Amicus Curiae Brief — ConAgra Grocery Products Company, et al., Petitioners v. California

Nos. 18-84, 18-86

In the Supreme Court of the United States

_______________

CONAGRA GROCERY PRODUCTS COMPANY, ET AL.,

Petitioners

v.

THE PEOPLE OF THE STATE OF CALIFORNIA,

THE SHERWIN-WILLIAMS COMPANY

Petitioner,

v.

THE PEOPLE OF THE STATE OF CALIFORNIA

______________________

On Petition for Writ of Certiorari to the California Court of Appeal, Sixth District

_______________

BRIEF OF AMICI NATIONAL ASSOCIATION OF

MANUFACTURERS, NFIB SMALL BUSINESS LEGAL CENTER, COALITION FOR LITIGATION JUSTICE, INC., AND PLASTIC PIPE AND FITTINGS ASSOCIATION IN SUPPORT OF PETITIONERS

_______________

Philip S. Goldberg

Counsel of Record

SHOOK, HARDY & BACON L.L.P.

1155 F Street, N.W., Suite 200

Washington, D.C. 20004

(202) 783-8400

August 17, 2018

Of Counsel

Linda E. Kelly

Peter C. Tolsdorf

Leland P. Frost

MANUFACTURERS’ CENTER

FOR LEGAL ACTION

733 10 Street, N.W., Suite 700

Washington, D.C. 20001

Counsel for National Association of

Manufacturers

Elizabeth Milito

Karen Harned

NFIB SMALL BUSINESS LEGAL CENTER

1201 F Street, N.W. Suite 200

Washington, D.C. 20004

Counsel for NFIB Small Business Legal

Center

Mark A. Behrens

SHOOK, HARDY & BACON L.L.P.

1155 F Street, N.W., Suite 200

Washington, D.C. 20004

Counsel for Coalition for Litigation

Justice, Inc.

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ..................................

ii

INTEREST OF AMICI CURIAE ...........................

1

INTRODUCTION AND

SUMMARY OF THE ARGUMENT .................

2

ARGUMENT ..........................................................

5

I.

The Liability Theory Adopted by

California’s Lower Courts Violates the

Constitutional Rights of Petitioners .........

5

A. There Has Been a Sustained

Campaign to Turn Public Nuisance

into a “Catch-All” Tort for Social

and Environmental Issues ...................

5

B. The Courts’ Creation of a

Standardless, “Catch-All” Tort

Violates Petitioners’ Due Process and

First Amendment Rights ......................

10

C. Basing Liability on Membership in

Trade Associations Further Infringes

on Petitioners’ Constitutional

Rights ....................................................

16

II. This Case Has Spawned a New Wave of

Government Public Nuisance Litigation

Lacking Constitutional Footing ................

17

III. Managing Public Risks Associated

with Inherently Harmful Products

Should Remain a Legislative and

Regulatory Matter .....................................

22

CONCLUSION .......................................................

