$1.1 billion California paint ruling may prompt new suits

SAN FRANCISCO (AP) — A California state court judge stunned the industry earlier this week when he ordered three companies to pay $1.1 billion to help government officials in seven counties and three cities remove lead from an estimated 5 million homes.

In doing so, the judge bucked the industry's quarter-century track record of legal success against public agencies. Paint manufacturers have defeated some 50 lawsuits filed nationwide by public agencies seeking billions of dollars to remove lead-based paint from homes built before the federal government banned lead-based paint from the U.S. market in 1987.

Now, legal experts and industry supporters predict a revival of paint-related lawsuits if the California verdict is allowed to stand.

"This ruling opens the flood gates for a surge of frivolous lawsuits and sets a dangerous precedent for other activist courts across the country to follow," said Lisa Rickard, president of the U.S. Chamber of Commerce's Institute for Legal Reform.

Many experts predicted — and the industry feared — that lead-based paint lawsuits would prove to be the next lucrative litigation market for many of the same plaintiffs' attorneys who secured for state governments the $248 billion settlement in 1998 from tobacco companies.

Rather than accusing the paint manufacturers of product liability and having to connect every lead poisoning case directly to a company, attorneys filed lawsuits on behalf of state and local governments and argued that lead-based paint is a "public nuisance" like a major air polluter or a dumper of toxic materials into a river.

The lawsuits claimed that unsafe levels of lead found in thousands of children's bloodstreams each year was caused by the paint industry. The Centers for Disease Control and Prevention earlier this year said 535,000 children had dangerously high levels of lead, which can stunt mental growth and other health problems. Researchers say lead poisoning is most common among poor children living in older properties.

But the paint lawsuits foundered for a variety of reasons. Many older homes have several layers of lead-based paint, making it impossible to determine which layer of paint was responsible for a resident's lead poisoning — if in fact paint was the culprit. Lead is also found in water, jewelry, toys and other places.

Other cases were dismissed after judges rejected the "public nuisance" claims, ruling that individuals must file individual lawsuits proving a paint company caused them direct harm.

Finally, the industry argued that the old paint is no longer a significant public health risk and that it never deliberately sold a harmful product.

On Monday, Santa Clara County Superior Court Judge James Kleinberg in San Jose, Calif., rejected those arguments, citing corporate documents dating back to 1900 to rule that Conagra Grocery Products Co., NL Industries Inc. and the Sherwin-Williams Co. marketed lead-based paint they knew was harmful for much of the 1900s.

The judge cited a Sherwin-Williams newsletter from 1900 conceding that lead-based paint was a "deadly cumulative poison" and then a 1922 company advertisement claiming its paint was safe.

"In the 1920s, scientists from the Paint Manufacturers Association reported that lead paint used on the interiors of homes would deteriorate, and that lead dust resulting from this deterioration would poison children and cause serious injury," the judge wrote in his 110-page decision. "It was accepted by the medical and scientific community before the 1950s, as reflected in literature from as early as 1894, that lead paint was a significant cause of childhood lead poisoning."

The three companies found liable have vowed to appeal the Santa Clara County Superior Court Judge James Kleinberg's verdict as far they can and that process is expected to take years. Kleinberg's ruling was made after a five-week trial conducted without a jury and 13 years after the original lawsuit was filed.

Before Kleinberg's ruling, the industry had enjoyed a near-perfect record in court.

Only one other verdict was returned against the industry. A Rhode Island trial court judge did award the state $2.4 billion in 2006, but that verdict was overturned on appeal two years later.

DuPont is the only paint manufacturer to have paid any damages, agreeing to a $12.5 settlement in 2005 to get out of the Rhode Island case before a verdict was rendered.

"The California ruling is certainly a significant development," said David Logan, a class action expert and dean of Roger Williams University Law in Rhode Island. "If it gets upheld, it will open a new path to victory for public agencies."

The 10 cities and counties awarded damages Monday are the counties of Santa Clara, Alameda, Los Angeles, Monterey, San Mateo, Solano and Ventura, and the cities of Oakland, San Diego and San Francisco.