Lead Paint Coverage Claim Bites The Dust

• Published date: 02 May 2022
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insurance Laws and Products, Class Actions, Personal Injury
• Law Firm: Duane Morris LLP
• Author: Ms Gina M. Foran, William J. Baron and Philip R. Matthews

Duane Morris lawyers helped secure a victory at the California Court of Appeal when the court held Tuesday that ConAgra's insurers have no duty to indemnify ConAgra against a public nuisance action in which ConAgra was ordered to contribute to an abatement fund due to its predecessor's promotion of the use of lead paint in pre-1950 homes. (See Certain Underwriters at Lloyd's London, et al. v. ConAgra Grocery Products Company, et al., Case No. A160548, April 19, 2022, certified for publication ("ConAgra").)

The underlying case (the "Santa Clara Action") began in 2000 when Santa Clara County, later joined by other California government agencies filed a class action complaint against certain lead paint manufacturers, including ConAgra, NL Industries, Inc., and Sherwin-Williams Company. The focus of the underlying case was narrowed, and that case ultimately went to trial on one cause of action for representative public nuisance. In pursuing that causes of action, the underlying plaintiffs alleged that the presence of lead in paint and coatings in and around homes and buildings in California created a public health crisis created and/or assisted by the defendants. In a pre-trial appeal in the Santa Clara County action, the court held that the representative public nuisance cause of action required as an essential element that the paint manufacturers had acted intentionally with actual knowledge that their marketing of lead paint for interior residential use would cause harm. (See County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 299 ("Santa Clara I").) The underlying case went to trial under that standard, and the court found the manufacturers jointly and severally liable for representative public nuisance.

In 2017, the Court of Appeal in the Santa Clara Action affirmed the finding that the paint manufacturer were liable, although the Court ruled that the amount of the judgment must be re-tried. (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51 ("Santa Clara II").). In upholding the finding of liability, Santa Clara II held that when ConAgra's corporate predecessor, W.P. Fuller & Co. ("Fuller") marketed paint for use inside homes, Fuller had "actual knowledge of the hazards of lead paint'including childhood lead poisoning," and specifically that "(1) 'lower level lead exposure harmed children,' (2) 'lead paint used on the interiors of homes would deteriorate,' and (3) 'lead dust resulting from this deterioration...