23

ii

TABLE OF AUTHORITIES

Cases

Page

Am. Elec. Power Co. v. Connecticut,

564 U.S. 410 (2011).............................................. 23

BMW of N. Am., Inc. v. Gore,

517 U.S. 559 (1996).............................................. 15

City of Chicago v. American Cyanamid Co.,

2003 WL 23315567 (Ill. Cir. Ct. Oct. 7, 2003) .... 17

City of Cincinnati v. Beretta U.S.A. Corp.,

768 N.E.2d 1136 (Ohio 2002) ................................ 9

City of Milwaukee v. NL Indus., Inc.,

691 N.W.2d 888 (Wis. Ct. App. 2004) ................... 9

City of St. Louis v. Benjamin Moore & Co.,

226 S.W.3d 110 (Mo. 2007) .................................... 9

City of St. Louis v. Cernicek, 145 S.W.3d 37

(Mo. Ct. App. 2004) ................................................ 8

County of Santa Clara v. Atlantic Richfield Co.,

137 Cal.App.4th 292 (Cal. Ct. App. 2006)........... 11

Diamond v. General Motors Corp.,

97 Cal. Rptr. 639 (Cal. Ct. App. 1971) .................. 7

Eastern Enterprises v. Apfel,

524 U.S. 498 (1998).............................................. 15

Exxon Co., U.S.A. v. Sofec, Inc.,

517 U.S. 380 (1996).............................................. 14

iii

Honda Motor Co., LTD. v. Oberg,

512 U.S. 415 (1994).............................................. 15

In re Lead Paint Litig.,

924 A.2d 484 (N.J. 2007) ................................. 9, 10

Johnson County, by and through Bd. of Educ. of

Tenn. v. U.S. Gypsum Co., 580 F. Supp. 284

(E.D. Tenn. 1984), set aside on other grounds,

664 F. Supp. 1127 (E.D. Tenn. 1985) .............. 7, 17

NAACP v. Claiborne Hardware Co.,

458 U.S. 886 (1982).............................................. 16

People v. Atlantic Richfield Co.,

No. 100CV788657, 2014 WL 1385823

(Cal. Super. Ct. Mar. 26, 2014) ................... passim

People v. ConAgra Grocery Prods. Co.,

17 Cal.App.5th 51 (Cal. Ct. App. 2017) ...... passim

Rubin v. Coors Brewing Co.,

514 U.S. 476 (1995).............................................. 13

Spitzer v. Sturm, Ruger & Co., 309 A.D.2d 91

(N.Y. App. Div. 2003) ............................................. 9

State v. Lead Ind. Ass’n, Inc., 2001 WL 345830

(R.I. Super. Ct. Apr. 2, 2001) ................................. 9

State v. Lead Indus. Ass’n,

951 A.2d 428 (R.I. 2009) .............................. 6, 9, 10

State v. Schenectady Chems., Inc.,

459 N.Y.S.2d 971 (N.Y. Sup. Ct. 1983) ................. 8

iv

Texas v. American Tobacco Co.,

14 F. Supp. 2d 956 (E.D. Tex. 1997) .................. 7-8

Tioga Pub. Sch. Dist. v. U.S. Gypsum Co.,

984 F.2d 915 (8th Cir. 1993) ................................. 9

Tull v. United States, 481 U.S. 412 (1987) ................. 6

West Virginia v. McKesson Corp.,

No. 16-cv-01772, 2016 WL 843443

(S.D. W. Va. Feb. 23, 2016) ................................. 20

Statute

15 U.S.C. § 2605 ........................................................ 19

Ohio Rev. Code Ann. § 2307.71 .................................. 9

Ohio Rev. Code Ann. § 2307.73 ............................. 9-10

Other Authorities

2 Am. Law Inst., Enterprise Responsibility for

Personal Injury: Reporter’s Study (1991) ........... 22

American Standards Ass’n, American Standards

Specifications to Minimize Hazards to Children from Residual Surface Coating Materials

(Z66.1-1955) (approved Feb. 16, 1955) ................ 12

Denise E. Antolini, Modernizing Public Nuisance: Solving the Paradox of the Special

Injury Rule, 28 Ecol. L.Q. 755 (2001) .................... 6

v

John Breslin, West Coast ‘Super Tort’ Against

Monsanto Could Spread to Other States, Forbes

(Jan. 11, 2017), at https://www.forbes.com/

sites/legalnewsline/2017/01/11/west-coastsuper-tort-against-monsanto-could-spread-toother-states/#61da5db176 ................................... 19

Climate Change Litigation Databases, Sabin

Center for Climate Change Law, Columbia

Law School, at http://climatecasechart.com ....... 19

Complaint, Bd. of Cty. Comm’rs of Boulder Cty.

v. Suncor Energy (U.S.A.), Inc., No. 2018

CV30349 (Colo. Dist. Ct. Apr. 17, 2018) ............. 19

Complaint, City of New York v. BP, P.L.C.,

No. 1:18-cv-00182 (S.D.N.Y. Jan. 9, 2018) .......... 19

Complaint, King Cty. v. PB P.L.C.,

No. 18-2-11859-0 (Wash. Super. Ct.

May 5, 2018)......................................................... 19

Dan B. Dobbs, The Law of Torts § 180 (2001).......... 14

Donald G. Gifford, Public Nuisance as a Mass

Products Liability Tort, 71 U. Cin. L. Rev.

741 (2003) ............................................................... 5

Scott Glover & Lisa Girion, Counties Sue

Narcotics Makers, Alleging ‘Campaign of

Deception’, L.A. Times (May 21, 2014) ................ 21

Rachel Graf, Ky. AG Hires Motley Rice, Others

in Opioid Fight, Law360 (Sept. 22, 2017), at

https://www.law360.com/articles/966930/kyag-hires-motley-rice-others-in-opioid-fight ......... 20

vi

Peter Hayes, Is the Public Nuisance Universe

Expanding?, Bloomberg BNA (Jan. 31, 2017),

at https://www.bna.com/public-nuisanceuniverse-n57982083122/...................................... 20

Bryce A. Jensen, From Tobacco to Health

Care and Beyond – A Critique of Lawsuits Targeting Unpopular Industries,

86 Cornell L. Rev. 1334 (2001) .............................. 8

Manufacturers’ Accountability Project,

Manufacturers’ Center for Legal Action,

at http://mfgaccountabilityproject.org/ ............... 18

Max Mitchell, Can Opiate Litigation Ever Be

the New Mass Tort?, Legal Intelligencer

(Mar. 31, 2017), at http://www.law.com/

thelegalintelligencer/almID/1202782732124...... 20

Order Granting in Part and Denying in Part

Defendants’ Motion to Dismiss for Failure to

State a Claim, City of Spokane v. Monsanto

Co., No. 2:15-CV-00201-SMJ, 2016 WL

6275164 (E.D. Wash. Oct. 26, 2016) .............. 19-20

Paint Maker Seeks Ruling on Judge in Lead

Case, Providence J., Aug. 19, 2005, at B1............. 8

Restatement (Second) of Torts § 821 (1979) .............. 6

Restatement (Second) of Torts § 821A (1979) ............ 7

Restatement (Second) of Torts § 821B (1979) ........ 5, 6

John Schwartz, Climate Lawsuits, Once

Limited to the Coasts, Jump Inland,

N.Y. Times, Apr. 18, 2018 .............................. 18-19

vii

Victor E. Schwartz et al., Deep Pocket Jurisprudence: Where Tort Law Should Draw the Line,

70 Okla. L. Rev. 359 (2017) ................................. 18

Victor E. Schwartz & Phil Goldberg, The Law of

Public Nuisance: Maintaining Rational

Boundaries on a Rational Tort, 45 Washburn

L.J. 541 (2006) ....................................................... 5

Richard Scruggs, Are Opioids the New Tobacco?,

Law360 (Sept. 18, 2017), at

https://www.law360.com/articles/962715 ........... 21

The Law of Associations, Chapter 2B, Association

Membership Issues (2017)................................... 16

INTEREST OF AMICI CURIAE1

Amici have a substantial interest in ensuring that

businesses sued under civil liability systems are

guaranteed constitutional protections. As explained

herein, amici believe the lower courts’ decisions violated Petitioners’ due process and First Amendment

rights, opening the door to unbounded governmentsponsored public nuisance actions targeting product

manufacturers and sellers for doing nothing more

than lawfully engaging in their spheres of commerce.

If the rulings stand, amici’s members would be adversely impacted by tort lawsuits seeking massive,

unprincipled, and often industry-wide liability.

