Judgment: WHITNEY LEEMAN PHD VS. NEWEGG, INC ET AL

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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO

Document Scanning Lead Sheet
Mar-30-2017 4:30 pm

Case Number: CGC-14-542330
Filing Date: Mar-30-2017. 4:30
Filed by: ERICKA LARNAUTI

Image: 05804331
~ TEXT JUDGMENT

WHITNEY LEEMAN PHD VS. NEWEGG, INC ET AL

001005804331

Instructions:
Please ‘place this sheet on top of the document to be scanned.Brian C. Johnson, State Bar No. 235965
Josh Voorhees, State Bar No. 241436
THE CHANLER GROUP

2560 Ninth Street

Parker Plaza, Suite 214

Berkeley, CA 94710

Telephone: (510) 848-8880
Facsimile: (510) 848-8118
brian@chanler.com

josh@chanler.com

Attorneys for Plaintiff
WHITNEY R. LEEMAN, PH.D.

" SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
UNLIMITED CIVIL JURISDICTION

WHITNEY R. LEEMAN, PH.D.,
Plaintiff,
v.
NEWEGG INC., et al.,
Defendants.

Case No. CGC-14-542330

JUDGMENT PURSUANT TO TERMS OF
PROPOSITION 65 SETTLEMENT AND
CONSENT JUDGMENT

Date:

Time:
Dept.:
Judge:

March 30, 2017

9:30 a.m.

302

Hon. Harold E. Kahn

Reservation No. 02080330-01

JUDGMENT PURSUANT TO TERMS OF PROPOSITION 65 SETTLEMENT AND CONSENT JUDGMENTCo Oe NY Dn FF BW NHN

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Plaintiff Whitney R. Leeman, Ph.D. and defendants Newegg Inc., Magnell
Associate, Inc., and Rosewill Inc., having agreed through their respective counsel that
Judgment be entered pursuant to the terms of their settlement agreement in the form of a

consent judgment, and following this Court’s issuance of an order approving their

Proposition 65 settlement and Consent Judgment,

IT IS HEREBY ORDERED, ADJUDGED AND DECREED that, pursuant to
Health and Safety Code section 25249.7(£)(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 settlement under Code of Civil Procedure section 664.6.

IT IS SO ORDERED.
.alasta AVE
Dated __iashr JUDGE OF THE SUPERIOR COURT
HAROLD KAHN

1

JUDGMENT PURSUANT TO TERMS OF PROPOSITION 65 SETTLEMENT AND CONSENT JUDGMENT

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Brian C. Johnson, State Bar No. 235965
Josh Voorhees, State Bar No. 241436
THE CHANLER GROUP

2560 Ninth Street

Parker Plaza, Suite 214

Berkeley, CA 94710

Telephone: (510) 848-8880

||Facsumile: (510) 848-8118

brian@chanler.com
josh@chanler.com

Attomeys for Plaintiff
WHITNEY R. LEEMAN, PH.D.

SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
_ UNLIMITED CIVIL JURISDICTION
WHITNEY R, LEEMAN, PILD.,

) CASE NO. CGC-14-542330
Plaintiff, } [PROPOSED] CONSENT
J JUDGMENT
vs.
; (Health & Safety Code § 25249.6 et seq.
NEWEGG INC., ef al., ) and Code of Civil Procedure § 664.6)
Defendant. }
)

L INTRODUCTION

1.1. Parties

This Consent Judgment is entered into by and between plaintiff Whitney R. Leeman,
Ph.D. (“Leeman”) on the one hand, and defendants Newegg Inc., Magnell Associate, Inc., and
Rosewill Inc. (“Defendants”) on the other hand, with Leeman and Defendants each referred to

individually as a “Party” and collectively as the “Parties.”

12 Plaintiff

Leeman is a resident of the State of California who seeks to promote awareness of
exposures to toxic chemicals, and improve human health by reducing or eliminating harmful
substances contained in consumer and commercial products.

1.3 Defendant

Defendants each employ ten or more persons and are each a person in the course of doing}

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business for purposes of the Safe Drinking Water and Toxic Enforcement Act of 1986,
California Health and Safety Code section 25249.5 et seq. (‘Proposition 65”).

