Chipping away at the lead paint industry

The state of Rhode Island’s landmark victory last year against the lead paint industry based on the theory of public nuisance has sparked a new wave of lead paint litigation across the country.
Other states, cities and counties – as well as some individuals – are using the same theory to take on the paint industry.
“The plaintiffs have huge momentum right now. The defendants are at the bottom of a very deep hole,” claimed Fidelma Fitzpatrick, a partner at Motley Rice in Providence, R.I., the firm that won the Rhode Island suit. The firm now represents several cities and counties across the country in lead paint litigation.
Jack McConnell, lead trial counsel in the Rhode Island case and Fitzpatrick’s partner at Motley Rice in Providence, added, “Over the last year and a half since the Rhode Island verdict, the lead paint industry has faced a succession of rather large legal defeats.”
In April, Ohio became the second state to file a public nuisance claim against the industry, and recent appellate decisions gave new life to cases in New Jersey and California.
“Rhode Island was really the catalyst for other states to start considering these lawsuits,” said Alan J. Mensh, a partner at Ashcraft & Gerel in Baltimore, who tries individual lead paint personal injury cases. “[But] people are still waiting to see what is going to happen on appeal.”
It hasn’t been completely one-sided, as defendants have also had their share of recent success.
In California, a trial court struck down a contingency fee agreement between Santa Clara County and outside counsel, while in Missouri the state Court of Appeals affirmed a summary judgment for the defendants in a public nuisance suit brought by the city of St. Louis. (City of St. Louis v. Benajmin Moore & Co., No. ED 87702 (2006).)
In spite of the plaintiffs’ optimism, the defendants reject their claims of a major shift in momentum, according to Bonnie J. Campbell, former Attorney General of Iowa and the spokesperson for Sherwin-Williams, Atlantic Richfield, Millennium Holdings and NL Industries.
“[The defendants] don’t think in terms of momentum, but in terms of a process,” she said, noting that they have been defending against lawsuits for nearly 20 years.
To date, the only case to reach a final resolution was a lawsuit brought by the city of Chicago, where the defendants emerged victorious after the Illinois Supreme Court refused to review an appellate court’s decision dismissing the city’s lawsuit. (City of Chicago v. American Cyanamid Co., 823 N.E.2d 126 (Ill. App. 2005).)
“You win a battle here and there, but in the end, you hope you win the war – and I think we are quite a long ways from that point,” said Campbell. “There are many different cases at different stages of the process.”

Rhode Island: Appeals begin
The state of Rhode Island was the first to successfully use the public nuisance theory against the lead paint industry, arguing the companies created the nuisance by failing to take action to halt exposure to lead paint across the state.
The lawsuit, filed in 1999, ended in a mistrial in 2002, but a retrial that lasted four months, ended early last year with a jury verdict against Sherwin-Williams Co., NL Industries, Inc. and Millenium Holdings LLC. (DuPont settled with the state prior to trial for $12.5 million).
Experts have estimated the cost of clean-up could run into the billions.
McConnell said the theory will work in other states as well, since Rhode Island’s public nuisance law is based on the Restatement of Torts, which most states have also adopted.
In March, Rhode Island trial judge Michael Silverstein denied post-trial motions by the defendants in a 197-page decision and asked the parties to suggest a special master, who would advise him on the practicalities of implementing the verdict.
The special master will most likely be “a national expert on the issue of abatement of lead from communities,” explained McConnell. The special master will probably not be a lawyer but someone from the public health community.
The defendants are appealing the verdict, Campbell noted, on a “host of issues” including the need to show the jury the most current data about the level of childhood lead poisoning in the state, and the theory of the plaintiffs’ public nuisance claim.
“The case went to the jury on a distorted theory,” said Campbell, noting traditional public nuisance cases involve disputes like a noisy neighbor.
“Trying to turn the sale of a lawful product 50 to 100 years ago into a public nuisance today just doesn’t make a lot of sense,” she argued.
Fitzpatrick said she is not concerned about a reversal on appeal.
“This wasn’t a rogue Rhode Island trial judge acting alone,” she said. “[Appellate courts in California, New Jersey and Wisconsin] have all found this public nuisance suit a viable, legitimate cause of action.”
Assuming the case isn’t reversed and abatement begins, the practicalities of enforcing the decision are overwhelming.
Campbell said the full meaning of abatement remains unclear.
“The whole purpose of a public nuisance remedy, as commonly understood, is to provide injunctive relief, which is very convoluted when it requires companies who haven’t put lead pigment in their paint for decades, to remove all the lead paint in every building and house in Rhode Island,” she said. “We are a very long way from having this issue resolved, and until our appeal is resolved, we’re all in a bit of a legal Neverland.”

