California Court Rules on Lead Paint Manufacturer Liability

The California Supreme Court handed down a unanimous decision on June 26, 1997, in Sinclair Paint vs. Board of Equalization. This is the first time the paint and oil industries have been held accountable for the harm their products have caused. The case was closely followed by the paint and oil industries, whose products (lead-based paint and leaded gasoline) are sources of lead poisoning in California, and who were assessed fees to cover the cost of remediating past health and environmental damage to the citizens of the state.

Sinclair's main argument, which was supported by the Western States Petroleum Association, California Manufacturers, and others, was that the fees collected by California are not used to regulate the paint industry and thus were actually taxes collected in violation of California's Proposition 13. This provision requires that state taxes be enacted with a super-majority, or two-thirds, vote. The fees that were imposed in this case were passed by a simple majority of the state legislature, which allowed Sinclair Paint to contend that the penalty was, in effect, an illegal tax. This position was supported by two lower courts.

The State Supreme Court soundly rejected this argument, ruling that the lead industries, whose products are the major causes of childhood lead poisoning, can be required to pay fees to mitigate the harm their products created in the community. The court found the state's police power can be used to require mitigation of past, present and future adverse impacts.

Writing for the entire court, Justice Chin concluded, "In our view, the shifting of costs of providing evaluation, screening, and medically necessary follow-up services for potential child victims of lead poisoning from the public to these persons deemed responsible for that poisoning is likewise a reasonable police power decision."

The state is allowed to collect up to $16 million per year in fees, using a complicated formula that takes into account such factors as the current number of children who are lead-poisoned and the state consumer price index. The money can be used only for case magement of childhood lead poisoning investigations, including the cost of environmental investigations and the cost of sending out a public health nurse to make on-site visits.

(Added May 1997)