On August 24, 2017, the Sixth District Appellate Court heard oral arguments
on an appeal from three major paint companies seeking to overturn a $1.15
billion judgment. The judgment was handed down in 2013, at the end of
a six-week trial presided over by Judge James Keinberg, who is now retired,
and rests upon a finding of “public nuisance.” Other attempts
to paint lead as a public nuisance has failed, and if upheld, this verdict
would be the first government victory of its kind.
The underlying suit was filed on behalf of multiple counties, including
Alameda, Los Angeles, San Mateo, Santa Clara, and Ventura against numerous
paint manufacturers purportedly responsible for making and selling lead-based
paint. The municipal governments argued that paint makers should be liable
for promoting the use of toxic lead paints inside homes and other residential
building up until its use was banned in 1978.
Judge Keinberg agreed with the municipalities and ordered three companies
alone – NL Industries, Inc., The Sherwin-Williams Company, and ConAgra
Grocery Products – to pay to remove lead paint in millions of homes.
The court reasoned that the presence of the lead based paint alone constitutes
a “public nuisance.”
On appeal, counsel for NL Industries, Inc. argued that the ruling was unprecedented
and ignored the law to effectively establish a new lead remediation program
to be funded from three companies on behalf of an entire industry. Further,
it was argued that Judge Kleinberg admitted to holding these companies
retroactively liable for selling lead-based paint in a time when the health
effects posed by lead were not scientifically known or established. It
was also argued that the municipalities failed to substantiate their damages
in establishing the extent of the problem or in establishing why these
three companies specifically should bear full responsibility.
With respect to the “public nuisance” ruling, counsel for ConAgra
argued that the municipalities failed to establish causation under California
nuisance law because nuisance is location specific, and because you can
only be liable for the contamination you cause. Further he argued that
to hold otherwise would make the participant in any industry an insurer
for the entire industry itself.
In response, counsel for the municipalities, Danny Chou, argued that the
benefits of removing lead paint from homes far outweighs the cost of removal,
pointing to declining values of homes and potential healthcare costs.
He compared the presence of lead in residential homes to an environmental
contamination and argued that it is no different than if someone had introduced
a contaminant into the water supply. He further argued that these companies
had knowledge reaching as far back as the 1920s, or even earlier, of the
potential harmful effects of lead-based paints and could have, at the
very least, scaled back or reduced marketing of the same.
Counsel for the paint makers have reason to be optimistic, as a similar
verdict was overturned by the Rhode Island Supreme Court in 2008, which
would have cost the defendants in that case $2.4 billion in abatement.
The fight here in California had now entered its seventeenth year, and
the Appellate Court’s ruling will undoubtedly be petitioned to the
State’s highest court.