1.4 General Allegations

Leeman alleges that Defendants manufacture, import, sell and/or distribute for sale in
California, audio headsets with vinyl/PVC cords and other components containing di(2-
ethylhexyl) phthalate (“DEHP”), and backpacks with vinyl/PVC handles and other components
containing DEHP, and that they do so without providing the health hazard warning required by
Proposition 65. .

1.5 Product Description

For purposes of this Consent Judgment, “Products” are defined as: (a) audio headsets
with vinyl/PVC cords and other components containing DEHP; and (b) backpacks with
vinyl/PVC handles and/or other components containing DEHP that are manufactured, sold, or
distributed for sale in California by Defendants. Products specifically includes, but is not limited
to, the (i) Rosewill USB Headset, Model No. RHM-6308, UPC #8 98745 03915 3; (ii) Rosewill
Ergonomic Designed Headset, RHM-556, UPC #8 98745 01696 3; (iii) Rosewill Multimedia
Stereo Headset, RH-001, UPC #8 98745 00949 1; and (iv) Rosewill 15.6” Notebook
Backpack/Computer Bag, RMBP-11001, UPC #8 98745 04517 8. In addition, the items
identified on Exhibit “A” to this Consent Judgment are also. included within the scope of the term
“Products.”

1.6 Notices of Violation

On July 30, 2014, Leeman served Defendants, the California Attorney General, and all
other requisite public enforcement agencies with a 60-Day Notice of Violation (“Notice”),
alleging that Defendants violated Proposition 65 when they failed to warn their customers and
consumers in California that the audio headset products expose users to DEHP. On March 23,
2016, Leeman served Defendants, Defendants’ retail customers, Amazon.com, Inc. (“Amazon”),
and Wal-Mart Stores, Inc. (“Wal-Mart”), the California Attorney General, and all other requisite

public enforcement agencies with a Supplemental 60-Day Notice of Violation (“Supplemental

Notice”), alleging that Defendants, Wal-Mart, and Amazon.com, Inc. all violated Proposition 65

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when they failed to warn their customers and consumers in California that the Products expose
users to DEHP. The Notice and Supplemental Notice are referred to collectively as the
“Notices.” No public enforcer has commenced and is diligently prosecuting an action to enforce
the allegations set forth in either of the Notices.

1.7. Complaint

On October 23, 2014, Leeman commenced the instant action, naming Newegg Inc.,
Magnell Associate, Inc., and Rosewill Inc. as defendants for the alleged violations of Proposition
65 that are the subject of the Notice. Thereafter, on July 19, 2016, Leeman filed a first amended
complaint, the operative pleading in this action (“Complaint”), adding Amazon and Wal-Mart as
defendants, and alleging additional violations of Proposition 65 regarding DEHP in Detendants’
backpack products, as alleged in the Supplemental Notice.

1.8 No Admission

Defendants deny the material, factual, and legal allegations contained in the Notices.and
Complaint, and maintain that all of the products that they have sold or distributed for sale in
California, including the Products, have been and are, in compliance with all laws. Nothing in
this Consent Judgment shall be construed as an admission by any of the Defendants of any fact,
finding, conclusion of law, issue of Jaw, or violation of law, nor shall compliance with this
Consent Judgment constitute or be construed as an admission by any of the Defendants of any
fact, finding, conclusion of law, issue of law, or violation of law. This Section shall not,
however, diminish or otherwise affect Defendants’ obligations, responsibilities, and duties under
this Consent Judgment.

19 — Jurisdiction

For purposes of this Consent Judgment only, the Parties stipulate that this Court has
jurisdiction over Defendants as to the allegations contained in the Complaint, that venue is
proper in the County of San Francisco, and that the Court has jurisdiction to enter and enforce
the provisions of this Consent Judgment pursuant to Proposition 65 and Code of Civil Procedure
séction 664.6.
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3.
[Proposed] Consent Judgment1.10 Effective Date

For purposes of this Consent Judgment, the term “Effective Date” shall mean the date
that the Court grants the motion for approval of this Consent Judgment contemplated by Section
5.

2. INJUNCTIVE SETTLEMENT TERMS: REFORMULATED PRODUCTS

Commencing ninety (90) days after the Effective Date, and continuing thereafter,
Defendants shall only manufacture for sale, or purchase for sale in California, Reformulated
Products. For purposes of this Consent Judgment, “Reformulated Products” are defined as
Products with a maximum DEHP concentration 1,000 parts per million (0.1 %) in any
component analyzed pursuant to U.S. Environmental Protection Agency testing methodologies
3580A and 8270C, or other methodologies utilized by state or federal agencies for the purpose of
determining DEHP content in a solid substance.

