The Record
By Reed Fujii
Deal over Behr wood sealant largest ever in S.J., attorney says…
The maker of Behr Paints agreed to settle a class-action lawsuit over wood sealants for $107.5 million, which the plaintiff’s attorney said is the largest settlement in San Joaquin County history.
“I believe it’s a terrific result for the class,” said Stockton attorney James B. Brown, who represented Stockton homeowner Judy Herum in a lawsuit originally filed in July 2000. Brown was later named liaison counsel in a nationwide class-action suit consolidating at least a dozen other California lawsuits as well as complaints from a hand full of other states.
Herum, the wife of Brown’s legal partner Steven Herum, filed suit after noticing mildew damage to her deck despite the application of Behr’s wood sealant. The settlement, if finally approved, would resolve all cases involving those products throughout the country.
Consumers who purchased and applied either Super Liquid Rawhide or Natural Seal Plus wood sealants after January 1, 1991, may be qualified to share in the settlement.
Brown said Wednesday those whose decks, fencing, home exteriors or other property suffered mildew-related damage may be eligible for a cash payment. Others, who applied the sealants but did not experience mildew damage, may be eligible for coupons good for discounts on other Behr products.
A preliminary settlement was approved Tuesday by San Joaquin County Superior Court Judge Carter Holley. A campaign has begun to notify affected consumers, who have until February 7th to comment on, object to or opt out of the settlement.
That will lead up to a March 6 fairness hearing, when the court may give final approval to the settlement, as well as determine and award fees and costs to the plaintiffs’ attorneys.
Those attorney fees, Brown noted, will be paid in addition to the settlement. Masco Corp., the parent company of Behr Process Corp., has agreed to accept fees of up to $25 million without opposition.
In agreeing to settle the case, Masco made no admission of liability or wrongdoing.
“Unfortunately, litigation is just part of doing business these days,” said Samuel Cypert, Masco vice president of investor relations from the company’s headquarter in Taylor, Michigan.
Rather than pursue a vigorous but potentially lengthy and costly legal defense, he continued, “We thought it would be in the best interests of our shareholders, our employees and our customers to settle the case and move on.”
Cypert said Wednesday the settlement could potentially cost Masco about 25 cents per share.
However, he added the company should be able to offset at least some of the settlement costs with payments from liability insurers or other third parties.
The company announced Tuesday that its third-quarter earnings, due to be formally announced November 12, should be at the higher end of the range of 41 to 44 cents per common share.
It’s stock closed Wednesday at $20.43 a share up to 53 cents, on the New York Stock Exchange. That’s up from its low for the past 52 weeks of $17.25 but well off its 52-week high of $29.43.
Masco, with 2001 sales of $8.3 billion, is one of the leading producers of faucets, cabinets, architectural coatings, locks and consumer home-improvement and building products.
While Santa Ana-based Behr has stopped making Super Rawhide and Natural Seal Plus, Cypert noted that they were two products in a large line of wood stains and sealants that accounted for no more than 15 percent of Behr sales.
As a continuing concern, “Behr’s very much alive and well,” he said.
