California’s Santa Clara County, better known as Silicon Valley, has been the center of furious innovation at least since Bill Hewlett and Dave Packard started their company in a rented garage in Palo Alto in 1939. It’s where Robert Noyce and Gordon Moore founded Intel INTC +7.41% in 1968, and where Steve Jobs and Steve Wozniak started Apple AAPL +5.50% Computer in 1976. And now it’s where rich plaintiff lawyers have joined with their government counterparts to pioneer a new and toxic invention: the public-nuisance suit.
Later this year a California appeals court will hear arguments over whether Sherwin-Williams SHW +2.75%, NL Industries and ConAgra should hand over $1.2 billion to the state to fund a program designed to remove lead paint from millions of homes in Santa Clara County, San Francisco, Los Angeles and other cities. Never mind that only two of the three companies ever sold a drop of the stuff–ConAgra inherited its liability by purchasing a company that had once owned a paint manufacturer–and the industry largely stopped selling lead interior paint in the early 1950s, decades before the federal government ordered it off the market.
Lawyer Timothy Hardy made a career out of defending companies against lead paint suits. (Photo credit: Jamie Kripke for Forbes)
None of that mattered to Judge James P. Kleinberg in Santa Clara. Nor did extensive government-sponsored studies showing that the best thing to do with lead paint is to leave it right where it is, since disturbing old paint can actually lead to more of the poisonous dust being scattered on windowsills and other surfaces. No, Kleinberg decided, the best solution was to dispatch an army of inspectors to examine hundreds of thousands of homes–starting with the ones owned by slumlords who have racked up the largest number of code violations–and then use the defendant companies’ money to perform expensive repairs, including fixing leaks and replacing doors and interior trim.
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