CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 206

Author:(Chiu)

As Amended Ver:May 30, 2019

Majority vote

SUMMARY:

To protect those opting to voluntarily participate in a lead paint abatement program, this bill provides limited immunity from lawsuits and other claims associated with the participation in the lead abatement program.

Major Provisions

1. Provides that a public entity or property owner who voluntarily participates in a lead paint abatement program shall be immune from liability in any lawsuit where a responsible party, as defined, seeks to recover any cost associated with a lead paint abatement program from a property owner or public entity.
2. Provides that for the purpose of the immunity protections described in 1), above, "participation" may be as limited as submission of an application to a lead paint abatement program or as extensive as completion of all activities conducted pursuant to the program.
3. States that a property owners participation in a lead paint abatement program shall not be evidence that the participating property is a nuisance, substandard, or untenantable.
4. Defines for the purpose of the protections provided pursuant to 3), above, "participation in a lead paint abatement program" to mean that a property has been voluntarily enrolled in a lead abatement program, qualifies for inspection and services, is deemed to contain actionable lead paint, and has been satisfactorily abated, is in the process of being satisfactorily abated, or is awaiting abatement under the lead paint abatement program.
5. Defines "lead paint abatement program" to mean a program that is created to abate lead-based paint and that is created as a result of a judgment or settlement in any public nuisance or similar litigation.
6. Defines "property owner" to mean the property owner as well as all agents or employees thereof acting within the course and scope of their agency or employment.
7. Provides that "public entities" include the state, the Regents of the University of California, the Trustees of the California State University, a county, a city, a district, a public authority, a public agency, and any other political subdivision or public corporation in the state, including employees or agents thereof acting within the course and scope of their employment or agency.
8. Defines "responsible party" to mean a private party legally responsible for the inspection costs, abatement costs, or any other costs associated with a lead paint abatement program.

The Senate Amendments:

Clarify two definitions and specify that nothing in the bill alters existing obligations on homeowners to maintain their property under applicable law or otherwise limit a tenant's legal remedies for addressing the presence of lead paint on a dwelling.

COMMENTS:

In responding to due process concerns raised by the paint companies, the appellate court noted that, "nothing precludes a defendant from testing the lead paint . . . and seeking to hold a fellow defendant liable for a greater share of responsibility." (People v. ConAgra Grocery Products Co., supra, at p. 119.) The court also noted that the paint companies could seek liability if there was evidence "that the hazardous condition is the 'owners fault' or that the condition is not hazardous. (Ibid.) This vague reference to the "owners fault," accordingly, could cause some property owners to balk at participating in the lead abatement program out of a fear that seeking abatement of a lead paint hazard could expose them to liability. Accordingly, this bill provides limited immunity to property owners and public entities who voluntarily participate in the lead paint abatement program. It would protect those property owners and entities from being held liable in any lawsuit that seeks contribution or recovery for the costs associated with participation in that abatement program. This should encourage well-meaning property owners to voluntarily participate in the program and help alleviate the ongoing hazards posed by lead paint in California for the benefit of the public at large.

According to the Author:

The appellate opinion suggested that the lead paint companies could sue homeowners who participate in the program for comparative fault. This would undoubtedly stop a homeowner from participating in the program. AB 206 simply states that a property owner who participates in the abatement program is immune from any legal action looking to recover costs.

Arguments in Support:

The City Attorney of the City and County of San Francisco states:

This judgement created a one-in-a-generation opportunity to protect California's children from the threat of lead paint poisoning. Its success, however, depends on the ability of the jurisdictions to convince homeowners to participate in the voluntary lead abatement program.

Additionally, the California Apartment Association notes:

The protections offered by the bill will encourage property owners to enroll in the abatement programs established as a result of the recent lead paint litigation and any future similar cases. The end result will be a safer rental housing stock for California tenants.

Arguments in Opposition:

This bill is strongly opposed by Californians for Safe and Affordable Housing, which describes itself as a "project of ConAgra Grocery Products Company and Sherwin Williams." They believe that this bill, "is unconstitutional, grants immunity to slumlord property owners who have profited from flouting the existing laws and failing to maintain their properties in a safe and habitable condition, and is broadly drafted with far-reaching and, likely, unintended impacts."

FISCAL COMMENTS:

None

VOTES:

ASM JUDICIARY: 12-0-0

YES: Mark Stone, Gallagher, Chau, Chiu, Gonzalez, Holden, Kalra, Kiley, Maienschein, Obernolte, Petrie-Norris, Reyes

ASSEMBLY FLOOR: 71-0-9

YES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Daly, Diep, Eggman, Frazier, Friedman, Gabriel, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, O'Donnell, Obernolte, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Voepel, Waldron, Weber, Wicks, Wood, Rendon

ABS, ABST OR NV: Arambula, Calderon, Dahle, Flora, Fong, Cristina Garcia, Kamlager- Dove, Mayes, Rodriguez

SENATE FLOOR: 39-0-1

YES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Dahle, Dodd, Durazo, Galgiani, Glazer, Lena Gonzalez, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Mitchell, Monning, Moorlach, Morrell, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Stone, Umberg, Wieckowski, Wiener, Wilk

ABS, ABST OR NV: Chang

UPDATED:

VERSION: May 30, 2019

CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0001156

 THIRD READING  

Bill No: AB 206

Author: Chiu (D), et al.

Amended: 5/30/19 in Senate

Vote: 21

SENATE JUDICIARY COMMITTEE: 9-0, 6/11/19

AYES: Jackson, Borgeas, Allen, Caballero, Jones, Monning, Stern, Umberg, Wieckowski

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 6/19/19

AYES: Allen, Bates, Dahle, Hill, Skinner, Stern, Wieckowski

ASSEMBLY FLOOR: 71-0, 3/28/19 - See last page for vote

SUBJECT: Public nuisance: abatement: lead-based paint

SOURCE: Author

DIGEST:

This bill immunizes property owners who voluntarily participate in lead paint abatement programs from associated liability. This bill prohibits such participation from being evidence of violations of specified housing statutes, but makes clear it does not alter existing obligations to maintain property or limit tenants’ remedies for addressing the presence of lead paint.

ANALYSIS:

Existing law:

1. Provides that anything which is injurious to health, or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property, or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake, or river, bay, stream, canal, or basin, or any public park, square, street, or highway, is a nuisance. (Civ. Code § 3479.)
2. Provides that a public nuisance is one which affects at the same time an entire community or neighborhood, or any considerable number of persons, although the extent of the annoyance or damage inflicted upon individuals may be unequal. (Civ. Code § 3480.) All other nuisances are private. (Civ. Code § 3481.)
3. Provides that the abatement of a nuisance does not prejudice the right of any person to recover damages for its past existence. (Civ. Code § 3484.) Furthermore, no lapse of time can legalize a public nuisance, amounting to an actual obstruction of public right. (Civ. Code § 3490.)
4. Authorizes a private person to maintain an action for a public nuisance, if it is specially injurious to that person, but not otherwise. (Civ. Code § 3493.) An action may be brought by any person whose property is injuriously affected, or whose personal enjoyment is lessened by a nuisance and by the judgment in that action the nuisance may be enjoined or abated as well as damages recovered therefor. (Code Civ. Proc. § 731.)
5. Authorizes a civil action brought in the name of the people of the State of California to abate a public nuisance by the district attorney or county counsel of any county in which the nuisance exists, or by the city attorney of any town or city in which the nuisance exists. (Code Civ. Proc. § 731; Civ. Code § 3494.)
6. Provides that a public nuisance cause of action is established by proof that a defendant knowingly created or assisted in the creation of a substantial and unreasonable interference with a public right. (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 305-306.)
7. Provides that the remedies against a public nuisance are an indictment or information, pursuant to the Penal Code, a civil action, or abatement. (Civ. Code §§ 3491, 3492.) Any person may abate a public nuisance which is specially injurious to the person by removing, or, if necessary, destroying the thing which constitutes the same, without committing a breach of the peace, or doing unnecessary injury. (Civ. Code § 3495.)
8. Deems and declares to be a substandard building any building or portion thereof in which there exists any of a series of listed conditions to an extent that endangers the life, limb, health, property, safety, or welfare of the public or the occupants thereof. (Health & Saf. Code § 17920.3.)
9. Defines “lead hazards” to mean deteriorated lead–based paint, lead–contaminated dust, lead–contaminated soil, or disturbing lead–based paint without containment, if one or more of these hazards are present in one or more locations in amounts that are equal to or exceed the amounts of lead established for these terms in applicable state law and attendant regulations and that are likely to endanger the health of the public or the occupants thereof as a result of their proximity to the public or the occupants thereof. (Health & Saf. Code § 17920.10.) Any building or portion thereof containing lead hazards is in violation of the State Housing Law.
10. Provides that a dwelling shall be deemed untenantable if it substantially lacks any of a series of affirmative standard characteristics. (Civ. Code § 1941.1.)

This bill:

1. Immunizes a property owner who voluntarily participates in a lead paint abatement program, and all public entities, from liability in any lawsuit where a responsible party seeks to recover any cost associated with a lead paint abatement program from a property owner or public entity. Participation is broadly defined to include anything from submission of an application to completion of all activities pursuant to the program. “Lead paint abatement program” means a program that is created to abate lead-based paint as a result of a judgment or settlement in any public nuisance or similar litigation.
2. Provides that a property owner’s participation in a lead paint abatement program shall not be evidence that the participating property is any of the following:
   1. A nuisance;
   2. Substandard under Section 17920.3 of the Health and Safety Code or is in violation of Section 17920.10 of the Health and Safety Code, to the extent that those sections apply to lead-based paint or other substandard conditions controlled utilizing program funds; or
   3. Untenantable under Section 1941.1 of the Civil Code, as that section applies to lead-based paint or other conditions controlled utilizing program funds.
3. Defines “participation in a lead paint abatement program” to mean that a property has been voluntarily enrolled in a lead paint abatement program, qualifies for inspection and services, is deemed to contain actionable lead-based paint, and has been satisfactorily abated, is in the process of being satisfactorily abated, or is awaiting abatement under the lead paint abatement program.
4. Declares that its provisions do not alter existing obligations on homeowners to maintain their property under applicable law or otherwise limit a tenant’s legal remedies for addressing the presence of lead paint on a dwelling.

