Getting the Lead Out

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Trial lawyers, their appetites whetted by a fat share of thequarter-trillion-dollar bonanza extracted from smokers (and a $3 billiondamage verdict this week), have targetedanother victim: the former manufacturers of lead paint.

The Houston Chronicle (May 8) describes “a potential flood of lead-paintlitigation from schooldistricts across Texas,” patterned after Rhode Island’s ongoing lawsuit.Sheldon Whitehouse (D), Rhode Island’s attorney general, credits themulti-state tobacco settlement for his inspiration. In fact, whenWhitehouse sued the lead paint companies, he hired South Carolina’s Ness,Motley, Loadholt, Richardson & Poole, one of the law firms that was pivotalin rounding up states to sue cigarette makers. Now, Ness, Motley has joinedwith teams of Houston and Beaumont attorneys hoping to “turn lead into gold.”

All of this might be nothing more than intriguing background for a battlebetween well-heeled lawyers and well-heeled paint companies, except thatthree corrosive ingredients have been added to the litigation formula.

First, because coordinated actions by multiple government entities canimpose enormous legal fees on defendants, those actions have been used toextort money notwithstanding that the underlying case is baseless. Ashakedown masquerades as law so that politicians can engorge governmentcoffers without raising taxes.

Second, government plaintiffs are hiring outside attorneys – not on aper-hour basis, but for a contingency fee geared to the size of any damageaward. Ness, Motley and their Beaumont colleagues can reportedly be signedup for a mere 40 percent of damages. In effect, private law firms, some ofthem major political donors, are awarded huge incentive-based contracts,thus placing the coercive power of government in the hands of parties whohave a financial interest in increasing the severity of punishment. It’slike giving prosecutors a bonus for each indictment they bring in. Thepotential for abuse is enormous.

Third, legislatures are supposed to enact laws, not the executive orjudicial branch. In too many cases, government-sponsored litigation hasbeen a substitute for failed legislation. That process violates theprinciple of separation of powers – a centerpiece of the federalconstitution and no less important at the state level. Evidently, none ofthat matters to some attorneys general, mayors, and their allies in theprivate bar. In an attempt to circumvent the legislative process, they areall too willing to pursue through litigation what was rejected by thelegislature.

For years, trial lawyers have sued landlords over lead poisoning and, insome cases, have won large judgments. But unlike landlords, the paint andpigment companies remain unscathed. The industry’s defenders make thesepoints: Lead was thought to be a useful component of paint. Once it wasknown to be harmful, paint makers voluntarily stopped using lead in interiorpaints in the 1950s. The industry supported a 1978 federal ban.

Well-maintained surfaces covered with lead paint are not a danger; the realculprit is poor maintenance by homeowners. Lead poisoning arises from manyproducts besides paint. In any event, it’s impossible to prove whichmanufacturer’s paint, if any, was responsible.

Never mind those facts. If the blandishments of the trial lawyers proveirresistible, Texas school districts will be arguing, not that the owners orlandlords of aging, substandard homes should have maintained them morediligently, but that lead poisoning in the 21st century should be blamed onthe makers of paint that was used in the 1920s through the mid-1950s. That’s bad logic, bad law, and bad public policy, directed against innocentcompanies that produce useful products, employ thousands of people, andhaven’t used lead for nearly half a century.

Nonetheless, private attorneys have fanned out in a frenzied search forpoliticians anxious to squeeze big bucks from another hapless industry. Sofar, attorney general John Cornyn has declined to join his counterpart inRhode Island. Cornyn has also criticized the tobacco settlement –especially the colossal $3.3 billion in legal fees that the states’ triallawyers collected. But other Texas officials are less hesitant. FrankSanders, chief of the litigation bureau in Harris County, has already sued.He gloats that outside lawyers will assume the costs even if the case fails.“We’ve got a situation we can’t lose,” he told the Chronicle. Some mightdisagree. Surely, the demise of the rule of law must be counted as a loss.

Robert A. Levy

Robert A. Levy is senior fellow in constitutional studies at the Cato Institute. This article is drawn in part from "Turning Lead into Gold," Legal Times, August 23, 1999.