Kitchen & Cookware Inc dba KC Trading Settlement Agreement

SETTLEMENT AGREEMENT

This Settlement Agreement is entered into between the California Air Resources

Board (CARB), with its principal location at 1001 I Street, Sacramento, California

95814; and Kitchen & Cookware, Inc., dba KC Trading (KC Trading), with its principal

location at 12935 Park Street, Santa Fe Springs, California 90670 (collectively, the

“Parties,” or individually, “Party”).

LEGAL BACKGROUND

(1) Purpose. The California Health and Safety Code mandates CARB adopt

regulations to achieve the maximum feasible reduction in volatile organic

compounds (VOCs) by consumer products. (Health & Saf. Code § 41712.)

(2) Regulation. CARB adopted the Regulation for Reducing Emissions from Consumer

Products (Consumer Products Regulation) to reduce VOCs. (Cal. Code Regs.,

tit.17, §§ 94507 et seq.)

(3) Re

gulatory Provisions. Any person who sells, supplies, offers for sale, or

manufactures any consumer product for use in California shall comply with the

standards set forth in the Consumer Products Regulation, including the VOC limit,

ingredient prohibitions, labeling, reporting, displaying the date of manufacture,

and other administrative requirements. (Cal. Code Regs., tit.17, §§ 94509–94515.)

If anywhere on the container of any consumer product, the manufacturer

represents that the product may be used or is suitable for a specific use in which a

lower limit applies, the lowest applicable limit shall apply. (Cal. Code Regs., tit.17,

§ 94512(a).)

(4) P

enalty Provisions. Failure to comply with the regulatory requirements is a violation

of state law that may result in penalties up to ten thousand nine hundred ten dollars

($10,910.00 USD) for strict liability violations for each day in which the violation

occurs. (Cal. Code Regs., tit.17, § 94507 et seq.; Health & Saf. Code §§ 39674,

39675, 42400 et seq., 42402 et seq., and 42410.)

CASE BACKGROUND

(5) Corporate Entity. At all relevant times, KC Trading was organized under the laws

of California as a corporation and conducted business in California.

(6) Allegations. This Settlement Agreement settles Notice of Violation (NOV) CP22-

01-07, which was issued on February 8, 2022. CARB alleged KC Trading violated

the Consumer Products Regulation by selling, supplying, offering for sale, or

manufacturing for use in California, Malpyo Shoe Polish that is subject to and

exceeded a VOC limit of 55 percent by weight for the Footwear or Leather Care

Product category as outlined in Notice of Violation CP22-01-07. CARB alleges that

Kitchen & Cookware, Inc., dba KC Trading

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if the allegations described in Paragraph 6 were proven, civil penalties could be

imposed against KC Trading for each and every day the noncompliant product

was sold, supplied, offered for sale or manufactured for use in California.

(7) Acknowledgment. KC Trading admits to the facts in paragraphs 1 through 6, but

denies any liability resulting from said allegations.

(8) Consideration. 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

obligations relating to the above-listed alleged violations and voluntarily agree to

resolve this matter by means of this Settlement Agreement. In order to resolve the

violations described herein, KC Trading has taken, or agrees to take, the actions

enumerated below within the Terms and Conditions. Further, CARB accepts this

Settlement Agreement in termination and full settlement of this matter.

TERMS AND CONDITIONS

In consideration of CARB not filing a legal action against KC Trading for the alleged

violations referred to above in Paragraph 6, and in consideration of KC Trading’s

agreement to complete all terms and conditions set forth below, CARB and KC

Trading agree as follows:

(9) Settlement Amount. KC Trading shall pay a civil penalty of three thousand dollars

($3,000.00 USD). KC Trading shall make payment within 30 calendar days from the

date CARB notifies KC Trading of the full execution of the Settlement Agreement.

(10) Civil Penalty Payment Method. KC Trading shall pay the civil penalty by check,

credit card, wire transfer, or portal, payable to CARB, using instructions provided

separately by CARB in a Payment Transmittal Form. KC Trading is responsible for

all payment processing fees. Payments shall be accompanied by the Payment

Transmittal Form to ensure proper application. CARB shall deposit the civil

penalty amount into the Air Pollution Control Fund for the purpose of carrying out

CARB’s duties and functions to ensure the integrity of its air pollution control

programs. Should payment instructions change, CARB will provide notice to KC

Trading in accordance with Paragraph 12 (Notices).

(11) Documents. KC Trading shall promptly email or mail the signed and dated

Settlement Agreement to the address or email in Paragraph 12 (Notices).

