Party Discovery: CENTER FOR ADVANCED PUBLIC AWARENESS, INC. VS. MID CITY CANNABIS CLUB, INC. ET AL

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JAMES KAWAHITO (SBN 234851)
KAWAHITO LAW GROUP APC
222 N. Pacific Coast Hwy, Suite 2222
El lephone? CA 90245

Telephone: (310) 746-5300
Faceumile: (310) 593-2520

Email: jkawahito@kawahitolaw.com

Attorneys for Plaintiff the Center for Advanced Public Awareness, Inc.

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO

CENTER FOR ADVANCED PUBLIC
AWARENESS, INC., in the public interest,

Plaintiff,
vs.
MID CITY CANNABIS CLUB, INC. dba LA
BREA COLLECTIVE, a California
Corporation; and DOES 1 through 50,

inclusive,

Defendants.

Ny ot ay ie D

Jui? 5 2019
CLERK OF THE COUR

Case Number: CGC-19-573796

JUDGMENT PURSUANT
TO TERMS OF PROPOSITION 65
SETTLEMENT AND CONSENT
JUDGMENT

Violation of Proposition 65, the Safe
Drinking Water and Toxic Enforcement Act
of 1986 (Health and Safety Code § 25249.5 et
seq.)

Date:

Time:
Dept.:
Judge:

June 25, 2019
9:30 a.m.

302
Honorable Ethan P. Schulman

Reservation No.: 05020625-07

TeRSPasaa} JUDGMENToor DAW WN

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Plaintiff Center for Advanced Public Awareness, Inc., and defendant Mid City Cannabis
Club, Inc. dba La Brea Collective having agreed through their respective counsel that Judgment be
entered pursuant to the terms of their settlement agreement in the form of a stipulated judgment
("Consent judgment"), and following this Court's issuance of an order approving their Prdposition
65 settlement and Consent Judgment, and for good cause being shown,

IT IS HEREBY ORDERED, ADJUDGED AND DECREED that, pursuant to
Health and Safety Code section 25249.7(f)(4) and Code of Civil Procedure section 664.6,
judgment is hereby entered in accordance with the terms of the Consent Judgment attached hereto
as Exhibit 1. By stipulation of the parties, the Court will retain jurisdiction to enforce the terms of

the Consent Judgment under Code of Civil Procedure section 664.6.

IT IS SO ORDERED.

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HONORABLE JUDGE OF THE SUPERIOR
court ETHAN P. SCHULMAN

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PROPOSED] JUDGMENTEXHIBIT 1Com IY DH F&F WN |

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JAMES KAWAHITO (SBN 234851)
KAWAHITO LAW GROUP APC
222 N. Pacific Coast Hwy., Suite 2222
El Segundo, CA 90245

Telephone: (310) 746-5300
Facsimile: (310) 593-2520

Email: jkawahito@kawahitolaw.com

Attorneys for Plaintiff the Center for Advanced Public Awareness

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO
CENTER FOR ADVANCED PUBLIC Case Number: CGC-19-573796
AWARENESS, INC., in the public interest,
Plaintiff,
STIPULATED CONSENT JUDGMENT
vs.
HEALTH AND SAFETY CODE §

MID CITY CANNABIS CLUB, INC. dba LA
BREA COLLECTIVE, a California
Corporation; and DOES 1 through 50,
inclusive,

Defendants.

25249.6wo Oo YU A BH Bw DK —

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1. INTRODUCTION
LA. Center for Advanced Public Awareness and MCC.
This Consent Judgment is entered into by and between plaintiff the Center for Advanced
Public Awareness (“CAPA” or “Plaintiff”) and defendant Mid City Cannabis Club, Inc. dba La
Brea Collective (“MCC” or “Defendant”), with MCC and CAPA each individually referred to as
a “Party” and collectively as the “Parties.”
1.2. Plaintiff
CAPA is a not-for profit corporation duly organized and existing in the State of
California, which seeks to promote awareness of exposures to toxic chemicals and to improve
human health by reducing or eliminating hazardous substances used in consumer and other

