Lead paint: mass tort litigation and public nuisance trends in America.

• Author: Schaefer, Fredrick C.

LEAD PAINT, the most recent subject of mass tort litigation, raises important and critical issues regarding the path that tort law may be taking. The confluence of certain legal and judicial philosophies, has made recent decisions possible. For example, in Thomas v. Mallett, (1) the Wisconsin Supreme Court applied the risk contribution theory in a private suit against makers of lead paint pigment. The Wisconsin Court of Appeals applied the public nuisance doctrine in the City of Milwaukee's suit seeking costs of abating lead paint in private housing in City of Milwaukee v. NL Industries. (2) Just over a year ago, a Rhode Island jury--the first ever--held the lead paint industry liable under a public nuisance theory in Rhode Island's suit against the makers of lead paint pigment. (3)

The Wisconsin decisions and the Rhode Island verdict, standing alone, may be viewed as aberrant; however, at their foundation are judicial and legal mindsets that have a dangerous potential to influence mass tort litigation today and in the future and to encroach on the role of the legislature. Judicial policy-making of this type can pose a formidable assault on the fundamentals of our tort system, as well as on the economic interests of the targeted industry. The lead paint problem, although addressed by the federal government and state and municipal governments, provides fertile ground for policy-making by those courts that may believe that legislation falls short of providing complete redress.

Decision-making in this modern mass tort litigation environment is influenced by several philosophies regarding the role of the justice system. The first of these is illustrated by the decision of the Wisconsin Supreme Court in Thomas v. Mallett where the court applied the risk contribution theory to lead paint litigation, ostensibly in adherence to the principle that "every wrong has a remedy." That maxim stands as a noble declaration that the judicial system will fashion a remedy so that no one wronged will find himself or herself without justice. (4) It is not a license, however, for activist courts to regulate or legislate.

Another philosophy holds that when the legal system poses evidentiary barriers to plaintiffs, especially in mass tort litigation, courts may ignore well-settled principles of tort law, especially the requirement of individual causation. This viewpoint results in decisions, like Thomas, holding that the plaintiff need not prove he or she was exposed to or harmed by a particular defendant's product. Supporting this view are such controversial jurists as Judge Richard Posner, former Chief Judge of the United States Court of Appeals for the Seventh Circuit, who advocates the theory that tort law is intended to redress "societal wrongs" not "individual wrongs." To serve that end, established rules of pleading and proof may be ignored.

Yet another judicial philosophy holds that courts may step into the breach when they believe the legislature has failed to act to promote social justice. Armed with a sense of a moral imperative, the courts may push the law to its outermost limits in order to obtain what they believe to be an equitable result. Applying the arcane law of public nuisance to redress the lead paint problem is an example of this type of judicial activism. Regardless whether the law of public nuisance may properly be applied to redress decades-old conduct lawful at the time, some courts, including the Wisconsin Court of Appeals in City of Milwaukee v. NL Industries, have embraced the common law nuisance doctrine in order to save the plaintiff's claim from the statute of limitations bar and other defenses fatal to a negligence or products liability claim.

It is premature to say whether public nuisance litigation against the lead paint industry will ultimately succeed in the courts. Governmental plaintiffs first used the public nuisance theory in litigation against the giant tobacco industry. The tobacco suits were hard fought by both sides. Though none resulted in a verdict, success was achieved by those plaintiffs who had survived motions to dismiss. Settlement soon ensued, and the rest is history.

The gun industry was the next target. The governmental plaintiffs relied on public nuisance and various theories asserted against the tobacco industry. The results were mixed: a few courts held that a claim for public nuisance would lie, at least at the pleading stage, (5) but other courts rejected the theory. (6) To plaintiffs' chagrin, no settlements of the magnitude of the tobacco industry settlements were achieved. However, the seeds were sown for squaring off once again with big industry. (7) This time, the lead paint industry is the target.

