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Calif. real estate board concerned about impact of lead paint case

By Jessica M. Karmasek | Aug 15, 2013

SAN JOSE, Calif. (Legal Newsline) -- A California real estate board says it is concerned about the impact of a lead paint case, currently on trial in Santa Clara County Superior Court, on the state's housing market.

The Los Angeles County Boards of Real Estate, or LACBOR, sent a two-page letter less than two weeks before the start of the trial, which began July 15, to the Los Angeles County Board of Supervisors.

In the July 4 letter, LACBOR President Giuseppe Veneziano said he is concerned about the impact the suit, The People of California v. Atlantic Richfield Company et al., would have on homeowners, sellers and real estate professionals.

"Before continuing on with this lawsuit, I believe that the Board should carefully consider the impact on the housing market," he wrote.

Veneziano asked the board 10 specific questions:

1. Why did Los Angeles County file the lawsuit that seeks to abate lead in homes, which under current law now does not have to be abated?

2. Why has Los Angeles County declared even well-maintained homes with old lead paint a public nuisance under the law?

3. Does Los Angeles disagree with federal, state and local public health officials' statements that well-maintained, intact old lead paint is not a hazard?

4. Why hasn't Los Angeles County notified or informed owners of properties built before 1978 that they are considered to be part of a public nuisance under the laws of California and the county?

5. What actions should sellers and buyers of these properties take now that the county considers them to be part of a public nuisance?

6. Will property owners have to remove all lead sources from their properties, including lead in soil and water, in order to be considered part of a public nuisance?

7. What is Los Angeles County doing about sources of lead in, on and around pre-1978 county-owned buildings, the water system, recreational areas and other facilities?

8. What impact does this law have on landlords with pre-1978 properties that are now compliant with federal, state and local laws?

9. Can tenants of pre-1978 properties now sue landlords because they are living in residences that are considered to be part of a public nuisance?

10. Has Los Angeles County conducted any studies to assess the impact of this lawsuit on housing, mortgages, insurance and realtors?

In a letter dated Aug. 5, the board responded -- sort of.

John Krattli, the county's counsel, took up a good portion of the two-page response summarizing the case.

"The focus of this case is holding five lead paint manufacturers, namely, ARCO (Atlantic Richfield Company), ConAgra (Grocery Products), NL Industries Inc., DuPont, and Sherwin-Williams Company, responsible for creating or assisting in the creation of lead paint poisoning, which is a widespread public health hazard," he wrote.

"Specifically, the public entities bringing this litigation contend that the defendants concealed the dangers of lead, mounting a campaign against the regulation of lead, and actively promoting lead for residential use despite knowledge of the harms that such use would create."

He continued, "During this litigation, these companies have denigrated the public health concern particularly concerning young children's exposure to lead by attempting to shift blame for lead poisoning to lower income families and local governments for their supposed failure to prevent lead poisoning caused by these defendants' own products."

Krattli said lead paint in older housing is "the pathway to children's exposure to the toxic effects of lead."

"Thus, while we appreciate your concern, we must emphasize in closing that the remedy sought by the public entities is the abatement of the nuisance caused by lead paint, with the cost of all abatement borne by the defendant paint manufacturers," he wrote.

"The public health interest of the public entities' residents, particularly children, demands no less."

Click here to read the board's full letter.

In a motion for judgment Tuesday, defendant Sherwin-Williams argues that the requested nuisance declaration, if issued, would cast a stigma over pre-1978 houses in the state.

That, in turn, would likely reduce property values and marketability, the company contends.

Owners could challenge property tax assessments, impacting city and county revenue, and owners of pre-1978 houses could have difficulty finding property insurance if their properties are declared to have a nuisance. Rates also would likely increase, Sherwin-Williams argues.

"The Court should not enter into this multi-faceted policy thicket where the best intentions of a few could trigger harmful, unintended consequences," wrote Robert A. Mittelstaedt, an attorney at Jones Day, which is representing the company.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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