Deal to keep lead paint initiative off ballot could have major financial effects

SACRAMENTO — Of the three last-minute deals made in the Capitol last week to keep initiatives off the November ballot, the agreement between paint companies and Democratic lawmakers may have received the least attention.

But in terms of the dollar amounts at stake and the liability the industry may now avoid, it may prove to be the most significant.

Under the agreement announced late Thursday, Paint makers ConAgra Brands Inc. and Sherwin-Williams Company agreed to drop the Healthy Homes & Schools Bond Act of 2018 from the ballot. Supporters had already invested at least $6 million in the effort.

The initiative would have absolved the manufacturers of hundreds of millions of dollars in liability stemming from a 2013 ruling in County of Santa Clara v. Atlantic Richfield Co. et al., (Santa Clara Super. Ct., filed March 23, 2000). It called on the state to sell $2 billion in bonds to fund lead paint cleanup.

“We thank the Legislature for their work over the last few weeks to get us to this point,” said Kendall Klingler, spokesperson for the initiative campaign, in an emailed statement. “We are committed to collaborating with them to develop a solution that works for California homeowners.”

In return, Democratic lawmakers announced they are dropping three bills. AB 2073 would have shielded homeowners who participate in abatement programs from lawsuits — in defiance of industry arguments that current law and a recent court case would make homeowners liable for lead paint in their homes.

AB 2803 would have modified the state’s superfund law to define lead paint as a “public nuisance.” AB 2136 would have made paint manufacturers jointly liable for selling lead-based paint, meaning a plaintiff would not have to prove a particular manufacturer sold the paint that caused harm in order to recover damages.

“Rather than engage in a highly costly initiative battle, we will have an opportunity to really take a step back and think about what we need to do,” Assemblyman David Chiu, D-San Francisco, author of AB 2073 and the leader of the legislative effort, said during a press conference on Thursday.

“The court case itself made the record that exposed the weakness of the lead paint industry position,” said Lee-Ann Tratten, political director of the Consumer Attorneys of California, which was heavily involved in the negotiations.

These bills were the surviving remnants of a package of lead paint measures announced in March as a response to the paint company initiative.

All three deals came within hours of the 5 p.m. Thursday deadline to withdraw an initiative from the ballot.

The other two deals, however, were completed same day in the form of bills signed by Gov. Jerry Brown. On paper, all the paint companies got was a promise. Lawmakers could still attempt to revive their paint measures, using the so-called gut-and-amend process to get around fiscal and policy committee deadlines, though that would be highly unusual.

Santa Clara and San Francisco counties also filed a motion last week with the state Supreme Court attempting to get the initiative thrown off the ballot. Their complaint alleged the initiative language was fatally misleading and also violated the single subject rule for ballot measures. County of Santa Clara et al. v. Padilla et al., S249610 (Cal. Supreme Court, filed June 27, 2018).

ConAgra and Sherwin Williams are also still enmeshed in the original lawsuits by 10 California cities and counties. A judge originally awarded $1.15 billion to the plaintiffs. The amount was reduced on appeal, but the plaintiffs are still seeking to recover about $700 million from the two companies.

Greta S. Hansen, who helped lead Santa Clara County’s lead paint case, could not be reached for comment.