- The Washington Times - Monday, November 25, 2002

On October 29, in a courthouse in Providence Rhode Island a jury rejected the novel claim by Attorney General Sheldon Whitehouse that the mere presence of lead paint in a house constitutes a public nuisance. After four days of deliberation the jury split 4-2 in favor of the lead paint manufacturers and the judge called a mistrial.
Some 40 cities and states have sued the industry, which has neither lost nor settled any of the lawsuits. Yet, the litigation goes on. It continues despite the fact that the lawsuits are inconsistent with sound public policy on every level. If successful, the suits would: punish the honorable, injure the innocent, let the guilty go unpunished, and reward the undeserving. A perfect perversion of justice.
The Rhode Island suit and its progeny bring to mind the maxim "no good deed will go unpunished." Concerns about the possible health effects of lead paint caused the industry in the mid-1900s to support research at Harvard and Johns Hopkins on the subject. In 1954, the industry supported a voluntary standard sponsored by the American Academy of Pediatrics to eliminate the use of lead pigments in consumer paints.
Much later, in 1978, the federal government banned lead paint, with the support of the industry. Today we are not faced with a massive lead poisoning epidemic. Instead blood lead levels in children have fallen dramatically in the last 20 years. In the words of Randall Lutter, American Enterprise Institute-Brookings scholar, the reductions represent a "remarkable public health success." The suits punish an industry that should be held up as a model of responsible corporate conduct.
One of the dangers inherent in pursuing these lawsuits is that they divert the attention and resources of policymakers away from real solutions. There are practical and effective ways to address the lead paint problem. An AmeriCorps program, CLEARCorps, trains members to go right into the homes of children at risk, to paint and to educate parents on prevention. The program, housed at the Shriver Center at the University of Maryland, Baltimore County, is cosponsored by the National Paint and Coating Association, and is currently operating in 10 cities and growing. This program, much like its sister program, Habitat for Humanity, is about Americans rolling up their sleeves and getting the job done. Holding out litigation as the remedy for the lead paint problem undermines the efforts of programs like CLEARCorps to get the cooperation and attention it needs to succeed.
Among the hidden victims of these lawsuits are the shareholders of the companies being sued. There is no question that the suits have affected the share value of the defendant companies. Within 20 minutes of the announced mistrial, one defendant's shares shot up nearly 14 percent. By the end of the day, that company's market value had increased by $470 million. Other defendants experienced increases in share value following the decision. Who are the shareholders whose investments are affected by these suits? Among them are: employees of the companies, workers at other companies who have their 401(K) or pension assets invested, and average citizens who have purchased stock to save for retirement or a college education for a child or some other life goal.
In focusing blame on the lead paint industry, the lawsuits avoid directing blame at those who are responsible for the harm done and the ongoing risk some children face: negligent landlords and the agencies that should have enforced reasonable housing standards. Rhode Island children have the highest rates of lead poisoning: the rate is 2 times higher in Rhode Island than in the rest of the country. In Providence, the rate is 4 times higher. Why?
Two Dartmouth researchers in a study published in the American Journal of Public Health examined the effect of an active program of household lead paint hazard abatement in Wooster, Mass., with Providence. They found the children in Providence were significantly more likely to have high blood lead levels.
They concluded that the risk of lead poisoning is lower in Massachusetts because of active enforcement of the state's longstanding housing policy that requires abatement. Research by a Brown University senior last spring revealed that some 400 landlords in Providence were repeat violators of their statutory duties under state and local laws, poisoning more than 1,700 children.
This enforcement failure is not because either Providence or Rhode Island has lacked resources. In the past seven years, the U.S. Department of Housing and Urban Development (HUD) has spent nearly $25 million on Rhode Island on loans to clean up lead paint housing and for lead paint hazard education. According to an article in the Providence Journal, HUD officials believe they have spent more per capita on Rhode Island than in any other state in the country.
If the Rhode Island suit is tried again and somehow the plaintiffs prevail in the end, who will benefit? It is very unlikely it will be the children at risk. Rhode Island participated in the tobacco master settlement, a lawsuit in which no money was paid to smokers and all money was paid to the states. (In fact, smokers are paying for the settlement through higher cigarette costs.) This suit stands as precedent. As of the end of last year Rhode Island received $103 million from that settlement. Yet, only about $3 million of those dollars have been spent on tobacco prevention programs.
The real beneficiaries of a plaintiff verdict would be the lawyers hired to pursue the litigation. In the Rhode Island case, it is the South Carolina firm of Ron Motley. This is one of a handful of law firms that negotiated the tobacco settlement, the fees for which will bring the lawyers involved approximately $25 billion. Yes, you read that right, billion.
The lesson in this story: There's big money in creating the appearance of social good.

Judyth Pendell is director of the Center for Legal Policy at the Manhattan Institute in New York City.


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