Insurers Fear That Lead Paint Is Next Litigation Battlefield.

In a product-liability development ominously similar to asbestos, a Rhode Island Superior Court decision cleared the way for the state's attorney general to pursue legal action against paint manufacturers for problems allegedly caused by lead-based paint.

Superior Court Judge Michael Silverstein's decision allows Attorney General Sheldon Whitehouse to proceed with a lawsuit against eight paint manufacturers and a trade association to recover costs incurred by the state for removal of decades-old paint containing lead-based pigment from all public and private buildings.

Robert Hartwig, executive director of the Insurance Information Institute, a Washington, D.C.-based research organization, said it is too early to tell what impact the Rhode Island decision will have on insurers. He does see a possible "asbestos-like situation," though.

While the decision allowing Rhode Island to pursue its lawsuit may encourage other states to try similar litigation, Hartwig said there are higher hurdles for plaintiffs in this issue than with asbestos or gun manufacturers.

"Lead paint was officially banned in 1978, but I believe most manufacturers stopped making it long before that," he said. "In addition, the Centers for Disease Control issued a recent report showing that lead levels in the blood of children ages 1 through 5 had been dropping consistently throughout the 1990s.

In his 31-page decision, Silverstein ruled that the state can pursue a "public nuisance" complaint under Rhode Island law, which would allow the attorney general to seek restitution for its cleanup. The judge threw out the state's claim that the defendants should pay the cost of special education programs for children mentally impaired by exposure to lead paint.

"That's very important," Hartwig said. "Basically, that throws out the part of the suit that is most closely associated with bodily injury."

Hartwig said the product-liability aspect of the case against the paint makers is impaired if the plaintiff cannot establish a connection with the product and bodily injury. "Without that, it's a remediation case, and I don't see that as an insurance issue," he said.

Another hurdle for potential plaintiffs, Hartwig said, is identifying lead paint as a specific source of harm. "Most houses built 70 or 80 years ago had lead paint, but there were also lead pipes and lead in water," he said. "They would have to prove the exposure did not occur some other way."