The Rhode Island Superior Court today ruled that the state must reimburse manufacturers who were forced to pay for “co-examiners” involved in development of a lead-paint abatement plan, costs pushed onto the paint companies before the R.I. Supreme Court dismissed the state’s lawsuit against them.
The latest ruling is another rebuke to the state’s attorneys general (past and present) who dreamed up this idea of suing companies under an expanded “public nuisance” theory of law, trying to shake them down for billions of dollars. The AGs hired private attorneys on contingency to pursue the litigation against the manufacturers (Sherwin-Williams Co., Millennium Holdings LLC and NL Industries.)
From the news release issued by the three defendant companies today:
“The Court got it right,” said Charles H. Moellenberg, Jr., an attorney for The Sherwin-Williams Company. “These companies should not bear the costs of litigation that the Supreme Court said should have been dismissed at the outset ten years ago. This case demonstrates that state and local governments solicited by trial lawyers to file public nuisance lawsuits should recognize that these cases are not cost-free.”
In July 2008, in a long-awaited ruling, the Rhode Island Supreme Court rejected the Attorney General’s public nuisance lawsuit filed nine years earlier against former manufacturers of lead pigment used in residential paint, saying the case should have been dismissed at the beginning. After the jury verdict, the state filed a motion seeking costs of more than $1 million. Following the Supreme Court decision reversing the jury verdict, defendants Sherwin-Williams, NL Industries, Inc., and Millennium Holdings LLC, filed a motion seeking reimbursement of $242,121.21 in costs they paid to court-appointed co-examiners whose work began before the Supreme Court reversal.
In its ruling today, the Superior Court said: “With regard to the actions taken by both parties here, as a matter of law and fairness, the Court finds little merit in the State’s suggestion that the Defendants should bear the burden of paying the Co-Examiner expenses.” The decision added: “The State made a calculated decision to pursue a claim against the Defendants and voluntarily participate in the judicial system, and thus may not invoke sovereign immunity to shield it from the imposition of costs.”
For a copy of the decision, click here.
The ruling should send yet another message to the attorney general’s office in Ohio, which is still litigating a public nuisance claim similar to Rhode Island’s. Richard Cordray was elected last November, and he bears no responsibility for having brought the suit. He would bear the responsibility for additional legal costs if he continues the suit in the face of clear evidence it will fail in the courts.
BTW, it was former Rhode Island Attorney General Sheldon Whitehouse — now a U.S. Senator — who brought the suit against the paint companies, and current AG Patrick Lynch who continued it.
UPDATE (3:15 p.m.): Genova knows the lead paint litigation and players well, and she observes: “Bad news for the RI plaintiff. This motion represented only the first of several that will likely be filed by the defendants to recover other costs and expenses associated with the nine years of litigation. Surely, this will not sit well with the taxpayers of the state.”
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