The American Tort Reform Foundation’s latest “Judicial Hellholes” report adds a useful new chapter, a review of the unjust connection between politically ambitious state attorneys general and private attorneys they hire on a continency basis to sue business on behalf of the state. The short essay is entitled, “Dangerous Liaison.” Thesis:

[The] actions of a handful of state attorneys general also contribute to growing concerns in the business community about the ability of defendants to receive fair trials. This happens when what are essentially private lawsuits are filed, often in a plaintiff-biased local court, with the backing of the state government and a strong incentive to obtain the highest monetary award possible. It’s a system of legal kickbacks known as “pay to play,” wherein lawyers who contribute to the campaigns of the state’s highest ranking attorney can then get a contract for a piece of the action and, in some cases, develop the action themselves and get a go-ahead to pursue it in the state’s name.

Cited are examples of this undemocratic, abusive process in Mississippi, Ohio, West Virginia and Rhode Island, the last state being notable for the public nuisance suit against lead paint manufacturers, eventually thrown out by the state Supreme Court.

Having covered the R.I. lead-paint litigation, Jane Genova of the Law and More blog also follows cases involving ambitious politicians turning to contingency fee arrangements to sue business. She recently noted another case of private lawyers being hired on spec to do the state’s work in Pennsylvania. From “Contingency – Philly Judge allows it in govt case against BigPharma“:

The use of contingency in cases filed by government entities probably will eventually wind up in the U.S. Supreme Court – and sooner than later with the emboldened state attorneys general and plaintiff bar. 

The latest ruling on that controversial issue has been by a Philadelphia County Court of Common Pleas.  That state judge Howland Abramson gave his okay to the participation of private law firm Bailey Perrin Bailey of Houston in the lawsuit filed by Pennsylvania Governor Ed Rendell against Janssen Pharmaceuticals.  The firm is accused of off-labeling marketing of drug Risperdal. 

As John O’Brien reports in LEGAL NEWSLINE, the defendant objects to the use of contingency based on the argument of violation of due process.  O’Brien states, “The Due Process Clause requires Rendell to be guided by the sense of public responsibility for the attainment of justice, Janssen says. ‘The risk that Bailey Perrin’s financial stake in the outcome will affect government decision-making in connection with this action is real and serious.’”  A number of legal experts view the due-process argument as the strongest against contingency in cases filed by government entities.

Manufacturers are also closely watching a case in California where the county of Santa Clara used contingency fee attorneys in lead-related lawsuits against ARCO and Sherwin-Williams.

The city of Columbus, Ohio, has voluntarily ended its litigation against paint manufacturers, seeing no expectation of success after the Rhode Island Supreme Court unanimously rejected the state’s public nuisance lawsuit against the companies.

From a news release:

The City of Columbus followed settled law by asking the court to dismiss its lawsuit,” said Charles H. Moellenberg, Jr., an attorney for The Sherwin-Williams Company, speaking on behalf of defendants Sherwin-Williams and Millennium Holdings, LLC. “The lawsuit was legally and factually wrong in suing companies that lawfully made products that the city, painters and consumers demanded historically as the best on the market.”

The notice of voluntary dismissal is here.

State Supreme Courts in Missouri and New Jersey and a jury in Wisconsin have also rejected public nuisance lawsuits.

“The lawyers who sold Columbus on this lawsuit made much of similar litigation in Rhode Island,” Moellenberg said. “Now, the unanimous ruling by the Rhode Island Supreme Court last week that dismissed the Rhode Island case has confirmed that public nuisance lawsuits are ill-advised and without merit. Extraordinary progress has been made in addressing lead risks to children from all sources. Enforcement of current Ohio law requiring property owners to keep their properties in a safe condition and free of hazards will finish the job.”

• Columbus Dispatch: “Columbus drops lawsuit against lead-paint makers“
• Associated Press: “Columbus drops lead paint lawsuit“
• Public Nuisance Fairness Coalition, news release.
• Jane Genova, Law and More blog, commentary here and here.
• The Ohio Attorney General’s office continues to whistle past the courthouse as spokesman Jim Gravelle says the state will continue its own public nuisance suit. It would be nice if Attorney General Nancy Rogers would explain more thoroughly to the public (via the media) how she could conceivably expect the state to prevail.

Last week amid all the postings on the Rhode Island Supreme Court’s ruling that rejected the state’s lawsuit against paint manufacturers, we noted the similarity of comments from Attorney General Patrick Lynch, former AG and now U.S. Senator Sheldon Whitehouse, and the contingency fee attorneys at Motley Rice who manned the legal assault (and campaign contributions): They were all acting “for the children.”

