Law Suits: Litigation, not lead, is the real poison

Litigation, not lead, is the real poison

December 8, 2007
By Joe Nocera

‘If I don’t bring the lead paint industry to its knees in three years, I will give them my boat.” So said Ronald Motley to The Dallas Morning News in the autumn of 1999 – and really, what a crass thing to say.

But understandable, too: In addition to being the owner of a very large yacht, Motley is also one of the preeminent plaintiffs’ lawyers in the United States, the titular head of a 70-lawyer firm, Motley Rice, based in Charleston, South Carolina.

At the time of that interview, Motley was on top of the world. He had just spearheaded the drive against the tobacco industry, resulting in a $246 billion settlement with 46 states. His piece of the action was unlike any contingency fee ever seen – almost surely in the billions.

“Retire?” he scoffed in the interview. “There are too many corporate crooks out there manufacturing dangerous products and injuring kids as a result.” He vowed to use his tobacco winnings to go after more bad guys, like the ones populating the paint industry.

That he has. In the wake of the Merck-Vioxx column I wrote a few weeks ago – in which I took the position that plaintiffs’ lawyers aren’t always on the side of the angels – I was deluged with e-mail messages from readers who said, in effect, “Oh yes they are!”

And up to a point, I would agree. Who can argue with the billions of dollars the plaintiffs’ bar extracted from the big banks that enabled Enron? But for every Enron, there are cases where lawyers abuse the legal system, take advantage of society’s ingrained suspicion of companies, and force them to pay large sums despite lacking that key ingredient known as evidence. In these cases, litigation can look more like an income redistribution racket than a search for justice.

So I come forward today with a new example of litigation run amok: Motley’s lead paint litigation.

Lead is poisonous. We all know that, though a century ago, we thought that people needed to have a lot of lead in their system for it to present a health problem. Now we know that lead can pose a danger even in small doses, especially for babies. Today, any child who has more than 10 milligrams per deciliter in his or her system is considered to have an elevated blood lead level.

Here’s what else we know: how to get the lead problem under control. In the mid-1970s, the U.S. government passed laws eliminating lead in gasoline, paint and tin cans. States and cities passed laws mandating that landlords keep their properties freshly painted, so that old lead paint chips would not fall off and be eaten by children. Many countries have followed suit.

“What we have succeeded in doing in this country is reduce the incidence of lead poisoning by 90 percent and the blood lead levels by 90 percent,” said Philip Landrigan, the head of the Department of Community and Preventive Medicine at Mount Sinai School of Medicine in New York. This, he added, constituted “a great public health triumph.”

But although lead was outlawed in paint in 1978 – and though many paint makers had removed it even earlier than that – the lawsuits began in 1987. Most were product liability suits that claimed the paint companies had known that lead was dangerous and had therefore knowingly harmed the consumer. Others were suits brought on behalf of individuals who said they had suffered damage from their exposure to lead, or by government agencies seeking to finance childhood lead exposure programs.

The cases went nowhere, for two primary reasons. First, it was hard to make the case in court that the companies had done anything wrong. Yes, there were “bad documents” – there are always bad documents – but most of them were a half a century old, as the science around lead was emerging. They mainly showed that the Lead Industries Association was less than keen about embracing the emerging consensus about the dangers of lead to small children. But the industry didn’t try to cover up the science: it voluntarily took lead out of interior paint in the 1950s, and when the ban came, most of the players were already in compliance.

I realize that many people think companies should rush to abandon legal products at the first whiff of a problem. But if that were really the standard, the shelves would be bare.

The second problem is that it was impossible to know which paint had been used on a particular house. For most judges, that was the real deal-breaker. For as long as there has been product liability law, it has been rooted in the notion that to sue a wrongdoer, you have to know who the wrongdoer is. Plaintiffs’ lawyers tried to argue that since all the manufacturers used lead paint, they were all guilty – and their guilt should be proportional to their market share. This was almost universally rejected by the courts.

And there things stood until Motley Rice arrived on the scene. In Rhode Island, where the firm has an office – and lots of political ties – it agreed to join forces with the state attorney general’s office, just as it had in the tobacco case. It would do the work, and if it won anything, it would take 16.7 percent of the proceeds. A lawyer named Fidelma Fitzpatrick came up with the most novel theory yet: the state should sue the lead companies on the grounds that lead paint was a “public nuisance.” It was so far-fetched that another lawyer in the office would later tell a reporter that, at first, they called it “Fidelma’s Wacky Idea.”

Fitzpatrick explained to me that she wanted to get away from “the personal injury stuff,” so she started to think about lead as “an environmental contamination case.” Since the substance was still so prevalent, it was a “public nuisance” and therefore all the companies were guilty of creating that nuisance. See how easy that was? Suddenly, the case was no longer about an individual who had been harmed by lead – or an absentee landlord who hadn’t maintained his property. It was about those dastardly paint makers that had put lead in paint.

Armed with this new theory, Motley Rice went to trial in Rhode Island. Hung jury. Then, in 2006, the case was retried – and Motley Rice won. “Evidence?” said Jane Genova, a blogger who has followed the case closely. “There was no evidence. The judge’s instructions said you didn’t need evidence.” If the jurors found that lead paint created a public nuisance, then they should find for the plaintiffs. Sure enough, they did. It didn’t help that the companies didn’t put on a defense, so sure were they of victory.

In the past year, it has gotten even worse for the defendants, at least in Rhode Island. The state recently introduced an abatement plan that would require the companies to pay for the inspection of 250,000 homes and remove lead from most of them. The estimated cost for doing this is $2.4 billion, a hefty chunk of which will go to the lawyers, of course. Never mind that for the majority of homes, the better and cheaper solution is to keep them maintained.

Here’s the other thing that happens when the plaintiffs’ lawyers see the chance to bring an industry “to its knees,” to borrow Motley’s felicitous phrase: Motley Rice and other big-time plaintiffs’ lawyers have raced all over the country, trying to get other jurisdictions interested in suing the same defendants on the same grounds. They have had less luck. This past summer, the public nuisance theory was rejected by high courts in New Jersey and Missouri. In Wisconsin, two high-profile trials were held this year; the plaintiffs lost them both.

“I think New Jersey is going to be an aberration,” Fitzpatrick said. She made it sound as if her firm remained undeterred – since, after all, it is on the side of the angels. “There is no doubt they knew,” she said of the companies. When I brought up her contingency fee, she pretty much bit my head off. “The real story here is the amount of money the defendants have spent defending these cases,” she said. “We’re the only group of lawyers who haven’t been paid in 10 years.” No wonder she’s still at it.

But what are the companies supposed to do? Let Motley Rice bankrupt them because of something they did three decades ago that was perfectly legal? When I asked Landrigan why he has testified for the plaintiffs, he said, “The removal of paint from apartment buildings is expensive. States and cities are chronically underfunded. So basically, getting a judgment against the companies is a way to get revenue to do the removal.” You will never hear a purer distillation of the real motivation for bringing these suits. The companies have lots of money, so they can pay.

So why weren’t the makers of gasoline – the major source of lead in the blood – subject to these kinds of lawsuits? When I asked David Rosner, a Columbia professor who has served as an expert witness for the plaintiffs, he reassured me. “I think there might be a suit like that filed next week,” he said.