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Last Updated Sunday, March 29 2015

Recent California Court Ruling Could Have Major Repercussions for the Paint Industry

By Kerry Pianoforte, Editor

Published January 22, 2014
A recent verdict was issued by Santa Clara Superior Court Judge James P. Kleinberg regarding removal of lead paint from homes in several California counties.  The final verdict ordering Sherwin-Williams, National Lead and ConAgra to pay $1.15 billion into a fund to remove lead paint from homes in various counties and cities in California is the largest public nuisance award in California history and comes after 13 years of litigation. The case has gone to the Court of Appeal twice and the California Supreme Court. The court increased the final verdict and judgment from $1.1 billion to $1.15 billion by increasing the amount payable for the cost of remediation of the lead paint.

According to Judge Kleinberg, Sherwin-Williams, National Lead and ConAgra or their predecessors were liable for promoting lead paint while knowing of its poisonous effects on children. The medical literature and the companies’ own internal documents demonstrate that the companies knew by the early 1900s that lead paint was injurious to children. Although banned in 1978, lead paint remains on millions of homes in the California counties of Santa Clara, Alameda, Los Angeles, Monterey, San Mateo, Solano and Ventura; as well as the city and county of San Francisco and the cities of San Diego and Oakland.

This verdict is likely to have major ramifications for the paint industry.

“If this penalty does hold up in the courts and Sherwin-Williams and others have to pay up, R&D new product output will be slowed dramatically,” said Phil Phillips, president of CHEMARK Consulting. “Of course, this will be due to a fear that raw materials used today could be culled out in the near future as ‘bad actors’ and ruled as such by our courts.”

CHEMARK recognizes this ruling is focused on the architectural paint sector right now, but it could influence other sectors such as OEM and specialty products in the near future. “The specialty products sector – traffic, maintenance and new construction and aerosols – would be the most logical impact adjacent extension of this ruling,” Phillips continued. “This latter U.S. situation will slow progress not only in meeting new coatings/paints need demands but will compound substrates to be coated and their development. Accentuating this potential legal strangle hold within the U.S. and EU, is the relative ‘freedom’ for other countries to use whatever raw materials they want to chose, both domestically and importing products as well.”

The ruling could also have a ripple effect on other states in the U.S.

“Of course the other obvious negative potential impact of this ruling would be to strengthen the resolve of other states, seeking a share of damages, to re-enter the lead issue,” Phillips concluded.

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