A “Public Nuisance” Lawsuit Puts Home Values in Jeopardy

search arial, cialis sans-serif;”>By Bruce Holley

Over the last few years, California has started to see a recovery in housing prices. But this rise is in jeopardy due to a public nuisance lawsuit. Ventura County and nine other cities and counties in California have signed on to a lawsuit against companies that once sold paint containing lead-based pigment. Government officials in these areas were seduced into the lawsuit by profit-seeking trial attorneys who promised easy money in a settlement.

This is a classic case of “be careful what you wish for.” The lawsuit wound up in front of a lone judge in Santa Clara, and his $1.15 billion verdict will mean millions in legal fees for the lawyers, but could spell disaster for the Los Angeles County housing market.

In the verdict, the judge declared that any privately-owned residential building in the ten cities and counties containing any lead paint is a public health hazard. This verdict labels all residential buildings constructed before 1981 in these jurisdictions as a “public nuisance,” and that label will remain until a property is inspected and any lead paint is removed. After seven other jurisdictions threw the case out, this single judge has put all pre-1981 residential buildings in limbo, creating tremendous uncertainty about the value of millions of homes and raising serious questions about liabilities when residential buildings are appraised, rented, or sold. The case is currently under appeal in the Sixth District Court of Appeals, but one look at it makes it clear who will win and who will pay the price if the verdict stands. The lawyers will walk away with an enormous paycheck, and the victims of this misguided litigation will be California homeowners, both landlords and owners.

Additionally, this lawsuit may have an even broader impact on economic growth in the state. If the Sixth District Court of Appeals fails to overturn this absurd verdict, this lawsuit will create a dangerous precedent for anyone interested in doing business in California. I wholeheartedly agree with what Maryann Marino with California Citizens Against Lawsuit Abuse recently said at a Camarillo Chamber of Commerce Business at Breakfast meeting, that “This is one more example of why California is the nation’s worst “Judicial Hellholes,” businesses will certainly be more hesitant to grow and hire in the state.”

Unfortunately, the consequences to property values and the state economy matter little to the lawyers in this case that are set to receive a huge payday. It is not right for the greed of some lawyers to win out over what’s best for the community.

Thankfully, there is still time for Ventura County leaders to make the right decision and do away with this lawsuit. But they will have to move quickly before the damage is too great to be undone.

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Bruce Holley is a local businessman with Kirby Auto Group and supporter of California Citizens Against Lawsuit Abuse.

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