Rhode Island Win Is Just a Battle in the Public Nuisance War To Come

The recent decision of the Supreme Court of Rhode Island in State v. Lead Indus. Ass'n, 898 A.2d. 1234, 1235 (R.I. 2006), was widely perceived by the American business community as a veritable life saver. The court reversed the trial court's judgment that lead pigment producers should be held liable for the potentially billions of dollars required to remove lead-based paint from hundreds of thousands of residences throughout the state. More broadly, the decision seemed to defuse the ominous potential for a new generation of cases based on “public nuisance” arguments exponentially increasing the liability of businesses in many industries.

However, while the court's decision was an important one, it also may give corporate counsel a false sense of security. It is unlikely that law of public nuisance will return anytime soon to the lowly status it held less than 50 years ago when a Michigan appellate court referred to it as “the great grab bag, the dust bin, of the law.” The state tobacco settlements, resting on public nuisance and similar claims and totaling more than $300 billion, still shine brightly for mass products plaintiffs' attorneys. The Rhode Island litigation provided them with important experience and taught them how to try such claims to jury verdicts. So the question facing corporate counsel is what public nuisance threats remain after the Rhode Island decision.

Other States

Other states could ' and probably will ' reach a different decision. Unfortunately for the business community and in-house counsel, the effect of the decision in the Rhode Island litigation offered great risk and little reward. If the Rhode Island Supreme Court had enabled the state's attorney general to collect billions of dollars in order to finance state programs, and allow the use of the state's general funds for other purposes, it was clear that attorneys general of a number of other states would have rushed to the courthouse to file similar litigation. It does not follow, however, that the Rhode Island decision means the end of the threat to pigment and paint manufacturers in other states, much less the end of the threat to other manufacturing and business interests. While there is some indication that this decision will influence other state courts (witness the recent decision by a New Hampshire court in dismissing the public nuisance claim alleged against refiners and former manufacturers of MTBE) the Rhode Island Supreme Court traditionally has not been one of the state supreme courts, such as those more populated states, that have great influence in the courts of other states.

At this time, litigation against manufacturers of lead paint continues in California, and a California appellate court has upheld public nuisance claims against these defendants. Throughout the decades, the California judicial system has initiated many of the legal doctrines, such as market share liability, that have posed the greatest threat to manufacturers. Their decisions often influence other courts. Similarly, Wisconsin courts have allowed public nuisance law to be used against manufacturers. Public nuisance is a vaguely defined and potentially expansive grounds of liability in most states. It would be very risky to assume that these other jurisdictions would necessary follow the decision of the Rhode Island Supreme Court and not that of the appellate courts in California and Wisconsin.

The Rhode Island Decision Is Limited

As strong as the Rhode Island opinion is, it does not prevent a business from having a public nuisance claim asserted against it for the wide variety of activities that businesses engage in other than the distribution of products. Recently, Joshua R. Cohen, the plaintiff's attorney who is representing the City of Cleveland in its public nuisance action against sub-prime mortgage lenders persuasively explained to a group of trial lawyers meeting as part of the American Bar Association's Annual Meeting why his lawsuit, however ludicrous, is not barred by the Rhode Island decision. Even more significantly, corporate counsel must be advised that public nuisance may continue to be asserted in actions seeking to hold businesses liable for global warming, the disposal of hazardous wastes, and other forms of pollution such as air and water pollution. So far trial courts have ruled that claims alleging that American business enterprises should be held liable for global warming have found such claims to be “non-justiciable” political questions that legislatures and administrative agencies, not courts, should handle. Several of these cases have been appealed, however, and the results on the justiciability issue are uncertain. Courts have yet to decide whether these claims satisfy the requirements for public nuisance liability.

It was easier for the Rhode Island Supreme Court to reach the conclusion that public nuisance liability did not extend to an action against lead pigment manufacturers than it would have been if the public nuisance claim had involved any of a number of other products. To corporate counsel's benefit, the court explicitly found that the State had not satisfied the following two requirements of public nuisance law:

• The manufacturers had not interfered “with a right common to the general public”; and
• The manufacturers did not have “control over the instrumentality alleged to have created the nuisance when the damage occurred.”

The court correctly concluded that the concept of “a right common to the general public” was not broad enough to encompass the right of a child to be free from exposure to lead-based paint that usually occurs within the most private and intimate of surroundings, the home she and her parent occupy. For example, a jury might be persuaded that automobiles producing emissions that contribute to global warming violate a public right. In short, the requirement of a violation of a public right, while potentially decisive in the Rhode Island lead pigment/paint litigation, may not prevent future claims alleging public nuisance against other manufacturers.

