The Historic Lead Paint Argument Before the Rhode Island Supreme Court:
|By ANTHONY J. SEBOK
|Tuesday, Jun. 3, 2008|
In Part One of this series of columns on the historic lead paint argument before the Rhode Island Supreme Court last month, I set the stage for the case. I noted how the suit, which was brought by the State of Rhode Island against the largest members of the lead paint industry, was an innovative use of public nuisance law – employing an approach with roots in earlier cases such as the state Medicaid cigarette litigation and asbestos litigation.
In this column I want to focus on two points: First, I want to explain why, contrary to the impression of many observers, the defendants did not dominate the oral argument. Second, I want to explain why the defendants should win, and what it will take for the Rhode Island Supreme Court to give them a victory based on principled adjudication, as opposed to mere expediency.
By necessity, I will ignore many of the issues that were fought out before the court on May 15. This is not because I think they are irrelevant. Many important objections were raised by the defendants to the judgment rendered by the Rhode Island jury which found them liable, after years of litigation and months of testimony, for having caused a “public nuisance” in the state by selling, since the late Nineteenth Century, lead pigment to companies that made lead paint that was used in homes and businesses until it was prohibited by federal law in the 1970’s.
I am certain that the defendants will win some kind of reversal of the trial verdict, which, if left standing, could result in an injunction requiring them to pay billions of dollars to ameliorate the threat posed by the remaining lead paint that covers older houses in Rhode Island. What the defendants want, however, is not just a new trial, or a denial of contingency fees to the plaintiffs’ firm that was retained by the state attorney general to pursue the suit. What the defendants want, and what Wall Street is hoping to see, is a complete repudiation of the state’s public nuisance theory. In this column, I will handicap the chances of the defendants winning that sort of total victory.
The Hardest Issue At Oral Argument: Is This Properly a Public Nuisance Action?
Many lawyers argued during the three-and-a-half hour oral argument, but only two lawyers really grappled with the hardest issue—whether the state had adequately pled a cause of action in public nuisance. Early in the proceedings, the trial judge had ruled that he was satisfied that, as a matter of law, the cause of action could be tried, and for years this legal conclusion sat unreviewed. On May 15, however, it finally fell to two lawyers—John MacFayden, representing NL Industries, and Fidelma Fitzpatrick, representing the state, to reopen the question at the heart of the suit.
I will begin my review of MacFayden and Fitzpatrick’s arguments with my conclusion: Both lawyers made a mess of the law they were supposed to clarify. Each screwed up in extraordinary ways that were, on reflection, utterly predictable. MacFayden, for the lead paint industry, misrepresented the law of public nuisance, going as far as making statements about a critical Rhode Island Supreme Court precedent that were facially wrong. Meanwhile, Fitzpatrick, for the state, misrepresented the significance of the trial judge’s holding, and kept saying that the suit neatly fit into established black letter law when, in fact, she was asking the court to extend the law in a radical (but not necessarily insupportable) direction.
MacFayden’s job was to convince the Supreme Court that a private law claim against the lead paint industry had to be based in tort, not public nuisance law. The advantages of convincing the court to force the claims into tort are myriad: First, the Attorney General’s standing to have brought the suit in the first place would be imperiled. Second, Rhode Island has a statute of repose for products liability claims. Third, the law of causation for products liability in Rhode Island would almost certainly doom a tort suit.
However, MacFayden started his argument at a funny place. He argued that the law of public nuisance looks just like the law of tort. This argument might have helped his client’s cause if it were true, but it is not. In fact, the state chose to sue under the law of public nuisance precisely because it is different (and more plaintiff-friendly) than the law of tort.
