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The manufacturers and promoters of lead pigments used in paints have proven to be a more difficult target for personal injury-mass tort litigation than the asbestos, tobacco, drug, chemical and automobile industries. This was demonstrated once again in In re Lead Paint, (Law Div., Middlesex County, Nov. 4, 2002), a decision that dismissed public nuisance and other claims brought by a number of the state’s counties and municipalities against the lead paint industry. Included among the public plaintiffs were several older urban and suburban municipalities, as well as a number of counties. The defendants had formerly produced and promoted lead pigments used in buildings throughout the state. They included Atlantic Richfield Co., The Sherwin-Williams Co., American Cyanamid Co., E.I. du Pont de Nemours & Co. and SCM Chemicals. The New Jersey Supreme Court had specially assigned the lead paint cases to Judge Marina Corodemus. The order designated the litigation as a mass tort and, as such, warranting special management as complex litigation. This approach had been previously used in cases involving asbestos, pharmaceutical drugs, tobacco and environmental contamination exemplified by the recently settled actions brought against Ciba-Geigy for the operations of its Toms River facility. According to an industry Web site, lead pigment manufacturers have been able to dodge the bullet in more than 50 lawsuits brought against them in various jurisdictions throughout the country since the late 1980s. Its boasts that “the courts have dismissed each suit against the companies, and the companies have not settled a single case.” See www.leadlawsuits.com. The local governmental plaintiffs in the Middlesex County case have recently sought review of the dismissal of their suit in the Appellate Division. As a result, the manufacturers’ string of victories will be tested in New Jersey’s appellate courts, generally known for being concerned with both victims’ rights and spreading the risk. See, for example, Byrd ex rel. Byrd v. Blumenreich, 317 N.J. Super. 496 (App. Div. 1999), where a general commercial liability insurance policy was found not to exclude coverage for injuries caused by the ingestion of the flaking and peeling lead paint chips in a private residence. LEGISLATIVE ACTIONS The underlying concern of the suits is lead poisoning of children due to lead-based paint in older homes and dust and soil laden with lead. Children are typically exposed by the chronic ingestion of soil contaminated with lead. Government studies indicate that housing built before 1950 presents the highest risk of childhood lead poisoning; more than 10,000 housing units constructed prior to that year are located in every county in the state. Children between 6 months and 6 years of age are most vulnerable to the hazards of lead poisoning. The effects of such poisoning can be very serious, including neurological damage, learning disabilities, mental retardation, behavioral disorders, convulsions, permanent brain damage and death. Both the federal and state governments have taken steps to address the problem. In 1971, the federal government enacted the Lead-Based Paint Poisoning Prevention Act. 42 U.S.C.A. � 4821 et seq. That statute banned the use of lead paint in federally assisted housing, limited the lead content of paint used for other residential purposes and provided financial assistance for local lead-related programs. This was followed in 1978 with a federal prohibition on the use of lead paint in homes and places accessible to children. New Jersey’s response includes the Lead Paint Statute, which took effect on Jan. 1, 1972. N.J.S.A. 24:14A-1 et seq. The implementing regulations are compiled in N.J.A.C. 8:51-1.1 et seq. The Legislature has declared lead poisoning to be the most prevalent health problem for children in the state, with more than 177,000 children under 5 years old at high risk. N.J.S.A. 26:2Q-1. It has recognized the various severe effects of lead poisoning and that the most significant sources are lead-based paint in older housing and lead-laden dust and soil. It has also noted that some 65 percent of the state’s housing may contain lead-based paint that represents a “potential public health hazard of alarming magnitude.” The Lead Paint Statute provides that the local board of health, regional health commission or other local health agency is primarily responsible for investigating violations and enforcing the law and for reporting all violations and enforcement procedures to the State Department of Health. N.J.S.A. 24:14A-6. When the local health agency finds lead paint in a dwelling or exterior surface readily accessible to children, and the occupant or user to have lead poisoning or a high risk of lead intoxication, it is directed to notify the owner that it is maintaining a public nuisance and to order the owner to abate the nuisance within 10 days. N.J.S.A. 24:14A-8. In the event that the owner fails to comply with the abatement order, the statute directs the local health agency to remove the nuisance, bill the owner and, if necessary, to recover the expense in a civil action. N.J.S.A. 24:14A-9. PLAINTIFFS’ CLAIMS The plaintiffs in the instant action based their claims on public nuisance theories, analogous to the lawsuits that had been commenced by governmental entities against gun manufacturers. They alleged that, pursuant to the agencies’ inherent police powers, they are empowered to abate public nuisances under case law in the absence of statutory prohibition. The plaintiffs also asserted that the lawsuit was in the public interest and was bolstered by the Legislature’s having declared lead paint poisoning to be a public nuisance presenting a health crisis. In addition to the public nuisance claims, plaintiffs’ allegations against the defendants included fraud, unjust enrichment and civil conspiracy. More particularly, the plaintiffs asserted that: the defendants had long-term knowledge of the human health risks from lead exposure but nonetheless misrepresented that its use was safe; targeted sales for use in areas foreseeably accessible to children; suppressed studies and research into adverse health effects of exposure; and opposed governmental action to address the problem. By way of relief, the plaintiffs sought damages for costs to detect lead poisoning and possible medical monitoring and screening, as well as to provide public health and education programs. They further sought damages or an abatement order to remove lead pigment from homes and buildings. In their motion to dismiss the complaint, the defendants asserted that the claims were barred by remoteness; were subsumed by the Products Liability Act; constituted a violation of the separation of powers doctrine, including conflicting with the Lead Paint Statute; and failed to state a claim. TRIAL COURT’S ANALYSIS The court found that “[p]laintiffs seek an unwarranted and impermissible expansion of their role as local government entities to act on behalf of the public.” It concluded that:
The parties … are currently involved in a health problem affecting not just New Jersey but the nation. The epicenter of plaintiffs’ complaint lies with the contemporary use of the common law tort of nuisance. … The remedial usage of this theory by these plaintiffs is in direct conflict with statutory, constitutional and case law provisions. … To merely cloak the action in parens patriae without having plead a substantial cause of action is impermissible.

