California Attorney General (AG) Rob Bonta recently announced a consent judgment resolving allegations that the Pacific American Fish Company, Inc. (PAFCO), a seafood distributor and processor, had sold frozen seafood products with elevated levels of lead and cadmium in California without the warnings required by state law.

The PAFCO settlement concludes a 2020 lawsuit filed by then-California AG Xavier Becerra against five seafood industry defendants. The state’s claims against three of PAFCO’s four co-defendants — Jayone Foods, Inc., Seaquest Seafood Corporation, and Clearwater Fine Foods (USA) Inc. — resulted in settlements in April 2025, while the state’s claims against the fifth co-defendant were voluntarily dismissed.

Background

As amended in 2021, the state’s complaint alleged that each of the five defendants (1) was on notice that one or more of its seafood products contained lead and/or cadmium, and (2) intentionally sold the products in California without providing a clear and reasonable warning that the products contained these metals. All defendants allegedly received notices from private parties of these allegations before the AG filed suit.

According to the complaint, the companies’ conduct violated California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65), which, with some exceptions, prohibits any person in the course of doing business from knowingly and intentionally exposing any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving a clear and reasonable warning to such individual.

In addition to the alleged violations of Proposition 65, the complaint asserted violations of the state’s Unfair Competition Law. By invoking both laws, the complaint alleged that the defendants faced cumulative penalties of $2,500 per day for each violation of Proposition 65 as well as $2,500 per violation of the Unfair Competition Law, in addition to injunctive relief and attorneys’ fees and costs.

The PAFCO Settlement

The PAFCO settlement covers 27 seafood products — from apple snail meat to squid tentacles — that are manufactured, packaged, and/or sold by the company. The AG alleged that these products contain lead and/or cadmium at levels that warrant warnings for reproductive health risks. The company does not admit any wrongdoing.

Injunctive Terms. The settlement’s injunctive terms include requirements (1) to warn consumers about health risks from the covered products, and (2) to ensure that the company adheres to good manufacturing practices.

First, PAFCO agrees to provide a Proposition 65 warning for all its covered products. The warning must state that consuming the product can expose individuals to chemicals — lead and/or cadmium — known to California to cause birth defects or other reproductive harm. In addition, if a chemical is present in a product at levels that would require a warning for cancer under California law, PAFCO must provide the required cancer warning.

The nature of the warning varies depending on how each product is manufactured, packaged, and sold. For covered products that PAFCO manufactures or packages, PAFCO must include the Proposition 65 warning prominently on the product label. For covered products that PAFCO sells but does not manufacture or package, PAFCO will provide the warning by annually notifying retailers, distributors, and wholesalers buying the product of their obligations to warn consumers of the health risks. And for all internet sales, PAFCO also must provide a warning online.

Second, PAFCO will take steps to ensure that the company and its suppliers comply with good manufacturing practices identified in the consent judgment. PAFCO’s compliance will be certified annually. The first two certifications will be made by an independent food quality auditor, while subsequent certifications may be made by an appropriately trained PAFCO employee. The company will also request that its suppliers of covered products adopt similar safeguards and annually certify their compliance.

Should PAFCO introduce new products into the market after the effective date of the settlement, it may request that they be added to the list of covered products, and PAFCO will comply with the settlement’s injunctive terms for those products.

Monetary Relief. PAFCO has agreed to pay a civil penalty of $172,000 and attorneys’ fees in the amount of $76,000. PAFCO did not agree to make payment to any of the private enforcers that provided notice of PAFCO’s alleged Proposition 65 violations.

Opt-In Settlement Program. Finally, the PAFCO settlement establishes an “Opt-In Settlement Program” under which similarly situated companies may agree to be bound by the terms of the PAFCO judgment. Companies are considered similarly situated if they have 10 or more employees, are seafood harvesters or processors, sell fresh or frozen seafood in California containing lead and/or cadmium, and have more than $500,000 in average annual profits from California sales of such seafood products.

Companies interested in becoming opt-in defendants may send notice to the state by March 23, 2026. In its discretion, the state may respond by initiating negotiations over such terms as the covered products, the amount the opt-in defendant will pay the state in penalties and attorneys’ fees, and the terms of any payment to one or more private enforcers, among other terms. Successful negotiations may result in amendment of the consent judgment to add the opt-in defendant(s) and the terms governing their settlement.

The Jayone and Seaquest Settlements

The PAFCO settlement has many features in common with the April 2025 settlement with Jayone and Seaquest. But some differences stand out.

While the PAFCO settlement involves seafood harvesters or processors with more than $500,000 in average annual profits, the settlement with Jayone and Seaquest covers (1) seafood harvesters and processors with lower profits, and (2) companies that are not harvesters or processors but that sell or distribute seafood products to retailers or other sellers in California.

