Lead victims painted into a corner by court decision

Landmark R.I. lead-paint verdict overturned

By Susan A. Baird

Providence Business News

2 July 2008

PROVIDENCE - In a unanimous ruling this morning, the R.I. Supreme Court rejected the landmark decision against former lead-pigment makers, holding that public-nuisance law had been misapplied. "This Court is bound by the law and can provide justice only to the extent that the law allows," the justices wrote.

In February 2006, a R.I. Superior Court jury found that lead paint that had accumulated on Rhode Island homes and public buildings in the decades before such pigments were banned constituted a public nuisance, and that Millennium Holdings LLC, NL Industries Inc. (formerly National Lead Co.) and The Sherwin-Williams Co. "were liable for causing or substantially contributing" to that nuisance and should be held responsible for the cost of abating the risk. A fourth defendant, Atlantic Richfield Co. (ARCO) was cleared of liability.

"This monumental lawsuit marked the first time in the United States that a trial resulted in a verdict that imposed liability on lead-pigment manufacturers for creating a public nuisance," the judges wrote in their decision today.

The case dates back to 1999, when the state filed suit against several manufacturers and the nationwide Lead Industries Association Inc. After that initial lawsuit ended in a mistrial, when jurors were unable to reach a decision, the state immediately filed suit again.

"That second trial, spanning four months, became the longest civil jury trial in the state's history," the high court justices noted. "Both before and after the jury returned its verdict, the trial justice issued nineteen written decisions, ruling on a variety of pretrial, trial and post-trial motions," from both the state and the defendants," they added.

The Supreme Court, "because of the sheer number of parties and the complexity of issues," consolidated the appeals into five tracks: appeals of the abatement judgment against Millenium, NL Industries and Sherwin-Williams by the individual defendants, who argued that the law of public nuisance had been misapplied; the state's cross-appeal seeking compensatory damages; the state's appeal of the judgment in favor of ARCO; appeals by the state and attorney general of the December 2005 and June 2006 contempt orders against the attorney general, which carried fines of $5,000 and $10,000, respectively; and the propriety of the state's contingency-fee agreement with private counsel prosecuting the public-nuisance action.

On May 15, in a session that was broadcast live via courts.ri.gov, the high court heard arguments on each appeal.

"We conclude that the trial justice erred by denying defendants' motion to dismiss," the justices wrote in their 81-page ruling today.

"More specifically, we conclude that the state has not and cannot allege any set of facts to support its public nuisance claim that would establish that defendants interfered with a public right or that defendants were in control of the lead pigment they, or their predecessors, manufactured at the time it caused harm to Rhode Island children.

"In reaching this conclusion, we do not mean to minimize the severity of the harm that thousands of children in Rhode Island have suffered as a result of lead poisoning," they added. "Our hearts go out to those children whose lives forever have been changed by the poisonous presence of lead.

But, however grave the problem of lead poisoning is in Rhode Island, public nuisance law simply does not provide a remedy."

The justices went on to outline the history of local lead-abatement efforts, saying that administration policies and General Assembly actions "have proven effective and, as a result, the entire state - including its 'core cities' - has experienced substantial declines in lead poisoning."

Because of their ruling on the public-nuisance claim, the justices said, the high court "did not reach" the issue of the state's request for additional compensatory damages, nor the arguments as to whether ARCO should have been included in the original verdict.

The contempt orders against the attorney general - citing his "subjective characterizations of the defendants" and their representatives in comments to the media and on an official Web site, such as a statement that "the legal process has held them accountable and said you can't duck and run" - both were reversed by the Supreme Court.

The court also found in favor of the attorney general's office on the final issue, upholding prosecutors' contingency fee arrangement with outside counsel, which defendants had argued constituted misappropriation of state funds. But it did set several limits on such arrangements, and noted that they are specifically barred in Rhode Island criminal cases. In any such future arrangement, the high court emphasized, the contingency fee should be subject to oversight and scrutiny before payment is made to the outside lawyers.

"Today's ruling is a landmark victory for common sense and for responsible companies that did the right thing," Sherwin-Williams lawyer Charles H. Moellenberg Jr. said today in a statement on behalf of Sherwin-Williams and fellow defendant Millennium Holdings.

"This case never should have been filed - it was factually wrong and legally flawed. A company should not be held liable when there is no proof that it did anything wrong. It has taken nine years and two juries, but the Supreme Court's decision today puts public nuisance law in Rhode Island squarely in line with the overwhelming majority of jurisdictions of the United States."

The Rhode Island verdict was the first against paint-makers to employ the public-nuisance statute, but other states have employed that tactic. Such arguments were rejected by courts in Missouri, New Jersey, Illinois and New York; were rejected by a jury in Wisconsin; and are being employed in cases still pending before courts in Ohio and California, Moellenberg noted.

The high court ruling was praised by business advocates Lisa Rickard, president of the U.S. Chamber of Commerce's Institute of Legal Reform, and Robin Conrad, executive vice president of the Chamber's public-policy law firm, the National Chamber Litigation Center.

"Public nuisance is an 800-year old legal theory twisted by the plaintiffs' bar and overreaching state attorneys general," Rickard and Conrad said in their joint statement.

"We commend the R.I. Supreme Court's ruling today for rightly repudiating this flawed legal scheme designed to put more money into the pockets of trial lawyers while doing little to correct any perceived wrongs. The court rightly recognized it's the job of the legislature, not the judiciary, to create new causes of action."

But in a statement this afternoon, R.I. Attorney General Patrick C. Lynch expressed "enormous" disappointment and disagreement with the decision.

"Today's decision affects every Rhode Islander, every taxpayer, every parent and, especially, every child - who has been injured, is still threatened with injury today, or will be poisoned by lead in the future. This reversal is enormously disappointing, and I disagree with it in the strongest terms."

"This case was litigated in the Superior Court for more than eight years," he noted.

"Despite the multi-million dollar lead-industry-funded defense waged by an army of more than 100 lawyers, my office proved to the satisfaction of a unanimous jury that the three defendants were liable for the public nuisance that their products created in Rhode Island. Those products poisoned our infants and children - and continue to poison our infants and children - while bringing great profits to the companies that made and sold them.

"Today, the Supreme Court ruled that these defendants do not have to clean up the mess they have made. I find this legally and fundamentally wrong. .

"I want every resident of Rhode Island to know that this office fought this battle well, and to what appears to be the end," Lynch added.

"We dedicated more attorneys, staff and resources to this case than to any other case in the history of our state. We met every legal challenge from corporate America's defense counsel and we survived their every attack to secure victory from a jury of our peers. I believed then, believe now and will always believe that our peers got it right."

* The U.S. Chamber of Commerce is the world's largest business federation. Its Institute for Legal Reform advocates for changes to the civil justice system, through legislative, political, judicial and educational activities at the local through national levels while the National Chamber Litigation Center, the public policy law firm of the U.S. Chamber, advocates for the business viewpoint before the courts and regulatory agencies. For more information, visit www.ny-chamber.com.

Additional information from the R.I. Supreme Court - including the full court opinion issued today in "State v. Lead Industries Association Inc. et al., No. 04-63" - is available at www.courts.ri.gov/supreme. Background information from the paint manufacturers is available at www.LeadLawsuits.com.