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A California appellate court excoriated a small plaintiffs’ law firm, Graham & Martin, over settlement terms in a toxic-warnings case and overturned the $540,000 settlement, calling the firm “bounty hunters” who set up “straw plaintiffs” as a means to collect legal fees. “The plaintiffs are rewarded for shaking down the defendants for ubiquitous trivia” while provisions of the settlement seek to preclude future enforcement by the state attorney general, according to David G. Sills, presiding justice for the California 4th District Court of Appeal, Division 3. Instead of $540,000, “this legal work merited an award closer to $1.98,” he said. Anthony G. Graham of Costa Mesa, Calif., took strenuous exception to the harsh characterization. “I thought it was one of the most extraordinary, biased and superficial opinions I ever read in my career here and in the United Kingdom.” He said the court ignored the four years of litigation involved. “I am more than happy to be judged on my record. No judge I have been in front of has said anything to support what the court wrote,” Graham said. “The court of appeal pretends that the global notice was a sword of litigation. It was just a tool of the settlement,” he said. Graham promised to seek depublication of the opinion, and failing that to appeal to the California Supreme Court. In addition to the public hiding, the appellate ruling bolstered the reach of the California attorney general to intervene in litigation involving Proposition 65, the Safe Drinking Water and Toxic Enforcement Act, by approving the state’s ability to do more than comment on settlements. It allows the state to intervene to appeal objectionable pacts. “If the Attorney General has no right to appeal the approval of a settlement (as distinct from merely voicing opposition at the trial level), then the most egregiously collusive settlement-contrary in every imaginable way to the public interest-would be insulated from attack if the trial judge were under the legal misimpression that he or she had no choice but to approve it,” wrote Sills in Consumer Defense Group v. Rental Housing Industry Members, No. G035101. California’s Proposition 65 is a 1986 voter initiative that prohibits contaminating drinking water and knowingly exposing individuals to chemicals known to cause cancer without first giving a reasonable warning. The state’s list of potential carcinogens today has more than 600 substances and has prompted thousands of civil suits for failure to post warnings. The law also requires that a private enforcement action must include a 60-day notice to the alleged violator and to the attorney general’s office-prior to filing a civil suit-to allow investigation and remedial action. Graham & Martin sued 170 apartment building owners around California and the Rental Housing Industry trade association for failure to warn of the danger of cigarette smoking by tenants anywhere in the building and parking lots where auto exhaust might expose tenants to carcinogens. But the ultimate global settlement included a promise to post a generic warning on buildings and a laundry list of potential sources of cancer provided on a Web site, including: furniture, paint, construction materials, cleaning supplies, swimming pool chemicals, pest control and landscaping. “Trade group wanted to buy its peace and was willing to pay off the law firm to obtain it, in return for which the owners would also get a favorable deal with regard to any future litigation concerning Proposition 65 violations,” Sills wrote. But he saved his wrath for Graham & Martin. “Consumer Defense Group and McKenzie are simply straw plaintiffs set up to enable the law firm of Graham & Martin to obtain legal fees in Proposition 65 litigation. We will therefore refer to the ‘plaintiffs’ by the title most substantively accurate: Graham & Martin,” said Sills. “If all the notice conveys is that-well, it’s a building with paint, furniture and a parking lot-or if the notice is so much shot-gun boilerplate covering every carcinogenic molecule currently known-then meaningful review [by the attorney general] is impossible,” Sills said. The apartment owners’ attorney, Jeffrey Riffer of Jeffer, Mangels, Butler & Marmaro in Los Angeles, said, “We agreed to put up extensive warning of exposure on the property. That’s what they wanted. The court approved it. We didn’t appeal. The plaintiff didn’t appeal. The end result is the court dismissed the plaintiffs’ claims and we have no obligation to pay. It’s not the position we argued for, but it is a good outcome.”

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