The National Association of Manufacturers

(NAM), the largest manufacturing association in the

United States, represents small and large manufacturers in every industrial sector and in all 50 states.

Manufacturing employs more than 12 million men

and women, contributes $2.25 trillion to the U.S.

economy annually, has the largest economic impact

of any major sector, and accounts for more than

three-quarters of all U.S. private-sector research and

development. The NAM is the voice of the manufacturing community and leading advocate for policies

that help manufacturers compete in the global economy and create jobs across the United States.

Pursuant to Rule 37.6, counsel for amici certifies that this

brief was not authored in whole or in part by counsel for any

party and that no person or entity, other than amici, their

members, or their counsel made a monetary contribution to the

preparation or submission of the brief. The parties received

timely notice of amici’s intent to file the brief and have filed a

blanket consent to the filing of amici briefs.

1

2

The NFIB Small Business Center, a nonprofit,

public interest law firm established to protect the

rights of America’s small-business owners, is the legal arm of the National Federation of Independent

Business (NFIB). NFIB is the nation’s oldest and

largest organization dedicated to representing the

interests of small-business owners throughout all fifty states. NFIB members own a wide variety of

America’s independent businesses from manufacturing firms to hardware stores.

The Coalition for Litigation Justice, Inc. is a nonprofit association formed by insurers in 2000 to address and improve the toxic tort litigation environment.2

The Plastic Pipe and Fittings Association is a

North American trade association comprised of

member companies that manufacture plastic piping,

fittings and solvent cements for plumbing and related applications, or supply raw materials, ingredients

or machinery for the manufacturing process

INTRODUCTION AND

SUMMARY OF THE ARGUMENT

The decisions below will change how local governments can manage public risks by allowing them

to impose vast, new obligations on private parties in

ways that violate the parties’ constitutional rights.

Specifically, the liability theory expressed here seeks

to subject manufacturers and others in the stream of

The Coalition includes Century Indemnity Company; San

Francisco Reinsurance Company; Great American Insurance

Company; Nationwide Indemnity Company; Resolute Management Inc., a third-party administrator for numerous insurers;

and TIG Insurance Company.

2

3

commerce to open-ended, industry-wide liability for

harms associated with lawful, non-defective products. The risks that give rise to these harms are often inherent to the products, or created by product

misuse, improper disposal, or, as here, deterioration

after they outlived their useful lives. Because tort

law does not impose manufacturer or seller liability

in these situations, the courts took unconstitutional

shortcuts to create liability. Amici urge the Court to

grant the Petitions to address this injustice and because lawsuits with comparable constitutional deficiencies are already being filed around the country.

Here, the California courts subjected the few remaining companies involved in the lead paint industry some 70 to 100 years ago to liability for all lead

paint applied in homes and other buildings in Plaintiffs’ jurisdictions. Petitioners have been ordered to

abate the old paint, regardless of whether they made

the paint to be remediated, when the paint in a

building was sold, or whether third party misconduct

created a particular lead hazard. The lower courts

held that so long as there was general knowledge

that lead paint had risks, including for children, and

Petitioners still promoted its sale for use in homes—

a standard that could apply to many chemicals and

lawful products—there is no defense to liability.

The California lower courts purported to ground

this expansive liability in public nuisance theory, but

tort law does not allow such unprincipled liability.

As detailed below, when Plaintiffs could not meet

their burdens of proof, including the core elements of

causation and wrongdoing, the courts jettisoned the

requirements. The resulting cause of action, therefore, lacks sufficient standards for ensuring Petition-

4

ers’ constitutional due process rights. Further, the

courts based their liability finding in part on truthful

commercial speech and lawful participation in a

trade association, which are protected under the

First Amendment and not indicative of tortious conduct. The trial court’s rationale for allowing these

shortcuts was that it did not want to “turn a blind

eye” to the problem of lead poisoning. People v. Atlantic Richfield Co., No. 100CV788657, 2014 WL

1385823, at *53 (Cal. Super. Ct. Mar. 26, 2014).

The allure of such a legal theory for local governments is understandable. As here, the lawsuits are

generally funded by contingency-fee counsel and target unpopular products. Thus, they present little

risk for government lawyers and elected officials who

bring them with the potential to generate revenue

for solving problems for their constituents. As detailed below, this type of “super tort” has long been

sought, including under the tort of public nuisance.

However, until this point, courts and legislatures

broadly rejected attempts at such liability. The failure of the California Supreme Court to stop this lawsuit has already generated other end-game oriented

litigations against manufacturers, including to pay

for local infrastructure projects to address impacts of

global climate change, remediation of water pollution

caused by third parties, and societal costs associated

with illicit use of opioids and heroin.

There is no legal, economic, or constitutional rationale for turning manufacturers and other employers into insurers for product externalities or downstream hazards. If, when, and under which circumstances these entities should be responsible for contributing to these costs is a determination best made

5

by legislatures, which can balance the interests involved and assign responsibility in targeted, principled ways. For these reasons, amici respectfully

urge the Court to grant the Petitions.

ARGUMENT

I. THE LIABILITY THEORY ADOPTED BY

CALIFORNIA’S LOWER COURTS VIOLATES THE CONSTITUTIONAL RIGHTS OF

PETITIONERS

The Court should grant the Petitions because,

under the law of this case, local governments would

be empowered to sue businesses for making, marketing or selling products based solely on the fact that

the products came with publicly known risks. Negligence and products liability were the focus of the initial attempts at such a “super tort.” When these

torts did not yield their desired results, the advocates turned to public nuisance, a little used and often misunderstood theory of liability. See Victor E.

Schwartz & Phil Goldberg, The Law of Public Nuisance: Maintaining Rational Boundaries on a Rational Tort, 45 Washburn L.J. 541, 552-55 (2006).

