Justices Turn Away Corporate Complaints in California Lead-Paint 'Nuisance' Case
Michael Carvin of Jones Day, counsel for Sherwin-Williams, said the cases highlighted runaway tort liability claims by states against companies.
October 15, 2018 at 10:48 AM
4 minute read
Paul Clement of Kirkland & Ellis.
The U.S. Supreme Court on Monday denied review in a closely watched pair of cases brought by major corporations challenging liability under California nuisance law for their long-ago promotion of lead pigments in house paints.
The cases, ConAgra Grocery Products v. California and Sherwin-Williams v. California, seemed like possible cert grants in part because they raised free speech issues. The companies claimed that California imposed millions of dollars in damages because of their advertising and promotion decades ago.
“The linchpin for imposing this massive liability was petitioners' speech, not their paint,” wrote Kirkland & Ellis partner Paul Clement, counsel of record for ConAgra in the case.
Santa Clara County launched the litigation in 2000, resulting in a $1.15 billion judgment against the companies for endangering the state's residents through exposure to their products, which they promoted as safe as far back as 70 years ago. Last November, California's Sixth District Court of Appeal affirmed the judgment but limited the abatement costs to homes built before 1951.
The defendants petitioned the California Supreme Court to overrule the decision, but the state's high court declined in a Feb. 14 split decision. Sherwin-Williams and ConAgra also backed a ballot initiative for this fall, a political move that two California counties tried to stop with a petition for writ of mandate before the California Supreme Court. The companies later dropped the proposal, which would have asked taxpayers for more than $2 billion.
Michael Carvin of Jones Day, counsel for Sherwin-Williams, said the cases highlighted runaway tort liability claims by states against companies. “They are seeking to invent tort liability for companies that are producing products that for whatever reason they don't like—fossil fuels, prescription drugs, guns and things like that,” Carvin said in a news conference last month. “They've designed tort liability theories to go after them in a way that avoids normal statutes of limitations and all kinds of normal tort defenses.”
Sherwin-Williams said in a statement Monday:
“While we are disappointed, the Supreme Court reviews very few cases. Its decision not to review is not a ruling on the merits of the important constitutional issues raised by defendants. California's decision is an outlier and at odds with courts across the country which have correctly held that companies should not be held retroactively liable for lawful conduct and truthful commercial speech decades after they took place.”
A U.S. Chamber of Commerce brief on behalf of the companies also stated: “Just in the last twelve months, in federal courts alone, at least 80 new public nuisance cases of this sort have been filed by states and other government entities against American businesses, all seeking to impose sweeping liability based on similarly novel theories.” The brief also said: “The recent avalanche of public nuisance claims under the new California doctrine will bury American business in even greater litigation costs and burdens.” King & Spalding's Jeffrey Bucholtz is counsel of record in the brief.
Michael Rubin of Altshuler Berzon, lawyer for 10 California county counsel and city attorneys, told the high court that “petitioners' alarmist predictions about the future of public-nuisance litigation are also overblown, as the lower courts conscientiously applied long-standing public nuisance statutes that codified common law principles dating back centuries.”
Read more:
Lead Paint Companies Were 'Stuck With the Bill,' Says SCOTUS Briefs
Awaiting a Ninth Justice, Supreme Court Tinkers With Its Docket
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