Companies & Industries

Billion-Dollar Lead-Paint Verdict Ends Industry's Win Streak


Paint manufacturers thought lead-paint-liability litigation was dead. Not quite. A California state court judge on Monday ordered Sherwin-Williams (SHW), NL Industries (NL), and ConAgra Grocery Products to pay $1.1 billion to replace or contain lead paint in millions of homes in a lawsuit brought by 10 cities and counties.

The large judgment broke the companies’ streak of fending off such suits in seven other states. Bloomberg News provides the essentials:

Superior Court Judge James Kleinberg in San Jose tentatively ruled against the companies after a non-jury trial that lasted about five weeks. Two other defendants, Atlantic Richfield Co., a Los Angeles-based unit of BP Plc (BP/), and Wilmington, Delaware-based DuPont Co. (DD), won dismissal of the claims against them. The local governments that sued includ[ed] Los Angeles County and the cities of San Diego and San Francisco. … Los Angeles County will get $605 million for lead abatement in today’s ruling.

Kleinberg rejected the manufacturers’ arguments that paint was “not the whole problem,” and that alternate sources of lead contribute to poisoning. “Consistent with their arguments throughout the trial the defendants rely on statistics and percentages,” Kleinberg wrote. “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.” The companies have 15 days to object to the ruling.

Bonnie J. Campbell, a spokeswoman for the paint manufacturers, said via e-mail that the decision is “at odds with California law and judicial decisions across the country that have uniformly rejected similar public nuisance claims.” The ruling, she added, penalizes the 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.”

Given the stakes, one can safely assume that the defeated defendants will make arguments along these lines on appeal.

Barrett_190
Barrett is an assistant managing editor and senior writer at Bloomberg Businessweek. His new book, Law of the Jungle, which tells the story of the Chevron oil pollution case in Ecuador, will be published by Crown in September 2014.

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Companies Mentioned

  • SHW
    (Sherwin-Williams Co/The)
    • $204.76 USD
    • -1.47
    • -0.72%
  • NL
    (NL Industries Inc)
    • $8.78 USD
    • 0.08
    • 0.91%
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