Now we see that Attorney General Lynch last month was elected to be chairman of the National Association of Attorneys General, or NAAG. (The old joke in state political circles is that NAAG stands for National Association of Aspiring Governors.)

Anyway, in the news release announcing his election, Lynch declared his goals for the year:

“I am enlisting the assistance of my colleagues and good corporate citizens, and marshalling the resources of NAAG and other organizations, to increase protections, decrease risks, and encourage a more just and secure world for our children,” Attorney General Lynch said. “Technology has created a borders-free, global society that is advantageous in many respects. But it also exposes our children to potentially dangerous influences and information, and makes them more vulnerable to those who seek to exploit, victimize, and harm them. We will continue our work in fostering a safer social networking environment and in preventing predators and other criminals from using cyberspace as their own personal playgrounds.”

Would it be too much to ask for enforcement of the law to create a more just and secure world for everybody, adults, too?

P.S. The Providence Journal prints a letter from Darren McKinney, communications director for the American Tort Reform Association, entitled, “Lynch, Whitehouse hurt R.I. economy.” Excerpt:

Lead-paint “products poisoned our infants and children — and continue to poison our infants and children — while bringing great profits to the companies that made and sold them,” Lynch said in disagreeing with the court. Yet the defendant companies had voluntarily ended sales of such products in 1955, long before 1978 government regulations required them to. Thus a reasonable person might conclude that property owners, not the former makers of then-perfectly legal products should more fairly be asked to shoulder the burden for lead-paint abatement today.

In any case, it’s no surprise that Mr. Lynch’s activist, litigious attitude, like that of his predecessor, Sheldon Whitehouse (now a U.S. senator), has helped keep Rhode Island’s rate of real GDP growth well below the national average while the unemployment rate remains considerably higher.

Rhode Island Attorney General Patrick Lynch responds with bluster and abuse to the state Supreme Court’s 4-0 ruling throwing out his lawsuit against paint manufacturers. From his statement:

This case was litigated in the Superior Court for more than eight years. Despite the multi-million dollar lead industry-funded defense waged by an army of more than 100 lawyers, my office proved to the satisfaction of a unanimous jury that the three defendants were liable for the public nuisance that their products created in Rhode Island. Those products poisoned our infants and children – and continue to poison our infants and children – while bringing great profits to the companies that made and sold them. Today, the Supreme Court ruled that these defendants do not have to clean up the mess they have made. I find this legally and fundamentally wrong.  As important, I find it impossible to explain to the kids who have been and will continue to be lead poisoned, to the parents and families harmed and suffering as a result, and to everyone trying on their own, and at their own expense, to protect our children from these defendants’ products.

But, then, as the Supreme Court found, the state did not prove the companies made “the mess,” as Lynch puts it. The justice rejected the causal relationship Lynch claimed.

Then there’s Lynch’s use of appeal, “for the children,” as the ultimate good he would substitute for the rule of law. “For the children” has replaced patriotism as the last refuge of the …Well, you know.

It’s the same appeal that Lynch’s contingency-fee attorneys at Motley Rice LLC, the people who really ran the show, made in their news release:

We are very disappointed that the Rhode Island Supreme Court chose to ignore the verdict of a jury of Rhode Island citizens and the judgment of a preeminent trial judge in order to absolve the lead paint companies of any responsibility for contaminating thousands of houses in Rhode Island with a poison that has injured tens of thousands of Rhode Island children.

These are political arguments, not legal arguments. But then, it’s politics, not the law, that drives self-promoting attorneys general to file these kind of suits in the first place.

UPDATE (5:20 p.m.): We had missed this Providence Journal story, which includes comments not reported elsewhere. For example, from the office of U.S. Senator Sheldon Whitehouse, who as AG filed the suit:

“There is no doubt that lead paint manufactured by these companies caused grave harm to thousands of Rhode Island children,” Whitehouse said. “It has for years been Rhode Island’s worst public health problem for children.”

Sherwin-Williams stopped producing lead-based paint 50 years ago. On point is this comment from the company’s attorney, Charles Moellenberg: “The Supreme Court went out of its way to make it clear that Rhode Island children are not left without a remedy — their remedy is the property owners.”  

To avoid making a public nuisance of ourselves, here’s a list of today’s posts on the Rhode Island Supreme Court’s opinion on the state’s lead paint lawsuit.

