which a violation occurs constitutes
a separate offense.”
From 2007 to 2011 I served as the Deputy Director of Enforcement at the Department of
Toxic Substances Control. In 2007 and 2008 I received tips from several informants
that the owner and operator of SA Recycling and Simms Metal West violated hazardous
waste and air pollution laws by continuing operations after an air pollution control
system was destroyed by a May 2007 explosion at its Port of Los Angeles site. The
investigation showed that the facility, which shreds automobiles, household appliances
and other metals, continued to operate for about 120 days without a fully functioning air
pollution control system in place. An estimated 4.4 tons of toxic particulates was
released into the air and onto the ground and water. The case was referred to the Los
Angeles District Attorney for criminal prosecution of violated hazardous waste and air
pollution laws, including violations of Health and Safety Code § 42400.2(a).
In 2011 the Los Angeles District Attorney settled the case under the UCL. The metal
shredding facility agreed to pay more than $2.93 million and comply with our air
pollution laws. This case is but one of many, following the passage of Proposition 64,
wherein the UCL was used to prosecute white-collar environmental violations.
For Sims the settlement was, no doubt, nothing more than the cost of doing business.
Indeed, $1.7 million of the $2.9 million settlement was an “offset” wherein the settlement
money was used to install an up-to-date air pollution control system.15 The settlement
clearly had little deterrent effect. The company continues to pollute.
At the end of 2013 an industrial fire erupted at the Sims recycling center in Redwood
City. The soot saturated the surrounding area at a volume of 114 parts per million
(ppm), more than three times the 35 ppm set by federal health standards. The fire
prompted University of California (Davis) professor emeritus and air expert Thomas
Cahill to say, “People have to be aware of the fact they are not being protected. This
fire is a good example.”16
Sims is the largest metal recycler in the world. This past August and October Sims had
notable fires at its Jersey City, N.J., plants. In 2012, the Sims Redwood City plant was
reprimanded by the Environmental Protection Agency based on findings that a high
level of toxic pollutants from the metal shredding ended up in nearby soil and sediment,
prompting pledges from company officials to comply with the federal agency. In 2011,
the U.S. Fish and Wildlife Service sent Sims a letter stating that fibrous residue from the
auto shredding that "may contain plastics, rubber foam, residual metal pieces" and other
waste was regularly blowing, or being washed, 800 feet across the water from the Sims
site and contaminated Bair Island, which is part of the San Francisco Bay National
15
A copy of the DTSC press release and SA Recycling settlement can be found at DTSC.ca.gov
16
See the “Bay Area Air Quality District Under Fire” report and video at
http://www.nbcbayarea.com/investigations/Bay-Area-Air-Quality-District-Under-Fire-231833511.html
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Enhancing enforcement through community support and technology
Wildlife Refuge.17
The UCL and Environmental Enforcement Today
In his 2011 article, Public Prosecutorial Enforcement of the Unfair Competition Law
Following the Passage of Proposition 64, former Marin County Deputy District Attorney
Bob Nichols states, “The principal role of a public prosecutor is to seek justice.
Restitution and recovery of losses for injured consumers is always a prosecutorial
concern, but this function is ancillary to the greater public need of ceasing the unlawful
conduct, punishment, and deterrence. This is not unlike the traditional prosecutorial role
in criminal cases. In fulfilling this obligation, consumer prosecutors do not seek
damages but rather injunctive relief, restitution, and civil penalties.”18 The same
principles also serve as the rationale for the prosecution of environmental violations
under the UCL.
Business and Professions Code § 17200 is routinely used today in the prosecution of
environmental cases. How did the UCL become the holy grail of environmental
prosecutions? What Proposition 64 took away from private attorneys, it gave to
prosecutors and added financial incentive, or what some folks in the legislature call
“bounty hunter” provisions.19
Proposition 64 amended Business and Professions Code § 17536, “Penalty for
Violations” to the following:
“(a) Any person who violates any provision of this chapter shall be liable for a civil
penalty not to exceed two thousand five hundred dollars ($2,500) for each
violation, which shall be assessed and recovered in a civil action brought in the
name of the people of the State of California by the Attorney General or by any
district attorney, county counsel, or city attorney in any court of competent
jurisdiction.
17
Robert Salonga and Richard Hurd, “Redwood City Fire: Dirty Air Expected to Linger, Metal
Yard Re-opens After Huge Blaze,” San Jose Mercury News (November 11, 2013) at
http://www.mercurynews.com/crime-courts/ci_24498551/redwood-city-seaport-blvd-open-firecrews-continue
18
Bob Nichols, “Public Prosecutorial Enforcement of the Unfair Competition Law Following the
Passage of Proposition 64, ”The Journal of the Institute for the Advancement of Criminal Justice
(Issue #4, 2010/2011) pp. 38-42 at p. 41 at http://www.iacj.org/PDF/IACJJournalIssue4.pdf
19
For example, Sen. Raymond Haynes (R-Riverside) charged during floor debate of
SB1865 that district attorneys and bureaucrats were only after the money generated by
increased fines. "District attorneys tend to like these things because fines actually go to
the district attorney, so they get a bounty for chasing businesses down." “Bill Hiking Air
Fines Escapes Senate; Assembly Battle Expected,” Inside Cal/EPA (06/30/2000) at
http://insideepa.com/Inside-Cal/EPA/Inside-Cal/EPA-06/30/2000/bill-hiking-air-finesescapes-senate-assembly-battle-expected/menu-id-1097.html
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(b) The court shall impose a civil penalty for each violation of this chapter. In
assessing the amount of the civil penalty, the court shall consider any one or more
of the relevant circumstances presented by any of the parties to the case,
including, but not limited to, the following: the nature and seriousness of the
misconduct, the number of violations, the persistence of the misconduct, the
length of time over which the misconduct occurred, the willfulness of the
defendant’s misconduct, and the defendant’s assets, liabilities, and net worth.
