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SETTLEMENT AGREEMENT
This Settlement Agreement (Agreement) is entered into by and between the California
Air Resources Board (CARB), with its principal office at 1001 I Street, Sacramento,
California, and Target Corporation (Target) with its principal place of business at 1000
Nicollet Mall, Minneapolis, Minnesota, hereinafter referred to individually as a Party, or
collectively as the Parties.
RECITALS
1.
The Consumer Products Regulations, title 17, California Code of Regulations
(17 CCR) section 94500 et seq. applies to any person who sells, supplies, offers
for sale, or manufactures consumer products for use in California.
2.
The Table of Standards in 17 CCR section 94509(a) sets forth the percentage by
weight of allowed volatile organic compounds (VOC) for the Automotive
Windshield Washer Fluid (Nontype “A” areas) category manufactured after
December 31, 2002. Windshield Washer Fluid (Nontype “A”) must meet the 1
percent by weight standard for VOC.
3.
Failure to comply with the Consumer Products Regulations is a violation of state
law resulting in penalties. Among other penalties, Health and Safety Code
(H&SC) sections 42400 – 42403 authorize strict liability penalties up to $10,000
for each day that the violation occurs.
4.
CARB alleges that Target manufactured, sold, supplied, or offered for sale in
California, RainX 2-in-1 All Season -25°F and Splash Windshield Wash All Season
-25°F that are subject to a VOC limit for the Automotive Windshield Washer
Fluid (Nontype “A”) category specified in 17 CCR section 94509(a).
5.
CARB alleges that the RainX 2-in-1 All Season -25°F and Splash Windshield
Wash All Season -25°F products referenced in Recitals paragraph 4 contained
concentrations of VOCs exceeding the 1 percent by weight VOC limit for the
Automotive Windshield Washer Fluid (Nontype “A”) category specified in 17
CCR section 94509(a).
6.
CARB alleges that if the allegations described in Recitals paragraphs 4 and 5
were proven, civil penalties could be imposed against Target as provided in
H&SC section 42402 et seq. for each and every unit involved in the violations.
7.
Target admits the allegations described in Recitals paragraphs 4 and 5, but
denies any liability resulting from said allegations.
8.
In consideration of the foregoing, and of the promises and facts set forth
herein, the Parties desire to settle and resolve all claims, disputes, and
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obligations relating to the above-listed alleged violation and voluntarily agree
to resolve this matter by means of this Agreement, without the need for formal
litigation. Target has taken, or agrees to take, the actions enumerated below
within the Terms and Conditions. CARB accepts this Agreement in termination
and settlement of this matter.
TERMS AND CONDITIONS
In consideration of CARB not filing a legal action against Target for the violations
referred to above, CARB and Target agree as follows:
9.
Target shall not manufacture, sell, supply, or offer for sale in California, any
consumer products in violation of the California Consumer Products Regulations
set forth in 17 CCR section 94500 et seq.; the terms and conditions set forth in
this Agreement will remain valid and enforceable notwithstanding any future
violations that may occur.
10.
Target, in settlement of the above-described violations of 17 CCR
section 94507 et seq., agrees to pay a penalty to CARB in the amount of
$221,850 payable to the California Air Pollution Control Fund, concurrent with
the execution of this Agreement. Payment and the signed Agreement shall be
mailed to the address specified on the Payment Transmittal Form enclosed with
this Agreement.
11.
This Agreement shall apply to and be binding upon Target and its officers,
directors, receivers, trustees, employees, successors and assignees, subsidiary
and parent corporations and upon CARB and any successor agency that may
have responsibility for and jurisdiction over the subject matter of this
settlement.
12.
The Parties stipulate that this Agreement shall be the final resolution of CARB
claims regarding the above-described violations and shall have the same res
judicata effect as a judgment in terms of acting as a bar to any civil action by
CARB against Target, its officers, directors, receivers, trustees, employees,
successors and assignees, subsidiary and parent corporations. This Agreement
shall be deemed the recovery of civil penalties for purposes of precluding
subsequent criminal action as provided in H&SC section 42400.7(a).
13.
This Agreement shall be interpreted and enforced in accordance with the laws
of the State of California, without regard to California’s choice of law rules.
14.
This Agreement constitutes the entire agreement and understanding between
CARB and Target concerning the claims and settlement in this Agreement, and
this Agreement fully supersedes and replaces any and all prior negotiations and
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agreements of any kind or nature, whether written or oral, between CARB and
Target concerning these claims.
15.