Background

A recent appellate court decision upheld a ruling against several paint manufacturers for their promotion of lead paint despite knowledge of the dire health risks. The judgment provided for an abatement program to be funded by the defendants in order to remove the lead paint hazards in homes in the participating jurisdictions.

In response to concerns that some property owners may be hesitant to participate in the abatement program for fear of triggering their own liability, this bill immunizes any property owner voluntarily participating in the program, and all public entities, in a lawsuit seeking to recover costs associated with the program. This bill further provides that a property owner’s participation cannot be used as evidence that the relevant property is a nuisance, substandard, or untenantable. A similar, if narrower, bill, AB 2073 (Chiu, 2018), passed through the Senate Judiciary Committee in 2018 on a 7-0 vote, but died on the Senate inactive file.

Comments

According to the author:

Assembly Bill 206 protects property owners from threats of legal action by lead paint manufacturers if they participate in an abatement program created by a 2017 judgment against lead paint manufacturers.

In 2000, ten local governments including the counties of Santa Clara, Los Angeles, Alameda, Monterey, San Mateo, Solano, Ventura and the cities of San Francisco, Oakland, and San Diego sued three lead paint manufacturers stating that companies' predecessors understood the health hazard of lead paint but nevertheless energetically promoted its use to improve the durability and water-resistance of house paint.

In 2014, the trial court held the paint manufacturers liable for the costs and found them responsible for removing or abating the hazards. The paint manufacturers appealed the trial court decision and in 2017 an appellate court disagreed and concluded they were responsible and upheld the order that they pay to abate the dangers. In February of 2018 the California Supreme Court denied review of the decision followed by the U.S. Supreme Court’s denial in October of the same year, ultimately affirming the trial court’s ruling.

However, the appellate opinion suggested that the lead paint companies could sue homeowners who participate in the program for comparative fault – the idea that the lead paint manufacturer’s liability should be reduced because homeowners bear some responsibility for the paint used in their homes. This would undoubtedly stop a homeowner from participating in the abatement program.

AB 206 simply states that a property owner who participates in the abatement program is immune from any legal action looking to recover costs related to inspection, abatement, or any other costs associated with the program. Further, to ensure all property owners with potential lead paint hazards participate in the program without reservation, this bill narrowly provides that voluntary participation in the program, alone, cannot be used to prove that a property is a nuisance or is untenantable. This is necessary to implement the judgment effectively and maximize use of the abatement program.

Without this legislation, property owners who do the right thing by removing toxic paint from their homes open themselves up to lawsuits by the paint companies, the worst possible outcome from the landmark legal judgment.

People v. ConAgra Grocery Products Co.

In People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51, 65-67, 78-79 (ConAgra), the People of the State of California (Plaintiff) brought suit against defendants ConAgra Grocery Products Company, NL Industries, Inc., and The Sherwin-Williams Company (collectively “Defendants” or “ConAgra defendants”). Plaintiff alleged that presence of lead in residential buildings was a public nuisance and asserted that Defendants were liable “because they had created or assisted in the creation of this public nuisance.” Plaintiff sought abatement, injunctive relief, and costs and fees.

The trial court “expressly found that, ‘[s]ince antiquity, it has been well known that lead is highly toxic and causes severe health consequences when ingested’ and that ‘[e]ven relatively low levels of lead exposure have severe health consequences.’” (Id. at 79.) Focusing on the 10 jurisdictions represented by Plaintiff, the trial court found that lead paint is prevalent there, inevitably deteriorates, and is the primary source of lead exposure for young children living in pre-1978 housing in the 10 jurisdictions.” The trial court found children continued to be exposed to lead despite the 1978 ban on lead paint. The trial court further found that Defendants “each had ‘actual knowledge of the hazards of lead paint,’ ‘including childhood lead poisoning,’ when they promoted lead paint for interior residential use.”

Based on its findings, the trial court ordered Defendants to pay $1.15 billion into an abatement fund that would pay for lead inspections, education about lead hazards, and remediation of particular lead hazards inside residences in the 10 jurisdictions. (Id.) On appeal, the ConAgra court found that the judgment should only apply to pre-1951 homes, however, it otherwise upheld the ruling of the trial court. The case was remanded back to the trial court to appoint a receiver and to recalculate the proper amount of the abatement fund. The California Supreme Court denied a petition to review the judgment.

It should be emphasized that the basis for the ConAgra defendants’ liability was not the lead paint itself or that the lead paint in any particular home was the Defendants’ paint. Rather, the Defendants were found liable because they promoted lead paint knowing it would pose a serious risk of harm to children. (Id. at 166.) According to the court:

The trial court found that defendants were liable for creating a public nuisance as a result of their conduct in promoting lead paint for interior residential use while knowing of the hazard that such use would create. The court did not find that lead paint itself was a public nuisance.

(Id.) “When a manufacturer promotes a product for a specific use that it knows will create a hazardous condition, public policy supports the use of California public nuisance law to require the manufacturer to remediate the hazards created by its conduct.” (Id. at 168.)

Encouraging Lead Abatement

The issue catalyzing this bill arises from a specific section of the ConAgra opinion in which the court states:

Furthermore, nothing precludes a defendant from testing the lead paint at specific locations during the remediation process and seeking to hold a fellow defendant liable for a greater share of the responsibility. The same is true of evidence that the hazardous condition is “the owner's fault” or that it is not hazardous.

(ConAgra at 119.) The concern is that this language opens the door for paint companies, including the ConAgra defendants, to pursue legal action against homeowners who attempt to utilize lead abatement programs that are created as the result of lawsuits, such as in ConAgra.

In order to address this issue, this bill, first, provides immunity for any property owner who voluntarily participates in such an abatement program. However, the immunity is narrow. This bill specifically limits the immunity to lawsuits against owners and public entities seeking to recover costs associated with an abatement program from the owner or public entity.

In an effort to ensure there are no additional disincentives to participation, this bill also provides that a property owners’ participation in the program cannot be evidence that the underlying property is a nuisance, substandard, or untenantable, as specified. To make sure this language does not interfere with existing obligations on property owners or tenants’ rights, this bill provides: “This section shall not alter existing obligations on homeowners to maintain their property under applicable law or otherwise limit a tenant’s legal remedies for addressing the presence of lead paint on a dwelling.”

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 6/22/19)

California Apartment Association

California Association of Joint Powers Authorities

California Association of Realtors

California State Association of Counties

City and County of San Francisco - Office of the City Attorney

County of Los Angeles

County of Monterey

County of Santa Clara

Environmental Working Group

International Union of Painters and Allied Trades District Council 16

Office of the San Diego City Attorney

Rural County Representatives of California

Southern California Rental Housing Association

Urban Counties of California

Ventura County Board of Supervisors

Western Center on Law and Poverty

OPPOSITION: (Verified 6/22/19)

Californians for Safe and Affordable Housing

ARGUMENTS IN SUPPORT: The County of Los Angeles County writes in support that this bill “would assist the ten prosecuting public entities in the lead paint public nuisance litigation in operationalizing the judgment, as the lead paint manufacturers that were defendants in the lawsuit contend that property owners have a statutory duty to abate lead hazards.” It argues that this bill “would protect property owners from frivolous lawsuits threatened by lead paint manufacturers and furthers [the County’s] commitment to protect the health and safety of [its] residents.”

ARGUMENTS IN OPPOSITION: Californians for Safe and Affordable Housing, “a project of Conagra Grocery Products Company and Sherwin Williams,” argue in opposition that this bill is unconstitutional, grants slumlords immunity, and is overly broad in its drafting. They argue that this bill unconstitutionally deprives them of their rights to seek contribution from property owners, arguing that this point was “fundamental to [the ConAgra court’s] conclusion.”

ASSEMBLY FLOOR: 71-0, 3/28/19

AYES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Daly, Diep, Eggman, Frazier, Friedman, Gabriel, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Voepel, Waldron, Weber, Wicks, Wood, Rendon

NO VOTE RECORDED: Arambula, Calderon, Dahle, Flora, Fong, Cristina Garcia, Kamlager-Dove, Mayes, Rodriguez

Prepared by: Christian Kurpiewski / JUD. / (916) 651-4113

6/26/19 15:52:02

**** END ****

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Allen, Chair

2019 - 2020 Regular

Bill No: AB 206

SUBJECT: Public nuisance: abatement: lead-based paint

DIGEST: This bill provides limited immunity from lawsuits and other claims associated with the property owner or public entities' participation in the lead abatement program.

ANALYSIS:

Existing law:

1. Defines a lead hazard in a human habitable building to include deteriorating lead paint, lead-contaminated dust, lead-contaminated soil, or a disturbance of lead paint without containment; provides that any residence with a lead hazard is in violation of the code. (Health and Safety Code Section 17920.10.)
   
2. Defines a dwelling as untenantable if it contains lead hazards or lacks other basic safety and health standards. (Section 1941.1.)
   
3. Establishes that all buildings constructed before January 1, 1978 are presumed to contain lead-based paint unless testing reveals lead content of less than 1 milligram per square centimeter or less than .5% by weight. (California Code of Regulations, Title 17, Section 35043.)
   
4. Defines a public nuisance as one that affects an entire community or neighborhood at the same time, or any considerable number of persons, although the extent of the annoyance or damage inflicted upon individuals may be unequal, and provides that a public nuisance may be remedied by an indictment or information, a civil action, or abatement. (Civil Code Section 3480-3495)
   

This bill:

1. Provides that a public entity or property owner who voluntarily participates in a lead paint abatement program shall be immune from liability in any lawsuit where a responsible party, as defined, seeks to recover any cost associated with a lead paint abatement program from a property owner or public entity.
   
2. Provides that for the purpose of the immunity protections described in 1), above, "participation" may be as limited as submission of an application to a lead paint abatement program or as extensive as completion of all activities conducted pursuant to the program.
   
3. States that a property owners participation in a lead paint abatement program shall not be evidence that the participating property is a nuisance, substandard, or untenantable.
   
