BOSTON — A Massachusetts investor who previously suggested that the shareholders of the three defendant paint companies that were sued by the State of Rhode Island under a public nuisance theory related to the selling of lead-based paint and pigment should sue the state for devaluation of their stock as a result of the ongoing litigation told Mealey Publications on July 2 that he is reviewing the recent Rhode Island Supreme Court decision to determine how to proceed with a lawsuit.
Todd Sullivan, a self-described value investor, announced he might sue the State of Rhode Island and the private plaintiff firm Motley Rice — which assisted the Rhode Island attorney general under a contingency fee agreement — in March 2007.
On July 2, after the Rhode Island Supreme Court overturned the verdict against the paint companies in State of Rhode Island v. Lead Industries Association, et. al (No. 07-121A, R.I. Sup.), Sullivan gave no timetable for when a lawsuit might be filed, nor did he say what the potential causes of action could be, but he clearly indicated that he was considering his options.
Sullivan previously said that the litigation against The Sherwin-Williams Co., NL Industries Inc. and Millennium Holdings Inc. was “wrong” and that the former makers of paint and pigment should be paid restitution for their defense costs. The money that was spent on litigation should have been spent on growing the companies, Sullivan said.
Originally, Sullivan said he would file a case on behalf of shareholders, alleging that the plaintiff attorneys’ actions devalued the defendants’ stock and that the companies should be compensated. Sullivan said he hoped to do something that would have a “chilling effect” on lawsuits against the former makers of lead paint in the future, as well as hamper the progress of actions that have already been filed in other jurisdictions across the country.
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