February 22, 2006

Landmark lead paint suit finds companies liable

By David Ortiz

PROVIDENCE, Rhode Island (Reuters) - Three former lead
paint makers were found liable on Wednesday for poisoning
thousands of children in Rhode Island in a landmark lawsuit
that could trigger a wave of litigation against the industry.

The verdict, which could force the companies to pay
millions of dollars in clean-up costs and mitigation, battered
stock prices of the two publicly traded companies and could
prompt other states, counties and cities to file similar

The Rhode Island Superior Court jury sided with prosecutors
who accused paint manufacturers of covering up the risk of lead
paint, especially to children, in their lawsuit filed in 1999,
the first by a state to hold the paint industry responsible.

"This is an enormous victory for the more than 30,000
children poisoned by lead paint in Rhode Island," Rhode Island
Attorney General Patrick Lynch told Reuters after the decision.

Superior Court Judge Michael Silverstein ordered attorneys
from both sides to report to court on Monday to make their
arguments on whether punitive damages should be awarded.

If Silverstein does not dismiss the punitive damage claims,
the jury will return Tuesday for deliberations on damages, said
Lisa Dinerman, a spokeswoman at the Rhode Island Supreme Court.

At a minimum, costs could be into the millions to put a
fresh barrier coat of paint over any chipping lead paint, while
total removal of the paint followed by a fresh coat would be
far greater, according to industry estimates.

The companies found liable are Sherwin-Williams Co., NL
Industries Inc. and Millennium Holdings LLC. A fourth
defendant, Atlantic Richfield, was not found responsible,
according to court officials.

Shares in Sherwin-Williams, maker of Dutch Boy, Krylon and
Duron paints, slid 17.8 percent on the verdict. NL Industries
Inc. lost 8 percent.

The cities of Chicago, Milwaukee, San Francisco and St.
Louis have also filed suits against former lead paint makers.


Lead paint was banned by the federal government in 1978
after studies showed it caused health problems in children,
including learning disabilities and permanent brain damage.

But it remains widespread, especially in older homes in the
northeastern United States. Rhode Island children routinely
test above the national average for blood-lead levels.

"I'm ecstatic. I was worried that it was going to go the
other way," said Srey Pen, whose 5-year-old son Christian
suffered from lead poisoning in 2004 while living in a house in
the state capital Providence. "This makes me really happy that
something is finally going to get done."

In the two years since her son was diagnosed with lead
poisoning, Christian has been expelled from both a day care
program and kindergarten for disrupting class and becoming
violent with teachers and other children, Pen said.

Paint companies have denied they are directly responsible
for the chipping of lead paint, saying landlords, not the
companies, should be held accountable for conditions that
exposes children to lead.

Cleveland-based Sherwin-Williams said the court still must
rule on remaining issues before the next steps in the legal
process can be determined. "We continue to believe that the
facts and the law are on our side," the company said.

Lawyers said they expected the verdict to prompt similar
lawsuits across the country, similar to the blizzard against
the tobacco and gun industries.

"It really is a historic day," said Alan Mensh, an attorney
with Ashcraft & Gerel in Baltimore. "Because of this finding, I
would assume that there would be additional cases," he added.

(Additional reporting by David Brinkerhoff in New York and
Karen Jacobs in Atlanta)