What About Legislative Remedies?

A state legislature typically has the power to declare any sort of activity to be a public nuisance and indeed, in-house counsel must take note of the long history of state legislatures doing just that throughout American history. A state legislature's enactments in this regard trump the decisions of courts under the common law, so long as the legislative pronouncements do not violate the federal or state constitutions. It is an open question whether a state could retroactively declare a harm resulting from defendants' conduct in the past to be a public nuisance.

Other Similar Collective Liability Theories

The major reason that a public nuisance claim in a parens patriae action was so attractive to states and plaintiffs' attorneys was that it avoided obstacles to recovery that would have prevented individual victims from recovering. For example, in the tobacco litigation, individual victims of tobacco-related diseases were not able to recover because the dangers of cigarette smoking were “common knowledge,” and the cancer victim either knew or should have known about these risks. However, as the first state attorney general to file a product regulatory action against the tobacco industry noted, “[T]he State of Mississippi never smoked a cigarette ' ” Similarly, Rhode Island property-owners almost certainly would not have won in a direct action against the pigment manufacturers, primarily because of their inability to identity the specific producers of the lead pigment that now covers the walls of their respective houses. By describing the harm allegedly sustained by tens of thousands of Rhode Island property owners as a “ collective harm” that constituted a public nuisance, the State sought to circumvent the requirement that a particular victim prove which party caused her individual harm.

Public nuisance is but one of several nontraditional theories that mass plaintiffs' attorneys have attempted to use during past decades to overcome their inability to prove a causal connection between the individual victim and the product manufacturer in actions involving fungible products that cause latent diseases. Others include concurrent causation, alternative liability, enterprise or industry-wide liability, civil conspiracy and concert of action, and the use of statistical sampling in class actions and consolidated actions. Each of these approaches, however, either can only be used only in very limited contexts or has been virtually universally rejected by the courts. Though not grounded in traditional, sound legal precedent, it is doubtful the plaintiffs' bar will forego future efforts to assert public nuisance claims, especially where their ability to prove both legal and actual causation against a product manufacturer is not clear.

In-house counsel must be aware of one serious challenge to the individual causation requirement remains that could pose serious consequences for manufacturers of fungible products that at some point decades after their distribution cause latent illnesses. Market share or risk-contribution liability enables the plaintiff to recover without proving a direct causal connection with a specific manufacturer by apportioning damages based either on the manufacturers' respective market shares or on their market shares considered alongside additional factors, including the manufacturers' other contributions to the distribution and marketing of the product, as well as their respective levels of culpability (allocated by the jury) in doing so.

Actions using risk-contribution analysis or market share liability appear to be the mass plaintiffs' products attorneys “second front” in their attacks on lead pigment and paint manufacturers. The Wisconsin Supreme Court has approved the use of risk-contribution analysis in actions against lead pigment manufacturers. Perhaps more ominously, state legislatures, such as the one in Maryland, have repeated considered legislation that would apply market share liability or risk-contribution in actions against lead pigment manufacturers. The likely impact of the Rhode Island Supreme Court's decision in Lead Indus. Ass'n will be to focus attention away from public nuisance actions and toward claims against industry based on market share or risk-contribution liability. Corporate counsel therefore should be prepared to contest the expansion of market share or risk contribution theories, as well as dubious interpretations of the tort of public nuisance.

Conclusion

It is difficult to know which litigation cycles will come next to test the boundaries of public nuisance law. Will it be global warming claims against product manufacturers? Obesity claims regarding fast-foods? Or will it be claims that are more traditional environmental claims, with new arguments that federal pre-emption does not apply? Nor is it easy to predict in which courts such litigation will occur. Will it be in a jurisdiction where the statutory definition of nuisance is far more vague than the opinion of the Rhode Island Supreme Court? Or in any one of a number of other states where the tort is defined in a more open-ended way than elsewhere in the United States? With a tort as traditionally amorphous and ill-defined as public nuisance, one can never tell for sure. However, this much is certain: barring comprehensive legislative or judicial reform, the next wave of public nuisance litigation probably is already in the pipeline.

Donald G. Gifford is the Edward M. Robertson Research Professor of Law at the University of Maryland School of Law whose principal research and teaching specialty is mass products torts. Several courts, including the Rhode Island Supreme Court and the New Jersey Supreme Court, have relied on Professor Gifford's scholarship on public nuisance when they ruled that lead pigment or lead paint manufacturers could not be held liable on such a claim.

