In an unprecedented victory for plaintiffs bringing public nuisance claims, a California appeals court has ruled that three lead paint manufacturers were liable for endangering the state's residents through exposure to their products, which they promoted for decades as safe despite knowing of health risks such as learning disabilities in children.

The Sixth District Court of Appeal disagreed with the defendants that they couldn't have known that small quantities of lead paint would harm children—something scientists only discovered decades later.

“Here, the evidence, while circumstantial, was sufficient to support reasonable inferences that defendants must have known in the early 20th century that interior residential lead paint posed a serious risk of harm to children,” wrote Associate Justice Nathan Mihara in Tuesday's opinion.

The findings, outlined in a 143-page ruling, largely upheld the findings of Santa Clara Superior Court Judge James Kleinberg, who issued a proposed statement of decision in 2013 and a subsequent $1.15 billion judgment in 2014 against Sherwin-Williams Co., NL Industries Inc. and ConAgra Grocery Products Co.  But the panel reversed the judgment as to the amount of the abatement costs after concluding that evidence in the bench trial was limited to homes built prior to 1951, not 1981. An attorney for one of the defendants said the new figure would be closer to $400 million.

Still, the ruling was largely a win for the 10 cities and counties in California that brought the case and their lawyers, Santa Clara County Assistant County Counsel Danny Chou, who argued the case in August, as well as the law firms that were hired on contingency to take the case.

“The court's decision provides for the removal of lead paint from many older homes in Santa Clara County that contain this dangerous toxin and holds the paint companies responsible for the danger that they created,” Chou said in a statement. “The court has sent a thundering message about the protection that California provides to its most vulnerable citizens.”

Barbara Parker, the city attorney of Oakland, acknowledged that the ruling was “not everything we hoped for.”

“However, the Court of Appeal requires that the defendants clean up the vast majority of Oakland homes that contain lead paint, and more importantly, reaffirms that these companies are accountable for the harm their products continue to cause to California's children,” she wrote.

San Francisco City Attorney Dennis Herrera called the ruling “a victory for California consumers.” In San Francisco, 68 percent of homes were built prior to 1950.

“While the court limited the earlier ruling to cover fewer homes, we're glad that these paint companies will still have to pay to clean up the vast majority of homes in San Francisco that contain this dangerous toxin,” he said in a statement.

The defendants said they would appeal the decision.

Andre Pauka of Bartlit Beck Herman Palenchar & Scott in Denver, an attorney for NL Industries, called the decision an “unprecedented expansion of public nuisance law.”

In an interview, he estimated that the appellate ruling trimmed the damages to about $400 million. And he stressed that even after the defendants exhaust their appellate options, there are lots of issues that have to be worked out at the trial court about how the remediation fund will work. Nothing in the lower court ruling, he said, precludes the companies from testing to see the source of the lead in any particular house and from raising challenges about whether any lead hazards can be blamed on landlords rather than the manufacturers.

In an interview, Tony Dias, a partner at Jones Day in Washington, D.C., who represents Sherwin-Williams, said the ruling could have an immediate effect on property owners, who didn't have to remove lead paint on older buildings under California regulations if they kept up with certain maintenance.

“The court has hung a scarlet letter around these property owners even if these properties had been well-maintained,” he said. “If you're a resident in a rental property, or even a homeowner that lives in your own home, this is a pretty confusing time.”

In a statement on behalf of both his client and ConAgra, which was represented by Reed Smith partner Raymond Cardozo in San Francisco, Dias wrote: “Even though the appellate court reversed the trial court's decision in part, it is at odds with California law and judicial decisions from seven other states that have uniformly rejected similar public nuisance claims.”

Other government cases in New Jersey, Missouri, Illinois, Ohio and Wisconsin failed  in their efforts to bring public nuisance claims over lead paint. In 2008, the Rhode Island Supreme Court reversed a jury's verdict that would have hit three paint companies, including Sherwin-Williams and NL Industries, with about $2.4 billion in abatement costs.

Motley Rice and Cotchett, Pitre & McCarthy, two law firms retained in the California case, took a swipe at those rulings in their statements about Tuesday's decision.

“I only hope that other communities will take note of what California has been able to accomplish to better protect children,” wrote Motley Rice attorney Fidelma Fitzpatrick , who served as lead trial counsel in the 2013 trial.

“All Californians should be outraged by the lead paint industry's sour grapes statement that California is out of step with the country,” said Joe Cotchett of Cotchett, Pitre & McCarthy in Burlingame. “California has made it clear that irresponsible corporations like Sherwin-Williams are out of step with America.”

In addition to claims that the paint companies had actual knowledge of lead paint's safety risks, the Sixth Circuit also disagreed with defendants that advertisements promoting the use of lead paint in residential interiors were constitutionally protected speech.

“Promotion of lead paint for interior residential use necessarily implied that lead paint was safe for such use,” Mihara wrote. “If defendants promoted lead paint for interior residential use while knowing that such use would create a public health hazard, then their promotions were misleading and not entitled to any First Amendment protection.”

The panel also struck down arguments involving evidence at trial and damages and disagreed that Kleinberg overreached by taking over the role of the Legislature, which already regulated lead paint in California. As to causation, the panel rejected the notion that the paint companies couldn't be held liable for the actions of others, like landlords or other manufacturers.

“In this case, there was plenty of evidence that defendants' affirmative promotions of lead paint for interior residential use played at least a 'minor' role in creating the nuisance that now exists,” Mihara wrote.

Ross Todd contributed to this report.