Reflecting the different nature of their businesses, Jayone and Seaquest settled for smaller monetary penalties and less onerous injunctive terms than PAFCO. Jayone, whose settlement covers nine products, agreed to pay $30,000 in civil penalties and $35,000 in fees and costs. Seaquest, whose settlement covers 11 products, agreed to pay $5,480 in civil penalties and $10,960 in fees and costs. The companies also agreed to pay $5,000 and $22,000, respectively, to a private enforcer.

As to injunctive relief requiring good manufacturing practices, harvesters and processors with profits under $500,000 are permitted to self-certify their compliance. Nonharvester/processors are only required to request that their suppliers adopt good manufacturing practices and provide the state with their response.

The Jayone and Seaquest settlement also created an opt-in settlement program for similarly situated companies, but the opt-in deadline has passed.

The Clearwater Settlement

The April 2025 settlement with Clearwater adopted a different framework. At the time of the settlement, Clearwater was a Canadian company selling various types of clams to consumers in California. The covered products are fresh and/or frozen Arctic Surf, Cockle, and/or Northern Propeller clams.

The Clearwater settlement requires adoption of certain cadmium reduction measures but offers the company pathways to avoid making Proposition 65 warnings for the covered products. Specifically, the settlement establishes a testing protocol for the company to evaluate the cadmium concentration in representative samples of production lots from each of Clearwater’s harvest areas. If testing reveals sufficiently low cadmium concentrations, no warning is required. If testing reveals cadmium concentrations above certain thresholds, Clearwater is required to adopt an escalating series of remedial measures, ranging from additional testing and assessments to introducing Proposition 65 warnings to outright stopping sales in California.

Because the testing protocol was established as a potential alternative to Clearwater adding warnings to its products, the company may opt out of the testing regime by voluntarily electing to provide Proposition 65 warnings.

Clearwater also agreed to pay $110,000 in civil penalties, $194,164.98 in attorneys’ fees and costs, and $6,000 to a private enforcer.

Unlike the other settlements, the Clearwater settlement did not establish an opt-in settlement program.

Why It Matters

While the requirements of California’s Proposition 65 are unique, the state’s litigation against seafood companies over heavy metals allegedly in their products is representative of the growing interest among state AGs in food safety. The litigation is also notable for the variety of settlements reached with different defendants who were sued in a single complaint. Those differences reflect the AG’s interest in avoiding unduly burdensome settlement terms for smaller companies and a certain willingness to tailor settlements to the particular circumstances of different regulated parties. 

Opt-in settlements remain an interesting feature of Proposition 65 litigation. Companies considering opting into the PAFCO settlement should consult legal counsel. Attorneys at Troutman Pepper Locke are available to guide clients through the process.

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Troutman Pepper Locke State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
	Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation.
	Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies.
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	Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations, as well as litigation involving state attorneys general and other state and federal governmental enforcement bodies. He has significant experience handling actions with federal agencies, including the CFPB and FTC, as well as single plaintiff and class action litigation for clients in highly regulated sectors such as financial services, health care, pharmaceutical, and education.
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	Matthew J. Berns Drawing on his experience in senior leadership roles in the New Jersey Attorney General’s and Governor’s Offices and as a trial attorney for the U.S. Department of Justice, Matt provides an insider’s perspective when guiding clients through complex government investigations, litigation, and other actions.
	Samuel E. “Gene” Fishel Gene is a former regulator with two decades of experience who has overseen state privacy and cybersecurity regulation enforcement, led national, multistate attorneys general privacy investigations, and prosecuted computer crimes at the state and federal levels. He has served at the forefront of state attorney general and federal enforcement, and utilizes this experience to proficiently represent client interests.
	Jeff Johnson Jeff helps clients navigate complex regulatory and litigation challenges with local, state, and federal authorities. His clients benefit from his decade of broad litigation experience, understanding of emerging state and federal regulatory issues, and strong relationships with attorneys general across the U.S. In addition to handling cases from trial through state or federal appeals, Jeff serves as amicus counsel in advancing legal rules to support his clients’ vital interests.
	Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs.
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	Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology.
	Nick Gouverneur Nick is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. He received his J.D. from the University of Illinois College of Law, where he served as a member of the Journal of Law, Technology & Policy.
	Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals.
	Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	Philip Nickerson Philip represents clients in sectors such as financial, tech, real estate, and energy in a range of litigation matters. He is experienced in matters involving trade secrets, government investigations, commercial contracts, construction and product defect.
	Lane Page Lane specializes in federal and state regulatory investigations and complex civil litigation. He focuses on representing financial institutions and other businesses, with a particular emphasis on consumer protection and fair lending issues.
	Dascher Pasco Dascher is an attorney within the Regulatory Investigations, Strategy, and Enforcement practice, based in the Richmond office. She joined our firm after working in personal injury and medical malpractice for a Virginia trial law firm. Dascher brings varied legal experience to the firm with strong litigation and regulatory strategy capabilities.
	Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review.
	Timothy Shyu Timothy is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group.
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