A. There Has Been a Sustained Campaign to

Turn Public Nuisance into a “Catch-All”

Tort for Social and Environmental Issues

The tort of public nuisance has centuries of jurisprudence defining its purpose, elements and boundaries. See Donald G. Gifford, Public Nuisance as a

Mass Products Liability Tort, 71 U. Cin. L. Rev. 741

(2003). In general terms, a public nuisance is an

“unreasonable interference with a right common to

the general public.” Restatement (Second) of Torts

§’821B (1979). For more than 200 years of American

6

jurisprudence, the tort has been applied to a narrow

set of circumstances, namely when defendants engaged in common law crimes. See Tull v. United

States, 481 U.S. 412, 421 (1987) (the tort provides “a

civil means to redress a miscellaneous and diversified group of minor criminal offenses”) (internal

quote omitted); Restatement (Second) of Torts § 821

cmt. e (1979) (explaining public nuisances have no

public benefit).

While common law courts have applied the tort in

slightly different ways, the essence of public nuisance liability has remained consistent, requiring (1)

the implication of a “public right”; (2) unreasonable

conduct by the tortfeasor in interfering with that

right; (3) control of the nuisance; and (4) proximate

cause between defendant’s unreasonable conduct and

the public nuisance. See State v. Lead Indus. Ass’n,

951 A.2d 428, 452-53 (R.I. 2009) (calling these elements “essential” to a public nuisance claim).

In the 1960s, some attorneys sensed the power of

public nuisance law and campaigned to transform

the tort from a restrained government enforcement

tort into a tool for requiring businesses to remediate

environmental conditions, regardless of fault. See

Denise E. Antolini, Modernizing Public Nuisance:

Solving the Paradox of the Special Injury Rule, 28

Ecol. L.Q. 755, 838 (2001). They pursued changes to

the Restatement (Second) Torts § 821B that would

have, in their words, “[broken] the bounds of traditional public nuisance.” Id. Most relevant here, they

tried to eliminate the need to prove wrongful conduct

so courts could establish liability even when federal,

state and local laws permitted the conduct. See id.

Although fully presented, none of their changes were

7

included in the black letter of the Restatement. The

Restatement makes clear that “[i]f the conduct of the

defendant is not of a kind that subjects him to liability . . . the nuisance exists, but he is not liable for it.”

Restatement (Second) of Torts § 821A cmt c. (1979).

The first test case to try to expand the scope of

public nuisance law failed. In Diamond v. General

Motors Corp., 97 Cal. Rptr. 639 (Cal. Ct. App. 1971),

class action plaintiffs sued corporations that sold

products or engaged in activities that were alleged to

have caused smog to form around Los Angeles. The

California court, in dismissing the claims, appreciated their inconsistency with traditional public nuisance law and the proper role of the legislature, not

the judiciary, in making regulatory decisions. It determined that plaintiffs were “asking the court to do

what the elected representatives of the people have

not done: adopt stricter standards over the discharge

of air contaminants in this country, and enforce them

with the contempt power of the court.” Id. at 645.

Granting relief would “halt the supply of goods and

services essential to the life and comfort of the persons whom plaintiff seeks to represent.” Id. at 644.

The strategy of trying to leverage governments to

bring catch-all public nuisance actions began in the

1980s and 1990s. These cases were often generated

through the aid and encouragement of contingency

fee lawyers against manufacturers of products that

were “unpopular” or could be used, misused, disposed

of, or allowed to deteriorate in ways that could create

harm. See, e.g., Johnson County, by and through Bd.

of Educ. of Tenn. v. U.S. Gypsum Co., 580 F. Supp.

284 (E.D. Tenn. 1984), set aside on other grounds,

664 F. Supp. 1127 (E.D. Tenn. 1985) (asbestos); Tex-

8

as v. American Tobacco Co., 14 F. Supp. 2d 956 (E.D.

Tex. 1997) (tobacco); City of St. Louis v. Cernicek, 145

S.W.3d 37 (Mo. Ct. App. 2004) (guns).

The first such lead paint case was brought in

1999, when the personal injury law firm of Motley

Rice convinced the then Rhode Island Attorney General to hire the firm to bring a government public

nuisance action against former lead paint companies.

By cloaking their claims in the force and legitimacy

of the State’s police power, plaintiffs sought to take

advantage of the belief that “the participation of

states and cities in a lawsuit brings credibility and a

‘moral authority’ to the cause.” Bryce A. Jensen,

From Tobacco to Health Care and Beyond – A Critique of Lawsuits Targeting Unpopular Industries, 86

Cornell L. Rev. 1334, 1370 (2001). Armed with the

power of the sovereign, Motley Rice took the litigation under a contingency fee agreement and sought

the costs of abating lead paint in homes and buildings throughout the state, which it estimated at $4

billion. See Paint Maker Seeks Ruling on Judge in

Lead Case, Providence J., Aug. 19, 2005, at B1.

Over the years, government public nuisance actions have had occasional successes. For example, a

New York court allowed a public nuisance claim over

water pollution against a business that neither contributed to the pollution, nor controlled the polluted

land. See State v. Schenectady Chems., Inc., 459

N.Y.S.2d 971 (N.Y. Sup. Ct. 1983). The court admitted that determining responsibility was “a political

question to be decided in the legislative arena,” but

stated candidly that “[s]omeone must pay to correct

the problem.” Id. at 977. The Ohio Supreme Court,

in allowing the theory against gun manufacturers,

9

stated that by “allowing this type of litigation to go

past the pleading stages,” the companies could be

forced to the negotiating table on regulatory changes.

City of Cincinnati v. Beretta U.S.A. Corp., 768

N.E.2d 1136, 1151 (Ohio 2002). Such end-game rulings undermine the judiciary’s impartiality and due

process protections against unprincipled liability.

