The California $1.15 billion lead abatement rush

Santa Clara Superior Court Judge James Kleinberg issued his final verdict at the end ofcalifornia flag business today Left Coast time, ordering Sherwin Williams, National Lead, and ConAgra to pay $1.15 billion to remove lead paint from homes in 11 Californian counties and cities.  The money will be paid into a fund administered by the state’s Childhood Lead Poisoning Prevention program, and will be used for inspections and lead abatement of tens of thousands of homes.  The People of the State of California v. Atlantic Richfield et al. (Santa Clara Superior Court Case No. CV-788657) is the largest public nuisance award in California’s history.  It’s also one of the few successful lead paint cases in the United States.  (Other public nuisance cases have failed in Ohio, Rhode Island, Missouri, New Jersey, Illinois, New York, and Wisconsin).  It comes after 13 years of litigation, including two trips to the California Court of Appeals and one to the California Supreme Court.

paint adThe case began when several local governments sued major paint manufacturers in 2000, alleging that they created a public nuisance by promoting the use of lead-based paint even though its dangers were known.  The superior court initially ruled last month after a five-week bench trial (today’s decision strictly addressed damages), concluding that the companies’ internal documents showed knowledge of lead’s health impacts since the early 1900s.  Although the United States prohibited the use of lead in paint in 1978, it nonetheless remains on and in millions of homes.

The companies argued that they did not deliberately sell a hazardous product, contending that little was certain about lead in paint much before its ban.  They also pointed to other parties responsible for lead-poisoned kids.  (Read here for more on the “secret life of lead.”)  Judge Kleinberg rejected the manufacturers’ arguments that paint was “not the whole problem,” and that alternate sources of lead contributed to poisoning: “Consistent with their arguments child eating paintthroughout the trial the Defendants rely on statistics and percentages. When translated into the lives of children that is not a persuasive position. The Court is convinced there are thousands of California children in the Jurisdictions whose lives can be improved, if not saved through a lead abatement plan.”

Sherwin-Williams’s written statement says that the ruling punishes manufacturers for “the truthful advertising of lawful products, done at a time when government officials routinely specified those products for use in residential buildings,” and “rewards scofflaw landlords who are responsible for the risk to children from poorly maintained lead paint.”

Atlantic Richfield and DuPont, who were also originally sued, were dismissed from the action.

lead abatementA county public health officer called it a “huge victory for public health and for common sense,” and observed that even though lead poisoning of children has decreased over the years, “it still remains unacceptably high, and if we are to make any further inroads in tackling this enormous problem we need to address the root of the problem: we need to abate the lead in older housing.”

Lead poisoning presents a classic environmental health problem, where lead in the environment (mostly from paint and gasoline exhaust) causes a variety of neurological impacts as well as death, mostly in young children.  State statutes have required testing, remediation, and some abatement (notably under strict liability statutes, like in Massachusetts), while federal statutes have provided funding and required disclosure.  But abatement – the oSHW cover the earthnly true means of primary prevention — has largely not occurred due to its high cost.

Nancy Fineman, a partner with the firm who tried the case, summed up the achievement of this environmental tort suit: “For too long, government, home owners and parents had to pay the costs to stop lead poisoning. Now, those who created the nuisance are being responsible to help remedy the problem.”

sherwim williams stockBut John Roberts, a New York-based analyst at UBS Securities, recommended buying Sherwin-Williams shares.  “This [the California case] should be viewed more as a process than an outcome,” he said.

The three defendants have promised to appeal.



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