4. Defines for the purpose of the protections provided pursuant to 3), above, "participation in a lead paint abatement program" to mean that a property has been voluntarily enrolled in a lead abatement program, qualifies for inspection and services, is deemed to contain actionable lead paint, and has been satisfactorily abated, is in the process of being satisfactorily abated, or is awaiting abatement under the lead paint abatement program.
   
5. Defines "lead paint abatement program" to mean a program that is created to abate lead-based paint and that is created as a result of a judgment or settlement in any public nuisance or similar litigation.
   
6. Defines "property owner" to mean the property owner as well as all agents or employees thereof acting within the course and scope of their agency or employment.
   
7. Provides that "public entities" include the state, the Regents of the University of California, the Trustees of the California State University, a county, a city, a district, a public authority, a public agency, and any other political subdivision or public corporation in the state, including employees or agents thereof acting within the course and scope of their employment or agency.
   
8. Defines "responsible party" to mean a private party legally responsible for the inspection costs, abatement costs, or any other costs associated with a lead abatement program.
   
9. Provides that the above provisions shall not alter existing obligations on homeowners to maintain their property under applicable law or otherwise limit a tenant’s legal remedies for addressing the presence of lead paint on a dwelling.

Background

1. Lead is a well-known toxin. Lead has been listed under California's Proposition 65 since 1987 as a substance that is known to the State of California to cause reproductive damage and birth defects and has been listed as a chemical known to cause cancer since 1992. According to the Office of Environmental Health Hazard Assessment, lead has multiple toxic effects on the human body. Decreased intelligence in children and increased blood pressure in adults are among the more serious non-carcinogenic effects.
   
   There is no level of lead that has been proven safe for children or for adults.

Even a slight elevation in blood levels can reduce IQ and stunt development. Millions of children are being exposed to lead in their homes through aging lead-based paint, increasing their risks for damage to the brain and nervous system, slowed growth and development, learning and behavior problems, hearing, and speech problems.

1. Lead paint poisoning. The Centers for Disease Control and Prevention (CDC) estimates that approximately 2.6% of U.S. children aged 1 - 5 have high levels of lead in their blood (blood lead levels ≥ 5 micrograms per deciliter (µg/dL)). Childhood lead exposure most often occurs because of aging lead-based paint. Like all paint, lead-based paint inevitably deteriorates: it flakes, chips, and turns to dust and can contaminate the air, soil, floors, and other surfaces in the home. This is particularly true of lead paint on windows, doors, and other friction surfaces. Because children are especially likely to play on the ground and put things in their mouths, lead paint presents a larger risk for them than it does for adults living in the same space.
   

Although lead paint has been banned in California for decades, lead poisoning from exposure to lead paint continues to plague the state. Despite the prohibition on lead paint, the Legislative Analyst’s Office, estimates that about 60% of houses in California were built before 1978 and are presumed to have lead-based paint. Removing the paint costs an estimated $8-$15 a square foot, which means removing all lead from a house of 1,200-2,000 square feet could run as much as $9,600-$30,000, according to RealtyTimes.com.

1. Judgement against paint industry. To combat the problems posed by lead paint, a number of local governments in the state filed complaints on behalf of the People of the State of California against three major paint manufacturers for promoting lead paint for use in homes despite knowing that the product was highly toxic. After 14 years of litigation, the Superior Court ruled against Sherwin-Williams, ConAgra, and NL Industries and ordered the companies to prefund approximately $1.15 billion in lead paint abatement activities. The Court of Appeal upheld that judgment, but limited it to abating homes built before 1951—significantly reducing the amount of the fund. (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51.)

On February 14, 2018, the California Supreme Court denied requests by the three paint manufacturers to review the appellate court decision requiring the companies to pay for identifying and cleaning up lead paint from millions of homes built before 1951 in 10 California cities and counties. On remand, the Superior Court later recalculated the amount that the lead paint companies would need to pay at $400 million. A hearing in Superior Court on the final judgment has been set for June 24, 2019.

Once the Court issues a final judgement, the defendants will have 60 days to pay the full $400 million into an abatement fund. The fund will be administered by the appointed receiver. Monies from the fund shall be disbursed to each jurisdiction based on grant applications, up to maximum percentages set by the court and used for the lead detection, removal, and prevention. The funds will be available for four years from the date of the total payment by defendants. Any monies remaining in the fund at the end of the four years will be returned to the paying defendants.

1. Clarification in the law to safeguard participation in a lead abatement program. While the court decision definitively determined that the lead paint makers were responsible, it has been represented that one passage of the appellate court's opinion suggests that lead paint companies could sue homeowners who participate in the abatement program for comparative fault. The court wrote, "nothing precludes a defendant from testing the lead paint . . . and seeking to hold a fellow defendant liable for a greater share of responsibility.” (People v. ConAgra Grocery Products Co., supra, at p. 119.) The court also noted that the paint companies could seek liability if there was evidence “that the hazardous condition is the ‘owners fault’ or that the condition is not hazardous. (Ibid.)
   
   This reference to the “owners fault,” could cause some property owners to balk at participating in the lead abatement program out of a fear that seeking abatement of a lead paint hazard could expose them to liability (i.e. as an admission that a lead paint hazard, potentially caused by their negligence, was present on their property).
   

AB 206 provides limited immunity to property owners and public entities who voluntarily participate in the lead paint abatement program. It would protect those property owners and entities from being held liable in any lawsuit that seeks contribution or recovery for the costs associated with participation in that abatement program. This should encourage well-meaning property owners to voluntarily participate in the program and help alleviate the ongoing hazards posed by lead paint in California for the benefit of the public at large.

Beyond the threat of lawsuits from the paint companies, owners of multi-family dwelling units risk litigation regarding the presence of lead paint in their buildings. Existing law generally deems deteriorating lead paint, lead-contaminated dust, lead-contaminated soil, or a disturbance of lead paint without containment as conditions that make property untenantable. Numerous properties across California may seek to have known lead paint abated, even if the paint is in a condition that would not trigger habitability concerns under existing law. To ensure that all residential property owners with potential lead paint hazards on their properties participate in the program without reservation, this bill narrowly provides that the voluntary participation of a property owner in the program cannot be used as evidence to prove that the owner’s property constitutes a nuisance, or is substandard or untenantable.

A similar measure, AB 2073 (Chiu, 2018) passed this Committee last year with a 7-0 vote before being moved to the Senate Inactive File.

Comments

1. Purpose of Bill. According to the author, “Assembly Bill 206 protects property owners from threats of legal action by lead paint manufacturers if they participate in an abatement program created by a 2017 judgment against lead paint manufacturers.

“In 2000, ten local governments including the counties of Santa Clara County, Los Angeles, Alameda, Monterey, San Mateo, Solano, Ventura and the cities of San Francisco, Oakland, and San Diego sued three lead paint manufacturers stating that companies' predecessors understood the health hazard of lead paint but nevertheless energetically promoted its use to improve the durability and water-resistance of house paint.

“In 2014, the trial court held the paint manufacturers liable for the costs and found them responsible for removing or abating the hazards. The paint manufacturers appealed the trial court decision and in 2017 an appellate court disagreed and concluded they were responsible and upheld the order that they pay to abate the dangers. In February of 2018 the California Supreme Court denied review of the decision followed by the U.S. Supreme Court’s denial in October of the same year, ultimately affirming the trial court’s ruling.

“However, the appellate opinion suggested that the lead paint companies could sue homeowners who participate in the program for comparative fault – the idea that the lead paint manufacturer’s liability should be reduced because homeowners bear some responsibility for the paint used in their homes. This would undoubtedly stop a homeowner from participating in the abatement program.

“AB 206 simply states that a property owner who participates in the abatement program is immune from any legal action looking to recover costs related to inspection, abatement, or any other costs associated with the program. This is necessary to implement the judgment effectively and maximize use of the abatement program.

“Without this legislation, property owners who do the right thing by removing toxic paint from their homes open themselves up to lawsuits by the paint companies, the worst possible outcome from the landmark legal judgment.”

DOUBLE REFERRAL:

This measure was heard in Senate Judiciary Committee on June 11, 2019, and passed out of committee with a vote of 9-0.

Related/Prior Legislation

AB 2073 (Chiu, 2018) would have provided that any property owner, or agent thereof, who participates in a program to abate lead-based paint created as a result of a judgment or settlement in any public nuisance or similar litigation shall be immune from liability in any lawsuit seeking to recover inspection, abatement, or any other costs associated with that abatement program and the activities conducted pursuant to that abatement program. This bill died on the Senate Inactive File.

AB 2803 (Limón, 2018) would have provided that residential lead-based paint interferes with a public right and that a party may be subject to liability for public nuisance if it promoted lead-based paint with actual or constructive knowledge that it was hazardous. This bill died in the Senate Appropriations Committee.

AB 2934 (Stone, 2018) would have required the Department of Public Health to request permission from the federal Environmental Protection Agency to modify its Lead Related Construction Program agreement to expand its authority and authorize a county to implement and administer the certification program for persons engaged in lead construction work. This bill died in the Senate Appropriations Committee.

AB 2074 (Bonta, 2018) would have provided that an injured party in a suit to recover damages caused by lead-based paint may establish a prima facie case that a particular lead paint manufacturer is the cause of the injury if the injured party proves by a preponderance of the evidence that the manufacturer sold, distributed, or promoted in California either the type of lead paint pigment that caused the injury or a product containing the type of lead paint pigment that caused the injury. This bill died on the Assembly Floor.

AB 2995 (Carrillo, 2018) would have provided that the presence of lead-based paint on a building constitutes a physical injury to property. The statute of limitations for bringing an action to remedy such an injury would have been extended to three years from the date the plaintiff has actual knowledge of the presence of lead-based paint on the property. This bill failed passage on the Assembly Floor.

AB 3009 (Quirk, 2018) would have enacted a fee on paint manufacturers for every gallon of paint sold in California. The bill would have created the Lead-Based Paint Cleanup Fund into which the fees would be deposited. Such funds would have gone toward abatement programs. This bill died on the Assembly Floor.

