Rhode Island, or outside counsel, ordered to reimburse companies in failed lead paint suit

By John O'Brien | Jan 22, 2009


PROVIDENCE, R.I. (Legal Newsline) - Rhode Island Attorney General Patrick Lynch's decision to craft a $2.4 billion lead paint abatement plan before securing a verdict will cost either the State or its contingent fee counsel.

The Rhode Island Superior Court ruled Thursday that the costs of co-examiners appointed to help with the plan are not the responsibility of the three companies initially deemed liable for the presence of lead paint in the state.

During the appeal of Sherwin-Williams, Millennium Holdings and NL Industries, Lynch and plaintiffs firm Motley Rice argued the abatement process needed to begin. On July 1, the state Supreme Court overturned the verdict, getting the companies off the hook for any abatement plan.

The State argued its sovereign immunity barred the defendants from seeking the costs of the examiners. A copy of the decision can be viewed here.

"To the contrary, here, the State has voluntarily availed itself of the judicial system by initially filing this lawsuit as the plaintiff," the decision states.

"The authority upon which the State bases its argument is inapplicable because it pertains to situations where the government entity has been sued as a defendant."

A footnote in the decision noted that Motley Rice signed into an agreement with the State that provides that "all costs and expenses of prosecuting said claims... will be borne by Motley Rice."

"This is a complex decision and we are still reviewing it," Lynch said.

"We will seek an opportunity to meet with Judge (Michael) Silverstein about the timing of his entering an order on this issue and about other issues still before him.

"As we wait to meet with Judge Silverstein, naturally, we will consider our options, one of which is filing an appeal."

The second-term Democrat had no comment on who will pay the costs of the co-examiners.

The decision said the costs of the co-examiners "could potentially be covered under that agreement."

"The Court got it right," said Jones Day attorney Charles H. Moellenberg, who represented Sherwin-Williams.

"These companies should not bear the costs of litigation that the Supreme Court said should have been dismissed at the outset ten years ago. This case demonstrates that state and local governments solicited by trial lawyers to file public nuisance lawsuits should recognize that these cases are not cost-free."

Lead paint was outlawed in 1978, and Motley Rice convinced former Rhode Island Attorney General Sheldon Whitehouse to bring the first state-backed case over the issue in 1999.

The first trial resulted in a mistrial, the second (filed by Lynch) in a 2006 verdict against the three companies. It was the longest civil trial in state history.

After the mistrial and while Whitehouse prepared to leave office in 2002, Jack McConnell, of the firm's Providence office, contributed $1,000 to Lynch's election efforts.

In Lynch's next campaign, McConnell gave him $2,000. In between, in Lynch's non-election year of 2004, McConnell still gave him $2,000.

The firm had thought of using a public nuisance claim against the companies as a way around certain defenses that could have stonewalled a products liability claim, like the tolled statute of limitations.

In 2007, the State filed a motion seeking court costs of more than $1 million. After the Supreme Court decision, the three companies filed the motion for reimbursement of $242,121.21 paid to the co-examiners.

"With regard to the actions taken by both parties here, as a matter of law and fairness, the Court finds little merit in the State's suggestion that the Defendants should bear the burden of paying the Co-Examiner expenses," Thursday's decision says.

"The State made a calculated decision to pursue a claim against the Defendants and voluntarily participate in the judicial system, and thus may not invoke sovereign immunity to shield it from the imposition of costs."

Moellenberg added the companies intend to submit a bill of costs to cover other litigation expenses. Attorneys fees are not included.

Lynch previously called the companies' request for reimbursement "astounding."

"While there is no question that the defendants have every right to challenge the case and have availed themselves of that right at every opportunity, it's astounding that the lead paint companies involved in the litigation have the audacity to claim that they are entitled to costs associated with the $100-million defense they mounted, and the more than 100 high-priced lawyers they used to avoid responsibility for the toxic poisoning of Rhode Island's children," Lynch said.

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.

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