3. MONETARY SETTLEMENT TERMS

3.1. Payments Pursuant to Health and Safety Code § 25249.7(b)(2)

Pursuant to Health and Safety Code section 25249.7(b)(2), and in settlement of all the
claims referred to in the Notices or this Consent Judgment, Defendants have agreed, jointly and |
severally, to be responsible for and to pay civil penalties in the amount of $14,000, The
Defendants’ penalty payment will be allocated in accordance with California Health & Safety
Code § 25249.12(c)(1) and (d), with 75% of the funds remitted to the California Office of
Environmental Health Hazard Assessment (“OEHHA”) and the remaining 25% of the penalty
remitted to Leeman. Defendants shall provide their payment in two checks for the following

.|| amounts payable to (a) “OEHHA” in the amount of $10,500; and (b) “Whitney R. Leeman,

Client Trust Account” in the amount of $3,500. Leeman’s counsel shall be responsible for
remitting Defendants’ penalty payment(s) under this Consent Judgment to OEHHA.

3.2. Reimbursement of Attorneys’ Fees and Costs

The Parties acknowledge that Leeman and her counsel offered to resolve this dispute
without reaching terms on the amount of fees and costs to be reimbursed to them, thereby

leaving the issue to be resolved after the material terms of the agreement had been settled.

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Shortly after the other settlement terms had been finalized, the Parties then negotiated a

resolution of the compensation due to Leeman and her counsel under general contract principles

|| and the private attorney general doctrine codified at California Code of Civil Procedure §

1021.5. For all work performed through the mutual execution of this agreement and the Court’s
approval of the same, but exclusive of fees and costs on appeal, if any, Defendants shall
reimburse Leeman and her counsel $49,000. Defendants’ payment shall be delivered in the
form of a check payable to “The Chanler Group.” Defendants’ reimbursement shall cover all
fees and costs incurred by Leeman investigating, bringing this matter to Defendants’ attention,
litigating, and negotiating a settlement in the public interest,

3.3. Payment Timing; Enforcement of Payment Terms

Defendants shall deliver all payments required by this Consent Judgment to Leeman’s
counsel within ten (10) days of the Effective Date. In the event that any payment required by
this Consent Judgment is untimely, the Parties agree and acknowledge that (a) Defendants shall
be liable to Leeman for ten percent (10%) simple interest per annum on any unpaid amount(s);
(b) Leeman may seek to enforce Defendants’ payment obligations under general contract
principles and Code of Civil Procedure sections 664.6; and (c) Leeman shall be entitled to any
fees incurred recovering such settlement payments pursuant to general contract principles and
Code of Civil Procedure section 1021.5.

3.4. Payment Address

All payments required by this Consent Judgment shall be delivered to:

The Chanler Group

Attn: Proposition 65 Controller
2560 Ninth Street

Parker Plaza, Suite 214
Berkeley, CA 94710

4, CLAIMS COVERED AND RELEASED
4.1. Leeman’s Release of Proposition 65 Claims
Leeman, acting on her own behalf and in the public interest, releases Defendants and
each of their parents, subsidiaries, affiliated entities under common ownership, directors,
officers, employees, and attorneys (“Releasees”) and each entity to whom they directly or
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indirectly distribute or sell the Products including, but not limited to, their downstream
distributors, wholesalers, marketplace hosts, direct or indirect customers (including, without
limitation, Wal-Mart Stores, Inc., Walmart.com USA LLC, EP Holdings, Inc., and Amazon.com,
Tne. and their respective parents, subsidiaries and affiliates), retailers, franchisers, coopcrative
meinbers, licensors and licensees (“Downstream Releasees”) from all claims arising under
Proposition 65 and alleging a failure to warn about exposures to DEHP in Products
manufactured, imported, sold or distributed for sale in Califomia by Defendants prior to the

Effective Date, as set forth in the Notices. Compliance with the terms of this Consent Judgment

‘constitutes compliance with Proposition 65 by Defendants with respect to the alleged or actual

failure to warn about exposures to DEHP in Products manufactured, sold, or distributed for sale |
by Defendants after the Effective Date.

