On the surface, a liability verdict involving lead paint poisoning might not seem like it has much to do with climate change, but a recent Supreme Court decision has legal experts drawing some important parallels.
The decision, in which the Supreme Court let stand a verdict against two paint companies for knowingly selling a dangerous product, could have an impact on climate liability cases currently being pursued against fossil fuel producers that may eventually also wind their way to the Supreme Court.
The group of California cities and counties that are currently suing fossil fuel companies over climate change impacts are following directly in the legal footsteps of the 10 communities that brought a public nuisance lawsuit in 2000 against paint manufacturers ConAgra Brands and Sherwin-Williams. The suits argued that the companies sold paint containing lead and marketed it as a safe product despite knowing it is toxic. It took more than a decade before a judge in Santa Clara County found the companies liable and an appeals court upheld that verdict in 2017.
When the California Supreme Court refused to take up the companies’ appeal, in February, the companies appealed to the U.S. Supreme Court, which on Oct. 15 refused to hear the case. That effectively upheld the verdict that the companies must pay more than $400 million in damages.
The paint companies argued that the verdict violated their free speech rights, because it challenged the truthfulness of their advertising. It’s an argument the fossil fuel companies are also using in defense of their stance on climate change: that they are not being entitled to their opinion on the issue.
“California’s decision is an outlier and at odds with courts across the country which have correctly held that companies should not be held retroactively liable for lawful conduct and truthful commercial speech decades after they took place,” the companies said in a statement following the Supreme Court’s rejection of their appeal.
The cities pursuing the cases cheered the verdict.
“These companies profited by selling products that they knew were toxic, and they sold them to unwitting families,” San Francisco City Attorney Dennis Herrera said in a statement. “The time has come for these companies to pay to clean up their mess.”
Herrera has also led the way in his city’s liability lawsuit against five fossil fuel giants, currently under appeal to the Ninth Circuit Court of Appeals.
The court’s decision could have implications for other public nuisance lawsuits against corporations selling harmful products. As the U.S. Chamber of Commerce noted in its amicus brief filed in August supporting ConAgra and Sherwin-Williams, “Just in the last 12 months, in federal courts alone, at least 80 new public nuisance cases of this sort have been filed by states and other government entities against American businesses, all seeking to impose sweeping liability based on similarly novel theories.” The Chamber referenced legal action underway against fossil fuel companies over climate change, agribusiness giant Monsanto over PCBs, and pharmaceutical corporations for their role in the opioid epidemic.
Attorney Vic Sher, partner in the San Francisco-based firm Sher Edling that is counseling several California plaintiffs in the climate lawsuits, said the cases are grounded in solid tort law, not “novel theories.”
“The lead paint decision on which the SCOTUS denied review is part of a well-established body of law that holds companies responsible for wrongfully over-promoting and failing to warn about products those companies know are dangerous to people and the environment,” he said.
The decision drew immediate criticism from the National Association of Manufacturers (NAM), which said manufacturers were being unfairly targeted for the liability claims.
“With the doctrine of public nuisance transformed into an unbridled tort, it is easy to imagine how it can be applied to many challenges facing states and municipalities with budget issues,” NAM general counsel Linda Kelly wrote in a recent op-ed. “It is only a matter of time before plaintiffs attorneys begin trying to convince public officials in jurisdictions all over nation to sue companies for manufacturing and selling products that were legal and regulated at the time of sale, but can now be retroactively transformed into public nuisances.”
Sher, however, emphasized that the oil companies have long known of the dangers of climate change and their products’ role in it. He pointed to several correlaries, including asbestos, chemicals in drinking water, pharmaceuticals and tobacco. “Like all these other examples, the fossil fuel industry knew that profligate use of its products could inflict serious—indeed, world damaging—harm to people, businesses, and communities but continued to over-promote their products anyway, all while waging a sophisticated communications and marketing campaign to create a public misperception that there was no need for concern or action.”
That argument, however, has failed to persuade U.S. District Court judges in the San Francisco, Oakland and New York City cases, in part because federal precedent led them to conclude that climate change-related issues are best tackled by the executive and legislative branches. Because of those decisions, most of the other communities are striving to keep their cases in state court under California common law, where experts say they’ll have a better chance of succeeding.
That makes an upcoming decision by the Ninth Circuit Court of Appeals in a group of California climate liability suits so crucial. The cases were ordered back to state court in March, but the defendants appealed and that appeal is pending.
If the Ninth Circuit allows the cases to proceed in California state courts, experts say the lead paint case ruling bolsters the climate liability plaintiffs’ chances, since that case was won under California public nuisance law.
“In California state courts, the ConAgra case is precedential, and is relevant to the public nuisance claims in the climate liability cases,” said Sean Hecht, UCLA School of Law professor and co-director of the Emmett Institute on Climate Change and the Environment. Because the climate cases bring essentially the same claims as the paint cases, Hecht said, they should have the same outcome, but the precedent applies only in California. “Other states, and federal courts aren’t obliged to follow California precedent,” Hecht said. “Nuisance law has been developed jurisdiction-by-jurisdiction, as a matter of state common law.”
Rhode Island, for example, filed a climate liability suit against fossil fuel producers. But unlike in California, its lead paint litigation resulted in a finding of no liability for the paint companies. Just as Rhode Island was the first state to sue Big Oil, it was also the first to file a lead paint lawsuit in 1999. In 2008, the state’s Supreme Court unanimously overturned a jury decision that found the companies liable for public nuisance. Had the decision held, the companies would have been required to pay more than $2 billion in cleanup costs.
Could SCOTUS Trample Climate Cases?
Should the climate liability suits follow the path of the lead paint litigation in California, including a finding of liability against the oil producers, they would likely be appealed to the Supreme Court just as the paint cases were. Although the Court declined review of the lead paint decision, it could make a different decision for the climate liability suits.
Hecht said he was not surprised that the Supreme Court turned down the paint companies’ appeal, and said the same treatment should apply to the climate cases.
“It would be highly unusual for the U.S. Supreme Court to step in and grant review of a case applying state tort law. It’s the job of state courts to interpret principles of state tort law, and the Supreme Court has no reason to review a state court tort law decision unless there’s a clear violation of the US Constitution in the state court’s application of the law,” he said.
“While some have characterized the Supreme Court majority as favorable to business interests, and there’s some evidence for that, taking this case on would have been highly unusual given the legal context,” Hecht said. “I would think the Supreme Court similarly would be unlikely to review a state court decision on climate liability based on state public nuisance doctrine, but there’s no way to know.”
Additionally, defendants in the climate cases argue that federal law preempts state law, “a constitutional argument that the Supreme Court might be more likely to take up,” Hecht said.
But considering the lead paint case took 18 years before it got to the Supreme Court level, the climate liability cases likely won’t be before the Supreme Court anytime soon.
“There’s a long road ahead before these cases get anywhere near a petition for review to the Supreme Court,” Hecht said.