Judgment against lead paint manufacturers upped to $1.15 billion

As we discussed on this blog in December, 10 cities and counties in California earned a surprise win in a public nuisance lawsuit against former lead paint manufacturers and their successor companies. Legal until 1978, lead paint is now known to be poisonous, especially to children. Yet 35 years later, innumerable older buildings in California, here in New York and across the nation still contain the hidden hazard. Lead paint abatement is mandatory in certain circumstances, but countless homes and apartments haven’t received it, risking the health of unknowing renters and homebuyers.

The municipalities argued that those who manufactured lead paint should share the expense of its abatement, even though it was legal when they sold it. After nearly five weeks of arguments, a Superior Court judge agreed and, in December, he issued a tentative order against Sherwin-Williams, NL Industries, and ConAgra Grocery Products in the amount of $1.1 billion.

The ruling was tentative pending objections by the defendant companies. After considering those, the judge upped the order by $50 million. The three companies are now ordered to pay $1.15 billion — $632.5 million to Los Angeles County alone. Nearly 2.6 million homes in LA County are affected; 5 million statewide.

Some potential beneficiaries of the order, unfortunately, are not pleased. One private property rights group, the Los Angeles County Boards of Real Estate, complained that the ruling raises a “host of troubling questions,” including its potential effect on home values and property tax receipts.

The group’s executive director owns a home in LA County that was built in 1958. He fears that the public nuisance label will result in his home being blackballed by mortgage lenders and insurance companies if he tries to sell it. He also predicted that potentially millions of occupants, “possibly blocks at a time,” will be forced to move out of their homes for abatement, even if they’re well-maintained.

Prophecies of disaster aside, the ruling sends a strong message to defendants who assumed the massive public nuisance suit would fail, as some others indeed have. “The takeaway is that he’s affirmed his tentative and made it even stronger,” said one of the municipalities’ lawyers.

The fact is, 35 years after the ban, lead paint contamination continues to be a major public health problem, affecting children who weren’t even born when the paint was legal. It’s time to resolve the problem.

Sources:

• Insurance Journal, “Final Order Issued In $1.15 Billion California Lead Paint Case,” Joel Rosenblatt, Bloomberg, Jan. 8, 2014
• Legal Newsline, “Housing and real estate group says Calif. judge’s final decision in lead paint case will hurt home values,” Jessica M. Karmasek, Jan. 13, 2014