SOURCE:

Author

SUPPORT:

California Apartment Association

California Association of Realtors

California Rental Housing Association

California State Association of Counties

City and County of San Francisco- Office of the City Attorney

County of Los Angeles

County of Monterey

County of Santa Clara

Environmental Working Group

Los Angeles county Board of Supervisors

Office of the San Diego City Attorney

Southern California Rental Housing Association

Ventura County Board of Supervisors

Western Center on Law and Poverty

OPPOSITION:

None received

ARGUMENTS IN SUPPORT:

According to the City and County of San Francisco, “This judgement creates a once-in-a-generation opportunity to protect California’s children from the threat of lead paint poisoning. Its success, however, depends on the ability of the jurisdictions to convince homeowners to participate in the voluntary lead abatement program. Under the judgment, any funds remaining in the abatement fund at the close of four years will revert to the lead paint companies who created the public nuisance…

“This possibility of reversion provides an incentive to the lead paint company defendants to discourage participation in the abatement programs, so that the money is not spent and will revert back to defendants at the end of the four-year term. And the defendants have time and again, on the record in open court, state their intent to do just that by suing homeowners who participate in the abatement programs, claiming that the homeowners contributed the public nuisance and are partly liable for the costs of abating the lead paint in their homes.

AB 206 is necessary to protect homeowners who participate in the abatement programs from lawsuits by the lead paint companies who have already been found responsible for creating the public nuisance of interior residential lead paint in pre-1951 homes.”

-- END --

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2019-2020 Regular Session

Bill No: AB 206 (Author:Chiu)

Version: May 30, 2019

Hearing Date: June 11, 2019

Fiscal: No

Urgency: No

Consultant: CK

SUBJECT

Public nuisance: abatement: lead-based paint

DIGEST

This bill immunizes property owners who voluntarily participate in lead paint abatement programs from associated liability. The bill prohibits such participation from being evidence of violations of specified housing statutes, but makes clear it does not alter existing obligations to maintain property or limit tenants’ remedies for addressing the presence of lead paint.

EXECUTIVE SUMMARY

A recent appellate court decision upheld a ruling against several paint manufacturers for their promotion of lead paint despite knowledge of the dire health risks. The judgment provided for an abatement program to be funded by the defendants in order to remove the lead paint hazards in homes in the participating jurisdictions.

In response to concerns that some property owners may be hesitant to participate in the abatement program for fear of triggering their own liability, this bill immunizes any property owner voluntarily participating in the program, and all public entities, in a lawsuit seeking to recover costs associated with the program. The bill further provides that a property owner’s participation cannot be used as evidence that the relevant property is a nuisance, substandard, or untenantable.

This bill is sponsored by the author. It is supported by an array of groups, including various local governmental entities and organizations representing the interests of property owners. It is opposed by a group formed by the defendants in the above case. A similar, if narrower, bill, AB 2073 (Chiu, 2018), passed through this Committee in 2018 on a 7-0 vote, but died on the Senate inactive file.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Provides that anything which is injurious to health, or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property, or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake, or river, bay, stream, canal, or basin, or any public park, square, street, or highway, is a nuisance. (Civ. Code § 3479.)
2. Provides that a public nuisance is one which affects at the same time an entire community or neighborhood, or any considerable number of persons, although the extent of the annoyance or damage inflicted upon individuals may be unequal. (Civ. Code § 3480.) All other nuisances are private. (Civ. Code § 3481.)
3. Provides that the abatement of a nuisance does not prejudice the right of any person to recover damages for its past existence. (Civ. Code § 3484.) Furthermore, no lapse of time can legalize a public nuisance, amounting to an actual obstruction of public right. (Civ. Code § 3490.)
4. Authorizes a private person to maintain an action for a public nuisance, if it is specially injurious to that person, but not otherwise. (Civ. Code § 3493.) An action may be brought by any person whose property is injuriously affected, or whose personal enjoyment is lessened by a nuisance and by the judgment in that action the nuisance may be enjoined or abated as well as damages recovered therefor. (Code Civ. Proc. § 731.)
5. Authorizes a civil action brought in the name of the people of the State of California to abate a public nuisance by the district attorney or county counsel of any county in which the nuisance exists, or by the city attorney of any town or city in which the nuisance exists. (Code Civ. Proc. § 731; Civ. Code § 3494.)
6. Provides that a public nuisance cause of action is established by proof that a defendant knowingly created or assisted in the creation of a substantial and unreasonable interference with a public right. (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 305-306.)
7. Provides that the remedies against a public nuisance are an indictment or information, pursuant to the Penal Code, a civil action, or abatement. (Civ. Code §§ 3491, 3492.) Any person may abate a public nuisance which is specially injurious to the person by removing, or, if necessary, destroying the thing which constitutes the same, without committing a breach of the peace, or doing unnecessary injury. (Civ. Code § 3495.)
8. Deems and declares to be a substandard building any building or portion thereof in which there exists any of a series of listed conditions to an extent that endangers the life, limb, health, property, safety, or welfare of the public or the occupants thereof. These conditions include:
   1. inadequate sanitation, which includes general dilapidation or improper maintenance;
   2. structural hazards, which includes deteriorated foundations, flooring, walls, ceilings, and roofs;
   3. any nuisance;
   4. faulty weather protection;
   5. all materials of construction, except those specifically allowed or approved by law that have been adequately maintained in good and safe condition;
   6. premises on which an accumulation of weeds, vegetation, junk, dead organic matter, debris, garbage, offal, rodent harborages, stagnant water, combustible materials, and similar materials or conditions constitute fire, health, or safety hazards; and
   7. any building or portion thereof determined to be an unsafe building due to inadequate maintenance. (Health & Saf. Code § 17920.3.)
9. Defines “lead hazards” to mean deteriorated lead–based paint, lead–contaminated dust, lead–contaminated soil, or disturbing lead–based paint without containment, if one or more of these hazards are present in one or more locations in amounts that are equal to or exceed the amounts of lead established for these terms in applicable state law and attendant regulations and that are likely to endanger the health of the public or the occupants thereof as a result of their proximity to the public or the occupants thereof. (Health & Saf. Code § 17920.10.) Any building or portion thereof containing lead hazards is in violation of the State Housing Law.

1. Provides that a dwelling shall be deemed untenantable if it substantially lacks any of a series of affirmative standard characteristics, including:
   1. plumbing or gas facilities that conformed to applicable law in effect at the time of installation, maintained in good working order;
   2. building, grounds, and appurtenances at the time of the commencement of the lease or rental agreement, and all areas under control of the landlord, kept in every part clean, sanitary, and free from all accumulations of debris, filth, rubbish, garbage, rodents, and vermin; and
   3. floors, stairways, and railings maintained in good repair. (Civ. Code § 1941.1.)

This bill:

1. Immunizes a property owner who voluntarily participates in a lead paint abatement program, and all public entities, from liability in any lawsuit where a responsible party seeks to recover any cost associated with a lead paint abatement program from a property owner or public entity. Participation is broadly defined to include anything from submission of an application to completion of all activities pursuant to the program. “Lead paint abatement program” means a program that is created to abate lead-based paint as a result of a judgment or settlement in any public nuisance or similar litigation.
2. Provides that a property owner’s participation in a lead paint abatement program shall not be evidence that the participating property is any of the following:
   1. a nuisance;
   2. substandard under Section 17920.3 of the Health and Safety Code or is in violation of Section 17920.10 of the Health and Safety Code, to the extent that those sections apply to lead-based paint or other substandard conditions controlled utilizing program funds; or
   3. untenantable under Section 1941.1 of the Civil Code, as that section applies to lead-based paint or other conditions controlled utilizing program funds.
3. Defines “participation in a lead paint abatement program” to mean that a property has been voluntarily enrolled in a lead paint abatement program, qualifies for inspection and services, is deemed to contain actionable lead-based paint, and has been satisfactorily abated, is in the process of being satisfactorily abated, or is awaiting abatement under the lead paint abatement program. It also provides the following relevant definitions:
   1. “property owner” means the property owner as well as all agents or employees thereof acting within the course and scope of their agency or employment;
   2. “public entities” includes the state, the Regents of the University of California, the Trustees of the California State University, a county, city, district, public authority, public agency, and any other political subdivision or public corporation in the state, including any employees or agents thereof acting within the course and scope of their employment or agency; and
   3. “responsible party” means a private party legally responsible for the inspection, abatement, or any other costs associated with a lead paint abatement program.
4. Declares that its provisions do not alter existing obligations on homeowners to maintain their property under applicable law or otherwise limit a tenant’s legal remedies for addressing the presence of lead paint on a dwelling.

COMMENTS

1. People v. ConAgra Grocery Products Co.

In People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51, 65-67, 78-79 (ConAgra), the People of the State of California (Plaintiff) brought suit against defendants ConAgra Grocery Products Company, NL Industries, Inc., and The Sherwin-Williams Company (collectively “Defendants” or “ConAgra defendants”). Plaintiff alleged that presence of lead in residential buildings was a public nuisance and asserted that Defendants were liable “because they had created or assisted in the creation of this public nuisance.” Plaintiff sought abatement, injunctive relief, and costs and fees.

At trial, Plaintiff presented evidence of the following:

• lead is a toxin and causes irreversible brain damage;
• lead poisoning is the number one environmental health problem for children in California;
• children are more vulnerable to the toxic effects of lead because their biological systems are still developing;
• lead-based paint is the most common source of lead exposure to children in California; and
• through the 1940s, lead paint contained as much as 50 percent lead.

(Id. at 65-67.)

The trial court “expressly found that, ‘[s]ince antiquity, it has been well known that lead is highly toxic and causes severe health consequences when ingested’ and that ‘[e]ven relatively low levels of lead exposure have severe health consequences.’” (Id. at 79.) Focusing on the 10 jurisdictions represented by Plaintiff, the trial court found that lead paint is prevalent there, inevitably deteriorates, and is the primary source of lead exposure for young children living in pre-1978 housing in the 10 jurisdictions.” The trial court found children continued to be exposed to lead despite the 1978 ban on lead paint. The trial court further found that Defendants “each had ‘actual knowledge of the hazards of lead paint,’ ‘including childhood lead poisoning,’ when they promoted lead paint for interior residential use.”