4.2 Leeman’s Individual Release of Claims

Leeman, in her individual capacity only and not in any representative capacity, also
provides a release to Defendants, Releasees, and Downstream Releasees which shall be effective
as a full and final accord and satisfaction, as a bar to all actions, causes of action, obligations,
costs, expenses, attorneys’ fees, damages, losses, claims, liabilities and demands of any nature, |
character or kind, whether known or unknown, suspected or unsuspected, arising out of alleged
or actual exposures to DEHP in Products manufactured, imported, sold or distributed for sale by
Defendants before the Effective Date.

4.3 Defendants’ Release of Leeman

Defendants, each on its own behalf, and on behalf of its past and current agents,

representatives, attorneys, successors, and assignees, hereby waive any and all claims against

_|| Leeman and her attorneys and other representatives, for any and all actions taken or statements

made by Leeman and her attorneys and other representatives, whether in the course of
investigating claims, seeking to enforce Proposition 65 against them in this matter, or with
respect to the Products. ‘

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5. 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 within one
year after it has been fully executed by the Parties, or by such additional time to which the
Parties may agrec to in writing. Leeman and Defendants agree to support the entry of this
agreement as a judgment, and to obtain the Court’s approval of their settlement in a timely
manner. The Parties acknowledge that, pursuant to California Health and Safety Code section
25249.7(f), a noticed motion is required for judicial approval of this Consent Judgment, which
motion Leeman shall draft and file and Defendants shall support, including by appearing at the
hearing if so requested. If any third-party objection to the motion is filed, Leeman and
Defendants agree to work together to file a reply and appear at any hearing. This provision is a
material component of the Consent Judgment and shall be treated as such in the event of a
breach.

6. DISMISSAL OF RETAILER DEFENDANTS

Within five (5) days of receiving the settlement payments required by Sections 3.1 and
3.2, or ten (10) days after the Effective Date, whichever is later, Leeman agrees to file a request
for dismissal without prejudice as to defendants Amazon.com, Inc., and Wal-Mart Stores, Inc.
1 SEVERABILITY

Tf, subsequent to the Court’s approval and entry of this Consent Judgment as a judgment,
any provision of this Consent Judgment is held by a court to be unenforceable, the validity of the

remaining provisions shall not be adversely affected.

18. 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,
preempted, or is otherwise rendered inapplicable by reason of law generally, or as to the
Products, then Defendants may provide Leeman with written notice of any asserted change in the
law, and shall have no further injunctive obligations pursuant to this Consent Judgment, with

respect to, and to the extent that, the Products are so affected.

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9. NOTICE
Unless specified herein, all correspondence and notice required by this Consent Judgment
shall be in writing and sent by: (i) personal delivery, (ii) first-class registered or certified mail,

return receipt requested; or (iii) a recognized overnight courier to any Party by the other at the

following addresses:

To Defendants: To. Leeman:
Brian M. Ledger, Esq. The Chanler Group
Gordon & Rees LLP Attn: Prop 65 Coordinator
101 W. Broadway Suite 2000 2560 Ninth Street
San Diego, CA 92101 Parker Plaza, Suite 214

Berkeley, CA 94710-2565

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

This Consent Judgment may be executed in counterparts and by facsimile 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 REPORTING REQUIREMENTS

Leeman and her counsel agree to comply with the reporting form requirements referenced
in Califomia Health and Safety Code section 25249.7(f).
12. MODIFICATION

This Consent Judgment may be modified only by: (i) a written agreement of the Parties
and the entry of a modified Consent Judgment by the Court thereon; or (ii) upon a successful '
mation of any party and the entry of a modified Consent Judgment by the Court thereon.
13. AUTHORIZATION

The undersigned are authorized to 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.
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AGREED TO: AGREED TO:
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[Proposed] Consent JudgmentExhibit “A” to Consent Judgment

1, All audio headsets with vinyl/PVC cords and/or other components containing DEHP that
were manufactured, imported, sold, or distributed by Defendants in California.

2. All backpacks with vinyl/PVC handles and/or other components containing DEHP that
were manufactured, imported, sold, or distributed by Defendants in California.

3._ All Notebook Backpacks and Computer Bags with components containing DEHP that
were manufactured, imported, sold, or distributed by Defendants in California.

0ns8B/3112778y.1