California cities seek $1 billion settlement for lead paint-related health care costs

Introduction

In April, the U.S. Centers for Disease Control and Prevention raised to 535,000 its estimate of the number of American children with potentially dangerous levels of lead in their blood.

But for U.S. communities combating the lead hazards, there might never be any money from the group some say is most responsible for creating the problem: The companies that made lead pigment used in the old, flaking paint still coating millions of dwellings.

The industry could be on the verge of defeating the last major legal assault by municipalities and states seeking damages to fund lead removal. Apart from one settlement, the industry has successfully defended roughly 50 lawsuits by states, cities, counties and school districts over the last 24 years.

Now, in a bench trial under way in San Jose, Calif., the industry is seeking a final victory in a case brought by 10 public agencies, including the cities of San Francisco, Oakland and San Diego, as well as Los Angeles and Santa Clara counties. The suit seeks to force the defendants to inspect more than 3 million California homes, and to remove any lead paint hazards that are discovered, at an estimated cost of more than $1 billion.

Lead lawsuits once were expected by some experts to follow the path of tobacco litigation. States that sued to recover smoking-related health care costs wrested a $248 billion settlement in 1998 from cigarette makers.

As in the tobacco cases, public agencies in California and elsewhere hired private law firms, including veterans of the tobacco wars such as Motley Rice. The lead pigment industry, likewise has been represented by legal heavyweights, including top corporate defenders Jones Day and Arnold & Porter.

The industry has been successful despite evidence that company officials knew more than a century ago that lead is hazardous, and industry advertisements promoted lead paint as healthy. In 1923, an ad in National Geographic from lead pigment maker NL Industries proclaimed: “Lead helps to guard your health.” The next year, an ad from a unit of paint maker Sherwin-Williams boasted: “Cousin Susie says her health improved instantly” after her home was covered with lead paint.

“My prediction was that lead would be the next big toxic tort litigation,” said Jed Ferdinand III, a Westport, Conn., lawyer who wrote about the issue in a law review two decades ago. “That really hasn’t happened.”

Lead has been found in drinking water and in children’s jewelry, and has many industrial uses, but federal authorities say the biggest public health threat comes from lead-laden paint. Lead pigment was mixed into paint for decades not only to give it color, but because it is durable and washable. The federal government outlawed lead paint for household use in 1978, however, due to its health hazards.

The paint is still found on the walls of old houses and apartments, where children sometimes ingest it when it chips off walls and turns into dust. Although poor and minority children are considered most at risk, approximately 35 percent of all U.S. homes have some lead paint, and 22 percent have significant lead paint hazards, according to a 2011 survey by the U.S. Department of Housing and Urban Development.

Public health authorities have made great strides in combating lead poisoning. But recent research has found that even small amounts of the metal can be harmful, which prompted federal authorities this year to raise their estimate of the number of children at risk. Young children with elevated lead levels in their blood are at risk of lower IQ, attention disorders and other problems related to brain damage.

Although some individuals who sued landlords for lead poisoning have won settlements, lawsuits brought by public agencies against lead pigment makers have yielded only one success: In July 2005, DuPont agreed to pay $12.5 million to resolve a case brought by Rhode Island, which accused the industry of creating a public nuisance and presented internal documents showing that the industry had long been aware of lead hazards.

The next year the state won $2.4 billion for lead abatement after a four-month trial against the remaining defendants. In 2008, however, the decision was overturned by the Rhode Island Supreme Court.

But whose paint was it?

Lawsuits against the industry have failed for various reasons. For one thing, individual plaintiffs claiming health damage from lead have been unable to prove that lead paint was the source.

Some suits by public agencies have failed because they couldn’t prove which companies manufactured the lead pigment used in specific buildings and neighborhoods. Courts have rejected efforts to assign liability according to the market shares of the various companies.

As the Missouri Supreme Court ruled in 2007 in a case brought by St. Louis, “Without product identification, the city can do no more than show that the defendants’ lead paint may have been present in the properties where the city claims to have incurred abatement costs. That risks exposing these defendants to liability greater than their responsibility and may allow the actual wrongdoer to escape liability entirely.”

Other suits by government agencies that charged the industry with violating public nuisance laws were thrown out when judges ruled the laws did not apply because lead paint threatened individuals in their private homes, rather than the community as a whole.

As the Rhode Island Supreme Court said in overturning the state’s victory: “However grave the problem of lead poisoning is in Rhode Island, public nuisance law simply does not provide a remedy for this harm.”

After marathon pre-trial battles, the California case has been allowed to proceed under the state’s public nuisance law.

Defense lawyers have argued in a brief that the companies weren’t aware when they promoted lead paint that it would someday cause harm. “Scientific knowledge concerning lead exposure evolved over the decades,” the brief said. What’s more, the defendants say that today there is no widespread lead danger. Current blood lead levels, their court papers say, do not present “a current public health crisis; it instead shows a public health success story.”

The defendants also say that California already has a well-funded lead poisoning prevention program that collects annual fees mainly from the gasoline industry, but also from makers of paint and other products.

