Additional Settlement Payment (ASP)

An Additional Settlement Payment (ASP) is a payment made by a defendant in a Proposition 65 enforcement action above and beyond civil penalties, typically directed to a non-governmental third-party organisation (such as an environmental or public health group) rather than to OEHHA. ASPs became controversial because private enforcers could direct these payments to affiliated organisations they controlled or chose. California Attorney General regulations (Title 11, CCR, Chapter 4) significantly restrict ASPs: ASPs must not exceed 75% of the civil penalties in the settlement, must have a sufficient nexus to the underlying litigation and benefit California residents, and must be subject to judicial approval in court judgments.

California Health & Safety Code §25249.7; Title 11 CCR §3203 (Attorney General’s Proposition 65 enforcement regulations); Cal. AG Annual Proposition 65 Settlement Summaries.

Businesses receiving a 60-Day Notice of Violation should be aware that proposed settlement structures may include ASPs. Any ASP above 75% of the civil penalty component of the settlement creates legal risk. Businesses should ensure that proposed ASPs have a clear nexus to the alleged violation and benefit California, and should obtain qualified legal counsel before agreeing to any settlement involving ASPs. Courts increasingly scrutinise ASP terms in consent judgments.