Enchante Case Summary

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California litigators are trained to treat Code of Civil Procedure section 998 as a powerful settlement tool. In ordinary civil cases, a well‑timed 998 offer can put economic pressure on the other side: reject it and fail to “beat” it at trial, and you may end up paying the offeror’s post‑offer costs (and, where available, expert fees).

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California’s Proposition 65—formally the Safe Drinking Water and Toxic Enforcement Act of 1986—relies on private enforcers to police toxic exposures when the Attorney General cannot or will not. These “private attorney general” actions are explicitly required to be brought “in the public interest.” Health & Safety Code § 25249.7(d). That statutory phrase is not decorative; it imposes mandatory procedural safeguards on any settlement, including court approval after a noticed motion, a 45-day Attorney General review period, and an express judicial finding that each of the many components of the settlement (proposed consent judgement) are in the public interest.

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Code of Civil Procedure § 998, by contrast, is a blunt cost-shifting tool designed for ordinary two-party litigation. Accept the offer → the clerk enters judgment as a ministerial act. Reject it and fail to beat it at trial → pay the defendant’s post-offer costs and expert fees. Cases which are not in the public interest are rarely resolved via consent judgement, which is mandatory for a public interest case.

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The two statutes are irreconcilable.

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Drawing on the recent appellate case Consumer Advocacy Group, Inc. v. Enchante Accessories, Inc. and related briefing, this article explains why 998 offers do not fit – and should not be used to shift costs – in Proposition 65 cases.

1. Proposition 65 Actions Are Public‑Interest, Qui Tam–Style Cases

Proposition 65 (the Safe Drinking Water and Toxic Enforcement Act of 1986, Health & Saf. Code, § 25249.5 et seq.) authorizes “any person in the public interest” to bring a civil action to enforce labeling and discharge requirements. These are not conventional private damages suits:

• The plaintiff is acting in the public interest, standing in the State’s shoes.

• The claim belongs to the State; civil penalties are owed to the government (with a portion potentially allocated to the private enforcer).

• Courts have recognized that Prop 65 actions are not meaningfully distinguishable from other qui tam–style statutes, such as PAGA, in terms of their public‑interest function.

The upshot is straightforward: a private Prop 65 enforcer is a representative of the public, not a private tort plaintiff vindicating personal rights. That representative role has direct consequences for settlement.

2. Prop 65 Settlements Are Always Conditional: AG Review and Court Approval

Proposition 65 does not allow the parties to simply agree to a deal, file a stipulation, and walk away. The statute and regulations impose mandatory safeguards whenever a case is resolved:

1. Broad definition of “settlement.”
   The regulations define “settlement” expansively to capture virtually any agreement that resolves or affects a Prop 65 claim (11 Cal. Code Regs. § 3001(e)).

2. Attorney General review.
   All proposed settlements must be served on the Attorney General, who has a statutory right to:

   • Review the terms;

   • Comment;

   • Demand changes; or

   • Object.

3. Court approval and specific findings.
   Under Health & Saf. Code § 25249.7(f), a court may approve a settlement only if it makes specific findings, including that:

   • The settlement is fair, reasonable, and in the public interest;

   • The penalties and injunctive relief are appropriate and consistent with Proposition 65’s purposes.

4. No judgment until criteria are adjudicated.
   Section 25249.7(f)(4) requires the court to withhold entry of judgment until:

   • Attorney General review has occurred, and

   • The court has adjudicated the statutory criteria and made the necessary findings.

In other words, every lawful Proposition 65 settlement is conditionally effective: it depends on AG review and judicial approval.

3. Section 998 Requires Unconditional Offers and Automatic Judgments

Section 998 is built on a fundamentally different model. It assumes that:

• The parties are litigating their own claims;

• They are free to settle those claims on any terms they choose; and

• The court’s role is ministerial when an offer is accepted.

Key features of section 998 include:

• A party may serve a written offer “to allow judgment to be taken” or “an award to be entered” on specified terms.

• If the offer is accepted and proof of acceptance is filed, “the clerk or the judge shall enter judgment accordingly.”

• Courts have stressed that a 998 offer must be unconditional to be valid. Where an offer is expressly contingent on trial court approval, it is a conditional offer and invalid under section 998.

