On July 16, 2018, Sherwin-Williams (“SW”) filed a petition
for a writ of certiorari with the United States Supreme Court seeking
to overturn a $1.15 billion verdict levied against it and two other companies,
ConAgra Grocery Products Co. and NL Industries Inc., involved in manufacturing
and marketing of lead paint used in California homes during a time when
lead paint was lawfully permitted to be used in residential interiors.
The basis of the petition is that SW’s First Amendment and Due Process
rights were infringed by California when it imposed tort liability for
truthfully promoting a lawful product that it finds to be hazardous, and
that California imposed a retroactive and grossly disproportionate public
nuisance liability based on decades-old promotions without evidence that
consumers relied on those promotions or that SW’s lead paint is
in any residence.
In 2014, a California trial court (unreported but available at 2014 WL
1385823) determined that SW’s promotion of its lead paint product
was misleading because it implied the paint was safe. The disputed promotion
was a 1904 ad which ran in Los Angeles Times and San Diego Union containing
a message “Put S.W.P. on your house and you will get satisfaction
and save money every time.” SW was also found liable because it
contributed a total of $5,000.00 between 1937-1941 to a trade association
to promote “better paint,” including lead paint. Ultimately,
the companies were ordered to pay a massive $1.15 billion into a state
fund intended to be utilized to remove health hazards posed by lead paint
in California homes.
On November 14, 2017, the California Court of Appeals modified the judgment
(reported at 17 Cal.App.5th 51) to hold that the companies should only
be liable for lead-paint usage before 1951 because there was insufficient
evidence to establish that the defendants had promoted lead paint for
interior use after 1950. This concession could potentially reduce damages
between $409 million and $730 million. However, the appeals court upheld
the substance of the ruling, and referenced the 1904 ad as misleading.
On February 14, 2018, the California Supreme Court denied review.
Accordingly, SW filed a petition for a write of certiorari with the United
States Supreme Court on July 16, 2018 contending that its First Amendment
and Due Process rights were infringed by California when it imposed tort
liability for truthfully promoting a lawful product that it finds to be
hazardous, and that California imposed a retroactive and grossly disproportionate
public nuisance liability based on decades-old promotions without evidence
that consumers relied on those promotions or that SW’s lead paint
is in any residence.
Whether this case is taken up by the Supreme Court, and subsequently how
the high court ultimately rules on this matter, could have a dramatic
impact on future cases. This case presents a “super tort”
theory whereby a governmental agency is targeting manufacturers of a product
because of a belief that the participation of states and cities in a lawsuit
brings credibility and a ‘moral authority’ to the cause. In
nearly every other instance, this theory has failed. With the trial and
appellate victories in this case, however, a new crop of lawsuits has
appeared, including suits against fossil fuel producers over the sales
and promotion of oil, gas and coal.