NL to provide $60.2 million in funding to address lead paint in homes across California.
After 18 years of litigation, NL Industries, Inc. (“NL”) and the People of the State of California, represented by the County Counsels and City Attorneys of 10 California jurisdictions, have reached a historic settlement agreement to fund remediation of lead paint in cities and counties across California. Under the agreement, which is conditioned (among other things) on the court’s certification of the settlement as being in good faith, NL will provide $60.18 million to the Counties of Santa Clara, Los Angeles, Alameda, Monterey, San Mateo, Solano, and Ventura; the City and County of San Francisco; and the Cities of Oakland and San Diego to address lead paint in homes.
“For nearly two decades, we have been fighting to protect vulnerable young children from the very serious harms caused by lead paint. We are pleased that NL has decided to resolve this matter and that millions of dollars can now go to address the harms to children resulting from toxic lead paint in homes,” said Santa Clara County Counsel James R. Williams.
“The hazards of lead paint have created a public health crisis for communities in California and across our nation,” said San Francisco City Attorney Dennis Herrera. “This agreement ensures that significant resources go to address that crisis and protect children from this toxic environmental hazard.”
“Although NL does not agree with the ruling in the courts, and by settling does not admit to any of the claims in the case, NL would prefer that its limited financial resources be used to fund public health programs rather than be spent on continued litigation,” said Andre Pauka, counsel for NL. “Subject to the court’s approval, NL will be able to put this litigation behind it and provide funds for the jurisdictions to address lead paint in the manner they believe is most effective to protect health.”
The settlement arises out of County of Santa Clara, et al. v. Atlantic Richfield Company, et al., Santa Clara County Superior Court, Case No. 1-00-CV-788657. The public nuisance lawsuit was filed in 2000 by then-Santa Clara County Counsel Ann Ravel on behalf of the People of the State of California (People). Other cities and counties joined the litigation, including the City and County of San Francisco; the Cities of Oakland and San Diego; and the Counties of Alameda, Los Angeles, Monterey, San Mateo, Solano, and Ventura.
In 2014, the Santa Clara County Superior Court ruled that three former lead paint manufacturers — The Sherwin-Williams Company, ConAgra Grocery Products, and NL— were liable for marketing lead paint. Although lead paint was banned for residential use in 1978, it remains present in millions of homes in California.
In 2017, the Court of Appeal upheld the Superior Court’s decision to hold the former lead paint manufacturers liable for creating a public nuisance in the 10 cities and counties, but limited the scope of the remedy to pre-1951 homes in the 10 cities and counties and remanded the case to the Superior Court for a hearing on the appointment of a receiver to administer the abatement fund. The California Supreme Court declined to review the Court of Appeal’s decision.
The defendants in the case are sponsoring a ballot initiative for the November 2018 election that would invalidate the judgment and ask taxpayers to pay $3.9 billion, through the issuance of State bonds, for the remediation of lead paint and other environmental hazards in homes throughout California. (See the California Attorney General’s official title and summary of the initiative here .) As part of the settlement, NL has agreed to immediately withdraw its support from the initiative.
Following this settlement, the remaining defendants are: (1) ConAgra Grocery Products Company; and (2) The Sherwin-Williams Company. The case is now before the trial court to determine the amount of funding sufficient to address the problems lead paint poses in pre-1951 housing.
The case is being litigated on behalf of the People by the County of Santa Clara, the City and County of San Francisco, the County of Alameda, the City of Oakland, the City of San Diego, the County of Los Angeles, the County of Monterey, the County of San Mateo, the County of Solano, and the County of Ventura. The People are represented by their own County Counsel and City Attorney’s Offices, working in collaboration with the law firms of Cotchett Pitre & McCarthy LLP, Motley Rice LLP, Mary Alexander and Associates, and the Law Office of Peter Earle.
UPDATE 5/17/18: On May 16, 2018, the People of the State of California, represented by 10 County Counsels and City Attorneys, announced a $60 million settlement with one of three defendants — NL Industries, Inc. (“NL”) — in the litigation over lead paint remediation. We understand that representatives of the Sherwin Williams Company, another defendant in the litigation, are now claiming that this settlement somehow reduces Sherwin Williams’s liability to less than $60 million based on Sherwin Williams’s relative share of the lead paint market in California. This is false.
The defendants’ liability for public nuisance is unrelated to their relative market share. This settlement does not reduce the liability of ConAgra or Sherwin Williams, who will both remain responsible for the remaining balance of any judgment — which the People calculate at $670 million. The settlement amount with NL is not a reflection of the company’s share of total liability, but rather its ability to pay. Rather than seeking a higher amount that could drive NL into lengthy bankruptcy proceedings and result in pennies on the dollar for remediation, this settlement provides timely, unrestricted funding to clean up the hazards of lead paint and address the harms to children and other vulnerable populations resulting from toxic lead paint in homes.
The case is: County of Santa Clara v. Atlantic Richfield Co. et al., Santa Clara Superior Court, case no. 1-00-CV-788657, filed Mar. 23, 2000. Additional documentation from the case is available on the City Attorney’s website at: sfcityattorney.org
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Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thomson-Reuters).
For over 4 decades theLaw Offices of Jon L Gelman 1.973.696.7900 jon@gelmans.com has been representing injured workers and their families who have suffered occupational accidents and illnesses.
