updated 7/1/2008 2:43:27 PM ET 2008-07-01T18:43:27

Rhode Island’s Supreme Court on Tuesday overturned a first-in-the-nation jury verdict against three former lead paint producers, a closely watched case that has been seen as bellwether for potential suits across the country.

The 4-0 decision spares the companies from potentially billions in cleanup costs for hundreds of thousands of contaminated homes.

Rhode Island was the first state to successfully sue former makers of lead pigment and paint, which can cause learning disabilities, brain damage and other health problems in children. A jury in 2006 found Sherwin-Williams Co., NL Industries, Inc. and Millennium Holdings LLC liable for creating a public nuisance.

The state had proposed that the companies spend $2.4 billion inspecting and cleaning hundreds of thousands of Rhode Island homes believed to contain lead paint.

The ruling was immediately denounced by groups supporting punitive action against paint companies.

“A lot of hopes were pinned on Rhode Island,” said Ralph Scott, community projects director of the Alliance for Healthy Homes, a Washington advocacy group.

The court, however, said the state’s lawsuit should have been dismissed at the outset. It said that while lead paint may be a public health problem, it was not the companies’ responsibility to clean it up because they, unlike landlords and homeowners, had no control over how the paint was used or if it was used in properties where children were poisoned.

“Our hearts go out to those children whose lives forever have been changed by the poisonous presence of lead,” Chief Justice Frank Williams wrote in the opinion. “But, however grave the problem of lead poisoning is in Rhode Island, public nuisance law simply does not provide a remedy for this harm.”

Lawsuits over lead paint have failed to live up to early hopes that they would mirror the success that states had in the 1990s with suits against the tobacco industry, which ultimately resulted in billions worth of settlements. Unlike tobacco, lead-based paint has not been sold for decades.

It has been virtually impossible to determine which company’s paint poisoned an individual child or was used in a certain home.

A lawyer for Sherwin-Williams called the ruling a “victory for common sense.”

“This case never should have been filed,” said Charles H. Moellenberg, Jr. “It was factually wrong and legally flawed. A company should not be held liable when there is no proof that it did anything wrong.”

The companies said the state never presented any evidence that their products were used in any Rhode Island home or had even been sold in the state.

Shares of Sherwin-Williams rose 4.3 percent to $47.92 and shares of NL Industries rose 3.5 percent to $9.86.

Jack McConnell, a lawyer representing Rhode Island, warned that children would continue to be poisoned by lead because of the ruling, and said homeowners whose properties are infected with led-based paint now have no way to hold the companies responsible.

“It will cost the homeowners billions to clean up, and cost the Rhode Island taxpayers millions more than it already has spent to try to protect our children from future harm from lead paint,” McConnell said in a written statement.

Attorney General Patrick Lynch did not immediately comment.

Rhode Island’s lawsuit, filed in 1999, targeted former makers of lead pigment, which had long been used in paint to make it more durable.

The first trial ended in 2002 with a hung jury.

The case went to trial again in 2005. The jury ruled against three manufacturers and absolved a fourth, Atlantic Richfield Co. It was the only court case the lead paint industry had lost.

Though lead-based paint was banned from residential use in the U.S. in 1978, lawyers for the state said it had poisoned tens of thousands of children since the early 1990s in Rhode Island, where a large percentage of homes were built before the ban took effect. They said lead paint remains in an estimated 240,000 properties.

The state said the companies manufactured and sold lead-based paint even when they knew it was unsafe.

Suits in Ohio and California are still pending. The top courts in New Jersey and Missouri last year rejected public nuisance lawsuits against the companies, while a jury in Milwaukee last year ruled in favor of NL Industries in a suit brought by the city.

Ohio is the only other state that has sued. Jim Gravelle, a spokesman for that state’s attorney general’s office, said lawyers in the office were interested in what the Supreme Court said because the arguments in both cases are very similar. But he said it does not affect Ohio’s lawsuit because that suit is based on Ohio law.

“This in no way restricts Ohio’s right to hold lead paint companies liable for the extreme harm they have caused Ohio citizens under public nuisance or other causes of action,” he said.

The court did, however, hand Lynch one court victory, setting aside contempt sanctions and fines totaling $15,000 for comments the attorney general made during and after the trial.

Lynch was fined twice, once after being quoted during the trial as describing the companies as “those who would spin and twist the facts” and another for saying after the verdict the companies could not “duck and run” from their obligations to deal with lead paint problems.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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