Based on its findings, the trial court ordered Defendants to pay $1.15 billion into an abatement fund that would pay for lead inspections, education about lead hazards, and remediation of particular lead hazards inside residences in the 10 jurisdictions. (Id.) On appeal, the ConAgra court found that the judgment should only apply to pre-1951 homes, however, it otherwise upheld the ruling of the trial court. The case was remanded back to the trial court to appoint a receiver and to recalculate the proper amount of the abatement fund. The California Supreme Court denied a petition to review the judgment.

It should be emphasized that the basis for the ConAgra defendants’ liability was not the lead paint itself or that the lead paint in any particular home was the Defendants’ paint. Rather, the Defendants were found liable because they promoted lead paint knowing it would pose a serious risk of harm to children. (Id. at 166.) According to the court:

The trial court found that defendants were liable for creating a public nuisance as a result of their conduct in promoting lead paint for interior residential use while knowing of the hazard that such use would create. The court did not find that lead paint itself was a public nuisance.

(Id.) “When a manufacturer promotes a product for a specific use that it knows will create a hazardous condition, public policy supports the use of California public nuisance law to require the manufacturer to remediate the hazards created by its conduct.” (Id. at 168.)

1. Encouraging lead abatement

The issue catalyzing this bill arises from a specific section of the ConAgra opinion in which the court states:

Furthermore, nothing precludes a defendant from testing the lead paint at specific locations during the remediation process and seeking to hold a fellow defendant liable for a greater share of the responsibility. The same is true of evidence that the hazardous condition is “the owner's fault” or that it is not hazardous.

(ConAgra at 119.) The concern is that this language opens the door for paint companies, including the ConAgra defendants, to pursue legal action against homeowners who attempt to utilize lead abatement programs that are created as the result of lawsuits, such as in ConAgra.

Fear of exposing themselves to legal liability would arguably dissuade many homeowners from taking advantage of these programs, which are aimed at protecting communities, especially children, from the dangers of lead-based paint. Regardless of the legal viability of such claims against homeowners, given the nature of the finding resulting in the abatement program, such concerns can chill participation.

In order to address this issue, this bill, first, provides immunity for any property owner who voluntarily participates in such an abatement program. However, the immunity is narrow. The bill specifically limits the immunity to lawsuits against owners and public entities seeking to recover costs associated with an abatement program from the owner or public entity.

As a general rule, California law provides that persons are responsible, not only for the result of their willful acts, but also for an injury occasioned to another by their want of ordinary care or skill in the management of their property or person, except so far as the latter has, willfully or by want of ordinary care, brought the injury upon themselves. (Civ. Code § 1714(a).) Although immunity provisions are rarely preferable, they are generally afforded when needed to incentivize certain conduct and/or to promote other policy goals that could benefit the public.

The immunity provided by this bill incentivizes homeowners to take part in lead abatement programs, which would protect children and make California’s communities safer. These are strong policy goals that arguably justify the narrow and limited immunity afforded by this provision. If a homeowner engaged in negligent activity, they could still be held liable by an injured third party. This bill simply closes the opportunity of parties such as the lead-paint manufacturers from going after homeowners in order to chill participation in abatement programs. The manufacturers do not lose any independent claims they may have against homeowners. This bill ensures that companies are made to pay for the consequences of their conduct.

In an effort to ensure there are no additional disincentives to participation, the bill also provides that a property owners’ participation in the program cannot be evidence that the underlying property is a nuisance, substandard, or untenantable, as specified. Again, this provision simply ensures that the mere participation in an abatement program does not trigger liability on the part of the property owner.

Just as with the immunity provision, this limitation is narrow. It does not prevent parties from bringing actions against property owners on these bases. Property owners are still held to the same standards imposed by existing law and any tenants of these properties are still protected and have access to all existing remedies for addressing the presence of lead paint in their homes. In an effort to make the scope of this provision absolutely clear, the author has recently amended the bill to include the following language: “This section shall not alter existing obligations on homeowners to maintain their property under applicable law or otherwise limit a tenant’s legal remedies for addressing the presence of lead paint on a dwelling.”

This language makes the intent and operation of the bill clear.

1. Stated intent of the bill

According to the author:

Assembly Bill 206 protects property owners from threats of legal action by lead paint manufacturers if they participate in an abatement program created by a 2017 judgment against lead paint manufacturers.

In 2000, ten local governments including the counties of Santa Clara, Los Angeles, Alameda, Monterey, San Mateo, Solano, Ventura and the cities of San Francisco, Oakland, and San Diego sued three lead paint manufacturers stating that companies' predecessors understood the health hazard of lead paint but nevertheless energetically promoted its use to improve the durability and water-resistance of house paint.

In 2014, the trial court held the paint manufacturers liable for the costs and found them responsible for removing or abating the hazards. The paint manufacturers appealed the trial court decision and in 2017 an appellate court disagreed and concluded they were responsible and upheld the order that they pay to abate the dangers. In February of 2018 the California Supreme Court denied review of the decision followed by the U.S. Supreme Court’s denial in October of the same year, ultimately affirming the trial court’s ruling.

However, the appellate opinion suggested that the lead paint companies could sue homeowners who participate in the program for comparative fault – the idea that the lead paint manufacturer’s liability should be reduced because homeowners bear some responsibility for the paint used in their homes. This would undoubtedly stop a homeowner from participating in the abatement program.

AB 206 simply states that a property owner who participates in the abatement program is immune from any legal action looking to recover costs related to inspection, abatement, or any other costs associated with the program. Further, to ensure all property owners with potential lead paint hazards participate in the program without reservation, this bill narrowly provides that voluntary participation in the program, alone, cannot be used to prove that a property is a nuisance or is untenantable. This is necessary to implement the judgment effectively and maximize use of the abatement program.

Without this legislation, property owners who do the right thing by removing toxic paint from their homes open themselves up to lawsuits by the paint companies, the worst possible outcome from the landmark legal judgment.

1. Support and opposition

The purpose and necessity of this bill is emphasized by those writing in support.

The Los Angeles County Board of Supervisors writes in support that this bill “would assist the ten prosecuting public entities in the lead paint public nuisance litigation in operationalizing the judgment, as the lead paint manufacturers that were defendants in the lawsuit contend that property owners have a statutory duty to abate lead hazards.” It argues that the bill “would protect property owners from frivolous lawsuits threatened by lead paint manufacturers and furthers [the County’s] commitment to protect the health and safety of [its] residents.”

The San Diego City Attorney’s Office writes in support:

AB 206 (Chiu) will protect homeowners who participate in the abatement program from legal action by the defendants in this lawsuit. For years, lead paint companies have attempted to shift responsibility for the costs of lead abatement to homeowners instead of paying their fair share as determined by multiple California courts. The threat of litigation would deter homeowners from participating in the abatement program, meaning that tons of lead paint will continue to threaten the lives of our children despite two decades of litigation success. AB 206 resolves this issue.

The County of Santa Clara asserts that these concerns are well-founded:

Although the lead paint manufacturers can no longer contest their liability for the public nuisance in this lawsuit, they are actively seeking to shift some portion of their liability onto others. They have publicly stated their interest in pursuing claims against homeowners who participate in the resulting abatement program to hold those homeowners jointly responsible for the lead paint in their homes. In addition, at least one of the lead paint manufacturers has sent letters to a number of public entities, demanding that they preserve documents in anticipation of litigation that the manufacturer will file against the public entities for their alleged contribution to the public nuisance.

Also in support, the California Association of Realtors writes that this bill “will ensure that homeowners who participate in abatement programs can do so without fear of litigation being brought against them and offers additional protections, all of which will encourage homeowners to participate in abatement programs without fear of any negative ramifications.”

The City and County of San Francisco argues that the bill “is necessary for the abatement fund to be effectively and broadly implemented, and to accomplish its goal of protecting the health of young children.”

The only opposition comes from the ConAgra defendants themselves. Writing as the Californians for Safe and Affordable Housing, “a project of Conagra Grocery Products Company and Sherwin Williams,” they argue the bill is unconstitutional, grants slumlords immunity, and is overly broad in its drafting. They argue that the bill unconstitutionally deprives them of their rights to seek contribution from property owners, arguing that this point was “fundamental to [the ConAgra court’s] conclusion.”

The California Apartment Association adequately responds to the opposition’s constitutional arguments:

The court held that defendant lead paint companies were not deprived of due process and that the identity of the manufacturer of lead paint at a specific location was of limited relevance because defendants were held liable for promoting lead paint for interior residential use with knowledge of its toxic properties. The constitutionality of their collective liability hinged on the fact that their promotional activities were not limited to advertisements for their own lead paints, but that the defendants also generically promoted lead paint for interior residential use. The passing reference to holding a fellow defendant liable for a greater share of the responsibility, or finding that a condition is not hazardous, or that it is the property owner’s fault is not essential to the finding regarding the lead paint manufacturer’s collective responsibility.

Californians for Safe and Affordable Housing also argue that the bill incentivizes slumlords to neglect maintenance and ignore existing laws. In response, the author states:

Bad landlords should be held accountable. Fortunately, AB 206 doesn’t interfere with anyone’s obligation to maintain their property. They should be subject to code enforcement, habitability claims, etc. There’s no excuse for putting tenants in a home that isn’t safe . . . especially for children.

The reason the defendants were liable for creating a public nuisance is because they manufactured a product they knew was hazardous, especially to children, and marketed it and profited from it anyway. The court specifically found that paint can’t ever be fully encased in perpetuity and that it always deteriorates. I don’t think it makes any sense for property owners to share in that specific liability the paint companies were found solely responsible for creating.

SUPPORT

California Apartment Association

California Association of Joint Powers Authorities

California Association of Realtors

California State Association of Counties

City and County of San Francisco- Office of the City Attorney

County of Los Angeles

County of Monterey

County of Santa Clara

Environmental Working Group

International Union of Painters and Allied Trades District Council 16

Office of the San Diego City Attorney

Rural County Representatives of California

Southern California Rental Housing Association

Urban Counties of California

Ventura County Board of Supervisors

Western Center on Law and Poverty

OPPOSITION

Californians for Safe and Affordable Housing

RELATED LEGISLATION

Pending Legislation: None known

Prior Legislation:

AB 2073 (Chiu, 2018) would have provided that any property owner, or agent thereof, who participates in a program to abate lead-based paint created as a result of a judgment or settlement in any public nuisance or similar litigation shall be immune from liability in any lawsuit seeking to recover inspection, abatement, or any other costs associated with that abatement program and the activities conducted pursuant to that abatement program. This bill died on the Senate inactive file.

