Three companies hit with a $1.15 billion lead paint judgment in California are hoping on Thursday to reverse a judge’s finding that they created a public nuisance by promoting for decades a product that they knew was toxic.
Sherwin-Williams Co., NL Industries Inc. and ConAgra Grocery Products Co. will make their case before the California Sixth District Court of Appeal in San Jose, California. They face Danny Chou, assistant county counsel for Santa Clara County, one of 10 cities and counties in California hoping to uphold the 2014 judgment. If California wins, it would be the first government victory in a public nuisance case over lead paint. Other government cases in New Jersey, Missouri, Illinois, Ohio and Wisconsin failed in their efforts to bring public nuisance claims over lead paint, which has been found to cause learning disabilities in children.
But unlike those cases, the main focus on Thursday will be whether Santa Clara County Superior Court Judge James Kleinberg, who presided over a bench trial before issuing an 111-page statement of decision, failed to follow a standard that the Sixth District set forth in 2006 when it allowed the public nuisance claim to go forward in the case. “The plaintiff had to prove the defendants had intentional promotion of the use of lead paint in the interiors of buildings with the knowledge of the public health hazard that this use would create,” said Tony Dias, a partner in Washington, D.C., at Jones Day, who represents Sherwin-Williams.
Dias’ Jones Day colleague Mickey Pohl, a partner in Pittsburgh, will be arguing for Sherwin-Williams. Arguments also will come from Jameson Jones, a partner at Bartlit Beck Herman Palenchar & Scott in Denver, who represents NL Industries, and Reed Smith partner Raymond Cardozo in San Francisco for ConAgra.
The paint companies have support from the Pacific Legal Foundation and the Civil Justice Association of California, whose amicus briefs chastised Kleinberg’s expansive view of public nuisance law. “This decision radically transforms public nuisance law, turning it into an unbridled tort that, unless corrected on appeal, will stand as a grave injustice to defendants and the administration of justice,” CJAC general counsel Fred Hiestand wrote.
The Consumer Attorneys of California, the Equal Justice Society and numerous health groups have sided with the plaintiffs. As in the other lead paint cases, the California cities and counties hired outside counsel on a contingency basis, including lawyers from Mount Pleasant, South Carolina’s Motley Rice and Cotchett, Pitre & McCarthy in Burlingame.
They’re hoping to avoid a repeat of what happened in 2008, when the Rhode Island Supreme Court reversed a jury’s verdict that would have put three paint companies, including Sherwin-Williams and NL Industries, on the hook for about $2.4 billion in abatement costs.
“What the trial court did was not simply follow the court of appeal’s guidance in the 2006 decision,” Chou said. “What it did, and what the court of appeals did in 2006, was to follow well-established California law, as well as well-established tort and public nuisance law, in reaching its decision.”
The paint companies claim Kleinberg, who has since retired from the bench, failed to meet that 2006 standard in his decision, which absolved two other companies—Atlantic Richfield Co. and E.I. du Pont de Nemours and Co.—but ordered them to contribute to a state fund that would pay for upgrades and repairs in millions of homes built before 1981. They insist they couldn’t have known that small quantities of lead paint would harm children—something that scientists only discovered decades later.
“The risk of what was known today of lead stuff was not appreciated at the early part of last century,” Dias said. They also claim that their advertisements didn’t promote the use of lead paint and, further, were constitutionally protected speech.
Chou disagreed. “We had world-renown experts on the history of lead paint and history of the lead industry testify and establish and the trial court found that each defendant had more than enough knowledge to render their decision to promote lead paint for interior use,” he said.
As for the ads, he said: “What those ads show is each defendant told homeowners it was OK to use lead paint in interior surfaces without telling them that lead was likely poisoning their children.”
Here’s a look at some of the other arguments:
As they have argued before, the paint companies say they shouldn’t be liable for the contributions of others, such as landlords or other manufacturers. “Here we’ve argued, like we did in Rhode Island, that we are not in control of the nuisance or the product once we’ve sold it,” Dias said. They also argued that the amount of the judgment was unconstitutionally disproportionate to their individual liability. Chou responded: “Somebody shouldn’t get off for being responsible for a harm just because others may have contributed to it, as well.”
The paint companies assert that the judge took over the role of the legislature in rendering a judgment that conflicts with California regulations, which have found lead paint to be safe when maintained. In fact, lead poisoning in children has fallen in the state, which already has a fund to which paint companies already contribute. “This judge has changed that and turned that law on its head now by saying the mere presence of old lead paint in a home or apartments constitutes a hazard and is a nuisance,” Dias said. But the California plaintiffs insist lead paint poisoning still exists, particularly in poor neighborhoods. “The evidence at trial—and common sense—revealed that lead paint used in homes, like in windows and doors, inevitably deteriorates,” Chou countered.
The paint companies argue the judgment impermissibly awarded damages in a public nuisance case, but Chou noted that any funds leftover would go back to the defendants.
Kleinberg prohibited re-cross-examinations and restricted the time to present a defense, according to the paint companies—errors at trial that were prejudicial. But Chou said the decisions were appropriate. “There’s nothing improper about what the trial court did in this case,” he said.