• Twisting Public Nuisance Laws
• Finally, for More on the R.I. Ruling, Go Here
• More on Lead Paint, Almost 800 Years Worth
• Our Thoughts Turn to Cleveland, Leadenly
• The NAM’s Statement on the R.I. Lead Paint Ruling
• Statement from the Defendants in R.I. Lead Case
• The NAM’s Involvement in Rhode Island Decision
• R.I. Court Reins In Abuse of Public Nuisance Laws

And again…

• Case summary from the Rhode Island Supreme Court
• Opinion (.pdf)
• Dow-Jones Newswires: “RI High Court Reverses Ruling Against Paint Cos“
• Reuters: “Rhode Island top court overturns lead paint ruling“
• Providence Journal: “Update: Landmark lead-paint judgment overturned

The Law and More blog, the go-to place for coverage of the long and painful history of the lead-paint litigation. Lots of commentary and insider insight from Jane Genova. We especially liked this observation from one of her regular legal sources:

Inside the Beltway Attorney, off the record:

“The Chief Justice’s quote from learned U.S. Supreme Court Justice Benjamin Cardozo is very telling about the perception of Judge Silverstein’s apparent bent in this protracted case:

“‘The judge … is not to innovate at pleasure.  He is not a knight-errant roaming at will in pursuit of his own ideal of beauty or of goodness.  He is to draw his inspiration from consecrated principles.  He is not to yield to spasmodic sentiment, to vague and unregulated benevolence.  He is to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to the primordial necessity of order in the social life.’

“Now, unburdened with the distraction of this case, Rhode Island can get on with the serious business of reducing its current 651 annual cases of childhood lead poisoning to zero.  That would be the true pursuit of goodness.”

And there’s more at Point of Law.com here and here.

UPDATE (4:08 p.m.): A statement from Karen Harned, executive director of the NFIB Small Business Legal Center:

Today’s decision by the Rhode Island Supreme Court is a major victory for all business owners. The court rejected the attempt of trial lawyers to dramatically expand tort liability for business owners by imposing a new ‘public nuisance’ theory of liability. In this case, trial lawyers were trying to hold paint manufacturers liable for lead paint exposure despite the fact that at the time the lead paint was being made and sold, it was a lawful product. This was a clear attempt by trial lawyers to attack manufacturers for unfortunate consequences far beyond the manufacturers’ control. The Rhode Island Supreme Court rightfully rejected this reasoning and reaffirmed that in order to hold a business liable, there must be at minimum a causal connection between actions taken by a business defendant and the harm caused to the claimants.

UPDATE (5:35 p.m.): Ted Frank has more commentary and links at Overlawyered.com, here. He remarks:  “Attorney General Patrick Lynch is unhappy about the legal setback to his campaign contributors constituents.” Also worth noting: “Existing abatement efforts already required of landlords under Rhode Island law mean that lead paint exposure is at an all-time low in the state–evidence that was excluded at trial.”

From the National Association of Manufacturers:

NAM CALLS RHODE ISLAND SUPREME COURT LEAD PAINT REVERSAL A VICTORY FOR MANUFACTURERS AND CONSUMERS

Landmark Ruling Is a Big Loss for Public Nuisance Claims

WASHINGTON, D.C., July 1, 2008 – The National Association of Manufacturers (NAM) applauded today’s decision by the Rhode Island Supreme Court to overturn the trial court verdict against lead paint manufacturers.

“The court essentially shut down the use of product-based nuisance claims in Rhode Island,” said NAM President and CEO John Engler. “Today’s verdict preserves predictability and logic within our civil courts and is a victory for manufacturers and consumers. The Court’s decision is similar to decisions by Supreme Courts in Missouri, New Jersey and Illinois and adds to the momentum toward rejecting product-based public nuisance claims,” he said.

“This decision is a testament to applying the rule of law. We would welcome more state and federal judiciaries to follow the lead of these courts in the ever-growing efforts to expand the limits of liability,” he continued.

“The court clearly understands the risks posed when public nuisance claims are used to displace traditional causes of action, such as product liability lawsuits or thoughtful public policy decisions. Today’s decision is a big win for anyone who is concerned with the growing misuse of public nuisance lawsuits. The NAM will continue to actively oppose the distortion of public nuisance theory in other venues and with other products,” Engler concluded.

The NAM filed an amicus brief in this case and noted the court’s statement that it found all amicus briefs helpful in reaching its decision.

From LeadLawsuits.com, a website sponsored by the companies involved in the lead paint litigation, a statement.

