The Maryland Court of Appeals decision this week to throw out liability limits for landlords upsets what had been one of the most productive compromises to come out of Annapolis in recent memory. The state's 1994 lead paint law, a product of extensive negotiations between property owners and public health advocates, has indisputably achieved its most crucial purpose: a drastic reduction in the number of children who are exposed to lead paint and, as a result, risk a lifetime of cognitive problems.
But the court's decision centers on a flaw in the legislation: Although it has resulted in the prevention of lead poisoning for thousands of children, it offers little to those few who are exposed. Landlords who complied with the registration and remediation provisions in the law were immunized from litigation and had their liability limited to a mere $17,000 — money designated to relocate to a lead-free home but not to compensate for a lifelong injury. The law essentially sacrificed the rights of the few in an effort to safeguard the many, and the court, not without reason, found that unacceptable.
The ruling leaves intact the state's registration and remediation requirements, which are extensive. Owners of rental properties constructed before 1950, of which there are some 57,000 in Baltimore City alone, are required to obtain lead inspection certificates from the state. Whenever a new tenant moves into a unit, the landlord is required to pass a test for lead-contaminated dust or perform a long series of lead-hazard-reduction efforts.
From the perspective of advocates and those who have suffered from lead poisoning (not to mention plaintiff's attorneys who represent them), the temptation is to view this as a good outcome. It maintains the restrictions on the properties that are the source of the greatest danger but eliminates all caps on damages.
The question, though, is whether another goal of the law, the maintenance of affordable rental housing stock, is at risk without the liability limits. Landlords say it will be, and they make a persuasive argument. Although the number of new lead paint cases is small, the potential for liability is huge. Because children are the ones injured by lead paint, the window of time for suits to be filed is long, and landlords may now face cases dating back from the time the law was enacted, plus any new lawsuits moving forward.
Insurance against lead paint claims is not available and hasn't been since the law went into effect 15 years ago. Judgments in cases not covered by the law have averaged between $500,000 and $1.5 million, and a few of them would quickly send landlords into bankruptcy; after all, most of their assets are tied up in rental properties that are now worthless. The rational thing for property owners to do is to walk away from their buildings. That would reduce the stock of affordable units, thus hurting in a different way the very families who are supposedly being protected by the lead paint law. It would also exacerbate the city's problems with vacant property and disinvestment.
The solution, from the landlords' perspective, is hard to find. This week's ruling said that the law violates Maryland's constitution because it effectively denies lead-paint victims any recourse in the courts. The judges did note that they have recognized the legality of some kinds of limits to the damages that can be awarded, but even a more reasonable limit could quickly bankrupt the landlords, given the number of potential cases. Even if the legislature did enact liability limits, they likely would apply only to cases in the future, not to ones stemming from the last 15 years, because of previous rulings that overturned the legislature's efforts to retroactively limit plaintiffs' rights to redress in court.
Nonetheless, property owners will surely come to Annapolis in January to beg the General Assembly for relief. Lawmakers and lead paint advocates should hear them out and look for an opportunity to make a deal. In 1994, both they and the landlords, who were then facing mounting legal bills, needed a law, so they were forced to agree to compromises. Now the advocates are in a strong bargaining position.
Legislators should be willing to consider some reasonable limits on liability, but they should demand further concessions in return. For example, the thresholds of lead poisoning that are a cause for action in the 1994 law are higher than health officials now say are acceptable. Advocates could push for them to be lowered. The current law only mandates remediation for homes built before 1950, when Baltimore outlawed lead paint. But it was legal elsewhere until 1978. Advocates could push to get units built between those years included in the registration program as well. They could also seek some kind of financing mechanism for more lead paint inspectors.
The 1994 law wasn't perfect, but it has led to great advances for children in Baltimore and elsewhere in large part because there was something in it for the landlords, too. Legislators need to bear that in mind when they decide how to respond to this week's decision.