AB 2803 (Limón, 2018) would have provided that residential lead-based paint interferes with a public right and that a party may be subject to liability for public nuisance if it promoted lead-based paint with actual or constructive knowledge that it was hazardous. A party bringing an abatement action would not need to present evidence that a particular party caused a particular lead-based paint to be applied in a particular residence. The element of causation could be inferred from evidence that does not itself constitute direct evidence of reliance on an individual basis. This bill died in the Senate Appropriations Committee.

AB 2074 (Bonta, 2018) would have provided that an injured party in a suit to recover damages caused by lead-based paint may establish a prima facie case that a particular lead paint manufacturer is the cause of the injury if the injured party proves by a preponderance of the evidence that the manufacturer sold, distributed, or promoted in California either the type of lead paint pigment that caused the injury or a product containing the type of lead paint pigment that caused the injury. This bill died on the Assembly inactive file.

AB 2995 (Carrillo, 2018) would have provided that the presence of lead-based paint on a building constitutes a physical injury to property. The statute of limitations for bringing an action to remedy such an injury would have been extended to three years from the date the plaintiff has actual knowledge of the presence of lead-based paint on the property. This bill failed passage on the Assembly Floor.

PRIOR VOTES:

Assembly Floor (Ayes 71, Noes 0)

Assembly Judiciary Committee (Ayes 12, Noes 0)

**************

ASSEMBLY THIRD READING

ATR Bill Id:AB 206

Author:(Chiu)

As Amended Ver:March 14, 2019

Majority vote

SUMMARY:

To protect property owners and public entities that voluntarily participate in a lead paint abatement program, this bill provides limited immunity from lawsuits and other claims associated with the property owner or public entities' participation in the lead abatement program.

Major Provisions

1. Provides that a public entity or property owner who voluntarily participates in a lead paint abatement program shall be immune from liability in any lawsuit where a responsible party, as defined, seeks to recover any cost associated with a lead paint abatement program from a property owner or public entity.
2. Provides that for the purpose of the immunity protections described in 1), above, "participation" may be as limited as submission of an application to a lead paint abatement program or as extensive as completion of all activities conducted pursuant to the program.
3. States that a property owners participation in a lead paint abatement program shall not be evidence that the participating property is a nuisance, substandard, or untenantable.
4. Defines for the purpose of the protections provided pursuant to 3), above, "participation in a lead paint abatement program" to mean that a property has been voluntarily enrolled in a lead abatement program, qualifies for inspection and services, is deemed to contain actionable lead paint, and has been satisfactorily abated, is in the process of being satisfactorily abated, or is awaiting abatement under the lead paint abatement program.
5. Defines "lead paint abatement program" to mean a program that is created to abate lead-based paint and that is created as a result of a judgment or settlement in any public nuisance or similar litigation.
6. Defines "property owner" to mean the property owner as well as all agents or employees thereof acting within the course and scope of their agency or employment.
7. Provides that "public entities" include the state, the Regents of the University of California, the Trustees of the California State University, a county, a city, a district, a public authority, a public agency, and any other political subdivision or public corporation in the state, including employees or agents thereof acting within the course and scope of their employment or agency.
8. Defines "responsible party" to mean a private party legally responsible for the activities of conducted pursuant to a lead paint abatement program and legally responsible for the inspection, abatement, or any other costs associated with the lead paint abatement program.

COMMENTS:

In responding to due process concerns raised by the paint companies, the appellate court noted that, "nothing precludes a defendant from testing the lead paint . . . and seeking to hold a fellow defendant liable for a greater share of responsibility." (People v. ConAgra Grocery Products Co., supra, at p. 119.) The court also noted that the paint companies could seek liability if there was evidence "that the hazardous condition is the 'owners fault' or that the condition is not hazardous. (Ibid.) This vague reference to the "owners fault," accordingly, could cause some property owners to balk at participating in the lead abatement program out of a fear that seeking abatement of a lead paint hazard could expose them to liability. Accordingly, this bill provides limited immunity to property owners and public entities who voluntarily participate in the lead paint abatement program. It would protect those property owners and entities from being held liable in any lawsuit that seeks contribution or recovery for the costs associated with participation in that abatement program. This should encourage well-meaning property owners to voluntarily participate in the program and help alleviate the ongoing hazards posed by lead paint in California for the benefit of the public at large.

According to the Author:

The appellate opinion suggested that the lead paint companies could sue homeowners who participate in the program for comparative fault- the idea that the lead paint manufacturer's liability should be reduced because homeowners bear some responsibility for the paint used in their homes. This would undoubtedly stop a homeowner from participating in the abatement program. AB 206 simply states that a property owner who participates in the abatement program is immune from any legal action looking to recover costs.

Arguments in Support:

The City Attorney of the City and County of San Francisco states:

This judgement created a one-in-a-generation opportunity to protect California's children from the threat of lead paint poisoning. Its success, however, depends on the ability of the jurisdictions to convince homeowners to participate in the voluntary lead abatement program.

Additionally, the California Apartment Association notes:

The protections offered by the bill will encourage property owners to enroll in the abatement programs established as a result of the recent lead paint litigation and any future similar cases. The end result will be a safer rental housing stock for California tenants.

Arguments in Opposition:

As noted, this bill is strongly opposed by Californians for Safe and Affordable Housing, which describes itself as a "project of ConAgra Grocery Products Company and Sherwin Williams." They believe that this bill, "is unconstitutional, grants immunity to slumlord property owners who have profited from flouting the existing laws and failing to maintain their properties in a safe and habitable condition, and is broadly drafted with far-reaching and, likely, unintended impacts."

FISCAL COMMENTS:

None

VOTES:

ASM JUDICIARY: 12-0-0

YES: Mark Stone, Gallagher, Chau, Chiu, Gonzalez, Holden, Kalra, Kiley, Maienschein, Obernolte, Petrie-Norris, Reyes

UPDATED:

VERSION: March 14, 2019

CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0000056

Date of Hearing: March 19, 2019

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

ABPCA Bill Id:AB 206

Author:(Chiu) – As Amended Ver:March 14, 2019

SUBJECT: Lead-based paint: abatement program participation: liability protection

KEY ISSUE: should property owners who voluntarily participate in a lead paint abatement program funded with proceeds from recent court judgements be provided with limited liability protection in order to encourage them to take part in the program?

SYNOPSIS

The California Legislature has a history of providing immunity from civil liability to particular groups in an effort to encourage them to act for benefit of the public when they have no legal obligation to do so (i.e. Good Samaritan laws). Along those same lines, to encourage voluntary participation in a unique lead paint abatement program that is being funded as a result of groundbreaking litigation between ten jurisdictions and three lead paint manufacturers, this bill provides limited liability protection to public entities and property owners who voluntarily participate in the program. Although the trial court verdict resulted in upwards of $400 million for lead paint abatement activity throughout the state, the appellate court opinion suggested that the lead paint manufacturers could sue homeowners who participate in the program for comparative fault, despite the court’s general finding that the presence of lead paint was the result of the paint manufacturers misleading promotion of a product the companies knew to be harmful to human health. Although the legal basis for such contribution is likely suspect, this bill is helpful in providing property owners the confidence that participation in the abatement program will not impose financial liability.

This narrowly-crafted measure is supported by many of the jurisdictions involved in the litigation, as well as apartment owners, realtors, and tenants’ rights organizations. The support coalition highlights the unique opportunity the lead paint abatement funding provides to the State of California to remedy one of the most persistent environmental and public health problems of the last half-century. This bill is opposed by Californians for Safe and Affordable Housing which describes itself as a “project of ConAgra Grocery Products Company and Sherwin Williams,” defendants in the litigation, who, among a lengthy list of issues with this measure, contend that this bill is unconstitutional, needlessly protecting of slumlords, and overly broad. A similar measure, Assembly Bill 2073 (Chiu, 2018) passed this Committee last year with a 10-0 before eventually being moved to the Senate Inactive File.

SUMMARY: To protect property owners and public entities that voluntarily participate in a lead paint abatement program, this bill provides limited immunity from lawsuits and other claims associated with the property owner or public entities’ participation in the lead abatement program. Specifically, this bill:

1. Provides that a public entity or property owner who voluntarily participates in a lead paint abatement program shall be immune from liability in any lawsuit where a responsible party, as defined, seeks to recover any cost associated with a lead paint abatement program from a property owner or public entity.
2. Provides that for the purpose of the immunity protections described in 1), above, “participation” may be as limited as submission of an application to a lead paint abatement program or as extensive as completion of all activities conducted pursuant to the program.
3. States that a property owners participation in a lead paint abatement program shall not be evidence that the participating property is any of the following:
   1. A nuisance;
   2. Substandard; or
   3. Untenantable.
4. Defines for the purpose of the protections provided pursuant to 3), above, “participation in a lead paint abatement program” to mean that a property has been voluntarily enrolled in a lead abatement program, qualifies for inspection and services, is deemed to contain actionable lead paint, and has been satisfactorily abated, is in the process of being satisfactorily abated, or is awaiting abatement under the lead paint abatement program.
5. Defines “lead paint abatement program” to mean a program that is created to abate lead-based paint and that is created as a result of a judgment or settlement in any public nuisance or similar litigation.
6. Defines “property owner” to mean the property owner as well as all agents or employees thereof acting within the course and scope of their agency or employment.
7. Provides that “public entities” include the state, the Regents of the University of California, the Trustees of the California State University, a county, a city, a district, a public authority, a public agency, and any other political subdivision or public corporation in the state, including employees or agents thereof acting within the course and scope of their employment or agency.
8. Defines “responsible party” to mean a private party legally responsible for the activities of conducted pursuant to a lead paint abatement program and legally responsible for the inspection, abatement, or any other costs associated with the lead paint abatement program.

