Rhode Island top court overturns lead paint ruling

By Jason Szep

BOSTON (Reuters) - Rhode Island's top court on Tuesday overturned a landmark lower court ruling that found three former manufacturers of lead paint liable for creating a public nuisance by covering up the health risks of lead paint.

Sherwin-Williams Co, NL Industries Inc and Millennium Holdings had asked the Rhode Island Supreme Court to reverse a February 22, 2006, jury verdict that could have forced them to spend an estimated $2.4 billion on cleaning up contaminated paint around the state.

Rhode Island's long-awaited decision could influence court decisions in other states, counties and cities where lead-poisoning lawsuits are pending. The case had drawn comparisons to the tobacco lawsuits that ultimately led to a settlement that cost cigarette makers more than $200 billion.

"However grave the problem of lead poisoning is in Rhode Island, public nuisance law simply does not provide a remedy for this harm," the court said in a unanimous 4-0 opinion that followed oral arguments on May 15.

The court added that landlords who allowed lead paint to decay on their properties could be liable.

Shares in Cleveland-based Sherwin-Williams, the nation's largest paint maker and best known for its Dutch Boy, Krylon and Duron paint brands, rose 3.6 percent to $47.56 on the New York Stock Exchange after the decision, while Dallas-based NL Industries added 3 percent to $9.82.

Sherwin-Williams' stock had been hammered to two-year lows after the 2006 decision.

Rhode Island accused paint manufacturers of covering up the risk of lead paint in its lawsuit filed in 1999, the first in the nation to seek to hold paint makers responsible.