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CA High Court Refuses Review of Lead Case

Wednesday, February 21, 2018

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In an ongoing saga out of California, a high court judge once again rejected requests from paint companies that have been ordered to pay hundreds of millions of dollars to remove lead paint from old homes.

SFgate.com reported last week that the court denied a review of November’s appellate ruling, which held ConAgra, NL Industries and Sherwin-Williams responsible for the lead paint removal. Only two justices voted to review the case, two short of the majority needed to proceed.

The Case

The lawsuit was originally filed in 2000, and intended to hold several gas, paint and chemical companies accountable for what was deemed a massive public health crisis brought on by the presence of lead paint in a number of California homes and buildings.

© iStock.com / XiFoto

SFgate.com reported last week that the court denied a review of November’s appellate ruling, which held ConAgra, NL Industries and Sherwin-Williams responsible for the lead paint removal.

During the 2013 trial, Judge Kleinberg dismissed Atlantic Richfield and DuPont, subsequently ordering Sherwin-Williams, ConAgra and NL Industries to pay $1.1 billion into a fund that would be distributed to the 10 cities and counties affected, as needed. At the time, the court also denied Sherwin-Williams' cross-claim, which cited that intact lead-based paint was not a hazard under state law, and that property owners were responsible for the abatement of the associated hazards.

In 2014, the judge increased the liability to $1.15 billion. That same year, after being denied the vacation of an amended judgement and the granting of a new trial, the three defendants filed notices of appeal, which effected an automatic stay of the judgement.

The Appeal

In an August 2017 hearing, attorneys representing The Sherwin-Williams Company, ConAgra Grocery Products Co. and NL Industries Inc. argued for a reversal of the December 2013 ruling.

Primary points of the companies' argument included that moving forward with the abatement would uphold an unprecedented expansion of public nuisance law, and that the companies themselves should not be held liable for old advertisements that promoted the use of lead-based paint.

“The plaintiff historians were unable to provide a single advertisement where Sherwin-Williams advertised lead-based paint for interior use or white lead carbonate in old lead paint in any of its advertising,” Tony Dias, a partner at Jones Day, which is representing Sherwin-Williams for this case, told Durability + Design News at the time.

In the November 2017 ruling, the Sixth District Court of Appeal in San Jose rejected that free speech claim, but did drop the amount of cleanup that the companies are responsible for to homes build before 1951, instead of 1978. This took the $1.15 billion tag down to $400 million.

Andre Pauka, a lawyer for NL Industries told the Chronicle that the companies are planning to appeal to the U.S. Supreme Court.

© iStock.com / Marilyn Nieves

Primary points of the companies' argument included that moving forward with the abatement would uphold an unprecedented expansion of public nuisance law, and that the companies themselves should not be held liable for old advertisements that promoted the use of lead-based paint.

“We are being held liable for truthful speech” in advertising the product, he said, and are also being ordered to pay amounts “disproportionate to anything that the courts thought we did wrong.”

Voter Agenda

In addition to the next planned appeal, the companies are working the polls. Last month, the Los Angeles Times reported that the companies are behind the Healthy Homes and Schools Act, which calls for a $2 billion bond that would go toward the remediation of lead paint, mold, asbestos and other dangers in homes.

Proponents say that financing the clean-up with a bond could allow for more wide-ranging solutions, instead of just the court-mandated clean-ups that have so far only been in certain jurisdictions where lawsuits have been filed.

"The Healthy Homes and Schools Act is a holistic and comprehensive approach to cleaning up existing homes in California by creating a statewide solution to address a variety of hazards in homes, such as mold, lead, asbestos, pests and other threats," said Tiffany Moffatt, a spokesperson for the bond campaign.

"Essentially, the initiative provides rehabilitation for old housing—providing a broader public benefit for all Californians versus cherry-picking winners and losers."

However, those opposed note that if the measure is passed, it would essentially get the three companies off the hook and negate 20 years of legal battles. It would also effectively keep anyone else from filing such a lawsuit.

"It seems to me that this is designed to erase liability in that case and also potential liability in any future cases for them, and substitute taxpayer-funded bond measures to do the remediation that these companies would otherwise be responsible for," said Sean Hecht, a UCLA School of Law professor who has followed the litigation.

California’s nonpartisan Legislative Analyst’s Office found that the bond would cost the state about $110 million a year for the next 35 years to repay with interest. Others are worried that this bond measure could effectively stop a different housing bond measure from passing, one that aims to fund low-income housing and home loans for veterans.

The three companies recently donated $6 million to the campaign, which needs to collect 365,880 signatures to secure a place on the ballot for the upcoming voting season.

   

Tagged categories: Laws and litigation; Lawsuits; Lead; Lead paint abatement; Sherwin-Williams

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