Public entities receive $8.7 million in settlement funds from bankrupt defendant in lead paint litigation

Court overrules defendants’ demurrer in ongoing litigation against remaining defendants

San Jose, Calif. — (June 23, 2011) — Ten major California counties and cities today announced that they received a total of $8.7 million under a court-approved settlement with bankrupt Millennium Holdings LLC. Millennium Holdings, a successor to Glidden Paint, paid this amount in order to be dismissed from a pending public nuisance abatement suit. Ten California county counsel and city attorneys are jointly prosecuting that action against multiple defendants who marketed and promoted lead pigment for use in paints, despite knowledge of the harm lead paint causes. The settlement funds will be divided among the ten jurisdictions, and used primarily to fund lead paint abatement efforts.

“This settlement marks the first major recovery for the public entities that have been diligently pursuing these claims on behalf of the people of California since 2000,” said Miguel Márquez, County Counsel for the County of Santa Clara. “It provides funds that will go directly toward our lead paint abatement efforts, in order to improve the public health and welfare of the residents in our community.”

Millennium Holdings LLC and its affiliates filed for bankruptcy under Chapter 11 of Title 11 of the U.S. Code on January 6, 2009. The settlement was reached by and among Millennium Holdings LLC and the following public entities: Santa Clara County, the City and County of San Francisco, Alameda County, the City of Los Angeles, Los Angeles County, Monterey County, the City of Oakland, the City of San Diego, San Mateo County, and Solano County.

“We’re gratified to see a company step up and take responsibility for the health hazards posed by lead paint,” said San Francisco City Attorney Dennis Herrera. “While the size of the settlement we secured from Millennium Holdings is obviously limited by the realities of bankruptcy law, it’s an important step in the right direction to hold other defendants accountable for their deliberate wrongdoing.”

The litigation against the remaining defendants is progressing after California appellate courts rejected two prior defense efforts to derail the case. On June 14, 2011, Santa Clara Superior Court Judge James P. Kleinberg issued an order on three motions filed by the defendants in response to the public entities’ fourth amended complaint. The Court overruled the defendants’ motion to have the complaint dismissed, holding that the complaint stated a case for public nuisance since it alleged that the defendants had sufficient knowledge of the hazards caused by lead paint, and that the defendants’ actions were a substantial factor in the creation of the public nuisance caused by lead paint in the public entities’ jurisdictions.

“The Court’s ruling is a big victory for the public entities prosecuting this action,” said Nancy Fineman, an attorney with Cotchett, Pitre & McCarthy, which is assisting the public attorneys in the case. “It brings us one step closer to reaching the merits of this case and to holding the promoters of lead pigment accountable for the health hazards they created in the State of California.”

The litigation is currently in the discovery stage. The Court anticipates setting a trial date sometime in the first quarter of 2012. The county counsel and city attorneys bringing the case are being assisted by the law firms of Cotchett, Pitre & McCarthy of Burlingame, CA; Motley Rice LLC of Providence, RI; Mary Alexander & Associates of San Francisco; and Thornton & Naumes of Boston, MA.

Related Documents:

PDF iconPDF of the Millenium Holdings lead paint case payment presskit (June 23, 2011)

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