products.
13. Defendant
CAPA alleges, and for purposes of this settlement only MCC does not dispute, that MC’
employs ten or more persons and is a person in the course of doing business for purposes of the
Safe Drinking Water and Toxic Enforcement Act of 1986, Califomia Health and Safety Code
section 25249.6 et seq. (“Proposition 65”).
14, General Allegations
CAPA alleges that MCC sold and/or distributed for sale in California the Covered
Products without provision of a Proposition 65 warning, and that the Covered Products exposed|
consumers to marijuana smoke and its chemical constituents which, collectively, are identified as
achemical known to the State of California to cause cancer. CAPA further alleges that MCC
failed to provide the health hazard warning required by Proposition 65 for exposures to marijuan a
smoke from the Covered Products.
15. Product Description
The products covered by this Consent Judgment include all marijuana flowers, buds,
leaves, stems and other organic parts of the cannabis and marijuana plants intended for

combustion via smoking and/or inhalation, including but not limited to those identified in

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[PROPOSED] STIPULATED CONSENT JUDGMENTCo Oe YN AH Fw Ww

CAPA’s Notice as marijuana “flowers” or “buds,” which are sold, manufactured, and/or
distributed for sale in California by MCC (‘Covered Product(s)”).
16. Notice of Violation
On or about August 17, 2018, CAPA served MCC and the requisite public enforcement
agencies with a 60-Day Notice of Violation (“Notice”), alleging that MCC violated Proposition
65. The Notice alleged that MCC had failed to warn its customers and consumers in California of
the health hazards associated with exposures to marijuana smoke from its sale and/or distribution
of the Covered Products.
CAPA subsequently provided MCC with information in CAPA’s possession concerning
its allegations. MCC provided CAPA with sales data related to the Covered Products. To the
best of the Parties’ knowledge, no public enforcer has commenced and is diligently prosecuting
the allegations set forth in the Notices.
1.7. Complaint
On February __ 2019, Plaintiff, who was and is acting in the interest of the general public
in California, filed a complaint “Complaint” or “Action”) in the Superior Court in and for the
County of San Francisco against MCC and Does 1 through 50, alleging violations of Health &
Safety Code §25249.6 based on the alleged exposures to marijuana smoke contained in the
Covered Products sold by MCC.
1.8. No Admission
The Parties enter into this Consent Judgment to settle disputed claims between the Parties
as set forth below, and as alleged in the Notice and Complaint, concerning the Parties’ and the
Covered Products’ compliance with Proposition 65 (the “Dispute”). Specifically, CAPA alleges
that MCC sold or distributed for sale in the state of California the Covered Products, which
resulted in the exposure to marijuana smoke, without first providing the clear and reasonable
exposure warning required by Proposition 65. MCC denies that such a warning is required under
Proposition 65 or any otherwise applicable law.
MCC further denies the material, factual, and legal allegations contained in the Notice and
Complaint and maintains that, to the best of its knowledge, all of the products that it has soldeo mr aun rk WN =

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and/or distributed in California, including the Covered Products, have been, and are, in
compliance with all laws. Nothing in this Consent Judgment shall be construed as an admission
by MCC of any fact, finding, conclusion, issue of law, or violation of law, nor shall compliance
with this Consent Judgment constitute or be construed as an admission by MCC of any fact,
finding, conclusion, issue of law, or violation of law, such being specifically denied by MCC.
However, this section shall not diminish or otherwise affect MCC’s obligations, responsibilitie:
and duties hereunder. Notwithstanding the allegations in the Notice, MCC maintains that it has
not knowingly sold or caused to be sold the Covered Product in California in violation of
Proposition 65.
19. Consent to Jurisdiction
For purposes of this Consent Judgment only, Parties stipulate that: 1) this Court has
jurisdiction over MCC as to the allegations contained in the Complaint; 2) that venue is proper in
the County of San Francisco; and 3) that this Court has jurisdiction to enter and enforce the
provisions of this Consent Judgment.
1.10. Effective Date
For purposes of this Consent Judgment, the term “Effective Date” shall mean the date on
which the Court approves this Consent Judgment, including any unopposed tentative ruling
granting approval of this Consent Judgment.
2, INJUNCTIVE RELIEF: REFORMULATED PRODUCTS AND WARNINGS
2.1, Clear and Reasonable Warnings
. Commencing on the Effective Date, MCC shall either (1) post in-store warning signs (“In-
Store Warnings”) or (2) cause a warning label to be affixed to the packaging, labeling, or directly
on each Covered Product (“Product Label Warnings”) sold in its dispensary or through a delivery
service, if any, in California.
2.1.1 In-Store Warnings. In-Store Warnings shall be provided at one or more of
the following locations: (a) at or near each cash register in the store; (b) at or near each display

