R.I., Former Lead Paint Makers Disagree over Cleanup

June 6, 2007

More than a year after the state won a landmark lawsuit against former manufacturers of lead paint, the two sides remain at a gaping impasse over how the cleanup of contaminated properties in Rhode Island should be carried out.

Some estimates have placed the potential cost in the billions of dollars.

The companies envision a need to conduct further hearings, cross-examine witnesses and photograph individual properties, part of a fact-finding process they say is necessary to understand the scope of the state’s lead paint problem and how best to deal with it.

But Jack McConnell, a lawyer for the state, said the companies were trying to ensure “that the ultimate judgment day never comes” and accused them in court papers of proposing a needlessly complex and never-ending process.

The companies reject the idea that they’re using a delay tactic, saying the state has been short on specifics on what its cleanup plan would look like and that it needs more evidence and information before any work can begin.

“We’ve never seen the state’s plan,” Laura Ellsworth, an attorney for Sherwin-Williams Co., told Superior Court Judge Michael Silverstein on Monday. “We’ve never presented witnesses on it. We’ve never presented evidence on it.”

She said the defendants had so little information that they were “boxing with a phantom.”

The state says it is prepared to submit a detailed plan by Sept. 15. Silverstein has said he will select a special master to help him in evaluating that plan.

In addition to Sherwin-Williams, a state jury in February 2006 found Millennium Holdings LLC and NL Industries, Inc., liable for creating a public nuisance by manufacturing and selling a toxic product. The verdict has been appealed to the Rhode Island Supreme Court.

Lawyers for the state say there are roughly 250,000 older homes in Rhode Island containing lead paint, and that it costs several thousands of dollars to properly clean each unit. The companies are looking to avoid the large-scale, and expensive, cleanup envisioned by the state.

A published research note in April by J.P. Morgan analyst Jeffrey Zekauskus predicted that Sherwin-Williams share price would “come under pressure” if costs per defendant in the Rhode Island case exceeded $500 million. But the note also said the defendants’ appeal might delay the final decision by at least two years.

The companies had earlier tried to get the cleanup process put off until the state Supreme Court ruled on their appeal, which is still pending. Silverstein denied the request several weeks ago.

This time, though, they say the special master should have the authority to subpoena witnesses and inspect individual properties _ and even photograph or videotape them or collect other data. He said the defendants were entitled “to actually look at whatever the nuisance is that the state is claiming exists.”

The companies also say the two sides should be entitled to adversarial hearings at which evidence is presented and expert witnesses are questioned.

“Of course, that’ll take some amount of time, but we’re certainly entitled to present that evidence,” Nilan said.

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