Ohio: The second state to file
In Ohio, a handful of cities have filed suit against the lead paint industry over the last year, but the biggest news came on April 6, when state Attorney General Marc Dann sued 10 companies, including those involved in the Rhode Island suit.
McConnell, who is also involved in the Ohio litigation, said the case could motivate other states to follow suit, especially those who have been in a “wait and see” mode since the Rhode Island verdict.
The Ohio lawsuit was filed amidst considerable political wrangling. The state’s General Assembly passed a bill last session prohibiting such lawsuits. But on his first day in office, Gov. Ted Strickland retrieved the bill from the secretary of state and vetoed it. The veto allowed the state’s attorney general to file suit, although some members of the legislature are now challenging the validity of the new governor’s veto.
And in another twist, Sherwin-Williams filed suit in U.S. District Court, seeking a preliminary injunction to halt the state litigation.
The federal lawsuit “underscores the desperation of the lead paint manufacturers,” Fitzpatrick contended.
Meanwhile, the New Jersey suit also hangs in the balance since an appellate court, in an unpublished decision, overturned dismissal of a suit brought by cities alleging a public nuisance. (In re Lead Paint Litigation, N.J. Super. Ct. App. Div. (2005).) The defendants appealed and the New Jersey Supreme Court heard oral argument. The parties are waiting on a decision.

Wisconsin: the next battleground?
Wisconsin will be facing a double-dose of lead paint litigation in the coming months.
A lawsuit brought by the city of Milwaukee is scheduled to begin jury selection on May 23. A trial court originally granted summary judgment for the defendants, although an appellate court later reversed. (City of Milwaukee v. NL Industries, 691 N.W.2d 888 (Wis. App. 2004).)
In addition, Wisconsin is the only state where individual lawsuits against the lead paint companies are going forward.
Steven Thomas suffers from mild retardation as a result of ingesting lead paint chips and dust as a toddler, according to his lawsuit. Thomas also sued the landlords of the buildings he lived in and received $300,000 in settlements.
A trial court judge in the case originally threw out the suit, a decision upheld by the state court of appeals before the Wisconsin Supreme Court reversed. (Thomas v. Mallett, 701 N.W.2d 523 (Wis. 2005).)
The state high court adopted a modified version of market share liability the court termed “modified risk utility analysis.” The theory allows plaintiffs to recover against an entire industry when they cannot establish the specific company that produced the product that caused their injuries.
“The theory in this case is that all of the pigment manufacturers engaged in conduct that created a risk of harm to the public – especially children who came into contact with the pigment – and that by creating that risk of harm, the manufacturers are joint and severally liable,” explained Fitzpatrick, whose firm also represents the individual plaintiffs.
A jury can consider a number of factors when apportioning a verdict to various defendants, including the share each company holds of the market, how much the manufacturers knew about the risk they were causing, and how long each company participated in the market, she said.
But “the biggest problem with market share or risk contribution is that it eliminates fault of any kind,” argued Campbell. As a defendant, “you aren’t able to prove what didn’t happen. It takes away any and all defenses if you can’t argue that it wasn’t your lead paint on the wall in the plaintiff’s house.”

California: One step up, one step back
Santa Clara County, Calif. filed suit against nine different lead paint companies in 2000, and over the last few years, was joined in the suit by other counties as well as the cities of Oakland and San Francisco.
Although the trial court originally dismissed the suit, an appellate court recently reinstated it. (County of Santa Clara v. Atlantic Richfield, 137 Cal. App. 4th 292 (Cal. App. 2006).)
But the defendants then objected to the fee arrangement in which the counties paid private law firms – including Motley Rice, as well as local California firm Cotchett, Pitre & McCarthy – on a contingency fee basis.
On April 4, Judge Jack Komar agreed that such a relationship is “antithetical to the standard of neutrality that an attorney representing the government must meet. … Given the inherent difficulties of determining whether or to what extent the prosecution of this nuisance action might or will be influenced by the presence of outside counsel operating under a contingent fee arrangement, outside counsel must be precluded from operating under a contingent fee agreement, regardless of the government attorneys’ and outside attorneys’ well-meaning intentions to have all decisions in this litigation made by the government attorneys.”
Because public nuisance is a quasi-criminal action, involving the use of a state’s police powers, it shouldn’t have been delegated to outside counsel, Campbell said.
“Citizens have the right to know that if the state is coming after them, it is in the public interest,” not the interest of a private firm generating fees, she added, noting that the defendants are challenging the Rhode Island contingency fee agreement on appeal as well.
While McConnell acknowledged the ruling as “the one positive thing” in recent months for the lead paint industry, he expressed confidence that the decision would be reversed on appeal, noting that Judge Silverstein in Rhode Island examined the same relationship and found it acceptable.