N.J. High Court Nixes Suit Against Lead Paint Makers

The New Jersey Supreme Court tossed out a lawsuit today brought by 26 New Jersey towns and counties against lead paint manufacturers that sought to recover the cost of removing the hazardous product.

The decision found that the action could not be brought under public nuisance law and was actually a product liability case.

The high court's decision is consistent with a similar reading of the law by the Missouri Supreme Court earlier in the week. That court ruled Tuesday against the City of St. Louis over who should pay to clean up lead paint in homes, upholding a lower court's finding that the city could not proceed with a lawsuit against makers of lead paint.

The New Jersey ruling has significance beyond that state, according to Phil Goldberg with the Washington, D.C. office of Shook, Hardy & Bacon. The firm defends insurers and other defendants in class action lawsuits.

"Coupled with the ruling in Missouri by the state Supreme Court there, it marks a new chapter in the use of public nuisance theories that returns to normalcy the use of public nuisance legal theory to its original intent," he said.

The New Jersey and Missouri decisions come as a suit is pending in Ohio, which was filed by that state's attorney general in April against 10 paint manufacturers and chemical companies, including Sherwin-Williams and DuPont.

Also, a Milwaukee jury is set to hear arguments June 18 in a public nuisance case in Wisconsin against NL Industries over the costs of removing or sealing up lead paint on homes and public buildings. City officials there are seeking $85 million in damages.

At the same time, the Rhode Island Supreme Court is scheduled to review a lower court decision shortly concerning lead paint removal.

That case brought by the State of Rhode Island against the makers of lead-based paint resulted in a jury finding last year that three companies must clean more than 300,000 homes of lead contamination and may potentially be forced to pay out billions of dollars in damages.

"If the Missouri and New Jersey rulings are applied in Rhode Island," Mr. Goldberg said, "the Rhode Island lower court decision would be unsustainable."

The 4-2 ruling by the New Jersey Supreme Court was a victory for the manufacturers, which included American Cyanamid Co. (now part of Wyeth), Sherwin-Williams Co. and DuPont.

The court determined that the towns and counties failed to identify a special injury that could be compensated. It said the claim was essentially a products liability issue and falls under the state Product Liability Act, which excludes coverage for exposure to toxic material.

The Supreme Court decision reversed a New Jersey Superior Court Appellate Division panel's ruling last Aug. 17 that said a trial court was wrong in dismissing the suit. The Appellate panel's decision held that the consolidated public nuisance lawsuit brought by 26 municipalities against the former makers of lead paint in the state could proceed.

The paint and pigment makers then asked the state Supreme Court to review the case. The defendants argued that the Appellate Division "impermissibly eviscerated" the distinction between products liability claims and public nuisance claims by allowing a public nuisance claim when the only allegations are that the defendants made and lawfully sold a product and failed to advise of its risks.

The majority Supreme Court decision held that the plaintiffs did not show that the case fell outside the New Jersey Products Liability Act by virtue of the environmental tort exception.

Moreover, the majority said, "although there may be room in other circumstances for an expanded definition of the tort of public nuisance, we find no basis in this record to conclude that these plaintiffs have stated such a claim."

The minority, Chief Justice James R. Zazzali and Justice Virginia Long, held that the Supreme Court has a duty to reconcile outdated formulations of the common law with the complexities of contemporary society and said the public nuisance doctrine is "an appropriate and efficient means for vindicating the public's right to be free from the harmful effects of lead paint."