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Sherwin-Williams’ Lead Based Paint Appeal Rejected by Supreme Court

The U.S. Supreme Court rejected appeals from Sherwin-Williams and Conagra Brands leaving intact a ruling that requires both companies to pay a sum total of $409 million for lead-paint remediation in California.

The court rebuff, issued without comment, is a blow to business groups, which had called for high court review in the hope of derailing other suits over climate change, opioid addiction and gun violence.

In separate appeals, Sherwin-Williams and units of Conagra said the California state court ruling violated their constitutional rights, penalizing them for things they said in the first half of the 20th century without proof that those statements contributed to current lead-paint problems. Ten California cities and counties sued the companies for creating a “public nuisance” by promoting lead paint.

“While we are disappointed, the Supreme Court reviews very few cases,” the companies said in a joint statement after the court acted. “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.”

The U.S. Chamber of Commerce said the success of the lead-paint suit has spawned a string of similar cases against other industries, more than 80 filed in federal court in California and elsewhere in the last 12 months alone.

The cities and counties said the companies and their trade associations promoted lead paint as safe well after they learned that it caused irreversible neurological harm, particularly to children. Lead paint was banned in the U.S. in 1978 but remains on the walls of many homes.

“Those cumulative, coordinated promotional efforts were enormously successful, resulting in sustained, increased, and prolonged use of lead paint in residences throughout the jurisdictions,” lawyers for the cities and counties argued.

A state court judge in Santa Clara County concluded after a six-week trial that the companies had created a public nuisance, and a California appeals court upheld the judgment. The trial judge later set the tentative amount the companies must pay at $409 million (lowered from the approximately $1billion judgement). The $409 million figure is designed to cover the cost of inspection and abatement in more than a million homes built before 1951. The original Santa Clara ruling had calculated homes built from 1977 and older, however the state appellate ruling curtailed the liability to the 1951 and prior timeframe.

Public-nuisance lawsuits are designed to address conduct that broadly affects a community, like pollution or the storage of explosives. California has authorized government lawyers to press public-nuisance suits since 1872.

Sherwin-Williams and Conagra said they aren’t opposed to all public-nuisance suits but said the case against them goes so far it violates the Constitution’s due process and free speech clauses.

“Pegging public nuisance liability to prior product promotion offers a tempting, facile way to shift responsibility from government policymakers and budgets onto corporations,” Sherwin-Williams argued.

Conagra said in court papers the California ruling “opens the door to potentially unbounded suits targeting manufacturers of products sold decades ago in situations where traditional common-law and constitutional protections should prevent recovery.”

The cases are Conagra Grocery Products v. California, 18-84, and Sherwin-Williams v. California, 18-86.

Source: https://www.insurancejournal.com/news/west/2018/10/16/504757.htm

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