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December 17, 2013

Paint Makers Ordered to Pay $1.1 Billion

A California Superior Court judge has ordered three paint companies to pay $1.1 billion into a fund to cover the cost of lead paint clean up in 10 counties throughout the state, the Associated Press reports. A spokesperson for the defendants said the companies will file objections. Under California law, the defendants have 15 days to appeal the ruling.

If the ruling stands, it would be the first public nuisance win for plaintiffs. Similar suits have been dismissed throughout the country. “Appeals courts variously found that the public nuisance claim couldn’t apply to a manufacturer that didn’t control its product’s use or maintenance after sale, or that the cities and counties lacked standing,” the American Lawyer noted in July.

ILR President Lisa Rickard issued a statement saying the ruling opens the flood gates for a surge of frivolous lawsuits and sets a dangerous precedent for other activist courts across the country to follow:

“The message to businesses from this ruling is: if you don’t have a crystal ball, you can be sued. Under the court’s logic, it doesn’t matter if businesses had no possible way of knowing about harms caused by products – they can still be sued, even decades after the products were sold. Courts in five other states have rightly rejected this outrageous theory.”

California has a notorious business reputation. It was found to have the fourth worst legal climate in the country in a 2012 survey of business decision makers. Seventy percent of those decision makers say that a state’s legal environment affects business decisions, such as where to locate or expand. Monday’s ruling will only fortify California’s unfriendly legal reputation.

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