R.I. SC says state not required to pay lead industries' court costs

By Jessica M. Karmasek | May 10, 2013

PROVIDENCE, R.I. (Legal Newsline) -- The Rhode Island Supreme Court ruled Friday that the state does not have to pay more than $10 million in litigation costs to a group of companies sued by the state over lead paint exposure.

The state's high court upheld the decision of Rhode Island Superior Court Justice Michael Silverstein in State of Rhode Island v. Lead Industries Association Inc. et al.

The appeal stemmed from (1) an order mandating that the state reimburse the defendants, Sherwin-Williams Co., NL Industries Inc. and Millennium Holdings LLC, for the fees, costs and expenses that they previously paid to court-appointed co-examiners in the underlying case, and (2) the superior court's dismissal of defendants Sherwin-Williams Co., NL Industries Inc., Millennium Holdings LLC, ConAgra Grocery Products Co., American Cyanamid Co., Cytec Industries Inc. and Atlantic Richfield Co.'s motion for costs related to the suit.

As to the co-examiners' fees -- about $242,000 worth -- the state argued that sovereign immunity barred it from being held financially responsible for these expenses.

However, Silverstein determined the state was barred by judicial estoppel from making a sovereign-immunity argument because that was inconsistent with the position in which it first presented to the court.

As to costs, the companies argued there is a strong presumption in favor of awarding costs to the prevailing party and the justice erred by departing from that presumption.

The state Supreme Court affirmed both orders of the superior court.

First, the court held that Silverstein was justified in his use of judicial estoppel, barring the state from claiming sovereign immunity in this case.

Second, the court said the justice "appropriately" applied the facts to the factors used in making the determination to hold both parties responsible for their own costs of litigation.

"In his written decision, the trial justice analyzed the totality of the circumstances and found the following: (1) that the state's claim was not frivolous or made in bad faith; (2) that the public had a heightened interest because of the physical and environmental problems lead paint presented; (3) that assigning all costs to the state could act as a penalty and deter future environmental suits; and (4) that both the public and defendants substantially benefited from the commencement of the litigation," Chief Justice Paul A. Suttell wrote in the court's 13-page opinion.

"As a result, the trial justice held that both the state and defendants were responsible for bearing their own costs."

Attorney General Peter Kilmartin, in a statement Friday, said he was "pleased" with the high court's decision.

"Exposure to lead paint is a very real problem that has caused long-lasting health issues for many children," Kilmartin said. "This case brought the dangers posed by lead paint to the forefront nationally and, as Justice Silverstein and the unanimous Supreme Court found, both the public and the parties substantially benefited from the attorney general's commencement of this action."

In 1999, the Attorney General's Office sued the former lead pigment manufacturers and Lead Industries Association Inc., a national trade association of lead producers formed in 1928.

According to Kilmartin's office, the state now will meet with Motley Rice, the law firm that brought the case on behalf of the state, to resolve the co-examiner fees.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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