case containing the Covered Products in the store; or (c) at or near the entrance of the store, The
warnings shall be at least 8 inches by 10 inches and posted at a height and location that will makeCe IY A Hw Bw Dw

it conspicuous and easy to read for the average person. The text of the warning shall be printed in
black ink, in a font that is easy to read and legible, but in no case less than a size 22 font. The
language shall be substantially similar to that set forth below and may also include a warning
concerning birth defects or other reproductive harm at the discretion of MCC. At MCC’s sole
option, the warning may use the phrase “Marijuana (cannabis) products” rather than “This
product.”

A WARNING: This product can expose you to chemicals, including Marijuana
Smoke, which are known to the State of California to cause cancer. For more
information go to www.P65Warnings.ca.gov.

Or

A WARNING: This product can expose you to chemicals including Marijuana
Smoke, which are known to the state of California to cause cancer, and [name of
reproductive toxicant], which are known to the State of California to cause birth
defects or other reproductive harm. For more information go to

www.P65Warnings.ca.gov.
2.1.2 Product Label Warnings. The text of any Product Label Warnings shall be

prominently displayed on the label and must be displayed with such conspicuousness as
compared with other words, statements, designs or devices on the label, labeling, or sign, as to
render the warning likely to be seen, read, and understood by an ordinary individual under
customary conditions of purchase or use. For the short form version of the warning set forth
below, the warning shall be in a type size no smaller than the largest type size used for other
consumer information, as that term is defined in Tit. 27, CCR, Section 25600.1(c), on the product
and, in no case, shall the warning appear in a type size smaller than 6-point type. The Product
Label Warnings shall be securely affixed to (via a label) or printed upon the packaging of each
Covered Product. Employees may not write over the text of the warning for any reason. The

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language shall be substantially similar to that set forth below:

A WARNING: This product can expose you to chemicals including Marijuana
Smoke, which are known to the State of California to cause cancer. For more

information go to www.P6SWarnings.ca.gov.
Or

A WARNING: This product can expose you to chemicals including Marijuana
Smoke, which are known to the State of California to cause cancer, and [name ofCeo A HW &® ww

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reproductive toxicant], which are known to the State of California to cause birth
defects or other reproductive harm. For more information go to

www.P65Warnings.ca.gov.
Or the short form version (with the bracketed text added at MCC’s sole option)

A WARNING: Cancer [and Reproductive Harm] - www.P65Warnings.ca.gov
2.2 Internet Website Warning. For all Covered Products that are advertised on a

website as offered for sale at MCC’s dispensary or available for delivery directly to MCC’s
dispensary members, a warning that complies with the content requirements of Section 25603(a)
and Section 2.1.2 above must also be provided by including either the warning or a clearly
marked hyperlink using the word “WARNING” on the Covered Product’s display page, or by
otherwise prominently displaying the warning to the purchaser prior to completing the purchase,
If a Product Label Warning is provided as set forth above, the warning provided on the website
may use the same content as the Product Label Warning, Supplemental information may be
provided only in compliance with Tit. 27, CCR, Section 25601(e).

23 - Compliance. The parties agree that compliance with the terms of this Consent
Judgment, or compliance with the Proposition 65 warning regulations adopted by the State of
California’s Office of Environmental Health Hazard Assessment (“OEHHA”) after the Effective
Date and as they may be amended from time to time, constitutes compliance with Proposition 6
with regard to the Covered Products.