“Today’s ruling is a landmark victory for common sense and for responsible companies that did the right thing,” said Charles H. Moellenberg, Jr., an attorney for The Sherwin-Williams Company, speaking on behalf of defendants Sherwin-Williams and Millennium Holdings, Inc. “This case never should have been filed – it was factually wrong and legally flawed. A company should not be held liable when there is no proof that it did anything wrong. It has taken nine years and two juries, but the Supreme Court’s decision today puts public nuisance law in Rhode Island squarely in line with the overwhelming majority of jurisdictions of the United States.”

From our Legal Beagle search engine:

On January 30, the NAM and other business groups filed an amicus brief urging the Rhode Island Supreme Court to reverse the verdict because the trial court improperly rewrote the law of public nuisance. Our brief argues that public nuisance law should never be used to replace product liability law. Traditional standards of public nuisance law require that there be an injury to a common public right, that there must be some conduct by the defendants that created a public nuisance, and not merely injury, and that the defendants must have some control over the nuisance, both for imposing liability and for providing a remedy of abatement. The lower court also ignored the need to show proximate cause between a particular manufacturer’s actions and an injury.

Allowing this suit would create unpredictable liability for manufacturers in situtations where they have no control over the ultimate use and/or maintenance of their products,a nd constitutes regulation by litigation. The NAM has been very active in opposing the attempted expansion of the public nuisance theory of liability by plaintiffs’ lawyers who are attempting to avoid the straightforward requirements of product liability law. Similar cases have been brought against manufacturers of firearms, cigarettes, automobiles, gasoline additives, chemicals and electricity. Many of these have been rejected.

Related Documents:
NAM brief (1/30/2008)
Press release (1/30/2008)

The other amici were the Coalition for Litigation Justice, Inc., the National Federation of Independent Business Legal Foundation, the American Chemistry Council, the American Insurance Association, National Association of Mutual Insurance Companies, and American Tort Reform Association.

The Rhode Island Supreme Court today handed down an important ruling that should discourage government officials from abusing public-nuisance statutes by stretching them into all-purpose legal weapons against whomever happens to be the target of the moment.

The court ruled unananimously in State of Rhode Island v. Lead Industries Association, Inc., et al., overturning the 2006 jury verdict that punished paint manufacturers (NL Industries, Inc., The Sherwin-Williams Co., and Millennium Holdings LLC) for violating the state’s public nuisance laws. State Attorney General Sheldon Whitehouse, now a Democratic U.S. Senator, brought the suit in 1999 and after a complicated legal process, the jury found the companies found responsible for lead paint contamination in Rhode Island homes and buildings.

We would summarize the AG’s argument this way: Some Rhode Island structures have lead paint in them, lead paint is dangerous, and even though the state can’t prove these manufacturers had anything to do with specific incidents of lead paint exposure, they’re kind of generally at fault, really. Or at least they should be. And so these bad actors should pay up for creating a public nuisance. How much? Attorney General Patrick Lynch outlined a $2.4 billion remediation plan last year to be paid for by manufacturers.

The court’s tough opinion rejects those arguments:

[We] conclude that the state has not and cannot allege any set of facts to support its public nuisance claim that would establish that defendants interfered with a public right or that defendants were in control of the lead pigment they, or their predecessors, manufactured at the time it caused harm to Rhode Island children.

In reaching this conclusion, we do not mean to minimize the severity of the harm that thousands of children in Rhode Island have suffered as a result of lead poisoning. Our hearts go out to those children whose lives forever have been changed by the poisonous presence of lead. But, however grave the problem of lead poisoning is in Rhode Island, public nuisance law simply does not provide a remedy for this harm. The state has not and cannot allege facts that would fall within the parameters of what would constitute public nuisance under Rhode Island law. As set forth more thoroughly herein, defendants were not in control of any lead pigment at the time the lead caused harm to children in Rhode Island, making defendants unable to abate the alleged nuisance, the standard remedy in a public nuisance action. Furthermore, the General Assembly has recognized defendants’ lack of control and inability to abate the alleged nuisance because it has placed the burden on landlords and property owners to make their properties leadsafe. 

Key links:

• Case summary from the Rhode Island Supreme Court
• Opinion (.pdf)

• Dow-Jones Newswires: “RI High Court Reverses Ruling Against Paint Cos“
• Reuters: “Rhode Island top court overturns lead paint ruling“
• Providence Journal: “Update: Landmark lead-paint judgment overturned