Most courts have expressed these concerns, appreciating that removing wrongful conduct and causation from public nuisance theory would be as extreme as removing breach and causation from negligence. The result would “give rise to a cause of action . . . regardless of the defendant’s degree of culpability.” Tioga Pub. Sch. Dist. v. U.S. Gypsum Co.,

984 F.2d 915, 921 (8th Cir. 1993). “All a creative

mind would need to do is construct a scenario describing a known or perceived harm of a sort that can

somehow be said to relate back to the way a company

or an industry makes, markets, and/or sells its nondefective, lawful product or service, and a public nuisance claim would be conceived and a lawsuit born.”

Spitzer v. Sturm, Ruger & Co., 309 A.D.2d 91, 96

(N.Y. App. Div. 2003).

Lead paint litigation has followed a similar pattern. Some courts, like here, initially allowed these

theories to result in liability. See, e.g., State v. Lead

Ind. Ass’n, Inc., 2001 WL 345830 (R.I. Super. Ct.

Apr. 2, 2001); City of Milwaukee v. NL Indus., Inc.,

691 N.W.2d 888 (Wis. Ct. App. 2004). But, state high

courts and legislatures have generally overturned

these rulings. See Lead Indus. Ass’n, 951 A.2d at

428; In re Lead Paint Litig., 924 A.2d 484 (N.J.

2007); City of St. Louis v. Benjamin Moore & Co., 226

S.W.3d 110 (Mo. 2007); Ohio Am. Sub. S.B. 117

10

(2006) (codified at Ohio Rev. Code Ann. §§ 2307.71

and 2307.73). The Rhode Island Supreme Court, in

overturning a trial court victory for the plaintiffs,

found that “basic fairness dictates that a defendant

must have caused the interference to be held liable

for its abatement.” Lead Indus. Ass’n, 951 A.2d at

451. The New Jersey Supreme Court agreed, stating, “were we to conclude that plaintiffs have stated

a claim, we would necessarily be concluding that the

conduct of merely offering an everyday household

product for sale can suffice for the purpose of interfering with a common right as we understand it.” In

re Lead Paint Litig., 924 A.2d at 501.

B. The Courts’ Creation of a Standardless,

“Catch-All” Tort Violates Petitioners’ Due

Process and First Amendment Rights

The California lower courts disregarded these

cautions, allowing public nuisance liability to attach

based solely on the lawful promotion of a product

that had general publicly known, inherent risks.

They held that, irrespective of regulatory approvals

at the time, so long as there was general knowledge

that lead paint could be harmful, including to children, it was unlawful for Petitioners to have promoted lead paint for interior use. See People v. ConAgra

Grocery Prods. Co., 17 Cal.App.5th 51 (Cal. Ct. App.

2017). Thus, liability is based on courts’ judgment

today that lead paint, categorically, should not have

been sold for use in homes before 1950. The companies must now remove all lead paint applied before

1950. See id. at 119. It is irrelevant whether other

companies made, sold or promoted the paint to be

remediated or when, where and for how long Petitioners made, sold or promoted their paint.

11

The Court should grant the Petitions because the

lower courts took unconstitutional shortcuts to reach

these conclusions. The courts purported to ground

the rulings in state public nuisance theory. But, because public nuisance is an activity-based tort, California has allowed a manufacturer to be subject to

such liability only if it instructed the end-user to use

the product in an unlawful way that created the nuisance. See County of Santa Clara v. Atlantic Richfield Co., 137 Cal.App.4th 292, 309 (Cal. Ct. App.

2006). The courts did not apply this standard; they

failed to require this wrongdoing or causation, depriving Petitioners of their due process rights.

First, the courts claimed that liability was premised on Petitioners’ knowledge that lead paint was

harmful to children, but allowed liability without requiring “that each defendant had actual knowledge

of the hazard that was created by the use of lead

paint on homes.” See Atlantic Richfield Co., 2014

WL 1385823, at *9 (emphasis in original). Under the

“constructive knowledge” standard, the trial court

found “there is ample authority to hold defendants

liable.” Id. (emphasis in original). It stated that it

has been known “[s]ince antiquity” that lead is harmful and that public literature during the early twentieth century identified hazards in lead paint, including for children. Id. at *10. The Court of Appeal

took issue with the constructive knowledge standard,

but nevertheless allowed the trial court’s determination to stand, stating its deferential standard of review “precludes us from drawing contrary inferences.” See ConAgra, 17 Cal.App.5th at 88. It also

cited to public documents to reach this conclusion.

12

Federal and state governments, therefore, had

the same constructive or inferred knowledge of the

risk of lead paint to children and did not make the

regulatory decision to ban its use in homes. To the

contrary, governments specified lead paint for interior use during this time because of its benefits, namely that it was washable, facilitated sanitation, and

stopped the spread of disease.

See SherwinWilliams’ Pet. for Writ of Cert., App. F at 385a-388a.

Government use of a product with comparable

knowledge as Petitioners undermines the notion that

Petitioners tortiously disregarded public health in

selling lead paint at that time. As risks of flaking

and peeling lead paint became appreciated in the

1950s, the companies, medical community, and government took steps together to remove lead from interior household paint.3

The trial court set aside the developing understanding of lead paint risks as being “of no moment.”

Atlantic Richfield Co., 2014 WL 1385823, at *9. It

stated: “All this says is medicine has advanced;

shouldn’t we take advantage of this more contemporary knowledge to protect thousands of lives?” Id. at

*53. Evolving scientific and societal knowledge and

tolerance for risks are common to many products.

