The jury orders Sherwin Williams Co., Millennium Holdings and NL Industries to clean up the paints that were used generations ago on thousands of Rhode Island homes.

01:31 PM EST on Thursday, February 23, 2006

BY PETER B. LORD
Journal Environment Writer

PROVIDENCE -- Six Rhode Islanders yesterday made up the first jury in the country to find major corporations liable for creating a public nuisance by making lead-based paints that have poisoned thousands of children. The verdict may cost the companies billions of dollars.

The jury ordered Sherwin Williams Co., Millennium Holdings and NL Industries to abate, or clean up, the paints that were used generations ago on thousands of Rhode Island homes.

A fourth defendant, Atlantic Richfield, was found not liable.

The verdict had an immediate and dramatic impact.

The value of Sherwin Williams stock began to plummet within moments of the verdict. By the end of the day, the value of the company's shares dropped by nearly 18 percent -- a loss totaling $1.3 billion.

The value of NL Industries stock dropped by 8 percent, for a total loss of $642 million.

Much uncertainty surrounds the actual damages the companies face.

The biggest potential expenditures are the abatement costs. The state argued that 240,000 houses in Rhode Island have lead paint on them that must be removed. Assuming an average expense of $10,000 per house, the total cost would be about $2.4 billion.

The specifics of any abatement program are up to Judge Michael A. Silverstein, who presided over the 15-week trial. And the costs for each house could be more or less.

On the other hand, lawyers for the companies plan to pursue motions to dismiss the case. If those fail, they certainly will appeal.

Silverstein also announced yesterday that he plans to hear arguments early next week on whether to assess punitive damages against the companies. In case he decides to go ahead with those, he asked the jury to return to the courtroom at 9:30 a.m. Tuesday to hear testimony.

In the meantime, the judge emphatically directed the jury not to discuss the case with anyone.

The verdict has importance far beyond Rhode Island because it is the first loss by paint companies in the face of dozens of lawsuits by communities, counties and state governments in 16 other states. Until now, the companies have always won.

The Alliance for Healthy Homes, a group formed in 1990 to work to reduce childhood lead poisonings, noted yesterday that the verdict may be a turning point for those seeking restitution from the companies.

Last summer, the DuPont Corp. settled with the state by agreeing to contribute about $12 million toward abatement and educational programs. The Alliance noted that the settlement -- along with recent procedural victories in courts in Milwaukee and New Jersey, the go-ahead for a class-action suit in Chicago, and yesterday's verdict -- signal "growing momentum and hope that some justice will finally come to those who have been affected by lead poisoning."

"This is a very important, milestone victory for those across the nation who work on childhood lead-poisoning prevention because it sets a historical precedent as the first time a state or local government has been able to hold lead-pigment manufacturers accountable for their actions in a judicial setting," said the Alliance's Brian Gumm.

The verdict came as the jury was midway through its eighth day of deliberations.

The case went to the jury a week ago Monday. Last Thursday, the defendants were optimistic because the jury announced it was deadlocked on the first of three questions it was ordered to address: did lead-based paints create a public nuisance in Rhode Island?

Judge Silverstein asked the jury to consider further deliberations. It did, and it didn't come back until it reached a verdict, shortly before noon yesterday.

The jury foreman dryly went through the three questions as they applied to the four defendants.

As to whether lead-based paints are a public nuisance in Rhode Island, he said, yes.

As to the second question, whether each company was liable for creating the nuisance, the court clerk named each company separately.

Throughout the trial, the companies always spoke in the same order: NL, ARCO, Sherwin Williams and Millennium.

But for the verdict, ARCO came first. The foreman said the jury found it wasn't liable.

"My heart sank at that point," said former Attorney General Sheldon Whitehouse, who filed the initial lawsuit. Whitehouse, now a candidate for the U.S. Senate, said he slipped into the back of the courtroom to watch the verdict. He said he was elated when the jury said yes to the public nuisance. He slumped when it exonerated ARCO. (The state's first trial against the paint companies, when Whitehouse was still in office, ended in a mistrial.)

But then the jury foreman said jurors found each remaining company liable.

And, the foreman said, each of those three companies should be ordered to abate the lead paints.

Silverstein gave the jury a break for lunch, and when it returned, he told jurors he expected them back Tuesday morning.

Silverstein ordered the jurors and lawyers on both sides to refrain from discussing the case.

Onlookers were left to wonder if the companies made the right move when they decided to rest their case without putting on any witnesses. Company lawyers told the jury the state simply didn't prove its case against any of them.

As to why ARCO was not found liable, two possible explanations were raised informally.

Even the state agreed that an ARCO predecessor manufactured lead pigments for a relatively brief duration. And there was little testimony about its products when compared with much more evidence presented against the other defendants.

ARCO was also the only defendant that chose a local lawyer to present most of its case before the jury. Even Attorney General Patrick C. Lynch praised ARCO's attorney, John Tarantino. Lynch said yesterday that Tarantino did a wonderful job.

The other defendants retained local lawyers, but chose litigators from national firms to present most of their arguments.

Lynch pointed out that children continue to be poisoned by lead paints and there were victims in nearly every community in Rhode Island last year.

"I was glad to take up this fight," he said. And he praised the jury for putting so much time and thoughtfulness into its verdict.

"We are absolutely thrilled," said Roberta Hazen Aaronson, executive director of the Childhood Lead Action Project, an advocacy group for lead-poisoned children. "Sometimes in this not so friendly world, the Goliaths are defeated and justice triumphs. This precedent-setting decision feels like a home run for the families devastated by lead poisoning and for a community that has borne the cost of this industry-made public health disaster."

The losing companies had little to say. They issued a statement from spokesperson Bonnie Campbell that said, "This is but one step in a lengthy process and there are a number of issues still to be decided by the Court."

With reports from staff writer David McPherson

plord@projo.com / (401) 277-8036

The verdict

The six-member jury unanimously agreed that:

Lead-base paints are a public nuisance in Rhode Island.

That three of the four companies involved in the case should be held liable.

That the three companies held liable should be ordered to abate, or clean up the paints.