(c) If the action is brought by the Attorney General, one-half of the penalty
collected shall be paid to the treasurer of the county in which the judgment was
entered, and one-half to the State Treasurer.
If brought by a district attorney or county counsel, the entire amount of
penalty collected shall be paid to the treasurer of the county in which the
judgment was entered. If brought by a city attorney or city prosecutor, one-half of
the penalty shall be paid to the treasurer of the county and one-half to the city. The
aforementioned funds shall be for the exclusive use by the Attorney General,
district attorney, county counsel, and city attorney for the enforcement of
consumer protection laws.” (Emphasis added)
Today the UCL is the primary tool used by the Attorney General and district attorneys
for the prosecution of white-collar, environment violations. Take, for example, the UCL
prosecution of Wal-Mart in 2010. The Attorney General and 20 district attorneys filed a
statewide, Business and Professions code § 17200 action against Wal-Mart for violating
California’s environmental laws in its handling and disposal of hazardous materials.
Wal-Mart agreed to settle the case for $27.6 million.20
Since the passage of Proposition 64, the Attorney General and local prosecutors have
obtained approximately $200 million in UCL settlements in statewide environmental
cases. In 2011 the Target Corporation agreed to pay $22.5 million to settle a case
wherein prosecutors accused the retailer of the “willful disregard for California’s
hazardous waste laws” for such violations as pouring chemicals returned by customers
down the drain and dumping incompatible, combustible liquids like ammonia and bleach
into trash bins. “The settlement,” the Los Angeles Times reported, “is part of a bigger
push by prosecutors throughout the state to crack down on environmental violations by
20
See “Wal-Mart to pay $27.6 million to settle California environmental case,” Los Angeles
Times (May 3, 2010). The settlement includes $20 million to be split among prosecutors in 20
jurisdictions and 32 environmental health agencies throughout the state; $1.6 million in costs for
the investigation; $3 million to a fund for other environmental investigations; and $3 million
toward keeping stores in compliance.
http://latimesblogs.latimes.com/greenspace/2010/05/walmart-to-pay-276-million-to-settlecalifornia-environmental-case-.html
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big-box retailers and follows multimillion-dollar settlements in recent years with WalMart Stores Inc. and Home Depot.”21
The 2007 Home Depot case resulted in a $9.9 million dollar settlement for illegal
hazardous waste storage and transportation violations found during a three- year
investigation. A multi-jurisdictional, statewide prosecution team in 28 counties tracked
hazardous waste management practices and the state’s fire code at California’s Home
Depot stores statewide. In 2009 the state forged a $8.65 million settlement with Kmart,
requiring the company to stop disposing of toxic substances in landfills.
In 2013 Attorney General Kamala D. Harris was joined by eight District Attorneys in
filing an UCL lawsuit against BP West Coast Products, BP Products North America, Inc.
and Atlantic Richfield Company (ARCO) for allegedly violating state laws governing
hazardous materials and hazardous waste by failing to properly inspect and maintain
underground tanks used to store gasoline for retail sale at more than 780 gas stations in
California.22 In 2002 Attorney General Bill Lockyer settled an UCL case with BP-ARCO
for $45.8 million, “the largest penalty in the nation for alleged widespread underground
tank violations at ARCO stations in California.”
The 2002 ARCO settlement provided a $20.8 million offset “in improvements that the oil
company must demonstrate have been made to underground tanks at its gas stations.”
Mr. Lockyer noted, “We believe that ARCO, which cooperated in this enforcement case,
is now in full compliance with the upgrade standards at all its gasoline stations. As
further assurance, the oil company under the settlement must provide state inspectors
with access to ARCO stations and close immediately any gasoline stations discovered
with upgrade violations until required improvements are made.”23
It might be said that we are in an UCL era of environmental enforcement. An era that
no doubt was the result of a perfect storm: an economic crisis that crippled many district
attorney offices which were in critical need of resources to maintain and preserve their
consumer and environmental protection units; big businesses that were flagrantly
21
Shaun Li, “Target to Pay $22.5 million To Settle Hazardous-waste Dumping Case,” Los
Angeles Times (February 4, 2011) at http://articles.latimes.com/2011/feb/04/local/la-me-targetsettlement-20110205
“Attorney General Kamala D Harris Sues BP and Arco over Environmental Violations at Gas
Stations” Office of the Attorney General Press Release (February 14, 2013) at
http://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-sues-bp-and-arco-overenvironmental-violations. A pdf copy of the complaint is attached to the bottom of the press
release.
23
“Attorney General Lockyer Announces ARCO to Pay Largest Penalty in Nation to Settle
Alleged Underground Tank Violations in California,” Office of the Attorney General Press
Release (June 19, 2002) at http://oag.ca.gov/news/press-releases/attorney-general-lockyerannounces-arco-pay-largest-penalty-nation-settle. PDF copies of the complaint and settlement
are attached at the bottom of the press release.
22
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violating our environmental laws and ripe for the picking; excellent attorneys who
happen to be prosecutors; and, of course Proposition 64.
One major question remains: does big business still see violations of our environmental
laws as the cost of doing business, just at a higher price under the UCL? The reader is
left to decide whether the state of environmental enforcement today is in a better place
than it was ten years ago. A host of issues remain surrounding the use of the UCL in
prosecuting environmental violations. That, however, is for another paper on another
day.
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