(12) Notices. Unless otherwise specified in this Settlement Agreement, whenever

notifications, submissions, or communications are required by this Settlement

Agreement, they shall be submitted in writing to the address or email below:

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As to CARB:

California Air Resources Board

Enforcement Division / Settlement Agreements

Consumer Products Enforcement Section

P.O. Box 2815

Sacramento, California 95812-2815

Settlement_Agree[email protected].gov

As to KC Trading:

Ki Kim

General Manager

12935 Park Street

Santa Fe Springs, California 90670

kale0327@gmail.com

Any Party may, by written notice to the other Parties, change its designated notice

recipient or notice address provided above. Notices submitted pursuant to this

section shall be deemed submitted upon emailing or mailing.

(13) Recovery of Costs. If the Attorney General files a civil action to enforce this

Settlement Agreement, KC Trading shall pay all costs of investigating and

prosecuting the action, including expert fees, reasonable attorneys’ fees, and

costs.

(14) Re

peat Violations. KC Trading agrees to comply with all regulatory requirements

and acknowledges that repeat violations could result in increased penalties in the

future.

(15) E

ntirety. This Settlement Agreement constitutes the entire agreement and

understanding between the Parties concerning the Case Background and

supersedes and replaces any and all prior negotiations and agreements of any

kind, whether written or oral, between the Parties concerning the Case

Background hereof. This Settlement Agreement consists of 8 pages and 33

paragraphs.

(16) Binding Effect. This Settlement Agreement binds KC Trading, and any principals,

officers, receivers, trustees, successors and assignees, subsidiary and parent

corporations and CARB and any successor agency that may have responsibility for

and jurisdiction over the subject matter of this Settlement Agreement.

(17) E

ffective Date. The effective date shall be the date upon which this Settlement

Agreement is fully executed.

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(18) Modification and Termination. No agreement to modify, amend, extend,

supersede, terminate, or discharge this Settlement Agreement, or any portion

thereof, is valid or enforceable unless it is in writing and signed by all Parties to

this Settlement Agreement.

(19) Sev

erability. Each provision of this Settlement Agreement is severable, and in the

event that any provision of this Settlement Agreement is held to be illegal, invalid

or unenforceable in any jurisdiction, the remainder of this Settlement Agreement

remains in full force and effect.

(20) Choice of Law. This Settlement 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.

(21) Non-Discharge. It is further agreed that the penalties described in this Settlement

Agreement are non-dischargeable under United States Code, title 11,

section 523(a)(7), which provides an exception from discharge for any debt to the

extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit

of a governmental unit.

(22) Rules of Construction. Any rule of construction to the effect that ambiguities are

to be resolved against the drafting party shall not be applied in interpreting this

Settlement Agreement.

(23) Non-Waiver. The failure to enforce any provision of this Settlement Agreement

shall not be construed as a waiver of any such provision, nor prevent such Party

thereafter from enforcing such provision or any other provision of this Settlement

Agreement. The rights and remedies granted all Parties herein are cumulative and

the election of one right or remedy by a Party shall not constitute a waiver of such

Party’s right to assert all other legal remedies available under this Settlement

Agreement or otherwise provided by law.

(24) Intent to be Bound. The Parties represent that: They have participated fully in the

review and drafting of this Settlement Agreement; understand and accept all

terms; enter into this Settlement Agreement freely and voluntarily; have had an

opportunity to consult with legal counsel; are fully informed of the terms and

effect of this Settlement Agreement; have agreed to this Settlement Agreement

after independent investigation and agree it was not arrived at through fraud,

duress, or undue influence; and knowingly and voluntarily intend to be legally

bound by this Settlement Agreement.

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(25) Venue. The Superior Court of California, located in the County of Sacramento,

shall hear any dispute between the Parties arising from this Settlement

Agreement.

(26) Counterparts and Electronic Signatures. This Settlement Agreement may be

executed in counterparts. Electronic, facsimile or photocopied signatures shall be

considered as valid signatures.

(27) Release. In consideration of the full completion of civil penalty, and all other

undertakings above, CARB hereby releases KC Trading and its principals, officers,

receivers, trustees, successors and assignees, subsidiary and parent corporations,

from any claims CARB may have based on the circumstances described in all

paragraphs contained in the Case Background above.

(28) Authority. The undersigned represents that he or she has full authority to enter

into this Settlement Agreement.

PENALTY BASIS

(29) Per Unit Penalty. The strict liability per unit penalty in this case is a maximum of

$10,910.00 per violation per day under Health and Safety Code section 42400

et seq., 38580 for violations of the Consumer Products Regulation.

