The Rhode Island Disease: An Assault on the Rule of Law
[This essay was originally published by the New Jersey Star Ledger on April 10th, 2006.]
A little more than a month ago, a jury in Rhode Island found lead paint manufacturers liable for the "public nuisance" created by the presence of lead-based paint in several hundred thousand buildings around the state. The verdict came despite evidence that these manufacturers had stopped selling paint containing lead pigment more than a half-century ago; their product was perfectly legal when they sold it; and childhood exposure to lead is not widespread and has dropped dramatically in recent years.
No evidence was submitted to the jury that any particular property in Rhode Island contained lead paint, and no notice was provided to property owners that their buildings have been declared to be public nuisances.
The details of this court case tell us a lot about what is wrong with America's legal system today. And unfortunately, the Rhode Island Disease has already spread to other states, including New Jersey.
The danger of lead pigment in paint is that children may eat paint chips that flake off of walls or inhale dust that contains lead. According to the Rhode Island and New Jersey government Web sites, the best solution is to paint over old walls with new, non-lead-based paint and to repair deteriorating paint. According to most public health officials, removal of lead-based paint is rarely recommended because it turns intact lead paint into lead dust, thereby increasing the risk of inhalation.
The New Jersey Dept. of Human Services Web site even points out that deteriorating lead paint is not the only potential source of childhood lead poisoning and that there are other, more hidden, sources of lead exposure. Lead from leaded gasoline, though long banned, still persists in dirt on New Jersey schools and playgrounds where children play, the department warns. Thus, while deteriorated lead paint is seemingly the most obvious source of lead poisoning, it is scientifically unsound to assume it is the only source.
The Rhode Island case is also controversial because that state's attorney general hired a high-powered law firm whose appetite for contingent fee recoveries was whetted in the tobacco litigation. That firm will receive nearly 17 percent of the damages awarded to Rhode Island. The issue of whether such contingent fee agreements are lawful is now before the Rhode Island Supreme Court.
The same firm has filed a similar suit in New Jersey, also on a contingent fee basis, on behalf of 26 cities, boroughs, and townships using the same public nuisance theory advanced in Rhode Island. In 2002, the New Jersey trial court dismissed the case and refused to let it proceed to trial, but the Appellate Division reversed that decision in August 2005. That decision is now on appeal to the New Jersey Supreme Court.
In addition to New Jersey, the Rhode Island Disease has already spread to California, Missouri, and Wisconsin. The legal precedent set in Rhode Island may inspire similar results in these cases and the filing of even more cases in other states. If billion-dollar verdicts multiply, paint companies will have to raise their prices, cut worker wages, or even go out of business or file for bankruptcy.
And after paint companies, a long line of other companies that allegedly contribute to "public nuisances" will be targeted by the plaintiff's bar. The pharmaceutical industry is concerned about exactly that. In New Jersey, amicus briefs were filed by Johnson & Johnson, Pfizer, Inc., Merck & Company, Inc., and Bristol-Myers Squib Company on behalf of paint manufacturers.
For decades, liability for defective products has been governed by carefully crafted state product liability laws, because a stable and predictable legal system is an essential part of our thriving economy. But these lead paint cases threaten to undermine that stability by making the rules of liability unpredictable, subject to change at the verdict of any jury.
To see how dangerous legal instability can be to a free society, one has only to look at foreign dictatorships, where the "law" is whatever strikes the fancy of the rulers. Under those systems, there are no clear standards of what is legal and what is illegal; and what yesterday was a legal business practice can today be branded a crime, with punishment and confiscation of the business as a result.
Most Americans probably think something like that can't happen in the U.S. The state of Rhode Island has shown it can. If the Rhode Island Disease is allowed to spread to other states, it will undermine not just our economy, but all our freedoms and rights. Let's hope our elected officials, judges, and jurors won't let that happen.
Maureen Martin (firstname.lastname@example.org), an attorney, is senior fellow for legal affairs of The Heartland Institute.