Presiding Judge James P. Kleinberg of Santa Clara County Superior Court has urged the two sides to settle, though the trial, which began July 15, is continuing.

The California suit is only the third lead pigment case brought by public officials to go to trial since 1989. Back then, New York City officials pioneered the litigation, only to become the first of many municipalities to have their claims dismissed before getting to the trial phase.

As in many other cases filed by public agencies, the defendants in California include Sherwin-Williams, the nation’s biggest paint producer, and DuPont, one of the world’s largest chemical companies, which in 2012 reported $9.5 billion and $34.8 billion in sales respectively.

Other defendants are the Atlantic Richfield Company, or ARCO, now a subsidiary of BP; ConAgra Grocery Products; and NL Industries, formerly National Lead Co.

The California lawsuit, initiated 13 years ago, has dragged on so long that Kleinberg is the third judge to handle the case. It took five years to resolve the side issue of whether it was proper for private contingency fee lawyers to represent public agencies. (Ultimately, the decision was yes.)

The case was dismissed in 2003 but three years later California’s Sixth District Court of Appeals revived the suit and reinstated the public nuisance claim.

Referring to hazards posed by lead paint, the appellate ruling stated, “Where such a ‘ticking time bomb’ exists … the public should not have to wait for the destructive results before taking action.”

A history of setbacks

Even before public agencies began seeking lead cleanup money from the industry, their struggles were foreshadowed by suits brought by private plaintiffs, including the landmark case known as Santiago v. Sherwin-Williams Company.

Monica Santiago was born on November 9, 1972. From her birth until 1978, Santiago lived in a Boston apartment covered with lead paint. She was diagnosed with lead poisoning at the age of 1, after allegedly ingesting some of the paint on the walls of her family’s apartment.

By July 1976, Santiago’s medical condition dramatically worsened. She underwent chelation therapy, a medical procedure that involves injecting chemicals that bind with lead, helping patients excrete the metal.

In 1987, Santiago filed the first suit against the lead pigment industry, asking for $2.5 million in compensatory and punitive damages. The suit contended that Sherwin-Williams, NL Industries and others had manufactured and sold the lead pigment used in the paint in her home. That paint, the suit claimed, had not only caused lead poisoning, but later caused her to develop hyperactivity-attention disorder and motor skill difficulties. Yet in 1992 a federal court in Boston rejected the case, and an appeal also failed.

Neil Leifer, a Boston lawyer who represented Santiago, took on the case after discovering documents in the National Archives that pointed to the industry’s early knowledge of the poisonous nature of lead.

Those documents, along with related papers discovered later, have been used in cases against the lead pigment industry ever since.

A Sherwin-Williams newsletter from 1900, for example, described lead as a “deadly cumulative poison.”

In 1904, Sherwin-Williams published an article in a company magazine that reported lead was “poisonous in a large degree, both for workmen and for the inhabitants of a house.”

And as early as 1912, documents show, NL Industries excluded women and children from working with lead because of its known dangers, yet continued to manufacture it for use in homes.

Donald E. Scott, one of the defense lawyers in the California case, said the early 20th century documents “describe lead-poisoning in workplace settings, like factories, from people consuming very large amounts of lead,” rather than household settings. Doctors, he said, spent many decades afterward trying to establish the toxic threshold for lead.

Letters from the now-defunct Lead Industries Association in the 1950s also signaled that industry officials were aware of public health dangers. “With us, childhood lead poisoning is common enough to constitute perhaps my major ‘headache,’” Manfred Bowditch, health and safety director for the association, wrote in 1955.

Bowditch elaborated on that point in a letter the next year to Felix E. Wormser, assistant secretary for the U.S. Department of the Interior, which was responsible for regulating mining and metal industries.

Bowditch wrote: “Aside from the kids that are poisoned (and we still don’t know how many there are), it’s a serious problem from the viewpoint of adverse publicity. The basic solution is to get rid of our slums, but even Uncle Sam can’t seem to swing that one. Next in importance is to educate the parents, but most of the cases are in Negro and Puerto Rican families, and how does one tackle that job?”

In 1960, at the Lead Industries Association annual meeting, a report by secretary-treasurer Robert L. Ziegfeld outlined concerns about lead poisoning. “The toxicity of lead poses a problem that other nonferrous industries generally do not have to face. Lead poisoning, or the threat of it, hurts our business in several different ways.”

“In the first place,” Ziegfeld continued, “it means thousands of items of unfavorable publicity every year. This is particularly true since most cases of lead poisoning today are in children, and anything sad that happens to a child is meat for newspaper editors and is gobbled up by the public. It makes no difference that it is essentially a problem of slums, a public welfare problem. Just the same the publicity hits us where it hurts.”

Scott, the industry lawyer, called the references to slums and minorities, “callous and regrettable.” But Scott said some of the same documents show the industry was working hard to help children in the affected communities.

Plaintiffs in the California lawsuit are continuing to present their case this week. The trial is expected to continue until at least late this month.

FairWarning is a Los Angeles-based nonprofit news organization focused on public health and safety issues.