EXISTING LAW:

1. Provides that anything which is injurious to health, including, but not limited to, the illegal sale of controlled substances, or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property, or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake, or river, bay, stream, canal, or basin, or any public park, square, street, or highway, is a nuisance. (Civil Code Section 3479.)
2. States that a public nuisance is one which affects at the same time an entire community or neighborhood, or any considerable number of persons, although the extent of the annoyance or damage inflicted upon individuals may be unequal. (Civil Code Section 3480.)
3. Provides that no lapse of time can legalize a public nuisance, amounting to an actual obstruction of public right. (Civil Code Section 3490.)
4. Authorizes a private person to maintain an action for a public nuisance, if it is specially injurious to himself, but not otherwise. (Civil Code Section 3493.)
5. Allows a public nuisance to be abated by any public body or officer authorized by law. (Civil Code Section 3494.)
6. Authorizes any person to abate a public nuisance which is specially injurious to him by removing, or, if necessary, destroying the thing which constitutes the same, without committing a breach of the peace, or doing unnecessary injury. (Civil Code Section 3495.)
7. Provides that an action may be brought by any person whose property is injuriously affected, or whose personal enjoyment is lessened by a nuisance, as defined in 1) and by the judgment in that action the nuisance may be enjoined or abated as well as damages recovered therefor. Additionally, provides that a civil action may be brought in the name of the people of the State of California to abate a public nuisance, as defined in 2), by the district attorney or county counsel of any county in which the nuisance exists, or by the city attorney of any town or city in which the nuisance exists. Each of those officers shall have concurrent right to bring an action for a public nuisance existing within a town or city. The district attorney, county counsel, or city attorney of any county or city in which the nuisance exists shall bring an action whenever directed by the board of supervisors of the county, or whenever directed by the legislative authority of the town or city. (Code of Civil Procedure Section 731.)
8. Deems a dwelling untenantable if the dwelling substantially lacks any of the following::
   1. Effective waterproofing and weather protection of roof and exterior walls, including unbroken windows and doors;
   2. Plumbing or gas facilities that conformed to applicable law in effect at the time of installation, maintained in good working order;
   3. A water supply approved under applicable law that is under the control of the tenant, capable of producing hot and cold running water, or a system that is under the control of the landlord, that produces hot and cold running water, furnished to appropriate fixtures, and connected to a sewage disposal system approved under applicable law;
   4. Heating facilities that conformed with applicable law at the time of installation, maintained in good working order;
   5. Electrical lighting, with wiring and electrical equipment that conformed with applicable law at the time of installation, maintained in good working order;
   6. Building, grounds, and appurtenances at the time of the commencement of the lease or rental agreement, and all areas under control of the landlord, kept in every part clean, sanitary, and free from all accumulations of debris, filth, rubbish, garbage, rodents, and vermin;
   7. An adequate number of appropriate receptacles for garbage and rubbish, in clean condition and good repair at the time of the commencement of the lease or rental agreement, with the landlord providing appropriate serviceable receptacles thereafter and being responsible for the clean condition and good repair of the receptacles under their control;
   8. Floors, stairways, and railings maintained in good repair; or
   9. A locking mail receptacle for each residential unit in a residential hotel. (Civil Code Section 1941.1.)
9. Provides a list of buildings conditions that if present at any building, or portion thereof, or the premises on which the building is located, and that endangers the life, limb, health, property, safety, or welfare of the public or the occupants of the building shall have that building deemed and declared to be a substandard building. (Health and Safety Code Section 17920.3.)
10. Defines a lead hazard in a human habitable building to include deteriorating lead paint, lead-contaminated dust, lead-contaminated soil, or a disturbance lead paint without containment; provides that any residence with a lead hazard is in violation of the code. (Health and Safety Code Section 17920.10.)
11. Authorizes a government enforcement agency to take actions to abate any nuisance or violation related to a building used for human habitation. (Health and Safety Code Sections 17980 et seq.)
12. Defines a dwelling as untenantable if it contains lead hazards or lacks other basic safety and health standards. (Section 1941.1.)
13. Establishes that all buildings constructed before January 1, 1978 are presumed to contain lead-based paint unless testing reveals lead content of less than 1 milligram per square centimeter or less than .5% by weight. (California Code of Regulations, Title 17, Section 35043.)
14. Provides that where a money judgment has been rendered jointly against two or more defendants in a tort action there shall be a right of contribution among them and that such right of contribution may be enforced only after one tortfeasor has, by payment, discharged the joint judgment or has paid more than his pro rata share thereof. (Code of Civil Procedure Section 875.)

FISCAL EFFECT: As currently in print the bill is keyed non-fiscal.

COMMENTS: In order to encourage property owners and public entities to participate in a lead abatement program, funded as the result of litigation between several paint companies and ten jurisdictions across California, this bill—similar to existing laws that encourage individuals and entities to act for benefit of the public when they have no legal obligation to do so (i.e. Good Samaritan laws)—provides limited immunity from liability to property owners who voluntarily participate in a lead paint abatement program. In support of this measure, the author states:

Assembly Bill 206 protects property owners from threats of legal action by lead paint manufacturers if they participate in an abatement program created by a 2017 judgment against the paint manufacturers. The appellate opinion suggested that the lead paint companies could sue homeowners who participate in the program for comparative fault- the idea that the lead paint manufacturer’s liability should be reduced because homeowners bear some responsibility for the paint used in their homes. This would undoubtedly stop a homeowner from participating in the abatement program.

AB 206 simply states that a property owner who participates in the abatement program is immune from any legal action looking to recover costs. Without this legislation, property owners who do the right thing by removing toxic paint from their homes open themselves up to lawsuits by the paint companies, the worst possible outcome from the legal judgment.

Lead paint poisoning remains as a significant public and environmental health problem in California. Although lead paint has been banned in California for decades, lead poisoning from exposure to lead paint continues to plague the state. Despite the prohibition on lead paint, the Legislative Analyst’s Office, estimates that about 60% of houses in California were built before 1978 and are presumed to have lead-based paint. Removing the paint costs an estimated $8-$15 a square foot, which means removing all lead from a house of 1,200-2,000 square feet could run as much as $9,600-$30,000, according to RealtyTimes.com.

Eliminating lead paint remains a pressing environmental and public health concern in California. According to the Centers for Disease Control and Prevention (CDC), there is no safe level of lead in the blood for children. The CDC estimates that approximately 2.6% of U.S. children aged 1 - 5 have high levels of lead in their blood (blood lead levels ≥ 5 micrograms per deciliter (µg/dL)). Childhood lead exposure most often occurs because of aging lead-based paint. Like all paint, lead-based paint inevitably deteriorates: it flakes, chips, and turns to dust and can contaminate the air, soil, floors, and other surfaces in the home. This is particularly true of lead paint on windows, doors, and other friction surfaces. Because children are especially likely to play on the ground and put things in their mouths, lead paint presents a larger risk for them than it does for adults living in the same space.

Exposure to lead can seriously harm a child’s health, including creating damage to the brain and nervous system, slowed growth and development, learning and behavior problems, hearing, and speech problems. Even a slight elevation in blood lead levels can reduce IQ and stunt development. Decreased intelligence in children and increased blood pressure in adults are among the more serious non-carcinogenic effects of lead.

To combat the problems posed by lead paint, a number of local governments in the state filed complaints on behalf of the People of the State of California against three major paint manufacturers for promoting lead paint for use in homes despite knowing that the product was highly toxic. After 14 years of litigation, the court ruled against Sherwin-Williams, ConAgra, and NL Industries and ordered the companies to prefund approximately $400 million in lead paint abatement activities. (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51.)

This bill protects property owners seeking to utilize abatement funds. In responding to due process concerns raised by the paint companies, the appellate court noted that, “nothing precludes a defendant from testing the lead paint . . . and seeking to hold a fellow defendant liable for a greater share of responsibility.” (People v. ConAgra Grocery Products Co., supra, at p. 119.) The court also noted that the paint companies could seek liability if there was evidence “that the hazardous condition is the ‘owners fault’ or that the condition is not hazardous. (Ibid.) This vague reference to the “owners fault,” accordingly, could cause some property owners to balk at participating in the lead abatement program out of a fear that seeking abatement of a lead paint hazard could expose them to liability (i.e. as an admission that a lead paint hazard, potentially caused by their negligence, was present on their property).

Accordingly, this bill provides limited immunity to property owners and public entities who voluntarily participate in the lead paint abatement program. It would protect those property owners and entities from being held liable in any lawsuit that seeks contribution or recovery for the costs associated with participation in that abatement program. This should encourage well-meaning property owners to voluntarily participate in the program and help alleviate the ongoing hazards posed by lead paint in California for the benefit of the public at large.

Beyond the threat of lawsuits from the paint companies, owners of multi-family dwelling units risk litigation regarding the presence of lead paint in their buildings. Existing law generally deems deteriorating lead paint, lead-contaminated dust, lead-contaminated soil, or a disturbance lead paint without containment as conditions that make property untenantable. Numerous properties across California may seek to have known lead paint abated, even if the paint is in a condition that would not trigger habitability concerns under existing law. To ensure that all residential property owners with potential lead paint hazards on their properties participate in the program without reservation, this bill narrowly provides that the voluntary participation of a property owner in the program cannot be used as evidence to prove that the owner’s property constitutes a nuisance, or is substandard or untenantable.

The paint manufacturers, not property owners, were held responsible for creating a public nuisance. After a decade of litigation, in 2017, the Court of Appeal upheld a judgment against the three paint manufacturers discussed above, holding that the paint companies’ “affirmative promotion of lead paint for interior use” led to the widespread application of lead paint in California, and thus created a public nuisance. (People v. ConAgra Grocery Products Co., supra, at p. 91.) The court highlighted evidence that showed that the lead paint industry knew no later than the 1920s that lead paint, particularly paint dust, posed a significant health hazard to children. The court also held that throughout the 1930s, despite fully understanding the risks associated with lead paint, the companies continued to actively promote lead-based paint for indoor residential use. (Id., at p. 85.)