The Court’s guidance is needed because mere

knowledge of risk does not provide sufficient notice

3

See American Standards Ass’n, American Standards Specifications to Minimize Hazards to Children from Residual Surface

Coating Materials (Z66.1-1955) (approved Feb. 16, 1955) (setting forth a voluntary standard worked on by industry and

American Academy of Pediatrics that effectively removed lead

pigments from interior paints).

13

for the liability sought here, raising serious due process concerns over this liability theory.

Second, the courts did not require Petitioners to

provide instructions to homeowners to use or dispose

of the paint unlawfully, which was the second prong

of California’s wrongful conduct test. Rather, the

courts found this prong could be satisfied solely by

Petitioners’ “affirmative promotion of lead paint for

interior use” and “participation in trade-associationsponsored lead paint promotional advertising.”

ConAgra, 17 Cal.App.5th at 91-93. The courts reasoned that promoting a product with known hazards

is unreasonable because it “implies” the product is

completely safe. Id. The courts also did not require

Plaintiffs to show that anyone relied on this advertising, allowing the trial court to “reasonably infer” that

some consumers must have heeded the advertising

when deciding to use interior lead paint. Id. at 103.

This case, therefore, raises key First Amendment

issues for the Court to consider in addition to the due

process concerns with basing liability on truthful

commercial speech. Many products, from alcohol to

cars to candy, have inherent risks and are the subject of truthful promotion that do not catalogue their

risks. If companies lawfully promote these products

without mentioning known risks, including liver disease, car crashes, and diabetes, does that make the

manufacturers responsible for all costs associated

with these harms? This Court has already held that

states do not have “broader latitude to regulate

speech that promotes socially harmful activities,

such as alcohol consumption, than they have to regulate other types of speech.” Rubin v. Coors Brewing

Co., 514 U.S. 476, 482 n.2 (1995). The Court should

14

grant the Petitions because of the broad impact liability here would have on commercial speech.

Third, in redefining the tort of public nuisance

the courts eliminated the bedrock principle that a

person can be liable only for harms that he or she

caused. See Exxon Co., U.S.A. v. Sofec, Inc., 517 U.S.

380 (1996) (defining causation as but-for defendants’

tortious conduct the alleged injuries would not have

occurred, and the injuries must be closely related

such that a reasonable person would see it as a likely

result of her conduct); Dan B. Dobbs, The Law of

Torts § 180, at 443 n.2 (2001) (“proximate cause limitations are fundamental and can apply in any kind of

case”). Here, the Court of Appeal proffered that under its promotion-based liability theory, “the identity

of the manufacturer of [any] lead paint is irrelevant.”

ConAgra, 17 Cal.App.5th at 108. Plaintiffs need not

“identify the specific location of the nuisance or a

specific product sold by each such Defendant.” Atlantic Richfield Co., 2014 WL 1385823, at *44. Petitioners are to be jointly and severally liable for remediating all lead paint regardless of who sold which

lead paint, when, or where.

The due process concerns with putting all manufacturers into a causation Cuisinart, where causation

for individual companies is blended together, is evident by the results. As Petitioners point out, hundreds of companies sold lead pigment and paint in

California, each with a distinct history of when it

produced and/or promoted their products and in

what forms. Yet, Petitioners are being forced to

abate all lead paint from all homes in Plaintiffs’ jurisdictions, as well as all lead in dust coming mostly

from non-paint sources. Thus, the overwhelming

15

majority of the lead Petitioners must abate was sold

by competitors, sometimes after their own manufacture of lead paint ceased. The Court should ensure

that any injury is traceable to a Petitioner and that

Plaintiffs establish causation for each Petitioner.

Labeling this case a “representative public nuisance action” does not absolve Plaintiffs of the due

process and First Amendment concerns this case

raises. Industry-wide, retroactive liability for truthful promotion of an inherently hazardous product

does not provide companies with sufficient notice of

when regular commerce gives rise to liability or how

to avoid such liability. Cf. BMW of N. Am., Inc. v.

Gore, 517 U.S. 559, 574 (1996) (“Elementary notions

of fairness . . . dictate that a person receive fair notice not only of the conduct that will subject him to

punishment, but also of the severity of the penalty

that a State may impose.”). “[S]evere retroactive liability on a limited class of parties that could not have

been anticipated the liability, and the extent of that

liability is substantially disproportionate to the parties’ experience” stretches constitutional limits. Eastern Enterprises v. Apfel, 524 U.S. 498, 528-29 (1998).

The result is the “arbitrary deprivations of property”

this Court warned against when “well-established

common-law protections” are compromised. Honda

Motor Co., LTD. v. Oberg, 512 U.S. 415, 430 (1994).

The Court should grant the Petitions to provide a

check on local governments who would violate constitutional protections of often out-of-state companies to

make them pay for local concerns.

16

C. Basing Liability on Membership in Trade

Associations Further Infringes on Petitioners’ Constitutional Rights

Of additional concern to amici is the Court of Appeal’s use of a trade association’s promotional activities against its members. The Court of Appeal asserts that Petitioners can be subject to liability based

on their participation in the Lead Industries Association’s promotion of white lead paint. See ConAgra,

17 Cal.App.5th at 92-95. But the court does not

properly define when such liability can attach, presuming the promotional activities were even actionable. They stated only that Petitioners attended

meetings, received transcripts of meetings where

lead poisoning was discussed, or funded promotional

campaigns for lead paint. See id.

This liability theory contravenes the Court’s longstanding doctrine that “[c]ivil liability may not be

imposed merely because an individual belonged to a

group” or had knowledge of the group’s activities.

NAACP v. Claiborne Hardware Co., 458 U.S. 886,

920 (1982). “For liability to be imposed by reason of

association alone, it is necessary to establish that the

group itself possessed unlawful goals and that the

individual held a specific intent to further those illegal aims.” Id.; see also The Law of Associations,

Chapter 2B, Association Membership Issues (2017)

(“Plaintiffs must demonstrate a ‘specific intention’ on

the part of this Defendant to further the aims or

adopt the actions of the association.”).