The Confusion Introduced at Oral Argument: The Suggestion That the Law of Public Nuisance Is Just Like Tort Law, When It is Not
The weirdness begins five minutes into the oral argument (at 19:00 on the webcast, which interested readers can find at http://22.214.171.124/content/RI_Courts/Lead_Paint_Appeal_2008_05_15/msh.htm). Asked by the court for the definition of public nuisance in Rhode Island, MacFayden listed three elements: the defendant must (a) have control over an activity that (b) occurs in a specific physical place, which (c) intrudes on a ‘public right.’ So far, so good. But then he jumped to add that there is a fourth element: the activity must be the result of “intentionally and knowing conduct, [or] negligence where knowledge cannot be proven, or, if the conduct is ultrahazardous (something which cannot be proven in this case) liability is then absolute.”
This statement set my tort professor antennae aquiver—where had the fourth element come from? I had never seen it before in my casebook or in the treatises. MacFayden told the court: in its own 1936 decision, Rose v. Standard Oil Co.. That case, noted MacFayden, adopted his proposed fourth element from the “Restatement at Section 822” (see the webcast at 20:24).
The problem, however, is that Rose is not a public nuisance case. It was an attempt to reframe a trespass case as a private nuisance case.
Furthermore, while Section 822 in the Restatement (Second) of Torts does set out conditions of liability identical to those in MacFayden’s purported fourth element, Section 822 is about private nuisance. Section 821B is about public nuisance and does not have anything like the language MacFayden drew from Rose.
Finally, Rose itself does not fully adopt Section 822. There, on page 279, the Court noted that even in the absence of an ultrahazadous activity, in some circumstances an actor can be held liable in nuisance “irrespective of negligence or active misconduct.”
It may be an indication of how sympathetic the Rhode Island Supreme Court is to MacFayden’s client and its co-defendants that no one on the court pointed out to him the utter irrelevancy of his argument to the questions they asked. Instead, the court gently asked MacFayden about the one major case it decided which actually grappled with the definition of public nuisance: Its 1982 decision in Wood v. Picillo.
I won’t go over the facts of Wood, but suffice it to say that one of the two issues on appeal was whether “Rhode Island case law requires plaintiffs to prove negligence as an element of the nuisance case.” The Court rejected that argument. Wood, to be blunt, was the plaintiffs’ ace, and it was the case upon which the trial judge relied, and it was clearly the precedent that the Rhode Island Supreme Court needed to have distinguished from the lead paint case before it.
How did MacFayden deal with Wood? He claimed that the Court’s conclusion that a plaintiff need not prove negligence (and, by implication, wrongful intent or an ultrahazardous activity) was dicta (see the webcast at 25:00). That is, he suggested that it was not a necessary basis for the Rhode Island Supreme Court’s conclusion and that the Court did not intend it to be used to guide future decisions.
Mr. MacFayden, I have some bad news for you. That language is not dicta: It is a holding. (I invite the reader to review the case, especially the sentence on page 1249 that begins, “We now hold that negligence is not a necessary element of a nuisance case . . . .”)
Why the Plaintiffs Will Lose: Their Attorney Inadvertently Made the Defense’s Argument For It
What the defendants should have argued is simply that the law of public nuisance is a form of liability without fault, even for activities that are legal, and it is precisely for that reason that the Supreme Court must vigilantly guard its scope.
The defense did not make this argument. However, the plaintiffs are going to lose this fight, despite the ridiculous errors committed by the defendants, because the plaintiffs’ own lawyer, Fidelma Fitzpatrick, inadvertently made the defendants’ argument for them.
The key mistake made by Fitzpatrick, in my opinion, is that she kept insisting that the lead paint suit was nothing special. She kept describing the application of the common law of public nuisance in this case as a matter of applying “black letter law.” She called this suit a “standard case” of public nuisance.
In truth, however, the lead paint case is not a standard case for many reasons. Fitzpatrick’s false modesty might be forgivable if the only difference between this case and, for example, Wood, was scale. And scale is a difference: Instead of a single, large waste dump burning up, this case involved an activity that took place over a century and affected (by her estimate) 250,000 homes. But Fitzpatrick also pretended that the concept of public nuisance in the lead paint case was identical to the concepts adopted by the Restatement and the Rhode Island Supreme Court in Wood, which was truly an insult to the Justices’ intelligence.
