California Judge Orders $1.15 Billion Fund To Remediate Lead Nuisance

SANTA JOSE, Calif. — (Mealey’s) A California judge on Jan. 8 ordered three of the defendant companies in the state’s public nuisance action against lead-paint and lead manufacturers to pay, pursuant to joint and several liability, $1.15 billion into a fund administered by the California Childhood Lead Poisoning Prevention Branch (CLPPB) (Santa Clara County, et al. v. Atlantic Richfield Co., et al., No. 00-788657, Calif. Super., Santa Clara Co.). 

The 110-page opinion issued by Judge James P. Kleinberg of the Santa Clara County Superior Court settles a multiyear public nuisance liability cause of action filed by 10 California municipalities and counties (the People) against lead pigment and lead-paint manufacturers.  The plaintiffs sought an injunction ordering the abatement and remediation of all lead-paint-contaminated homes within the 10 municipalities.  The remaining defendants in the suit are Atlantic Richfield Co. (ARCO), E.I. du Pont de Nemours & Co., NL Industries Inc., ConAgra Grocery Products Co. (successor to W.P. Fuller) and the Sherwin-Williams Co.  

The cause of action resulted in a bench trial commencing July 15 and with closing arguments on Sept. 23.  Judge Kleinberg received additional briefing on a potential remediation and abatement fund in November, followed by a tentative ruling on Dec. 15 in which he dismissed claims against ARCO and DuPont but found NL, ConAgra and Sherwin-Williams jointly and severally liable for the lead-paint public nuisance in all of the jurisdictions. 

2 Defendants Dismissed 

In regard to ARCO and DuPont, Judge Kleinberg explained that while both companies possessed the constructive knowledge of the hazards of lead and lead-based paint, the People failed to show that either company promoted the use of lead or lead-based paint for interior use in the plaintiff jurisdictions.  Judge Kleinberg, however, found that defendants NL Industries Inc., ConAgra and Sherwin-Williams possessed the constructive knowledge of the hazards of lead-based paint beginning in the early 1900s, as well as promoted the use of and sold lead and lead-based paints within the plaintiffs’ jurisdictions, thus causing a public nuisance. 

Fund Established 

As a result of his finding of joint and several liability, Judge Kleinberg ordered the establishment of a fund dedicated to abating the lead public nuisance.  He ordered that the fund shall be administered by the municipal plaintiffs and will focus on the interiors of homes that met certain parameters. 

The fund would exempt institutional group facilities such as correctional facilities, nursing homes and nonfamily military houses, as well as homes built after 1980.  Judge Kleinberg further ordered that the abatement plan would not require full-fledged removal of all lead paint from all surfaces in all homes covered but does require testing of interior surfaces, remediation of lead-based paint on friction surfaces (windows, doors and floors), remediation of lead-based paint in excess of actionable levels on all other surfaces, dust removal and covering of bare contaminated soil, repair of building deficiencies that might cause corrective measures to fail (water leaks) and education of families and homeowners on lead poisoning prevention and paint stabilization techniques to remediate lead-based paint hazards on nonfriction surfaces. 

CLPPB To Administer Fund 

Judge Kleinberg further ordered that the payments into the fund by ConAgra, NL Industries and Sherwin-Williams should be made directly to the California CLPPB and that jurisdiction should apply for grant funds for specific needs. 

The plaintiff municipalities will be responsible, through the existing local lead control programs, for conducting inspections, public education campaign, bidding for a payment of hazard control contractors, clearance tests, design of all control plans for each property, review of payments to contractors and review of the workforce development and training operations, the judge ordered. 

Judge Kleinberg further ordered that there would be “Priority” groups to balance efficiency, simplicity and practical considerations, such as “worst-first” prioritization. 

Abatement for interior surfaces would cost approximately $486 million for the estimated 3,555,630 units within the municipalities, the judge said. The costs of remediation, including education expenses to the communities, were estimated to be approximately $750 million, Judge Kleinberg said in the order. 

Thus, the funding for the four-year program should be $1.15 billion, Judge Kleinberg concluded.  Broken down by jurisdiction, Alameda County, including the City of Oakland, would receive $103.5 million, Los Angeles County would receive $632.5 million, Monterey County would receive $23 million, San Mateo County would receive $57.5 million, Santa Clara County would receive $103.5 million, San Diego County and City would receive $80.5 million, San Francisco would receive $80.5 million, Solano County would receive $23 million and Ventura County would receive $46 million, Judge Kleinberg ordered. 

If money remains in the fund at the end of four years, Judge Kleinberg ordered that the defendants should be refunded the money at the ratio by which the program was funded. 

Counsel 

Solano, Alameda, Monterey, San Mateo and Ventura Counties and Oakland are represented by Frank Pitre of Pitre, Fineman, Jabagchourian and Park in Burlingame, Calif.  Alameda County is also represented by Richard E. Winnie and Raymond L. MacKay of the Office of County Counsel for Alameda in Oakland.  San Francisco and its related agencies are represented by Dennis J. Herrera, Owen J. Clements and Erin Bernstein of the San Francisco City Attorney’s Office; Michael P. Thornton and Neil T. Leifer of Thornton & Naumes in Boston; Ronald L. Motley, John J. McConnell Jr. and Fidelma Fitzpatrick of Motley Rice in Providence, R.I.; and Mary E. Alexander and Jennifer L. Fiore of Mary Alexander and Associates in San Francisco.  Oakland also is represented by John A. Russo, Randolph W. Hall and Christopher Kee of the Oakland City Attorney’s Office. 

DuPont is represented by Clement L. Glynn, James M. Hanlon and Peter A. Cownan of Glynn & Finley in Walnut Creek, Calif., and Steven R. Williams, Joy C. Fuhr and Christian E. Henneke of McGuireWoods in Richmond, Va.   

NL is represented by James McManis, William Faulkner and Matthew Schechter of McManis, Faulkner in San Jose and Donald E. Scott, Andre M. Pauka and Jameson R. Jones of Bartlit Beck Herman Palenchar & Scott in Denver.  

ConAgra is represented by Raymond A. Cardoza, Margaret M. Grignon and Anne M. Grignon of Reed Smith in San Francisco, Allen Ruby, Jack P. DiCanio; and Patrick Hammon of Skadden, Arps, Slate, Meagher & Flom in Palo Alto, Calif., and James P. Fitzgerald and James J. Frost of McGrath, North, Mullin & Kratz in Omaha, Neb.  

ARCO is represented by Sean Morris, Eric May and Gwendolyn M. Ostrosky of Arnold & Porter in Los Angeles and Philip H. Curtis, William H. Voth and Bruce R. Kelly in the firm’s New York office.   

Sherwin-Williams is represented by John Edwards and Gillian Garrett of Jones Day in Menlo Park, Calif.; Robert A. Mittelstaedt and Peter N. Larson in the firm’s San Francisco office; Paul M. Pohl and Charles H. Moellenberg  in the firm’s Pittsburgh office; and Cynthia H. Cwik in the firm’s San Diego office.

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