The recent decision of the Supreme Court of Rhode Island in State v. Lead Indus. Ass ' n, 898 A.2d. 1234, 1235 (R.I. 2006), was widely perceived by the American business community as a veritable life saver. The court reversed the trial court's judgment that lead pigment producers should be held liable for the potentially billions of dollars required to remove lead-based paint from hundreds of thousands of residences throughout the state. More broadly, the decision seemed to defuse the ominous potential for a new generation of cases based on “public nuisance” arguments exponentially increasing the liability of businesses in many industries.

However, while the court's decision was an important one, it also may give corporate counsel a false sense of security. It is unlikely that law of public nuisance will return anytime soon to the lowly status it held less than 50 years ago when a Michigan appellate court referred to it as “the great grab bag, the dust bin, of the law.” The state tobacco settlements, resting on public nuisance and similar claims and totaling more than $300 billion, still shine brightly for mass products plaintiffs' attorneys. The Rhode Island litigation provided them with important experience and taught them how to try such claims to jury verdicts. So the question facing corporate counsel is what public nuisance threats remain after the Rhode Island decision.

Other States

Other states could ' and probably will ' reach a different decision. Unfortunately for the business community and in-house counsel, the effect of the decision in the Rhode Island litigation offered great risk and little reward. If the Rhode Island Supreme Court had enabled the state's attorney general to collect billions of dollars in order to finance state programs, and allow the use of the state's general funds for other purposes, it was clear that attorneys general of a number of other states would have rushed to the courthouse to file similar litigation. It does not follow, however, that the Rhode Island decision means the end of the threat to pigment and paint manufacturers in other states, much less the end of the threat to other manufacturing and business interests. While there is some indication that this decision will influence other state courts (witness the recent decision by a New Hampshire court in dismissing the public nuisance claim alleged against refiners and former manufacturers of MTBE) the Rhode Island Supreme Court traditionally has not been one of the state supreme courts, such as those more populated states, that have great influence in the courts of other states.

At this time, litigation against manufacturers of lead paint continues in California, and a California appellate court has upheld public nuisance claims against these defendants. Throughout the decades, the California judicial system has initiated many of the legal doctrines, such as market share liability, that have posed the greatest threat to manufacturers. Their decisions often influence other courts. Similarly, Wisconsin courts have allowed public nuisance law to be used against manufacturers. Public nuisance is a vaguely defined and potentially expansive grounds of liability in most states. It would be very risky to assume that these other jurisdictions would necessary follow the decision of the Rhode Island Supreme Court and not that of the appellate courts in California and Wisconsin.

The Rhode Island Decision Is Limited

As strong as the Rhode Island opinion is, it does not prevent a business from having a public nuisance claim asserted against it for the wide variety of activities that businesses engage in other than the distribution of products. Recently, Joshua R. Cohen, the plaintiff's attorney who is representing the City of Cleveland in its public nuisance action against sub-prime mortgage lenders persuasively explained to a group of trial lawyers meeting as part of the American Bar Association's Annual Meeting why his lawsuit, however ludicrous, is not barred by the Rhode Island decision. Even more significantly, corporate counsel must be advised that public nuisance may continue to be asserted in actions seeking to hold businesses liable for global warming, the disposal of hazardous wastes, and other forms of pollution such as air and water pollution. So far trial courts have ruled that claims alleging that American business enterprises should be held liable for global warming have found such claims to be “non-justiciable” political questions that legislatures and administrative agencies, not courts, should handle. Several of these cases have been appealed, however, and the results on the justiciability issue are uncertain. Courts have yet to decide whether these claims satisfy the requirements for public nuisance liability.

It was easier for the Rhode Island Supreme Court to reach the conclusion that public nuisance liability did not extend to an action against lead pigment manufacturers than it would have been if the public nuisance claim had involved any of a number of other products. To corporate counsel's benefit, the court explicitly found that the State had not satisfied the following two requirements of public nuisance law:

• The manufacturers had not interfered “with a right common to the general public”; and
• The manufacturers did not have “control over the instrumentality alleged to have created the nuisance when the damage occurred.”

The court correctly concluded that the concept of “a right common to the general public” was not broad enough to encompass the right of a child to be free from exposure to lead-based paint that usually occurs within the most private and intimate of surroundings, the home she and her parent occupy. For example, a jury might be persuaded that automobiles producing emissions that contribute to global warming violate a public right. In short, the requirement of a violation of a public right, while potentially decisive in the Rhode Island lead pigment/paint litigation, may not prevent future claims alleging public nuisance against other manufacturers.