In cases like this, involving unintentional violations of the Consumer Products

Regulations where there are low VOC emissions and the violator cooperates with

the investigation, CARB has obtained penalties based on at least three days of

violation. The per unit penalty in this case is for three days resulting in a penalty of

$1,000.00 per day of violation.

(30) Emissions. The provisions cited above prohibit emissions above a specified limit.

Consumer products meeting the definition of a Footwear or Leather Care Product

are subject to a VOC limit of 55 percent by weight, effective December 1, 2006.

Since CARB has alleged that the product did not meet the regulatory

requirements, the emissions above the specified percentage were in excess and

illegal.

(31) Aggravating and Mitigating Factors. The penalties in this matter were determined

in consideration of all relevant circumstances, including statutory factors as

described in CARB’s Enforcement Policy. CARB considered whether the violator

came into compliance quickly and cooperated with the investigation; the extent of

harm to public health, safety and welfare; nature and persistence of the violation,

including the magnitude of the excess emissions; compliance history; preventative

efforts taken; innovative nature and the magnitude of the effort required to

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comply, and the accuracy, reproducibility, and repeatability of the available test

methods; efforts to attain, or provide for, compliance prior to violation; action

taken to mitigate the violation; financial burden to the violator; and voluntary

disclosure. The penalties are set at levels sufficient to deter violations, to remove

any economic benefit or unfair advantage from noncompliance, to obtain swift

compliance, and the potential costs, risks, and uncertainty associated with

litigation. Penalties in future cases might be smaller or larger depending on the

unique circumstances of the case.

(32) Confidential Business Information. CARB based this penalty in part on confidential

business information provided by KC Trading and confidential settlement

communications.

(33) Effect of Settlement/Reservation of Rights. The following shall apply:

(a) This Settlement Agreement resolves the civil claims of CARB for the

violations alleged in this Settlement Agreement.

(b) CARB reserves, and this Settlement Agreement is without prejudice to, all

claims, rights, and remedies against KC Trading with respect to all matters

not expressly resolved in this Settlement Agreement. Notwithstanding any

other provision of the Settlement Agreement, CARB reserves all claims,

rights, and remedies, whether in law or equity, against KC Trading with

respect to:

(i) Noncompliance with or enforcement of any provision of this Settlement

Agreement.

(ii) Facts that were not disclosed by KC Trading to CARB.

(iii) Violation of the California Health and Safety Code and its implementing

regulations, or other State laws, regulations, or permit condition(s) not

expressly resolved in this Settlement Agreement.

(iv) Any imminent and substantial endangerment to the public health,

welfare, or the environment in California, whether related to the

violations addressed in this Settlement Agreement or otherwise.

(v) Any criminal liability.

(vi) Any claim(s) of any officer or agency of the United States or California,

other than CARB.

injunctive relief, civil penalties, or other appropriate relief relating to

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enforcement of the Settlement Agreement, KC Trading shall not assert, and

may not maintain, any defense or claim based upon the principles of waiver,

res judicata, collateral estoppel, issue preclusion, claim preclusion, claim-

splitting, or other defenses based upon any contention that the claims raised

by CARB in the subsequent proceeding were or should have been brought in

the instant case.

(d) This Settlement Agreement does not limit or affect the rights of KC Trading

or of CARB against any third parties not covered by this Settlement

Agreement, nor does it limit the rights of third parties not covered by this

Settlement Agreement against KC Trading, except as otherwise provided by

law. This Settlement Agreement shall not be construed to create rights in, or

grant any cause of action to, any third party not covered by this Settlement

Agreement.

(e) This Settlement Agreement is not a permit, or a modification of any permit,

under any federal, State, or local laws or regulations. KC Trading is

responsible for achieving and maintaining compliance with all applicable

federal, State, and local laws, regulations, and permits; KC Trading’s

compliance with this Settlement Agreement shall not be a defense to any

action commenced pursuant to any such laws, regulations, or permits. CARB

does not, by its execution of this Settlement Agreement, warrant or aver in

any manner that KC Trading’s compliance with any aspect of this Settlement

Agreement will result in compliance with any provisions of federal, State, or

local laws, regulations, or permits.

ACKNOWLEDGED AND ACCEPTED BY:

California Air Resources Board

Signature: /S/

Name: Todd P. Sax, D.Env.

Title: Chief, Enforcement Division

Date: March 23, 2022

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Kitchen & Cookware, Inc., dba KC Trading

Signature: /S/

Name: Choong Whan Kim

Title: President

Date: March 17, 2022