California settles decades-long lawsuit over lead paint, but outcome is bittersweet
17/07/2019 20:19
By Joshua Schneyer
OAKLAND, Calif., July 17 (Reuters) - When Californian
counties and cities first sued paint makers in 2000, they wanted
the companies to pay billions to remove dangerous old lead paint
from hundreds of thousands of homes.
After a 19-year legal struggle, they have finally succeeded
in getting the companies to fund a remediation program, albeit
on a much smaller scale. Sherwin-Williams SHW.N , Conagra
Brands Inc CAG.N and NL Industries NL.N have agreed to a
$305 million settlement, according to a filing in Santa Clara
County Superior Court in California on Wednesday.
The resolution marks a rare success for a public nuisance
claim, under which counties and municipalities can sue
corporations for past activities - including those conducted
decades ago - they say have harmed communities.
High-profile public nuisance claims have proliferated in
recent years in the United States as local governments try to
use the courts to make corporations pay for societal ills like
lead poisoning, the opioid addiction crisis and climate change.
Yet the glacial pace and complex twists in California’s lead
paint case highlight just how difficult it can be to use the
public nuisance strategy against corporations, even in a state
whose courts are particularly consumer friendly.
A trial judgment in 2014 ordered the paint companies to pay
$1.15 billion, but an appeals court decision led to the amount
being slashed by more than half in 2017. Once the companies had
exhausted the appeals process, they threatened to sue individual
property owners who received help cleaning up their properties,
by claiming they had failed to properly maintain their housing.
“This landmark settlement will allow thousands of homes to
be remediated, and as a result current and future generations of
California children will no longer face the threat of lead
poisoning,” said James Williams, County Counsel for Santa Clara
County, where the lawsuit was first filed.
“We’re pleased that we’ve been able to hold lead paint
manufacturers accountable and responsible,” he said.
The defendant paint companies did not admit any wrongdoing
under the settlement.
One of the companies said the agreement would limit its
liability.
"Sherwin-Williams is pleased to have reached an agreement to
resolve this litigation, and it will continue to vigorously and
aggressively defend against any similar current or future
litigation," the company said in a written statement.
BITTERSWEET VICTORY
The number of U.S. children poisoned by lead has fallen
sharply since the United States banned the toxic metal from
residential paint and gasoline, during the 1970s and 80s.
But for California districts like Oakland and Los Angeles,
where childhood lead poisoning still exacts a heavy toll, the
outcome of the legal struggle is bittersweet.
In the decades it took the local governments to prevail,
tens of thousands more children in California have been exposed
to dangerous levels of lead, state public health data shows.
In Alameda County, for example, some zip codes have lead
poisoning rates higher than those found in Flint, Michigan, at
the peak of that city’s water contamination crisis (https://reut.rs/2XUaLWq).
County inspectors found dangerous paint dust in the East
Oakland home of 3-year-old Alexander Avila, who tested with lead
levels more than five times the elevated standard of five
micrograms per deciliter set by the Centers for Disease Control
and Prevention (CDC).
When a reporter visited the nearly century-old home last
month, Alexander was a ball of hyperactive energy. His mother
Stephanie, 26, said he is able to speak few words and has
trouble engaging with other kids at preschool. She fears his
past lead exposure will affect him for life.
“People just don’t know what’s in their own houses, or the
dangers their kids can face,” she said.
A county program helped fix lead paint hazards at the home,
but public funds are scarce to repair housing before it can harm
children.
In nearby Hayward, California, another predominantly working
class city in the San Francisco Bay Area, five members of the
Mariscal family, including two children, were poisoned by lead
paint at their old home during 2017 and 2018, county health data
and inspection reports show.
Three year-old Isaac, who tested at levels more than twice
the CDC’s elevated threshold, suffered anemia - a common symptom
of lead exposure - and, like Alexander, has also had speech
problems.
