June 19, 2013 – A provision recently added to the state budget bill – which is set for approval this month – would favor lead paint manufacturers by retroactively limiting the application of “risk contribution theory” in product liability cases.
The risk-contribution theory relaxes the burden to prove causation when a plaintiff is harmed by a product but cannot pinpoint the exact manufacturer. A law passed in 2011 restricted application of risk contribution theory in cases filed on or after Feb. 1, 2011.
A provision inserted into the budget bill by Republican lawmakers through a motion before the legislature’s Joint Finance Committee would apply to “all actions, whenever filed or accrued,” thereby impacting lead paint litigation that is currently pending.
“It is private legislation for the specific benefit of defendants in a number of cases that are pending in both state and federal court,” said Milwaukee lawyer Peter Earle, who represents 171 plaintiffs in various cases alleging injuries caused by lead paint.
Lawmakers will reportedly push the provision despite warnings from legislative attorneys who say retroactive application is potentially unconstitutional.
In a Wisconsin Legislative Council memo, staff attorneys explain that any retroactive legislation must comport with due process requirements under a balancing test. The Legislative Council is a nonpartisan agency of the Wisconsin Legislature.
“Although it is impossible to predict how a court would apply this test in a particular circumstance, based on prior holdings of the Wisconsin Supreme Court, the retroactive elements of the motion raise constitutional concerns,” the memo notes.
Act 2 and Thomas v. Mallet
The provision, inserted into the state budget by a 12-4 vote on party lines, amends a comprehensive tort reform bill (2011 Wisconsin Act 2) that was passed in 2011.
Act 2 effectively reversed the Wisconsin Supreme Court’s 2005 decision in Thomas v. Mallet,1 in which a majority (4-2) extended application of the risk contribution theory to paint manufacturers whose products contained white lead carbonate.
Joe Forward is the legal writer for the State Bar of Wisconsin. He can be reached by email or by phone at (608) 250-6161.
Plaintiff Steven Thomas, a minor, suffered permanent cognitive impairment and other medical problems after exposure to lead paint as a child in the 1990s. But he could not identify the exact manufacturer of the lead paint that caused his injuries.
Additionally, the lead paint at issue could have been applied as early as 1900 or 1905 – the years the Milwaukee residences containing lead paint were built – and as late as 1978, the year lead paint was banned under federal law. Wisconsin banned it in 1980.
Thomas, through attorney Earle, asked the court to expand the risk contribution theory first applied to drug manufacturers in Collins v. Eli Lilly Co.2 In Collins, the plaintiff could not identify the manufacturer of the injury-causing drug taken by pregnant women.
The Wisconsin Supreme Court ruled that liability attached to defendant drug manufacturers who “reasonably could have contributed” to the actual injury, and failing to hold them liable would leave the plaintiff with significant injury and no remedy.
Those manufacturers that contributed to the risk and could better absorb the costs of injury, the supreme court majority explained in Collins. The Thomas court used the same policy justifications to extend risk contribution theory to lead paint producers.
“The main policy reasons identified by Collins warrant extension of the risk-contribution theory here,” Justice Louis Butler Jr. wrote in the majority opinion.
Act 2’s Restrictions
The Thomas court allowed liability to be imposed on lead paint manufacturers, even though the plaintiff had other potential remedies against landlords. The defendants had argued that risk contribution theory does not apply if a plaintiff has other remedies.
Act 2 addressed this issue. It created Wis. Stat. section 895.046(4)(a), which ensures that risk contribution theory cannot be invoked unless “no other lawful process exists for the claimant to seek any redress from any other person for the injury or harm.”
In addition, Act 2 puts a time limit on claims. Under section 895.046(5), no manufacturer of a product is liable for injuries if more than 25 years have passed between the date the manufacturer last manufactured the product and the date the lawsuit was filed.
This time limitation only applies to actions filed on or after Feb. 1, 2011. Claimants who filed lawsuits before then could still seek redress under Thomas. The current proposal would time-bar certain actions filed before Act 2 was enacted.
Presumably, every lead paint manufacturer stopped making the product 35 years ago, when the federal government banned production for residential use. Arguably, any case filed after 2003 would be barred by Act 2’s statute of repose.
“There are major constitutional problems with this,” said Earle, noting case law that says substantive changes to joint and several liability cannot be retroactively applied to cases where the injury had accrued prior to the date of legislative enactment.
Earle filed pending lead paint cases starting in 2006. He said the legislation is capricious, and he is prepared to fight on constitutional grounds. “I will immediately challenge this if it passes,” he said. “And it will be expensive for the taxpayers.”
In 2012, attempts to apply Act 2 retroactively failed (see SB 373 / AB 538). At least one defense lawyer who supported these bills stated that Thomas was an overreaching expansion of risk contribution theory and should not be applied in any case.
“[W]ithout the proposed amendment of Act 2, plaintiff lawyers will continue to attempt to exploit what they assert is a loophole in Act 2 to attack Wisconsin’s business community for years to come,” said attorney Jim Murray in testimony supporting SB 373. Murray spoke as one of the lawyers litigating risk contribution cases for NL Industries.
1 2005 WI 129, 285 Wis.2d 236, 701 N.W.523 (Wis. 2005).
2 116 Wis.2d 166, 342 N.W.2d 37 (Wis. 1984).