SACRAMENTO - While the California Supreme Court has refused to review an appeals court decision against three companies ordered to pay hundreds of millions for lead paint abatement, the long running fight over the deeply fractious issue is not over.
Two of the companies have announced they will ask the U.S. Supreme Court for a review, and all three are backing a ballot initiative that would raise $2 billion in bond money and eliminate their liability for those claims that lead paint causes a public nuisance.
The Supreme Court posted Wednesday its decision to deny a review of the Sixth District Court of Appeal ruling.
Santa Clara Superior Court Judge James Kleinberg ruled in 2013 that the three companies, ConAgra, Sherwin Williams and NL Industries, are liable for the abatement of lead paint in homes built prior to 1981. In November, the Sixth District Court of Appeal ruled that they were only liable for those homes built pre-1951.
As it stands, the plaintiffs are facing a bill of anywhere between $400 million and $700 million, down from the original $1.15 billion. Calculating the liability following the appeal court decision will be the job of the trial court.
"It's disappointing that our state's highest court refused to give their voice on a case of such significance," Ken Barnes, executive director of Sacramento-based Citizens Against Lawsuit Abuse (CALA), told the Northern California Record.
"We're looking at a situation where millions of pre-1981 built homes across this state will be labeled a public nuisance, and as a result, homeowners will likely face a tsunami of frivolous lawsuits."
Julian Canete, executive director of the California Hispanic Chamber of Commerce, said residents should be clear what the "public nuisance" language means.
"Every California homeowner who owns a pre-1981 home could be subject to criminal liability, eminent domain, foreclosure, special taxes to resolve the nuisance, orders to vacate or demolish, loss of tax deductions, and mandatory disclosure on real estate transactions," Canete wrote in an op-ed piece for the Sacremento Bee.
And, he added, "their addresses will be entered into a public database."
Several groups, including CALA and the National Organization of African Americans In Housing (NOAAH), filed amicus briefs in support of the companies. NOAAH argued that low income residents, home owners and renters, will be most affected by the adverse rulings against the lead paint manufacturers and distributors.
Ten cities and counties, including San Francisco and Los Angeles, sued the three companies under public nuisance laws.
"This is a major victory for California children and families. It settles all of the state law issues in this case,” Dennis Herrera, the city attorney for San Francisco, said in a statement on Thursday.
“These companies have dragged out this case for 18 years. It’s past time that they stop shirking their responsibility and start paying to clean up the toxic mess they created. We don’t need another generation of children to be poisoned by their product.”
Sherwin Williams will petition the U.S. Supreme Court for a writ of certiorari, or a review of the California decision, Tony Dias, an attorney representing the company, told the Northern California Record.
Andre Pauka, a partner with Bartlit Beck Herman Palenchar & Scott, which represents NL Industries, said the company also plans to appeal to the U.S. Supreme Court. Pauka told the San Francisco Chronicle that the appellate court decision an “unprecedented expansion of public nuisance law.”
Dias said it remains to be seen what will happen in the short term as the case is sent back to the trial court to decide on the monetary penalty and the companies appeal to the Supreme Court. Either could issue a stay on proceedings, he added.
"Of course we are disappointed with the decision," he said, adding that the implication for homeowners and businesses "should be on the forefront of the minds of everyone concerning this decision."
He noted that two of the California Supreme Court justices indicated they were in favor of a review, and that none of those groups that filed amicus will get an opportunity to be heard by the state's high court.
"This will have a detrimental effect on a wide variety of constituents in California, businesses, homeowners, minorities, low income of affordable housing," Dias said.
"In addition it also should be troubling that the decision by the court of appeals has really usurped the legislature's effort with its lead poison prevention program in the state that has proven to be very successful over the years."
The impact of the decision by the appeals court is that it rewards bad, slumlords, who have consistently flouted the law and will now be rewarded with a "bailout," Dias said.
"Under California law, children should not be exposed to lead hazards in their homes because state and local law prohibit lead hazards and if they do exist it is because of a small percentage of landlords have chosen to ignore the law...It seems like bad public policy to reward lawbreakers with a windfall like this."
During the trial, all the plaintiffs agreed the most effective way to address unsafe lead levels is to enforce existing laws, the attorney said, adding that the outcome of the lengthy litigation has turned the state's Childhood Lead Poisoning Prevention Program on its head.
Dias said the proposed ballot initiative fixes both the court ruling and provides funding for abatement without prejudicing home owners or rewarding slumlords.
In its fiscal analysis, the Legislative Analyst's Office stated that the measure would cost the state general fund, that is tax payers, $3.9 billion in total, $2 billion in principal and interest of $1.9 billion on bonds over a period of 35 years. Annual payments would average $110 million, the legislature's fiscal and policy adviser concluded.