The CDC says there is no safe level of lead in children’s
blood. At least 4 million U.S. children remain at risk of
exposure from chipping paint or lead dust in their housing, the
agency says. Lead paint doesn't pose an immediate danger unless
it is deteriorating.
Many of the 10 counties and cities that brought the lawsuit
have tens of thousands, or hundreds of thousands, of older
housing units. Neutralizing lead paint hazards in a single home
can cost thousands of dollars, so the settlement money may only
cover the clean-up of a fraction of homes that need work.
“The litigation money can only go so far, but it’s a start,”
Larry Brooks, director of Alameda County's lead poisoning
prevention program, said in an interview last month.
More than 6,300 children have been exposed to elevated lead
levels in his county since 2000, when the litigation began,
according to county health data.
Although the United States banned lead paint sales in 1978,
most old housing still contains it, and thousands of U.S.
neighborhoods still have alarming poisoning rates, Reuters found
in a series of articles in 2017. (https://reut.rs/2MfnIGn)
NEW LEGAL PRECEDENT?
California jurisdictions are the first to have a public
nuisance verdict upheld against former lead paint manufacturers.
Several lawsuits in other states have failed since 2000, from
Illinois to Missouri and Rhode Island.
The California case may set a new legal precedent for
seeking remediation. Legal scholars say it could encourage new
lawsuits against paint companies, and Californian local
governments report receiving inquiries from counterparts in
other areas of the country interested in bringing their own
nuisance claims.
In product liability lawsuits, attorneys must prove harm to
individual plaintiffs. In public nuisance cases, the plaintiffs
don’t have to prove harm to specific people. Instead, they can
claim that the defendants’ activities impeded broad community
rights, such as the public right to enjoy property.
In California, the plaintiffs argued the companies were
responsible for creating a public health threat and knew of the
toxic dangers of lead paint when they marketed it, without
properly warning consumers, for decades before the U.S.
government banned its use in homes.
The paint companies argued that they stopped marketing lead
paint products once risks became known. They contended that home
owners were responsible for preventing any poisoning hazards in
their living spaces.
Santa Clara County recently filed another public nuisance
case against opioid pill manufacturers, and similar cases are
popping up with increasing frequency nationwide.
Many of these suits share a common goal: making big business
pay to fix high-cost societal burdens that their profit-making
activities may have left behind.
Corporate defense attorneys worry that more wins for local
governments under the public nuisance doctrine could saddle
businesses with huge and unpredictable liabilities, in some
cases for decades-old actions they thought were safe at the
time.
WHY SETTLE NOW?
The California local governments and the companies settled
after a marathon legal battle that saw both sides suffer
setbacks.
Beyond seeing the earlier $1.15 billion judgment sharply cut
back by an appeals decision, the plaintiffs were concerned with
court-imposed restrictions on how the money could be used.
For instance, the terms had limited the remediation program
to housing built before 1951, and only indoor paint hazards
could be fixed. The local governments also faced a tight,
four-year window to complete the program, after which any
unspent funds would be returned to the paint companies.
As recently as January, court filings from the case show,
lawyers for the paint companies vowed to sue California property
owners who sought to use the remediation funds. Counties were
concerned the mere specter of these suits would have a chilling
effect on the remediation program, which will rely on housing
owners' voluntary participation.
It was an unusually bold move, legal scholars say.
“Talking about suing property owners is an aggressive
tactic,” said Bob Rabin, a tort law specialist at Stanford
University.
“I can’t think of another public nuisance judgment where
defendants turned around and said recipients of the damages
should be disqualified because they are to blame,” he said.
With the settlement in place, these threats and
court-imposed limitations on how the money can be spent will now
be lifted.
Paint companies have agreed not to target property owners
with lawsuits, cities and counties can take as much time as they
need fixing homes, and housing built through the 1970s – when
lead paint was still being sold – are also eligible for help,
including on exterior walls.
(Reporting By Joshua Schneyer
Editing by Michael Williams and Ross Colvin)