R.I. Court Rejects 'Nuisance' Claim

Rhode Island's Supreme Court last week rejected efforts by the state's attorney general to hold lead pigment manufacturers liable for injuries suffered by children exposed to lead paint, throwing out the only jury verdict against paint-makers in multiple suits filed nationwide that were based on alleged violations of “public nuisance” laws.

The court decision threw out a 2006 jury verdict against Sherwin-Williams Companies, NL Industries Inc. and Millennium Holdings LLC, which held them liable for creating a “public nuisance” by manufacturing and selling a toxic product.

“Justice is based on the relationship among people, but it must be based upon the rule of law,” the court said in its 4-0 decision. “This court is powerless to fashion independently a cause of action that would achieve the justice that these children deserve.”

“The Rhode Island Supreme Court…put an important nail in the coffin of recent efforts to expand public nuisance theory into a super tort that can overcome all previous known bounds of civil liability,” according to Phil Goldberg, a lawyer at Shook, Hardy & Bacon in Washington, D.C., who has followed the case for the insurance industry and industry trade groups since 2000–the year after it was first filed.

“The rule of law won out today,” he added.

The Rhode Island court ruled that the elements needed to support a suit based on public nuisance laws could not be made against the manufacturers of lead pigment.

The court said the defendants were “not in control of any lead pigment at the time the lead caused harm to children in Rhode Island, making defendants unable to abate the alleged nuisance–the standard remedy in a public nuisance action,” the court said.

The court added that “the General Assembly has recognized defendants' lack of control and inability to abate the alleged nuisance, because it has placed the burden on landlords and property owners to make their properties lead-safe.”

More important to insurers and risk managers from a broader liability perspective, according to Mr. Goldberg, the court also ruled that “it would be inappropriate to use this [public nuisance] tort in suing product manufacturers in an effort to get around product liability laws.”

Indeed, the National Association of Mutual Insurance Companies–which joined with other organizations to file a “friend of the court” brief in the case–said in a statement the decision “re-establishes that product liability laws, not public nuisance laws, are the proper means for claims against product manufacturers.”

Paul Tetrault, NAMIC's Northeast state affairs manager, said the court “rejected another attempt by a state attorney general to improperly use public nuisance laws to circumvent the well-defined structure of product liability laws.”

“Under the trial court's application of public nuisance law in this case, the government would have near limitless ability to impose liability on an industry if its products could at some point contribute to an inherent risk to enough people,” the organizations argued in their amicus brief.

“Any business that ever lawfully made or sold a product could be held liable in Rhode Island at the whim of the attorney general, if the product category as a whole were misused or not properly maintained by certain members of the public and, as a result, became associated with a potential hazard,” the groups added in their brief.

The result would have been the creation of a cause of action against which there would be practically no defense, according to Mr. Tetrault.

As a result of the original verdict, the state had proposed that the companies spend an estimated $2.4 billion to inspect and clean hundreds of thousands of homes built before 1980 that it said were likely to contain lead paint.

Rhode Island was the first state to sue over the harm of lead paint, which studies have shown can cause brain damage, coma and even death in children exposed to flaking paint chips or dust. The state's lawsuit targeted former makers of lead pigment, which had long been used in paint to make it more durable.

The first trial ended in 2002 with a hung jury. The case went to trial again in the fall of 2005, where the jury ruled against three manufacturers and absolved a fourth–Atlantic Richfield Company. It was the only court case the lead paint industry has lost.

Several suits are still pending, including in Ohio and California. The top courts in New Jersey and Missouri last year rejected public nuisance lawsuits against the companies, while a jury in Milwaukee in November ruled in favor of NL Industries in a suit brought by the city.

In Ohio, Mr. Goldberg said a decision of the Ohio Supreme Court upholding a new law barring these suits effectively ended the Ohio cases.

In California, an appeals court in April upheld the right of large cities to use private outside counsel working on a contingency basis to pursue cases that have been pending since 2000.

California cities including Los Angeles may use private lawyers to sue lead paint manufacturers for the cost of treating lead-induced illness and other actions to protect the public from the toxic product, a California appeals court has ruled.

If it stands, the California appeals court ruling would have a broad impact because communities suing the paint makers also include San Francisco, Oakland and San Diego, as well as Alameda, Monterey, San Mateo, Santa Clara and Solano.

However, Mr. Goldberg questioned the ability of the California communities to ultimately win their cases.

“As the Rhode Island Supreme Court recognized in oral arguments, many people were waiting for this decision,” he said. “Any attorney general or court looking at speculative public nuisance claims should read this case because it provides important and necessary context as to how public nuisance laws should be applied.”

Specifically, Mr. Goldberg cited language in the Rhode Island decision 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, the court said, “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. Our hearts go out to those children whose lives forever have been changed by the poisonous presence of lead.”

Still, the Rhode Island court added, “however grave the problem of lead poisoning is in Rhode Island, public nuisance law simply does not provide a remedy for this harm.”

“The state has not and cannot allege facts that would fall within the parameters of what would constitute 'public nuisance' under Rhode Island law,” the court concluded.