Most would agree that the health danger to young children living in buildings with lead paint is real. The unresolved issues include how to redress the problem and who should bear the costs. Should courts be allowed to trump the legislature and its scheme of addressing the lead paint problem? Who are the culpable parties--the building owners, the lead paint industry, or both? Should the tort requirement of causation be circumvented and the theory of public nuisance re-engineered to provide redress against manufacturers of lead paint pigment whose conduct was lawful at the time?

The discussion of lead paint necessarily requires reference to developments in traditional tort law, especially the requirement of individual causation. A few courts have adopted alternative theories of causation and some scholars and jurists muse about abolishing the requirement of individual causation. Experience in DES (8) and asbestos litigation and, more recently, tobacco and handgun litigation teaches that courts have not yet been disposed to overhauling the tort system. However, sympathies to the plight of young children exposed to lead pigment in their homes may play a larger role in lead paint litigation, resulting in judicial policymaking/regulating.

The temptation to re-engineer the law in order to reach the conduct of big industry, like the lead paint pigment manufacturers, may be real, indeed. Moreover, the governmental plaintiffs who have incurred significant costs for inspecting and abating lead paint and now seek to hold the lead paint industry liable may garner more sympathy than the governmental plaintiffs in the handgun litigation whose interests were remote. The well-founded principle of judicial restraint, including recognition that the legislature and not the judiciary is the policy-making body, must serve as the polestar in the lead paint litigation as it unfolds. (9)

Finally, the duty to defend and the duty to indemnify must be addressed. No court has yet ruled on the duty to indemnify lead paint pigment manufacturers sued by a governmental entity under a public nuisance theory. The discussion will therefore draw on duty to defend decisions in the lead paint litigation and duty to indemnify decisions in the handgun industry litigation for indications of how the courts may approach coverage for lead paint liabilities.

Governmental plaintiffs bringing public nuisance claims are not required to prove "bodily injury" or "property damage" in the strict sense, as were plaintiffs in the underlying asbestos claims. Rather, the essence of a public nuisance is harm to the community or the general public, as opposed to individuals who may have suffered specific personal injury or property damage. Plaintiffs must prove that defendants' conduct in marketing and selling lead-based paint was a "substantial cause of the existence of a public nuisance and that the nuisance was a substantial factor in causing injury to the public." (10) Nonetheless, the ultimate question of whether the insurers owe a duty to indemnify the lead paint pigment manufacturers found liable for creating a public nuisance will likely turn on the concepts of "bodily injury," "property damage" and "damages," as defined by the Commercial General Liability ("CGL") policies.

The recent lead paint decisions by the Wisconsin Supreme Court and Court of Appeals, although troubling, should not be viewed as precursors to developments in lead paint litigation elsewhere. Rather, these decisions should be seen as the product of a single jurisdiction where individual causation had already been replaced with the risk contribution theory in the context of DES litigation and where claims by governmental plaintiffs to redress environmental problems as public nuisances have long been permitted and successful.

The Debate: Is Tort Law Intended to Redress Private or Societal Wrongs?

The modern mass tort litigation environment has been shaped and influenced by two schools of thought. One school, a minority view, holds that the tort system exists to address societal wrongs, not individual wrongs. The system is intended to deter and punish culpable industries. The "instrumental theorists" who support this theory, such as Judge Posner, challenge the traditional requirements of individual causation. The market share liability and risk contribution theories, which grew out of the DES litigation, are identified within this school. (11) Only a few jurisdictions have adopted these theories in DES and asbestos litigation; most recently, Wisconsin has adopted this theory in lead paint litigation. (12)

Instrumentalists believe that an individual plaintiff need not identify the individual defendant who caused his or her harm in order to prevail. Rather, they would virtually eradicate any requirement of individual causation. (13) "[C]ausation in the law is an inarticulate groping for economically sound solutions." (14) Instrumentalists believe that requiring a plaintiff to demonstrate individual causation is outdated and an impediment to the goals of pursuing policy objectives, such as wealth maximization, accident prevention, or distribution of losses on a widespread basis. (15)

The theory operates as follows: Manufacturers that may have...