Section 998 is designed to be self‑executing: once an offer is accepted, the court (or clerk) simply enters judgment in accordance with the offer. There is no statutory room for additional public‑interest review, changes demanded by a third party, or discretionary findings by the court.

4. You Cannot Draft a Prop 65 Settlement That Is Also a Valid 998 Offer

This is the heart of the incompatibility. The Enchante briefing makes the conflict explicit:

• Every lawful Prop 65 settlement is conditional on Attorney General review and court approval.

• Every valid 998 offer must be unconditional and immediately enforceable upon acceptance.

Thus, you face a binary choice:

• If you draft an “unconditional” 998 offer in a Prop 65 case that purports to be fully effective upon acceptance, you are attempting to bypass statutory AG review and court‑approval requirements, and the settlement is unlawful under Prop 65; or

• If you draft an offer that is expressly conditioned on Attorney General review and court approval, the offer is not a valid 998 offer because it is conditional.

You cannot have both:

Any settlement offer that complies with Proposition 65’s public‑interest safeguards cannot be a valid section 998 offer. Any offer that qualifies as a valid section 998 offer cannot comply with Proposition 65.

5. Direct Procedural Clash: Judgment Entry Under Prop 65 vs. 998

The conflict is not just conceptual; it is procedural and irreconcilable.

• Section 998: Once a written offer is accepted and filed, “the clerk or the judge shall enter judgment accordingly.” The role is ministerial. The court does not revisit or alter the terms.

• Proposition 65: Section 25249.7(f)(4) instructs the court to refrain from entering judgment until it has:

  • Considered Attorney General input, and

  • Adjudicated whether the settlement meets statutory criteria and made express findings.

Under 998, the court must enter judgment because the parties have agreed.
Under Prop 65, the court must withhold judgment unless and until it independently determines the settlement serves the public interest.

A trial court simply cannot follow both commands at once:

• It cannot automatically enter judgment “accordingly” upon acceptance (998),
  and

• Withhold judgment until it evaluates public‑interest criteria and potentially rejects or alters the settlement (Prop 65).

This procedural clash alone is enough to show that 998’s framework does not fit within Prop 65’s enforcement regime.

6. Private Enforcer Cannot “Just Take the Deal”

In a typical civil case, a plaintiff presented with a reasonable 998 offer has complete authority to:

• Accept or reject the offer;

• Settle their claim on those terms; and

• Bind themselves by that decision, with no required involvement from anyone else.

In a Proposition 65 case, the private enforcer:

• Does not own the claim – they act as a proxy for the State;

• Cannot unilaterally compromise penalties or injunctive relief; and

• Must structure any settlement to withstand Attorney General scrutiny and court review.

Even if a defendant makes what appears to be a generous 998 offer, the plaintiff cannot simply accept it and end the case:

• The agreement must still be submitted for AG review;

• The Attorney General may object or demand changes;

• The court must evaluate and may reject or require modifications to the settlement.

Penalizing a Prop 65 plaintiff for “not accepting” or “not beating” a 998 offer ignores these structural limits. It treats them like a traditional private litigant with unilateral authority to settle, when the statute expressly denies them that autonomy.

As the Enchante briefing underscores, punishing a plaintiff for failing to do something they are legally incapable of doing—ending the case unilaterally on the defendant’s terms—cannot be squared with either the text or the purpose of section 998.

7. 998 Cost‑Shifting Undermines the Economics of Prop 65 Enforcement

Proposition 65’s enforcement model depends heavily on private enforcers to supplement public resources. To make that model viable, the statute:

• Provides for civil penalties and fee awards sufficient to support complex litigation;

• Envisions that citizen enforcers will take on cases involving specialized science, discovery, and expert testimony.

If defendants can deploy section 998 as a cost‑shifting weapon against citizen enforcers:

• Plaintiffs face the risk of substantial cost exposure, including expert fees, even where they act reasonably and in the public interest;

• The mere threat of adverse 998 cost‑shifting can deter meritorious cases, especially for smaller organizations and counsel;

• The economic feasibility of private enforcement—the mechanism voters relied upon to ensure real‑world compliance—erodes.

