The judge says such damages are not necessary since the three companies haven't made lead-based paints for decades.

01:00 AM EST on Wednesday, March 1, 2006

BY PETER B. LORD
Journal Environment Writer

PROVIDENCE -- Superior Court Judge Michael A. Silverstein dismissed punitive damage claims that could have reached into the billions of dollars yesterday against the three corporations found liable last week for creating a public nuisance by selling lead-based paints in Rhode Island.

Silverstein said evidence that the companies behaved in a manner that would have justified punitive damages was "thin at best."

Such damages are designed to punish or deter bad behavior, but Silverstein said the companies haven't made lead-based paints for decades. And, he said, standards for lead poisoning of children have changed dramatically since the first half of the last century when most of the paints were made and sold, and the companies shouldn't be held to those standards.

The three defendants, Sherwin Williams Inc., Millennium Holdings and NL Industries, still face some serious damages because the jury's decision last week means they must pay to clean up the lead paint on an estimated 240,000 houses in Rhode Island.

Estimates have placed the abatement price tag from $1 billion to several billion dollars. But that would still be cheaper than punitive damages, which typically are multiples of actual damages.

Silverstein told a courtroom crowded with lawyers, financial advisers and insurance company representatives from around the country that he wants to get to work soon on determining specifics of the abatement program. He began meeting with lawyers late yesterday to talk about hearings that would determine the abatement damages.

The judge said he didn't think the trial was actually complete until the abatement protocol was established.

The trial portion of the case ended yesterday afternoon with Silverstein dismissing, and profusely thanking, the six-person jury. The judge told jurors and lawyers they could talk publicly about the case if they chose.

The trial, which began in October, was the longest civil jury trial in recent memory, the judge said.

One juror, Sheryl Costa of Riverside, said afterward that when the jury was deadlocked in its fourth day of deliberations, the vote was four for the defense and two for the state.

Silverstein asked the jury to go back and consider further deliberations. It then deliberated for four more days before finding three of four defendants liable. The jury did not find against Atlantic Richfield.

Costa said that after they were deadlocked, the jury went back and took a closer look at the lengthy legal instructions given by Silverstein.

She said the jury reached its verdict by closely following the judge's instructions and closely examining the evidence.

The jury found a nuisance was created by looking at the children poisoned by lead, and by looking at all the work required of the state Health Department and other state agencies. All those consequences, she said, amounted to harming the public.

Costa was the juror crying when the jury foreman announced the deadlock to the judge. She said yesterday she had been ill and hadn't slept the night before. She and others were upset, she said, because they deadlocked and didn't know what to do next.

She said the deliberations went well and the jury worked hard.

"We each knew we had a right to our opinions, but we also abide by our oaths," she said. "It was long, but it was our civic duty."

Jack McConnell, one of the state's lawyers, said the state was happy that abatement can proceed, saying that cleaning up the lead paints was the state's primary goal.

And he left no doubt that the case will have ramifications around the country. Already, he said, his firm, Motley Rice, has been getting calls from other states interested is similar suits.

"This case is hugely precedent-setting," said McConnell. "It is the first time the companies that sold products that injured kids are finally being held responsible. And my phone has been ringing off the hook."

McConnell declined a reporter's request to compare the case to the national tobacco litigation, on which he also played a big role. McConnell said each case is unique.

He said the state wasn't terribly upset about losing out on the punitive damages. "This case has always been about abating the paint, and that's what we got," he said.

He acknowledged the paint companies will probably appeal the verdict, but in Rhode Island there is only one level of appeal, to the state Supreme Court, so the appeal could be concluded within about a year.

Yesterday morning, lawyers for the state argued that the evidence cried out for punitive damages against the companies because they knew for decades that their paints were hurting and even killing children.

Fidelma Fitzpatrick suggested that Silverstein could assess punitive damages after he establishes how much the defendants will have to pay to clean up, or abate, the lead-based paints now on houses in Rhode Island.

"I believe this is your issue," Fitzpatrick said to the judge. "Just as you are going to fashion an abatement order, you should make a decision on punitive damages. You are solely empowered to make the ruling in this case."

She acknowledged that Silverstein, in past rulings, had said the jury should make any decisions on punitive damages.

As an alternative, she said the jury could go ahead and reach a decision on punitive damages now, and the judge could review its appropriateness after he rules on abatement.

"There's no reason why this jury can't make a determination on punitive damages, you then make determination on remedy, and then you review the jury's award," Fitzpatrick said.

But company lawyers said Rhode Island judicial decisions are clear: to find punitive damages in Rhode Island, a court has to find behavior amounting to criminality, and that didn't happen in this case.

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