Fitzpatrick kept insisting that the lead paint case was no different from a pollution case. For her, “pollution” was the concept that would quiet any doubts on the court, since it had long been settled around the nation that the standard public nuisance case involved a smokestack belching pollution, even in the absence of intent or fault. Thus, the lead pigment manufacturers are liable in public nuisance because they put lead into the world, and lead is, according to the plaintiffs, “an environmental toxin,” just like smoke from a smokestack or oil dumped into a river (see the webcast at 1:25).
The problem with Fitzpatrick’s reliance on pollution as her template, however, is that a lot of people think that the lead in lead paint is different from smoke or oil. This is for many reasons. First of all, the lead manufactured for lead paint is intended to be a component part in a product, and it is not a by-product of another activity. Fitzpatrick’s response to this argument was, in effect, “that only makes it worse!”
No, it might make it tort law. After all, public nuisance law developed at a time when there was no liability for defective products, and barely any for negligently maintenaned property. But tort law was grown since then in leaps and bounds. Why shouldn’t we assume that the injuries caused by a component parts that are also toxins are properly the domain of tort law?
My point is not that one could not imagine a reason for sorting the lead paint case on one side or the other of the nuisance/tort divide. It is simply that one has to give the court a reason to pick one approach over the other—something the plaintiffs have not done.
The Difficulty of the Issue Whether This Case Falls Into Public Nuisance Law, or Tort Law
Let me provide a simple illustration how the decision to classify lead poisoning as pollution, as opposed to a tort-like hazard, can work against plaintiffs. Property insurance policies, which typically cover tort liabilities incurred by a landlord, now typically exclude coverage for liabilities arising from the “discharge, release, or escape of pollutants.” Lots of plaintiffs who have sued the owners of buildings for lead paint poisoning of children have discovered that the defendant’s insurer refuses to pay under the policy, which often leaves the plaintiff unable to recover their full damages, since many landlords in these cases are barely wealthier than the plaintiffs.
In the Wisconsin Supreme Court’s 1999 decision in Peace v. Northwestern National Insurance Co., the court held that there was “little doubt” in its mind that “lead paint chips, flakes, or dust” was pollution, and that when the insurer sold the homeowners policy to the landlord, the landlord should have known that he would not be covered in the event of a lawsuit by a tenant for lead poisoning. Yet the dissenters in this case—the Wisconsin Supreme Court’s most liberal justices—thought otherwise. They thought it was not obvious that lead paint, eaten as chips, was “pollution.” Moreover, many other stare courts have agreed with the dissenters—in fact, right now, about half the jurisdictions view lead paint as a pollutant for purposes of excluding coverage, and half view it as a tort-like hazard just like a broken stair or a defective front door lock.
Over the course of her oral argument before the Court, Fitzpatrick kept reassuring the justices that all of their concerns could be handled by various doctrines drawn from tort law. Causation? No problem—there are market share doctrines to handle that. The fact that there were other actors between the sale of the pigment and the creation of the risk? No problem—there are doctrines of proximate cause to handle that.
The Risk for the Plaintiffs: The Rhode Island Supreme Court May Deem Lead Paint to Fall Into the Law of Tort, and Dismiss the Case Entirely
Without realizing it, Fitzpatrick had painted herself into a doctrinal corner: If so much of the heavy lifting of the case depended on tort-like concepts, why shouldn’t the court just treat the case as concerning a tort?
Of course, Fitzpatrick could never answer that question truthfully. The real answer is that the plaintiffs don’t like the “other stuff” that comes with tort—the stuff that would make their case impossible, ranging for the requirement of the proof of defect, all the way to the fact that injunctive relief is not available in tort. (The plaintiffs are seeking injunctive relief in the form of an order directing defendants to remove (“abate”) the lead paint from all the affected homes.)I predict, however, that the Rhode Island Supreme Court will understand what is at stake in this case, and do the right thing. It will act like a responsible common law court and interpret the doctrine of public nuisance in a principled way—which in this case means drawing the line between tort and public nuisance, and drawing that line in favor of the defendants.