3. MONETARY PAYMENTS

31 Payments Pursuant to Health & Safety Code § 25249.7(b)

MCC shall pay a civil penalty of $4,000.00, to be apportioned in accordance with
California Health & Safety Code §§25249.12(c) & (d), with 75% of these funds remitted to the
State of California's Office of Environmental Health Hazard Assessment (“OEHHA™) and the
remaining 25% of the penalty remitted to CAPA. MCC shall issue two separate checks for the
penalty payment; (a) one check made payable to the Kawahito Law Group in Trust for the State,
of California's Office of Environmental Health Hazard Assessment (“in Trust for OEHHA”) in

the amount of $3,000.00, representing 75% of the initial civil penalty and (b) one check towo mond AH ew

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“Kawahito Law Group in Trust for Center for Advanced Public Awareness, Inc.,” in the amount
of $1,000, representing 25% of the initial civil penalty. Two separate 1099s shall be issued for
the above payments: The first 1099 shall be issued to OEHHA, P.O. Box 4010, Sacramento, CA
95814 (EIN: 68-0284486). The second 1099 shall be issued to CAPA, who shall furnish a W2at
least five calendar days before payment is due.

The payments shall be delivered to CAPA’s counsel at the following address within ten
(10) days of the Effective Date of this Consent Judgment:

James Kawahito, Esq.

Kawahito Law Group APC

222 N. Pacific Coast Hwy., Suite 2222
El Segundo, CA 90245

4, REIMBURSEMENT OF ATTORNEYS’ FEES AND COSTS

The Parties acknowledge that CAPA and its counsel offered to resolve this dispute
without reaching terms on the amount of fees and costs to be reimbursed to them, thereby leavin 1g
any fee reimbursement issue to be resolved after the material terms of the agreement had been
settled. The parties reached an accord on the compensation due to CAPA and its counsel under
general contract principles and the private attorney general doctrine codified at California Code of
Civil Procedure (CCP) § 1021.5, for all work performed through the mutual execution of this
Consent Judgment. MCC shall reimburse CAPA and its counsel in the total amount of
$31,000.00 for fees and costs incurred by CAPA as a result of investigating, bringing this matter
to the attention of MCC, negotiating this Consent Judgment, drafting the Complaint, and
preparing the papers necessary briefing to obtain the Consent Judgment from this Court. MCC
shall pay the attorneys’ fees and costs identified herein in two (2) equal installment payments,
MCC shall make the checks payable to “Kawahito Law Group APC” and shall issue a check for
the first installment payment of $15,500.00 within ten (10) days of the Effective Date. MCC shall
issue a check for the second and final installment payment of $15,500.00 made payable to
“Kawahito Law Group APC” within sixty (60) days of the Effective Date to:

James Kawahito, Esq.
Kawahito Law Group APCcoe NAH PF wD

Attn. CAPA v. Mid City Cannabis, Inc.
222 N. Pacific Coast Hwy., Suite 2222
El Segundo, CA 90245

To allow for the issuance of a timely payment to be rendered pursuant to the above,
CAPA shall provide MCC with a completed IRS Form W-9 for the Kawahito Law Group APC
upon request.
5. RELEASE OF CLAIMS

3.1. CAPA’s Release of MCC

This Consent Judgment is a full, final and binding resolution between CAPA, on behalf of
itself, its past and current agents, representatives, attorneys, successors and/or assignees, and in
the interest of the general public (“Releasors”), on the one hand, and MCC, its parents,
subsidiaries, affiliated entities that are under common ownership, directors, officers, employees,
licensors, licensees, predecessors in interest, retailers, marketplace hosts, distributors and/or any
other person to whom MCC directly or indirectly distributed Covered Products (“Releasees”), of}
any violation of Proposition 65 that was or could have been asserted by CAPA against the
Releasees, related to any violation of Proposition 65 that was or could have been asserted by
CAPA, on behalf of itself, against Releasees for unwarned exposures to marijuana smoke, and fo
claims based on the Notice and Complaint relating to the Covered Products that were
manufactured, imported, distributed, sold and/or offered for sale by MCC (either directly or
through the Releasees) in California before the Effective Date.

With respect to the foregoing waivers and releases in this paragraph, Releasors hereby
specifically waive any and all rights and benefits which they now have, or in the future may have,
conferred by virtue of the provisions of § 1542 of the California Civil code, which provides as

follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE
CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH |
THE DEBTOR OR RELEASED PARTY..