The Court should grant the Petitions to enunciate

standards for when it is constitutionally permissible

to impute an association’s activity to a member.

Otherwise, this case will chill trade association

17

membership and activities. Trade associations have

proven integral to businesses because they allow

businesses to pool resources and take advantage of

efficiencies. They also facilitate health and safety

standards, educate members on regulatory compliance, and work with members to educate policymakers on the impact of legislation, as well as many

other activities important to responsibly engage in

today’s marketplace. If businesses opt out of trade

associations for fear of liability, the downsides will be

felt by consumers, employees, and regulators.

II. THIS CASE HAS SPAWNED A NEW WAVE

OF GOVERNMENT PUBLIC NUISANCE

LITIGATION LACKING CONSTITUTIONAL

FOOTING

The absence of clear standards for liability has

created the exact type of “super tort” many courts

cautioned against in rejecting similar litigation. See

Johnson County, by and through Bd. of Educ. of.

Tenn. v. U.S. Gypsum Co., 580 F. Supp. 284, 294

(E.D. Tenn. 1984) (rejecting such liability because

governments could “convert almost every products

liability action into a nuisance claim”); City of Chicago v. American Cyanamid Co., 2003 WL 23315567, at

*4 (Ill. Cir. Ct. Oct. 7, 2003) (appreciating that Chicago “deliberately framed its case as a public nuisance action” to try to get around constraints of the

American legal system). Under these theories, litigation could be filed at the whim of any local, county,

or state attorney–and contingency-fee counsel they

may hire–any time a product has been used, misused, disposed of improperly, or not properly maintained and became associated with a hazard.

18

To this end, the California courts appeared to put

out the welcome mat for such filings, taking “judicial

notice of the fact that drugs, facilities, foods, and

products of all kinds that were at one time viewed as

harmless are later shown to be anything but.” Atlantic Richfield, 2014 WL 1385823 at *53. Local governments have accepted this invitation, filing new

public nuisance lawsuits in California and other

states seeking money from businesses to address a

variety of environmental or social concerns. See Victor E. Schwartz et al., Deep Pocket Jurisprudence:

Where Tort Law Should Draw the Line, 70 Okla. L.

Rev. 359, 379-388 (2017) (detailing this trend).

Since the trial court’s ruling in this case, three

major deep pocket public nuisance initiatives invoking comparable tort theories have been launched. In

2017, local governments began suing dozens of fossil

fuel producers over lawful sales and promotions of

oil, gas, and coal. See Manufacturers’ Accountability

Project, Manufacturers’ Center for Legal Action

(providing detailed background on this litigation).4

The lawsuits claim that these companies can be subject to liability for knowingly selling and promoting a

product that contributes to global climate change.

Consequently, they must pay for seawalls and other

infrastructure projects allegedly needed to abate the

impacts of climate change. The lawsuits were first

filed by eight California communities and now have

been filed by New York City, Boulder, Colorado, and

King County (Seattle) in Washington, among others.

See John Schwartz, Climate Lawsuits, Once Limited

to the Coasts, Jump Inland, N.Y. Times, Apr. 18,

4 http://mfgaccountabilityproject.org/.

19

2018.5 The private organizers and funders of the litigation are actively recruiting other governments to

file lawsuits, so more such litigation can be expected.

Several West Coast governments have sued Monsanto, a former manufacturer of polychlorinated biphenyls (PCBs), to pay to remove PCBs from local

waterways. See John Breslin, West Coast ‘Super

Tort’ Against Monsanto Could Spread to Other

States, Forbes (Jan. 11, 2017).6 Monsanto years ago

manufactured and sold PCBs to other companies

that used them in transformers, paint mixtures, and

other products as fire retardants. As the part supplier, Monsanto did not control the final products,

where they were sold, or how they were used or disposed. Also, as with lead paint, the appreciation for

risks associated with PCBs developed over time and

PCBs were banned in the 1970s. See Toxic Substances Control Act, 15 U.S.C. § 2605(e) (1976).

Courts have echoed this case that public nuisances

could be defined as the “production, marketing, and

distribution” of a chemical, not the act of polluting

which was done entirely by third parties. Order

Granting in Part and Denying in Part Defendants’

5 See Complaint, City of New York v. BP, P.L.C., No. 1:18-cv-

00182 (S.D.N.Y. Jan. 9, 2018); Complaint, Bd. of Cty. Comm’rs

of Boulder Cty. v. Suncor Energy (U.S.A.), Inc., No. 2018

CV30349 (Colo. Dist. Ct. Apr. 17, 2018); Complaint, King Cty. v.

PB P.L.C., No. 18-2-11859-0 (Wash. Super. Ct. May 5, 2018); see

also Climate Change Litigation Databases, Sabin Center for

Climate

Change

Law,

Columbia

Law

School,

at

http://climatecasechart.com (categorizing the litigation).

6

https://www.forbes.com/sites/legalnewsline/2017/01/11/ westcoast-super-tort-against-monsanto-could-spread-to-otherstates/#61da5db176.