Instead of encouraging efficient settlements, importing 998 into Prop 65 would chill public‑interest enforcement and frustrate the statute’s core purpose: protecting Californians from toxic exposures through robust, economically viable citizen suits.

8. Specific Statutory Scheme Controls Over General Cost‑Shifting Rules

California courts apply familiar principles of statutory interpretation when two statutes conflict:

• A specific, later‑enacted statutory scheme typically controls over a more general statute that would otherwise apply.

• Courts seek to harmonize statutes where possible, but where the conflict is direct and irreconcilable, the specific statute prevails.

Here:

• Proposition 65 creates a comprehensive, specific enforcement regime for toxic‑warning cases, including mandatory settlement procedures and standards.

• Section 998 is a general procedural tool for civil cases, aimed at encouraging settlement through cost‑shifting.

Where 998’s requirements for unconditional offers and automatic judgments collide with Prop 65’s mandatory AG review, court approval, and public‑interest findings, the specific Proposition 65 framework controls. In that domain, section 998 simply has no work to do.

9. Legislative Acquiescence: The Conflict Is Not an Accident

Both Proposition 65 and section 998 have been amended since practitioners and courts began recognizing that 998 does not fit comfortably within Prop 65 citizen suits. Yet the Legislature has:

• Not added any special rule authorizing 998 offers in Prop 65 enforcement actions;

• Not carved out Prop 65 from the Attorney General and court‑approval requirements;

• Not attempted to reconcile the unconditional‑offer/automatic‑judgment structure of 998 with Prop 65’s mandatory oversight.

Under standard rules of statutory interpretation, when the Legislature amends statutes against the backdrop of a well‑understood conflict and does nothing to alter that conflict, courts may infer legislative acquiescence: the Legislature has effectively accepted that section 998 cost‑shifting is incompatible with Prop 65’s enforcement scheme.

10. Practical Takeaways for Proposition 65 Practitioners

For Defendants

• Be cautious with 998 strategy. A purported 998 offer that either bypasses AG/court review or conditions itself on such review is likely either unlawful under Prop 65 or invalid under 998—or both.

• Focus on compliant settlements. Center negotiations on settlements that will achieve durable, enforceable injunctive relief and appropriate penalties.

• Consider the optics and risk. Aggressive attempts to seek large cost awards based on questionable 998 offers can invite appellate scrutiny and damage credibility with trial courts.

For Private Enforcers

• Know your statutory role. You cannot unilaterally dispose of the State’s claim. Any settlement must pass AG and court review, regardless of how a 998 offer is framed.

• Build a clear record. If confronted with a 998 offer, document why:

  • The offer cannot be accepted unconditionally;

  • Compliance with Prop 65 requires AG and court involvement;

  • Cost‑shifting would chill public‑interest enforcement in violation of legislative purpose.

• Frame your opposition in public‑interest terms. Emphasize that 998’s private‑dispute logic does not map onto a public enforcement action that is, in functional terms, a form of qui tam litigation.

Conclusion

Section 998 was designed for conventional private disputes where parties have complete authority to settle their own claims and where judgment can be entered automatically once an offer is accepted. Proposition 65 enforcement actions are different in kind, not just degree:

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• They vindicate public rights through a citizen‑suit mechanism akin to a qui tam statute;

• Every settlement is necessarily conditional on Attorney General review and court approval, with express public‑interest findings;

• The trial court is a gatekeeper, not a passive recorder of the parties’ bargain.

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As the recent Enchante (Consumer Advocacy Group, Inc. v. Enchante Accessories, Inc. (July 25, 2025, No. B337902), Cal.App.5th [2025 Cal. App. Unpub.]) briefing makes clear, no litigant and no court in a Proposition 65 case can simultaneously comply with both section 998 and Proposition 65’s settlement requirements. Given this direct conflict, and the statute’s reliance on economically viable private enforcement, section 998 cost‑shifting simply does not belong in Proposition 65 citizen suits.

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For both plaintiffs and defendants, effective Proposition 65 practice means recognizing that reality and tailoring settlement strategy to the statute we actually have—one that places public health and transparent, supervised resolutions above private cost‑shifting gamesmanship.

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