Amanda Robert Sep. 12, 2013, 5:22pm

SAN JOSE, Calif. (Legal Newsline) -- California and its residents will face unintended consequences if 10 cities and counties win their lawsuit over the presence of lead paint in older homes, says Tony Dias, a partner in the Washington, D.C. office of Jones Day, who became involved with the case when it began in 2000.

"They really are seeking to reverse what has been decades of development of public policy on how to deal with old lead paint in older properties," he said. "The efforts by the federal government, state governments and local governments ... reach back to public health officials and others working together with the industry in the early parts of the last century."

In The People of California v. Atlantic Richfield Co.,, the plaintiffs - Santa Clara County, San Francisco City, Alameda County, Los Angeles County, Monterey County, Oakland City, San Diego City, San Mateo County, Solano County and Ventura County - asked Santa Clara County Superior Court Judge James Kleinberg to declare that pre-1978 built, private residences with interior lead paint constitute a public nuisance.

They also asked the judge to order five paint manufacturers - The Sherwin-Williams Co., NL Industries, ConAgra Grocery Products, DuPont and Atlantic Richfield Co. - to pay at least $1.2 billion to abate the lead in those residences.

Dias, who represents Sherwin-Williams, and other advocates for the paint manufacturers contend that testimony in the recent six-week trial showed that current policies and programs in California not only successfully educate residents about lead exposure risks, but continue to lower their blood lead levels. These advocates also contend that if plaintiffs prevail and these initiatives change, problems with real estate, public housing, the environment and even the state could arise in the future.

With regard to real estate, Dias points out that federal, state and local rules mandate what homeowners need to do in order to sell a property that contains lead-based paint. They must disclose the presence of lead-based paint to potential buyers as well as offer them educational materials about how to properly maintain the paint.

He explains that this system, which dates back to the 1990s, allows homeowners to buy and sell homes that have lead-based paint without creating hazards for anyone living in those homes. However, he heard some realtors say if the court declares that the "mere presence" of lead-based paint in a property constitutes a public nuisance, it could raise questions over the value of that property.

"Even if you were to take care of certain parts of the property that have old lead-based paint, the plaintiffs suggested that having lead-based paint in the home still constitutes a potential hazard because the paint could deteriorate in the future," Dias said. "It leaves a lot of uncertainty in the market and about what potential buyers should think about homes that are pre-1978 properties."

Some realtors also suggest that if the court decides these properties are part of a public nuisance, homeowners could have trouble obtaining or maintaining their mortgage or property insurance, he says.

Brendon DeSimone, a national real estate expert, who has sold properties in California, argues that half the homes in the state contain lead-based paint, but people still buy them. In his experience, they read the lead-based paint disclosure in their real estate contracts and sign them.

"It exists, but it's not a huge deal," DeSimone said. "It doesn't stop someone from buying a home."

DeSimone agrees that changes to current procedures in California could make it more difficult to buy and sell homes. For example, he points to a water conservation ordinance in San Francisco that requires homeowners to install water-efficient shower heads and ultra low-flow toilets before selling their properties. While it caused initial problems, homeowners caught on to the new mandates, he says.

"Now saying you have to go into an entire house and take all the paint off, that's a different story," DeSimone said. "Taking out lead-based paint in a home is much more complicated than changing out a couple of faucets."

In addition to homeowners, rental property owners in California could face their own problems if plaintiffs prevail in the lead paint case.

Dias points out that in the past, children were exposed to lead-based paint in older, substandard housing units. In many cases, he says, their landlords failed to maintain their units and knowingly put them in danger.

He explains that labeling these rental properties as a public nuisance - and paying "slumlords" to abate their lead-based paint - would counteract the efforts of community leaders who have worked to hold landlords accountable for their actions.

"This is a for-profit business that these slumlords are in, and they'd basically get away without having to maintain their properties or offer safe properties for rent for these vulnerable families," Dias said.

The trial also brought up questions about how the large-scale abatement of lead-based paint could impact the environment.

Bonnie Campbell, a spokeswoman for the five paint manufacturers and the former Iowa attorney general, reiterates that the U.S. Environmental Protection Agency and California Department of Health Care Services agree that well-maintained, intact, lead-based paint poses no health risks. However, she says, abating this paint could create lead dust that does pose risks.

"Tellingly, the plaintiffs' suit seeks extensive abatement of lead paint, including removal and replacement of all doors and windows with lead paint, declaring it a public nuisance, yet specifically exempts their own public buildings, including schools, their lead water pipes, roads and parks from the requirement for abatement," she said.

Like Dias, Campbell maintains that California already adheres to a comprehensive plan that handles the presence of lead-based paint in older properties. In addition to its other efforts, the state legislature levied a tax on industries that once contributed lead to the environment, including the paint industry. That tax helps fund such programs as the Childhood Lead Poisoning Prevention Program, she says.

"It seems not sensible to now overlay the abatement plan the plaintiffs are recommending, which would turn the law, these policies, these programs, on their head," Campbell said. "It's completely unnecessary."

Plaintiffs and defendants in the case have until Sept. 13 to draft and file their proposed statements of decision. Closing arguments are set for Sept. 23.

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