20

Motion to Dismiss for Failure to State a Claim, City

of Spokane v. Monsanto Co., No. 2:15-CV-00201-SMJ,

2016 WL 6275164, at *20 (E.D. Wash. Oct. 26, 2016);

see also Peter Hayes, Is the Public Nuisance Universe

Expanding?, Bloomberg BNA (Jan. 31, 2017).7

A third series of claims involves governments suing pharmaceutical manufacturers, distributors, and

pharmacies over costs associated with fighting prescription opioid abuse. See, e.g. Rachel Graf, Ky. AG

Hires Motley Rice, Others in Opioid Fight, Law360

(Sept. 22, 2017).8 Several years ago, individuals

brought personal injury claims against opioid manufacturers, but courts concluded that responsibility for

prescription drug abuse largely rested with physicians who overprescribed the painkillers and individuals who took the drugs illegally. See Max Mitchell, Can Opiate Litigation Ever Be the New Mass

Tort?, Legal Intelligencer (Mar. 31, 2017).9 In reframing the litigation under public nuisance theory,

plaintiffs blamed manufacturers, distributors, and

pharmacies for generating a marketplace in which

opioid addiction could arise. See id. The lawsuits

sought money for fighting opioid addiction and, in

some cases, heroin addiction as well. See, e.g., West

Virginia v. McKesson Corp., No. 16-cv-01772, 2016

WL 843443 (S.D. W. Va. Feb. 23, 2016).

7

https://www.bna.com/public-nuisance-universen57982083122/.

8 https://www.law360.com/articles/966930/ky-ag-hires-motley-

rice-others-in-opioid-fight.

9 http://www.law.com/thelegalintelligencer/almID/

1202782732124.

21

As with here, the opioid lawsuits do not allege objective tortious misconduct. Richard Scruggs, a former plaintiffs’ attorney, explained that governments

should avoid fault-based theories, focusing on “only

who should pay as between the general public and

the industry whose otherwise legal products caused

the epidemic.” See Richard Scruggs, Are Opioids the

New Tobacco?, Law360 (Sept. 18, 2017).10 As with

the other litigations discussed herein, these lawsuits

started in California under the theories in the case at

bar, but spread to governments around the country.

See Scott Glover & Lisa Girion, Counties Sue Narcotics Makers, Alleging ‘Campaign of Deception’, L.A.

Times (May 21, 2014). There are more than sixty

opioid lawsuits, with each aimed at some twenty

manufacturers, more than a dozen distributors, and

a few pharmacy chains.

There is nothing unique about these products.

For example, what would stop a court from forcing a

convenience store that sells drinks to abate all litter

in a municipality solely because people, including

those who bought drinks from other stores, improperly discarded bottles? Also, could a seller of sugar or

candy products be subject to public nuisance liability

for tooth decay? The Court should grant the Petitions so manufacturers and downstream companies

are not ATMs, tapped whenever people used or neglected a product and created a risk of harm.

10

https://www.law360.com/articles/962715.

22

III. MANAGING PUBLIC RISKS ASSOCIATED WITH INHERENTLY HARMFUL PRODUCTS SHOULD REMAIN A LEGISLATIVE

AND REGULATORY MATTER

The “public risk” cases discussed in this brief expose the weakness of the judiciary to administer cases where there is no objective wrongdoing. See 2 Am.

Law Inst., Enterprise Responsibility for Personal Injury: Reporter’s Study 87 (1991). With lead paint

and PCBs, the regulators acted and banned the

products. There are many products, including fossil

fuels and opioids, where risks are known and deemed

acceptable. This case, therefore, implicates the balance among the branches of government as to how to

regulate risk associated with the manufacture, sale

and promotion of lawful, non-defective products.

A predicament arises for companies that manufacture chemicals and other products in reliance on

government regulations setting acceptable exposure

levels. Like blood lead levels for children in homes,

government agencies regulate maximum exposure

levels for many chemicals and other products. Companies that sell these products must be able to rely

on the knowledge of the time and government guidelines, including when regulations evolve based on

new scientific studies or public acceptance of known

risks change. Category liability should not ensue,

including when a product is subject to increased restrictions. Massive, uncertain retroactive liability in

these circumstances would chill innovation and deprive the public of important new technologies.

With respect to lead paint, California has strong

laws for old, lead-based interior paints that property

owners and landlords must follow. These regulations

23

have been effective in managing risks posed by deteriorated lead-based paints. This is not to say that

manufacturers may not have post-sale responsibilities. Legislators and regulators can make such decisions as public risks become known and validated.

They can regulate a product’s manufacture, sale, and

use; remove a product from the market; or tax a

product to generate revenues for programs to alleviate harms. See Am. Elec. Power Co. v. Connecticut,

564 U.S. 410, 428 (2011) (setting aside federal public

nuisance claims and deferring to Congress and regulators as “better equipped to [regulate emissions]

than individual district judges issuing ad hoc, caseby-case” decisions).

It is understandable that the desire to regulate an

industry or create a revenue source can be a powerful

motivator for a local government to bring a catch-all

public nuisance action. The Court should grant the

Petitions to provide a needed check on this unprincipled liability. The lack of standards in this case

transcends any state’s tort law and infringes on the

constitutional rights of Petitioners to due process, as

well as free speech and association.

CONCLUSION

For these reasons, amici curiae respectfully request that this Court grant the Petitions.

Respectfully submitted,

Philip S. Goldberg

Counsel of Record

SHOOK, HARDY & BACON L.L.P.

24

1155 F Street, N.W., Suite 200

Washington, D.C. 20004

(202) 783-8400

pgoldberg@shb.com

Counsel for Amici Curiae

Of Counsel

Linda E. Kelly

Peter C. Tolsdorf

Leland P. Frost

MANUFACTURERS’ CENTER

FOR LEGAL ACTION

733 10 Street, N.W., Suite 700

Washington, D.C. 20001

Counsel for National Association

of Manufacturers

Elizabeth Milito

Karen Harned

NFIB SMALL BUSINESS LEGAL CENTER

1201 F Street, N.W. Suite 200

Washington, D.C. 20004

Counsel for NFIB Small Business Legal

Center

Mark A. Behrens

SHOOK, HARDY & BACON L.L.P.

1155 F Street, N.W., Suite 200

Washington, D.C. 20004

Counsel for Coalition for Litigation

Justice, Inc.

Dated: August 17, 2018