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Attorney General's office and attorneys spar over settlement for lead paint victims

The Maryland attorney general’s office is seeking to block a settlement for lead-paint victims who sold off their structured settlements for pennies on the dollar, arguing they are entitled to far more restitution.

The attorney general’s office and attorneys for 100 people injured by lead paint are set to spar in court Tuesday over who can get a better deal for the victims. Both sides say they are trying to get the best outcome and greatest payout for the lead-paint victims, whom they both allege were taken advantage of and misled into selling the structured settlements for lump sum payouts worth far less.

Under such settlements, landlords agreed to pay victims over time rather than in a lump sum.

The outcome of the court hearing Tuesday could help determine whether the lead-paint victims are able to get back their full structured settlement, a smaller amount of restitution or nothing at all.

“The state is stepping in where they don’t belong,” said Brian Brown, an attorney with Brown & Barron LLC, who is representing the lead-paint victims. “They are interfering with lead-poisoned plaintiffs, their right to get some remedy from the wrongs against them. Now the state is coming in and saying ‘No, we can’t do that, we have some kind of better remedy.’ Which they do not.”

Charles Sims, an attorney for Access Funding, the firm that bought the lead-paint settlements, declined to comment.

The attorney general’s office sued Chevy Chase-based Access Funding last year on behalf of the victims, alleging the company took advantage of the lead-paint damaged clients from whom it bought structured settlements. The victims, who suffered brain damage and cognitive harm from lead paint in their homes, had won the structured settlements in lawsuits against former landlords.

The state argued that the lead-paint victims were entitled by law to advice from an independent third party to help them make the decision about whether to sell the settlements, but the third party was instead affiliated with Access Funding and not independent at all.

A few months later, a separate class action suit was filed by Brown and other attorneys. Brown said during the discovery period in that case, the attorneys learned that Access Funding did not have enough money to fully reimburse the victims. So they worked out a deal that, according to the state, is worth about $1.1 million and will result in an average payout of $7,500 for each lead-paint victim.

The attorney general’s office has asked a six-month stay of the class-action proceedings while its separate case moves forward. The office declined to comment on the motion, which is set to be heard in court on Tuesday

The attorney general’s office is seeking to restore the structured settlements to the victims who sold them. But the attorneys for the lead-paint victims argue that such an outcome is not possible because the settlements have since been sold by Access Funding to third parties.

“The state is going to leave our clients with nothing in the real world,” Brown said. “It’s an impossible remedy to achieve.”

In its motion, the attorney general’s office argued such rhetoric was “mere sloganeering,” that the attorney’s arguments were legally flawed, and that it would be able to get a better outcome for the lead-paint victims.

Ruth Ann Norton, a longtime advocate on lead-poisoning issues and president and CEO of the Green and Healthy Homes Initiative, said she agreed with the attorney general’s office’s approach.

“I’ve been somewhat troubled when plaintiffs attorneys tell their clients in the first place to accept offers from Access Funding,” she said. “I think Access Funding shouldn’t get a second bite of the apple. I think they have to be held accountable for the incredibly predatory practices that they have executed and families should be made whole.”

cwells@baltsun.com

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