03 July 2008 16:35 [Source: ICIS news]
By Joe Kamalick?xml:namespace>
On Tuesday the Supreme Court of Rhode Island overturned a lower state court ruling that had held paint companies liable for removal or other remediation of lead-based paints in homes, schools and other structures where children might be exposed.
Estimates of the cost of such a vast remediation effort were as high as $4bn (€2.5bn), according to attorneys involved in the case.
The case was initially filed by a private law firm on behalf of the State of
Paint producers should be liable, the state argued, for related health costs and for removing lead paint where it still exists.
The state government had sought massive compensation from US coatings manufacturers not on usual product liability grounds but on the basis that decades-old lead paint in homes and elsewhere constituted a “public nuisance” which made paint manufacturers liable.
To many, the
“This is a tremendous victory, not only for the paint companies but for the entire business community,” said Don Evans, senior counsel at the American Chemistry Council (ACC).
The court win is significant for manufacturers in general, said Evans, because if the State of
“This was truly a matter that would have overwhelmed the business community in all sorts of areas,” Evans said.
The National Association of Manufacturers (NAM) also hailed the Rhode Island Supreme Court ruling, saying the decision “is a big win for anyone who is concerned with the growing misuse of public nuisance lawsuits”.
The paints and coatings industry - joined by the chemistry council and
The defendants noted that landlords and other property owners who failed to maintain paint coatings - by allowing them to deteriorate, break off and chip - have properly been held liable in state courts.
Holding the original manufacturer liable under public nuisance law, industry argued, was akin to finding an automobile manufacturer responsible when a car owner caused damage or injury because he hadn’t maintained the brakes on his 20-year-old jalopy.
Thomas Graves, vice-president and general counsel at the National Paint and Coatings Association (NPCA), said the
“It is in the public interest that children be protected from exposure to lead, but the court held that is a problem for the state legislature to discern and resolve,” Graves said, citing the
Indeed, as the association pointed out in its brief,
Graves also noted that the
As Rhode Island Supreme Court Chief Justice Frank Williams put it in the ruling:
“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
children.” Rhode Island
The Rhode Island ruling is similar to other public nuisance/liability cases that have been overturned recently in Missouri, New Jersey and Illinois, but for Graves the Rhode Island high court decision is the most damning.
“The Supreme Court in
But Graves believes that the
“This ruling will definitely chill other state attorneys general that were waiting for a decision in
The win in
In that landmark case, the federal high court decided that a $5bn punitive damages ruling against ExxonMobil for the 1989 oil spill was excessive, holding that as a general rule punitive damages should not exceed compensatory damages, which in the Exxon Valdez case were about $500m.
($1 = €0.63)
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