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Billion Dollar Judgment Against Lead Paint Companies

3/11/2014 | Construction Blog

Your eyes did not deceive you when you read the title. Lead paint companies were hit with a $1.15 billion verdict – that is billion with a b – in California recently. In addition to the size of the award, the theory by which it was obtained is of some interest. The question for the construction industry in this region is whether this case is a precursor to similar litigation in Pennsylvania, New Jersey, or Delaware.

The case, captioned People v. Atlantic Richfield, was initiated by the County of Santa Clara in California state court. The argument made against Atlantic Richfield and a number of other paint manufacturers was one of public nuisance. Like courts in other jurisdictions, the trial court in this case initially rejected that argument for a number of reasons. The decision to dismiss the case was overturned by the appellate courts and sent back to the trial court. A subsequent trial resulted in the $1.15 billion verdict after a bench trial. The money is to be placed into an abatement fund to assist in lead paint investigations and removal programs in California.

This case is the first of its kind. Until this decision, courts in multiple states had rejected public nuisance arguments in these settings. In addition to permitting a new theory of liability, the logic used by the trial judge to reach his decision may have far reaching consequences. Effectively, he determined that the Plaintiff did not have to prove causation as to each particular end user. Rather, a vague showing of something more than “infinitesimal or theoretical” connections was all that was necessary. If defendant could be shown to have created or assisted in creating the nuisance, then the burden of proof is met. Control and ability to abate the nuisance are of no value in the analysis.

This decision sets a dangerous precedent in that it allows for plaintiffs who would otherwise not have standing to effectively bring a product’s liability claim against manufacturers or construction companies. Moreover, it allows for the assertion of a product’s liability claim without having to make the same proofs of defect and causation. The size of the award does nothing to allay fears. Accordingly, if this decision is repeated in Pennsylvania, New Jersey, Delaware, or any other jurisdiction, it could create a much wider risk of liability for those in the industry.