The Effective Date of this Agreement shall be the date upon which it is fully
executed.
16.
This Agreement is deemed to have been drafted equally by CARB and Target;
it will not be interpreted for or against either Party on the grounds that said
Party drafted it.
17.
No agreement to modify, amend, extend, supersede, terminate, or discharge
this Agreement, or any portion thereof, shall be valid or enforceable unless it is
in writing and signed by all Parties to this Agreement.
18.
This Agreement shall further serve to toll any statute of limitation until all terms
and conditions of this Agreement have been fulfilled.
19.
It is further agreed that the stipulated penalties described in this Agreement are
non-dischargeable under United States Code, title 11, section 523(a)(7).
20.
Penalty Determination
H&SC section 39619.7 requires CARB to provide information on the basis for
the penalties it seeks. This Agreement includes this information, which is also
summarized here.
The provision of law the penalty is being assessed under and why that
provision is most appropriate for that violation.
The penalty provision being applied in this case is H&SC section 42402 et seq.
because Target sold, supplied, offered for sale, or manufactured for sale
consumer products for commerce in California in violation of the Consumer
Products Regulations (17 CCR section 94507 et seq.). The penalty provisions of
H&SC section 42402 et seq. apply to violations of the Consumer Products
Regulations because the regulations were adopted under authority of
H&SC section 41712, which is in Part 4 of Division 26.
The manner in which the penalty amount was determined, including
aggravating and mitigating factors and per unit or per vehicle basis for the
penalty.
H&SC section 42402 et seq. provides strict liability penalties of up to $10,000
per day for violations of the Consumer Product Regulations with each day being
a separate violation. In cases like this, involving unintentional violations of the
Consumer Products Regulations where the violator cooperates with the
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investigation, CARB has obtained penalties based on the excess emissions of
VOCs. Administrative penalties are also obtained in some cases.
In this case, the total penalty is $221,850 for the emission violations, which was
a strict liability violation. The per-unit penalty was based on 4.93 tons of excess
VOC emissions. CARB considered Target’s compliance history, including
previous violations involving automotive windshield washer fluids. The penalty
was reduced because Target significantly enhanced their inventory control and
cooperated with this investigation.
Final penalties were determined based on the unique circumstances of this
matter, considered together with the need to remove any economic benefit
from noncompliance, the goal of deterring future violations and obtaining swift
compliance, the consideration of past penalties in similar negotiated cases, and
the potential cost and risk associated with litigating these particular violations.
The penalty reflects violations extending over a number of days resulting in
quantifiable harm to the environment considered together with the complete
circumstances of this case. Penalties in future cases might be smaller or larger
on a per ton basis.
The final penalty in this case was based in part on confidential financial
information or confidential business information provided by Target that is not
retained by CARB in the ordinary course of business. The penalty in this case
was also based on confidential settlement communications between CARB and
Target that CARB does not retain in the ordinary course of business. The
penalty also reflects CARB’s assessment of the relative strength of its case
against Target, the desire to avoid the uncertainty, burden and expense of
litigation, obtain swift compliance with the law and remove any unfair
advantage that Target may have secured from its actions.
Is the penalty being assessed under a provision of law that prohibits the
emission of pollution at a specified level, and, if so a quantification of excess
emissions, if it is practicable to do so.
The Consumer Product Regulations do not prohibit emissions above a specified
level, but they do limit the concentration of VOCs in regulated products. In this
case, a quantification of the excess emissions attributable to the violations was
practicable because Target made the product formulation and sales data
necessary to make this quantification available to CARB. Based upon this
information (which Target has designated as confidential), the violations were
calculated to have 4.93 tons of excess VOC emissions emitted in California.
21.
Each provision of this Agreement is severable, and in the event that any
provision of this Agreement is held to be illegal, invalid, or unenforceable in any
jurisdiction, the remainder of this Agreement remains in full force and effect.
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22.
The Parties shall exchange signed copies of this Agreement. Facsimile,
portable document format or photocopied signatures shall be considered as
valid signatures as of the date hereof, although the original signature pages
shall be provided for CARB records, and shall thereafter be appended to this
Agreement.
23.
The undersigned represent that they have full power and authority to enter into
this Agreement.
ACKNOWLEDGED AND ACCEPTED BY:
California Air Resources Board
Target Corporation
By: _____________\S\_____________
By: ___________\S\_______________
Name: Richard W. Corey
Name: Cara A. Sylvester
Title: Executive Officer
Title: SVP, Merchandising
Date: November 21, 2019
Date: November 4, 2019