In its analysis of the separation of powers issue, the court reasoned that in the Lead Paint Statute, the Legislature explicitly set forth the manner in which local health agencies are to enforce its provisions. The court refused to “circumvent” the precise grant of statutory powers by liberally construing the law. The plaintiffs’ action was also found to exceed municipal police powers by infringing on fiscal policy. Once again, the trial court stressed the specific limited authority granted to local boards of health by the Lead Paint Statute, which authorizes actions only for abatement by injunction, abatement where the property owner fails to comply or reimbursement from the owner. In the absence of specific legislative authorization, the governmental services described in the Lead Paint Statute were to be provided free of charge. The action was further found to be impermissible under the Constitution’s Commerce Clause. The court reasoned that the plaintiffs were essentially seeking to impermissibly regulate and punish lawful conduct occurring outside New Jersey, that is, the past sale of lead pigments by out-of-state manufacturers to in-state companies. The court also rejected the plaintiffs’ reliance on the public nuisance theory and their assertion that the action was supported by the declaration in the Lead Paint Statute that the presence of lead paint in a dwelling constitutes a public nuisance. It found that public nuisance does not encompass manufacturers who place lawful products in the stream of commerce and exercise no further control. Plaintiffs’ failure to establish direct injury — essentially proximate cause — led to the dismissal of their cost recovery claims. The governmental entities also were unable to establish the requisite elements of fraud with respect to adequate reliance on the defendants’ misrepresentation. The claim for civil conspiracy likewise failed since it was predicated on the fraud claim. The plaintiffs’ unjust enrichment claim was likewise dismissed in that they failed to demonstrate that they conferred a benefit on the defendants. REACTION The lead pigment industry’s view of this type of litigation is expressed on its Web site:

In bringing these suits, the plaintiffs — both private individuals and government officials — misrepresent the facts and attempt to use discredited legal theories to prevail. Government plaintiffs also are partnering with well-known wealthy plaintiffs’ attorneys to secure additional resources to wage their suits. Despite these tactics, the plaintiffs cannot overcome the basic truth: former manufacturers of lead pigment have a long record of corporate responsibility. As the medical community, government and industry came to understand the risks associated with lead paint, the industry took steps to protect workers, painters and the public at large.

These views were consistent with those expressed by one of the defendant’s counsel, Ezra Rosenberg of Princeton’s Dechert, who observed: “The court recognized that this lawsuit was not an appropriate way to address hazards to children living in neglected housing. Our Legislature has placed responsibility where it belongs — with landlords who do not maintain their properties and thereby put children at risk. Perhaps this ruling will focus cities and towns on enforcing the law against property owners who create lead hazards, rather than against persons who had no control over the application, use and maintenance of lead paint.” As might be expected, the plaintiffs’ attorneys did not share these views. According to Michael Gordon, of West Orange’s Gordon & Gordon: “I believe it is appropriate for New Jersey courts to specifically recognize that a public nuisance can be caused by a legal product and that municipalities and counties have the authority to take legal action to abate this type of serious public health condition. I believe that the Judge’s opinion too broadly interprets the breadth of the statutory scheme that currently exists in New Jersey with regard to remedial action concerning the presence of lead paint.” Goldshore is a partner at Szaferman, Lakind, Blumstein, Blader, Lehmann & Goldshore (www.szaferman.com) of Lawrenceville. Goldshore and Wolf are co-authors of New Jersey Environmental Law, the Environmental Law Citator, the Environmental Law Newsletter, published by the New Jersey Institute of Continuing Legal Education and an online New Jersey environmental newsletter, www.njenvironews.com. Goldshore is a co-author of “New Jersey Brownfields Law,” published by New Jersey Law Journal Law Books. Their column appears regularly in the New Jersey Law Journal. If you are interested in submitting an article to law.com, please click here for our submission guidelines.

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