What About Legislative Remedies?

A state legislature typically has the power to declare any sort of activity to be a public nuisance and indeed, in-house counsel must take note of the long history of state legislatures doing just that throughout American history. A state legislature's enactments in this regard trump the decisions of courts under the common law, so long as the legislative pronouncements do not violate the federal or state constitutions. It is an open question whether a state could retroactively declare a harm resulting from defendants' conduct in the past to be a public nuisance.

Other Similar Collective Liability Theories

The major reason that a public nuisance claim in a parens patriae action was so attractive to states and plaintiffs' attorneys was that it avoided obstacles to recovery that would have prevented individual victims from recovering. For example, in the tobacco litigation, individual victims of tobacco-related diseases were not able to recover because the dangers of cigarette smoking were “common knowledge,” and the cancer victim either knew or should have known about these risks. However, as the first state attorney general to file a product regulatory action against the tobacco industry noted, “[T]he State of Mississippi never smoked a cigarette ' ” Similarly, Rhode Island property-owners almost certainly would not have won in a direct action against the pigment manufacturers, primarily because of their inability to identity the specific producers of the lead pigment that now covers the walls of their respective houses. By describing the harm allegedly sustained by tens of thousands of Rhode Island property owners as a “ collective harm” that constituted a public nuisance, the State sought to circumvent the requirement that a particular victim prove which party caused her individual harm.

Public nuisance is but one of several nontraditional theories that mass plaintiffs' attorneys have attempted to use during past decades to overcome their inability to prove a causal connection between the individual victim and the product manufacturer in actions involving fungible products that cause latent diseases. Others include concurrent causation, alternative liability, enterprise or industry-wide liability, civil conspiracy and concert of action, and the use of statistical sampling in class actions and consolidated actions. Each of these approaches, however, either can only be used only in very limited contexts or has been virtually universally rejected by the courts. Though not grounded in traditional, sound legal precedent, it is doubtful the plaintiffs' bar will forego future efforts to assert public nuisance claims, especially where their ability to prove both legal and actual causation against a product manufacturer is not clear.

In-house counsel must be aware of one serious challenge to the individual causation requirement remains that could pose serious consequences for manufacturers of fungible products that at some point decades after their distribution cause latent illnesses. Market share or risk-contribution liability enables the plaintiff to recover without proving a direct causal connection with a specific manufacturer by apportioning damages based either on the manufacturers' respective market shares or on their market shares considered alongside additional factors, including the manufacturers' other contributions to the distribution and marketing of the product, as well as their respective levels of culpability (allocated by the jury) in doing so.

Actions using risk-contribution analysis or market share liability appear to be the mass plaintiffs' products attorneys “second front” in their attacks on lead pigment and paint manufacturers. The Wisconsin Supreme Court has approved the use of risk-contribution analysis in actions against lead pigment manufacturers. Perhaps more ominously, state legislatures, such as the one in Maryland, have repeated considered legislation that would apply market share liability or risk-contribution in actions against lead pigment manufacturers. The likely impact of the Rhode Island Supreme Court's decision in Lead Indus. Ass'n will be to focus attention away from public nuisance actions and toward claims against industry based on market share or risk-contribution liability. Corporate counsel therefore should be prepared to contest the expansion of market share or risk contribution theories, as well as dubious interpretations of the tort of public nuisance.

Conclusion

It is difficult to know which litigation cycles will come next to test the boundaries of public nuisance law. Will it be global warming claims against product manufacturers? Obesity claims regarding fast-foods? Or will it be claims that are more traditional environmental claims, with new arguments that federal pre-emption does not apply? Nor is it easy to predict in which courts such litigation will occur. Will it be in a jurisdiction where the statutory definition of nuisance is far more vague than the opinion of the Rhode Island Supreme Court? Or in any one of a number of other states where the tort is defined in a more open-ended way than elsewhere in the United States? With a tort as traditionally amorphous and ill-defined as public nuisance, one can never tell for sure. However, this much is certain: barring comprehensive legislative or judicial reform, the next wave of public nuisance litigation probably is already in the pipeline.

Donald G. Gifford is the Edward M. Robertson Research Professor of Law at the University of Maryland School of Law whose principal research and teaching specialty is mass products torts. Several courts, including the Rhode Island Supreme Court and the New Jersey Supreme Court, have relied on Professor Gifford's scholarship on public nuisance when they ruled that lead pigment or lead paint manufacturers could not be held liable on such a claim.