5.2. MCC’s Release of CAPA

MCC on behalf of itself, its past and current agents, representatives, attorneys, successors,
and/or assignees, hereby waives any and all claims against CAPA, its attorneys and other
representatives, for any and all actions taken or statements made (or those that could have been
taken or made) by CAPA and its attorneys and other representatives in the course of investigating
claims or otherwise seeking to enforce Proposition 65 against it in this matter with respect to the
Covered Products.
6. COURT APPROVAL

This Consent Judgment is not effective until it is approved and entered by the Court and|
shall be null and void if, for any reason, it is not approved and entered by the Court. |
7, SEVERABILITY

If, subsequent to the execution of this Consent Judgment, any provisions of this Consent|
Judgment are deemed by a court to be unenforceable, the validity of the remaining provisions |
shall not be adversely affected. |
8 GOVERNING LAW |

The terms of this Consent Judgment shall be governed by the laws of the State of California

and apply within the State of California, In the event that Proposition 65 is repealed or is
otherwise rendered inapplicable by reason of law generally, or as to the Covered Products, then
MCC shall have no further obligations pursuant to this Consent Judgment with respect to, and to
the extent that, Covered Products are so affected. ~
9. NOTICES

Unless specified herein, all correspondence and notice required to be provided pursuant to
this Consent Judgment shall be in writing and, with courtesy copies to counsel delivered by email,
sent by: (a) personal delivery; (b) first-class, registered or certified mail, return receipt requested;
or (c) a recognized overnight courier on any Party by the other at the following addresses:

For MCC: Daniel Sosa

Mid City Cannabis Club, Inc.

5057 W. Pico Blvd.
Los Angeles, CA 90019with a copy to: Ann Grimaldi
Grimaldi Law Offices
535 Mission Street, 14th Floor
San Francisco, CA 94105

For CAPA: James K. Kawahito |
Kawahito Law Group APC
Attn. CAPA v. Mid City Cannabis, Inc.
222 N. Pacific Coast Hwy., Suite 2222
El Segundo, CA 90245
jkawahito@kawahitolaw.com

with a copy to: Center for Advanced Public Awareness, Inc.
Attn: Linda Droubay
100 Promenade Circle, Suite 300
Sacramento, CA 95834

Any Party may, from time to time, specify in writing to the other a change of address to
which all notices and other communications shall be sent.
10. COUNTERPARTS; FACSIMILE SIGNATURES

This Consent Judgment may be executed in counterparts and by facsimile or portable

document format (PDF) signature, each of which shall be deemed an original, and all of which,
when taken together, shall constitute one and the same document.
11. COMPLIANCE WITH HEALTH & SAFETY CODE § 25249.7

CAPA and his attorneys agree to comply with the reporting form requirements referenced
in California Health and Safety Code Section 25249.7(f).
12, ADDITIONAL POST EXECUTION ACTIVITIES

The parties acknowledge that, pursuant to Health & Safety Code §25249.7, a noticed
motion is required to obtain judicial approval of this Consent Judgment. In furtherance of
obtaining such approval, CAPA and MCC and their respective counsel agree to mutually employ
their reasonable best efforts to support the entry of this agreement as a Consent Judgment and
obtain approval of the Consent Judgment by the Court in a timely manner. For purposes of this
paragraph, reasonable best efforts shall include cooperating on the drafting and filing of any
required papers in support of the motion for judicial approval.

13. MODIFICATION4a

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This Consent Judgment may be modified only: (1) by written agreement of the parties and
upon entry of a modified consent judgment by the Court thereon; or (2) upon a successful motion
of any party and entry of a modified consent judgment by the Court. The Attorney General shal
be served with notice of any proposed modification to this Consent Judgment at least fifteen days
in advance of its consideration by the Court.

14, AUTHORIZATION

The undersigned are authorized to stipulate to, enter into, and execute this Consent

Judgment on behalf of their respective parties, and have read, understood, and agree to all of the

terms and conditions of this Consent Judgment.

AGREED TO: AGREED TO:

Date: Date:_Z-Z5-19

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By.” EST By: LAME Se SF

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Center for Public Awareness, Inc. Mid City Cannabis Club, Inc.

ORDER AND JUDGMENT.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that, pursuant to Health &
Safety Code § 25249.7(f)(4) and Code of Civil Procedure § 664.6, judgment is hereby entered.

Dated:

JUDGE OF THE SUPERIOR COURT

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