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From Products Liability Law Daily, October 13, 2015

Is retroactive application of risk-contribution theory shield for lead paint makers constitutional?

By Pamela C. Maloney, J.D.

The question of whether the retroactive application of Wis. Stat. §895.046, which prohibits plaintiffs from asserting claims against manufacturers of white lead carbonate (WLC) under the risk-contribution theory as articulated in Thomas v. Mallett, 2005 WI 129, 285 Wis. 2d 236, 701 N.W.2d, deprives a plaintiff of a vested property right in violation of the due process protections guaranteed by the Wisconsin Constitution was certified to the Wisconsin Supreme Court. The state court of appeals sought guidance on the issue because the constitutionality of the statute was unsettled in light of a recent federal court decision on the question (Clark v. American Cyanamid Co., September 29, 2015, per curiam).

Background. Yasmine Clark, a minor, allegedly was poisoned and suffered significant irreversible neurological damage following her exposure to paint that contained white lead carbonate while residing at two different rental properties in Milwaukee. The minor’s guardian ad litem filed negligence and strict liability claims against numerous manufacturers and sellers of WLC, including American Cyanamid Co.; E.I. DuPont de Nemours and Co.; NL Industries, Inc.; Atlantic Richfield Co.; Sherwin-Williams Co.; Milwaukee County Department of Health and Human Services; Armstrong Containers, Inc. (the WLC defendants).

Risk-contribution theory. Because the minor could not identify which manufacturer or manufacturers produced the WLC to which she had been exposed, the WLC defendants were sued under the “risk contribution theory” first pronounced in Collins v. Eli Lilly, 116 Wis. 2d 166, 193-95, 342 N.W.2d 37 (1984), and which was later extended to cases involving white lead carbonate poisoning in Thomas. Thomas generally holds that once a plaintiff has established the other elements of a negligence or strict-liability claim and has met the prerequisites to the application of risk contribution, the burden of proof shifts to each defendant to prove that it did not produce or market white lead carbonate during the relevant time period or in the geographic market where the exposure occurred.

Related litigation and legislation. While the Clark case was pending, the U.S. District Court for the Eastern District of Wisconsin, in Gibson v. American Cyanamid Co., 719 F. Supp. 2d 1031, 1052 (E.D. Wis. 2010) (Gibson I), ruled that the risk-contribution doctrine as expanded in Thomas violated the federal substantive due process rights of one of the WLC defendants in that case. Gibson I was later extended to the remaining WLC defendants in Gibson v. American Cyanamid Co., 750 F. Supp. 2d 998, 999 (E.D. Wis. 2010) (Gibson II). That decision was appealed.

While the appeal was pending in Gibson II, the trial court stayed the instant case. The stay was issued shortly after the state legislature enacted §895.046, which abrogated Thomas prospectively as of February 1, 2011. While both Gibson II and this case were pending, the Wisconsin legislature amended §895.046, making its abrogation of Thomas retroactive in nature.

The trial court determined that retroactive application of §895.046 is unconstitutional as a violation of the minor’s right to due process. About four months later, the U.S. Court of Appeals for the Seventh Circuit decided Gibson II [see Products Liability Law Daily’s July 25, 2014 analysis]. The Seventh Circuit, consistent with the trial court’s decision in this case, ruled that §895.046 cannot be applied retroactively in light of the state’s constitution’s guarantee of due process. The WLC defendants appealed the trial court’s decision.

Parties’ constitutional arguments. The WLC defendants argued that §895.046 is constitutional because it does not impair a vested right and because the public’s interest in abrogating Thomas retroactively outweighs the minor’s private interest in her claims. Essentially, the WLC defendants contend that because Thomas did not expand Collins’ risk-contribution theory until two years after the minor was injured initially, the minor had no vested right to sue them for her exposure to WLC.

On the other hand, the minor, through her guardian, argued that she did have a vested right in her claim because even if Thomas had not been decided when she was first exposed to WLC, Wisconsin law already had adopted the risk-contribution theory in Collins.

Certification of question. Given the unsettled state of the law, the pressing need for a final resolution, and the potential conflict with federal case law—as pronounced by the Seventh Circuit in Gibson II—should the appellate court find the statute constitutional, the appellate court turned to the state supreme court for guidance on the issue of the constitutionality of §895.046.

The case is No. 2014AP775.

Attorneys: Victor C. Harding (Warshafsky, Rotter, Tarnoff & Bloch, S.C.) for Yasmine Clark. Ralph A. Weber (Gass Weber Mullins LLC) for American Cyanamid Co. Timothy A. Bascom (Bascom, Budish & Ceman, S.C.) for Armstrong Containers, Inc. Paul E. Benson (Michael Best & Friedrich LLP) for E.I. DuPont de Nemours and Co. James T. Murray, Jr. (Peterson, Johnson & Murray, S.C.) for NL Industries, Inc. Daniel T. Flaherty (Godfrey & Kahn, S.C.) for Atlantic Richfield Co. Jeffrey K. Spoerk (Quarles & Brady LLP) for Sherwin-Williams Co. Timothy R. Schoewe, Milwaukee County Corp. Counsel, for Milwaukee County Department of Health and Human Services.

Companies: American Cyanamid Co.; E.I. DuPont de Nemours and Co.; NL Industries, Inc.; Atlantic Richfield Co.; Sherwin-Williams Co.; Milwaukee County Department of Health and Human Services; Armstrong Containers, Inc.

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