Unlike a product liability tort action, where the paint companies could have been held liable for the manufacturing of a hazardous product that caused harm to a specific person or class of persons, and thus could have been required to pay damages to compensate for the harm, the ConAgra litigation instead held that the paint manufacturers created a public nuisance. Existing law, generally, provides that a nuisance is created by anything that is injurious to health, indecent or offensive to the senses, or obstructs the free use of property. (Civil Code Section 3479.) Further, a public nuisance is one that affects an entire community at the same time. (Civil Code Section 3480.) Accordingly, the court found that by contaminating large portions of the state’s housing stock through the promotion of a known toxin, the paint manufacturers essentially harmed properties across the entire community and accordingly must pay into a fund to remediate the community harm. Also distinct from product liability cases, where a responsible party is required to pay damages to a particular plaintiff that compensates the plaintiff for a past harm and return the plaintiff to a position where they would have been if the tort had not occurred, existing law explicitly limits the recovery in public nuisance claims to the abatement of the public nuisance. (Code of Civil Procedure Section 731, also see People ex rel Van de Kamp v. American Art Enterprises, Inc (1983) 33 Cal.3d 328, 333, at fn. 11.) Accordingly, to remedy the nuisance created by the presence of lead paint, the court’s decision required the defendants to pre-fund future work to abate the hazards. While the end result--money paid by an offending corporation--may look like traditional damages, the remedy is wholly consistent with a public nuisance case rather than a tort case. This bill is designed to further the goals of the nuisance judgment by ensuring that litigation threats cannot hamper the local jurisdiction’s ability to fully utilize the abatement funds.

Protecting property owners from liability does not limit legitimate opportunities of paint companies to seek meaningful contributions for creation of the nuisance. In opposition to this measure, Californians for Safe and Affordable Housing, which describes itself as a “project of ConAgra Grocery Products Company and Sherwin Williams,” defendants in the nuisance litigation, argue that the liability protections offered by this bill essentially curtail their due process rights and ability to sue or otherwise seek contributions from property owners, particularly slumlords. The opponents then cite the above-discussed language from the appellate decision, indicating that they may be able to seek evidence that the condition or hazard created by lead paint is the “owners’ fault” and contend that this provides the defendants with license to seek contributions from property owners as joint tort-feasors.

The language relied upon by the opposition to argue that they have a vested opportunity to seek contribution cannot be read in isolation. The language was essentially dicta because it was from a broader discussion in the appellate decision holding that the defendants were not denied due process because they were unable to examine individual properties. (People v. ConAgra Grocery Products Co., supra, p. 91.) The appellate court determined that the presence of lead paint created the nuisance, and in the same discussion of the defendant’s due process rights, reiterated that the defendant’s liability for the nuisance stems from their promotion of lead paint despite knowing of its toxic impacts. (Ibid.) Nonetheless, the opposition argues that this bill “undermines the court’s basis and justification for holding just three companies responsible to pay for a societal problem like the abatement of lead paint that was collectively created by thousands of manufacturers, retailers, public entities and property owners.” While the opposition is correct that California law provides limited statutory and equity based rights of indemnity and contribution, such rights are generally tied to the same tortious act. Thus, the opposition’s statement regarding societal harms seems to misconstrue the basis of liability imposed on the three companies. The opposition’s arguments would hold greater weight if the companies were held liable for product liability, in which numerous parties along the chain of commerce could be held to varying degrees of liability. However, as noted, the companies were held liable for the promotion of lead paint that resulted in the toxic paint being applied to a vast area of residential properties which, in turn, created the public nuisance. Accordingly, it is unclear how a property owner could be held jointly liable under the underlying theory of liability in the ConAgra litigation given that there is little evidence to suggest property owners aided in the promotion of lead paint. In fact, most current property owners are unlikely to have owned the property when the lead paint was applied, and those few who owned property decades ago are more likely to be the direct victims of the paint manufacturers’ deceptive and fraudulent advertising practices than they are to be co-conspirators.

It should be noted that nothing in this bill precludes the defendants from seeking indemnity or contribution from other paint companies or from other parties who promoted the use of lead paint. In this situation, others who promoted the use of paint would likely be prime sources for contribution to the judgment. Nonetheless, the paint manufacturers seem intent on seeking financial redress from property owners, even if the likelihood of establishing their role in the promotion of lead paint nearly 80 to 100 years ago is quite small. Given the high costs associated with litigation, threats alone could be sufficient to deter a property owner from participating in an abatement program. Given that the Legislature has created many of the existing rights of contribution, the Legislature is also free to amend such rights. Accordingly, this bill is well within the Legislature’s power to protect property owners from potentially vexatious litigation.

Given California’s existing law regarding joint tortfeasors, this bill does not constitute a taking. In addition to decrying the alleged loss of due process rights for the three defendants, Californians for Safe and Affordable Housing also argue that the bill constitutes a taking. They argue that the “right to seek contribution is a ‘significant property right’ for a joint tortfeasor under California law.” Indeed, case law does hold that a right of contribution can be viewed as a vested property right upon the final judgment of a legal case. (Singer v. Superior Court (1986) 179 Cal.App.3d 875.) It should be noted, however, that this right applies to contributions from joint tortfeasors. In California, the term “joint tortfeasor” has been narrowly defined to apply only to those (1) who act in concert to accomplish some common purpose or plan, and (2) whose concerted acts cause the harm. (5 Witkin Sum. Cal. Law Torts Section 149.) In the ConAgra litigation the court held that lead paint, “will not disappear on its own,” and that the presence of “interior lead paint interferes with the community’s public right to housing that does not poison children.” (People v. ConAgra Grocery Products Co., supra, at p. 110-112.) Thus, the underlying harm that created the nuisance is simply the presence of lead paint. Liability is therefore attributable to the lead paint’s presence in residences, regardless of its condition, and the fact that lead paint is present in such residences can largely be traced to the paint manufacturer’s promotion of lead paint, despite knowing how hazardous the product was.

Given that current property owners are unlikely to have acted to cause the presence of lead paint, or promoted its use, it is difficult to see how those property owners could be characterized as joint tortfeasors and thus subject to contribution. Nor did the nuisance litigation find that they were necessarily jointly liable for the nuisance. Accordingly, clarifying that these property owners cannot be sued for participating in the nuisance abatement program does not remove a vested legal right or viable legal claim and should not be deemed a taking.

Narrowly crafted liability protections do not prevent contract lawsuits, tort claims, or protect slumlords. The opposition additionally argues that this bill would immunize property owners against a wide (and in some cases, highly implausible) variety of tortious conduct associated with the lead paint program, and create a moral hazard. For example, they contend that this bill would immunize a property owner who “assaults a lead paint inspector and is sued for damages.” The liability protections are limited to the recovery of any “cost associated with a lead paint abatement program.” It is difficult to conceive how a tortious battery of a person could fall within the scope of the program cost, even if it involved two parties who were both involved in the program.

The opposition also contends that this bill would bar actions for contract violations. Again, the bill is limited to contribution suits against public entities and property owners who voluntarily participate in an abatement program. Nothing in the language appears to serve as a bar against contract law violations. Finally, the opposition argues that this bill lets local agencies and slumlords avoid their responsibility for California’s lead paint issues. This is also suspect. The bill simply prevents contribution lawsuits against public entities and property owners who voluntarily participate in an abatement program. The claim that this bill shifts liability from slumlords to paint manufacturers again misstates the original premise for the paint manufacturer’s liability: the manufacturers knowingly promoted a hazardous product and that promotion resulted in the product’s widespread use in the state.

ARGUMENTS IN SUPPORT: This bill is supported by a coalition of local governments, property owners, and tenant’s advocates. Representative of many of the jurisdictions who prevailed in the litigation, the City Attorney of the City and County of San Francisco states:

This judgement created a one-in-a-generation opportunity to protect California’s children from the threat of lead paint poisoning. Its success, however, depends on the ability of the jurisdictions to convince homeowners to participate in the voluntary lead abatement program. Under the judgment, any funds remaining in the abatement fund at the close of four years will revert to the lead paint companies.

The possibility of reversion provides an incentive to the lead paint company defendants to discourage participation in the abatement programs. AB 206 is necessary to protect homeowners who participate in the abatement programs.

Additionally, the California Apartment Association notes:

The protections offered by the bill will encourage property owners to enroll in the abatement programs established as a result of the recent lead paint litigation and any future similar cases. The end result will be a safer rental housing stock for California tenants.

Finally, the Western Center on Law and Poverty states:

Without this legislation, property owners who do the right thing by removing toxic paint from their properties open themselves up to lawsuits by the paint companies, the worst possible outcome from the landmark legal judgment.

ARGUMENTS IN OPPOSITION: As noted, this bill is strongly opposed by Californians for Safe and Affordable Housing, which describes itself as a “project of ConAgra Grocery Products Company and Sherwin Williams.” They believe that this bill, “is unconstitutional, grants immunity to slumlord property owners who have profited from flouting the existing laws and failing to maintain their properties in a safe and habitable condition, and is broadly drafted with far-reaching and, likely, unintended impacts.”

Despite the broad opposition to the measure, Californians for Safe and Affordable Housing primarily objects to the provisions of this bill that prevent the paint manufacturer defendants from suing property owners arguing:

The defendants’ right to seek recovery from property owners – in situations where they can the property owners share responsibility for the nuisance -- is entirely consistent with long-standing legal principles

By taking away the defendants’ right of recovery against wrongdoing property owners, the

Bill undermines the court’s basis and justification for holding just three companies (including ConAgra, a successor that never manufactured or sold a single drop of lead paint) responsible to pay for a societal problem like the abatement of deteriorating lead paint that was collectively created by thousands of manufacturers, retailers, public entities, contractors, and property owners.

REGISTERED SUPPORT / OPPOSITION:

Support

California Apartment Association

California Association of Realtors

City and County of San Francisco- Office of the City Attorney

County of Los Angeles

County of Santa Clara

Office of the San Diego City Attorney

Ventura County Board of Supervisors

Western Center on Law and Poverty

Opposition

Californians for Safe and Affordable Housing

Analysis Prepared by: Nicholas Liedtke / JUD. / (916) 319-2334